---

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Exhibit 4.(a).13Redacted Version

# ASSET PURCHASE
AGREEMENT

# BY AND AMONG

# MED - 1 I.C.1 (1999)
LTD.

# AND

# PARTNER COMMUNICATIONS
COMPANY LTD.

# Dated as of January
22, 2006

---

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

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# EXHIBITS AND SCHEDULES

|                |                                          
|--------------- | -----------------------------------------
|EXHIBITS:       |                                          
|               
|Exhibit A-1     | Form of Adjustment Escrow Agreement      
|               
|Exhibit A-2     | Form of Indemnity Escrow Agreement       
|               
|Exhibit B       | Form of Indemnity Bank Guarantee         
|               
|Exhibit C       | Form of Employee Waiver                  
|               
|Exhibit D-1/2   | Forms of Notice of Assumption            
|               
|Exhibit E       | Form of Hosting Agreement                
|               
|               
|               
|SCHEDULES:     
|               
|Schedule 1.1.26 | Dual Contracts                           
|               
|Schedule 1.1.40 | Leased Real Property                     
|               
|Schedule 1.1.52 | Repair Plan                              
|               
|Schedule 1.1.54 | Certain Retained Claims                  
|               
|Schedule 2.1(a) | Map of System Location                   
|               
|Schedule 2.1(b) | Tangible Property                        
|               
|Schedule 2.1(d) | Certain Assigned Contracts               
|               
|Schedule 2.1(f) | Certain Assigned Approvals               
|               
|Schedule 2.1(i) | Certain Assigned Claims                  
|               
|Schedule 2.2(d) | Excluded Approvals                       
|               
|Schedule 2.5(c) | Certain Approved Investments             
|               
|Schedule 2.5(d) | Additional Assumed Liabilities           
|               
|Schedule 5      | Company Disclosure Letter                
|               
|Schedule 6      | Purchaser Disclosure Schedule            
|               
|Schedule 7.2.2  | Required Governmental Filings & Approvals
|               
|Schedule 7.2.4  | Required Third Party Approvals           
|               
|Schedule 7.7.1  | List of Employees                        

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

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THIS ASSET PURCHASE AGREEMENT(this Agreement), dated as of
January 22, 2006, is made by and among MED-1 I.C.1 (1999) Ltd., a company organized under
the laws of the State of Israel with offices located at 6, HaNechoshet St., Tel-Aviv,
Israel (the Company), and Partner Communications Company Ltd.
(Partner), organized under the laws of the State of Israel with offices
located at 8 Amal St., Afeq Industrial Park, Rosh Haayin, Israel
(Purchaser).

# WHEREAS:

|A. | The
Company owns and operates, inter alia, the Business, as defined
                    herein; and
|-- | ---------------------------------------------------------------------------------------------------

|B. | Purchaser
desires to acquire all of certain rights and other assets of the
                    Company and to assume certain liabilities and obligations relating to
the                     Business, all on the terms and subject to the conditions
hereinafter set forth,                     and the Company desires to sell such rights
and assets to Purchaser, and to                     transfer and assign such liabilities
and obligations to Purchaser on the terms                     and subject to the
conditions hereinafter set forth.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOW, THEREFORE, in
consideration of the foregoing and the mutual representations, warranties, covenants and
agreements herein contained, and intending to be legally bound hereby, the Company and
Purchaser hereby agree, as follows:

|1. | DEFINITIONS
& INTERPRETATION.
|-- | -----------------------------

1.1.        Definitions.
Wherever used in this Agreement, the following capitalized           terms shall have the
meanings attached to them:

| | 1.1.1.        Acquired
Assets shall have the meaning set out in Section           2.1.
| | ----------------------------------------------------------------------------------------

| | 1.1.2.        Purchaser
Disclosure Schedule shall have the meaning set out           in Section 6.
| | ----------------------------------------------------------------------------------------------------

| | 1.1.3.        Action means
any lawsuit, action, arbitration proceeding,           Claim, complaint, criminal
prosecution, investigation, demand letter,           governmental or other administrative
proceeding, before or by any Court or           Governmental Authority.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.4.        Adjustment
Escrow Agreement means an escrow agreement to be entered into by and between the
parties and Escrow Agent, in the form attached hereto as Exhibit A-1[*].
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.5.        Affected
Employees shall have the meaning set out in Section           7.7.1.
| | ---------------------------------------------------------------------------------------------

| | 1.1.6.        Approval means
any license, permit, consent, approval,           authorization, registration, filing,
waiver, qualification or certification,           including, without limitation, rights
of way, easements and other intangible           licenses, utility rights, digging
permits, and licenses to use Software.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

1

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| | 1.1.7.        Approved
Investments shall have the meaning set out in           Section 2.5(d).
| | ------------------------------------------------------------------------------------------------

| | 1.1.8.        Assigned
Approvals shall have the meaning set out in Section           2.1(f).
| | ----------------------------------------------------------------------------------------------

| | 1.1.9.        Assigned
Claims shall have the meaning set out in Section           2.1(j).
| | -------------------------------------------------------------------------------------------

| | 1.1.10.        Assigned
Contracts shall have the meaning set out in Section           2.1(d).
| | -----------------------------------------------------------------------------------------------

| | 1.1.11.        Assumed
Liability shall have the meaning set out in Section           2.5.
| | -------------------------------------------------------------------------------------------

| | 1.1.12.        Business means
the fiber optic transmission business,           operations and activities of the
Company.
| | --------------------------------------------------------------------------------------------------------------------------

| | 1.1.13.        Business
Customer means a client or customer of the Business           designated in
Section 5.10 of the Company Disclosure Schedule as a Business Customer.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.14.        Business
Day means any day other than a Friday, a Saturday, a           public holiday
or the eve of a public holiday in the State of Israel, or any           other day on
which banks are permitted to close in the State of Israel.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.15.        Business
Data and Records shall have the meaning set out in           Section 2.1(c).
| | ------------------------------------------------------------------------------------------------------

| | 1.1.16.        Claim means
any claim, suit, service of process, demand,           cause of action, chose in action,
right of recovery, right of set off, or right           of recoupment.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.17.        Closing shall
have the meaning set out in Section           4.1.
| | ---------------------------------------------------------------------------------

| | 1.1.18.        Closing
Date shall have the meaning set out in Section           4.1.
| | --------------------------------------------------------------------------------------

| | 1.1.19.        Company
Disclosure Schedule shall have the meaning set out in           Section 5.
| | ---------------------------------------------------------------------------------------------------

| | 1.1.20.        Contract means
any written or oral contract, agreement,           arrangement, understanding,
commitment, purchase order or other instrument, and           all amendments,
modifications and supplements thereto.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.21.        Cooperation
Agreement means a cooperation agreement to be           entered into by the
Company and Purchaser under which each party shall offer the           other partys
services to its prospective clients and customers, and to           current clients and
customers who may be interested in entering into new           undertakings, all of the
foregoing as more particularly described in Section           7.11.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.22.        Court means
any court or arbitration tribunal of any           jurisdiction, or any state, province
or other subdivision thereof, including,           without limitation, the State of
Israel.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

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| | 1.1.23.        Customer
Contracts means Assigned Contracts entered into by           and between the
Company and clients or customers of the Business, with respect           to the sale,
lease, or grant of indefeasible right of use or other rights (of           use or
otherwise), and the provision of related services, by the Company, in,           to, or
on the System.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.24.        [*]
| | ------------------

| | 1.1.25.        Deducted
Amounts shall have the meaning set out in Section           3.3.3 (a).
| | ------------------------------------------------------------------------------------------------

| | 1.1.26.        Dual
Contracts means those Customer Contracts listed on Schedule 1.1.26,
relating both to the Business and to the data center, hosting, collocation and
DRP business and operations of the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.27.        Dual
Customers means clients or customers of the data center,           hosting,
collocation and/or DRP business and operations of the Company, who are           also
clients or customers of the Business pursuant to Dual Contracts to which           they
are party.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.28.        Employee
Waiver means a release and waiver, to be executed by           each Affected
Employee in accordance with Section 7.7.1, substantially           in the form
attached hereto as Exhibit C.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.29.        Escrow
Agent means Gross, Kleinhendler, Hodak, Halevy,           Greenberg, Trustees
Ltd.
| | ----------------------------------------------------------------------------------------------------------

| | 1.1.30.        Excluded
Assets shall have the meaning set out in Section           2.2.
| | -----------------------------------------------------------------------------------------

| | 1.1.31.        Excluded
Liabilities shall have the meaning set out in           Section 2.6.
| | ----------------------------------------------------------------------------------------------

| | 1.1.32.        Existing
Pledge means a Bond (Floating Charge) issued by the           Company in favor
of Bank HaPoalim BM on July 24, 2005, granting Bank HaPoalim BM           an
unsubordinated floating charge over all of the Companys assets and
          properties.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.33.        Governmental
Authority means any governmental, municipal           (including, local and/or
district planning and construction committee) or other           public agency,
authority, department, commission, board, bureau, Court or           instrumentality of
any jurisdiction, and any subdivision or agency thereof,           having governmental,
quasi-governmental or administrative jurisdiction or           powers.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.34.        Impositions means
any real property Taxes, general and           special assessments, water and sewer
charges, license fees and other similar           fees and charges assessed or imposed by
any municipal authority upon any real           property or in connection with the title,
lease, occupancy or use thereof.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.35.        Indemnity
Bank Guarantee means an autonomous bank guarantee           to be issued by
Bank HaPoalim BM and/or Bank Leumi LeIsrael Ltd., in           favor of the
Escrow Agent, substantially in the form attached hereto as Exhibit B, in the
amount of two million US dollars (US$2,000,000).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

3

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| | 1.1.36.        Indemnity
Escrow Agreement means an escrow agreement to be           entered into by and
between the parties and Escrow Agent, in the form attached           hereto as Exhibit
A-2, in connection with the holding and release of the           Indemnity Bank
Guarantee.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.37.        Independent
Auditor means an accountant who shall be           designated by the parties
out of the Big 4" accounting firms,           excluding, however, Ernst & Young
and/or PriceWaterhouseCoopers. If the           parties are unable to agree on the
identity of such a designated accountant           within twenty one (21) days of the
date hereof, then the parties shall request           from the president of the
Institution of Certified Public Accountants in Israel           to designate such an
accountant in accordance with the above principles of           designation; such request
shall be submitted at least thirty (30) days prior to           the intended Closing
Date. If the Independent Auditor designated pursuant to           this provision above is
unwilling or unable to serve as an Independent Auditor,           then the parties shall
request that the president of the Institution of           Certified Public Accountants
in Israel designate a substitute Independent           Auditor, in accordance with the
above principles of designation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.38.        knowledge (including
any derivation thereof, such as           know or knowing) means,
with respect to any individual,           that such individual is actually aware of such
fact or other matter.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.39.        Law means
any law, statute, code, written policy, licensing           requirements, ordinances,
rules and regulations of any Governmental Authority.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.40.        Leased
Real Property means any leasehold or sub-leasehold           estate and other
rights to use or occupy any land, buildings, structures,           improvements, fixtures
or other interest in real property held by the Company in           relation to the
Business, as set forth in Schedule 1.1.40.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.41.        Liabilities means
any debt, obligation, duty or liability of           any nature regardless of whether
such debt, obligation, duty or liability would           be required to be disclosed on a
balance sheet prepared in accordance with any           generally accepted accounting
principles, and regardless of whether such debt,           obligation, duty or liability
is immediately due and payable.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.42.        Licensed
Software means any and all Software that is licensed           to the Company
and required for the conduct the Business.
| | --------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.43.        Lien means
any encumbrance, mortgage, hypothecation, pledge,           lien, Claim, option, proxy,
right of first refusal, charge, security interest,           conditional sale agreement,
activity or use limitation, conservation easement,           servitude, deed restriction,
equitable interest, or exception to title, or any           other third party right or
interest in any asset, property or right; excluding, however, any such
third party rights or interests           disclosed to Purchaser, and which are created
by, arising out of, or           specifically contemplated by any of the Acquired Assets
or the Assumed           Liabilities, provided such third party rights or
interests are not           imposed as a result of any breach or violation occurring
prior to the Closing           Date.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.44.        Losses means
losses, damages, Liabilities, Actions,           sanctions, deficiencies, assessments,
judgments, costs, interest, penalties and           expenses (including, without
limitation, reasonable attorneys fees).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

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| | 1.1.45.        Material
Adverse Effect means, with respect to the Business,           any material
adverse effect on or change in the legal, financial, business or           operational
condition of any of the Acquired Assets, that is material to the           assets,
liabilities, operations or results of operations of the Business (other           than
changes or circumstances affecting general market conditions or which are
          generally applicable to the industry in which the Company engages).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.46.        Material
Contracts shall mean Contracts or transactions that           are material to,
or may materially affect, the assets, liabilities, operations           or results of
operations of the Business, or the benefits to be assigned to           Purchaser
pursuant to this Agreement, including, without limitation, Contracts           for the
grant of indefeasible rights of use in the System, or involving an           investment
by the Company in relation to the Business in excess of twenty five           thousand US
dollars (US$25,000) per each such Contract, or a monthly aggregate           of one
hundred thousand US dollars (US$100,000).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.47.        Order means
any judgment, order, writ, injunction, ruling,           verdict, decision or decree of,
or any settlement under the jurisdiction of any           Court or Governmental
Authority.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.48.        Organizational
Documents means, with respect to any           corporation incorporated under
the Laws of the State of Israel, the memorandum           of incorporation, if any, of
such corporation, and the articles of association           of such corporation,
including all restatements thereof and amendments thereto,           and, with respect to
any other entity, the equivalent organizational or           governing documents of such
entity.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.49.        Person means
an individual, corporation, partnership,           association, trust, unincorporated
organization, limited liability company or           other legal entity.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.50.        Purchase
Price shall have the meaning set out in Section           3.1.
| | ----------------------------------------------------------------------------------------

| | 1.1.51.        Real
Property Transfer Agreement means the agreement entered           into by and
between the Company and Purchaser of even date herewith, pursuant to           which the
Company shall sell, transfer and convey to Purchaser the Transferred           Real
Property.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.52.        Repair
Plan means a plan for the current repair of certain           parts of the
System, as more particularly described in Schedule           1.1.52.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.53.        Revenues
Table shall have the meaning set out in Section           5.11
| | ----------------------------------------------------------------------------------------

| | 1.1.54.        Retained
Claims means all Claims of the Company relating to           disputes to which
the Company is a party or which are threatened by or against           the Company,
including, without limitation, all pending, anticipated or future           litigation
arising out of, and all rights and interest of the Company in, all           such Claims,
other than the Assigned Claims. The Retained Claims include,           without
limitation, all Claims of the Company relating to the disputes described           in Schedule
1.1.54
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.55.        Software means
computer programs, known by any name,           including all versions thereof, and all
other material related to any such           computer programs.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.56.                     System shall
have the meaning set out in Section           2.1(a).
| | ------------------------------------------------------------------------------------------------

5

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| | 1.1.57.        Tangible
Property shall have the meaning set out in Section           2.1(b).
| | ----------------------------------------------------------------------------------------------

| | 1.1.58.        Tax
Returns shall have the meaning set out in Section           7.7.1.
| | ---------------------------------------------------------------------------------------

| | 1.1.59.        Taxes means
any state, local, foreign and other taxes,           assessments, or other governmental
charges, including, without limitation,           income, estimated income, business,
occupation, franchise, property, sales, use,           employment or withholding taxes,
including interest, penalties and additions in           connection therewith.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.60.        Telecom
Customer means a client or customer of the Business           designated in
Section 5.10 of the Company Disclosure Schedule as a Telecom Customer.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.61.        Transaction
Documents means the documents, instruments and           certificates
contemplated by this Agreement or to be executed in connection with           the consummation
of the transactions contemplated by this Agreement (each,           a Transaction
Document).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.62.        Transferred
Real Property means the long term leasehold           interest (zchut
hachira ledorot) in the base floor of           the building situated in
Kiryat Nordau Industrial Zone, Netanya, which is the           subject matter of the Real
Property Transfer Agreement and is more particularly           described therein.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.63.        Utility
Charges means, with respect to any real property,           charges for
electricity, power, gas, oil, water, telephone, sanitary sewer           service and all
other utilities used in or on such real property, excluding,           however, any
Impositions.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.1.64.        Withheld
Amounts shall have the meaning set out in Section           3.3.3(a).
| | -----------------------------------------------------------------------------------------------

1.2.        Interpretation.
The schedules and exhibits attached hereto are an           integral part of this
Agreement. All schedules and exhibits attached to this           Agreement are
incorporated herein by this reference and all references herein or           therein to
this Agreement shall mean this Agreement together           with all
such schedules and exhibits. Except as may be otherwise specifically           indicated,
when a reference is made in this Agreement to Sections, Schedules, or           Exhibits,
such reference shall be to a Section, schedule or exhibit to this           Agreement
unless otherwise indicated. The words include,          includes and
including when used herein shall be deemed           in each case to be
followed by the words without limitation. The           word herein and
similar references mean, except where a specific           Section or Article reference
is expressly indicated, the entire Agreement rather           than any specific Section.
The words disclosed to Purchaser refer to           any disclosure made
within this Agreement or to any disclosure made in writing           in the process of
the due diligence investigations carried out by Purchaser with           respect to the
transactions contemplated hereby. The headings contained in this           Agreement are
for reference purposes only and shall not affect in any way the           meaning or
interpretation of this Agreement. As used herein, all pronouns shall           include
the masculine, feminine, neuter, singular and plural thereof whenever           the
context and facts require such construction.

6

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|2. | PURCHASE
AND SALE OF ASSETS.
|-- | ----------------------------

2.1        Purchase
and Sale of Acquired Assets. Upon the terms and subject to the conditions set forth
in this Agreement, at the Closing, the Company shall sell, transfer, convey, assign and
deliver to Purchaser, free and clear of all Liens, all right, title and interest in and
to all of the Acquired Assets.

As
used in this Agreement, the term Acquired Assets means any and all of
the business, assets, properties, goodwill and rights of the Company, of any kind and
nature whatsoever, whether tangible and intangible, owned, used or held for use by the
Company in relation to any and all of the Business as conducted at the Closing Date,
including, without limitation, the following, but excluding, however, the Excluded Assets:

| | (a)        A
fiber-optic cable infrastructure comprising of a network of approximately 900
          kilometers of submerged and terrestrial transmission fiber, the location of
          which is specified on the map attached hereto as Schedule 2.1(a)          (the
System).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        All
working equipment, inventory and other tangible property of the Company
          required for the operation and activation of the System and the performance of
          services relating to the Business, as listed in Schedule 2.1(b),
          and all additional Tangible Property as may be owned, used or held for use by
          the Company between the date hereof and the Closing Date (together, the
          Tangible Property). Schedule 2.1(b) shall be updated
          on the Closing Date, accordingly;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        All
data and records relating to the Business, including, to the extent           available,
client and customer lists and records, installed base information,           referral
sources, research and development reports and records, production           reports and
records, test reports, quality and process documentation, service           and warranty
records, equipment, logs, operating guides and manuals, financial           and
accounting records, copies of all personnel records, creative materials,
          advertising materials, promotional materials, studies, reports, correspondence
          and other similar documents relating to the Business (together,           Business
Data and Records), provided, that where any           Business Data and
Records do not relate exclusively to the Business, then (i)           the Company shall
retain the original copies of any such Business Data and           Records relating
primarily to the Excluded Assets, in which case Purchaser shall           be delivered a
copy of such Business Data and Records, without transfer of           rights in and to
the information contained therein; and (ii) the Company may           retain for its own
use copies of any such Business Data and Records relating           primarily to the
Business and relating also to the Excluded Assets;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        All
rights, title, interests and benefits of the Company under all Contracts to
          which the Company is a party, and which are required for or related to the
          operation and activation of the System and the performance of services relating
          to the Business, as listed in Schedule 2.1(d), and under any and
          all such additional Contracts to which the Company may enter into in relation
to           the Business between the date hereof and the Closing Date, subject to
Section           7.1 (together, the Assigned Contracts), in each case
          to the extent such rights, title, interests or benefits are attributable to the
          period from and after the Closing Date;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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| | (e)        All
rights of the Company under the Dual Contracts, to the extent such rights           are
required for or related to the operation and activation of the System and           the
performance of services relating to the Business, and to the extent such           rights
are attributable to the period from and after the Closing Date;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)        All
Approvals held by the Company, which are required for the operation and
          activation of the System and the performance of services relating to the
          Business (the Assigned Approvals), as listed in Schedule
          2.1(f);
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        All
accounts receivable of the Company, and all other rights to receive payment,
          however evidenced, whether by notes, instruments, chattel paper or otherwise,
in           each case to the extent attributable to the conduct of the Business from and
          after the Closing Date. In addition, accounts receivable of the Company
[*] regardless
          of the period to which such accounts receivable are attributed;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        All
cash amounts the Company has received from any clients or customers of the
          Business, from and after September 5th, 2005, and all cash amounts which the
          Company shall receive from any client or customer of the Business, from and
          after the date hereof, in each case to the extent attributable to the conduct
of           the Business from and after the Closing Date (including for the sake of clarity, any amounts the Company may have received on account of [*]);
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)        All
Claims which the Company has or may have against third parties in connection
          with the Business, as described in Schedule 2.1(i), and all
          Claims of the Company against third parties (other than the Retained Claims)
          which shall arise from or relate to the Business between the date hereof and
the           Closing Date and which Purchaser shall decide, at its sole discretion, to
          assume, provided Purchaser shall so notify the Company, in writing, at
          least two (2) Business Days prior to the Closing Date (the Assigned
          Claims);
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (j)        All
rights, benefits or interests of the Company to insurance claims, refunds           and
proceeds under any insurance policies of the Company, to the extent relating           to
the Business, except for such rights to insurance claims and proceeds: (i)
          relating to actual expenses incurred by the Company prior to the Closing Date,
          (ii) relating to expenses incurred or payable by the Company in connection with
          the Repair Plan, or (iii) to which the Company is entitled in connection with
          any of the Excluded Assets;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k)        All
rights of the Company under non-disclosure or confidentiality, non-compete,           or
non-solicitation agreements with employees and agents of the Company or with
          third parties, in each case to the extent relating to the Business (or any
          portion thereof); and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l)        All
rights of the Company under or pursuant to all warranties, representations           and
guarantees made by suppliers, manufacturers and contractors to the extent
          relating to the Acquired Assets or any part thereof.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

8

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2.2        Excluded
Assets. Notwithstanding anything to the contrary in Section 2.1, the
following assets and properties are to be retained by the Company and shall not
constitute Acquired Assets (collectively, the Excluded Assets):

| | (a)        All
of the business, assets, properties, goodwill and rights of the Company of
          every kind and nature, tangible and intangible (i) other than the Acquired
          Assets, or (ii) to the extent relating to any business or operations of the
          Company other than the Business, including, without limitation, the data
center,           hosting, collocation and DRP business and operations of the Company,
and any           rights and obligations pertaining thereto;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        All
rights of the Company under any Contract other than the Assigned Contracts,           and
all rights of the Company under any Assigned Contract to the extent
          attributable to the period prior to the Closing Date;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        All
rights of the Company under the Dual Contracts, other than to the extent
          required for or related to the operation and activation of the System and the
          performance of services relating to the Business, or which are attributable to
          the period prior to the Closing Date;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        The
Approvals set forth in Schedule 2.2(d).
| | ------------------------------------------------------

| | (e)        All
ownership, leasehold or other interest of the Company in any real property,           or
in any improvements, fixtures and other appurtenances thereto, other than the
          Leased Real Property;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)        All
accounts receivable of the Company, and all other rights to receive payment,
          however evidenced, whether by notes, instruments, chattel paper or otherwise,
to           the extent attributable to the conduct of the Business prior to the Closing
          Date, excluding however accounts receivable of the Company [*] regardless
          of the period to which such accounts receivable are attributed.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        Subject
to Section 2.1(i), all cash or cash equivalents of the Company;
| | ----------------------------------------------------------------------------------

| | (h)        All
Retained Claims including, without limitation, [*]. For the
          avoidance of any doubt, any right, obligation, liability or cause of action
with           respect to the disputes with such Persons shall be retained by and
ascribed only           to the Company, and the Purchaser shall not be assigned any right
or claim, and           shall not assume any obligation or liability, toward such Persons
in connection           with such disputes;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)        All
insurance policies of the Company, and all rights to insurance claims,           proceeds
and benefits relating to actual expenses incurred by the Company in           connection
with the Business prior to the Closing Date, or to which the Company           is
entitled in connection with any of the Excluded Assets;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

9

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| | (j)        All
trade names, trademarks, service marks, symbols, logos, copyrights and other
          proprietary materials or trade rights, whether or not used by the Company in
the           conduct of the Business, and all registrations, applications and Approvals
          relating to any of the foregoing;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k)        All
rights and interests of the Company in, to and in respect of the Excluded
          Liabilities; and
| | -------------------------------------------------------------------------------------------------------------------

| | (l)        All
rights, title and interest of the Company in, to and under this Agreement           and
any of the Transaction Documents.
| | ----------------------------------------------------------------------------------------------------------------------------------------

2.3        Assignment
of Assigned Contracts.

| | 2.3.1.        Notwithstanding
anything in this Agreement to the contrary, this Agreement shall           not constitute
an agreement to assign or otherwise transfer any Assigned           Contract or Assigned
Approval if an attempted assignment or transfer thereof,           without the consent of
a third party to such assignment or transfer, would           constitute a breach
thereof, would be ineffective, or would adversely affect the           rights of
Purchaser hereunder or thereunder.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.3.2.        Prior
to the Closing Date, and without limiting the generality of Section           7.2.4
the Company shall use its best reasonable efforts to consummate           the irrevocable
assignment to Purchaser of any and all of the rights and           obligations of the
Company under the Assigned Contracts, pursuant to the           provisions of this
Agreement. Without limiting the generality of the above,           prior to the Closing
Date the Company shall use its best reasonable efforts to           obtain the express
written consent of each client or customer of the Business,           whereby such client
or customer expressly acknowledges and agrees to the           irrevocable assignment to
Purchaser of any and all of the rights and obligations           of the Company under
such clients or customers Customer Contract,           pursuant to the
provisions of this Agreement. The parties agree that such           irrevocable consent
may be subject to reasonable conditions imposed by said           customers or clients.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.3.3.        In
the event that, at or prior to the Closing Date, the Company is unable to
          obtain the express written consent of any Business Customer to the irrevocable
          assignment to Purchaser of any and all of the rights and obligations of the
          Company under such Business Customers Customer Contract, pursuant to the
          provisions of this Agreement, then such Customer Contract shall not be assigned
          to Purchaser but shall be retained by the Company (each such Customer Contract,
          a Retained Business Customer Contract) [*].
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

10

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| | 2.3.4.        In
the event that, at or prior to the Closing Date, the Company is unable to
          obtain the express written consent of any Telecom Customer to the irrevocable
          assignment to Purchaser of any and all of the rights and obligations of the
          Company under such Telecom Customers Customer Contract, pursuant to the
          provisions of this Agreement, then such Telecom Customers Customer
          Contract shall not be assigned to Purchaser but shall be retained by the
Company           and shall be held by the Company, from and after the Closing Date and
until the           irrevocable assignment thereof to Purchaser, in trust for Purchaser
until the           assignment thereof to Purchaser (each such Customer Contract, a
          Retained Telecom Customer Contract). Upon the Closing,
          Purchaser shall assume, and agree to perform and discharge, in the
          Companys name, all Liabilities that would have been assumed by Purchaser
          hereunder with respect to any Retained Telecom Customer Contract, and the
          Company shall provide Purchaser with all rights and benefits that would have
          been assigned to Purchaser hereunder with respect to such Retained Telecom
          Customer Contract, had such Retained Telecom Customer Contract been assigned.
To           the extent practicable, the parties shall endeavor that all proceeds payable
          under any Retained Telecom Customer Contracts shall be paid directly to
          Purchaser. In addition, the Company shall take or cause to be taken, at
          Purchasers expense, such actions in its own name or otherwise as
Purchaser           may reasonably request, so as to enforce the rights and benefits of
any Retained           Telecom Customer Contracts and to effect collection of money or
other           consideration that becomes due and payable thereunder, for the benefit of
          Purchaser, and the Company shall promptly pay over to Purchaser all such money
          or other consideration received by it in respect of such Retained Telecom
          Customer Contracts.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.4.        Separation
of Dual Contracts.

| | 2.4.1.        Notwithstanding
anything in this Section 2.4 to the contrary, this           Section 2.4
shall not constitute an agreement to assign or otherwise           transfer any Dual
Contract if an attempted assignment or transfer thereof,           without the consent of
a third party to such assignment or transfer, would           constitute a breach
thereof, would be ineffective, or would adversely affect the           rights of
Purchaser hereunder or thereunder.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.4.2.        Prior
to the Closing Date, the Company shall use its best reasonable efforts to
          obtain the consent of its Dual Customers to the irrevocable assignment to
          Purchaser of any and all rights and obligations of the Company under such Dual
          Customers Dual Contracts, to the extent required for or related to the
          operation and activation of the System and the performance of services relating
          to the Business, and to the extent such rights are attributable to the period
          from and after the Closing Date. The parties agree that such irrevocable
          consents may be subject to reasonable conditions imposed by said Dual
Customers.           Such assignment shall be intended at separating the Dual Contracts
into two           legally independent contracts, one relating to the Acquired Assets as
set forth           in Section 2.1(e) (which shall be assigned to the Purchaser)
and one           relating to the Excluded Assets as set forth in Section 2.2(c)
(which           shall be retained by the Company). Where a Dual Contract does not
specify the           consideration payable for service provided thereunder in relation
to the           Business, the instrument of assignment shall specify such consideration,
which           the parties intend to be based on the amounts specified in the Revenues
Table,           subject at all times to Section 3.3.3.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.4.3.        In
the event that, at or prior to the Closing Date, the Company is unable to
          separate and assign any Dual Contract pursuant to the provisions of Section
          2.4.2 above, then no rights or obligations shall be assigned under such
          Dual Contract, and such Dual Contract shall be deemed a Retained Telecom
          Customer Contract (where the Dual Contract Customer is a telecom operator), or,
          as the case may be, a Retained Business Customer Contract (in all other cases).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.4.4.        In
the event that a Dual Customer agrees to the assignment of such Dual           Customers
Dual Contract, pursuant to the provisions of Section           2.4.2 above, but
does not agree to separate such Dual Contract into two           legally independent
contracts, then the Company and Purchaser will each provide           their respective
services and will indemnify each other for any damages,           expenses, or harm
caused or incurred to the other party as a result of a breach           of the Dual
Contract, for which such party is responsible, provided that           neither
party shall assume any liabilities for compensation that do not result           from its
own failure to provide its respective services.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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2.5.        Assumption
of Liabilities. Upon the terms and subject to the conditions           set forth in
this Agreement, at the Closing, Purchaser shall assume, and from           and after the
Closing, Purchaser shall pay, discharge when due, and perform, all           of the
following Liabilities of the Company and only such Liabilities           (collectively,
the Assumed Liabilities):

| | (a)        All
of the Companys Liabilities under the Assigned Contracts and the           Assigned
Approvals, to the extent attributable to the conduct of the Business           from and
after the Closing Date;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        All
accounts payable incurred in the ordinary course of the Business, to the           extent
attributable to the conduct of the Business from and after the Closing           Date;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        All
Liabilities of the Company relating to investments made by the Company in
          respect of the System or any Tangible Property, as listed in Schedule
          2.5(c), and all Liabilities of the Company relating to any
          additional investments which the Company shall make between the date hereof and
          the Closing Date in respect of the System or any Tangible Property, provided that
Purchaser has given its prior written consent to such           additional investments
(together, Approved Investments). For           the removal of doubt,
as used in this Section 2.5(c), the term           Liabilities shall
include accounts payable incurred by the           Company in connection with any
Approved Investments, regardless of the due date           of payment thereof; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        The
Liabilities set forth in Schedule 2.5(d); and
| | ------------------------------------------------------------

| | (e)        All
other Liabilities attributable to the conduct of the Business from and after
          the Closing Date, to the extent created by, arising out of, or specifically
          contemplated by any of the Acquired Assets provided however, such
          Liabilities have been disclosed to Purchaser.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.6.        Excluded
Liabilities. Notwithstanding any provision of this Agreement to           the
contrary, except for the Assumed Liabilities, Purchaser shall not be deemed           to
assume, nor shall it assume or be obligated to pay, discharge, indemnify or
          perform, any other Liability of the Company, including, without limitation, the
          following Liabilities (collectively, the Excluded           Liabilities),
all of which shall remain the sole responsibility of the           Company, and shall be
retained, paid, performed and discharged by the Company:

(a)       
          All Liabilities of the Company attributable to the conduct of the Business prior
          to the Closing Date;

(b)       
          All Liabilities of the Company arising under any Contract of the Company other
          than the Assigned Contracts, or arising under any Assigned Contract terminated
          or effectively terminated as of the Closing Date, or arising under or relating
          to any breach or violation by the Company of any Assigned Contract occurring
          prior to the Closing Date;

(c)       
          All Liabilities of the Company in respect of the Excluded Assets;

12

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(d)       
          All Liabilities of the Company for salaries, wages, vacation pay or other rights
          and benefits due or accrued by any present or former employee and/or
          subcontractor of the Company, including, as more particularly set forth in
          Section 7.7.2;

(e)       
          All Liabilities of the Company arising out of or resulting from the
          Companys non-compliance with any Law or Order of, or Approval granted by,
          any Governmental Entity;

(f)       
          All Liabilities of the Company resulting from any act or omission of the Company
          occurring from and after the Closing Date;

(g)       
          All Liabilities of the Company for Taxes payable in connection with the
          Companys conduct of the Business prior to the Closing Date; and

(h)       
          All Claims of the Company alleging infringement, of patents, trademarks or trade
          names held by others and any Losses based upon or arising out of such Claims;
          and

(i)       
          All Liabilities of the Company under this Agreement and any of the Transaction
          Documents.

The
Company shall timely perform, satisfy and discharge all Excluded Liabilities, whether
known at the Closing or determined anytime thereafter and, upon the terms and subject to
the conditions set forth in Sections 9.4.1 and 9.5, shall indemnify and
hold the Purchaser harmless therefor.

|3. | PURCHASE
PRICE, VAT, ADJUSTMENTS, APPORTIONMENTS.
|-- | -------------------------------------------------

3.1.        Purchase
Price. The entire purchase price (the Purchase           Price)
payable by Purchaser to the Company in consideration for the           Acquired Assets
and the transactions contemplated hereby shall be US$14,800,000           (fourteen
million eight hundred thousand US dollars), subject to any requisite           adjustment
pursuant to Section 3.3.

3.2.        Value
Added Taxes. The Purchase Price does not include any value added           taxes
applicable to the acquisition of the Acquired Assets. Value added taxes,           to the
extent applicable, shall be added to all payments hereunder and paid by
          Purchaser to the Company, against receipt of a duly issued invoice.

3.3.        Purchase
Price Adjustments.

| | 3.3.1.        Adjustment
for Approved Investments. The amounts set forth in Section           3.1
shall be increased, at the Closing, by an amount equal to the           aggregate cash
payments that the Company has made between September           5th, 2005 and
the date hereof, or that the Company shall make between           the date hereof and the
Closing Date, in connection with any Approved           Investment, provided, however,
such cash payments are consistent with the           payments that were consented to by
the Purchaser for any Approved Investment and           further providedthat the
cash payments made by the Company are evidenced           by a certificate which shall be
executed by an officer of the Company and           delivered to Purchaser at least four
(4) Business Days prior to the Closing           Date, setting forth in reasonable detail
a calculation of all such payments and           attaching copies of all receipts
thereof.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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| | 3.3.2.        Adjustment
for Certain Post Closing Attributions. The amounts set forth           in Section
3.1 shall be reduced, at the Closing, by an amount equal to           the
aggregate cash payments that (i) the Company has received from any client or
          customer of the Business, between September 5th, 2005 and the date
          hereof, to the extent attributable to the conduct of the Business from and
after           the Closing Date, as described in Section 5.11 of the Company
Disclosure           Schedule, and (ii) the Company may receive from any client or
customer of the           Business, between the date hereof and the Closing Date, to the
extent           attributable to the conduct of the Business from and after the Closing
Date, in           each case as evidenced by a certificate which shall be executed by an
officer of           the Company and delivered to Purchaser at least four (4) Business
Days prior to           the Closing Date, setting forth in reasonable detail a
calculation of all such           payments.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.3.3.        [*]
| | -----------------

| | (a)        [*]
| | --------------

| | (b)        [*]
| | --------------

| | (c)        [*]
| | --------------

| | (d)        [*]
| | --------------

| | (e)        As
promptly as practicable prior to the Closing Date, the parties shall discuss           in
good faith any adjustments necessary to be made under this Section           3.3.3,
and shall attempt to reach an agreement on the Withheld Amounts           and the
Deducted Amounts, if any. In the event the parties shall be unable to           reach
such an agreement, then the parties shall proceed to Closing subject to           the
deposit of any Withheld Amounts or Deducted Amounts in dispute (such           amounts,
as the case may be, Disputed Withheld Amounts or           Disputed
Deducted Amounts, and collectively,           Disputed Adjustments),
with the Escrow Agent, who shall hold           and release the same in accordance with
the Adjustment Escrow Agreement, until           such dispute is resolved as set forth
below.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

14

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| | (f)        In
the event of any Disputed Adjustments, either party may, by written notice to
          the other party and the Independent Auditor, delivered within thirty (30) days
          of the Closing Date, appoint the Independent Auditor to review and audit the
          Disputed Adjustments (and all related financial information as shall be deemed
          relevant by the Independent Auditor). The Independent Auditor shall be
          instructed to prepare a reasonably detailed statement determining the Withheld
          Amounts and the Deducted Amounts, if any (the Audited Adjustment
          Statement) pursuant to the instructions in this Agreement. The
Audited           Adjustment Statement shall be final and binding on the parties absent
manifest           error. The costs of the Independent Auditor shall be borne equally by
the           parties, unless either partys determination of the Withheld Amounts
and           the Deducted Amount, in the aggregate (as set forth in each partys
          position statement submitted to the Independent Auditor) deviated by more than
          20% from such amounts as stated in the Audited Adjustment Statement, in which
          case such party shall bear the costs of the Independent Auditor. For the
          purposes hereof, the Final Withheld Amount and the
          Final Deducted Amounts shall respectively equal either (i)
          the Withheld Amount and the Deducted Amounts, if any, as agreed by the parties
          prior to the Closing Date, (ii) the Withheld Amount and the Deducted Amounts,
if           any, as mutually agreed upon by the Company and Purchaser at any time after
the           Closing, or (iii) the Withheld Amount and the Deducted Amounts, if any, as
set           forth in the Audited Adjustment Statement, if the Independent Auditor is
          appointed and delivers a calculation of such amounts.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        (i)       
Upon the determination of the Final Withheld Amount, if any, then the Escrow
          Agent shall, pursuant to the Audited Adjustment Statement and in accordance
with           the Adjustment Escrow Mechanism, either release the Disputed Withheld
Amounts to           the Company or retain in the same as additional Withheld Amounts, to
be held and           released by the Escrow Agent in accordance with the Adjustment
Escrow Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        Upon
the determination of the Final Deducted Amount, if any, then the Escrow           Agent
shall, pursuant to the Audited Adjustment Statement and in accordance with           the
Adjustment Escrow Mechanism, release the Disputed Deducted Amounts either to
          the Company or to Purchaser.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        Notwithstanding
the aforesaid, neither the Minimum Commitment nor anything           else in this Section
3.3.3 shall diminish the Companys           obligation under this
Agreement to use its best reasonable efforts to           obtain the express written
consent to the irrevocable assignment of all           Customer Contracts and Dual
Contracts, pursuant to the provisions of this           Agreement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.4.        Apportionments.
Each party will cooperate with the other and will           prepare, execute and deliver
such instruments, and take such further action, as           may be required, or as may
be reasonably requested by the other party, in order           to give effect to the
parties agreement that all items of income and           expense attributable to
the Acquired Assets and the Assumed Liabilities shall be           apportioned between
them as of the Closing. Without limiting the generality of           the preceding
sentence, all current Taxes or payments attributable to the           Acquired Assets and
the Assumed Liabilities, including, without limitation, any           Impositions and
Utility Charges incurred in respect of the use or occupancy of           any Leased Real
Property, shall be apportioned as of the Closing Date, such that           the Company
shall be obligated for all such Taxes and other payments apportioned           in respect
of the period through and including the Closing Date, and Purchaser           shall be
obligated for all such Taxes and other payments apportioned in respect           of the
period following the Closing Date. In the case of any such current Taxes           and
other payments covering a payment period commencing before the Closing Date           and
ending thereafter, the party required to make such payments (the           Paying
Party) shall timely prepare and file any Tax Returns           and make all
payments required thereunder, and the other party will promptly           reimburse the
Paying Party upon receipt of evidence of payment to the extent any           payment made
by the Paying Party relates to that portion of the period for which           the other
party is obligated hereunder. For the sake of clarity, reimbursement           pursuant
to this Section is not subject to the terms and conditions of Section 9           and
shall not be limited or restricted by the provisions of Section 9.4.

15

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|4. | CLOSING.
|-- | --------

4.1.        Closing.
Upon the terms and subject to the conditions hereof (including           fulfillment or,
where permitted, the waiver of the conditions precedent set           forth in Section
8), the closing of the transactions contemplated by           this Agreement (the
Closing) will take place at 11:00 a.m.           (Israel Time) on the
third (3rd) Business Day following the date on           which all of the
conditions set forth in Section 8 have been satisfied           or waived, but in
any event not earlier than the 60th day following           the date hereof,
unless another time or date is agreed to in writing by the           parties (the Closing
Date). Notwithstanding the foregoing, if           the conditions precedent set
forth in Section 8 have not been fulfilled           on or before the Closing
Date, the Closing Date shall be automatically extended           for an additional thirty
(30) days provided that the conditions precedent in           Section 8 have been
fulfilled by such date. The Closing shall be held at           the offices of Gross,
Kleinhendler, Hodak, Halevy, Greenberg & Co., Law           Offices, located at One,
Azrieli Center (the Round Building), Tel-Aviv, unless           another place is agreed
to in writing by the parties. The consummation of the           transactions contemplated
by this Agreement shall be deemed to occur on the           Closing Date.

4.2.        Transactions
at Closing. At the Closing, all of the actions set forth in           this Section
4.2 below shall occur and shall be deemed to occur           simultaneously, such
that no action shall be deemed to have been completed or           any document delivered
until all such actions have been completed and all such           documents have been
delivered:

| | 4.2.1.        The
Company shall deliver or cause to be delivered to Purchaser:
| | ------------------------------------------------------------------------------

| | (a)        a
certificate (the Company Closing Certificate), executed by
          an officer thereof, certifying that, except as expressly set forth in the
          Company Closing Certificate, each of the conditions set forth in Section
          8.2(a), and in Sections 8.2(d) through 8.2(i), has been
          satisfied in all material respects;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        a
certificate, executed by an authorized representative of the Company,
          certifying as to the incumbency of the officers executing this Agreement and
any           Transaction Documents to which the Company is a party, on behalf of the
Company,           and further certifying that the execution, delivery and performance of
this           Agreement, the Transaction Documents to which the Company is a party, and
the           transactions contemplated hereby and thereby, and the acts of the officers
of           the Company in carrying out the terms and provisions hereof and thereof,
have           been authorized and approved by all corporate action required to be taken
on the           part of the Company;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        all
deeds and bills of sale, assignments, endorsements, certificates of title,
          consents and other good and sufficient instruments and documents of conveyance
          and transfer in a form reasonably satisfactory to Purchaser, duly executed by
          the Company, as necessary to vest in or confirm to Purchaser full and complete
          right, title and interest in and to all of the Acquired Assets, free and clear
          of any and all Liens, including, without limitation, any written consents of
          assignment of Customer Contracts executed by clients or customers of the
          Business;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

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| | (d)        copies
of all filings made by the Company with, all notification made by the           Company
to, and all Approvals obtained by the Company from any Governmental           Authority,
in connection with the authorization, execution and delivery of this           Agreement
and the Transaction Documents required to be executed by such party           hereunder
or thereunder;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)        copies
of all notifications made by the Company, and all consents or           acknowledgements
received by the Company from third parties, in respect of the           assignment,
transfer and conveyance to Purchaser of all right, title and           interest in and to
the Assigned Contracts pursuant to the provisions of this           Agreement;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)        copies
of the Employee Waivers of each Affected Employee who has accepted           Purchasers
offer of employment;
| | -------------------------------------------------------------------------------------------------------------------------------

| | (g)        a
notice issued by Bank HaPoalim BM, in form and substance fully satisfactory
          both to Bank HaPoalim BM and to Purchaser and its counsel, confirming the
          exclusion of the Existing Pledge in respect of the Acquired Assets and the
          Transferred Real Property, and the sale, transfer and conveyance thereof
          pursuant to the transactions contemplated by this Agreement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        a
certificate issued by the Companys insurers or insurance advisors,
          evidencing that the insurance coverage carried by the Company with respect to
          the Business or any of the Acquired Assets, as at the date hereof, is valid and
          enforceable as of the Closing Date, and specifying any claims made by the
          Company thereunder between the date hereof and the Closing Date.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.2.        The
Company shall deposit with the Escrow Agent the Indemnity Bank Guarantee,           which
shall serve to secure Claims by Purchaser for indemnification pursuant to
          Section 9.2 and Purchasers reimbursement for payment of the
          Companys real estate taxes pursuant to the Real Property Transfer
          Agreement. The Indemnity Bank Guarantee shall be held and released by the
Escrow           Agent in accordance with the terms of the Indemnity Escrow Agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.3.        Purchaser
shall deliver or cause to be delivered to the Company:
| | ------------------------------------------------------------------------------

| | (a)        a
certificate (the Purchaser Closing Certificate), executed           by
an officer thereof, certifying that, except as expressly set forth in the
          Purchaser Closing Certificate, each of the conditions set forth in Sections
          8.3(a) and 8.3(c) has been satisfied in all material respects;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        a
certificate, executed by an authorized representative of Purchaser, certifying
          as to the incumbency of the officers executing this Agreement and any
          Transaction Documents to which Purchaser is a party, on behalf of Purchaser,
and           further certifying that the execution, delivery and performance of this
          Agreement, the Transaction Documents to which Purchaser is a party, and the
          transactions contemplated hereby and thereby, and the acts of the officers of
          Purchaser in carrying out the terms and provisions hereof and thereof, have
been           authorized and approved by all corporate action required to be taken on
the part           of Purchaser.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

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| | (c)        a
duly executed, irrevocable notice of assumption in respect of the Assigned
          Contracts and Dual Contracts, substantially in the forms attached hereto as Exhibits
D1 and D2, as necessary to enable the Company to vest in or           confirm to
Purchaser full and complete right, title and interest in and to all           of the
Acquired Assets pursuant to the provisions of this Agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.4.        Purchaser
shall pay to the Company the Purchase Price, as adjusted pursuant to           Section
3.3. Such payment shall be made in immediately available funds
          transferred by wire transfer to the Companys bank account designated by
          the Company to Purchaser, in writing, at least three (3) Business Days prior to
          the Closing Date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.5.        The
parties shall duly execute, deliver and exchange, and shall procure the
          execution, delivery and exchange by the Escrow Agent, of the Adjustment Escrow
          Agreement and the Indemnity Escrow Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.6.        The
parties shall duly execute, deliver and exchange the Hosting Agreement, in           the
form attached hereto as Exhibit E.
| | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.7.        The
parties shall duly execute, deliver and exchange the Cooperation Agreement.
| | ---------------------------------------------------------------------------------------------

4.3.        Further
Assurances. From time to time after the Closing, at the request           of
Purchaser, the Company will execute and deliver such other instruments of           sale,
transfer, conveyance, assignment and confirmation, and will take such           further
action, as may be reasonably requested in order to more effectively           transfer,
convey and assign to Purchaser, and to confirm Purchasers           rights, title
and interest in and to, the Acquired Assets. Each of the parties           shall
diligently cooperate with the other, and shall execute such other           documents and
take such further action as may be reasonably required to carry           out the
provisions of this Agreement and the transactions contemplated hereby.

18

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|5. | REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
|-- | ----------------------------------------------

Except
as disclosed by the Company in the disclosure schedule attached hereto as Schedule
5 (the Company Disclosure Schedule) or as disclosed to
Purchaser, the Company hereby represents and warrants to Purchaser that the statements
contained in this Section 5 are complete and accurate as of the date of this
Agreement.

5.1.        Organization
and Qualification of the Company. The Company is a           corporation duly
organized and validly existing under the Laws of the State of           Israel. The
Company has all requisite power and authority to own, lease and           operate its
properties and to carry on its business as it is now being           conducted.

5.2.        Authorization;
Binding Obligation. Subject to the fulfillment of all of           the conditions
precedent contained in Section 8.1, the Company has all           necessary power
and authority to execute and deliver this Agreement, and each           Transaction
Document required to be executed and delivered by it pursuant to           this
Agreement, and to perform its obligations hereunder and thereunder and to
          consummate the transactions contemplated hereby and thereby. The execution and
          delivery by the Company of this Agreement and each Transaction Document
required           to be executed and delivered by it pursuant to this Agreement, the
performance           of its obligations hereunder and thereunder, and the consummation
by the Company           of the transactions contemplated hereby and thereby, have been
duly and validly           authorized by all required corporate action on the part of the
Company, and no           other corporate proceedings on the part of the Company are
necessary to           authorize this Agreement or any such Transaction Document or to
consummate the           transactions so contemplated herein and therein. This Agreement
has been, and           each of the Transaction Documents required to be executed and
delivered by it           pursuant to this Agreement, when executed and delivered by the
Company, will be,           duly and validly executed and delivered by the Company, and
this Agreement           constitutes, and each such Transaction Document, when executed
and delivered,           will constitute, a legal, valid and binding obligation of the
Company           enforceable against the Company in accordance with its terms.

5.3.        Consents
and Approvals. Subject to the fulfillment of all of the           conditions
precedent contained in Section 8.1 and in Section           8.3(b), the
execution and delivery by the Company of this Agreement, and           each Transaction
Document required to be executed and delivered by it pursuant           to this
Agreement, do not, and the performance of the foregoing shall not,           require the
Company to obtain any Approval of any Person or Governmental           Authority, or make
any filing with or notification to, any Governmental           Authority.

5.4.        No
Violation. The execution and delivery by the Company of this           Agreement, and
each Transaction Document required to be executed and delivered           by it pursuant
to this Agreement, do not, and the performance of this Agreement,           and each
Transaction Document required to be executed and delivered by it           pursuant to
this Agreement, will not, (a) conflict with or violate the           Organizational
Documents of the Company, (b) conflict with or violate any Law           applicable to
the Company or by which its properties are bound or affected, or           (c) subject to
the fulfillment of all of the conditions precedent contained in           Section 8.2(h),
result in any breach or violation of, or constitute a           default (or an event that
with notice or lapse of time or both would become a           default) under, any
Contract to which the Company is a party or by which the           Company is bound;
which conflict, violation, breach or default is likely to           affect the
transactions contemplated hereby or the Companys ability to           fulfill its
obligations under this Agreement or any Transaction Document           required to be
executed and delivered by the Company pursuant to this Agreement.

19

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5.5.        Title
to Acquired Assets. Except as set forth in the Companys           Disclosure
Schedule, the Company is the sole and exclusive legal and equitable           owner and
holder of all rights and interests in the Acquired Assets, including,           without
limitation, the proprietary, possession and usage rights therein and           thereto,
and the Company has good, clear, and marketable title to, all of the           Acquired
Assets, free and clear of all Liens.

5.6.        Assigned
Contracts. Except as set forth in the Company Disclosure           Schedule (i) to
the best of the Companys knowledge, other than the           Assigned Contracts,
there are no other Contracts required for or related to the           conduct the
Business, and (ii) all Assigned Contracts are valid, enforceable and           in full
force and effect.

5.7.        Tangible
Property. To the best of the Companys knowledge, the           Tangible
Property, as listed in Schedule 2.1(b), includes all of           the
Tangible Property required for or related to the operation and activation of
          the System and the performance of services relating to the Business, and there
          is no other Tangible Property required for the conduct the Business.

5.8.        Assigned
Approvals. Except as set forth in the Company Disclosure           Schedule, to the
best of the Companys knowledge, the Assigned Approvals           are all of the
Approvals required for the conduct of the Business. To the best           of the Companys
knowledge, except as set forth in the Company Disclosure           Schedule, (i) each of
the Assigned Approval is valid and in full force and           effect, (ii) the Company
has complied with all such Assigned Approvals to a           material extent, and (iii)
there is no event that has occurred or circumstances           that exist, that may
constitute or result in a violation of, or in the           revocation, withdrawal or
suspension or modification of, any such Assigned           Approvals. To the best of the
Companys knowledge, there is no Action           pending or threatened, that could
result in the termination, revocation,           limitation, suspension, restriction or
impairment of any Assigned Approval that           is required for the conduct the
Business, or the imposition of any fine, penalty           or other sanctions for
violation of any legal or regulatory requirements           relating to any such Assigned
Approval.

5.9.        Absence
of Certain Events. Except as set forth in the Company Disclosure           Schedule,
since September 5, 2005, the Company has conducted the Business in the           ordinary
and usual course and has used commercially reasonable efforts to           preserve
intact the business organization and properties of the Company, to keep
          available the services of the present officers, employees, consultants and
          independent contractors of the Company, and to preserve the present
          relationships of the Company with suppliers, customers, and other Persons with
          which the Company has business relations. Without derogating from the
generality           of the preceding sentence, since September 5, 2005:

| | 5.9.1.        the
Company has not authorized or consummated any merger, consolidation, sale or
          other disposition of any or all of the Acquired Assets, or any other
disposition           relating to and/or that may affect any of the Acquired Assets,
except in the           ordinary and usual course of business;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 5.9.2.        the
Company has not acted to collect any advance payments, or any accounts
          receivable, prior to their due date of payment, from any clients or customers
of           the Business;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.9.3.        except
as set forth in the Company Disclosure Schedule, the Company has not,           without
the prior written consent of Purchaser, entered into any Material           Contract in
relation to or which may affect the Acquired Assets; and
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.9.4.        there
has not been any other event or circumstance which has had or could           reasonably
be expected to have, a Material Adverse Effect on the Business.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.10.        Customer
Contracts.

| | 5.10.1.        The
Company Disclosure Schedule sets out a true and complete list of all clients           or
customers of the Business, together with all Customer Contracts between the
          Company and such clients or customers. The Company has delivered to Purchaser
          true and complete copies of all Customer Contracts, including any amendments or
          revisions thereto.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.10.2.        To
the Companys best knowledge, the Customer Contracts are in full force           and
effect, are valid and enforceable, and constitute the only Contracts between
          the Company and such clients or customers with respect to the sale, lease,
grant           of indefeasible right of use, or other rights (to use or otherwise), and
the           provision of related services, by the Company, in, to, or on the System.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.10.3.        The
Company has not received any notice from any client or customer of the
          Business, of the termination or threatened termination of any Customer
Contract,           or of any Claim with respect thereto, nor, to the knowledge of the
Company, is           there any basis therefor.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.11.        Accounts Receivable; Cash
Payments. The Company Disclosure Schedule accurately sets forth (i) the aggregated
payments actually received and accounts receivable arising from the Customer Contracts for
the period commencing on January 1, 2005 (the Revenues Table), and (ii)
a true and complete description and calculation of all payments the Company has received
from any clients or customers of the Business, between September 5th, 2005 and
the date hereof, and which are attributed to the conduct of the Business from and after
the Closing Date. The Company Disclosure Schedule shall be updated by the Company on the
Closing Date with respect to all payments the Company shall have received from any clients
or customers of the Business, from the date hereof until the Closing Date, and which are
attributed to the conduct of the Business from and after the Closing Date. All accounts
receivable set forth in the Company Disclosure Schedule represent valid obligations
arising from Customer Contracts. From and after September 5, 2005, no discount or
allowance from any receivable has been made or agreed to and no such accounts receivable
represents billing prior to actual sale of goods or provision of services.
 To the Companys best knowledge, no client or customer of the
          Business has refused or threatened to refuse to pay any outstanding or future
          obligations owed to the Company.

5.12.        Compliance
with Laws. To the best of the Companys knowledge, except           as set forth
in the Company Disclosure Schedule, the Company has not violated           any Law
applicable to the Business or any of the Acquired Assets, and has not           received
any notice to the effect that, or otherwise been advised that, it is           not in
compliance with any such Laws.

21

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5.13.        Legal
Proceedings. Except as set forth in the Company Disclosure           Schedule, there
is no Action pending or, to the best of the Companys           knowledge,
threatened by or against the Company, relating to, or which could           reasonably be
expected to affect, the Acquired Assets or the transactions           contemplated by
this Agreement and by any Transaction Document required to be           executed
hereunder.

5.14.        Employees.
Schedule 7.7.1 sets forth a list of all of the           employees of the
Company engaged in the conduct of the Business. The Company has           furnished
Purchaser with true and complete copies of all Contracts relating to           the
employment of such employees. Except as set forth in such Contracts, there           are
no other arrangements, understandings, or commitments for the payment of any
          pensions, allowances, lump sums or other benefits to any such employees,
whether           on retirement, death, termination, or otherwise. To the best of the
          Companys knowledge, there are no collective agreements or extension
orders           that apply to any employees of the Company, except for collective
agreements and           extension orders of common application to all employees in
Israel.

5.15.        Insurance.
The Company Disclosure Schedule lists, by type, carrier,           policy number, limits,
premium and expiration date, all insurance coverage           carried by the Company with
respect to the Business or any of the Acquired           Assets, together with a history
of all claims made by the Company thereunder           during the past three (3) years.
The Company Disclosure Schedule also states           whether each such policy is carried
on a claims made or           occurrence basis. Except as sets
out in the Company Disclosure           Schedule, all such insurance policies are owned
by and payable solely to the           Company and all premiums with respect thereto are
currently paid and will be           paid through the Closing Date. To the Companys
knowledge, all such           insurance policies are in full force and effect, and are
valid and enforceable.           The Company has not received notice of cancellation or
non-renewal of any such           policies and is not aware of any threatened or proposed
cancellation or           non-renewal of any such policies.

5.16.        Condition
of System and Tangible Property. The System and every           substantial tangible
asset forming part of the Acquired Assets are of good           quality. At the date of
this Agreement, the System is in proper and orderly           working and repair
condition, with the exception of: (i) normal wear and tear,           (ii) minor defects
which do not substantially interfere with the continuous use           thereof, and (iii)
such parts of the submerged portion of the System between Tel           Aviv and Ashkelon
which are being currently repaired, which repairs shall be           completed by the
Company and at Companys expense, in accordance with the           Repair Plan, by
February 28, 2006. The System is suitable and fit for immediate           and continuous
deployment in the provision of the services for which it was           designed.

5.17.        No
Brokers. The Company has not employed or engaged, either directly or
          indirectly, or incurred or will incur any Liability to, any broker, finder,
          investment banker or other agent in connection with the transactions
          contemplated by this Agreement.

5.18.        Intellectual
Property. The Company Disclosure Schedule sets out a           complete and accurate
list of all license agreements granting any right to use           the Licensed Software (License
Agreements), indicating, for           each License Agreement, the title, the
parties, date executed, the term, whether           or not it is exclusive, and the
Licensed Software covered thereby. To the           Companys knowledge, all License
Agreements are in full force and effect,           and are valid and enforceable. The
Company has not received notice of           cancellation or non-renewal of any such
License Agreements and is not aware of           any threatened or proposed cancellation
or non-renewal of any such policies.           Except as set forth in any License
Agreements, no royalties, honoraria or other           fees are payable to any third
parties for the use of or right to use any           Licensed Software.

22

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5.19.        Disclosure.
Neither this Agreement (including the exhibits and schedules           hereto) nor any
other Transaction Document required to be executed by the           Company hereunder,
contains or will contain any untrue statement of a material           fact or omits or
will omit to state a material fact necessary in order to make           the statements
contained herein or therein not misleading in light of the           circumstances under
which they were made or necessary to provide a prospective           purchaser of the
Company with all information material thereto.

|6. | REPRESENTATIONS
AND WARRANTIES OF PURCHASER.
|-- | --------------------------------------------

Except
as disclosed by Purchaser in the disclosure schedule attached hereto as Schedule
6 (the Purchaser Disclosure Schedule), Purchaser hereby
represents and warrants to the Company that the statements contained in this Section
6 are complete and accurate as of the date of this Agreement.

6.1.        Organization
and Qualification of Purchaser. Purchaser is a corporation           duly organized
and validly existing under the Laws of the State of Israel.           Purchaser has all
requisite power and authority to own, lease and operate its           properties and to
carry on its business as it is now being conducted.

6.2.        Authorization;
Binding Obligation. Subject to the fulfillment of all of           the conditions
precedent contained in Section 8.1, Purchaser has all           necessary power
and authority to execute and deliver this Agreement, and each           Transaction
Document required to be executed and delivered by it pursuant to           this
Agreement, and to perform its obligations hereunder and thereunder and to
          consummate the transactions contemplated hereby and thereby. The execution and
          delivery by Purchaser of this Agreement and each Transaction Document required
          to be executed and delivered by it pursuant to this Agreement, the performance
          of its obligations hereunder and thereunder, and the consummation by Purchaser
          of the transactions contemplated hereby and thereby, have been duly and validly
          authorized by all required corporate action on the part of Purchaser, and no
          other corporate proceedings on the part of Purchaser are necessary to authorize
          this Agreement or any such Transaction Document or to consummate the
          transactions so contemplated herein and therein. This Agreement has been, and
          each of the Transaction Documents required to be executed and delivered by
          Purchaser pursuant to this Agreement, when executed and delivered, will be,
duly           and validly executed and delivered by Purchaser, and this Agreement
constitutes,           and each such Transaction Document, when executed and delivered,
will           constitute, a legal, valid and binding obligation of Purchaser,
enforceable           against it in accordance with its terms.

6.3.        Consents
and Approvals. Subject to the fulfillment of all of the           conditions
precedent contained in Section 8.1 and in Section 8.2           (b), the
execution and delivery by Purchaser of this Agreement, and of each           Transaction
Document required to be executed and delivered by it pursuant to           this
Agreement, do not, and the performance of the foregoing shall not, require
          Purchaser to obtain the Approval of any Person or Governmental Authority, or
          make any filing with or notification to, any Governmental Authority.

23

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6.4.        No
Violation. To the best knowledge of Purchaser, except as set forth in           the
Purchaser Disclosure Schedule, the execution and delivery by Purchaser of           this
Agreement and of each Transaction Document required to be executed and
          delivered by it pursuant to this Agreement, do not, and the performance of this
          Agreement, and each Transaction Document required to be executed and delivered
          by it pursuant to this Agreement, will not, (a) conflict with or violate the
          Organizational Documents of Purchaser, (b) conflict with or violate any Law
          applicable to Purchaser, or by which its properties are bound or affected, or
          (c) result in any breach or violation of, or constitute a default (or an event
          that with notice or lapse of time or both would become a default) under, any
          Contract to which Purchaser is a party or by which it is bound; which conflict,
          violation, breach or default is likely to affect the transactions contemplated
          hereby or Purchasers ability to fulfill its obligations under this
          Agreement or any Transaction Document required to be executed and delivered by
          it pursuant to this Agreement.

6.5.        Legal
Proceedings. Except as set forth in the Purchaser Disclosure           Schedule,
there is no Action pending or, to the best of the Purchasers           knowledge,
threatened by or against Purchaser, relating to, or which could           reasonably be
expected to affect, the transactions contemplated by this           Agreement and by any
Transaction Document required to be executed hereunder.

6.6.        Financing
and Capital Resources. Purchaser has adequate cash to pay the           Purchase
Price as contemplated by this Agreement, together with all fees and           expenses of
Purchaser associated with the transactions contemplated hereby, and           to make any
other payments necessary to consummate the transactions contemplated           hereby.

6.7.        No
Brokers. Purchaser has not employed or engaged, either directly or
          indirectly, or incurred or will incur any Liability to, any broker, finder,
          investment banker or other agent in connection with the transactions
          contemplated by this Agreement.

6.8.        Disclosure
of Information; No Further Representations. Without prejudice           to the
representations and warranties contained in Section 5, Purchaser
          acknowledges and agrees that it has received, to its satisfaction, all
          information requested from the Company (except for certain information which
the           Company has stated not to be in possession of), and has had an opportunity
to           ask questions and receive answers from the Company regarding the information
          delivered to it, including but not limited to, the condition of the Business,
          the Acquired Assets and the Assumed Liabilities. Except for the representations
          and warranties expressly set forth in Section 5, the Company has not
          made any further representations or warranties with respect to any subject
          matter of this Agreement, and the Acquired Assets shall be sold, transferred
and           assigned to, and the Assumed Liabilities shall be assumed by, Purchaser,
without           any further representation, warranty or guarantee (including, without
          limitation, any implied representation, warranty or guarantee) on the part of
          the Company or any representatives thereof. Purchaser has examined the
Business,           the Acquired Assets and the Assumed Liabilities to its satisfaction,
and except           for the representations and warranties expressly included in Section
5,           is relying solely on its own discretion, judgment and investigations
with           respect to all such matters and the transactions contemplated herein.

24

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|7. | COVENANTS.
|-- | ----------

7.1.        Conduct
of Business by the Company Pending Closing. The Company covenants           and
agrees that, between the date hereof and the Closing Date, the Company shall
          conduct the Business in the ordinary and usual course and shall use
commercially           reasonable efforts to preserve intact the business organization
and assets of           the Company, to keep available the services of the present
officers, employees,           consultants and independent contractors of the Company
(except as otherwise           required pursuant to this Agreement), and to preserve the
present relationships           of the Company with suppliers, customers, and other
Persons with which the           Company has business relations. Without derogating from
the generality of the           preceding sentence, between the date hereof and the
Closing Date:

| | 7.1.1.        the
Company shall not authorize or consummate any merger, consolidation, sale or
          other disposition of any or all of the Acquired Assets or any other disposition
          relating to and/or that may affect any of the Acquired Asset, except in the
          ordinary and usual course of business;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1.2.        the
Company shall not act to collect any advance payments, or any accounts
          receivable, prior to their due date of payment, from any clients or customers
of           the Business;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1.3.        the
Company shall not, without the prior written consent of Purchaser, enter           into
any Material Contracts in relation to or which may affect the Acquired           Assets;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1.4.        the
Company shall not take any action that could reasonably be expected to           result
in the representations and warranties set forth in Section 5           becoming
untrue or inaccurate, that could result in a Material Adverse Effect on           the
Business, or that could materially impair the ability of the Company to
          consummate the transactions contemplated hereby in accordance with the terms
          hereof; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1.5.        the
Company shall use its best reasonable efforts to exercise the Approved
          Investments in a cost-effective manner and to minimize the amounts expended in
          relation to such Approved Investments without compromising the quality thereof
          including, where practically possible, by exchanging and/or sharing ducts
and/or           by otherwise cooperating with third party transmission providers.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.2.        Cooperation;
Approvals, Filings and Consents.

| | 7.2.1.        Upon
the terms and subject to the conditions set forth in this Agreement, each           party
shall use commercially reasonable efforts to take, or cause to be taken,           all
actions, and do, or cause to be done, and to assist and cooperate with the
          other party in doing, all things necessary, proper or advisable to consummate
          the transactions contemplated hereby and to satisfy or cause to be satisfied
all           of the conditions precedent that are set forth in Section 8, as
          applicable to each of them. Each party, at the reasonable request of the other
          party, shall execute and deliver such other instruments and do and perform such
          other acts and things as may be necessary or desirable for effecting completely
          the consummation of this Agreement and the transactions contemplated hereby.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 7.2.2.        Each
party shall, as promptly as practicable, use commercially reasonable           efforts to
obtain all necessary Approvals from Governmental Authorities and make           all other
necessary registrations and filings under applicable Law required to           be
obtained or made by it in connection with the authorization, execution and
          delivery of this Agreement and the Transaction Documents required to be
executed           by such party hereunder or thereunder, and the consummation of the
transactions           contemplated hereby and thereby, including, without limitation,
those set forth           in Schedule 7.2.2. The Company and Purchaser
shall act in good           faith and reasonably cooperate with each other in connection
therewith and in           connection with resolving any investigation or other inquiry
with respect           thereto. To the extent not prohibited by Law, each party to this
Agreement shall           use commercially reasonable efforts to furnish to each other
all information           required for any application or other filing to be made
pursuant to any Law in           connection with the transactions contemplated by this
Agreement. Each party           shall give the other party reasonable prior notice of any
communication with,           and any proposed understanding, undertaking, or agreement
with, any Governmental           Authority regarding any such Approval.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.2.3.        Notwithstanding
anything in this Agreement to the contrary, nothing contained in           this Agreement
(including under this Section  7.2 or under Section            8.1(a))
shall require any party, or any shareholder thereof, (i) to take           or agree to
take any action with respect to, or agree to any prohibition or           limitation on,
or other requirement which would prohibit, impair or otherwise           materially
adversely affect the ownership or operations of all or any portion of           the
business or properties of such party or any of its shareholders (including,
          without limitation, the Business).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.2.4.        The
parties shall use their commercially reasonable efforts to obtain all           Approvals
from third parties that are necessary for the consummation of the           transactions
contemplated by this Agreement (including, without limitation,           those Approvals
set forth in Schedule  7.2.4 and any Approval           required for the
assignment and transfer to Purchaser of any Assigned Contract,           other than an
Assigned Approval). To the extent permitted at Law, if any such           Approval has
not been obtained as of the Closing Date and Purchaser nevertheless           determines
to proceed with the Closing, the Company shall use commercially           reasonable
efforts to obtain such Approval after the Closing.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.3        Access
to Information. Prior to the Closing Date and subject to the execution of a
confidentiality agreement in form and substance satisfactory to the Company, the Company
shall afford to the officers, employees, accountants, counsel and other representatives
of Purchaser, upon reasonable notice, full access during normal working hours to all of
its properties, Contracts, Business Data and Records and other documents of the Company
that are pertaining to the transactions contemplated hereby, and shall cause its
officers, employees, accountants, counsel and other representatives to make themselves
available to the officers, employees, accountants, counsel and other representatives of
Purchaser for discussion of the transactions contemplated hereby. No information
disclosed pursuant to this Section  7.3 shall affect any representations,
warranties, covenants or agreements of the parties herein.

26

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7.4.        Public
Announcements. The parties hereto agree to keep confidential the           terms of
this Agreement and any Transaction Document required to be executed           hereby.
Subject to applicable Laws, all announcements to third parties           pertaining to
this Agreement or the transactions contemplated hereby will be           subject to
review and approval of both parties before public disclosure.           Notwithstanding
the preceding sentence, the parties understand that Purchaser is           a publicly
traded company and therefore, immediately following the date hereof           and the
Closing Date, Purchaser intends to publish a press release and/or a           mandatory
report to the relevant Governmental Authorities regarding the           execution of this
Agreement and the consummation of the transactions           contemplated hereby, as the
case may be. Purchaser shall procure that Purchaser           will coordinate the content
of any such press release or mandatory report with           the Company.

7.5.        No
Solicitation of Other Proposals. From the date hereof until the           earlier of
the Closing Date or the termination of this Agreement in accordance           with its
terms, the Company shall not, nor shall it permit any of its officers,
          directors, employees, representatives or agents (collectively, the
          Company Representatives), directly or indirectly, to (i)
          solicit, facilitate, initiate, entertain, encourage or take any action to
          solicit, facilitate, initiate, entertain or encourage, any inquiries or
          communications or the making of any proposal or offer that constitutes or may
          constitute an Acquisition Proposal, or (ii) participate or engage in any
          discussions or negotiations with, or provide any information to or take any
          other action with the intent to facilitate the efforts of, any Person
concerning           any possible Acquisition Proposal or any inquiry or communication
which might           reasonably be expected to result in an Acquisition Proposal. For
purposes of           this Agreement, the term Acquisition Proposal shall
mean any           inquiry, proposal or offer from any Person (other than Purchaser or
any of its           affiliated companies) relating to any merger, consolidation,
liquidation or           other direct or indirect business combination or reorganization,
involving the           sale, lease, exchange, or other disposition of any significant
portion of the           Business, or any other transaction, the consummation of which
could reasonably           be expected to impede, interfere with, prevent or materially
delay the           consummation of the transactions contemplated hereby or which would
reasonably           be expected to diminish significantly the benefits to Purchaser of
the           transactions contemplated hereby.

7.6.        Notice
of Certain Events; Updates to Disclosure Schedules.

| | 7.6.1.        Without
limiting the provisions of Section  8.2, between the date hereof           and the
Closing Date, the Company shall promptly notify Purchaser, in writing,           of: (i)
the discovery by the Company of any event, condition, fact or           circumstance that
occurred or existed on or prior to the date of this Agreement           and that caused
or constitutes a material inaccuracy in or a material breach of           any
representation or warranty made by the Company in this Agreement; (ii) any
          event, condition, fact or circumstance that occurs, arises or exists after the
          date of this Agreement and that would cause or constitute a material inaccuracy
          in or a material breach of any representation or warranty made by the Company
in           this Agreement, if (A) such representation or warranty had been made as of
the           time of the occurrence, existence or discovery of such event, condition,
fact or           circumstance or (B) such event, condition, fact or circumstance had
occurred,           arisen or existed on or prior to the date of this Agreement; and
(iii) any           material breach of any covenant or obligation of the Company. If any
event,           condition, fact or circumstance that is required to be disclosed
pursuant to           this Section  7.6.1 requires any change in the Company
Disclosure           Schedule, or if any such event, condition, fact or circumstance
would require           such a change assuming the Company Disclosure Schedule were dated
as of the date           of the occurrence, existence or discovery of such event,
condition, fact or           circumstance, then the Company shall promptly deliver to
Purchaser an update to           the Company Disclosure Schedule specifying such change;
provided that, no           such update shall be deemed to supplement or amend the
Company Disclosure           Schedule for the purpose of determining whether the
conditions set forth in           Section  8.2 have been satisfied.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 7.6.2.        Without
limiting the provisions of Sections  2.3.2 or  7.2, or,           with
respect to the Company, of Section  7.6.1, prior to the Closing           Date,
each party shall give the other prompt written notice of (i) any           notice or
other communication from any Person alleging that the consent of such           Person is
or may be required in connection with the consummation of the           transactions
contemplated by this Agreement, (ii) any notice or other           communication from any
Governmental Authority in connection with the           transactions contemplated by this
Agreement, (iii) any Action or threatened           Action relating to or involving
or otherwise affecting the transactions           contemplated by this Agreement, (iv) the
occurrence of a breach or default           or event that, with notice or lapse of time
or both, could become a breach or           default under this Agreement, and (v) any
change, event or circumstance           which is likely to delay or impede the ability of
the parties to consummate the           transactions contemplated by this Agreement or to
fulfill their respective           obligations set forth herein or that could reasonably
be expected to have a           Material Adverse Effect on the Business.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.7.        Employment
Matters.

| | 7.7.1.        Promptly
after the date hereof, Purchaser shall be entitled, at its sole           discretion, to
offer employment, effective as of the Closing, to each employee           of the Company
listed in Schedule  7.7.1, provided, that           Purchaser shall
have notified the Company, at least thirty five (35) days prior           to the Closing
Date, of the identity of those employees who have been offered           employment with
Purchaser and who have accepted such employment offers and provided, further,
that, each such employee shall have executed           and delivered to the Company and
Purchaser, prior to the Closing Date, an           Employee Waiver. Any such employee of
the Company accepting employment with           Purchaser offered pursuant to the
preceding sentence and executing an Employee           Waiver shall become an employee of
Purchaser from and after the Closing, and           shall be referred to as an Affected
Employee.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.7.2.        Between
the date hereof and the Closing Date, the Company shall terminate the           Affected
Employees employment agreements, and shall pay the Affected           Employees any
and all rights, payments, and benefits to which they are entitled           in connection
with their employment with the Company, the termination of such           employment, and
anything related to such employment or termination of employment           (whether by
Contract or applicable Law), including, without limitations, all           severance and
prior notice payments.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.7.3.        Upon
the terms and subject to the conditions of Sections  9.4.1 and            9.5,
the Company shall indemnify the Purchaser against any or all           liabilities,
costs, expenses, damages and actions arising out or in connection           with the
employment of the Affected Employees by the Company, prior to the           Closing Date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.8.        Tax
Matters.

| | 7.8.1.        To
the extent relevant to the Acquired Assets or the transactions contemplated
          hereby, each party shall (i) provide the other with such assistance as may
          reasonably be required in connection with the preparation of any filings,
          reports or returns to the Israel Tax Authority (Tax Returns)
          and the conduct of any audit or other examination by the Israel Tax Authority
or           in connection with judicial or administrative proceedings relating to any
          Liability for Taxes and (ii) retain for the period of time required at Law and
          provide the other with all records or other information that may be relevant to
          the preparation of any Tax Returns, or the conduct of any audit or examination,
          or other proceeding relating to Taxes.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 7.8.2.        Except
as expressly set forth in Sections  3.4 above, each party shall           bear its
own Taxes in connection with the transactions contemplated hereby; except that any
stamp duty payable, at law, jointly and severally by the           parties, in connection
with, as a result of, or as a consequence of this           Agreement, shall be borne and
paid by the parties in equal parts such that each           party shall be responsible to
pay 50% of such stamp duty.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.9.        Litigation
Cooperation. Purchaser acknowledges and agrees that the           Company shall be
entitled to control any Action that constitutes or relates to           any Retained
Claim; [*].  Purchaser shall
cooperate with the Company and its counsel in connection with           any such Action,
including, without limitation, by making available to the           Company or its
counsel, without any charge (except for reimbursement of           Purchasers own
out of pocket expenses incurred in connection with such           cooperation), all
relevant records, and by using its commercially reasonable           efforts to make
available the current and former employees, officers, directors,           agents and
representatives of Purchaser who are reasonably expected to be           helpful with
respect to such Action, whether for the purpose of preparing           judiciary
documents, affidavits, or expert testimony, for providing testimony,           or as may
otherwise be reasonably required by the Company or its counsel.

7.10.        Completion
of Repair Plan. The Company shall carry out the Repair Plan,           and shall
complete the repairs described therein by February 28, 2006. As soon           as
practicable following the completion of the works to be performed under the
          Repair Plan, the Company shall provide Purchaser with As Made plans
          reflecting the works so performed.

7.11.        Completion
of the Cooperation Agreement. Between the date hereof and the           Closing Date,
the parties shall negotiate in good faith the Cooperation           Agreement, which
shall address and include, inter alia, the following           material terms:

| | (i)        the
Company shall offer the Purchasers Business related services to
          prospective clients or customers of the Companys data center, hosting,
          collocation, DRP business and other services provided by the Company in
          connection with its hosting and backup facilities (collectively, the
          Hosting Services), and to current clients and customers of
          the Hosting Services who may seek proposals for additional Hosting Services.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

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| | (ii)        the
Purchaser shall offer the Hosting Services provided by the Company to
          prospective clients or customers of the Business, and to current clients and
          customers of the Business who may seek proposals for additional Business
related           services.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)        the
arrangements set out in (i) and (ii) above (together, the           Cooperation
Obligations) shall be carried out on a           non-exclusive basis.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)        the
mutual payments and commissions each party shall be entitled in           consideration
of its Cooperation Obligations, and the terms of payment thereof,           shall be
discussed and agreed upon in the Cooperation Agreement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)        the
initial term of the Cooperation Agreement shall be for five (5) years; provided that
both the Company and the Purchaser shall have the right to           terminate the
Cooperation Agreement prior the expiration of the said initial           term (or of any
extension thereof) in the event that the Company shall sell,           transfer,
outsource, or otherwise dispose of its Hosting Services related           business.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.12.        Continuity
of Insurance. Between the date hereof and the Closing Date,           the parties
shall cooperate in good faith to enable Purchaser to maintain, as           from the
Closing Date, by having issued a new insurance policy or by way of           inclusion
thereof in Purchasers then existing insurance coverage, such           insurance
coverage carried by the Company as at the date hereof with respect to           the
Business or any of the Acquired Assets.

|8. | CONDITIONS
PRECEDENT TO CLOSING.
|-- | --------------------------------

8.1.        Conditions
to Obligations of Each Party. The respective obligations of           each party to
consummate the transactions contemplated by this Agreement shall           be subject to
the satisfaction at or prior to the Closing Date, of the following           conditions:

| | (a)        Governmental
Approvals. All Approvals of, or declarations or filings,           with any
Governmental Authority necessary for the consummation of the           transactions
contemplated hereby, if any, shall have been obtained or made,           including,
without limitation, the Approvals described in Schedule            7.2.2,
providedthat such Approvals shall not include           conditions or limitations
that may materially adversely affect the activities of           Purchaser, the Company,
or the Business.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        No
Injunctions or Restraints; Illegality. No temporary restraining order,
          preliminary or permanent injunction, or other Order (whether temporary,
          preliminary or permanent) issued by any Court, or other legal restraint or
          prohibition shall be in effect, which prevents the consummation of the
          transactions contemplated hereby on the terms, and conferring upon Purchaser
all           of the rights and benefits, as contemplated herein, nor shall any Action
brought           by any Governmental Authority seeking any of the foregoing be pending,
and there           shall not be any Action taken, any Law enacted, or any breach of the
          representations and warranties contained in Section  5, which makes the
          consummation of such transactions on the terms, and conferring upon Purchaser
          all of the rights and benefits, as contemplated herein, illegal.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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8.2.        Additional
Conditions of Purchaser. The obligation of Purchaser to           consummate the
transactions contemplated by this Agreement shall be subject to           the
satisfaction at or prior to the Closing Date of the following additional
          conditions, unless waived in writing by Purchaser:

| | (a)        Representations
and Warranties. Each of the representations and           warranties set forth in
Section  5 shall have been true and correct in           all respects when made,
and each of such representations and warranties shall be           true and correct in
all material respects as of the Closing Date as though made           on and as of the
Closing Date, in each case except where the           untruthfulness or
incorrectness of such representations and warranties has not           had, is not
having, and is not reasonably expected to have a Material Adverse           Effect on the
Business (provided, that such exception shall not apply in           the event
that, as a result of such untruthfulness or incorrectness, Purchaser           shall be
in violation of any applicable Laws).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Obtainment
of Transmission License. Purchaser shall have obtained a           license from the
Ministry of Communications for the provision of transmission           services on terms
substantially similar to the Special License for Domestic           Provision of
Transmission Services currently held by the Company (the           Companys
MOC License), which license shall authorize           Purchaser to operate the
Business and to provide services using the Acquired           Assets, as provided by the
Company immediately prior to the Closing Date, on           terms not less favorable and
beneficial than those set forth in the           Companys MOC License.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        Obtainment
of Permit Pursuant to Chapter 6, Section 4(6) of The Communication           Law
(Telecommunications and Broadcasting), 1982.Purchaser shall have           obtained
a Permit from the Ministry of Communications Pursuant to Section 4(6)           of The
Communication Lawauthorizing the Purchaser to perform the           activities
specified under Chapter 6 of The Communication Law.This           Section  8.2(c)
shall only be condition to Closing if Purchaser applied           for such Permit
together with or within seven (7) days of its application for           the transmission
license described in Subsection (b) above and in reference           thereto.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        Assignment
of Assigned Contracts and Assigned Approvals. The Company           shall have made
all notifications, obtained all Approvals, and taken all other           actions
necessary under the terms of each Assigned Contract and Assigned           Approval, as
required to facilitate the due assignment and transfer thereof to           Purchaser as
of the Closing Date; provided, however, that the           failure to duly
assign and transfer any Customer Contract shall not be deemed a           failure to meet
the condition set forth in the preceding sentence but shall be           treated in
accordance with the provisions of Section  2.3 and Section            3.3.3.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)        Employment
Relationship with Affected Employees. The Company shall have           terminated its
employment relationship with each Affected Employee and shall           have performed or
complied with its obligations and covenants set forth in           Section  7.7.2.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)        Agreements
and Covenants. The Company shall have performed or complied           with in all
material respects each obligation, agreement and covenant to be           performed or
complied with by it under this Agreement at or prior to the Closing           Date, other
than as set forth in Section  7.7.2.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (g)        No
Material Adverse Effect. From and including the date hereof, there           shall
not have occurred any event which has had, is having, or would reasonably           be
expected to have a Material Adverse Effect on the Acquired Assets (it being
          agreed, however, that the refusal of any of the employees listed in Schedule
           7.7.1to accept employment with Purchaser shall not be deemed a
          Material Adverse Effect on the Business).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        Removal
or Exclusion of Existing Pledge. The Existing Pledge shall have           been
removed or excluded, to the satisfaction of Purchaser and its counsel, in
          respect of the Acquired Assets and the sale, transfer and conveyance thereof
          pursuant to the transactions contemplated by this Agreement.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)        Completion
of Repair Plan. Prior to the Closing Date, the Company shall           have completed
the works to be performed under the Repair Plan, and shall have           delivered to
Purchaser a report confirming the completion of such works.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.3.        Additional
Conditions of Company. The obligation of the Company to           consummate the
transactions contemplated by this Agreement shall be subject to           the
satisfaction at or prior to the Closing Date of the following additional
          conditions, unless waived in writing by the Company:

| | (a)        Representations
and Warranties. Each of the representations and           warranties set forth in
Section  6 shall have been true and correct in           all respects when made,
and each of such representations and warranties shall be           true and correct in
all material respects as of the Closing Date as though made           on and as of the
Closing Date.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Obtainment
of Transfer Approval. The Company shall have obtained the           approval of the
Ministry of Communications to the sale, transfer and assignment           of the Acquired
Assets, as required pursuant to the terms of the Companys           MOC License.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        Agreements
and Covenants. Purchaser shall have performed or complied with           in all
material respects each obligation, agreement and covenant to be performed           or
complied with by it under this Agreement at or prior to the Closing Date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|9. | SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; REIMBURSEMENT.
|-- | ---------------------------------------------------------------------------

9.1.        Survival
of Representations and Warranties. All representations and           warranties
contained in Sections  5 and  6, or in any other           Transaction
Document delivered by or on behalf of or the Company in connection           with this
Agreement or the consummation of the transactions contemplated hereby,           shall
survive the Closing for a period of two (2) years after the Closing Date.           For
convenience of reference, the date upon which any representation or warranty
          shall terminate is referred to herein as the Survival Date.

9.2.        Indemnification
by the Company. From and after the Closing, the Company           shall indemnify,
defend and hold harmless Purchaser, its successors and assigns           (the Purchaser
Indemnified Persons) from and against any and           all direct Losses
arising out of or resulting from any of the following:

| | (a)        Any
material breach of any representation or warranty made by the Company in           this
Agreement (including the exhibits and schedules hereto) or in any           Transaction
Document;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Any
failure by the Company to perform, comply with or observe any covenant,
          agreement or obligation contained in this Agreement; or
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        The
employment by the Company of the Affected Employees during the period ending           on
the Closing Date, or the termination of employment thereof.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.3.        Indemnification
by Purchaser. From and after the Closing, Purchaser shall           indemnify, defend
and hold harmless the Company, its successors and assigns (the           Company
Indemnified Persons) from and against any and all           direct Losses
arising out of or resulting from any of the following:

| | (a)        Any
material breach of any representation or warranty made by Purchaser in this
          Agreement (including the exhibits and schedules hereto) or in any Transaction
          Document; or
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Any
failure by Purchaser to perform, comply with or observe any covenant,           agreement
or obligation contained in this Agreement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

9.4.        Limitations
on Indemnification.

| | 9.4.1.        To
the extent that any circumstance giving rise to indemnification under this
          Section  9 is reasonably capable of being remedied by the Indemnifying
          Person (as defined below), the Indemnified Person (as defined below) shall
          afford the Indemnifying Person such opportunity as is reasonable to remedy such
          circumstance.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.4.2.        No
indemnification shall be payable to any Purchaser Indemnified Person under
          Section  9.2 or to any Company Indemnified Person under Section
           9.3, until the aggregate amount of all direct Losses incurred by all
          Purchaser Indemnified Persons or all Company Indemnified Persons, as the case
          may be, exceeds $100,000, whereupon the Purchaser Indemnified Persons or the
          Company Indemnified Persons, as the case may be, shall be entitled to receive
          the full amount of all direct Losses (i.e., including the first $100,000
          of such Losses);
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 9.4.3.        The
maximum aggregate liability of either party pursuant to this Section            9
shall be equal to the Purchase Price actually received by the Company           (the
Maximum Indemnification Amount);
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.4.4.        No
party shall be entitled to recover any indirect, consequential, special,
          exemplary, punitive or similar damages, except to the extent that such damages
          are awarded to a third party in a Third Party Claim (as defined below);
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.4.5.        No
claims for indemnification against any Indemnifying Person (as such term is
          defined below) under this Section  9 may be made following the Survival
          Date. The foregoing sentence notwithstanding, in the event any Indemnified
          Person (as such term is defined below) delivers an Indemnifying Person (as such
          term is defined below) a Notice of Claim (as such term is defined below) within
          sixty (60) days prior to the Survival Date, then such Indemnified Person may
          file a statement of claim with the proper judiciary tribunal within sixty (60)
          days after the date of the Notice of Claim, provided such statement of
          claim is based on the said Notice of Claim, and does not exceed the scope
          detailed therein.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.4.6.        With
the exception of Section  9.4.1, the limitations set forth in this
          Section  9.4 above shall not apply to any indemnification payable under
          Section  9.2(c) and Section  7.7.3, or in connection with any of
          the Assumed Liabilities or Excluded Liabilities.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.5.        Indemnification
Process.

| | 9.5.1.        Any
Purchaser Indemnified Person or Company Indemnified Person seeking
          indemnification under this Section  9 (an Indemnified
          Person) shall give each party from whom indemnification is being
          sought (each, an Indemnifying Person) prompt notice of any
          matter (a Notice of Claim) which such Indemnified Person has
          determined has given rise to or could give rise to a right of indemnification
          under this Agreement, stating the amount of the Losses, if known, and method of
          computation thereof, and containing a reference to the provisions of this
          Agreement in respect of which such right of indemnification is claimed or
arises           as promptly as practicable after becoming aware of such matter; provided,
however, that the failure to so provide such Notice of Claim will not
          relieve the Indemnifying Person(s) from any Liability which they may have under
          this Agreement or otherwise (unless and only to the extent that such failure
          results in the loss or compromise in any material respect of any material
rights           or defenses of the Indemnifying Person(s) and the Indemnifying Person(s)
was not           otherwise aware of such action or claim).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.5.2.        The
Liabilities of an Indemnifying Person under this Section  9 with           respect
to Losses arising from Claims of any third party which are subject to           the
indemnification provided for in this Section  9 (Third Party
          Claims) shall be governed by the following additional terms and
          conditions:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)        Upon
delivery of a Notice of Claim that relates to a Third Party Claim, the
          Indemnified Person shall also deliver to the Indemnifying Person copies of all
          relevant documentation with respect to such Third Party Claim under the
          possession or control of the Indemnified Person, including, without limitation,
          any summons, complaint or other pleading that may have been served, any written
          demand or any other document or instrument.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (b)        The
Indemnifying Person shall have the right to defend against the Third Party
          Claim on its own, with counsel reasonably satisfactory to the Indemnified
          Persons, subject to (i) the right of the Indemnified Persons to participate (at
          its own expense and with counsel of its own choice) in the defense of such
Third           Party Claim, and subject to (ii) the Indemnifying Persons written
          acknowledgement that it is obligated to provide indemnification to the
          Indemnified Persons with respect to such Third Party Claim. The Indemnifying
          Person, on the one hand, and the Indemnified Persons, on the other hand, shall
          make available to each other and their counsel and accountants all books and
          records and information relating to any Third Party Claims, keep each other
          apprised as to the details and progress of all proceedings relating thereto,
and           render to each other such assistance as may be reasonably required to
ensure the           proper and adequate defense of any and all Third Party Claims.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        No
Third Party Claim shall be settled or compromised by the Indemnified Persons,
          and no Indemnified Person shall admit any Liability under any Third Party
Claim,           without the written consent of the Indemnifying Person. Any settlement
or           compromise made in violation of the foregoing sentence shall relieve the
          Indemnifying Person from its indemnification obligations in respect of such
          Third Party Claim.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.6.        Reimbursement
for Non-Completion of The Repair Plan. In the event that,           the Company shall
not complete the repairs in accordance with the Repair Plan as           set forth in
Section  7.10, the Company shall promptly reimburse the           Purchaser for
any direct cost or expense incurred or borne by Purchaser toward           the completion
of the Repair Plan and duly documented by invoices. For the sake           for clarity,
reimbursement pursuant to this Section is not subject to the terms           and
conditions of Section 9 and shall not be limited or restricted by the
          provisions of Section  9.4.

9.7.        Characterization
of Payments. The parties agree that any payment to           Purchaser pursuant to an
indemnification obligation under this Section  9           shall be treated for
Tax purposes as an adjustment to the Purchase Price.

35

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|10. | TERMINATION.
|--- | ------------

10.1.        Termination.
This Agreement may be terminated and the transactions           contemplated hereby may
be abandoned at any time prior to the Closing Date:

| | (a)        By
mutual written consent duly authorized by the Boards of Directors of           Purchaser
and the Company;
| | -----------------------------------------------------------------------------------------------------------------------

| | (b)        By
either Purchaser or the Company, by means of written notice to the other, if:
| | -------------------------------------------------------------------------------------------

| | (i)        the
Closing shall not have occurred within ninety (90) days from the date hereof
          (the Drop-Dead Date); provided, however, that
          the right to terminate this Agreement under this Section  10.1(b) shall
          not be available to any party whose failure to fulfill any material obligation
          under this Agreement has been the cause of, or resulted in, the failure of the
          Closing to occur on or before such date;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        a
competent Court or Governmental Authority shall have issued an Order or taken
          any other action, in each case, which has become final and non-appealable and
          which restrains, enjoins or otherwise prohibits the Closing;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)        such
party (the Non-Breaching Party) is not in breach of any           its
obligations under this Agreement, and if the other party (the           Breaching
Party) shall have breached in any material respect           any of its
representations or warranties or failed to perform in any material           respect any
of its covenants or other agreements contained in this Agreement,           which breach
or failure to perform would render unsatisfied any condition           contained in
Section  8, and (A) is incapable of being cured or (B) if           capable of
being cured, is not cured prior to the earlier of (x) the Business           Day prior to
the Drop-Dead Date, or (y) the date that is thirty (30) days from           the date that
the Breaching Party is notified of such breach; or
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        By
Purchaser, if after the date hereof there shall have occurred any event which
          has had, is having or would reasonably be expected to have a Material Adverse
          Effect on the Acquired Assets.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
parties agree that, except as otherwise set forth in this Section  10.1, this
Agreement may not be otherwise terminated.

10.2.        Effect
of Termination. In the event of the termination of this Agreement           pursuant
to Section  10.1, this Agreement (other than those Sections           which, by
their nature, are intended to survive such termination, including this           Section
 10.2) will forthwith become void, and there will be no Liability           on the
part of Purchaser or the Company or any of their respective officers or
          directors to the other and all rights and obligations of any party hereto will
          cease, except that nothing herein will relieve any party from any Losses
arising           out of, resulting from or relating to any breach, prior to termination
of this           Agreement in accordance with its terms, of any representation,
warranty,           covenant or agreement contained in this Agreement.

36

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Notwithstanding
anything to the contrary in this Agreement, in the event that the Closing does not occur
or the transactions contemplated by this Agreement are not consummated, and as a result
thereof this Agreement is terminated pursuant to Section 10.1(i), or in the event this
Agreement is terminated pursuant to: (a) Section 10.1(ii), or (b) Section 10.1(iii) under
circumstances where the Company was the Breaching Party, then Purchaser shall not be
responsible for nor assume any liabilities or incur any costs or expenses in relation to
any of the Approved Investments and shall not be liable for the consequences of its
decision to grant or withhold its consent to any action where such consent is requested
under this Agreement.

|11. | MISCELLANEOUS.
|--- | --------------

11.1.        Expenses.
All fees, costs and expenses incurred in connection with this           Agreement and the
transactions contemplated hereby including, without           limitation, legal and
accounting fees and any, fees, costs and expenses borne by           Purchaser in
connection with any due diligence investigations carried out with           respect to
the transactions contemplated hereby (Transaction           Expenses),
shall be paid by the party incurring such Transaction           Expenses, whether or not
the Closing occurs.

11.2.        Amendment
and Waiver. This Agreement may be amended only by an instrument           in writing
signed by duly authorized representatives of Purchaser and the           Company. At any
time prior to the Closing Date, any party hereto may extend the           time for the
performance of any of the obligations or other acts required           hereunder, waive
any inaccuracies in the representations and warranties           contained herein or in
any document delivered pursuant hereto and waive           compliance with any of the
agreements or conditions contained herein. Any such           extension or waiver shall
be valid if set forth in an instrument in writing           signed by the party or
parties to be bound thereby.

11.3.        Entire
Agreement. This Agreement, together with its Schedules, Exhibits,           the
Transaction Documents, the Real Property Transfer Agreement, and all other
          ancillary agreements, documents and instruments to be delivered in connection
          herewith, contain the entire understanding of the parties with respect to the
          subject matter hereof and supersede all prior agreements, either oral or
          written, including, without limitation, that certain Memorandum of
Understanding           entered into by and between Purchaser and the Company on
September 5, 2005,           which is hereby cancelled and revoked. Without limiting the
generality of           foregoing and notwithstanding anything in this Agreement to the
contrary, no           party is making any representation or warranty whatsoever, oral or
written,           express or implied, in connection with the transactions contemplated
by this           Agreement and the Transaction Documents other than those set forth in
this           Agreement or in the Transaction Documents and no party is relying on any
          statement, representation or warranty, oral or written, express or implied,
made           by any other party except for the representations and warranties set forth
in           this Agreement or in the Transaction Documents.

11.4.        Third
Party Beneficiaries. Nothing express or implied in this Agreement           is
intended to confer, nor shall anything herein confer, upon any Person other
          than the parties and the respective successors or assigns of the parties, any
          rights, remedies, or Liabilities whatsoever, except to the extent that such
          third person is an Indemnified Person in respect of the indemnification
provided           in accordance with Section  9 of this Agreement.

37

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11.5.        Company
Disclosure Schedule. Nothing in the Company Disclosure           Schedule
constitutes an admission of any liability or obligation of the Company           to any
third party, nor an admission against the Companys interest to any           third
party. The Company Disclosure Schedule contains information, descriptions           and
disclosures regarding the Company only, all of which constitutes           confidential
information of the Company. The Company Disclosure Schedule is not           intended to
expand the scope and effect of any representations, warranties or           covenants of
the Company provided in this Agreement.

11.6.        Assignment.
No party hereto shall assign or otherwise transfer this           Agreement or any of its
rights hereunder, or delegate any of its obligations           hereunder, without the
prior written consent of the other parties hereto; provided, however, that
Purchaser shall be permitted, by written           notice to the Company, to assign or
otherwise transfer this Agreement, in whole           but not in part, to any wholly
owned subsidiary thereof, providedsuch           assignment and transfer is made
prior to the Closing Date. Subject to the           preceding sentence, this Agreement
and the rights and obligations set forth           herein shall inure to the benefit of,
and be binding upon the parties hereto,           and each of their respective
successors, heirs and assigns.

11.7.        Governing
Law; Jurisdiction. This Agreement shall be governed by the laws           of the
State Israel without giving effect to any choice of law or conflict of           law
provision or rule that would cause application of the laws of any           jurisdiction
other than the State of Israel. The parties hereby stipulate that           any action or
other legal proceeding arising under or in connection with this           Agreement shall
be commenced and prosecuted in its entirety exclusively in the           competent courts
located in Tel-Aviv, Israel, each party hereby submitting to           the exclusive
jurisdiction thereof.

11.8.        Severability.
If any term or other provision of this Agreement is           invalid, illegal or
incapable of being enforced by any rule of law, or public           policy, all other
conditions and provisions of this Agreement shall nevertheless           remain in full
force and effect so long as the economic or legal substance of           the transactions
contemplated hereby is not affected in any manner adverse to           any party. Upon
such determination that any term or other provision is invalid,           illegal or
incapable of being enforced, the parties hereto shall negotiate in           good faith
to modify this Agreement so as to effect the original intent of the           parties as
closely as possible in an acceptable manner to the end that           transactions
contemplated hereby are fulfilled to the extent possible.

11.9.        Notices.
All notices or other communications which are required or           permitted hereunder
shall be in writing and sufficient if delivered personally           or sent by
registered mail, return receipt requested, or by facsimile, with           confirmation
as provided above addressed as follows:

| |                  |                                 
| | ---------------- | --------------------------------
| | If to Purchaser: | Partner Communications Co. Ltd. 
| |                  | 8 Amal St., Afeq Industrial Park
| |                  | Rosh Ha'ayin                    
| |                  | Attention: Legal Counsel        
| |                  | Facsimile: 03 - 9122028         
| |                 
| | With copies to:  | Gross, Kleinhendler, Hodak,     
| |                  | Halevy, Greenberg & Co.         
| |                  | One Azrieli Center, Tel Aviv    
| |                  | Attention: Ofer Hanoh, Adv.     
| |                  | Facsimile: 03-6074422           
| |                  | Email: ofer@gkh-law.com         

38

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| |                    |                                   
| | ------------------ | ----------------------------------
| | If to the Company: | Med-1 I.C.1 (1999) Ltd.           
| |                    | 6, HaNechoshet St., Tel-Aviv      
| |                    | Facsimile: 03-7666011             
| |                    | Attention: Chief Executive Officer
| |                   
| |                   
| | With copies to:    | Melcer & Co., Law Offices         
| |                    | 2, Kaplan St., Tel-Aviv           
| |                    | Facsimile: 03-6951104             
| |                    | Attention: Rona Orlicki, Adv.     
| |                    | Email: rona@melceradv.co.il       
| |                   
| |                    | and                               
| |                   
| |                    | Sharon Raviv, Law Offices         
| |                    | 31, HaLechi St., Suite 402, Bnei  
| |                    | Brak I.Z.                         
| |                    | Attention: Sharon Raviv, Adv.     
| |                    | Facsimile: 03-6164499             
| |                    | Email: Sharon@ravivlaw.com        

or
to such other address as the party to whom notice is to be given may have furnished to the
other party in writing in accordance herewith. All such notices or communications shall be
deemed to be received (a) in the case of personal delivery, on the date of such delivery,
(b) in the case of facsimile transmission, upon confirmed receipt, and (c) in the case of
registered mailing, on the fifth working day following the date on which the piece of mail
containing such communication was posted.

11.10.        Representation
by Counsel. Each party hereto acknowledges that it has           been advised by
legal and any other counsel retained by such party in its sole           discretion. Each
party acknowledges that such party has had a full opportunity           to review this
Agreement and all related exhibits, schedules and ancillary           agreements and to
negotiate any and all such documents in its sole discretion,           without any undue
influence by any other party hereto or any third party.

11.11.        Construction.
The parties have participated jointly in the           negotiations and drafting of this
Agreement and in the event of any ambiguity or           question of intent or
interpretation, no presumption or burden of proof shall           arise favoring or
disfavoring any party by virtue of the authorship of any of           the provisions of
this Agreement.

39

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11.12.        Waivers.
No waiver by any party, whether express or implied, of           its rights under any
provision of this Agreement shall constitute a waiver of           the partys
rights under such provisions at any other time or a waiver of           the partys
rights under any other provision of this Agreement. No failure           by any party to
take any action against any breach of this Agreement or default           by another
party shall constitute a waiver of the former partys right to           enforce any
provision of this Agreement or to take action against such breach or           default or
any subsequent breach or default by the other party. To be effective           any waiver
must be in writing and signed by the waiving party.

11.13.        Counterparts.
This Agreement may be executed in two or more           counterparts, any one of which
need not contain the signatures of all parties,           but all of which counterparts
when taken together will constitute one and the           same agreement.

[Remainder of Page
Intentionally Left Blank]

40

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[Signature Page to an
Asset Purchase Agreement dated January 22, 2006]

NOW
THEREFORE, the parties hereto have executed, or caused this Asset Purchase Agreement to be
executed by their duly authorized representatives, as of the date first written above.

| |  | PARTNER COMMUNICATIONS COMPANY LTD./s/ Dan Eldar, /s/ Alan GelmanBy:Dan Eldar, Alan GelmanTitle:VP, CFO
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |  | MED 1 IC-1 (1999) LTD./s/ Ilan Faldon, /s/ Ofer WeissBy: Ilan Faldon, Ofer WeissTitle:Authorized Signatory, Director
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

41

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# EXHIBIT A-1

# ADJUSTMENT ESCROW
AGREEMENT

This
Adjustment Escrow Agreement (Adjustment Escrow Agreement)dated
as of _______, 2006, is entered into by and among MED-1 I.C.1 (1999) Ltd. (the
Company), and Partner Communications Company Ltd. (the
Purchaser) (the Parties and each a
Party) and Gross, Kleinhendler, Hodak, Halevy, Greenberg, Trustees Ltd
(Escrow Agent).

WHEREAS,
the Parties entered into an Asset Purchase Agreement dated January ______, 2006 (the
Asset Purchase Agreement) whereby the Purchaser has agreed to purchase
certain rights and other assets of the Company and to assume some of the Companys
Liabilities;

[*];

[*];

WHEREAS,
Section 3.3 of the Asset Purchase Agreement further provides that in the event that the
Parties disagree as to the amounts of the Withheld Amounts or the Deducted Amounts, as
defined in the Asset Purchase Agreement, then the amounts of the Withheld Amounts or
Deducted Amounts that are in dispute (Disputed Withheld Amounts or
Disputed Deducted Amounts, respectively and collectively,
Disputed Adjustments), shall be deposited with the Escrow Agent until
such dispute is resolved; and

WHEREAS,
it is a condition to the closing of the transactions contemplated in the Asset Purchase
Agreement that the Company, the Purchaser, and the Escrow Agent shall have entered into
this Adjustment Escrow Agreement.

NOW
THEREFORE, the Parties and the Escrow Agent hereby agree as follows:

1.    
          Appointment of Escrow Agent.Upon the terms of this Adjustment Escrow
          Agreement, the Parties hereby appoint Escrow Agent to serve as escrow agent
          hereunder and Escrow Agent hereby accepts such appointment.

2.    
          Escrow Agent Obligations. The Escrow Agent shall hold, invest and release
          the Withheld Amounts and the Disputed Adjustments solely in accordance with the
          terms, conditions and provisions of this Adjustment Escrow Agreement.

3.    
          Treatment of Withheld Amounts and Disputed Amounts.

A. Withheld Amounts:

(a)       
          Acceptance of Withheld Amounts. The Escrow Agent hereby acknowledges the
          receipt from the Purchaser of the Withheld Amounts in the amount of US $_______.

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

- 1 -

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(b)        Release
of Withheld Amounts.

| | (i)        [*].
| | ---------------

| | (ii)        [*].
| | ----------------

| | (iii)        [*].
| | -----------------

| | (iv)        (1)       
The Escrow Agent shall, prior to the release of any Withheld Amounts           pursuant
to this Section 3-A (b), provide the parties a written certificate           containing a
calculation of any amount the Escrow Agent proposes to so release           (the Escrow
Agent Statement). Unless the Escrow Agent           receives, within seven (7)
days of the date of delivery of the Escrow Agent           Statement (the Objection
Period), a written statement by any           of the Parties objecting to the
calculations set out in the Escrow Agent           Statement and containing an
explanation of such objection (an Objection           Statement), the
Escrow Agent shall release the amounts stated in the           Escrow Agent Statement to
the intended recipient thereof, in accordance with           such statement, promptly
after the lapse of the Objection Period.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)        In
the event that, within the Objection Period the Escrow Agent shall have
          received any Objection Statement, then, promptly after the lapse of the
          Objection Period the Escrow Agent shall release any Withheld Amount(s) which
are           not the subject matter of any Objection Statement(s), to the intended
          recipient(s) thereof pursuant to the Escrow Agent Statement. Any remaining
          Withheld Amounts shall be retained by the Escrow Agent and shall be treated,
for           all intents and purposes, as Disputed Adjustments in accordance with
Section 3-B           below. The Parties hereby agree that the provisions of Section
3.3.3(f) of the           Asset Purchase Agreement shall apply to such Disputed
Adjustments, if any, mutatis mutandis.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B.     Disputed
Adjustments

(a)       
          Acceptance of Disputed Adjustments. The Escrow Agent hereby acknowledges
          the receipt from the Purchaser of the Disputed Adjustments in the amount of US
          $_______.

(b)       Release
of Disputed Adjustments

| | (i)        The
Escrow Agent shall hold the Disputed Adjustments under this Escrow           Adjustment
Agreement until (a) the Escrow Agent receives a letter of           instructions, signed
by the Parties, irrevocably instructing the Escrow Agent to           release the
Disputed Adjustments (Release Instructions) or           (b) the
Escrow Agent receives a letter from any of the Parties attaching an           Audited
Adjustment Statement deemed to be executed by the Independent Auditor           and
setting forth the Independent Auditors determination of the Final
          Withheld Amount and/or Final Deducted Amount, if any.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        Unless
stated otherwise in any Release Instructions, upon receiving an Audited
          Adjustment Statement pursuant to subsection (b)(i) above, the Escrow Agent
          shall, as the case may be:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1)        retain
any Disputed Withheld Amounts determined in the Audited Adjustment           Statement as
constituting part of the Final Withheld Amounts; all such retained           amounts
shall be considered additional Withheld Amounts, and shall be held and           released
by the Escrow Agent in accordance with Section 3-A of this Adjustment           Escrow
Agreement; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.

- 2 -

---

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| | 2)        promptly
release to the Company all other Disputed Withheld Amounts, if any;
| | --------------------------------------------------------------------------------------

| | and:
| | ----

| | 3)        release
to Purchaser any Disputed Deducted Amounts determined in the Audited           Adjustment
Statement as constituting part of the Final Deducted Amounts; and           release all
other Disputed Deducted Amounts, if any, to the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

C.     Release
of Interest and other Proceeds

Notwithstanding
any provision of this Agreement to the contrary, any release of Escrow Amounts (as defined
below), by the Escrow Agent, under this Adjustment Escrow Agreement, shall include the
release of any interest or other investment proceeds accruing on such Escrow Amounts,
after deduction of any fees and commissions payable to the Depositing Bank (as defined
below) in respect of the maintenance and investment of the Escrow Amounts pursuant to the
provisions of this Adjustment Escrow Agreement.

4.     Investment
of Proceeds

The
Escrow Agent shall deposit the Withheld Amounts and Disputed Adjustments (collectively,
Escrow Amounts), if any, in an appropriate, segregated escrow account
at Bank Hapoalim BM or in any other bank to be approved by the Parties (the
Depositing Bank), shall notify the Parties of the details of the said
account. All such deposited Escrow Amounts shall be invested in NIS based, short term
interest bearing deposits, at the sole discretion of the Escrow Agent.

5.    
          Escrow Fees.

The
Escrow Agent shall be entitled to receive reasonable compensation for its services
hereunder pursuant to the schedule of fees attached hereto as Schedule 1 and
made a part hereof and, in addition thereto, shall be reimbursed for all out of pocket
expenses, including reasonable attorneys fees, actually and reasonably incurred by
it in connection with the performance of its duties and obligations under this Adjustment
Escrow Agreement. All such fees and expenses shall be paid equally by the Parties.

The
Escrow Agent does not have any interest in the Escrow Amounts, but is acting hereunder as
escrow agent only for the benefit of the Parties. Therefore, the Escrow Agent shall not
have any right to appropriate, seize, confiscate and/or apply the Escrow Amounts to
satisfy payment of any or all obligations due hereunder to the Escrow Agent.

6.     Miscellaneous

6.1        With
respect to the rights of the Purchaser and the Company, any inconsistency between the
terms hereof and the terms of the Asset Purchase Agreement shall be interpreted in favor
of the Asset Purchase Agreement. In addition, nothing is this Adjustment Escrow Agreement
or any action preformed in accordance with therewith shall limit or prejudice the rights
or remedies of the Parties under the Assets Purchase Agreement and under applicable law.

- 3 -

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6.2        The
Escrow Agent shall undertake to fulfill its duties under this Adjustment Escrow Agreement
in good faith and with reasonable care. The Escrow Agent shall not be liable for any
damage or loss incurred by the Parties as a result of any action or omission on its
part in connection with this Adjustment Escrow Agreement, on condition that the Escrow
Agent acted within the scope of this Adjustment Escrow Agreement and provided that
it acted in a reasonable manner and in good faith.

6.3        The
Parties release the Escrow Agent from any obligation or duty as custodian for hire
pursuant to the Custodians Law (Hok Hashomrim) with respect to the
Escrow Amount.

6.4.       
          The Parties shall immediately indemnify the Escrow Agent upon its request,
          against any loss, damage or expense of any kind (including reasonable and
          documented lawyers fees and other experts fees) that it shall incur
          as a result of or in connection with the performance of its duties pursuant to
          the terms and provisions of this Adjustment Escrow Agreement or the performance
          of a its duties required by law, unless such loss, damage or expense results
          from the Escrow Agents gross negligence, bad faith or willful misconduct
          or from a breach of this agreement. The Parties shall indemnify the Escrow Agent
          for any payment its shall have to make as a result of a court sentence or a
          compromise that the Parties have agreed to, filed in connection with (directly
          or indirectly) this Adjustment Escrow Agreement, unless the lawsuit was filed as
          a result of the Escrow Agents gross negligence, bad faith or willful
          misconduct or from its action resulting from a breach of this agreement. The
          Escrow Agent shall notify the Parties promptly upon the receipt of notice or
          threat of such lawsuit.

6.5.       
          The Escrow Agent shall be entitled to consider as true and correct any document
          it receives from the Parties, including but not limited to  Instruction
          Letters, Audited Adjustment Statements, requests, agreements or confirmations,
          that appear to be signed by the appropriate entity and/or person and that the
          Escrow Agent believes in good faith to be true.

6.6        Capitalized
terms appearing herein which are not otherwise defined shall have the meanings ascribed
to such terms in the Asset Purchase Agreement.

PARTNER COMMUNICATIONS COMPANY LTD.By:
MED-1 IC-1 (1999) LTD.By: ___________________________

- 4 -

---

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The undersigned agrees to serve as
Escrow Agent in accordance with the terms of this Adjustment Escrow Agreement.

Gross, Kleinhendler, Hodak, Halevy, Greenberg, Trustees Ltd

By: ________________________

- 5 -

---

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# Schedule 1

[to be completed by
the Parties and the Escrow Agent prior to the Closing]

- 6 -

---

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# ANNEX 2

# ESCROW AGENTS
FEES

[to be completed by
the Parties and the Escrow Agent prior to the Closing]

- 7 -

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# EXHIBIT A-2

# INDEMNITY ESCROW
AGREEMENT

This
Indemnity Escrow Agreement (Indemnity Escrow Agreement)dated as
of ________, 2006, is entered into by and among MED-1 I.C.1 (1999) Ltd. (the
Company), and Partner Communications Company Ltd. (the
Purchaser) (the Parties and each a
Party) and Gross, Kleinhendler, Hodak, Halevy, Greenberg, Trustees Ltd
(Escrow Agent).

WHEREAS,
the Parties entered into an Asset Purchase Agreement dated January ___, 2006 (the
Asset Purchase Agreement) whereby the Purchaser has agreed to purchase
certain rights and other assets of the Company and to assume some of the Companys
Liabilities;

WHEREAS,
in connection with the Asset Purchase Agreement, the parties have further entered into the
Real Estate Transfer Agreement;

WHEREAS,
pursuant to Section 9.2 of the Asset Purchase Agreement, the Company has undertaken to
indemnify the Purchaser for losses arising out of certain events;

WHEREAS,
pursuant to Section 4.2.2 of the Asset Purchase Agreement, the Company has deposited with
the Escrow Agent an autonomous bank guarantee issued by [enter name of issuing
bank], in favor of the Escrow Agent, in the amount of US$ 2,000,000, valid until the
lapse of eighteen (18) months from the date hereof(1)and exercisable in whole
or in parts, a copy of which is attached hereto as Annex 1 (the Indemnity
Bank Guarantee), to secure the Companys indemnification obligations under
Section 9.2 of the Asset Purchase Agreement and to further secure payment by the Company
of its obligation to pay (i) ongoing municipal taxes (e.g., arnona)
pursuant to Section 8.1.1 of the Real Property Transfer Agreement, (ii) Amelioration
Charges (heitel hashbacha) pursuant to Section 9.1 of the Real Property
Transfer Agreement, and (iii) Sales Tax (mas mechira) and Betterment
Tax (mas shevach) pursuant to Section 8.1.2 of the Real Property
Transfer Agreement (such taxes, together, the Real Estate Taxes); and

WHEREAS,
it is a condition to the closing of the transactions contemplated in the Asset Purchase
Agreement that the Company, the Purchaser, and the Escrow Agent shall have entered into
this Indemnity Escrow Agreement.

NOW
THEREFORE, the Parties and the Escrow Agent hereby agree as follows:

1.    
          Appointment of Escrow Agent.Upon the terms of this Indemnity Escrow
          Agreement, the Parties hereby appoint Escrow Agent to serve as escrow agent
          hereunder and Escrow Agent hereby accepts such appointment.

---

(1)i.e., from the Closing Date.

- 1 -

---

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2.    
          Escrow Agent Obligations. The Escrow Agent shall hold, invest and release
          the Indemnity Bank Guaranty and any proceeds which may result from the exercise
          thereof (collectively, the Escrow Amounts) solely in
          accordance with this Indemnity Escrow Agreement.

3.    
          Exercise of Indemnity Bank Guaranty and Release of Proceeds of the Indemnity
          Bank Guaranty.

A.    
          Exercise of Claim Amount

3.1        In
the event that the Escrow Agent receives a notice from the Purchaser stating that the
Purchaser is entitled to receive all or part of the Escrow Amount under Section 9.2 of
the Asset Purchase Agreement, specifying a specific sum (the Claim Amount)
and containing a calculation of the Claim Amount and relevant supporting documentation
pertaining to the Claim Amount (together, the Notice of Claim), then
the Escrow Agent shall promptly notify the Company of the receipt of the Notice of Claim
and request a response from the Company within thirty (30) days (the Escrow Agents
Notice).

3.2        If
the Company either (a) does not respond to the Escrow Agents Notice within thirty
(30) days from the date of receipt of Escrow Agents Notice (the Response
Period), or (b) does not notify the Escrow Agent, within the Response Period,
that it objects to the payment of the Escrow Amount as set forth in the Notice of Claim,
then the Escrow Agent shall promptly exercise the Indemnity Bank Guaranty in the amount
of the Claim Amount and shall release the Claim Amount to the Purchaser.

3.3        If
the Company notifies the Escrow Agent, within the Response Period, that it does not
consent to the payment of all or part of the Claim Amount (such amount being a Disputed
Claim), then the Escrow Agent shall promptly exercise the Indemnity Bank
Guarantee in respect of any undisputed portion of the Claim Amount, release such
undisputed portion to Purchaser, and continue to hold the Indemnity Bank Guarantee in
escrow pursuant to the provisions hereof.

3.4        The
Parties hereby agree that the Purchasers receipt of the Claim Amount (or any
undisputed portion thereof) shall exhaust all of Purchasers rights of claim and
causes of action with respect to the matters set forth in the Notice of Claim, up to the
Claim Amount or any undisputed portion thereof received by the Purchaser. For the sake of
clarity, if the Purchasers Claims set forth in the Notice of Claim exceed the Claim
Amount (or any undisputed portion thereof) received by the Purchaser under Sections 3.2
and/or 3.3 above, then the Purchasers receipt of the Claim Amount (or any such
portion thereof) shall not exhaust the Purchasers rights of claim and causes of
action with respect to the matters set forth in the Notice of Claim that relate to the
amounts exceeding the Claim Amount (or any such portion thereof) received by the
Purchaser.

- 2 -

---

---



3.5        In
the event that on the Exercise Date, as defined below, there shall be outstanding any
Filed Dispute Proceedings, as defined below, then the Escrow Agent shall exercise the
Indemnity Bank Guarantee in the amount of the Disputed Claim(s) directly and specifically
underlying the said Filed Dispute Proceedings (the Exercised Amount)
and, subject to Section 3.6 below, shall thereafter return the Indemnity Bank Guarantee,
in respect of any remaining Escrow Amounts, to the Company, provided, however,
that the Escrow Agent provides the Parties with at least seven (7) days prior written
notice of its intention to so exercise the Indemnity Bank Guarantee, and providedfurther that
the Escrow Agent shall not have received, by the Exercise Date, either: (a) an extension
of the Indemnity Bank Guarantee, or (b) an alternative autonomous bank guarantee issued
by the same bank, in the amount of the Exercised Amount (each, an Alternative
Guarantee). The Escrow Agent shall hold the proceeds resulting from the
exercise of the Indemnity Bank Guarantee or the Alternative Guarantee held pursuant to
this subsection above, in accordance with the terms hereof, until the Escrow Agent
receives (i) a verified copy of a judgment or other decision issued by a competent
Israeli court of law, resolving the Filed Dispute Proceedings and specifying the amount,
if any, to be paid to the Purchaser under Section 9.2 of the Asset Purchase Agreement, or
(ii) a verified copy of a decree or other court order, issued by a competent Israeli
court of law, ordering the release or extension of the Indemnity Bank Guarantee ((i) and
(ii), each a Court Decree), or (iii) other joint written instructions
of the Parties as to release thereof.

| | As
used in this Indemnity Escrow Agreement:
| | -------------------------------------------

| | (i)        the
term Filed Dispute Proceedings shall mean a statement of
          claim submitted in a competent court of law, based on substantially the same
          claims as set forth in any outstanding Disputed Claim(s), as evidenced by a
          stamped copy of such statement of claim, indicating the same to have been duly
          filed and opened;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        the
term Guarantee Expiration Date shall mean the date of
          expiration of the Indemnity Bank Guarantee or of any Alternative Guarantee held
          by the Escrow Agent pursuant to this Section 3.5 above; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)        the
term Exercise Date shall mean fourteen (14) days prior to
          the Guarantee Expiration Date.
| | ---------------------------------------------------------------------------------------------------------------------

3.6        Notwithstanding
Section 3.5 above, if a Notice of Claim is delivered to the Escrow Agent less than sixty
(60) days prior to the expiration of the eighteen (18) month period following the date
hereof (a Last Minute Claim), then, upon the Exercise Date, the Escrow
Agent shall, in addition to any exercise permitted pursuant to Section 3.5 above, also
exercise the Indemnity Bank Guarantee in respect of the amount of the Last Minute Claim,
provided, however, that the Escrow Agent provides the Parties with at least
seven (7) days prior written notice of its intention to so exercise the Indemnity Bank
Guarantee. Subject to Sections 3.2 and 3.3, which shall apply to the Last Minute Claim,
mutatis mutandis, the Escrow Agent shall continue to hold the proceeds resulting
from such exercise until the lapse of sixty (60) days from the date of the Last Minute
Claim (the Deferred Filing Period).

| | Upon
the lapse of the Deferred Filing Period, the Escrow Agent shall return to the Company any
Escrow Amounts held pursuant to this Section 3.6, if there shall not have been delivered
to the Escrow Agent, prior to the end of the Deferred Filing Period, a copy of any Filed
Dispute Proceedings based on substantially the same claims as set forth in the Last
Minute Claim. In the event that, at the end of the Deferred Filing Period there shall be
outstanding any Filed Dispute Proceedings based on substantially the same claims as set
forth in the Last Minute Claim, then the Escrow Agent shall: (a) continue to hold, out of
the proceeds resulting from the exercise of the Indemnity Bank Guarantee pursuant to this
subsection above, the amount of the Last Minute Claim directly and specifically
underlying the said Filed Dispute Proceedings, until the Escrow Agent receives a Court
Decree or other joint written instructions of the Parties as to release thereof, and (b)
return to the Company all other Escrow Amounts held pursuant to this Section 3.6.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 3 -

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B.     Exercise
of Tax Amount

3.7        In
the event that the Escrow Agent receives a notice from the Purchaser stating that the
Company has not paid any or all of the Real Estate Taxes pursuant to the Real Property
Transfer Agreement, specifying the unpaid Real Estate Taxes and the amount thereof (the
Real Estate Tax Amount), and containing a valid payment demand issued
on the same amount by the Real Property Betterment Tax Division (agaf mas
shevach mekarkein) of the Israel Tax Authority and/or by the applicable
municipal authority or zoning commission having jurisdiction over the Transferred Real
Property, as the case may be (each such notice and payment demand, a Tax Payment
Demand and together, the Tax Payment Demands), then, the
Escrow Agent shall promptly notify the Company of the receipt of the Tax Payment
Demand(s) (the Escrow Agents Tax Payment Notice); provided,
however, that:

| | (a)        together
with the Tax Payment Demand(s), Purchaser has delivered to the Escrow           Agent a
written statement duly executed by an officer thereof, stating that           Purchaser
has entered into a binding agreement for an arms length sale of           the
Transferred Real Property to a third party, and has attached to its said
          statement a copy of such agreement; or otherwise:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        the
Tax Payment Demand(s) were delivered to the Escrow Agent not less than
          seventeen (17) months after the Closing Date.
| | ---------------------------------------------------------------------------------------------------------------------------------------------

3.8        Unless
the Company delivers to the Escrow Agent, within fourteen (14) days of the date of
receipt of the Escrow Agents Tax Payment Notice, a written statement duly executed
by an officer thereof, stating that it has paid up or is exempted from paying the Tax
Payment Demand(s) underlying the Escrow Agents Tax Payment Notice, and delivers the
Escrow Agent, together with such notice, the original copy of confirmation of payment of
such Tax Payment Demand(s) or an exemption therefrom (which confirmation, in the case of
the Sales Tax (mas mechira) and Betterment Tax (mas shevach)
payable pursuant to Section 8.1.2 of the Real Property Transfer Agreement, shall be in a
form as required to enable the transfer of the Transferred Real Property by the Company
to Purchaser to be recorded with the Office of the Land Registrar in the State of
Israel), then the Escrow Agent shall promptly exercise the Indemnity Bank Guarantee in
respect of any unpaid Tax Payment Demand(s) and pay any such unpaid Real Estate Taxes for
and on behalf of the Company.

- 4 -

---

---



C.     Release
of Interest and Other Proceeds; Irrevocable Instructions

3.9        Notwithstanding
any provision of this Agreement to the contrary, except for any release of Escrow Amounts
pursuant to Section 3.8 above, the release of any Escrow Amounts, by the Escrow Agent,
under this Indemnity Escrow Agreement, shall include the release of any interest or other
investment proceeds accruing on such Escrow Amounts, after deduction of any fees and
commissions payable to the Depositing Bank (as defined below) in respect of the
maintenance and investment of the Escrow Amounts pursuant to the provisions of this
Indemnity Escrow Agreement.

3.10        The
provisions of this Section 3 above constitute the Parties irrevocable instructions
to the Escrow Agent in respect of the release of the Escrow Amounts.

4.     Investment
of Proceeds

In
the event that the Escrow Agent exercises any portion of the Indemnity Bank Guarantee in
accordance with this Indemnity Escrow Agreement, the Escrow Agent shall deposit all such
proceeds in an appropriate, segregated escrow account at Bank Hapoalim BM or in any other
bank to be approved by the Parties (the Depositing Bank), shall notify
the Parties of the details of the said account, All such deposited Escrow Amounts shall be
invest in NIS based, short term interest bearing deposits at the sole discretion of the
Escrow Agent.

5.    
          Escrow Fees.

The
Escrow Agent shall be entitled to receive reasonable compensation for its services
hereunder pursuant to the schedule of fees attached hereto as Annex 2 and made
a part hereof and, in addition thereto, shall be reimbursed for all out of pocket
expenses, including reasonable attorneys fees, actually and reasonably incurred by
it in connection with the performance of its duties and obligations under this Indemnity
Escrow Agreement. All such fees and expenses shall be paid equally by the Parties.

The
Escrow Agent does not have any interest in the Escrow Amounts, but is acting hereunder as
escrow agent only for the benefit of the Parties. Therefore, the Escrow Agent shall not
have any right to appropriate, seize, confiscate and/or apply the Escrow Amounts to
satisfy payment of any or all obligations due hereunder to the Escrow Agent.

6.     Miscellaneous

6.1
With respect to the rights of the Purchaser and the Company, any inconsistency between the
terms hereof and the terms of the Asset Purchase Agreement shall be interpreted in favor
of the Asset Purchase Agreement. In addition, nothing is this Indemnity Escrow Agreement
or any action preformed in accordance with therewith shall limit or prejudice the rights
or remedies of the Parties under the Assets Purchase Agreement and under applicable law.

6.2        The
Escrow Agent shall undertake to fulfill its duties under this Indemnity Escrow Agreement
in good faith and with reasonable care. The Escrow Agent shall not be liable for any
damage or loss incurred by the Parties as a result of any action or omission on its
part in connection with this Indemnity Escrow Agreement, on condition that the Escrow
Agent acted within the scope of this Indemnity Escrow Agreement and provided that
it acted in a reasonable manner and in good faith.

- 5 -

---

---



6.3        The
Parties release the Escrow Agent from any obligation or duty as custodian for hire
pursuant to the Custodians Law (Hok HaShomrim) with respect to the
Escrow Amount.

6.4.       
          The Parties shall immediately indemnify the Escrow Agent upon its request,
          against any loss, damage or expense of any kind (including reasonable and
          documented lawyers fees and other experts fees) that it shall incur
          as a result of or in connection with the performance of its duties pursuant to
          the terms and provisions of this Indemnity Escrow Agreement or the performance
          of a its duties required by law, unless such loss, damage or expense results
          from the Escrow Agents gross negligence, bad faith or willful misconduct
          or from a breach of this Indemnity Escrow Agreement. The Parties shall indemnify
          the Escrow Agent for any payment its shall have to make as a result of any Court
          Decree or compromise that the Parties have agreed to, and which shall be filed
          in connection with (directly or indirectly) this Indemnity Escrow Agreement,
          unless the lawsuit was filed as a result of the Escrow Agents gross
          negligence, bad faith or willful misconduct or in connection with its breach of
          this Indemnity Escrow Agreement. The Escrow Agent shall notify the Parties
          promptly upon the receipt of notice or threat of such lawsuit.

6.5.       
          The Escrow Agent shall be entitled to consider as true and correct any document
          it receives from the Parties, including but not limited to  letters of
          instructions, Notices of Claim, requests, agreements or confirmations, that
          appear to be signed by the appropriate entity and/or person and that the Escrow
          Agent believes in good faith to be true.

6.6.       
          Capitalized terms appearing herein which are not otherwise defined shall have
          the meanings ascribed to such terms in the Asset Purchase Agreement.

6.7        This
Indemnity Escrow Agreement constitutes the entire agreement between the Parties and the
Escrow Agent with respect to the subject matter hereof and supersedes all prior
understandings, if any, with respect thereto. This Indemnity Escrow Agreement contains
irrevocable instructions to the Escrow Agent and may not be modified, changed,
supplemented or terminated, nor may any obligations be waived, except by written
instrument signed by the Parties. The parties do not intend to confer any benefit
hereunder on any person, firm or corporation other than the Parties and, as the case may
be, the Escrow Agent.

[this space left
intentionally blank]

- 6 -

---

---



[Signature page to
an Indemnity Escrow Agreement]

PARTNER COMMUNICATIONS COMPANY LTD.

By: ___________________________

MED-1 IC-1 (1999) LTD.

By: ___________________________

The undersigned agrees to serve as
Escrow Agent in accordance with the terms of this Indemnity Escrow Agreement.

Gross, Kleinhendler, Hodak, Halevy, Greenberg, Trustees Ltd.

By: __________________________________________________

- 7 -

---

---



# ANNEX 1

# INDEMNITY BANK
GUARANTEE

(see Exhibit B attached hereto)

- 8 -

---

---



# ANNEX 2

# ESCROW AGENTS
FEES

(to be completed)

- 9 -

---

---



# EXHIBIT B

[LETTERHEAD OF
GUARANTEEING BANK]

Date: ____________, 2006

To:
Gross, Kleinhendler, Hodak, Halevy, Greenberg, Trustees Ltd.
One Azrieli Center (Round Building)
Tel Aviv

Dear Sirs,

|Re: | Guarantee
No. _____________ on the amount of US$2,000,000  In force until [enter expiration
date].
|--- | --------------------------------------------------------------------------------------------------

At the request of Med-1 IC-1
(1999) Ltd.(hereinafter: the Applicant) we hereby guarantee to you
to pay any amount payable or which will become payable to you up to an aggregate amount of
US$2,000,000 (two million US dollars) (hereinafter, the Guarantee
Amount) in connection with an Asset Purchase Agreement dated January __, 2006.

We shall pay any amount out of the
Guarantee Amount together with linkage differences as set out above within 7 days from the
date of receipt of your first demand in writing, without imposing on you any duty to base
or detail your demand.

Any demand made pursuant to this
Guarantee should be delivered to our branch in [state address of issuing bank
branch] not later than [state the date occurring at the end of 18
months after the Closing Date].

This guarantee shall remain in force
until and including [state the date occurring at the end of 18 months after the
Closing Date]. After this date this Guarantee shall become null and void.

This Guarantee is not assignable or
transferable in any manner.

Please return this Guarantee to us
upon its expiration or after its payment in full, according to the earlier thereof.

Any demand received by our branch by
facsimile shall not be deemed a demand in accordance with the terms of this Guarantee, and
shall not be complied with.

| |  | Respectfully yours,[enter name of guaranteeing bank and branch]
| |  | ---------------------------------------------------------------



---

---



# Exhibit C

# Employee Waiver

TO: Partner Communications Company Ltd. (Partner
or the New Employer)
8 Haamal St., Afek Industrial Park, Rosh Haayin 48103

Dear Sir/Madam,

|RE: | Undertaking
and declaration regarding the absence of claims against New Employer
|--- | --------------------------------------------------------------------------------

I, the undersigned, I.D. no. _________________, hereby declare and acknowledge as follows:

|1. | On _________________ 2006 the working relationship between me and Med-1 I.C.
          1(1999) Ltd., (hereinafter: Med-1 and/or the Former
          Employer) will cease, following the sale of the transmission business
          activity, including the assets of the Company relevant for such activity, by
          Med-1.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Subject to the drawing up of a full and final account in respect of the term of
          my employment with Med-1, and receiving all my rights and all the monies due to
          me by law and/or agreement, including, without derogating from the generality of
          the foregoing, severance pay, compensation for overtime, compensation for work
          during weekly rest time, annual vacation monies, vacation encashment, vacation
          allowance, sick leave, traveling costs, compensation for delayed salary if due
          to me, and compensation for delayed payment of severance pay if due to me, in
          respect of the entire term of my employment, I undertake to sign notice of
          discharge in favor of the Former Employer in the form attached as an annexure
          hereto (hereinafter: Notice of discharge in favor of the Former
          Employer).
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | I hereby further undertake and declare that:
|-- | --------------------------------------------

| | (1) | I neither have nor will have, nor will any person on my behalf have any claims,
               demands or actions against Partner on any matter pertaining to the term of my
               employment with the Former Employer, including, without derogating from the
               generality of the foregoing, in respect of: severance pay, compensation for
               overtime, compensation for work during weekly rest time, annual vacation monies,
               vacation encashment, vacation allowance, sick leave, traveling costs,
               compensation for delayed salary (if due to me), and compensation for delayed
               payment of severance pay, if due to me, in respect of the entire period of my
               employment.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | In addition I am aware and agree that no period of employment prior to the date
               of my employment by Partner will be brought into account for the period of my
               employment with Partner, and will not be deemed as work seniority for purposes
               of calculating severance pay or for any other purpose.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



|4. | It has been explained to me and I understand and acknowledge that I have been
          hired for work at Partner as a new employee in all respects, and that my being
          hired by Partner has been done in reliance on and is predicated on everything
          stated by me in this letter above.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In witness whereof I have set my
hand:

|Date: _________________ | Signature: _________________
Witness to signature: ____________
|----------------------- | ---------------------------------------------------------------

2

---

---



TO: Med-1 I.C. 1(1999)
Ltd., (the Company)

Dear Sir/Madam,

RE: Finalization of
Account and Notice of Discharge

|1. | I, the undersigned, _________________ I.D. no. _________________, hereby
          acknowledge and declare that I received from you on _________________ the sum of
          NIS ______ by bank transfer / check no. _________________ and a copy of your
          letter to the _________________ continuing education fund and the insurance
          company / pension fund by letters of release to regulate my rights therein, as
          more particularly set out in the finalization account documents attached hereto.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | By signing this document I acknowledge that the amount paid to me as stated
          above constitutes full, final and absolute consideration for everything due to
          me from the Company in respect of any cause whatsoever, whether in respect of my
          employment at the Company or in respect of the termination of my employment at
          the Company and in respect of any other cause, and without derogating from the
          generality of that stated, salary, severance pay, compensation for overtime,
          compensation for work during weekly rest time, annual vacation monies, vacation
          encashment, compensation for delayed salary (if due to me), compensation for
          delayed payment of severance pay , if due to me, sick leave, pension and/or
          insurance policy and/or monies that have accumulated in a pension fund for my
          benefit in respect of the period of my employment.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | I also acknowledge by signing this document that except for what has been paid
          to me as stated above, I do not have nor will I have against the Company and/or
          its employees and/or its authorized persons and/or those acting on its behalf or
          by virtue thereof, all of them jointly and/or each of them severally, directly
          or indirectly, any claims and/or demands and/or actions of any kind whatsoever
          or in relation to or resulting from my employment at the Company or from the
          termination of my employment with the Company and that I waive and give
          instructions of discharge also with respect to any sum that is due to me, if at
          all, as severance pay in accordance with Section 29 of the Severance Pay Law.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | I hereby undertake that if I breach any of my undertakings under this document
          and raise at any time in the future, without limitation in time, any action,
          claim or demand of any kind whatsoever on any matter relating to or resulting
          from my employment with the Company or from the termination of my employment
          with the Company, against the Company and/or against any one of the parties
          enumerated in paragraph 3 above and/or against Partner Communications Ltd.,
          jointly and/or severally  I will repay to the Company
          immediately,all the sums that have been paid to me within
          the scope of the finalization of the account attached hereto (except for sums
          due to me by law),  with the addition of interest and linkage
          differentials as required by law from the date of payment  until the date
          of the repayment.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | I acknowledge having read this document carefully, and have received all the
          clarifications and explanations that I requested and I have taken advice in
          connection with the document, well understood the content and significance of my
          undertakings under the document and assume without reservation all my
          undertakings set out above.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



# In witness whereof I
have set my hand:

|Date: _________________ | Signature: _________________
Witness to signature: ____________
|----------------------- | ---------------------------------------------------------------

Encl: Form 161
Final Account Document
Copy of letter to the relevant funds

2

---

---



# EXHIBIT D-1

# NOTICE OF ASSUMPTION
 ASSIGNED CONTRACTS

[to be completed
prior to the Closing]



---

---



# EXHIBIT D-2

# NOTICE OF ASSUMPTION
 DUAL CONTRACTS

[to be completed
prior to the Closing]



---

---



Exhibit E[unofficial translation from Hebrew original]Hosting Agreement

# Made and executed in Tel
Aviv this ____ day of _____________, 2006

|BETWEEN: | Med-1
I.C. 1(1999) Ltd.
|-------- | -----------------------

| | private company no. 512776394 
of 6 Hanechoshet St., Tel Aviv 
(hereinafter: "the Host")
| | ----------------------------------------------------------------------------------------

of the one part

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

| | public corporation no. 520044314 
of 8 Amal St., Afek Industrial Park, Rosh
Ha'ayin (hereinafter: the Customer)
| | -----------------------------------------------------------------------------------------------------------------

of the other part

|WHEREAS | Pursuant
to an agreement dated January 22, 2006, the Customer acquired from the Host, inter
alia, a fiber-optic based cable transmission network deployed
throughout the country (hereinafter: "the Cable Transmission
Network"); and
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS | The Host leases a basement floor (minus 3) in a building known as the Merkavim
Building in the Kiriat Arieh Industrial Zone in Petach Tikva (hereinafter: the PT
Site); and holds a long-term lease in a 3-storey building, with a basement and
ground floor on 1 Hacarmelim Street in Tirat HaCarmel (hereinafter: the Haifa
Site); and is the owner of a 2-storey building, basement at 116 Hayarkon Street,
Tel Aviv (hereinafter: the TA Site) (the PT Site, the Haifa Site and
the TA Site being hereinafter collectively called  the Sites ;
each of the Sites being referred to on occasions, separately as  a
Site); and
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS | The Cable Transmission Network reaches each of the Sites, at each Site  up to the
end-point of the Network situated in the Communications Cabinet (as hereinafter defined)
at such Site; and
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS | The Host has offeredto maintain for the Customer at the Sites the Communications
Facilities (as hereinafter defined) and received from the Host a right of use and access
in relation thereto and to the Manholer (as hereinafter defined) and also various services
related to all of the foregoing, on the conditions, for the period and against the
consideration hereinafter set forth, and the Customer  after having examined the
Sites and the vicinity, installations and systems thereof (including the air conditioning
systems, the electrical systems and electrical back up systems, security systems, fire
fighting systems and drainage systems) from the physical, planning, technical, legal
standpoints and from every other relevant standpoint, and after having been afforded an
opportunity to raise questions in relation thereto, and having examined the Hosts
offer, and found all of the foregoing to be suitable for its needs and requirements, and
after having been informed and is aware that the Host is entitled to provide the Site
Services, Additional Services  if provided  or part of such services by means
of sub-suppliers and/or sub-contractors  requests to maintain at the Sites the
Communications Facilities and receive a right of use and access in relation thereto and to
the Manholes, all on the conditions, for the term and against the consideration
hereinafter set forth, and received from the Host the Site Services (as hereinafter
defined).
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



It
is therefore stipulated, agreed and declared between the parties to this Agreement as
follows:

|1. | Preamble,
Schedules and Headings
|-- | --------------------------------

| | 1.1 | The
preamble to this Agreement and the declarations of the parties therein, constitute an
integral part hereof.
| | --- | ---------------------------------------------------------------------------------------------------------------

| | 1.2 | This
Agreement and the Schedules thereto constitute jointly the complete contract. In the
event of any divergence or inconsistency between that stated in this Agreement and the
contents of the Schedules or any of them, the contents of this Agreement will control.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.3 | The
headings to the clauses or sections in this Agreement are set out for ease of reference
only and are not to be applied in interpreting the Agreement.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Interpretation
and Definitions
|-- | ------------------------------

| | 2.1 | Unless
the context otherwise directs, the terms as set out below will have in this Agreement the
meanings set out opposite them:
| | --- | --------------------------------------------------------------------------------------------------------------------------------

| | The
Host  Med-1 I.C. 1(1999) Ltd.
| | ------------------------------------

| | The Customer - Partner Communications Company Ltd.
| | ----------------------------------------------------

| | Site/
the Sites as defined in the preamble hereto.
| | ------------------------------------------------------

| | Communications
Cabinet  means the cabinet in which the switching boards (the ODF/DDF
optic or digital) switching boards are installed, used in connecting the end-point of the
Cable Transmission Network at the relevant Site and the internal communication network
owned by the Host at such Site, including any future addition or extension of the cabinet
and/or the switching systems so installed therein.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Manhole  means
the manhole situated in the area of the Site and which enables direct access to the Cable
Transmission Network.
| | ---------------------------------------------------------------------------------------------------------------------------------

| | Customer
Cage  the floor area fenced off by a metal cage having a designated
entrance, in which the various equipment required to operate the Cable Transmission
network or other equipment, at the Customers discretion are or will be installed,
including any extension or addition to such area or manhole.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Communications
Facilitiesthe installations that will be made available for the
Customers use under this Agreement, and which comprise:
| | ------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | At
the PT Site  Customer Cage the features and location of which on
               the date of the execution of this Agreement are set out in Schedule
               1 hereto;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

---

---



| | (b) | At
the Haifa Site  Customer cage the features and location of which
               on the date of the execution of this Agreement are set out in Schedule
               1 hereto, and a Communications Cabinet common to the
Company and                a third party, as described in clause 3.3.1 hereof, and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | At
the TA Site  columns designed for the installation of computer
               and of communications equipment and which are located in the area of the
TA                Site, as described and delineated in Schedule 1 hereto.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cable
Transmission Network  as defined in the preamble hereto.
| | -----------------------------------------------------------------

| | Site
Services  the services pertaining to the general physical and/or
technical conditions existing in each of the Sites, i.e.: air conditioning, water,
security, lighting, firefighting system, water pumping system, floating floor and
building maintenance and cleaning.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Additional
Services  additional services beyond the content of the Site Services,
expected to be supplied by the Host to the Customer from time to time according to the
Hosts custom and/or by separate agreement with the Customer, all against the
additional consideration that will be fixed in accordance with its price list from time
to time as determined or as determined by the parties by mutual agreement, and according
to a written order from the Customer, including also the installation of jumpers and
connections, the provision of interconnectability services in the area of the Site/s
(cross-connect services), equipment ordering services, equipment installation, the Hosts
representative accompanying the Customer during visits in the area of the Site/s and
other services involved in connecting to the Hosts installation infrastructures.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Customers
Works and Installations  services, works and installations within the
Customer Cage that will be effected by the Customer, provided that these will not include
services involved in connecting to the Hosts installation infrastructures (beyond
the existing connection under this Agreement).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.2 | The
Schedules hereto and set forth below, constitute an integral part of this Contract
between the parties:
| | --- | -----------------------------------------------------------------------------------------------------------

| | Schedule 1 - | Specification
of the communications  installations and the Pits and
                                             ancillary drawings.
| | ------------ | ------------------------------------------------------------------------------------------------------------------------------------

| | Schedule 2 - | Consideration.
| | ------------ | --------------

| | Schedule 3 - | Rules
of  conduct  and  security  at the Site  and  undertaking  to
                                             maintain confidentiality.
| | ------------ | ------------------------------------------------------------------------------------------------------------------------------------------

| | Schedules 4-1/2 - | Insurance
Schedules.
| | ----------------- | --------------------

| | Schedule 5 - | Service
and maintenance level (SLA).
| | ------------ | ------------------------------------

|3. | Rights
of Use and Access; Site Services
|-- | ---------------------------------------

| | 3.1 | Pursuant
to the terms of this Agreement, and subject to the conditions described in this Agreement
and against the consideration specified in Schedule 2, the Host undertakes to
supply to the Customer and the Customer hereby undertakes to acquire and take from the
Host, during the term of this Agreement:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

---

---



| | 3.1.1 | A
right to use the Communications Facilities and a non-exclusive right of access to the
Communications Facilities and the Manhole/s all for the purposes of operating and/or
repairing and/or maintaining and/or upgrading the Customers communication equipment
installed therein and/or the Cable Transmission Network;
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.1.2 | The
Site Services.
| | ----- | ------------------

| | 3.2 | The
Host will allow the Customer to have free access at all times to the Communications
Facilities and the Manhole/s Site/s at each and every Site, pursuant and subject to the
terms of this Agreement and the Rules of safety as set out in Schedule 3.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.3 | Notwithstanding
clause 3.2 above, the Customer hereby acknowledges that it is aware of and agrees that:
| | --- | -------------------------------------------------------------------------------------------------------

| | 3.3.1 | The
Communications Cabinet installed at the Haifa Site is, in addition to being the end-point
of the Cable Transmission Network, used also for the end-point of the international cable
transmission network that is owned or operated by Mediterranean Nautilus Israel Ltd.,
(hereinafter respectively called  Med Nautilus Network and Med
 Nautilus) and is installed in the area leased to Med Nautilus. Accordingly, as
long as the Communications Cabinet at the Haifa Site will be common to the Cable
Transmission Network and the Med Nautilus Network mentioned, the Customers access
to the Communications Cabinet is conditional on prior notice to the Host, in addition to
that stated in Schedule 3.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.3.2 | Access
to the Communications Facilities and/or the Manhole/s at any given site may be denied to
the Customer at times of general emergency at such Site, by reason of which such free
access will not be enabled or granted. In this clause, general emergency means:
fire, flood, act of sabotage or terrorist act, the giving of instructions by the Defence
Forces (police, army, firefighting or rescue agencies etc.) or taking control of the
building by the Defence Forces or urgent action within the framework of the handling of
any one of such events, and, following the occurrence of which or at the time of or
following the occurrence thereof, no entry to the building will be permitted.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Customer in this clause includes the Customers managers, employees,
visitors, contractors representing it and any persons found on its behalf at the Site,
provided that such parties have been approved by the Customer in advance for such purpose
and/or have been approved pursuant to Schedule 3. The Host will not
unreasonably refuse to authorise any such entity.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.4 | Subject
to the physical possibility of expanding the areas of the Communications Facilities
and/or of acquiring rights of use and access in relation to additional areas in the Sites
or any of them (hereinafter  Physical Possibility of Expansion),
the Host will enable the Customer to have the Physical Possibility of Expansion for
purposes of operating and/or maintaining and/or repairing and/or updating the Cable
Transmission Network and the Customers remaining communications equipment installed
at the Site/s, on the conditions provided by this Agreement and in consideration of a
price that will, at each and every Site, be computed according to the per  sq.
meter price on the basis of which the consideration at such site is computed pursuant to
Schedule 2. In the event of such Physical Possibility of Expansion,
the right will be granted to the Customer to choose, at its sole discretion, the location
of the additional areas at the Sites or in any of them, based on free space (for this
purpose, free space excepts unoccupied areas in respect of which future rights (an option) have been granted) to third parties).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

---

---



| | 3.5 | It
is expressly agreed that nothing contained above in this Agreement shall permit the
Customer (as hereinbefore defined) to have the use of and/or entry to any other part of
any of the Sites beyond the Communications Facilities and/or the Manhole/s in each and
every Site, except for the access corridors from the entry point to the Site up to the
Communications Facilities and the Manhole/s in such Site, as instructed by the Host from
time to time, and subject to the provisions of Schedule 3 to this
Agreement, and the Customer will not be entitled to enter upon, pass through or visit any
of the parts of the Site mentioned, including, but without derogating from the generality
of the foregoing, the control room of the Site, the central communications room at the
Site (Meet Me Room) areas that are or will be leased to other customers of
the Host, battery rooms, pumping rooms, generator rooms, transformer rooms and the like.
This clause is fundamental to this Agreement.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.6 | It
is expressly agreed that nothing contained in this Agreement shall confer upon the
Customer any right in the land relating to the Sites or any part of them, including any
right of lease and/or easements whatsoever, beyond the rights of use and access conferred
expressly by this Agreement and for the duration of the term of this Agreement only, and
that the grant of such rights and/or any other right according to this Agreement will not
be construed as granting to or creating in favor of the Customer any right in the land or
undertaking to grant any right whatsoever in the land. It is further expressly agreed
that the Lending and Borrowing Law, 5731  1971 and/or any other enactment defining
or creating a leasing relationship, including a protected tenancy, will not apply to the
provisions of this Agreement and the Agreement will be construed as negating all the
provisions of those enactments. Accordingly it is hereby agreed that no liability of an
owner of land and/or of the occupier of land will apply to the Customer or to any person
on its behalf towards the Host and/or towards any other party that is found at the Sites.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.7 | The
Customer will be responsible for its representatives strictly complying with the
instructions of the Hosts representative at each and every Site, including in all
matters relating to the manner of conduct at the Site, the access roads at the Site and
the safety rules at the Site.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.8 | The
Host warrants that the level of maintenance and level of services that will be provided
to the Customer will be appropriate and not be less than or deviate from the provisions
contained in Schedule5 to this Agreement.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.9 | Additional
Services (if and to the extent they will be supplied to the Customer) will, unless
otherwise expressly agreed in writing between the parties, be subject to the provisions
of this Agreement.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.10 | The
Customers Works and Installations (as hereinbefore defined) will be carried out at
the sole discretion of the Customer, without any further consideration to the Host, but
will, nonetheless be subject to prior arrangement with and under the supervision of, the
Host, provided also that such supervision costs will be fully borne by the Host.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

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|4. | Term
of the Agreement
|-- | ---------------------

| | This
Agreement will enter into immediate effect upon the execution thereof by the parties and
remain in force until May 31, 2015 (hereinafter: the Agreement Term).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | Consideration
|-- | -------------

| | 5.1 | The
Customer will, in consideration of the right of access and the Services mentioned in
clause 3 above, pay the Host the financial consideration mentioned in Schedule 2 hereto
(hereinafter: the Consideration). The Consideration will be paid to
the Host once every calendar quarter in advance in respect of that calendar quarter, not
later than the fifth of such quarter. It is hereby clarified that the Customer will be
bound to pay the Consideration in respect of the entire Agreement Term, whether or not it
will have exercised its rights under this Agreement.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.2 | The
Customer will, in addition to that stated in Clause 5.1 above, and together with the
Consideration, pay the Host a further payment in respect of the Additional Services that
have been ordered (if at all) by the Customer, in writing, during the period of the
preceding calendar quarter, according to the prices to be agreed upon between the parties
and against a detailed invoice to be submitted by the Host to the Customer and which will
contain an itemisation of the Addition of Services that have been provided to the
Customer and the dates on which those Services were provided during such calendar
quarter.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.3 | Value
Added Tax will be added to the Consideration and the payment for the Additional Services
at the lawful rate applicable by law from time to time. The Host, will, in respect of the
Consideration and any additional payment that will be so added thereto, provide the
Customer, subject to the actual making of the payment, with a lawfully-drawn tax invoice.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.4 | It
is agreed that the payments according to this clause include all taxes, levies and fees,
including customs duties and import fees, if applicable, in respect of the management and
operation of the Site, and the Customer will not be separately charged for these payments
in addition to the Consideration. That stated does not apply to Value Added Tax that will
be added to the payments mentioned in clause 5.3 above, or to taxes, levies, fees and/or
other compulsory payments that apply to the Customer in connection with its operations or
in relation to the Services that will be received by it under this Agreement or
generally. Where the Host has been charged, borne or paid any payment which by this
Agreement or law applies to the Customer, the Customer will reimburse the Host for such
amount immediately upon the Hosts first demand.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

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| | 5.5 | Annual
default interest in respect of each day of delay in making payment up to 30 days of the
delay in making any of the payments prescribed by this Agreement will be added to the
amount in arrears at the rate of 1% above the prime interest rate customary in Bank
Hapoalim BM (i.e. prime plus 1%). In respect of each day of delay in making any payment
beyond such 30 day period, penal interest on the amount in arrears will be added and once
every 30 days, the penal interest will be added to the amount in arrears so that penal
interest will similarly be imposed thereon (compound interest). Penal interest in
this Agreement means the annual interest charged for the time being by Bank Hapoalim BM
on unlawful overdrawings from an approved credit facility in overdraft accounts.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.6 | All
prices in this Agreement and/or in the Schedules are US Dollar denominated and, as stated
above  are exclusive of VAT. Payment will be made in New Shekels pursuant to the
representative rate of exchange of the US Dollar on the date of issue of the invoice.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.7 | The
Customer will be entitled to offset the payments under this Agreement only against
charges or liquidated sums that are, in its opinion, due to it from the Host.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.8 | The
full and punctual payment according to this Agreement constitutes a fundamental condition
hereof and the breach thereof will constitute a fundamental breach of this Agreement.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Intellectual
Property
|-- | ---------------------

| | 6.1 | It
is hereby agreed and stated that nothing contained in this Agreement shall confer upon
any of the parties the right to exploit or use, directly or indirectly, in any manner,
the know-how of the other party, including in relation generally to the provision of
hosting services.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.2 | Nothing
contained in this Agreement constitutes any permit or consent to the use by any party of
any brand name, trade mark or like property belonging to or held by or used by the other
party, without the prior written and special consent of such party.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | Breach
and Termination
|-- | ----------------------

| | 7.1 | Each
party will be entitled to rescind this Agreement by thirty days prior notice, upon
the occurrence of any of the following:
| | --- | --------------------------------------------------------------------------------------------------------------------------------

| | 7.1.1 | Any
temporary or permanent receiver, special manager, liquidator, temporary or permanent,
being appointed for the other party, or a winding up petition having been filed against
it, provided that such appointment or petition will not have been vacated within forty
five (45) days.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1.2 | The
other party has filed a petition for voluntary winding up, or a stay of proceedings
and/or the making of an arrangement with its creditors.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1.3 | The
other party has committed a breach of any of the confidential duties imposed upon it
under this Agreement.
| | ----- | --------------------------------------------------------------------------------------------------------------

| | 7.1.4 | The
other party has committed a fundamental breach of this Agreement (not being a delay in
the making of any of the payments applicable under this Agreement). It is agreed that any
breach other than a fundamental breach will be regarded as fundamental after fifteen (15)
days will have elapsed from the date on which either of the parties sends the other
notice of breach and the other party will have failed to cure such breach to the full
satisfaction of the party sending such notice.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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| | 7.1.5 | The
other party having delayed in the making of any of the payments imposed upon it for a
period exceeding ninety (90) days.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------

| | 7.1.6 | If
the Customer has, during any period of twelve (12) consecutive months, at the discretion
of the Host, offset any sum exceeding the Consideration in respect of three (3) months,
as set out in Schedule 2 hereto. Such termination shall not operate
to affect the parties rights under this Agreement.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.2 | Upon
such termination of the Agreement, the Customer will, as quickly as possible, remove the
communications equipment and any other equipment owned by it at any of the Sites
(excepting the Cable Transmission Network), unless, in a case where the Host is the party
who has terminated this Agreement following the breach thereof by the Customer  the
Host has, at its sole discretion, elected to effect the removal itself, in which case it
will be entitled so to do and also give the Customer reasonable prior notice regarding
the time and place at which it must attend in order to take possession of the equipment
so removed from the Sites.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
the Customer has failed to remove the equipment or failed to attend in order to take the
same on the date prescribed for that purpose by the Host, as appropriate, the Host will
be entitled to store that equipment at the Customers expense, and the Customer will
pay the Host the expenses involved in storing the equipment, and if the Host has stored
the equipment in a building occupied by the Host, the Customer will pay the Host payment
in respect of the storage of the equipment as fixed according to the maximum price per
sq. meter that will be charged by the Host from its customers at the Site in respect of
granting the right of use of a similar area.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Confidentiality
|-- | ---------------

| | 8.1 | Subject
to any law, the Customer will keep secret and not disclose to any person without the
prior written authorisation of the Host, any information, particular or data relating to
this Agreement, the grant of the right of access and/or the services thereunder, the
Site, the rights of access to the Site, the security procedures at the Site, the types of
activity carried on at the Site, other customers of the Host and any other particular or
data relating to the Host. Notwithstanding the foregoing, the Customer will be entitled
to disclose the very existence of the engagement with the Host for providing hosting
services as provided by this Agreement.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.2 | The
Host will keep secret and not disclose to any person without the express authorisation of
the Customer, any information relating to the Customer and/or the activity of the
Customer at the Site and/or in connection with the technical or financial situation of
the Customer. Notwithstanding the foregoing, the Host will be entitled to disclose the
very existence of the engagement with the Customer for providing hosting services as
provided in this Agreement.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

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| | 8.3 | The
parties undertaking to maintain secrecy mentioned above will not apply to the
information that is in the public domain and/or which has reached the knowledge of the
other party from any third party, provided that such third party was not bound to
maintain secrecy regarding such information and/or, in the event of a demand to disclose
such information on the part of any authority that has demanded to receive such
information by virtue of its power by law, or on the part of any competent court, subject
to such a demand having been received by any party to this Agreement in relation to
confidential information of the other party, the party receiving such demand will, prior
to disclosing the confidential information, give notice of the demand to the other party
a reasonable time in advance and enable it to take proceedings to prevent the disclosure
of the information.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.4 | This
clause will apply among the parties independently of the validity of the Agreement
between them and will continue to apply also after the termination of the Agreement Term,
regardless of the reason for the termination.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.5 | Without
derogating from the foregoing, the Customer and all persons on its behalf attending at
the Site will sign the Rules of Conduct and Security at the Site and a written
undertaking to maintain secrecy in the form attached hereto as Schedule 3.
The Host will be entitled to prevent access to the Site by any person attending at the
Site on the Customers behalf if he has failed prior to entering the Site, to sign
the Rules of Conduct and Security at the Site and such written undertaking to maintain
confidentiality.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Insurance
|-- | ---------

| | 9.1 | The
Customer and the Host will, during the entire term of this Agreement, by means of
reputable insurance companies in Israel, maintain the insurances set out in Schedules 4-1
and 4-2 (hereinafter respectively: the Customers Insurance Certificate and
the Hosts InsuranceCertificate) and remit to one
another, from time to time, upon request such Certificates signed by their insurers.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.2 | Notwithstanding
that stated in clause 9.1 above, it is agreed that the Customer will be entitled not to
affect the property insurance mentioned in sub-paragraph (2) of the Customers
Insurance Certificate, in whole or in part, save that the provisions contained in clause
9.4 below will apply, as if the insurance had been made in full.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.3 | The
Host exempts the Customer and/or any of its successors from liability in respect of
damage for which it is entitled to indemnity under the insurance effected according to
section (2) of the Hosts Insurance Certificate (or for which it would have been
entitled to indemnity had it not been for the deductible specified in the policy), save
that such exemption from liability will not apply in favor of any person who has caused
wilful damage.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.4 | The
Customer exempts the Host and/or its successors as well as the owners of the buildings in
which the Sites are housed and the proprietors of other rights in the Sites and/or in
such buildings, including other hosted parties (the other proprietors of rights being
hereinafter called: the Other Proprietors), under whose agreements the
Other Proprietors are vested with rights in such Sites and/or buildings and an exemption
from liability is included and/or responsibility to include a waiver of the right of
subrogation in their property insurance, from liability in respect of loss and/or damage
for which the Customer is entitled under the insurance effected by it pursuant to section
(2) of the Customers Insurance Certificate (or for which it would have been
entitled to indemnity had it not been for the deductible specified in the policy), save
that such exemption will not apply in favor of any person who has caused malicious
damage.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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| | The
Host declares that pursuant to the agreements between it and/or the Other Proprietors and
between it and the proprietors of the buildings in which the Sites are housed (not being
in the ownership of the Host) the Other Proprietors and the proprietors of such buildings
have undertaken to insure the property in their ownership and which is under their
responsibility against loss or damage following the usual risks covered by extended fire
insurance, such insurances including a waiver of the right of subrogation against the
Host and its successors as well as against Other Proprietors (including the Customer)
where the property insurance of such Other Proprietors contains a parallel clause
regarding the waiver of the right of subrogation, save that the waiver of such right of
subrogation will not apply in favor of any person who has caused malicious damage.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | Prevention
of disturbances to the Host and third parties
|--- | --------------------------------------------------------

| | 10.1 | The
Customer hereby declares, acknowledges and undertakes that it has been explained to it
and it understands that areas and/or rooms and/or installations exist at the Sites which
are operated by the Host and/or by its customers, in which are installed Communications
Equipment and/or computer servers and/or electricity and/or switching and/or other
similar equipment. The Customer undertakes that the Communications Equipment that is in
its ownership at the Sites will not cause any disturbances, inductions, or nuisances to
the Host and/or the equipment that is operated by it, or to third parties and/or to the
equipment that is operated by them. Without derogating from the Hosts rights under
this Agreement and/or at law, the Customer undertakes, immediately upon the Hosts
first demand, to effect any act and/or repair that will be required in order to prevent
and/or terminate such disturbances. The Host declares that agreements with its other
customers contain and will contain in the future a provision similar to this clause.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 | The
Customer undertakes that it and all of its successors for each of the Sites will keep the
Sites and the surroundings thereof clean, and particularly will keep clean and intact the
public areas at the sites and the access ways thereto, including stairwells, entry rooms,
elevators, corridors and any other public area.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | The
Customer is aware of the fact that the Host may effect during the term of this Agreement,
various works at the Sites or any of them, including adjacent to or contiguous with the
Communications Facilities and/or the Manhole/s, that are located in each and every Site,
and also that it is the Hosts intention to construct, independently or by means of
others, additional storeys in the building in some of the Sites. The Customer will
neither disrupt nor oppose any act that will be effected in connection with the
foregoing, provided that the Customers rights under the Agreement will not be
affected. Without derogating from that stated above, it is agreed that the Host will be
entitled to run through any part of the Site, in each Site, including adjacent to the
Communications Facilities and/or to the Manhole/s and/or contiguous thereto, including
above or under the floor thereof, communications cables, wiring and conduits, water, gas,
air-conditioning conduits, electrical lines, telephone cables, sewage, drainage and the
like, and also to put in place such installations, all on condition that such transfer
will not cause the ongoing activity of the Cable Transmission Network and/or the
Communications Facilities any harm. It is expressly agreed that in the event of the Host
intending to effect in any of the Sites works which could lead to harm in the activity of
the Cable Transmission Network and/or the Communications Facilities, it will give notice
thereof to the Customer a reasonable time in advance and act in co-ordination with it.
For the avoidance of any doubt it is clarified that current works at the Site such as the
laying of wiring, wire sleeving, the placing of cages and cabinets and the like will not
be deemed to be works for which prior notice will be required to be given to the
Customer, except where they are likely to lead to harm to the system activity.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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|11. | Assignment
of rights
|--- | --------------------

| | 11.1 | Each
party will be entitled to assign, endorse, charge or pledge this Agreement and all of its
rights and obligations hereunder to third parties, without affecting the other partys
rights under this Agreement.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.2 | Save
as stated in clause 11.1 above, the Customer will not be entitled to grant any right of
use, possession or access of any kind to any third parties in the Communications
Facilities and/or in the Manhole/s situated in the areas of each and every Site, or in
any other component of the services. Notwithstanding the foregoing, the Customer will be
entitled to grant such rights to third parties solely for the purpose of the current
operation and/or repair and/or maintenance and/or upgrading of the Cable Transmission
Network. Without derogating from the generality of the foregoing, it is hereby clarified
that the Customer is not entitled to make use of the Communications Facilities and/or the
rights conferred upon it under this Agreement, in order to supply services similar to
those that are supplied to the Customer under this Agreement, to third parties
(regardless of whether such services will be supplied by the Customer independently or by
means of others). This clause is fundamental to this Agreement.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | Licenses
and authorizations
|--- | ---------------------------

| | 12.1 | The
Customer hereby declares and undertakes that on the date of the execution of this
Agreement, it holds all the licenses, authorizations and permits required to operate the
Cable Transmission Network, and/or receive the Site Services and/or any other activity in
connection with which the Customer is contracting with the Host under this Agreement.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.2 | The
Host hereby declares and undertakes that on the date of the execution of this Agreement,
it holds all the licenses, authorizations and permits required to operate the Sites
and/or supply the Site Services and/or any other activity in connection with which the
Host is contracting with the Customer under this Agreement.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.3 | The
parties will compensate one another in respect of any damage, loss, expense or out of
pocket expense that will be incurred by the other party as a result of a party to this
Agreement having committed a breach of its undertaking contained in clauses 12.1 and 12.2
above.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Liability
and indemnity
|--- | -----------------------

| | 13.1 | The
Customer will bear the liability imposed upon it at law in respect of harm and/or damage
that may be caused to the person or property of any individual or body whatsoever
following the act of the Customer and/or its successors under this Agreement.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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| | The
Customer undertakes to indemnify the Host for the full amount that the Host has been made
liable to pay under any judgment, the execution of which has not been stayed following an
action filed against the Host in respect of harm or damage for which the Customer is
responsible as mentioned in the first section of this clause, and will also indemnify the
Host in respect of the reasonable costs that will be borne by the Host for defending such
action, provided that the Host undertakes to notify the Customer promptly concerning the
receipt of any action or demand in respect of that stated in this clause and enable the
Customer to defend the same and will co-operate with the Customer defending such action.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.2 | Notwithstanding
that stated in clause 13.1 above, the Host exempts the Customer and all of its successors
from any liability in respect of indirect damage and/or loss that may be caused to the
Host (including loss which could be caused to the Host following any action on the part
of any of the other persons being hosted and/or any of its customers) as a result of loss
and/or damage that is caused to the Sites and/or the contents thereof, whether such loss
and/or damage have been caused by the Customers negligence or by negligence and/or
deliberately by any person on its behalf; save that such exemption from liability will
not apply in favor of any person who has caused loss and/or damage maliciously.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.3 | The
Host will bear the liability imposed upon it at law in respect of harm or damage that may
be caused to the person or property of any individual or body following the act of the
Host and/or of its successors under this Agreement.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Host undertakes to indemnify the Customer for the full amount that the Customer has been
made liable to pay under any judgment, the execution of which has not been stayed
following an action filed against the Customer in respect of harm or damage for which the
Host is responsible as mentioned in the first section of this clause, and will further
indemnify the Customer in respect of the reasonable costs that will be borne by the
Customer for defending such action, provided that the Customer undertakes to notify the
Host promptly concerning the receipt of any action or demand in respect of that stated in
this clause and enable the Host to defend the same and will co-operate with the Host in
defending such action.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.4 | Notwithstanding
that stated in clause 13.3 above, the Customer exempts the Host and all of its successors
from any liability in respect of indirect damage and/or loss that may be caused to the
Customer (including loss which could be caused to the Customer following any action on
the part of any of the other persons being hosted and/or any of its customers) as a
result of loss and/or damage that is caused to the Sites and/or the contents thereof,
whether such loss and/or damage have been caused by the Hosts negligence or by
negligence and/or deliberately by any person on its behalf; save that such exemption from
liability will not apply in favor of any person who has caused loss and/or damage
maliciously.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.5 | The
provisions of the Bailees Law, 5727-1967 will not apply to this Agreement.
| | ---- | ------------------------------------------------------------------------------

12

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|14. | Law
of the Agreement
|--- | --------------------

| | 14.1 | The
law applicable in the State of Israel as existing from time to time will apply to this
Agreement, the interpretation thereof and actions by virtue thereof or by virtue of a
breach thereof.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 14.2 | The
parties convey to the competent courts in the Tel Aviv district the territorial,
exclusive and special jurisdiction to dispose of any matter resulting from this action or
the breach thereof. Nothing stated will affect the right of any party to this Agreement
to join the other party to another action which has been filed against him in any other
court.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 14.3 | This
Contract will not be deemed to be a contract in favor of any third party and is not
intended to confer any rights whatsoever on any third parties, including the Customers
customers or other customers of the Host.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15. | Notices
and addresses
|--- | ---------------------

| | 15.1 | Each
notice that will be given according to this Agreement will be delivered to the addresses
of the parties as expressed below. Each notice will be deemed to be a notice given to the
receiving party upon the fulfillment of at least one of the following conditions:
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.1.1 | Where
the notice has been given by registered mail, 3 days after the date of posting;
| | ------ | -------------------------------------------------------------------------------------

| | 15.1.2 | Where
the notice has been sent by means of fax, the recipients telephonic confirmation of
the delivery thereof has been received, and the sender of the notice has made a notation
regarding the time of the dispatch, and the name of the recipient of the notice that has
approved the receipt thereof by telephone and has attached to the notation the copy of
the notice and the printed confirmation of the dispatch by the facsimile machine.
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.1.3 | Where
the notice has been delivered by hand at the offices of the recipient party, a copy
thereof bearing the stamp of the receiving party and the signature of the person
receiving it, specifying the date and time of receipt of the notice have been obtained.
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.2 | The
parties may give notice of change of address by notice that will be given as stated above
to the other party.
| | ---- | -----------------------------------------------------------------------------------------------------------------

| | 15.3 | The
addresses of the parties for the purpose of this Agreement are:
| | ---- | -------------------------------------------------------------------

|The Host: |  | Med-1
- I.C.1 (1999) Ltd.
6 Hanechoshet St., Tel Aviv
Fax: 03-7666011; Tel: 03-7666000
Attention the Managing Director
|--------- |  | ----------------------------------------------------------------------------------------------------------------------

|The Customer: |  | Partner
Communications Company Ltd.
8 Amal St.,  Afek Industrial Park, Rosh Ha'ayin
Fax: 03-9122028; Tel: 054-7814181
Attention the Legal Advisor
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------

13

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|16. | Miscellaneous
|--- | -------------

| | 16.1 | Subject
as provided in clause 16.5 hereof, the provisions contained in this Agreement encompass
all the undertakings between the parties in relation to all the subjects which have been
regulated thereunder, and any representation, assurance, statement or undertaking,
whether made concurrently with or subsequent to the execution of this Agreement, and
which have not been expressly included in this Agreement, will be of no effect.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.2 | No
modifications or amendments to this Agreement will be of any effect unless made in
writing and signed by the parties.
| | ---- | ------------------------------------------------------------------------------------------------------------------------

| | 16.3 | The
Host will be entitled to instruct the Customer to pay the payments under this Agreement
in a certain place or to a certain bank account, and the Customer will act in accordance
with such instruction within 3 (three) business days from the date of its receiving the
instructions.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.4 | No
waiver, concession or forebearance from acting on time or the grant of an extension will
be deemed to be a waiver by any of the parties of any of their rights under this Contract
nor will the same give rise to any estoppel of an action by them, unless such waiver is
expressly made in writing.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.5 | The
provisions contained in this Agreement shall not derogate from any right, undertaking
and/or representation applicable between the parties under any other valid agreement
between them, including under the Asset Purchase Agreement dated January 22, 2006 and the
Schedules thereto, and nothing contained in this Agreement shall vary the provisions of
any other agreement mentioned above.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# In witness whereof the
parties have set their hands 
at the time and place
first above written:

|
Med-1 I.C. 1(1999) Ltd. |  | 
Partner Communications Company Ltd.
|-------------------------------------- |  | ------------------------------------------------------

14

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# Schedule 1

# Technical
Specification of the Communications Facilities

Unless otherwise expressly stated in
the body of this Schedule, the terms mentioned in this Schedule will bear the specific
meaning ascribed thereto in the Hosting Agreement dated _________________ 2006
(hereinafter: the Agreement) between Med-1 I.C. 1(1999)
Ltd.(hereinafter: the Company) and Partner Communications Company Ltd.,
(hereinafter: the Customer).

| | I. | The
Petach Tikvah Site
| | -- | ----------------------

| |  | Customer
Cage:
| | - | --------------

| |  | The
floor area of 20.2 sq.m. fenced off in a metal cage located in Hall 30-16.
| | - | ------------------------------------------------------------------------------

| |  | The
Customer Cage is designated for hosting communications cabinets and equipment, including
equipment transferred for the Customer by virtue of the Asset Purchase Agreement dated
January 22, between the Host and the Customer.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
location and configuration of the Customer Cage at the Petach Tikvah site is described in
the plan annexed hereto as Schedule 1-1.
| | --------------------------------------------------------------------------------------------------------------------------------------

| |  | Manholes:
| | - | ---------

| | Two
(2) manholes are situated in the area of the Petach Tikvah Site.
| | --------------------------------------------------------------------

| | II. | Haifa
Site (Tirat Hacarmel)
| | --- | ---------------------------

| |  | Customer
Cage:
| | - | --------------

| |  | The
floor area of 13.35 sq.m. fenced off in a metal cage located in Hall 40-15.
| | - | -------------------------------------------------------------------------------

| |  | The
Customer Cage is designated for hosting communications cabinets and equipment, including
equipment transferred for the Customer by virtue of the Asset Purchase Agreement dated
January 22, between the Host and the Customer.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
location and configuration of the Customer Cage at the Haifa site is described in the
plan annexed hereto as Schedule 1-2.
| | ------------------------------------------------------------------------------------------------------------------------------

| |  | Manholes:
| | - | ---------

| | Two
(2) manholes are situated in the area of the Haifa Site.
| | ------------------------------------------------------------

15

---

---



| | III. | The
Tel Aviv Site
| | ---- | -----------------

| |  | Communications
equipment:
| | - | -------------------------

| | Communications
equipment is installed at the Tel Aviv Site on 3 columns which are located in the central
hall.
| | --------------------------------------------------------------------------------------------------------------

| | The
precise location of these columns at the Tel Aviv site is described in the plan annexed
as Schedule 1-3.
| | ------------------------------------------------------------------------------------------------------------

| |  | Manholes:
| | - | ---------

| | Two
(2) manholes are situated in the area of the Tel Aviv Site.
| | ---------------------------------------------------------------

(*)    
          Note  the Agreement does not include the supply of the equipment
          installed on the date of the execution of this Agreement at the Sites, including
          in the Customers Cages; such equipment having been transferred to the
          Customers ownership in accordance with the Asset Purchase Agreement, and
          the supply, operation and maintenance thereof, are not part of the content of
          the services under the Hosting Agreement.

# Schedule 2

# The Consideration

Unless otherwise expressly stated in
the body of this Schedule, the terms mentioned in this Schedule will bear the specific
meaning ascribed thereto in the Hosting Agreement dated _________________ 2006
(hereinafter: the Agreement) between Med-1 I.C. 1(1999)
Ltd.(hereinafter: the Company) and Partner Communications Company Ltd.,
(hereinafter: the Customer).

|I | Consideration
in respect of the services
|- | ----------------------------------------

|Site                        | Total per month (in US$) | Remarks                                                                                                                                                         
|--------------------------- | ------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Petach Tikvah site          | 2,323                    | The area will be delineated  in a designated  cage
including a  designated  entrance,  having a total
setup  of  20kva  (1kva  for  every  sq.m.  of net
floor).
|Haifa (Tirat Hacarmel) Site | 1,268                    | The area will be delineated  in a designated  cage
including a  designated  entrance,  having a total
setup  of  13kva  (1kva  for  every  sq.m.  of net
floor).
|Tel Aviv site               | 1,200                    |                                                                                                                                                                 
|Total Consideration         | 4,791                    |                                                                                                                                                                 

16

---

---



|Notes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The
 Consideration  includes current  expenses in respect of managing the Sites and the
support systems  installed therein,  such as  peripheral  lighting,  air-conditioning,
 guarding,  as well as general  expenses in respect of managing the Sites, such as city
taxes,  etc., and these systems only.  Without  derogating from the generality of the
 foregoing,  the  Consideration  does  not  include  the  following  components,  which
 will be  charged  for separately:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The
Host will, at the end of each calendar  year, be entitled,  at its choice,  and by at
least 30 days' notice to the Customer  before the end of that year,  to  determine  that
the  Consideration  in respect of the next ensuing calendar year will be linked to the
Consumer Price Index  published in the United States (for this purpose the CPI will serve
from the date of the execution of this Agreement as the Base Index).                                               

17

---

---



|II | Payment
terms
|-- | -------------

Current payments will be made each
quarter, on the first day of each quarter, in advance in respect of that quarter. (For
example, on April 1, 2006, payment will be made in respect of the month of April through
June (inclusive) 2006).

The first payment will be made on the
date of the execution of this Agreement in respect of the period commencing on the date of
the execution of the Agreement and expiring at the end of the calendar quarter on which a
day corresponding to the execution date occurs.

One-time costs will be paid on a
current month basis + 30 days.

18

---

---



# Schedule 3

# Rules of Conduct and
Security at the Sites and Undertaking to Maintain Secrecy

Date: _________________

Med-1 I.C. 1(1999) Ltd.
6 Hanechoshet St.,Tel Aviv

Dear Sir/Madam,

|RE: | Personal
undertaking to keep rules of conduct and security at the Sites and duty of secrecy
|--- | -------------------------------------------------------------------------------------------

I, the undersigned, _________________
hereby declare and undertake as follows:

|Whereas: | Partner
Communications Company Ltd., (hereinafter: "the Customer") is bound by a Hosting
Agreement with you dated _________________ in connection
with various sites (hereinafter: "the Sites")
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Whereas: | We
work at the Customer  provide  services to the  Customer/are  employed by the Customer;
                     and
|-------- | -------------------------------------------------------------------------------------------------------------------

|Whereas: | For
the purpose of providing services to the Customer, the undersigned is desirous of
entering the Sites or any of them and declares and undertakes that the Customer has
authorized his entry into the Sites as mentioned on its behalf.
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Therefore I hereby
undertake towards you as follows:

|1. | I
undertake to keep absolutely secret and not disclose, show, publicize,
               distribute, deliver and/or transfer, directly or indirectly, to any person
               and/or body, any of your information. In this Undertaking
               information means: any document, record, drawing, plan,
               specification, content of any of the foregoing, know-how, professional
secrets,                trade secrets, working methods, marketing, costing, technical
solutions as well                as any information particular, or data relating to the
Agreement, the provision                of the services thereunder, the Site, access ways
to the Site, structure                thereof, rules of safety at the Site, the types of
activity maintained at the                Site, recipients of your other services and any
other detail or data in                connection therewith, and which does not fall
within the public domain.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | I
undertake not to make any use of the information except for purposes of my
               actions within the scope of the Agreement on the Customers behalf,
and not                to make any other use of the information personally or by means of
others. In                addition, I undertake not to transfer and/or deliver any
information to any                third party for any purpose or reason whatsoever.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



|3. | I
undertake to operate with the proper diligence in order to ensure that
               information will be kept in a proper manner and not be disclosed to any
third                party. I will be responsible towards you for the consequences of any
breach of                the duty of secrecy by me, including where the breach has been
committed by any                person on my behalf.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | My
undertaking to maintain secrecy will not apply in the following cases:
|-- | -------------------------------------------------------------------------

| | a. | In
the event of the information becoming the public domain otherwise than as a
                    result of a breach of this undertaking;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------

| | b. | In
the event of my having received a demand by law to disclose the information
                    provided that in such a case, I will give you notice immediately of
receiving                     the demand by me and enable you to defend the same prior to
my disclosing the                     information.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c. | If
you have given your express consent in writing to the disclosure of the
                    information by me.
| | -- | -----------------------------------------------------------------------------------------------------------------

|5. | For
the avoidance of any doubt it is hereby clarified that my undertaking will
               remain in force for the period of 7 years from the last occasion on which
I will                visit the Sites or any of them.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | In
addition to all of the foregoing, I declare that the rules of security and
               conduct customary at the Sites and set out in Schedule 1 to this
               Undertaking, have been brought to my attention and I undertake to act in
               accordance therewith and comply with the directives of the security staff
at the                Sites as indicated to me, and that to the extent I encounter any
breach of these                rules, whether committed by me, by any person on my behalf
or by others, I will                be obliged to report this as quickly as possible to
the party in charge of                security in your Company or to any person on his
behalf.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Yours faithfully,
| |  | -------------------------------

2

---

---



# Schedule 1

For
the personal undertaking to keep rules of conduct and safety at the Sites and duty of
secrecy

# Rules of Conduct and
Security at the Sites:

|a. | It
is prohibited to bring arms of any type into the area of the Site/s.
|-- | -----------------------------------------------------------------------

|b. | It
is prohibited to bring cameras into the area of the Site/s (including
               telephone cameras) and photograph the Site/s.
|-- | -------------------------------------------------------------------------------------------------------------------------------------

|c. | Only
authorized persons will enter the Site/s, whose entry has been arranged in
               advance with Med-1 I.C.1 (1999) Ltd., (hereinafter: the
               Company). A person whose entry has been authorized whilst
accompanied,                must be accompanied at all times whilst at the Site/s by one
of the Company                employees or persons on his behalf.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|d. | Notwithstanding
sub-paragraph (c) above, the entry will be allowed of persons                representing
the Customer, whose entry has not been previously arranged with the
               Company, in accordance with the following:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1) | Where
the Company has refused the entry of a person claiming to represent the
                    Customer, the Company will promptly contact the Customers
control                     department to verify the authorization of such person. If
such authorization has                     been granted by the Customer to allow his
entry, his entry will be immediately                     authorized.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The
Company will supply the Customer in advance with an identity code having 8
                    (eight) digits (hereinafter: the Customers identity
                    code). The Customer will be entitled at any time to contact
the                     Hosts security center to confirm the entry of a person on
its behalf whose                     entry has not been previously arranged with the
Host. Such entry will be                     authorized provided the Customer identifies
itself by means of the Customer                     identity code.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|e. | Every
person entering the Site/s must bear the identity tag given to him on
               entry, in a prominent manner. On leaving the Site/s, the tag should be
returned.                If the tag is lost or stolen, this should be reported
immediately to the party                in charge of security or persons on his behalf.
The Customer will be charged for                loss of a tag.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|f. | No
equipment should be brought in or removed from the Site/s without approval or
               registration.
|-- | -------------------------------------------------------------------------------------------------------------

|g. | Movement
in the area of the Site/s is confined to the public areas only from the
               entrance to the Customers hosted areas only. Entry to the hosted
areas is                forbidden for persons other than the Customer, including entry to
any other                area, including the battery rooms, the generator rooms, the
guard or control                centers and the like.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



# Schedule 4-1 
Certificate of Customers Insurance

Date: _________________

TO: Med-1 I.C. 1(1999) Ltd. (hereinafter: "the Host") and/or the parent and/or subsidiaries and/or other
companies and/or affiliates
6 Hanechoshet St., Tel Aviv

|RE: | Certificate
of the making of insurance by Partner Communications Company Ltd., (hereinafter:
"the Customer) with regard to Cable Transmission Hosting Services and Ancillary
Services (hereinafter: the Services) at various Sites
(hereinafter: the Sites) as stated in the Agreement dated    (hereinafter:
the Agreement)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We certify that we have effected in
the name of the Customer, from _________________ until _________________, (hereinafter:
the Insurance Term) the insurances set out below, the extent of the
cover provided by these insurances to be not less than the cover provided according to the
form of the policies known as BIT 2005" or the form of the BIT
policy which is parallel thereto on the date of the making of the insurances, including
all the extensions, constituting an integral part of the form of that policy:

|1. | Policy
no. _________________
|-- | ----------------------------

| | Third
party liability insurance insuring the liability of the Customer by law by reason of loss
or damage which may be caused to the person or property of any individual or body in
relation generally to the Customers activity under the Agreement, with a liability
limit of $1 million per event and cumulatively for the annual insurance term. This
insurance is not subject to any limitation regarding liability resulting from fire,
explosion, panic, hoisting instruments, loading and unloading, strike and lockout,
poisoning, defective sanitary fittings, animals, any harmful thing in food or drink,
liability in respect of and towards contractors, sub-contractors (of any degree) and
their employees and also subrogation actions on the part of the National Insurance
Institute. The insurance is extended to indemnify the Host in respect of liability which
could be imposed upon it following the act or omission of the Customer and/or of persons
on its behalf subject to a cross-liability clause whereby the insurance will be deemed to
be made separately for each of the individuals comprising the insured.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Policy
no. _________________
|-- | ----------------------------

| | Insurance
insuring the Communications Facilities as well as any other property owned by or in the
responsibility of the Customer and situated at the Sites, in the full value thereof,
against loss or damage following the usual risks in extended fire insurance, including
fire, smoke, lightning, explosion, earthquake, riots, strikes, malicious damage, storm,
tempest, flooding, damages caused by liquids from bursting, damage by vehicles, damage by
aircraft and burglary, (on the basis of primary damage). The insurance includes a
condition whereby the insurer waives the right of subrogation against the Host and its
successors, and also against the proprietors of the buildings in which the Sites are
housed and other proprietors of rights in the Sites and/or in such buildings, including
other parties hosted (parties having other rights being hereinafter called: the
Other Proprietors) whose agreements conferring upon the Other Proprietors rights in
the Sites and/or buildings mentioned, include an exemption from liability and/or
undertaking to include a waiver of the right of subrogation of the insurance of their
property applicable in favor of the Customer, save that the waiver of the right of
subrogation mentioned will not apply in favor of any person who has caused willful
damage.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



|3. | Policy
no. _________________
|-- | ----------------------------

| | Employers
liability insurance insuring the liability of the Customer towards its employees in
respect of bodily harm and/or professional sickness which could be caused to any of them
during the course of and consequent upon their employment at the Sites and/or in the
vicinity thereof, with a liability limit of $5 million per claimant, per event and
cumulatively for the annual insurance term. The insurance mentioned does not include any
limitation regarding working hours, work at height or at depth, bait and poisons and
employment of juveniles. The insurance is extended to indemnify the Host in the event of
it being claimed with regard to the occurrence of a work accident and/or professional
sickness, that it bears the responsibilities of an employer towards any of the Customers
employees. Moreover, the insurance includes a waiver of the right of subrogation towards
the Host and its successors; save that such waiver will not apply in favor of any person
who has caused the damage maliciously.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The above policies contain an express
condition whereby they are prior to any insurance which has been made by the Host and we
waive any claim and/or demand regarding the sharing of the Hosts insurances. In
addition we undertake that the above policies will not be cancelled or adversely changed
for the duration of the Insurance Term except by written notice given by registered mail
to the Host at least 60 days in advance. For the avoidance of any doubt we confirm that
the Customer is solely responsible for payment of the insurance monies for the above
policies and bears the deductibles applicable under those policies.

Subject to the conditions and
reservations of the original policies to the extent that they have not been expressly
varied by this Certificate.

Yours faithfully,

|
(Insurer's stamp) | 
(Insurer's signature) | 
(Name) | 
(Signatory's position)
|---------------------------- | -------------------------------- | ----------------- | ---------------------------------

2

---

---



# Schedule 4-2
Certificate of Hosts Insurance

Date: _________________

TO: Partner Communications Company Ltd. (hereinafter: "the Customer") and/or the parent and/or subsidiaries
and/or other companies and/or affiliates 8 
Haamal St., Afek Industrial Park, Rosh Haayin

|RE: | Certificate
of the making of insurance by Med-1 I.C. 1(1999) Ltd. (hereinafter: "the Host")
with regard to Cable Transmission Hosting Services and Ancillary Services (hereinafter:
the Services) at various Sites (hereinafter: the Sites) as
stated in the Agreement dated     (hereinafter: the Agreement)
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We certify that we have effected in
the name of the Customer, from _________________ until _________________, (hereinafter:
the Insurance Term) the insurances set out below, the extent of the
cover provided by these insurances to be not less than the cover provided according to the
form of the policies known as BIT 2005" or the form of the BIT
policy which is parallel thereto on the date of the making of the insurances, including
all the extensions, constituting an integral part of the form of that policy:

|1. | Policy
no. _________________
|-- | ----------------------------

| | Third
party liability insurance insuring the liability of the Host by law by reason of loss or
damage which may be caused to the person or property of any individual or body in
relation generally to the Hosts activity under the Agreement, with a liability
limit of $1 million per event and cumulatively for the annual insurance term. This
insurance is not subject to any limitation regarding liability resulting from fire,
explosion, panic, hoisting instruments, loading and unloading, strike and lockout,
poisoning, animals, any harmful thing in food or drink, liability in respect of and
towards contractors, sub-contractors (of any degree) and their employees and also
subrogation actions on the part of the National Insurance Institute. The insurance is
extended to indemnify the Customer in respect of liability which could be imposed upon it
following the act or omission of the Host and/or of persons on its behalf subject to a
cross-liability clause whereby the insurance will be deemed to be made separately for
each of the individuals comprising the insured.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Policy
no. _________________  
Insurance insuring the buildings of the Sites and by the Host,
plus additions and improvements to the buildings of the Sites that are leased by the Host
as well as the contents of the Sites which are owned by and are within the responsibility
of the Host (expressly with the exception of contents which persons being hosted have
undertaken to insure) in the full value thereof, against loss or damage following the
usual risks in extended fire insurance, including fire, smoke, lightning, explosion,
earthquake, riots, strikes, malicious damage, storm, tempest, flooding, damages caused by
liquids from bursting, damage by vehicles, damage by aircraft and burglary, (on the basis
of primary damage). The insurance includes a condition whereby the insurer waives the
right of subrogation against the Customer and its successors; save that the waiver of the
right of subrogation mentioned will not apply in favor of any person who has caused
malicious damage.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



|3. | Policy
no. _________________ 
Employers liability insurance insuring the liability of the
Host towards its employees in respect of bodily harm and/or professional sickness which
could be caused to any of them during the course of and consequent upon their employment
at the Sites and/or in the vicinity thereof, with a liability limit of $5 million per
claimant, per event and cumulatively for the annual insurance term. The insurance
mentioned does not include any limitation regarding working hours, work at height or at
depth, bait and poisons and employment of juveniles. The insurance is extended to
indemnify the Customer in the event of it being claimed with regard to the occurrence of
a work accident and/or professional sickness, that it bears the responsibilities of an
employer towards any of the Hosts employees. Moreover, the insurance includes a
waiver of the right of subrogation towards the Customer and its successors; save that
such waiver will not apply in favor of any person who has caused the damage maliciously.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The above policies contain an express
condition whereby they are prior to any insurance which has been made by the Customer and
we waive any claim and/or demand regarding the sharing of the Customers insurances.
In addition we undertake that the above policies will not be cancelled or adversely
changed for the duration of the Insurance Term except by written notice given by
registered mail to the Customer at least 60 days in advance. For the avoidance of any
doubt we confirm that the Host is solely responsible for payment of the insurance monies
for the above policies and bears the deductibles applicable under those policies.

Subject to the conditions and
reservations of the original policies to the extent that they have not been expressly
varied by this Certificate.

Yours faithfully,

|
(Insurer's stamp) | 
(Insurer's signature) | 
(Name) | 
(Signatory's position)
|---------------------------- | -------------------------------- | ----------------- | ---------------------------------

2

---

---



# Schedule 5

# SLA

# Service Level:

The service level assured is 99.9% of
the total time of activity of the installation, measured over a period of time of at least
two years, total malfunction time not to exceed 12 hours.

# Malfunction repair time:

| | Electricity
of the Electric Corporation response time being that of the Electric
Corporation and for which the Host is not responsible.
|- | ----------------------------------------------------------------------------------------------------------------------------------------

| | Generators  response
time of 2 hours from the start of handling the crash of a generator, 10 hours for repair
 total 12 hours for repair.
|- | -------------------------------------------------------------------------------------------------------------------------------------------

| | Air-conditioning  response
time of 4 hours from the start of the repair of malfunctions, 8 hours for repair  totaling
12 hours for repair.
|- | --------------------------------------------------------------------------------------------------------------------------------------------

Agreed compensation mechanism
in respect of non-compliance with the Service Level:

In respect of each month in which
damage will occur in the level of the Service in any of the Sites  5% (five per
centum) of the total monthly consideration in respect of such Site, for each hour beyond
the cumulative number of 12 hours, up to a compensation cap of 100% of the total monthly
consideration in respect of such Site, for the month in which such damage occurred in the
level of the Service.

The Customer will be entitled to
demand such agreed compensation through the end of the calendar quarter following the date
of the occurrence of the damage in the level of service only. Payment of the agreed
compensation constitutes a full and absolute waiver of the Customers claims
pertaining to the damage in the level of service in respect of which such agreed
compensation has been paid.

The terms mentioned in this Schedule
will bear the specific meaning ascribed thereto in the Hosting Agreement dated
_________________ 2006 (hereinbefore and hereinafter called: the
Agreement) between Med-1 I.C.1 (1999) Ltd., and Partner Communications Company
Ltd., (hereinbefore and hereinafter called: the Customer) save where
expressly otherwise stated in the body of the Schedule.

[Diagram of Hosting Servers]



---

---



# SCHEDULE 1.1.26LIST OF DUAL CONTRACTS[*]

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SCHEDULE 1.1.40

# LEASED REAL PROPERTY

|   | Details of Leased Property                                                                                                                                              | Nature of Agreement                                              | Details of Underlying Assumed Contract                                                                                                                                                                                                                                                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Rooftop of Omega House, 1, Nachum Chet St., Tirat HaCarmel                                                                                                              | Permission to deploy a small communication equipment             | Permission Agreement (undated) by and between the
Company and Toren Development and Properties Company
(1989) Ltd.                                                                                                                                                                                                                          
|2. | Warehouse (42 sq. m.) located in
the upper basement of the building
located in 6, HaNechoshet St., Tel
Aviv                                                             | Usage rights                                                     | Amendment dated January 31, 2005 to Lease Agreement
dated September 27, 2000 by and between Med-1
Submarine Cables Ltd. and (1) Edgar Investments and
Development Ltd., (2) Pama Building and
Entrepreneurship Ltd., and (3) Salmar Development
Ltd. (later assigned to Mediterranean Nautilus Israel
Ltd. and subsequently to the Company).
|3. | Room located on the rooftop of
Building 97 located in 5, Kanfei
Nesharim St., Jerusalem                                                                                 | Non-exclusive
permission to
deploy IR facility                   | Permission Agreement dated June 3, 2002 by and
between the Company and the Economic Company of
Jerusalem Ltd.                                                                                                                                                                                                                               
|4. | 1 sq. m. area located in the yard
of the "Alon Mishan" gas station
located in Mishan Junction on Road
35                                                                | Lease for the
purpose of
deployment of an
amplification
facility | Unprotected Lease Agreement dated May 16, 2002 by an
between the Company and Alon Gas Co. Ltd.                                                                                                                                                                                                                                              
|5. | Unit (20 sq. m.) located in
basement floor (-3) of Ackerstein
Towers in HaMenofim St., Herzelia
Pituach                                                                 | Lease for
deployment of
communication
equipment                  | Lease Agreement dated June 1, 2003 by and between the
 Company and Ackerstein Towers Ltd.                                                                                                                                                                                                                                                   
|6. | Unit (178 sq. m.) located on ground
floor (-3.15) and an additional
area (45 sq. m.) located on 1st
floor (-5.95) of a building located
in 53, Ezel St., Rishon Le'Zion | Lease                                                            | Unprotected Lease Agreement dated July 30, 2002 by
and between the Company and B.R.A.P. Projects
Entrepreneurship Ltd., as amended pursuant to the
letter of B.R.A.P. Projects Entrepreneurship Ltd.
dated March 27, 2003.                                                                                                                  
|7. | Area located in a building in
HaGalil St. in Airport City                                                                                                               | Permit to deploy
communications
facility                         | Permit Agreement dated 15.6.2005 by and between the
Company and P.K. Generators Ltd. (as contemplated to
be amended).                                                                                                                                                                                                                       
|8. | Area and service room located on
the rooftop of the Sheraton Hotel
in Tel Aviv.                                                                                         | Permit to deploy
communications
facility                         | Transmission and Communications Services Agreement
dated 24.12.2000 by and between Med-1 Submarine
Cables Ltd. and Beeper Communication Israel Ltd., as
supplemented and amended on 4.2.2002.                                                                                                                                               



---

---



# SCHEDULE 1.1.52 REPAIR PLAN[*]

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SCHEDULE 1.1.54CERTAIN RETAINED CLAIMS[*]

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SCHEDULE 2.1(a)MAP OF SYSTEM LOCATION [*]

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SCHEDULE 2.1(b)TANGIBLE PROPETRY [*]

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SCHEDULE 2.1(d)

# ASSIGNED CONTRACTS

|I. AGREEMENTS WITH SUPPLIERS                                                                                                             
|-----------------------------------------------------------------------------------------------------------------------------------------
|CONTRACTS RELATING TO THE SUPPLY AND MAINTENANCE OF THE SYSTEM                                                                           
|No.                                                                                                                                      
|1.                                                                                                                                       
|2.                                                                                                                                       
|3.                                                                                                                                       
|CONTRACTS FOR THE PROVISION OF PLANNING SERVICES IN CONNECTION WITH THE DIGGING AND LAYING OUT OF CABLE PIPES                            
|No.                                                                                                                                      
|1.                                                                                                                                       
|2.                                                                                                                                       
|3.                                                                                                                                       
|4.                                                                                                                                       
|CONTRACTS FOR THE PERFORMANCE OF DIGGING, LAYING OUT AND FILLING WORKS FOR FIBER OPTICS CABLE INFRASTRUCTURE AND/OR COMMUNICATIONS FIBERS
|No.                                                                                                                                      
|1.                                                                                                                                       
|2.                                                                                                                                       
|3.                                                                                                                                       
|4.                                                                                                                                       
|5.                                                                                                                                       
|6.                                                                                                                                       
|7.                                                                                                                                       



---

---



|CONTRACTS FOR THE PERFORMANCE OF INSERTION OF FIBER OPTIC CABLES BY BLOWING AND WELDING OF CABLES IN CONNECTION WITH THE SYSTEM
|-------------------------------------------------------------------------------------------------------------------------------
|No.                                                                                                                            
|1.                                                                                                                             
|CONTRACTS FOR INFRASTRUCTURAL COOPERATION AND SERVICES IN RELATION TO THE SYSTEM                                               
|No.                                                                                                                            
|1.                                                                                                                             
|2.                                                                                                                             
|3.                                                                                                                             
|4.                                                                                                                             
|5.                                                                                                                             
|6.                                                                                                                             
|7.                                                                                                                             
|OTHER SUPPLIER CONTRACTS                                                                                                       
|No.                                                                                                                            
|1.                                                                                                                             
|2.                                                                                                                             
|3.                                                                                                                             
|II. [*]                                                                                                                        
|No.                                                                                                                            
|1.                                                                                                                             
|2.                                                                                                                             
|3.                                                                                                                             
|4.                                                                                                                             
|5.                                                                                                                             
|6.                                                                                                                             

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



|III. LEASE, PERMISSION & PROPERTY MANAGEMENT AGREEMENTS(relating to POPs)
|-------------------------------------------------------------------------
|No.                                                                      
|1.                                                                       
|2.                                                                       
|3.                                                                       
|4.                                                                       
|5.                                                                       
|6.                                                                       
|7.                                                                       
|8.                                                                       
|9.                                                                       



---

---



|IV. CUSTOMER CONTRACTS
|----------------------
|[*]                   

|V. CONTRACTS CONTAINING
APPROVALS         
|------------------------------------------
|See Schedule 2.1(f),
Assigned Approvals.

|VI. CONTRACTS RELATING TO LAST MILE TRANSMISSION SERVICES
|-----------------------------------------------------------
|[*]                                                        

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



|VII.
          ADDITIONAL OUTSTANDING PURCHASE ORDERS                                                                                                                                                            
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The Company issues from time to time
and in the ordinary course of its business purchase orders for the procurement of
equipment, spare parts and services relating to the Acquired Assets, from various vendors.

No mention of or reference to any
assignment limitation in respect of any Assigned Contract or Assigned Approval is intended
to, nor shall derogate from, the Companys obligation under the Agreement to make all
notifications, obtain all Approvals, and take all other actions necessary under the terms
of each such Assigned Contract and Assigned Approval, as required to facilitate and secure
the due assignment and transfer thereof to Purchaser as of the Closing Date pursuant to
the provisions of the Agreement.

In addition, nothing herein is
intended to exempt the Company from obtaining the prior written consent of Purchaser,
where such consent is required under the Agreement, to the execution of any Contract
mentioned or referenced herein as not yet executed, and that, at the date hereof, is in
the process of negotiation.

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.



---

---



# SCHEDULE 2.1(f)

# ASSIGNED APPROVALS

|No. | Detail of Approval                                                                                                                                      | Approval Identification                                                                                                                                                                                                                 | Date                                               | Assignment Limitations & Other Comments                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | Usage license for one
pipe in Raines St. and
one additional pipe
located elsewhere in the
municipality area                                             | Construction Agreement by and
between the Tel-Aviv - Jaffa
Economic Development Authority
Ltd. and the Company (Raines)                                                                                                                 | 1.8.2004                                           | Assignment of rights and
obligations is subject to the
prior written consent of the
Authority, at the sole
discretion of the Authority.                                                          
|2.  | Usage license for one
pipe and one additional
pipe located in Ganei
Yehoshua.                                                                           | Agreement by and between the
Company and the Tel-Aviv - Jaffa
Economic Development Authority
Ltd., as supplemented,                                                                                                                     | 1.8.2004,
supplemented on
28.9.2004                | Assignment of rights in and to
the pipes is not permitted.                                                                                                                                       
|3.  | Usage license for one
pipe and one additional
pipe located in Ganei
Yehoshua.                                                                           | Commitment Letter, Terms of
Performance of Communication
Infrastructure executed by the
Company in favor of the Tel-Aviv
- Jaffa Economic Development
Authority Ltd. (Ganei Yehoshua),
as supplemented.                                 | 17.7.2003,
supplemented
on: 30.10.2003
& 9.10.2003 | Assignment of rights is not
permitted.                                                                                                                                                           
|4.  | Indefeasible rights of
use in pipes located in
certain areas in Tel Aviv                                                                                | Letter Agreement with Leadcom on
"Assistance in Obtaining
Approval for Digging Permits in
Shdema Project"; and                                                                                                                          | 30.3.2004                                          |                                                                                                                                                                                                  
|    |                                                                                                                                                         | Letter Agreement with Leadcom on
an "Agreement for Grant of
Permit to Use Leadcom's
Infrastructures to Med-1"                                                                                                                           | 20.10.2004                                         |                                                                                                                                                                                                  
|5.  | Framework Agreement for a
permit procedure for
communication
infrastructure layout in
public grounds in the
jurisdiction of the
Jerusalem Municipality. | Memorandum of Understanding
between the Company and the
Jerusalem Municipality.                                                                                                                                                         | Undated, 2005.                                     | Assignment of rights and
obligations requires the
municipality's consent, except
if the assignee is an acquirer
of the Company's activity and
holds a valid MOC license.                         
|6.  | Irrevocable and exclusive
right of use in four
pipes located on a 17km
strip from Hertezlia to
Poleg.                                                   | Agreement by and between Eilat
Ashkelon Pipe Line Ltd.
("Katzaa") and the Company.                                                                                                                                                      | Not yet signed.                                    | Under the contemplated draft,
the assignment of the
Company's rights and
obligations under this
agreement to Purchaser is
expected to be expressly
permitted.                                    
|7.  | Rights of use in a pipe
infrastructure and in
manholes located on the
Western side of the
Cross-Israel Highway.                                         | Agreement by and between the
Company and Derech Eretz Telecom
Ltd. (under incorporation), and
a letter of consent pertaining
to such agreement and executed
between Derech Eretz Highways
(1997) Ltd. and the Company on
June 14, 2005. | 19.6.2005                                          | Assignment subject to the
prior written consent of
Derech Eretz Telecom Ltd.,
which may be subject to the
consent of certain third
parties. Telecom's consent
shall not be unreasonably
withheld.



---

---



|8.  | Permission to deploy and maintain cable system in Tel Aviv beach area                                                                                        | Agreements by and between the  Company and Atarim in Tel Aviv Beach, the Company for         Development of Tourist Sites in
Tel Aviv Jaffa Ltd.:
                               
-        Agreement No. 44/99
-        Agreement No. 8/2000 | 22.12.1999
7.2.2000 | Assignment of rights and
obligations is subject to
notification and provision of
pertinent information to
Atarim, and to the assignee
undertaking the Company's
obligations under the
agreement.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9.  | Approval relating to the
deployment and
maintenance of fiber
optic cables in Ganei
Yehoshua Park.                                                            | Agreement by and between the
Company ad Ganei Yehoshua
Company Ltd.                                                                                                                                                                          | 28.4.2002           | The Company may not transfer
or assign its rights and
liabilities under this
Agreement.                                                                                                         
|10. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Kibbutz Shomrat.                                            | License Agreement by and between
the Company and Kibbutz Shomrat.                                                                                                                                                                            | Undated, 2001       |                                                                                                                                                                                                 
|11. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Kibbutz Nitzanim.                                           | License Agreement by and between
the Compay and Kibbutz Nitzanim.                                                                                                                                                                            | Undated, 2001       |                                                                                                                                                                                                 
|12. | Approval relating to the
passage of subterranean
fiber optic cable in Kfar
Kassem area.                                                                      | License Agreement by and between
the Company and Ahmad
Bin-Mustapha.                                                                                                                                                                         | 2.8.2001            |                                                                                                                                                                                                 
|13. | Approval relating to the
passage of subterranean
fiber optic cable in
Petach Tiqva.                                                                          | License Agreement by and between
the Company and Shalom Gross.                                                                                                                                                                               | 10.2.2002           |                                                                                                                                                                                                 
|14. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Kibbutz Palmach Zova.                                       | License Agreement by and between
the Company and Kibbutz Palmach
Zova.                                                                                                                                                                       | 2.6.2002            | The Company may not transfer
or assign its rights and
liabilities under this
Agreement.                                                                                                         
|15. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Moshav Givat Ye'arim.                                       | License Agreement by and between
the Company and Givat Ye'arim,
Workers' Agricultural Community
Settlement.                                                                                                                                  | 5.8.2002            | Transfer of rights subject to
the Moshav's prior written
consent.                                                                                                                               
|16. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Moshav Eshta'ol.                                            | License Agreement by and between
the Company and Eshta'ol,
Workers' Agricultural Community
Settlement.                                                                                                                                       | Undated, 2002       |                                                                                                                                                                                                 
|17. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Na'aman Educational
Institution Partnership
in Ashrat area. | License Agreement by and between
the Company and Na'aman
Educational Institution
Partnership.                                                                                                                                                | Undated, 2001       | The License Agreement is not
signed by the other party.                                                                                                                                         
|18. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Hassidim Youth Village.                                     | License Agreement by and between
the Company and Hassidim Youth
Village.                                                                                                                                                                     | Undated, 2001       |                                                                                                                                                                                                 



---

---



|19. | Permission to perform
infrastructural work in
Kibbutz Yaqum
jurisdiction, in a joint
pipe with HOT, for the
purpose of connecting
Europe Business Park to
the System, and related
undertaking to Kibbutz
Yaqum. | Permit Letter to the Company
issued by Kibbutz Yaqum, and an
Undertaking Letter to Kibbutz
Yaqum | 25.7.05 and
27.7.2005,
respectively |                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ----------------------------------- | -----------------------------------------------------------------------------------
|20. | Approval relating to the
passage of subterranean
fiber optic cable in an
area owned or leased by
Kibutz Sha'ar Ha'Amakim.                                                                                       | License Agreement by and between
the Company and Kibutz Sha'ar
Ha'Amakim.                        | Undated, 2002                       | The License Agreement is not
signed by the other party.                            
|21. | Approval relating to the
passage of subterranean
fiber optic cable in
HaKfar HaYarok area.                                                                                                                      | License Agreement by and between
the Company and HaKfar HaYarok
named after Levy Eshkol Ltd.     | 18.7.2002                           | The License Agreement is not
signed by the other party.                            
|22. | Approval relating to the
passage of subterranean
fiber optic cable in
Haifa area.                                                                                                                               | License Agreement by and between
the Company and Nachman Lerner.                                 | Undated, 2002                       | The License Agreement is not
signed by the other party.                            
|23. | Approval relating to the
passage of subterranean
fiber optic cable in an
area possessed by Yakhin
Hakal Ltd.                                                                                                    | Agreement by and between the
Company and Yakhin Hakal Ltd.                                       | Undated, 2001                       | No assignment permitted. The
Company does not have a signed
copy of this agreement.
|24. | Approval relating to the
passage of subterranean
fiber optic cable in
Kibbutz Usha.                                                                                                                             | Letter Agreement between the
Company and Kibbutz Usha.                                           | 7.1.2001                            |                                                                                    
|25. | Approval relating to the
passage of subterranean
fiber optic cable in an
area held by Kfar Galim
(Haifa Youth Village
Agricultural Education
Union).                                                            | Commitment and Indemnity
Undertaking                                                             | Undated                             | The Company does not have a
signed copy of this
instrument.                        

The above list does not constitute a
comprehensive list of the rights of way and similar Approvals held by the Company. Except
as set out in Section 5.8 of the Company Disclosure Schedule, the Company believes it is
in possession of all rights of way and similar Approvals relating to the layout and
deployment of the System. In addition to the above Contracts, the Company holds rights of
way and other Approvals relating to the Acquired Assets which are not detailed herein.
Such Approvals include:

| |  | Licenses
issued by Maatz; either to Globescom Ltd. or to Med-1 Submarine Cables Ltd.
Notification was given to Maatz of the assignment of said licenses issued to
Globescom Ltd., to the Company. While the Company cannot be certain that all formal
requirements to the completion of such assignment were met, the Company currently
operates without disturbance under the assumption that such licenses have been assigned.
In any event, such licenses may be subject to underlying commitment to comply with
conditions relating to such licenses;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



| |  | Licenses
 issued by Israel  Rail Co.  Ltd.,  containing  obligations  relating to the  performance
 of          underlying works; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| |  | Licenses
or similar Approvals issued by Gas Products Line (Kamad)
| | - | -----------------------------------------------------------------

| |  | Licenses
or similar Approvals issued by Mekorot Water Co. Ltd.
| | - | --------------------------------------------------------------

No mention of or reference to any
assignment limitation in respect of any Assigned Contract or Assigned Approval is intended
to, or shall derogate from, the Companys obligation under the Agreement to make all
notifications, obtain all Approvals, and take all other actions necessary under the terms
of each such Assigned Contract and Assigned Approval, as required to facilitate and secure
the due assignment and transfer thereof to Purchaser as of the Closing Date pursuant to
the provisions of the Agreement.

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.



---

---



# SCHEDULE 2.1(i)CERTAIN ASSIGNED CLAIMS[*]

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SCHEDULE 2.2(d)

# EXCLUDED APPROVALS

The following Approvals are to be
retained by the Company and shall not constitute Acquired Assets:

| | A
Special License granted to the Company by the Ministry of Communications in the State of
Israel, license no. 5-12010-0-96388, as supplemented;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | The
authorities set out in Chapter 6 of the Communications Law (Bezeq and Broadcasting)  1982,
granted to the Company by the Minister of Communications pursuant to a Notice
Regarding Grant of Authorities dated February 24, 2002, as amended.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Qualified
Supplier Approval issued by the Ministry of Defense.
|- | --------------------------------------------------------------

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.



---

---



# SCHEDULE 2.5(c)

# CERTAIN APPROVED
INVESTMENTS

|Description of Approved Investment                                                | Length of Route
 (in approximate meters) | Actual/Estimated Costs
(in denominated currency)                                               | Payment Status/Schedule                        
|--------------------------------------------------------------------------------- | ---------------------------------------- | ---------------------------------------------------------------------------------------------- | -----------------------------------------------
|Projects in Jerusalem Area                                                       
|Planning of Jerusalem                                                             | --                                       | US$ 75,000                                                                                     | Paid                                           
|Connection to Har HaHotzvim                                                       | 2,600                                    | Intended to be mainly
carried out by way of pipe
exchange with Cellcom Israe
Ltd.              |                                                
|Har HaHotzvim Park, Jerusalem                                                     | 4,500                                    | NIS 760,000                                                                                    | By the end of 1st Q. 2006                      
|Beit Zait Junction to Givat Sha'ul                                                | 7,000                                    | NIS 1,300,000                                                                                  | 50% by end of st Q. 2006;
50% after 1st Q. 2006
|Connection of Givat Sha'ul to
Government Campus                                   | 3,700 + 300                              | NIS 800,000 (subject to
municipality requirements on
limited work time and police
supervision) | Q. 2 2006                                      
|Additional Projects                                                              
|Planning and performance of partial
segment between Road No. 4 and the
Coast line | 1,000                                    | NIS 170,000                                                                                    | January 2006                                   
|Hertzelia - Haifa segment                                                         |                                          | US$ 2,400,000, including
purchase of prepared routes
from Katza'a                              | Post Closing                                   
|Customer connection (ZIM) at Matam
(Haifa)                                        | --                                       | NIS 100,000                                                                                    | 03-04/2006                                     
|Equipment Purchases                                                              
|Purchase of submerged cables and
connectors                                       | --                                       | Euros 152,000
GBP 70,570                                                                       | 1st Q. 2006
Paid                               
|End equipment for Machba                                                          | --                                       | NIS 150,000                                                                                    | By the end of 1st Q. 2006                      



---

---



# SCHEDULE 2.5(d)

# CERTAIN ADDITIONAL
ASSUMED LIABILITIES

The Company is required to pay annual
spectrum license fees for 2006, in the total amount of NIS 70,720.

Without derogating from the
generality of Section 3.4 of the Asset Purchase Agreement to which this document is
scheduled, this amount shall be apportioned as of the Closing Date, such that the Company
shall be obligated for the relative portion attributable to the period through and
including the Closing Date, and Purchaser shall be obligated for the relative portion
attributable to the period following the Closing Date.

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.



---

---



# SCHEDULE 5

# COMPANY DISCLOSURE
SCHEDULE

THIS DOCUMENT CONTAINS CERTAIN
QUALIFICATIONS AGAINST THE STATEMENTS CONTAINED IN SECTION 5 OF THE AGREEMENT.

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is attached as Schedule 5 (the
Agreement).

# SECTION 5.5  THIRD
PARTY LIENS ON ACQUIRED ASSETS

| |  | Some
of the Tangible Property constituting part of the Acquired Assets is not in the physical
possession of the Company but is located in the premises of the Companys customers.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | At
the date hereof, the Acquired Assets are subject to a floating charge imposed in favor of
Bank HaPoalim BM. This floating charge is intended to be excluded in respect of the
Acquired Assets pursuant to the provisions of the Agreement.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# SECTION 5.6 
ASSIGNED CONTRACTS NOT IN EFFECT

| | [*].
|- | ----

| | The
Agreement entered into by and between the Company and Derech Eretz Telecom Ltd. (under
incorporation) dated June 19, 2005 is conditioned upon the obtainment of certain third
party approvals, as more particularly provided therein and/or in a letter of consent
executed by the Company and Derech Eretz Highways (1997) Ltd. on June 14, 2005. To the
best of the Companys knowledge, such consents have not been obtained.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Some
of the Assigned Contracts specified in Schedule 2.1(d) are still being negotiated
and have not yet been executed but are, at present, being negotiated. This fact is noted,
specifically with regard to each such Assigned Contract, within Schedule 2.1(d).
Hence, the arrangements under all such contracts are presently not binding and effective,
and such Contracts are not as yet enforceable.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



| | [*]
|- | ---

# SECTION 5.8
REQUIRED APPROVALS

| | The
Company has laid down pipes in the following routes in cooperation (or pursuant to
certain pipe exchange arrangements) with third parties, on the basis of the belief that
such third parties possess all necessary digging permits, rights of way, and other
Approvals necessary to grant the Company rights of way in such routes:
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Infrastructure
deployed by HOT (Golden Channels) in Jerusalem;
| | - | --------------------------------------------------------------

| |  | Approximately
 11 km of pipes laid by HOT (Golden  Channels) in Ramat Gan;  these pipes are  presently
                  inactive;
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| |  | Approximately
1.5 km of pipes laid by HOT (Golden Channels) in Kfar Saba;
| | - | -------------------------------------------------------------------------

| |  | Approximately
 1 km of pipes  obtained from Cellcom Ltd.  pursuant to a pipe exchange  transaction  in
                  Tirat HaCarmel.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| |  | Approximately
0.5 km of pipes in Carmiel; and
| | - | ---------------------------------------------

| |  | Approximately
0.5 km of pipes laid by Leadcom Ltd. in Tel Aviv as well as other pipes in which the
Company has received an IRU from Leadcom Ltd.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------

| | The
rights of way and similar  Approvals  issued by Ma'atz were issued to  Globescom  Ltd. or
to Med-1        Submarine Cables Ltd. Globescom Ltd. notified Ma'atz(1) of  the
 assignment  of  such  Approvals  to the        Company but the Company has not received
any formal confirmation of the acceptance of such Approvals.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has performed digging works and has laid down the submerged portion of the System
in the territorial waters of the State of Israel in reliance upon the letter of
confirmation issued by Adv. Yehuda Zimrat on December 28, 2000, in lieu of
applying for a specific construction permit by the Coastline Waters Commissions or any
other commission operating the Zoning Law, 1965 in connection with the submerged portions
of the System.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | With
regard to infrastructural work carried out before the Company obtained a permit pursuant
to Section 4(6) of the Communication Law (Telecommunications and Broadcasting), 1982 (the
CommunicationLaw), the Company has, in most cases, carried out
such work in reliance upon its infrastructural coordination with third parties. The
Company believes that all such work was carried out in accordance with then current
industry practice. After the obtainment of such Section 4(6) permit, the Company has
acted in cooperation with the different municipal authorities in which the Company has
performed such infrastructural work, in reliance upon the existence of such Section 4(6)
permit. Although the Company has not generally followed through the formal notification
requirements set out in Chapter 6 of the Communication Law, the Company believes to be in
possession of all Approvals necessary for the deployment and usage of the System.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

(1)
          The National Company for Roads and Transportation Infrastructures Ltd.

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



# SECTION 5.10  CUSTOMERS AND CUSTOMER CONTRACTS

[*]

# SECTION 5.11  ACCOUNTS RECEIVABLE AND CASH IN

[*]

Between September 5, 2005 and the
date hereof, the Company has not received any payments from any clients or customers of
the Business, which are attributable to the conduct of the Business from and after the
Closing Date.

# SECTION 5.12 
VIOLATIONS OF LAWS

See Section 5.8 above.

# SECTION 5.13  LEGAL PROCEEDINGS

[*]

# SECTION 5.15  INSURANCE

The table attached hereto as Table
5.15-1 lists all insurance coverage carried by the Company with respect to the
Acquired Assets and the insurance premiums payable by the Company in connection with such
insurance coverage for the year 2006.

The policy underlying such insurance
coverage refers both to the Acquired Assets and to the Excluded Assets. The aggregate
premium payable for such policy for the year 2006 is US$48,366. The premium attached to
the coverage relating to the Acquired Assets as set forth in Table 5-15.1 reflects the
Companys good faith estimation of the pro rated premium expected to be payable for
such coverage. It is likely that, should the Company seek to separate the insurance
coverage to policies covering separately the Acquired Assets and the Excluded Assets, such
separation will result in an increase of premiums. The Company has paid or will pay the
premium for such policy for the period ending upon the Closing Date.

Attached hereto as Table
5.15-2 is a statement of all insurance claims filed by the Company during the three
(3) year period ending on the date hereof. All of these claims refer to the Excluded
Assets. No insurance claims were made during said period in respect of the Acquired
Assets.

Building & Transmission Equipment Insurance I.C. 1[unofficial translation from Hebrew original]

|Policy Type                                                   | Insurer | Policy No. | Insurance limits | Annual Premium | Expiry date | Date of event/submission | Payment status
|------------------------------------------------------------- | ------- | ---------- | ---------------- | -------------- | ----------- | ------------------------ | --------------
|
|
|
|
|Insurance for fire and related risks                          | Migdal  |            |                  | temp. policy   |             |                          | $             
|Insurance for fire and related risks + risks posed to clients | Migdal  |            |                  | temp. policy   |             |                          | $             
|Insurance for equipment in transit                            | Migdal  |            |                  | temp. policy   |             |                          | $             
|                                                              |         |            |                  |                |             |                          |               
|                                                              |         |            |                  |                |             |                          |               

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



---

---



Insurance coverage for
I.C.1 Network for 2006 [unofficial translation from Hebrew original]

|                                                                                     | 
|------------------------------------------------------------------------------------ | 
|
|
|
|
|Property Insurance - Netanya                                                         | 
|                                                                                     | 
|Structure & Improvements                                                             | 
|                                                                                     | 
|Property Insurance - Rishon Letzion                                                  | 
|Structure & Improvements                                                             | 
|Equipment                                                                            | 
|                                                                                     | 
|Property Insurance - Jerusalem                                                       | 
|Structure & Improvements                                                             | 
|Equipment                                                                            | 
|Property Insurance - Herzlia                                                         | 
|Structure & Improvements                                                             | 
|Equipment                                                                            | 
|Property Insurance - Bronze                                                          | 
|Equipment                                                                            | 
|                                                                                     | 
|Property Insurance for Equipment at POPs & Clients                                   | 
|                                                                                     | 
|Equipment SDH                                                                        | 
|Equipment GIS                                                                        | 
|Equipment MICRO                                                                      | 
|                                                                                     | 
|                                                                                     | 
|Insurance for transmission equipment in stations in Petach Tikva, Haifa, and Yarkon: | 



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[the following is a
translation]

[Peltours Insurance Agencies Ltd., subsidiary of Migdal Group Letterhead]

# FAX 
If this document is
not clear, please call (03) 7537111

No. of pages: ___

DOC. 338763

DATE:  17 January 2006
TO: MED 1 I.C. Ltd.
CARE OF: Mr. Erez Tzvi
FROM: Alon Neumark
FAX NUMBER IN OUR OFFICE: 03-6138883

RE: Attempts to file property claims
by your company

We hereby certify that except for the
damage caused by the fire in the station on Yarkon St. in Tel Aviv that occurred a few
months before, no claims were filed by your company in the past three years.

Sincerely,

|/s/ Alon Neumark
A. Neumark |  | 
|----------------------------------------- |  | 

Aurec Bldg., Derech Abba Hillel 16,
Ramat Gan, 520506, Tel. 03-7637111, Facsimile: 972-3-6138883

www.pelins.com



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# SECTION 5.18 
SOFTWARE LICENSE AGREEMENTS

The Company has acquired the right to
use the following off-the-shelf Licensed Software:

| | n | 3
licenses to MapInfo Professional Software (MapInfo, Inc.), Serial Numbers: (i)
WP650024941, (ii)          WP6500224940, and (iii) WP WP6500224942.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | n | AutoCAD
Autodesk  Software, SERIAL Number 700-51125644 (Autodesk, Inc., acquired from Tovana
Digital          Engineering Ltd.)
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | n | OSPInSight
Software (AdvanceFiber Optics, Inc.) purchased for the Company by Corning Cable Systems
         GmbH & Co.
| | - | ----------------------------------------------------------------------------------------------------------------------

[*].

* The symbol [*] denotes places
where portions of this document have been omitted and filed separately with the
Commission. Confidential Treatment is being requested with respect to the omitted
portions.



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# SCHEDULE 6

# PURCHASERS
DISCLOSURE SCHEDULE

None.



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# SCHEDULE 7.2.2

# REQUIRED GOVERNMENTAL
FILINGS AND APPROVALS

The parties are of the good faith
opinion that the following are the only filings required to be made, and the only
approvals required to be received, from Governmental Authorities, in connection with the
Agreement:

| | Filing
of a Merger Notice with, and the obtainment of the consent of the Antitrust Commissioner
to the Companies Merger entailed by the transactions contemplated by
the Agreement.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Approval
of the Ministry of Communication to the sale by the Company of the Acquired Assets,
pursuant to the terms set out in the Companys MOC License.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | Filing
of an application for, and the obtainment of a license from the Ministry of
Communications for the provision of transmission services by Purchaser.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | Filing
of an application for, and the obtainment of a Permit from the Ministry of Communications
Pursuant to Section 4(6) of The Communication Lawauthorizing Purchaser to perform
the activities specified under Chapter 6 of The Communication Law in connection
with the Acquired Assets.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.



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# SCHEDULE 7.2.4

# REQUIRED
3RDPARTY FILINGS AND APPROVALS

The parties are of the good faith
opinion that the conditions precedent set forth in Section 8 of the Agreement, including,
without limitation, all Approvals required for the assignment and transfer to Purchaser of
any Assigned Contract and any Assigned Approval, satisfy all required filings and
approvals to be made with or obtained from, as the case may, third parties who are not
Governmental Authorities.

All capitalized terms not expressly
defined herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement to which this document is scheduled.



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# SCHEDULE 7.7.1

# LIST OF EMPLOYEES

(translated from the original Hebrew)

|FIELD                      | NAME OF EMPLOYEE  | POSITION                           
|-------------------------- | ----------------- | -----------------------------------
|Management                 | Avi Alkalai       | CEO                                
|                           | Carmit Gromer     | Secretary to CEO                   
|                           | Haim ben Hamo     | VP Development and Regulation      
|                           | Smadar Noy        | CFO                                
|                           | Erez Tzvi         | Reporting and Collection Manager   
|                           | Orit Weissman     | Accounts Manager                   
|Marketing and Sales        | Ofer Mualam       |                                    
|                           |                   |                                    
|Engineering and Operations | Moshe Vengel      | VP Engineering                     
|                           | Tzvi Shacham      | Technology Consultant              
|                           | Eli Nissim        | Marine-network Engineer            
|                           | Yigal Sahar       | Operations Manager, Passive Network
|                           | Mort Fidler       | Engineer Passive Network           
|                           | Freddy Shmilovitz | Engineer Optic Network             
|                           | Sandy George      | Optic Field Manager                
|                           | Avishai Ohana     | Operations Manager, Active Network 
|                           | Yaniv Luzon       | Technician - Active Network        



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