Exhibit 4b(ii)bd

LOGO

State of Israel
Ministry of Communications

General Licensefor Emet Telecom Limited Partnership for the Provision of
Fixed Line Domestic Telecommunications Services

Consolidated version
as at 30 Heshvan 5764 [November 25, 2003]This consolidated version was prepared on the basis of the following documents:

The original license
dated          November 25,
2003

This combined version was prepared for the convenience of the user; in
any case of a discrepancy between this version and the original license, the original
license and the amendments  shall be the
determining version. This version does not include appendices that have not
been published for public perusal.

|                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------
|Ministry of
  Communications
  Engineering and Licensing Department
  9 Achad Haam Street, Shalom Tower
  Tel Aviv 61290

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Table of Contents

|FOR EMET TELECOM LIMITED PARTNERSHIP FOR THE PROVISION OF FIXED LINE
  DOMESTIC TELECOMMUNICATIONS SERVICES | 1 
|----------------------------------------------------------------------------------------------------------- | --
|                                                                                                            |   
|Consolidated version as at 30 Heshvan 5764 [November 25, 2003]                                              | 1 
|                                                                                                            |   
|FOR THE PROVISION OF FIXED LINE DOMESTIC TELECOMMUNICATIONS SERVICES                                        | 5 
|                                                                                                            |   
|CHAPTER 1  GENERAL                                                                                         | 6 
|                                                                                                            |   
|Part A  Definitions and Interpretation                                                                     | 6 
|                                                                                                            |   
|Part B  Provisions of Law and Administrative Provisions                                                    | 19
|                                                                                                            |   
|CHAPTER 2 - THE LICENSE  SCOPE, VALIDITY AND CANCELLATION                                                  | 20
|                                                                                                            |   
|Part A  Scope and Validity of the License                                                                  | 20
|                                                                                                            |   
|Part B   Changes in the
  License Conditions and Cancellation Thereof                                      | 24
|                                                                                                            |   
|Part C  Structural Separation in Provision of Services                                                     | 27
|                                                                                                            |   
|CHAPTER 3  OWNERSHIP, ASSETS AND MEANS OF CONTROL                                                          | 30
|                                                                                                            |   
|Part A  Restrictions on Transfer of the License and its Assets                                             | 30
|                                                                                                            |   
|Part B  Means of Control  Changes and Restrictions                                                        | 33
|                                                                                                            |   
|Part C  Cross Ownership and Conflict of Interests                                                          | 35
|                                                                                                            |   
|CHAPTER 4  DEVELOPMENT, MAINTENANCE AND OPERATION OF THE NETWORK                                           | 37
|                                                                                                            |   
|Part A  Establishment and Development of the Network                                                       | 37
|                                                                                                            |   
|Part B  Supervising Network Development Work                                                               | 39
|                                                                                                            |   
|Part C  Technical compatibility                                                                            | 41
|                                                                                                            |   
|Part D  Inspections and Maintenance                                                                        | 42
|                                                                                                            |   
|Part E  Use of Frequencies in Wireless Segments                                                            | 44
|                                                                                                            |   
|Part F  Use of Frequencies in the Cable System                                                             | 47
|                                                                                                            |   
|Part G  Numbering                                                                                         | 51
|                                                                                                            |   
|Part H  License Implementation                                                                             | 54
|                                                                                                            |   
|Part I  Mutual connectivity and use                                                                        | 57

2

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|Part J  Operating the Network in a State of Emergency and Security
  Arrangements  | 62 
|----------------------------------------------------------------------------------- | ---
|                                                                                    |    
|CHAPTER 5  PROVIDING SERVICES TO SERVICE RECIPIENTS                                | 65 
|                                                                                    |    
|Part A  Engaging with Subscribers                                                  | 65 
|                                                                                    |    
|Part B  Level of Service                                                           | 67 
|                                                                                    |    
|86. Information services and directory inquiries for clarifying
  telephone numbers | 71 
|                                                                                    |    
|Part C  Termination or Disconnection of Service                                    | 73 
|                                                                                    |    
|Part D: Miscellaneous                                                               | 77 
|                                                                                    |    
|Part A  General                                                                    | 78 
|                                                                                    |    
|Part B  Determining Rates and Publicity                                            | 80 
|                                                                                    |    
|Part C  Changes in the Rates                                                       | 84 
|                                                                                    |    
|Part D  Miscellaneous                                                              | 85 
|                                                                                    |    
|CHAPTER 7   PAYMENTS FROM THE
  LICENSEE, LIABILITY,  INSURANCE AND
  GUARANTEES   | 87 
|                                                                                    |    
|Part A  Royalties and Payments                                                     | 87 
|                                                                                    |    
|Part B  Liability and Insurance                                                    | 89 
|                                                                                    |    
|Part C  Guarantee for Fulfillment of the License Conditions                        | 92 
|                                                                                    |    
|CHAPTER 8  SUPERVISION AND REPORTING                                               | 95 
|                                                                                    |    
|Part A  Supervising the Operations of the Licensee                                 | 95 
|                                                                                    |    
|Part B  Reporting and Rectifying Defects                                           | 97 
|                                                                                    |    
|Part C  Enforcing Compliance with the License and its Conditions                   | 100
|                                                                                    |    
|CHAPTER 9   MISCELLANEOUS                                                          | 102
|                                                                                    |    
|LIST OF APPENDICES                                                                  | 104
|                                                                                    |    
|APPENDIX B  SERVICE AREA AND MILESTONES IN PROVISION OF SERVICES                   | 105
|                                                                                    |    
|APPENDIX D  LIST OF THE LICENSEES SERVICES                                        | 107
|                                                                                    |    
|APPENDIX E  CLASS OF SERVICES FOR THE SUBSCRIBER                                   | 118

3

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|APPENDIX F  RULES OF ACCESS TO INTERNATIONAL TELECOMMUNICATIONS
  SERVICES | 123
|--------------------------------------------------------------------------- | ---

4

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LOGO

State of Israel
Ministry of Communications

General Licensefor the Provision of Fixed Line Domestic
Telecommunications Servicesfor Emet
Telecom Limited Partnership

Granting of License

By the power invested in me under the Communications
(Telecommunications and Broadcasts) Law, 5742  1982, and my other powers under
any law, I grant a license to Emet Telecom
Limited Partnership, to establish a fixed line public
telecommunications network, to maintain and operate it and to implement
telecommunications operations and provide fixed line domestic
telecommunications services by means thereof, as specified in this License.
This License replaces the general licenses granted to the Domestic Operator
Limited Partnership, Telecom Zahav 2001 Limited Partnership and Matav
Infrastructures 2001 Limited Partnership, under the law.

The license is granted for the period specified in the License and
subject to its conditions as follows:

5

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Chapter 1  General

Part A  Definitions and Interpretation

1.     Definitions

1.1     In this License:

| | The Service Area - | A geographic
  Area, described in Appendix B, in which the licensee is required to
  establish, maintain or operate the Network and supply, by means thereof,
  telecommunications services to the general public as specified in the
  License;
| | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                      |                                                                                                                                                                                                                                                 
| | Israeli citizen -  | As defined
  by the Citizenship Law, 5712  19521;                                                                                                                                                                                              
| |                      |                                                                                                                                                                                                                                                 
| | Type Approval      | Approval
  granted under law to a model of end equipment for the purpose of its
  connection to the network;                                                                                                                                    
| |                      |                                                                                                                                                                                                                                                 
| | The Treaty         | The
  Constitution and the treaty of the International Telecommunications Union
  (ITU) and the relevant administrative regulations for radio and telephone, as
  these shall be valid from time to time;                                       
| |                      |                                                                                                                                                                                                                                                 
| | Means of Control   | In a
  corporation  all of the following:                                                                                                                                                                                                      
| |                      |                                                                                                                                                                                                                                                 
| |                      | (a)                                                                                                                                                                                                                                             
| |                      |                                                                                                                                                                                                                                                 
| |                      | (b)                                                                                                                                                                                                                                             
| |                      |                                                                                                                                                                                                                                                 
| |                      | (c)                                                                                                                                                                                                                                             
| |                      |                                                                                                                                                                                                                                                 
| |                      | (d)                                                                                                                                                                                                                                             
| |                      |                                                                                                                                                                                                                                                 
| | Telecommunications | Broadcast,
  transfer or reception of characters, signals, writing, visual forms, sounds,
  or information by means of wire, wireless, optical systems or other
  electromagnetic systems;                                                      

|                                           
|-------------------------------------------
|1Code
  of Laws 5712, p. 146; 5752, p. 295.

6

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| | The Licensee                                 | Emet Telecom
  Limited Partnership;                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Interested Party                             | A party
  holding 5% or more of a certain type of means of control;                                                                                                                                                                                                                                                                                      
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Licensee                                     | A party that
  has received a general or special license to implement telecommunications
  operations and provide telecommunications services;                                                                                                                                                                                                           
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | General Licensee -                           | A party that
  has received a general license or a special general license as defined in
  Article 1 of the Law;                                                                                                                                                                                                                                         
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Licensee for CableBroadcasts -               | A party that
  has received a general license for cable broadcasts or a special license for
  cable broadcasts pursuant to Chapter B1 of the Law;                                                                                                                                                                                                        
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Board of Directors -                         | Including a corresponding
  body in another corporation;                                                                                                                                                                                                                                                                                                 
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Technical Requirementsand Quality of Service | Standards of
  availability and quality of service, standards for telecommunications
  facilities and telecommunications services and instructions for installation,
  operation, updating and maintenance, all pursuant to this License and as the
  Director shall instruct from time to time with regard to the services of the
  Licensee;           
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Holding                                      | With regard
  to means of control in a corporation  directly or indirectly, whether alone
  or jointly with others, including through another, including a trustee or
  agent, or by means of a vested interest pursuant to an agreement, including
  the choice of a holding that does not derive from convertible securities or
  in any other manner;
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Engagement Agreement                         | A uniform
  agreement which serves as an engagement between the Licensee and the
  subscriber, for provision of the Licensees services, in whole or in part;                                                                                                                                                                                            
| |                                                |                                                                                                                                                                                                                                                                                                                                                          
| | Transfer                                     | With regard
  to a means of control  whether directly or indirectly, whether for payment
  or without payment, whether permanent or for a period, whether all at once or
  in parts;                                                                                                                                                                    

7

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| | Substantial Influence | The ability
  to have real influence in the activities of the Corporation, whether alone or
  jointly with others or by means thereof, whether directly or indirectly, by
  virtue of the holding in the means of control therein or in another
  corporation, including ability deriving from the articles of association of
  the corporation by virtue of a written, oral or other form of contract, or an
  ability deriving from any other source, except for ability deriving solely
  from fulfilling the function of an officer in the corporation;
| | ----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                         | Without
  derogating from the generality of that stated, a person shall be deemed to
  have substantial influence in a corporation if he holds twenty five percent
  (25%) or more of any means of control in the corporation;                                                                                                                                                                                                                                                                                                                             
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Company -             | Including
  another corporation, and including a partnership;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Parent Company        | A company
  with substantial influence in another company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Company in Privity    | A parent
  company, a subsidiary, a fellow subsidiary, a company that is an interested
  party, an affiliate, an associated company, a related company or a partner
  company;                                                                                                                                                                                                                                                                                                                                                                             
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Subsidiary            | A company in
  which another company has Substantial Influence;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Affiliate             | A company in
  which another company is an interested party;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Associated Company    | A company
  whose investments in another company are twenty five percent (25%) or more of
  its equity capital, whether in shares or in another manner, other than a loan
  given in the course of its regular business;                                                                                                                                                                                                                                                                                                                                   
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Fellow Subsidiaries   | Companies in
  which a party with substantial influence in one also has substantial
  influence in the other;                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Related Companies     | Companies in
  which a party with substantial influence in one is also an interested party
  in the other;                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Partner Companies     | Any one of
  the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                         | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                         | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

8

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| |                            | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Companies
  where one of them is an associated company of a third company and the other
  has substantial influence therein;
| | -------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The Broadcasting Company | A company that
  is linked to the Licensee which has received a general license for cable
  broadcasts by means of the network; for the purposes of this License  Golden
  Channels & Co., Idan Israel Cable Systems Ltd.,  TLM Subscriber Television Ltd., Tevel Israel International
  Communications Ltd., Gevanim Cable Television Ltd., Gevanim Krayot Cable
  Television (1989) Ltd., Matav Cable System Media Ltd. and Cable Systems Media
  Haifa  Hadera Ltd., jointly or severally, as the case may be;
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The Law                  | The
  Telecommunications (Bezeq and Broadcasts) Law, 5742  19822;                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Jointly With Others      | A permanent
  collaboration; a permanent collaboration shall be deemed, with regard to an
  individual  the individual, the individuals relative and a corporation in
  which one of them has a controlling interest, and with regard to a
  corporation  the corporation, whoever holds the controlling interest
  therein, and one in which one of them holds a controlling interest;                                                                                                                         
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Security Forces          | Each of the
  following: the Israel Defense Forces, the Israel Security Agency (ISA), the
  Institute for Intelligence and Special Tasks (Mossad), and the Israel Police;                                                                                                                                                                                                                                                                                                                                          
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Applicant                | A party that
  applies to the Licensee to become a subscriber;                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Sector of Activity       | A field of
  services including data communications and transmission service, telephony
  service, mobile radio telephone (MRT) service, international
  telecommunications service, multi-channel broadcasting service to subscribers
  and so forth, provided throughout the country or part thereof;                                                                                                                                                                                                            
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Index                    | The Consumer
  Price Index published by the Central Bureau of Statistics from time to time
  or any other index that shall replace it;                                                                                                                                                                                                                                                                                                                                                                             

|                                          
|------------------------------------------
|2Code
  of Laws 5742, p. 218; 5762, p. 134

9

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| | Monopoly                                  | As defined
  in Section 26 of the Trade Restriction Law, 5748  19883                                                                                                                                                                                                                                                                                                                                                                            
| | ------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Interface                                 | The physical
  meeting between various functional telecommunications units, including by
  optical or wireless means;                                                                                                                                                                                                                                                                                                                            
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | TelecommunicationsFacility                | A facility
  or installation that is intended fundamentally for telecommunications
  purposes, including end equipment;                                                                                                                                                                                                                                                                                                                          
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | The Director                              | The Director
  General of the Ministry of Communications or anyone he has empowered in the
  matter of licenses in general or in the matter of this License, in general or
  for a specific matter;                                                                                                                                                                                                                                              
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Subscriber                                | A party
  bound by an engagement agreement with the Licensee for the purpose of
  receiving the latters services as an end user;                                                                                                                                                                                                                                                                                                                
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | International Telecommunications System   | A system of
  telecommunications facilities installed in Israel, including an international
  switch, international outlet and interface to international infrastructure,
  serving or intended to serve for the transfer of telecommunications messages
  originating in Israel and destined for another country or the reverse, or for
  the transfer of telecommunications messages between destinations in different
  countries;            
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Mobile Radio TelephoneSystem (MRT System) | A system of
  wireless facilities constructed in cell form and other facilities, by which
  mobile radio telephone services are provided to the public, including a MRT
  exchange, cell radio centers, and wireless or cable transmission arteries
  connecting between cell radio centers, between cell radio centers and a MRT
  exchange, between MRT exchanges, or between the MRT exchange and another
  public telecommunications network;
| |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | TelecommunicationsInfrastructure Operator | A party that
  has received a telecommunications infrastructure license, including a special
  telecommunications infrastructure license;                                                                                                                                                                                                                                                                                                        

|                                            
|--------------------------------------------
|3
  Code of Laws 5748, p. 128; 5762, p. 165.

10

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| | Special Telecommunications   Infrastructure Operator | A party that
  has received a special telecommunications infrastructure operating license;                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | International Operator                               | The holder
  of a general license for providing international telecommunications services;                                                                                                                                                                                                                                                                                                                                                                   
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | General Operator                                     | A general
  licensee, a general licensee for cable broadcasts or a licensee for satellite
  broadcasts;                                                                                                                                                                                                                                                                                                                                                      
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Substantive Operator                                 | A general
  operator with the ability to actually influence the competition in the sector
  of activity; without derogating from the generality of that stated, a party
  that, alone or jointly with a parent Company, a subsidiary or a fellow
  subsidiary, holds a market share of twenty five percent (25%) or more shall
  be deemed a substantive operator; a general operator shall be presumed to be
  substantive if it meets one of the following:
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                        | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                        | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                        | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | MRT Operator                                         | A general
  licensee for providing MRT services;                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Service Recipient                                    | A subscriber
  or service supplier;                                                                                                                                                                                                                                                                                                                                                                                                                          

11

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| | Exchange                 | A
  telecommunications facility in which means of switching, routing and
  transmission are located and operated, enabling a connection to be made
  between different units of end equipment which are linked or connected to it,
  and the transfer of telecommunication messages between them, including control
  and routing facilities and other facilities enabling the provision of
  different telecommunications services to the Licensees service recipients
  and to service recipients of other licensees;
| | -------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The Ministry             | The Ministry
  of Communications;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Transit Switch           | A
  telecommunications facility in which means of switching, routing and
  transmission are located and operated, enabling a connection to be made
  between different exchanges which are linked or connected to it, and the
  transfer of telecommunication messages between them, including control and
  routing facilities;                                                                                                                                                                                        
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Officer                  | A person
  serving as a director, general manager, chief business manager, assistant
  general manager, deputy general manager or fulfilling a function as stated in
  a company, even if his title is different, and another manager who is
  directly subordinate to the companys general manager or a person who
  fulfills corresponding functions in another corporation;                                                                                                                                         
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Routing                  | Directing a
  telecommunications message to its destination;                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The License Assets       | The assets
  required to ensure provision of the telecommunications services by the
  Licensee in accordance with this License;                                                                                                                                                                                                                                                                                                                                                                                         
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Outlet                   | An interface
  to which are connected a public telecommunications network on one side and
  end equipment on the other, a private network or another public
  telecommunications network, as the case may be;                                                                                                                                                                                                                                                                                                           
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | International Outlet     | An outlet
  serving or intended to serve as a connection between an international
  telecommunications system and another public telecommunications network;                                                                                                                                                                                                                                                                                                                                                            
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Internet ServiceProvider | A licensee
  for providing internet access services (ISP);                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Service Provider         | Another
  licensee, including a general licensee for cable broadcasts that provides its
  services to its subscribers through a network;                                                                                                                                                                                                                                                                                                                                                                                

12

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| | TelecommunicationsOperation                 | Operation of
  a telecommunications facility, its installation, construction or maintenance,
  all for the purpose of telecommunications;                                                                                                                                                                                                                                                                              
| | --------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The Ordinance                               | The Wireless
  Telegraph Ordinance [New Version], 5732  19724;                                                                                                                                                                                                                                                                                                                                                        
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | End Equipment                               | Telecommunications
  equipment for the use of a subscriber, which is connected or intended for
  connection from the premises of the subscriber or from any other location to
  a public telecommunications network by means of the interface designated for
  this purpose;                                                                                                                                           
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | PTP Line (Point toPoint)                    | A line for
  the transfer of telecommunications messages, that connects two points by a
  permanent link, physically or logically, including through a switching or
  routing network;                                                                                                                                                                                                                                 
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Reciprocal Connection                       | A connection
  between the public telecommunications network of one licensee and the public
  telecommunications network of another licensee, physically or logically,
  enabling the transfer of telecommunications messages between the licensees
  subscribers or the provision of services by one licensee to the subscribers
  of the other licensee;                                                            
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Relative                                    | Spouse,
  including common-law spouse, parent, grandparent, child or grandchild,
  sibling, and the spouse of any of these;                                                                                                                                                                                                                                                                                            
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The License                                 | This license
  with its appendices as it shall be updated from time to time;                                                                                                                                                                                                                                                                                                                                           
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Telecommunication Infrastructure 
  License | A general
  license to provide fixed-line domestic telecommunications services;                                                                                                                                                                                                                                                                                                                                        
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The Network                                 | The
  Licensees fixed line public telecommunications network;                                                                                                                                                                                                                                                                                                                                                         
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Public Telecommunications Network           | A system of
  telecommunications facilities that serves or that is intended to serve for
  the supply of telecommunications services to the general public throughout
  the country or at least in the service area, including switching and routing
  equipment, transmission equipment and access network, including MRT system
  and international telecommunications system, with the exception of end
  equipment;

|                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------
|4 Laws
  of the State of Israel, New Version 25, 5732, p. 506; Code of Laws 5754, p.
  47;  Compendium of Regulations 5752,
  p. 995.

13

---

---

| | Fixed Line Public TelecommunicationsNetwork | A domestic
  public telecommunications network, except for an MRT system and an international
  telecommunications system;                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Access Network                              | The
  components of the public telecommunications network which serve as a link
  between an exchange and an outlet by means of a linear infrastructure, a
  wireless infrastructure or a combination of the two;                                                                                                                                                                                                                                                                                                          
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Private Network                             | A
  telecommunications network serving or intended to serve a particular person
  or a particular group of people with a common interest, linking or intended
  to link to a public telecommunications network by means of an outlet, including
  switching equipment, connection devices, cables, transmission equipment and
  any other telecommunications facility; providing that the common interest is
  not solely the existence of the network;                                                                    
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The General Partner                         | Emet Telecom
  Ltd., which constitutes a General Partner as defined in the Partnerships
  Ordinance [New Version], 5735  19755 in the Licensee.                                                                                                                                                                                                                                                                                                                                                                           
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Use                                         | Provision of
  access to the telecommunications facility of the Licensee, including to the
  public telecommunications network or to its access network, in whole or in
  part, and the possibility of utilizing them for the purpose of implementing
  telecommunications operations or providing telecommunications services by
  means thereof; and providing the possibility of installing a telecommunications
  facility of another licensee in the telecommunications facility or on the
  premises of the Licensee;
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | TelecommunicationsService                   | Implementing
  telecommunications operations for others;                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | International Telecommunications Services   | A telecommunications
  service provided for the public by means of the international
  telecommunications system of an international telecommunications operator;                                                                                                                                                                                                                                                                                                                                                          

|                                                                        
|------------------------------------------------------------------------
|5 Laws
  of the State of Israel, 5735 p. 549, Code of Laws 5759 page 26.

14

---

---

| | Access Service                                  | Providing
  the subscriber with the possibility of receiving the services of the service
  provider;                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Basic TelephoneService                          | Full duplex
  switching or routing transmission, including by means of a modem, of speech
  or speech-related telecommunications messages, such as facsimile signals;                                                                                                                                                                                                                                                                                                                                                                    
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Telephony Service                               | Basic
  telephone service and services related to this service;                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Added Value Service                             | Service
  provided on the basis of the basic telephone service and which, by its
  nature, cannot be provided by another, including another licensee, who is not
  the supplier of the basic telephone service; added value services given by
  the Licensee, as detailed in Appendix D to the License;                                                                                                                                                                                                                                 
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | MRT Services (Mobile Radio   Telephone)         | Telecommunications
  services provided to the public by means of the MRT system of a MRT operator;                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Transmission Service                            | Implementing
  transmissions for the public;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Data Communication Service                      | Implementing
  data communication for the public;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Infrastructure Service                          | Providing
  another licensee or a licensee for broadcasts with the option to use the
  network, for the purpose of implementing telecommunications operations,
  including broadcasts, and for the purpose of providing telecommunications
  services thereby;                                                                                                                                                                                                                                                                           
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Domestic Fixed Line Telecommunications Services | Fixed line
  infrastructure, transmission, data communications and telephony services;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Licensee Services                               | Services
  which the Licensee is entitled to supply pursuant to the License;                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Basic Services                                  | The telecommunications
  services detailed in Appendix D;                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Control                                         | The ability
  to direct the activities of a corporation, whether alone or jointly with
  others or by means thereof, whether directly or indirectly, by virtue of the
  holding in the means of control therein or in another corporation, including
  ability deriving from the articles of association of the corporation by
  virtue of a written, oral or other form of contract, or an ability deriving
  from any other source, except for ability deriving solely from fulfilling the
  function of an officer in the corporation;

15

---

---

| |                                               | Without
  derogating from the generality of that stated, a person shall be deemed to
  have control of a corporation if he holds fifty percent (50%) or more of any
  means of control in the corporation, or if he has the ability to prevent the
  making of business decisions in the corporation, except for decisions dealing
  with the issue of means of control in the corporation or decisions dealing
  with the sale or liquidation of most of the business of the corporation or a
  substantive change therein, as well as rights vested in the minority by
  virtue of the law;
| | --------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                               | It is
  presumed that a person controls a corporation if he holds the largest portion
  of any means of control whatsoever;                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The Minister                                | The Minister
  of Communications, including anyone to whom he has delegated his
  authority  in whole or in part, in the
  matter of this License;                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Resident                                    | As defined
  in the Population Registration Law, 5725  19656;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Transmission                                | The transfer
  of electromagnetic signals, including optical signals or a sequence of bits
  between certain points, between the telecommunications facilities of
  licensees, including broadcasting licensees, with the exception of end
  equipment;                                                                                                                                                                                                                                                                                                                                      
| |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Telecommunication InfrastructureRegulations | The
  Communications Regulations (Telecommunications and Broadcasts) (Procedures
  and Conditions for Obtaining a General License for the Provision of Domestic
  Fixed Line Telecommunications Services), 5760  20007                                                                                                                                                                                                                                                                                                                                                                      

|                                                    
|----------------------------------------------------
|6
  Code of Laws 5725, p. 270; 5755 p. 180.         
|                                                    
|7
  Compendium of Regulations, p. 886; 5762, p. 787.

16

---

---

| | SupervisoryRegulations | The
  Telecommunications Regulations (Supervision of the Operations of the
  Licensee), 5746  19868.                                                                                        
| | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                          |                                                                                                                                                                                              
| | Data Communications    | The transmission
  of information and software other than speech between end equipment units,
  including computers; for the purposes of this definition:                                    
| |                          |                                                                                                                                                                                              
| |                          | Information
   Data, characters, concepts or instructions, except for software, expressed
  in computer reading language, which are stored in a computer or in another
  means of storage;
| |                          |                                                                                                                                                                                              
| |                          | Computer 
  A device that operates by means of software to implement the arithmetical or
  logical processing of data, and its peripheral equipment, including a system
  of computers;   
| |                          |                                                                                                                                                                                              
| |                          | Software 
  A group of instructions expressed in a computer reading language which can
  cause the functioning of a computer or the implementing of an action by a
  computer;            

|1.2 | Words and
  expressions in the License that have not been defined in Section 1.1 or
  anywhere else in the License, shall have the meaning as stated in the Law, in
  the Telecommunication Infrastructure Regulations, in the Ordinance or in the
  Interpretation Law, 5741  19819 (hereinafter  the
  Interpretation Law), unless implied otherwise by the language of the text
  or the context.                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.  | Interpretation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.1 | The headings
  of the sections in this License have been provided solely to facilitate
  reading and they may not be used for the purpose of interpreting or
  explaining the content of any of the License conditions.                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.2 | In any case
  of a dispute regarding the interpretation of a provision of the License,
  including a prima facie
  discrepancy between the various provisions of the License or between the
  provisions of the License and another administrative provision given under
  the Law or the Ordinance, the Minister shall determine the interpretation of
  the provision, or shall decide in the matter of settling said discrepancy,
  after the Licensee has been given a suitable opportunity to voice its
  arguments.

|                                                         
|---------------------------------------------------------
|8
  Compendium of Regulations 5746, p. 362; 5754, p. 778.
|                                                         
|9
  Code of Laws 5741, p. 302; 5754, p. 358.             

17

---

---

|2.3 | The
  provisions of the Interpretation Law shall apply, mutatis mutandis, to the interpretation of this License.                                                                                                                                                                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                          
|3.  | The blue pencil principle                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                          
|3.1 | A
  cancellation or determination regarding the nullity of a condition of the
  License shall apply only to that condition or part thereof, as the case may
  be, and it shall not serve, per se, to infringe the binding validity of the
  License or of any other condition therein, unless the cancellation or nullity
  necessitates another meaning.

18

---

---

Part B  Provisions of Law and Administrative
Provisions

|4.  | Application of laws and provisions                                                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                  
|4.1 | In all
  matters pertaining to the establishment, maintenance and operation of the
  Network, as well as implementation of telecommunications operations and the
  provision of telecommunications services, the Licensee shall act pursuant to
  the provisions of the License and pursuant to the following:   
|    |                                                                                                                                                                                                                                                                                                                  
|    | (a)                                                                                                                                                                                                                                                                                                              
|    | (b)                                                                                                                                                                                                                                                                                                              
|    | (c)                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                  
|4.2 | Any law,
  administrative provision and treaty, as stated in section 4.1, shall apply to
  the Licensee as these shall be valid from time to time, including remedies
  for the breach thereof, and the provisions of the law as stated shall be
  considered to be an integral part of the terms of the License.
|    |                                                                                                                                                                                                                                                                                                                  
|5.  | Obligation under any other law                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                  
|5.1 | To preclude
  doubt, nothing in the granting of the License shall serve to exempt the
  Licensee from fulfilling an obligation pursuant to any other law, including
  the obligation to obtain any license, permit, authorization or consent
  pursuant to any law.                                              

19

---

---

Chapter 2 - The
License  Scope, Validity and Cancellation

Part A  Scope and Validity of the License

|6.  | Scope of the License                                                                                                                                                                                                                                                                                                      
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                           
|6.1 | Subject to
  the provisions of the License and its conditions, the Licensee shall
  establish, maintain, develop and operate the Network, and shall utilize it
  for the purpose of implementing telecommunications operations and for the
  purpose of supplying telecommunications services as specified in the License;
|    |                                                                                                                                                                                                                                                                                                                           
|6.2 | Subject to
  the provisions of the license and its conditions, the Licensee shall provide
  recipients of its services with the services specified in Appendix D;                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                           
|6.3 | Subject to
  the provisions of the License and its conditions, the Licensee shall be
  entitled to permit another to implement telecommunications operations through
  its facilities, insofar as these shall be required for the purpose of
  receiving the services of the Licensee.                                    
|    |                                                                                                                                                                                                                                                                                                                           
|6.4 | This License
  cancels and replaces the licenses granted to:                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                           
|    | (a)                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                           
|    | (b)                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                           
|    | (c)                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                           
|6.5 | The Licensee
  shall provide its services in the Service Area pursuant to the License
  provisions and pursuant to any law.                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                           
|6.6 | The Licensee
  shall not implement telecommunications operations and shall not provide
  telecommunications services unless it has been permitted to do so in the
  framework of the License or in the framework of another license, pursuant to
  the Law or the Ordinance.                                              
|    |                                                                                                                                                                                                                                                                                                                           
|7.  | Non-exclusivity                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                           
|7.1 | To preclude
  doubt, the Licensee shall not have any exclusivity whatsoever in provision of
  its services.                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                           
|8.  | License period                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                           
|8.1 | The License
  shall be valid for a period of twenty (20) years, commencing on the
  determining date (hereinafter  the First Period).                                                                                                                                                                                  

20

---

---

|    | For the
  purposes of this section, the determining date  the date on which a bank
  guarantee is given to the Ministry in accordance with the provisions of the
  Telecommunications Infrastructure Regulations, providing that this is
  produced within twenty (20) dates of the date of granting the License.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                     
|    | In this
  License, the determining date shall be considered to be the date of granting
  the License.                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                     
|8.2 | The Minister
  shall be entitled to extend the validity of the License for additional
  periods of ten (10) years each, in accordance with that stated in section 9
  (hereinafter  Additional Period).                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                     
|9.  | Extending the License period                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                     
|9.1 | The Minister
  shall be entitled, at the request of the Licensee, to extend the validity of
  the License for an additional period, after weighing the considerations
  specified in Article 4 (b) of the Law, including all of the following:                                                                      
|    |                                                                                                                                                                                                                                                                                                                     
|    | (a)                                                                                                                                                                                                                                                                                                                 
|    | (b)                                                                                                                                                                                                                                                                                                                 
|    | (c)                                                                                                                                                                                                                                                                                                                 
|    | (d)                                                                                                                                                                                                                                                                                                                 
|    | (e)                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                     
|9.2 | The Licensee
  shall submit its application to extend the License period within  forty five (45) days preceding the period
  of eighteen (18) months before the date of expiry of the License.                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                     
|9.3 | The Licensee
  shall attach to its application a summary report including the following:                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                     
|    | (a)                                                                                                                                                                                                                                                                                                                 
|    | (b)                                                                                                                                                                                                                                                                                                                 
|    | (c)                                                                                                                                                                                                                                                                                                                 

21

---

---

|9.4  | The summary
  report pursuant to section 9.3 shall contain up-to-date details and  shall be made in the form of an affidavit.                                                                                                                                                                                                                                    
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                  
|9.5  | For the
  purpose of examining the request of the Licensee to extend the License
  period, the Minister shall be entitled to demand that the Licensee produce,
  within a period to be determined and in a manner to be determined, any information
  and document, and without derogating from the generality of that stated, the
  Minister shall be entitled 
|     |                                                                                                                                                                                                                                                                                                                                                                  
|     | (a)                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                  
|     | (b)                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                  
|     | (c)                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                  
|     | (d)                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                  
|9.6  | The Licensee
  shall fulfill every demand as stated in section 9.5; should the Licensee be
  required to appear before the Minister, the CEO of the Licensee or the CEO of
  the General Partner or anyone they have empowered therefor in writing shall
  appear.                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                  
|9.7  | Should the
  Licensee not respond to the demand or the summons as stated in section 9.5 at
  least twice, the Minister shall be entitled to reject its request to extend
  the validity of the license.                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                  
|9.8  | The
  conditions of this License, including any change thereto shall apply to the
  Additional Period.                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                  
|10.  | Notification of the Minister regarding extension of the License
  validity                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                  
|10.1 | The Minister
  shall notify the Licensee in writing of his decision regarding the request to
  extend the License validity, no later than a year before the end of the
  License period.                                                                                                                                                                         

22

---

---

|10.2 | Should the
  Minister decide to reject the request, after the Licensee has been given a
  suitable chance to bring its arguments before him, he shall so notify the
  Licensee in writing, giving reasons for the rejection.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|11.  | End of the License period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|11.1 | Should the
  License period end pursuant to section 8.1, or an Additional Period pursuant
  to section 8.2,and the validity of the License is not extended, or the
  License is canceled pursuant to section 13, the Minister shall be entitled:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|11.2 | During the
  Period of the End of the Service and if an alternative licensee, one or more,
  has proposed purchasing the Network and the rights and obligations of the
  service recipients, the Licensee and the alternative licensee shall negotiate
  for the purpose of the purchase of the Network as stated at its financial
  value and as a going concern; should said licensees not reach an agreement
  within six (6) months from the end of the License period, and should the
  parties not have appointed an agreed-upon arbitrator, the conditions for the
  purchase of the Network shall be determined pursuant to the principles stated
  by an arbitrator who shall be appointed by the chairman of the Auditors
  Council, pursuant to the request of one of said licensees.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|11.3 | The
  arbitrator shall give his decision after hearing said licensees and giving
  them a chance to bring their arguments before him; the decision of the
  arbitrator shall be given no later than three (3) months from the date of his
  appointment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|11.4 | In this
  section, Alternate Licensee  a party that has satisfied the Minister that it
  is qualified to receive a Telecommunication Infrastructure license if the
  Network is handed over to it.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

23

---

---

Part B  
Changes in the License Conditions and Cancellation Thereof

|12.  | Changes in
  the License conditions                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|12.1 | The Minister
  shall be entitled, at any time, to change the conditions of the License, to
  add to them or to detract from them; in this matter, the considerations
  mentioned in Article 4 (e) of the Law, inter
  alia, shall be taken into account, as well as the need for
  adaptation to the changes in international and Israeli regularization and
  standardization in the field of telecommunications and broadcasting.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|12.2 | The Minister
  shall act pursuant to his authority, as stated in section 12.1, after the
  Licensee has been given a suitable opportunity to voice its arguments.                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|12.3 | The Minister
  shall be entitled, at the request of the Licensee, to change the conditions
  of the License, to add to them or to detract from them, and in this matter,
  the provisions of section 12.1 shall apply.                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|13.  | Cancellation of the License                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|13.1 | The Minister
  shall be entitled to cancel the License if one or more of the causes
  specified in Article 6 of the Law shall exist, or the provisions of
  Regulation 23 of the Telecommunication Infrastructure Regulations shall cease
  to exist in the Licensee, including the following:                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                    

24

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|     |                                                                                                                                                                                                                                                                                                  | (6)                                                                                                                                                                                                                                                                                                                                   | The Licensee
  is not fulfilling the instructions regarding operation of the Network in time
  of emergency pursuant to section 69, is not providing services to the
  Security Forces pursuant to section 70 and Appendix H, or is not fulfilling
  the security provisions pursuant to section 71 and Appendix G;
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                  | (7)                                                                                                                                                                                                                                                                                                                                   | The Licensee
  did not provide or did not extended a guarantee as required, or did not
  supplement the amount of the guarantee to the original guarantee amount, in a
  case in which the guarantee was exercised in whole or in part.                                                                              
|     |                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                      
|     | (c)                                                                                                                                                                                                                                                                                              | The Licensee
  breached a condition of the License that is not a substantive condition and
  did not remedy the breach within a reasonable time as instructed by the
  Minister;                                                                                                                                                     
|     | (d)                                                                                                                                                                                                                                                                                              | The Licensee
  did not begin to provide one of its services pursuant to that set forth in
  the License or it ceased, restricted or delayed provision of one of its
  services unlawfully or in contravention of the License;                                                                                                        
|     | (e)                                                                                                                                                                                                                                                                                              | One or more
  of the qualities that qualified it to be a Licensee ceased to exist in the
  Licensee, including:                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                  | (1)                                                                                                                                                                                                                                                                                                                                   | The Licensee
  ceased to be a company duly incorporated in Israel;                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                  | (2)                                                                                                                                                                                                                                                                                                                                   | Israeli
  citizens and residents therein ceased to hold, directly or through a
  corporation controlled by Israeli citizens and residents, at least 20% of
  each one of the means of control in the Licensee;                                                                                                       
|     |                                                                                                                                                                                                                                                                                                  | (3)                                                                                                                                                                                                                                                                                                                                   | The CEO, a
  director who has been given implementational powers or a majority of the
  directors in a company that is the Licensee, or the holder of a corresponding
  office in another corporation that is the Licensee are not Israeli citizens
  or residents;                                                  
|     |                                                                                                                                                                                                                                                                                                  | (4)                                                                                                                                                                                                                                                                                                                                   | An officer
  in the Licensee was convicted of a crime, whose nature, severity or
  circumstances render him, in the opinion of the Director, unfit to serve as
  an officer in the Licensee and he continues to serve in his position despite
  the demand of the Director that he cease to do so;                   
|     |                                                                                                                                                                                                                                                                                                  | (5)                                                                                                                                                                                                                                                                                                                                   | The
  Licensee, a parent company or subsidiary of the Licensee or an officer in the
  Licensee are not upholding the provisions of sections 28 or 30 regarding the
  prohibition on cross-ownership and the prohibition on harming competition;                                                                      
|     |                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                      
|     | (f)                                                                                                                                                                                                                                                                                              | Means of
  control in the Licensee or control therein were transferred in contravention
  of that stated in sections 20, 26 or 27, or in contravention of the
  provisions of any law;                                                                                                                                               
|     | (g)                                                                                                                                                                                                                                                                                              | The Licensee
  did not disclose, to the Minister or anyone acting on his behalf, information
  in its possession which it was obligated to disclose by virtue of the
  provisions of this License or pursuant to law, or the Licensee knowingly
  provided incorrect information to the Minister or to anyone acting on his
  behalf.
|     |                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                      
|13.2 | Should the
  Minister learn that the cause of the cancellation, in the circumstances of
  the matter, does not obligate cancellation of the License, the Minister shall
  give the Licensee a suitable opportunity to remedy the act or the omission
  which constitutes cause for cancellation.

25

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|13.3 | The Minister
  shall notify the Licensee, in advance, of his intention to cancel the
  License; he shall state in the notification the cause therefor and shall
  enable the Licensee, within a period of time that shall be set forth in the
  notification which shall not be less than thirty (30) days, to voice its
  arguments with regard to the cause of cancellation, whether in writing or
  orally, according to the circumstances.                                                                                                                                      
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|13.4 | The Minister
  shall be entitled to summon the Licensee to appear before him and shall be
  entitled to require that it respond to questions, present documents or
  provide him with information, data, and documents as this shall be required
  for the purpose of clarifying the cause of cancellation.                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|13.5 | Should the
  Minister learn that the cause of cancellation justifies cancellation of the
  License, the Minister shall be entitled to cancel the License by notification
  that shall be delivered to the Licensee (hereinafter  the Cancellation
  Notice).                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|13.6 | In the
  Cancellation Notice, the Minister shall set forth the date on which
  cancellation of the License shall come into effect.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|13.7 | The Licensee
  shall continue to provide the services until the end of the date set forth by
  the Minister in the Cancellation Notice and shall fulfill the provisions of
  the License and any instruction giving to it by the Minister in this matter.                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|14.  | Other remedies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|14.1 | In addition
  to his authority to cancel the License as stated in section 13, the Minister
  shall be entitled, upon the existence of the causes specified in section
  13.1, to restrict or to stipulate the License, to change its conditions or to
  exercise  the guarantee given by the
  Licensee to ensure fulfillment of the conditions of the License, in whole or
  in part. The procedure specified in the matter of cancellation of the License
  shall apply, mutatis mutandis,
  to the restriction or stipulation of the License, and to exercise of the
  guarantee.

26

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---

|Part C  Structural Separation in Provision of Services
|-------------------------------------------------------
|                                                       
|15.                                                    
|                                                       
|15.1                                                   

|Other
  Licensee      |  | including
  licensee for broadcasts;                                               
|----------------------- | - | -----------------------------------------------------------------------------------
|                        |   |                                                                                    
|Internet
  Subscriber |  | anyone
  connected to an Internet provider by means of the Network and cable modem;

|16.  | Obligation for structural separation from the Broadcasting Company                                                                                                                                                                                                                                                                                                                                                                                                                   
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|16.1 | The Licensee
  shall maintain a structural separation between itself and the Broadcasting
  Company in the format specified below:                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|16.2 | Without
  derogating from the continued application of the provisions of section 16.1
  (a), should an additional general license be granted for the provision of
  cable broadcasts on the Network or should the number of Internet subscribers
  reach 350,000, or should the number of telephone lines operated by the
  Licensee reach 250,000, the Licensee shall implement a structural separation
  between itself and the Broadcasting Company in the format specified below:
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

27

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| | (b) | Separation
  between the assets of the Licensee and the assets of the Broadcasting
  Company, subject to section 21.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (c) | The Licensee
  and the General Partner shall not employee employees of the Broadcasting
  Company, and the Broadcasting Company shall not employ employees of the
  Licensee and employees of the General Partner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (d) | Without
  derogating from the obligation of the Licensee pursuant to section 19.2 to
  determine rules and procedures regarding maintaining the confidentiality of
  commercial information, and the obligation of an employee of the Licensee,
  pursuant to said section, to maintain the confidentiality of commercial
  information, the Licensee and the General Partner shall not employee anyone
  serving as a director in the Broadcasting Company if, in the framework of the
  employees position in the Licensee or in the General Partner, he is liable
  to have access to commercial information on the licensee competing with the
  Broadcasting Company (hereinafter in this section  Competitor);
| |     | In this
  matter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | Commercial
  Information  data on a competitor which is not in the public domain and
  which pertains to one of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |  | (1) | Customers;                                                                                                                                                                                                                                                         
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (2) | The structure
  of the system of telecommunications facilities, its deployment, the
  technology by which it operates;                                                                                                                                             
| |  | (3) | Plans for
  the expansion of the system of telecommunications facilities, changes therein
  and the operation of new services by means thereof;                                                                                                                    
| |  | (4) | The
  quantity, type and objective of telecommunications messages moving through
  the Network;                                                                                                                                                                    
| |  | (5) | Other
  marketing or technological plans or activities, information on which was
  given to the Licensee or the General Partner by a competitor, or other
  business activities, information on which was classified by a competitor as
  confidential information.

|17.  | Obligation of structural separation from an Internet supplier                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                            
|17.1 | The Licensee
  shall maintain a structural separation between itself and an ISP which is a
  company connected with it in the format specified, mutatis mutandis, in subsections 16.1 (a) and 16.2 (a),
  (b), (c) and (d).

28

---

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|18.  | Structural separation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|18.1 | Subject to
  sections 16 and 17, the Minister shall be entitled, after having suitably
  invited the Licensee to voice its arguments, to set forth additional
  restrictions and conditions in the License regarding the relationship between
  the Licensee and companies connected with it, including with regard to the
  staffing of  positions and appointing
  officers, transferring information, the existence of separate corporations or
  a separate accounting system between activities, and regarding technological,
  geographical or commercial restrictions in infrastructure deployment or in
  the provision of services.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|18.2 | Should the
  Minister see that special circumstances exist making it possible, and after
  he is convinced that this will not serve to harm competition in the field of
  telecommunications and broadcasting, he shall be entitled, pursuant to a
  written request from the Licensee, by way of a license amendment, to
  determine qualifications to the obligation for structural separation set
  forth in this Part, under the conditions that shall be determined.                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|19.  | Prohibition on preference                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|19.1 | Without
  derogating from that stated in Chapter 4  Part F in the matter of Use of
  Frequencies in the Network, the Licensee shall not discriminate and shall
  refrain from giving preference to a company connected with it over another
  licensee in providing service, including in the matter of payment for the
  service, terms of the service, availability of the service, provision of
  information pertaining to the service, and in any other manner.                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|19.2 | The Licensee
  shall determine procedures and rules for maintaining the confidentiality of
  commercial information and the prohibition on transferring same to a
  connected company which is competing with another licensee, to which said
  information relates; these procedures shall set forth, inter alia, restrictions regarding
  distribution of information in the Licensee and access thereto by employees
  who are not designated to handle the commercial information in the framework
  of their jobs; for the purposes of this subsection, Commercial Information
   as defined in section 16.2 (d).                   

29

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|Chapter 3  Ownership, Assets and Means of
  Control           
|---------------------------------------------------------------
|                                                               
|Part A  Restrictions on Transfer of the License and its Assets
|                                                               
|20.                                                            
|                                                               
|20.1                                                           
|                                                               
|20.2                                                           
|                                                               
|21.                                                            
|                                                               
|21.1                                                           
|                                                               
|                                                               
|                                                               
|                                                               
|21.2                                                           
|                                                               
|21.3                                                           

30

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|21.4 | In granting
  a permit pursuant to section 21.2, the Minister shall be entitled to
  stipulate conditions, including with regard to the scope of use of the
  telecommunications facilities of another licensee, the period of the use and
  requirements regarding infrastructure development by the Licensee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|21.5 | The Licensee
  shall be entitled to make use of the telecommunications facilities of the
  Security Forces for the purpose of supplying services to the Security Forces,
  subject to an agreement with the Security Forces or anyone acting on their
  behalf.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|22.  | Restrictions on transfer of the License assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|22.1 | The Licensee
  shall not be entitled to transfer to another or to encumber any of the
  license assets, including by way of pledge, without the prior written consent
  of the Minister and in accordance with the conditions determined by him; the
  Minister shall consent to the transfer or encumbrance of any of the License
  assets to a third party, if he learns that the Licensee has ensured that
  exercise of the rights by the third party would not in any way impair the
  provision of the Licensees services, as long as the Licensee is obligated to
  provide the services pursuant to the provisions of the License, including
  that provision of the Licensees services shall not be impaired or restricted
  in accordance with the conditions set forth in the License, including
  conditions pertaining to the level, scope, availability and quality of the
  services, and that the possibility of renewal of these services shall not be
  impaired if they had been restricted or ceased prior to exercise of the
  rights in the License assets.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|22.2 | Notwithstanding
  that stated in section 22.1, the Licensee shall be entitled to encumber any
  of the License assets in favor of a banking corporation operating lawfully in
  Israel for the purpose of obtaining bank credit, provided that it has given
  the Director advance notice regarding the intended encumbrance and provided
  that the encumbrance agreement includes a section under which the banking
  corporation undertakes that exercise of the rights thereby shall not cause
  any impairment whatsoever of provision of the services pursuant to this
  License; for the purposes of this section, Banking Corporation  as defined
  in the Banking Law (Licensing), 5741  198110.                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|22.3 | The
  encumbrance of one of the License assets, implemented lawfully or pursuant to
  a franchise prior to the granting of the License, shall be deemed an
  encumbrance made pursuant to the License, until the end of the encumbrance
  period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|22.4 | The
  provisions of section 22.1 shall not apply to the sale of items of equipment
  at the time of implementing an upgrading procedure, including the sale of
  equipment, as stated, by the trade-in method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|                                           
|-------------------------------------------
|10 Code of Laws 5741, p. 232, 5756, p. 318.

31

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|23.  | Provision of service by means of another                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|23.1 | Should the
  Licensee wish to provide one of its services, in whole or in part, by means
  of another acting on its behalf, which is a licensee, it shall contact the
  Director and request his approval therefor; the Licensee shall attach to its
  request the agreement between itself and the other licensee; authorization as
  stated shall not be required for an engagement between the licensee and a
  person engaging in the sale or installation of End Equipment.                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|23.2 | The Director
  shall be entitled to approve or reject the request, or to make his approval
  contingent upon conditions that must be fulfilled, including amendment of the
  agreement as stated in section 23.1 above; the Director shall consider, inter alia, to what extent the terms of
  engagement with the other licensee ensure the maintaining of fair
  competition, the level of services to the public, fulfillment of the
  provisions of the license and the obligations of the Licensee pursuant
  thereto; the Director shall not approve an engagement with another licensee
  that contravenes the obligations of the Licensee pursuant to the License.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|23.3 | The
  engagement with the other licensee shall not serve to derogate from the
  obligations of the Licensee and from its responsibility to implement its
  services pursuant to the provisions of the License, and it shall not serve to
  derogate from the powers of the Minister, the Director or anyone acting on
  their behalf.                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|23.4 | The Minister
  shall be entitled to exempt the Licensee, at its request, from the
  requirement pursuant to sub-section 23.1 if he sees that this is an
  engagement which has no concrete effect on implementation of the License.                                                                                                                                                                                                                                                                                                                                                                                                                                       

32

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|Part B  Means of Control  Changes and Restrictions
|----------------------------------------------------
|                                                    
|24.                                                 
|                                                    
|24.1                                                
|                                                    

| | Holding                                                |  | Including
  acquisition, and the two jointly, as these terms are defined in the
  Securities Law, 5728  196811, and including transfer or
  encumbrance, all without derogating from the definition of Holding in
  section 1;
| | -------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                          |  |                                                                                                                                                                                                                                  
| | Substantive
  Holding                                  |  | The holding
  of means of control in the Licensee, as a result of which a person becomes an
  interested party, a party of substantial influence, or holder of controlling
  interest in the Licensee;                           
| |                                                          |  |                                                                                                                                                                                                                                  
| | Substantive
  Telecommunication Infrastructure company |  | A domestic
  operator or special domestic operator that is a substantive operator in the
  sector of activity of domestic fixed line telecommunications services.                                                                

|25.  | Details of the Licensee                                                                                                                                                                                                                                                                                                                                                       
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                               
|25.1 | Details
  regarding the legal identity of the Licensee, its incorporation, holders of
  controlling interest therein, holders of substantial influence therein,
  interested parties therein, officers therein, are specified in Appendix A to
  the License; the Licensee shall provide the Director, at the beginning of
  January each year, within the updated Appendix A.
|     |                                                                                                                                                                                                                                                                                                                                                                               
|25.2 | The Licensee
  shall report to the Director in writing of any change in the information
  contained in Appendix A, no later then the end of twenty one (21) days from
  the date of the change.                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                               
|26.  | Substantive Holding                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                               
|26.1 | No person
  shall hold a substantive holding without receiving the approval of the
  Minister therefor.                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                               
|26.2 | A person
  shall not transfer means of control in the Licensee if, as a result thereof,
  the transferee shall hold a substantive holding, without receiving the
  approval of the Minister therefor.                                                                                                                                                                         

|                                         
|-----------------------------------------
|11 Code of Laws 5728, p. 234; 5763, p. 70

33

---

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|26.3 | Any party
  holding means of control in the Licensee or constituting an interested party
  therein, shall not be entitled to encumber them in such manner that exercise
  of the encumbrance shall cause a substantive holding by the creditor, unless
  the encumbrance agreement includes a restriction under which the encumbrance
  cannot be exercised without the advance written consent of the Minister.
  Nothing in the existence of valid encumbrance agreements, to the end of the
  first encumbrance period set forth therein for the means of control in the
  Licensee or in an interested party therein, made prior to March 27 2003,
  which do not included a restriction as stated, shall serve to constitute a
  breach of this section; for the purposes of this subsection, Substantive
  Holding- holding means of control in the Licensee, as a result of which a
  person becomes the holder of substantial influence or the holder of a
  controlling interest in the Licensee.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|27.  | Transfer and acquisition of means of control                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|27.1 | Should means
  of control in the Licensee be transferred at a rate that causes a substantive
  holding, without having received the approval of the Minister, the Licensee
  shall report this to the Minister in writing immediately after the Licensee
  learns of the transfer and no later than twenty one (21) business days from
  said date. A transfer as stated in section 26.2 which was not known to the
  Licensee, shall not constitute a cause for cancellation of the License
  pursuant to section 13.1 (f).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

34

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|Part C  Cross Ownership and Conflict of Interests
|--------------------------------------------------
|                                                  
|28.                                               
|                                                  
|28.1                                              
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|28.2                                              
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|29.                                               
|                                                  
|29.1                                              
|                                                  
|29.2                                              

35

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|30.  | Prohibition on impairing competition                                                                                                                                                                                                                                                                                                                                                                        
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                             
|30.1 | The
  Licensee, any party in which the Licensee is an interested party or an
  officer in the Licensee shall not conduct any activity by way of act or
  omission, and shall not be a party to any agreement, arrangement, or
  understanding whatsoever, which are intended or which are likely to reduce or
  impair the competition in the field of telecommunications or in the field of
  broadcasting;
|     |                                                                                                                                                                                                                                                                                                                                                                                                             
|30.2 | Should the
  Minister see that the operations of the Licensee are impairing competition in
  the field of telecommunications or in the field of broadcasting, he shall be
  entitled to instruct the Licensee, after the latter has been given a suitable
  opportunity to voice its arguments, of the measures that it must take to
  prevent the impairment.                                              

36

---

---

|Chapter 4  Development, Maintenance and
  Operation of the Network
|-------------------------------------------------------------------
|                                                                   
|Part A  Establishment and Development of the Network              
|                                                                   
|31.                                                                
|                                                                   
|31.1                                                               
|                                                                   
|31.2                                                               
|                                                                   
|31.3                                                               
|                                                                   
|32.                                                                
|                                                                   
|32.1                                                               
|                                                                   
|33.                                                                
|                                                                   
|33.1                                                               

37

---

---

|33.2 | Upon
  completion of the deployment and development work, the Licensee shall clean
  the worksite and shall return the site to its previous state.                                                                                                                                                  
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                     
|34.  | Intersecting electricity and telecommunications lines                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                     
|34.1 | Where
  electricity lines or electrical facilities exist at a worksite, the
  obligations imposed pursuant to the Telecommunications and Electricity
  Regulations (Proximity and Intersection between Telecommunications Lines and
  Electricity Lines), 5746  198612 shall apply to the Licensee.

|                                                          
|----------------------------------------------------------
|12 Compendium of Regulations 5746, p. 595;
  5750, p. 131.

38

---

---

|Part B  Supervising Network Development Work
|---------------------------------------------
|                                             
|35.                                          
|                                             
|35.1                                         
|                                             
|35.2                                         
|                                             
|36.                                          
|                                             
|36.1                                         
|                                             
|36.2                                         
|                                             
|37.                                          
|                                             
|37.1                                         
|                                             
|37.2                                         

39

---

---

|38.  | Rectifying faults and defects in the Network development                                                                                                                                                                                                                                                                                                                                     
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                              
|38.1 | The Director
  shall be entitled to notify the Licensee in writing of faults, defects and
  discrepancies found by him in the Network and development work, on the basis
  of reports, documents, and information submitted by the Licensee, on the
  basis of measurements and examinations conducted by him or on the basis of
  complaints from the public.                               
|     |                                                                                                                                                                                                                                                                                                                                                                                              
|38.2 | Should the
  Licensee receive notification as stated in section 38.1, it shall inform the
  Director, on the date set forth in the notice or within fourteen (14) days
  from the date of receipt of the notice, of its response to that stated
  therein and the actions that it has taken or is about to take for the purpose
  of rectifying the faults, the defects or the discrepancies.

40

---

---

|Part C  Technical compatibility
|--------------------------------
|                                
|39.                             
|                                
|39.1                            
|                                
|40.                             
|                                
|40.1                            
|                                
|                                
|                                
|                                

41

---

---

|Part D  Inspections and Maintenance
|------------------------------------
|                                    
|41.                                 
|                                    
|41.1                                

| | Periodic
  Inspection |  | Inspection
  of the Network or any part thereof conducted pursuant to the provisions of
  the License at set intervals and at least once every year;                                                                                                                                                                                                       
| | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                         |  |                                                                                                                                                                                                                                                                                                                                                            
| | Special
  Inspection  |  | An
  inspection of the Network or any part thereof conducted due to a maintenance
  or repair operation, as a result of electromagnetic interference,
  malfunction, clarification of a complaint, a technological change, a change
  in the engineering plan and so forth, conducted at the initiative of the
  Licensee or at the demand of the Director;
| |                         |  |                                                                                                                                                                                                                                                                                                                                                            
| | Regular
  Inspection  |  | Inspection
  of the Network or any part thereof, conducted on a regular basis.                                                                                                                                                                                                                                                                             

|42.  | Implementation of inspections                                                                                                                                                                                                                                                                                                                                                                              
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                            
|42.1 | The Licensee
  shall conduct periodic inspections of the Network, all in the format and at
  the inspection points as specified in the engineering plan and shall furnish
  the inspection results on demand by the Director within 30 days from the date
  of the demand.                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                            
|42.2 | The Licensee
  shall establish and operate a control system for constant monitoring of
  Network operations and for ongoing inspection of the good working order of
  the Network, and it shall conduct in an ongoing manner regular inspections of
  the Network or any part thereof as required, pursuant to the inspections plan
  set forth in the engineering plan.                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                            
|42.3 | The Director
  shall be entitled to instruct the Licensee to conduct a special inspection;
  the Licensee shall conduct said inspection in the format and on the date
  determined by the Director.                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                            
|42.4 | The Director
  or anyone empowered therefor on his behalf shall be entitled to conduct
  inspections by himself insofar as he shall deem this to be necessary; the
  Licensee, after prior coordination, shall afford the Director or anyone
  empowered therefor on his behalf, access to the facilities and to the
  equipment and shall place at his disposal inspection equipment that is in its
  use.

42

---

---

|43.  | Log of inspections, malfunctions and maintenance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|43.1 | The Licensee
  shall maintain a log of inspections and malfunctions and maintenance
  (hereinafter  Maintenance Log) in which details of the Network
  malfunctions and inspections shall be recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|43.2 | The Licensee
  shall maintain the maintenance log in its offices, shall enable the Director
  or qualified representative acting on his behalf to peruse it at any time, to
  examine or copy it in any manner whatsoever, and it shall be submitted for
  the perusal of the Director upon demand.                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|44.  | Repair of faults and defects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|44.1 | The Director
  shall be entitled, after having given the Licensee a suitable opportunity in
  the circumstances of the matter to voice its arguments before him, to notify
  the Licensee in writing of faults and defects that he has found which impair
  the level of service given to its service recipients and the survivability
  and backup level of the Network, and which impair the level of safety or
  cause interference in other lawfully operating systems, all based on
  observation of the Network performance, complaints from service recipients,
  inspections conducted by him or on the basis of inspection reports, documents
  and information provided to him by the Licensee.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|44.2 | The Director
  shall be entitled to instruct the Licensee regarding the dates by which the
  Licensee must repair the faults and defects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|44.3 | Should the
  Licensee receive notification as stated, it shall inform the Director, within
  the time set forth therefor in the Directors notification, of repair of the
  faults and defects, with the details requested by the Director.                                                                                                                                                                                                                                                                                                                                                                                                                                                              

43

---

---

|Part E  Use of Frequencies in Wireless Segments
|------------------------------------------------
|                                                
|45.                                             
|                                                
|45.1                                            
|                                                
|46.                                             
|                                                
|46.1                                            
|                                                
|46.2                                            
|                                                
|46.3                                            
|                                                
|46.4                                            
|                                                
|46.                                             
|                                                
|47.1                                            
|                                                
|47.2                                            
|                                                
|47.3                                            

44

---

---

|48.  | Safety in the use of frequencies and preventing interference                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|48.1 | The Licensee
  shall establish and operate the Network pursuant to all laws, including the
  provisions of the Pharmacists Regulations (radioactive elements and their
  products) 5740 - 198013 (hereinafter: the Pharmacists
  Regulations), and shall take whatever steps are required to obtain a permit
  under any law. In the matter of the Pharmacists Regulations the Licensee
  shall take, inter alia, the
  following steps:                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|48.2 | The Licensee
  shall submit to the Director, during January of each year, an updated annual
  report with regard to the wireless telecommunications facilities it operates,
  including, inter alia, the
  location of the facility, transmission and reception frequencies, betterment
  of antennas, height of antennas, transmission capacity and transmission
  bandwidth; however, in certain cases the Director shall be entitled to demand
  at any time that the Licensee submit to him, within five (5) days, an updated
  report regarding operation of wireless telecommunications facilities, radio
  channels and use of frequencies.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|48.3 | The Licensee
  shall establish and operate the Network in such a manner as to prevent
  reciprocal interference between it and other legally operated systems;
  without derogating from the generality of that stated, the Licensee shall
  take, inter alia, the following
  steps:                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                                                         
|---------------------------------------------------------
|13 Compendium of Regulations 5740, p. 992;
  5757, p. 706
|14 Code of Laws 5725, p. 307; 5763, p. 192               

45

---

---

|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Cooperate
  with other operators in the event of interference to a legally operating
  system; should a solution not be found for said interference between systems,
  the Licensee shall act, after being given an appropriate opportunity to voice
  its arguments, in accordance with the instructions of the Director with
  regard to implementing changes in operation of the Network, Network
  components or use of frequencies, or cease to transmit on certain frequencies
  throughout the service area or in a particular area;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Respond
  immediately, and no later than 24 hours from receipt of a demand by the
  Director, to all the Directors demands with regard to dealing with
  interference and coordination with other licensees or other legally operating
  entities, in Israel, in the Palestinian Authority and in neighboring
  countries, submit to the Director all information required for this purpose,
  implement electromagnetic measurements at the Directors demand, avoid use of
  frequencies as determined by the Director and act within the restrictions as
  instructed by the Director, including with regard to broadcasting capacity on
  certain frequencies at certain sites, including imposing restrictions with
  regard to antenna height, antenna betterment, type of antenna, antenna
  polarity and antenna direction; said coordination shall be implemented by the
  Licensee at its expense and responsibility, both pursuant to special
  instructions by the Director and pursuant to the provisions of international
  charters and bilateral agreements with countries and/or with the Palestinian
  Authority to which the state of Israel is a party.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|48.4 | Nothing in
  the granting of this license, including in approval of the engineering plan,
  shall serve to confer protection against other electromagnetic generators
  operating in frequency ranges identical to the frequency ranges permitted for
  the use of the Licensee or protection against intermodulations caused by
  lawful operation of the electromagnetic generators, or protection against
  other electromagnetic generators operating in frequency ranges identical to
  the frequency ranges permitted for use by the Licensee cooperation with
  additional entities in  the Licensee,
  or outside the territory of the state or in territory over which the state
  has no control, or in space; however, the Director shall do everything in his
  power to find an appropriate solution for the protection required.

46

---

---

|Part F  Use of Frequencies in the Cable System
|-----------------------------------------------
|                                               
|49.                                            
|                                               
|49.1                                           

| | Channel         |  | Frequency,
  bandwidth and rate of information in units of Kbps, approved for the
  provision of a defined service;                                  
| | ----------------- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |                   |   |                                                                                                                                                      
| | Cable
  System  | - | The Network,
  other than wireless telecommunications systems;                                                                                       
| |                   |   |                                                                                                                                                      
| | Frequency
  Map |  | A table
  specifying allocation of the channels pursuant to the services of the
  Licensee, which constitutes part of Appendix C - Engineering Plan;

|50.  | Cable system frequency regime                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|50.1 | Frequencies shall be allocated in the cable system for the purpose of
  providing the Licensees services in accordance with the frequency map;
  should the Licensee request to make a change in the frequency map, both
  regarding a change in channel and a change in the service provided in the
  channel, it shall present to the Director, no less than 30 working days  prior to implementation of the change,
  notification with regard to the change; the notification shall include a
  description of the change with details of the central frequency and bandwidth
  of the channel, rate of information in Kbps and any other information
  required by the Director. For the purpose of this section, exchanging
  channels used for transmission of legally approved broadcasting stations
  shall not be considered as a change, providing that the Network capacity
  available for providing services is not changed as a result of the exchange.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | The Director shall be entitled to inform the Licensee that
  implementation of the change involves the fulfillment of conditions that the
  Licensee must fulfill before or after implementation of the change, and he
  shall be entitled to instruct the Licensee not to implement the change,
  giving reasons for his decision. Should the Director not inform the Licensee
  as stated, the Licensee shall be entitled to implement the change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|50.2 | Without derogating from the provisions of Article 5 (I) of the Law
  and relating, inter alia, to
  the provisions of Article 6xxxiv of the Law, the Minister shall be entitled
  to give instructions, in the regulations or in the License or in
  administrative instructions, regarding the obligation of the Licensee to
  designate capacity in the Network for the transmission of the broadcasts or
  telecommunications services of another, and he shall be entitled to instruct
  the Licensee to connect to the Network more than one broadcasting station of
  those who have received a license therefor.                                                                                                                                                                                                                                                                                                                                                  

47

---

---

|50.3                  | The allocation of Network channels refers to both downstream channels
  and upstream channels.                                                                                                                                                                                                                                       
|--------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                      |                                                                                                                                                                                                                                                                                                                                      
|50.4                  | The principles set forth in this section for the purpose of
  allocating Network frequencies, shall apply to this entire Part.                                                                                                                                                                                                       
|                      |                                                                                                                                                                                                                                                                                                                                      
|51.                   | Dividing bandwidth among the Licensees services                                                                                                                                                                                                                                                                                     
|                      |                                                                                                                                                                                                                                                                                                                                      
|51.1                  | The Licensee shall insure that bandwidth shall be reserved for the
  provision of the telecommunications services as set forth in the License in
  the entire Service Area; the Minister shall be entitled to give the Licensee
  instructions in this matter, after having given it a suitable opportunity to
  voice its arguments.
|                      |                                                                                                                                                                                                                                                                                                                                      
|52.                   | Frequency interference                                                                                                                                                                                                                                                                                                               
|                      |                                                                                                                                                                                                                                                                                                                                      
|52.1                  | For the purpose of this section:                                                                                                                                                                                                                                                                                                     
|                      |                                                                                                                                                                                                                                                                                                                                      
|Field
  intensity  | The field
  intensity flowing from a cable system measured at a distance of ten meters
  from the cable, at a bandwidth of 100 KHz, fed to an antenna in which the
  following properties exist:                                                                                                                                     
|                      |                                                                                                                                                                                                                                                                                                                                      
|                      | (1)  it
  is bipolar;                                                                                                                                                                                                                                                                                                                
|                      | (2)  it
  is a half-wavelength                                                                                                                                                                                                                                                                                                       
|                      |                                                                                                                                                                                                                                                                                                                                      

|52.2 | The Licensee
  shall be required to ascertain that the cable system is covered and protected
  against radiation from other systems, including from other telecommunications
  facilities, in such manner as to prevent interference with the services
  provided on the Network.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                  
|52.3 | The cable
  system shall not cause electromagnetic interference and the field intensity therefrom
  shall not exceed the following:                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                  
|     | a.                                                                                                                                                                                                                                                                               
|     | b.                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                  
|52.4 | No signals
  shall be broadcast on the cable system in the following frequency ranges:                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                  
|     | a.                                                                                                                                                                                                                                                                               
|     | b.                                                                                                                                                                                                                                                                               

48

---

---

|     | c.                                                                                                                                                                                                                                                                                                                                            | 162.16 to
  165.75 MHz;                                                                                                                                                                                                                                                                                                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | d.                                                                                                                                                                                                                                                                                                                                            | 806 to 862
  MHz; unless the Director has approved in writing the use of this range of
  frequencies, and pursuant to the conditions set forth.                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                       
|52.5 | The
  Licensee, after submitting a request and receiving written approval therefor
  from the Director, shall be entitled to transmit signals on the cable system
  in the frequency ranges of 136  162.16 MHz, 165.75  174 MHz and 450-470
  MHz, all of part, by the digital method only, at a field intensity not
  exceeding 5 dB μV/m.
|     |                                                                                                                                                                                                                                                                                                                                              
|52.6 | Without
  derogating from that set forth in Part E above, the Licensee shall not be
  entitled to make use of the frequencies detailed in the frequency map for
  wireless broadcasts, unless it possesses a license pursuant to the Ordinance,
  including an operators license or a trade license, as the case may be.                    
|     |                                                                                                                                                                                                                                                                                                                                              
|52.7 | With regard
  to mutual interference between the cable system and other lawfully operating
  systems, linear or wireless, the provisions of sections 48.3 and 48.4 shall
  apply, mutatis mutandis, as
  well as the following:                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                              
|     | (a)                                                                                                                                                                                                                                                                                                                                           | Without
  derogating from the provisions of Part D above, should the Licensee receive
  authorization from the Director as stated in subsection 52.5, the Licensee
  shall implement periodic inspections of the cable system pursuant to the
  provisions of the License, and shall ensure compliance with the conditions
  detailed in subsections 52.2, 52.3, 52.4 and 52.5.                                       
|     | (b)                                                                                                                                                                                                                                                                                                                                           | Should the
  Licensee find that electromagnetic interference is expected to lawfully
  operating systems, or a deviation in field intensity is discovered causing
  interference as stated, it shall act immediately to prevent interference
  within 24 hours from the discovery of the deviation and shall amend the
  deviation within 24 hours of discovery, unless the Director authorizes it to
  act otherwise.
|     | (c)                                                                                                                                                                                                                                                                                                                                           | Without
  derogating from secondary section (b), should the Licensee find a deviation
  from the permitted field intensity, it shall act immediately to correct the
  deviation and no later than within 6 days of the date the deviation is
  discovered.                                                                                                                                                            
|     | (d)                                                                                                                                                                                                                                                                                                                                           | Inspection
  and coordination pursuant to this section shall be implemented by the
  Licensee, at its expense and at its responsibility.                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                       
|52.8 | (a)                                                                                                                                                                                                                                                                                                                                           | Subsections
  52.1, 52.3, 52.4, 52.5 shall become valid when the amendment to the
  Telecommunications Regulations (standards and specifications of cable
  networks) 5748 0 198715 becomes valid in this regard. Until said
  amendment, the Licensee shall act pursuant to the provisions of section 52.9.                                                                                                          

|                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------
|15 Code of Laws 5748, p. 134; 5755, p. 1350;
  It should be noted that the Ministry is currently taking steps to amend said
  Regulations.

49

---

---

|     | (b)                                                                                                                                                                           | The
  provisions of subsections 52.3, 52.5 and 52.7 shall apply, mutatis mutandis, also with regard to
  end equipment linked to the Network.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                               |                                                                                                                                              
|52.9 | For the purpose of this section:                                                                                                                                             
|     | Radiated
  Power  the radiant power of a cable system measured in comparison to the
  power of the broadcasts fed to an antenna in which the following properties
  exist:
|     |                                                                                                                                                                              
|     |                                                                                                                                                                               | (a)                                                                                                                                          
|     |                                                                                                                                                                               | (b)                                                                                                                                          
|     |                                                                                                                                                                               | (c)                                                                                                                                          
|     |                                                                                                                                                                               | (d)                                                                                                                                          
|     |                                                                                                                                                                              
|     | (a)                                                                                                                                                                           | The Network
  shall not cause electromagnetic interference and the radiant power
  therefrom shall not exceed the following:               
|     |                                                                                                                                                                               |                                                                                                                                              
|     |                                                                                                                                                                               | (1)                                                                                                                                          
|     |                                                                                                                                                                               | (2)                                                                                                                                          
|     |                                                                                                                                                                               |                                                                                                                                              
|     | (b)                                                                                                                                                                           | No signals
  shall be broadcast on the Network in the following frequency ranges:                                                            
|     |                                                                                                                                                                               |                                                                                                                                              
|     |                                                                                                                                                                               | (1)                                                                                                                                          
|     |                                                                                                                                                                               | (2)                                                                                                                                          
|     |                                                                                                                                                                               | (3)                                                                                                                                          
|     |                                                                                                                                                                               | (4)                                                                                                                                          
|     |                                                                                                                                                                               | (5)                                                                                                                                          

50

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Part G  Numbering

|53. | Definitions                   |   |                                                                                                                                                                                                                                                                   
|--- | ----------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                               |   |                                                                                                                                                                                                                                                                   
|    | Dialing
  Area              | - | All public
  exchanges where the connection between subscribers is made without dialing a
  prefix;                                                                                                                                                               
|    | National
  Dialing Area     | - | A prefix and
  number format defined for a series of telephone numbers allocated for the use
  of subscribers throughout the country;                                                                                                                             
|    | Geographic
  Dialing Area   |  | A prefix
  and number format defined for a series of telephone numbers allocated for the
  use of subscribers in a contiguous geographic area, which includes
  settlements pursuant to a map of dialing areas16.                                                 
|    | Service
  Dialing Area      | - | An access
  code and number format defined for a series of service telephone numbers,
  allocated for access to a special national telephone service;                                                                                                             
|    | Range of
  Numbers          | - | A group of
  consecutive numbers, intended for use in a geographic dialing area, a
  national dialing area or a service dialing area;                                                                                                                             
|    | Telephone
  Number          | - | A group of
  numbers in a particular order, including area code, which when dialed is
  intended to enable transmission of a telecommunications message to specific
  end equipment or to a specific telecommunications service;                                  
|    | Access
  Code               | - | A group of
  numbers in a particular order, which when dialed enables access to a special
  telephone service, national or network; dialing additional numbers, as
  required, is intended to create a connection to the end equipment of the
  subscriber called;
|    | Prefix                      | - | A group of
  numbers preceding the telephone number dialed and serving for general
  identification of the call destination, such as: dialing area or network of a
  general licensee;                                                                            
|    | Special
  Telephone Service |  | A
  supplementary or added value service given to subscribers, by means of
  dialing an access code only or by means of dialing an access code and
  numbers;                                                                                                     
|    | Numbering
  Plan            | - | A plan determined
  by the Minister for announcing and allocating telephone numbers, determining
  dialing rules and portability of numbers, or part thereof17, as
  revised from time to time;                                                                   

|                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|16
The map, The state of Israel  dialing areas and natural areas  can be found
at the Ministry of Communications website: http://www.moc.gov.il                                                                                                                   
|                                                                                                                                                                                                                                                                      
|17
The plan is included in the document Numbering plan for telephony services and
added value services in Israel, which can be found at the Ministry of
Communications website: http://www.moc.gov.il , and in
the Directors instructions issued from time to time.

51

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|     |                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                  
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Telephone
  Number Plan                                                                                                                                                                                                                                                                                                                                                                          | - | A plan
  prepared by the Licensee, pursuant to the numbering plan and the instructions
  of the Director, for allocating telephone numbers to its subscribers, and
  including access codes for its services and the services of other licensees;
|     |                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                  
|54.  | Acting pursuant to the numbering plan                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|54.1 | The Licensee
  shall act in accordance with the numbering plan and the instructions of the
  Director with regard to implementation and application of the numbering plan.                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|54.2 | Should the
  numbering plan contain no provision with regard to a certain matter and no
  instruction be given by the Director with regard to said matter, the Licensee
  shall act in this matter pursuant to standards and recommendations relevant
  to the numbering plan which have been determined by standardization
  organizations around the world or other international organizations.
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|54.3 | The Director
  shall be entitled to limit the Licensee in operating certain groups of
  numbers, corresponding to a range of numbers, prefixes, access codes or
  telephone numbers, inter alia
  in order to lead to efficient utilization of a range of numbers and prefixes
  or to adapt the use of numbers to the needs of service recipients or to that
  customary around the world.       
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|55.  | Prohibition against transferring telephone numbers and ranges of
  numbers                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|55.1 | The Licensee
  shall be entitled to allocate telephone numbers for the use of its service
  recipients within the range of numbers allocated for its use pursuant to the
  numbering plan and the provisions of the License.                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|55.2 | The Licensee
  shall not be entitled to transfer to the use of another numbers or groups of
  numbers included in the range of numbers allocated for its use, other than
  when implementing number portability or pursuant to the instructions of the
  Director.                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|55.3 | The Licensee
  shall not be entitled to allocate to a service recipient a telephone number
  that has been allocated to another service recipient, other than a number
  allocated to a service recipient who has ceased to receive the services of
  the Licensee and after a reasonable period of time has elapsed, all pursuant
  to rules to be determined by the Director.                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|56.  | Preparing a telephone number plan                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                   
|56.1 | The Licensee
  shall prepare a telephone number plan, pursuant to the numbering plan and the
  instructions of the Director, and shall update it periodically as required.                                                                                                                                                                                                                        

52

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|56.2 | Should the
  Director so request, the Licensee shall produce a telephone number plan for
  the Director in the format and on the date as instructed by the Director.                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|56.3 | The Director
  shall be entitled to instruct the Licensee to amend the telephone number
  plan, wholly or in part, or to make changes therein; the Licensee shall amend
  the telephone number plan pursuant to the instructions of the Director.                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|56.4 | The Licensee
  shall act pursuant to the telephone number plan and the instructions of the
  Director.                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|57.  | Number portability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|57.1 | Should an
  instruction be given with regard to the operation of number portability, the
  Licensee shall act in such a way that every subscriber of another
  telecommunications infrastructure operator shall be able to become a
  subscriber of the Licensee or receive services from the Licensee without
  changing his telephone number, and the reverse; the Licensee shall
  incorporate in the Network devices to enable application of this property, on
  the date and by the method determined in the instruction.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|57.2 | No later
  than eighteen months from the date of granting the License, the Ministry
  shall examine the need to give an instruction to apply number portability in
  the framework of the numbering plan, should it see that this is necessary in
  order to promote competition in the field of telecommunications
  infrastructures.                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|58.  | Telephone number plan and mutual connectivity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|58.1 | The Licensee
  shall report to all other licensees regarding changes in the telephone number
  plan which may affect mutual connectivity with the public telecommunications
  network of the other licensee or provision of services to the other licensee.                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|58.2 | The Licensee
  shall not discriminate in any manner whatsoever between other licensees with
  regard to application of the telephone number plan and implementation of said
  duty of reporting, including with regard to scope of information, content,
  manner of provision and date of report, and shall provide said information in
  such a manner as to enable other licensees to prepare in a reasonable manner
  for application of said changes.                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|58.3 | The Licensee
  shall publish the main points of its telephone number plan, including the
  rules for dialing to subscribers telephone numbers and the access code for
  services given to subscribers by means of an access code. The Director shall
  be entitled to give the Licensee instructions regarding the format of said
  publication.                                                                                                                                                                              

53

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Part H  License Implementation

|59.  | Operating the Network                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|59.1 | The Licensee
  shall set up, maintain and operate the Network all days of the year and all
  hours of the day, both during peaceful periods and in states of emergency, in
  accordance with the technical and service quality requirements, and in a
  manner that shall allow for the proper and orderly provision of the
  Licensees services in the Service Area, in accordance with this License.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|59.2 | The Licensee
  shall constantly act to update the Network technology and to expand and
  improve its performance, in order to meet, in a proper and orderly manner,
  the needs of the population, the economy and the security of Israel for
  telecommunications and broadcasting services as these shall be from time to
  time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|59.3 | The Director
  shall be entitled to determine, from time to time, technical requirements and
  quality of the service, including regarding the upgrading and updating of the
  Network and providing innovative technological capabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|59.4 | Should the
  Minister see that the Licensee is operating in a manner that might impair
  provision of telecommunications services or broadcasts in a proper and
  orderly manner, he shall be entitled to instruct the Licensee, after giving
  it a proper opportunity to voice its arguments, on measures that it must take
  in order to prevent the impairment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|60.  | Provision of the Licensees services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|60.1 | The Licensee
  shall provide its services in accordance with the technical and service
  quality requirements, in accordance with the provisions of the License and
  the provisions of any law, and subject to the provisions of section 69.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|60.2 | The Licensee
  shall provide its services to all who request them throughout the entire
  Service Area; the Licensee shall provide its services as stated in accordance
  with the technical and service quality requirements and in accordance with
  the provisions of law and the License, pertaining to priorities and the
  availability of its services, insofar as such provisions shall exist, and it
  shall do so under equal terms and at non-discriminatory rates according to
  types of service recipients or types of services, irrespective of the
  location of the party requesting the service or the special cost of providing
  the services to each service recipient; Type of Service Recipient or Type
  of Service  shall mean: a group of service recipients or type of services
  whose characteristics distinguish them in a practical and reasonable manner
  from another group.

54

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|60.3 | When the
  Licensee commences provision of telecommunications service, the Licensee
  shall provide this service to everyone who requests it throughout the entire
  Service Area pursuant to the technical and service quality requirements, at
  the time set forth therefor in Appendix B. Notwithstanding that stated, a
  party requesting to become a subscriber of a general licensee for cable
  broadcasts for the entire Service Area shall be connected within three (3)
  months of receipt of the request, and in accordance with the provisions of
  Appendices B and E, whichever is the earlier of the two.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|61.  | Operation of the service                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|61.1 | The Licensee
  shall provide its services, at the time and of the quality detailed in
  Appendix D  List of the Licensees Services, and Appendix E  Level of
  Service to Subscribers.                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|61.2 | Should the
  Licensee request to operate a service from the list of future services in
  Appendix D, it shall inform the Director in writing thirty (30) days in
  advance of the date designated for commencement of provision of the service;
  the Director shall be entitled to require the Licensee to produce a service
  file, and in this regard the provisions of section 62 shall apply.                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|62.  | Service file                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|62.1 | The Licensee shall inform the Director of any new service not
  specified in Appendix D which it intends to provide to any of the service
  recipients (for the purpose of this section  the New Service), no later
  than sixty (60) days before the date designated for commencement of provision
  of the new service. The Licensee shall not be entitled to provide the new
  service without the approval of the Director.                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|62.2 | Pursuant to the request of the Director, the Licensee shall submit,
  for the approval of the Director, a service file for the new service; should
  the Licensee not submit a service file pursuant to the Directors
  instruction, or should the Director not approve the service file, the
  Licensee shall not commence provision of the new service.                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|62.3 | Without derogating from sections 62.1 and 62.2, the Director shall be
  entitled to demand that the Licensee submit for his approval a service file
  for an existing service in respect of which no service file was required
  under said sections, and from the date set forth in the Directors approval,
  the Licensee shall supply the service in accordance with the conditions of
  the approved file.                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|62.4 | The service file shall be submitted to the Director in the format and
  at the time determined by the Director and it shall include, inter alia, documents describing the
  service and the manner of its supply and its operation by the service
  recipient, and presenting the rates therefor and the standards of the
  technical and service quality requirements relating thereto.                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|62.5 | After its approval, the service file shall be publicized for the
  public by the  Licensee with the
  details and in the manner that shall be determined by the Director, and the
  Director shall be entitled to publicize it himself, provided he does not to
  publicize it until after commencement of provision of the service.                                                                                                                                                                                                                                                                                       

55

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|     |                                                                                                                                                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|62.6 | Any new service which the Licensee commences providing pursuant to
  this section shall be considered as part of Appendix D; Appendix D shall be
  updated from time to time by the Director.
|     |                                                                                                                                                                                                
|62.7 | The provisions of this section shall apply, mutatis mutandis, to testing of the
  Network.                                                                                                     

56

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|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Part I  Mutual connectivity and use
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|63.                                  | The requirement of mutual connectivity                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|63.1                                 | The Licensee
  Shall act to implement mutual connectivity of the network to any other public
  telecommunications network.                                                                                                                                                                                                                                                                                                                                                                                     
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|63.2                                 | Mutual
  connectivity shall be implemented in a manner enabling the proper and regular
  transmission of telecommunications messages between the Licensees
  subscribers and the subscribers of the other licensee, and in a manner
  enabling the proper and regular provision of services by the Licensee to the
  subscribers of the other licensee and the provision of services by the other
  licensee to the Licensees subscribers.                                                                   
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|63.3                                 | Mutual
  connectivity may be implemented directly or indirectly, by means of a public
  telecommunications network of another general licensee, providing it enables
  that stated in section 63.2.                                                                                                                                                                                                                                                                                                            
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|63.4                                 | In mutual
  connectivity between the Network and another public telecommunications
  network, the Licensee shall act to establish points of interface between the
  two networks, for the purpose of providing telephony services in at least two
  main transit switches; notwithstanding that stated, the Licensee shall be
  entitled to operate by means of one main transit switch providing that in the
  event that the number of telephone lines reaches 50,000 two switches are linked
  up as stated.
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|63.5                                 | In mutual
  connectivity between the Network and an international telecommunications
  system, the Licensee shall act pursuant to the provisions of Appendix F to
  the License.                                                                                                                                                                                                                                                                                                                               
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|64.                                  | Rules regarding the exercise of mutual connectivity                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|64.1                                 | Without
  derogating from the generality of that stated in section 63, the Licensee
  shall act to implement mutual connectivity subject to all of the following:                                                                                                                                                                                                                                                                                                                                              
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

57

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------
| |     | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Availability
  of the connection facilities;                                                                 
| |     | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Method,
  quality and survivability of the connection;                                                       
| |     | (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Changes and
  adaptations of switching18 in facilities, protocols and points of
  interface with the Network;
| |     | (5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Payments for
  mutual connectivity;                                                                          
| |     | (6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Charging and
  collection arrangements and transfer of information about subscribers;                        
| |     | (7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Commercial
  terms for implementation of mutual connectivity;                                                
| |     | (8)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Transmission
  of information regarding the Network and changes thereto relating to mutual
  connectivity;   
| |    
| | (c) | The licensee
  shall make available to the other operator all essential information required
  by the other operator for providing its services by means of the licensees
  facilities; said information shall be given subject to any law regarding
  protection of privacy or commercial confidentiality; should the parties not
  reach agreement regarding the nature and scope of the essential information,
  the matter shall be decided by the Minister;                                                                             
| |    
| | (d) | The Licensee
  shall pass on to the other operator information regarding changes to its
  Network which may affect mutual connectivity with the public
  telecommunications network of the other operator, or the mutual connectivity
  between the public telecommunications networks of the other operators; the
  Licensee shall provide said information in such a manner as to enable the
  other operator to prepare in a reasonable manner for application of said
  changes;                                                          
| |    
| | (e) | For the purpose
  of subsections (c) and (d), the Licensee shall be entitled to make
  transmission of the information to the other operator conditional on signing
  an agreement of confidentiality, intended to protect the Licensees rights
  under any law, including commercial secrets, intellectual property rights and
  so forth, relating to information concerning changes to the Network that are
  to be given to the other operator;                                                                                          
| |    
| | (f) | The Licensee
  shall enable its subscribers to receive all the services provided by another operator,
  and shall enable subscribers of the other operator to receive all the
  services it provides, providing that receipt of said services is technically
  possible; the Director shall be entitled, at the written request of the
  Licensee, to exempt the Licensee from providing the possibility of receiving
  a service to its subscribers or to the subscribers of another operator,
  including for technical or economic reasons;
| |    
| | (g) | The Licensee
  shall give the Director a signed copy of any agreement between it an another
  operator with regard to mutual connectivity;                                                                                                                                                                                                                                                                                                                                                                                                    
| |    
| | (h) | The Licensee
  shall give the Director, on demand, all information given to another operator
  pursuant to subsections (c) and (d), and a copy of any agreement to maintain
  confidentiality pursuant to subsection (e);                                                                                                                                                                                                                                                                                                                     

|                                               
|-----------------------------------------------
|18Including
numbering, as stated in section 66.

58

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|65.  | Payment for completion of traffic and mutual connectivity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|65.1 | Should no
  regulations be drawn up with regard to payment for mutual connectivity or
  payment arising from mutual connectivity, the Licensee shall be entitled to
  demand reasonable and non-discriminatory payment therefor. In the absence of
  agreement between the Licensee and another operator in this regard, the
  Minister shall instruct regarding said payment, pursuant to his authority
  under Article 5 of the Law.                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|66.  | Prohibition against delaying mutual connectivity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|66.1 | The Minister
  shall give the Licensee a reasonable opportunity to voice its position in
  connection with the Ministers intention to instruct it with regard to the
  manner and scope of implementing mutual connectivity, with regard to the
  supplementary actions, services and arrangements for implementing mutual
  connectivity and with regard to payment for mutual connectivity; should the
  Minister instruct the Licensee in said matter, the Licensee shall not delay
  in any manner whatsoever implementation of mutual connectivity and shall
  uphold its obligations pursuant to the instructions of the Minister in good
  faith and in proper manner, on the date determined therefor and in full
  cooperation.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|67.  | Providing the possibility of use                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | For the
  purposes of this section and section 68, another licensee  including a
  licensee for satellite broadcasts and a general licensee for cable
  broadcasts, as relevant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|67.1 | The Minister
  shall be entitled to instruct the Licensee with regard to providing the
  possibility of use to another licensee pursuant to his authority under
  Article 5 of the Law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|67.2 | In giving an
  instruction pursuant to section 67.1, the Minster shall be entitled to
  determine conditions with regard to the manner of use and supplementary
  arrangements for the purpose of exercising the possibility of use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|67.3 | Should the
  Minister instruct the Licensee to give another licensee the possibility of
  using its telecommunications facility, the Licensee shall act in full
  cooperation and pursuant to the Ministers instructions, for the purpose of
  exercising the possibility of use; for this purpose the Licensee shall enable
  use of its telecommunications facility, including implementation of the
  connection and adaptation required for its proper and regular use, and
  pursuant to the Directors instructions.                                                                                                                                                                                                              

59

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|67.4 | The Licensee
  shall enable another licensee, on instruction by the Minister, to provide
  added value services by means of the network; the Licensee shall ensure
  reasonable and equal conditions for all other licensees in everything
  relating to provision of added value services by it to the Licensees
  subscribers, including in the matters detailed in section 64, mutatis mutandis.                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|67.5 | The Licensee
  shall make available to another licensee essential information required by
  the other licensee for making use of the Licensees Network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|67.6 | The Minister
  shall give the Licensee a reasonable opportunity to voice its arguments in
  connection with the intention to instruct it with regard to providing the
  possibility of use to another licensee and the conditions therefor, and with
  regard to payment for providing the right of use; should the Minister
  instruct the Licensee in said matter, the Licensee shall not delay in any
  manner whatsoever providing the possibility of use and shall uphold its
  obligations pursuant to the instructions of the Minister in good faith and in
  proper manner, on the date determined therefor and in full cooperation.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|68.  | Infrastructure service for another licensee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|68.1 | The Licensee
  shall provide infrastructure service to another licensee, in such manner as
  to enable the other licensee to provide its services to its subscribers in
  accordance with the conditions of the License and conditions of the license
  of the other.                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|68.2 | The Licensee
  shall provide the other licensee with any type of infrastructure service
  pursuant to this License or pursuant to an instruction giving by the Minister
  by virtue of Article 5 of the Law, under conditions that are reasonable and
  equal for all other licensees, except for special cases that shall be
  determined by the Minister in advance and in writing; the Licensee shall
  provide the infrastructure service as stated to every other licensee in a
  proper, orderly and egalitarian manner, so as not to impair the possibility
  of fair competition among them.                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|68.3 | The Licensee
  shall refrain from showing preference to a company with which it is connected
  over another licensee in the provision of infrastructure service, whether in
  payment for the service, in the conditions of the service, in the
  availability of the service or in any other manner.                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|68.4 | The Licensee
  shall provide the other licensee with essential information that the other
  licensee requires for the purpose of the provision of the infrastructure
  service of the Licensee.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|68.5 | Without
  derogating from the provisions of section 60.3, in providing infrastructure
  service to a service provider, the Licensee shall guarantee the service
  provider compliance with the technical and service quality requirements, in
  such manner as to allow the service provider to comply with the service level
  requirements which it has undertaken vis-à-vis its subscribers pursuant to
  its license and in such manner that shall not discriminate between the
  subscribers of the Licensee and the subscribers of the service provider.                                                                              

60

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|     |                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|68.6 | To preclude
  doubt, it is clarified that nothing in the provisions of this section shall
  serve to derogate from the Ministers authority pursuant to Article 5 of the
  Law.
|     |                                                                                                                                                                                

61

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|Part J  Operating the Network in a State of
  Emergency and Security Arrangements
|----------------------------------------------------------------------------------
|                                                                                  
|69.                                                                               
|                                                                                  
|69.1                                                                              
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|69.2                                                                              
|                                                                                  
|69.3                                                                              
|                                                                                  
|                                                                                  
|                                                                                  

|                                           
|-------------------------------------------
|19
Code of Laws 5711, page 78; 5758, p. 42.

62

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | By
  disconnecting some of the service recipients, according to lists prepared in
  advance or pursuant to the Directors instructions;                                               
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | In a
  cross-section combining cross-sections (a), (b) and (c).                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|69.4 | The Licensee
  shall prepare in such a manner as to enable the quick and efficient
  implementation of the restrictions as detailed in section 69.3, by the
  presence of a trained operator at the sites themselves or by means of remote
  control of the equipment at the sites from a staffed control facility.                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|69.5 | The Director
  shall be entitled to determine a detailed procedure regulating the operation
  of the network in a State of Emergency, which he shall furnish to the
  Licensee, and the latter shall meticulously fulfill the provisions of this
  procedure.                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|70.  | Services provided to the Security Forces                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|70.1 | The Licensee
  shall provide the Security Forces with telecommunications services and
  infrastructure services, infrastructure set up and maintenance, the supply
  and maintenance of end equipment, all pursuant to that set forth in
  agreements that shall be signed between the Licensee and the Security Forces
  or any one thereof.                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|70.2 | The Licensee
  shall enable the Security Forces of which it has been notified by the
  Director in writing to exercise their authority, subject to any law, in
  regard to any telecommunications activity in the framework of the License and
  it shall be responsible for the maintenance, good working order and
  technological compliance of the equipment and the infrastructure required for
  realizing said implementational capability, all in coordination with the
  Security Forces and as specified in Appendix H of the License; the Security
  Forces shall bear the payment pursuant to the provisions of Article 13 of the
  Law.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|70.3 | Without
  derogating from the generality of that stated in sections 70.1 to 70.2, the
  Licensee shall supply special services to the Security Forces, as specified
  in Appendix H to the License. The Licensee shall see to it that Appendix H to
  the License is maintained in accordance with the provisions of the Records
  Security Procedure of the Israel Security Agency (ISA).                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|70.4 | The Licensee
  shall act in such manner that each purchase or installation of hardware or
  software in its telecommunications facilities, except for End Equipment,
  shall be implemented in full compliance with the instructions given to the
  Licensee from time to time pursuant to Article 13 of the Law.                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|70.5 | In this
  section                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       
|     | Hardware                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Any
  equipment, facility or device used for telecommunications purposes, including
  computer hardware or software by means of which the equipment, facility or
  device is operated;
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                       

63

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Software                                                                                                                                                                                                                                                                                                                                                                                                                                       | As defined
  in the Computers Law, 5755 -199520;                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|     | Purchase                                                                                                                                                                                                                                                                                                                                                                                                                                       | Including
  rental or an experimental telecommunications facility or upgrading of the
  telecommunications facility, and including maintenance of hardware or a
  telecommunications facility.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|71.  | Security provisions                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|71.1 | The Licensee
  shall appoint a security supervisor in accordance with the provisions of the
  Security Arrangements in Public Entities Law, 5758  199821, and
  shall meticulously fulfill the security provisions specified in Appendix G to
  the License.                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|71.2 | The Licensee
  shall determine suitable provisions in its articles of association, including
  a parallel document in another corporation, in such manner that shall ensure
  that the majority of members of the board of directors, as well as the
  functionaries and officers appointed in Appendix G to the License, shall not
  be appointed and shall not serve in a function in the Licensee unless they
  meet the following conditions:
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|     | (a)  they
  are Israeli citizens and residents thereof;                                                                                                                                                                                                                                                                                                                                                                                          
|     | (b)  they
  have received security clearance from the ISA under which there is no
  impediment to this service or to the function as stated.                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|71.3 | The Licensee
  shall maintain confidentiality with regard to the activities of the Security
  Forces, and shall act pursuant to the security directives of those Security
  Forces, including with regard to suitable security classification for
  officers and functionaries in the Licensee and compartmentalizing information
  regarding activities pertaining to the Security Forces.                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|71.4 | The Licensee
  shall take the required measures to protect the Network, the Network
  components and the databases that serve for provision of the services for
  operation and control of the Network against unauthorized entities and, inter alia, pursuant to the provision
  specified in Appendix G to the License.                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                               

|                                           
|-------------------------------------------
|20
Code of Laws 5755, p. 366               
|                                           
|21
Code of Laws 5758, p. 348; 5763, p. 681.

64

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|Chapter 5  Providing Services to Service Recipients
|----------------------------------------------------
|                                                    
|Part A  Engaging with Subscribers                  
|                                                    
|72.                                                 
|                                                    
|72.1                                                
|                                                    
|72.2                                                
|                                                    
|72.3                                                
|                                                    
|72.4                                                
|                                                    
|72.5                                                
|                                                    
|72.6                                                
|                                                    
|73.                                                 
|                                                    
|73.1                                                
|                                                    
|73.2                                                

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|73.3 | The
  provisions of section 72 shall apply, mutatis
  mutandis, in the matter of the amendment of the text of the engagement
  agreement by the Licensee.                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|74.  | Connecting subscribers to the Network                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|74.1 | The Licensee
  shall connect all parties who so request to the Network no later than the
  date set forth in the engagement agreement with the subscriber, under the
  rules of level of service pursuant to Appendix E to the License and in
  accordance with the provisions of section 60, unless a delay in connection
  has been approved by an exceptions committee pursuant to the provisions of
  section 131.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|74.2 | The Licensee
  shall not stipulate connection of the subscriber on unreasonable,
  discriminatory or unfair conditions, and without derogating from the
  generality of that stated:                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                    | it shall not
  obligate the subscriber to purchase from it or from anyone acting on its behalf
  End Equipment or other equipment;                                                                                         
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                    | it shall not
  obligate a subscriber to receive from it maintenance services for the End
  Equipment in his possession;                                                                                                    
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                    | it shall not
  restrict the supply of spare parts for End Equipment purchased from it or
  from anyone acting on its behalf, for the subscriber or for another providing
  maintenance service for the equipment as stated.
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                    | subsections
  (a) to (c) shall be valid from the end of two years from the date of the
  granting of the License.                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|74.3 | The Licensee
  shall not provide any of its services, for consideration or without
  consideration, nor shall it enable the provision of service by a service
  provider, which the subscriber has not requested to receive, and it shall not
  make the provision of one service conditional upon the provision of another
  service.                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|74.4 | The Licensee
  shall offer each one of its services without discrimination to any person,
  whether he is a subscriber of another licensee, including a licensee for
  broadcasting, or whether he is not the subscriber of another licensee, as
  stated.                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|75.  | Prohibition against making one service conditional upon another
  service                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            
|75.1 | The Licensee
  shall not stipulate, directly or indirectly, the provision of a service upon
  the purchase or receipt of another service given by it or by another, or upon
  the non-receipt of a service given by another, unless it has been permitted
  to do so by the Minister, pursuant to a request in writing from the Licensee;
  in this section, Service  telecommunications services or broadcasts.   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                            

66

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|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Part B  Level of Service
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|76.                       | Cancellation of service                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|76.1                      | The Licensee
  shall be entitled to request that the Minister cancel provision of  telecommunications service due to the
  technological obsolescence entailed in the provision of said service; in said
  request the Licensee shall specify the number of service recipients of said
  service and the measures it intends to take in order to prevent any harm or
  damage to them; in this section, Cancellation of Service  absolute
  cessation of telecommunications service to all recipients of that service.
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|77.                       | Service center                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|77.1                      | The Licensee
  shall maintain and operate a service center and shall publicize its address
  and the manner of contacting it; the Licensee shall inform the Director and
  its subscribers of the address of the service center and of any change in its
  address. Telephone calls to the service center shall be implemented by a
  network access code or another national code that shall be allocated by the
  Director, or by dialing a telephone number located in the area code in which
  the caller is located.
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|77.2                      | The service
  center shall receive the calls of subscribers and applicants in all matters
  pertaining to the Licensees services, including the quality of the service
  and handling of subscriber billing; the service center shall be open to the
  public every day of the week except rest days as defined in the
  Administration of Rule and Justice Ordinance, 5708  194822.                                                                                                                                   
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|77.3                      | The Licensee
  shall comply with the requirements for the level of services to the
  subscriber, as specified in Appendix E to the License, in everything
  pertaining to maintaining and operating the service center.                                                                                                                                                                                                                                                                                                  
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|78.                       | Ombudsman                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|78.1                      | The Licensee
  shall appoint an ombudsman whose functions shall be as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|                          | (a)  to
  examine subscribers complaints, including applicants,  regarding the services of the Licensee;                                                                                                                                                                                                                                                                                                                                                                                                                
|                          | (b)  to
  examine subscribers complaints regarding bills submitted to the subscriber
  by the Licensee and to decide in regard thereto.                                                                                                                                                                                                                                                                                                                                                                                 
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|78.2                      | The
  ombudsman shall act pursuant to the policy outlined by the Licensees
  management.                                                                                                                                                                                                                                                                                                                                                                                                                                

|                                                              
|--------------------------------------------------------------
|22
Official Gazette 2, 5708, page 1; Code of Laws 5761, p. 53.

67

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|78.3 | The Licensee
  shall give the ombudsman all the assistance he requires to fulfill his
  function.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|78.4 | The Licensee
  shall inform every subscriber of the possibility of submitting complaints to
  the ombudsman, of his authority and of his address. The content of this
  subsection shall be included in the engagement agreement.                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|79.  | Settling disputes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|79.1 | The
  engagement agreement shall state that any disagreements that arise between
  the Licensee and a subscriber in everything pertaining to the interpretation
  or performance of the engagement agreement shall be transferred for the
  examination of the Licensees ombudsman.                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|79.2 | The
  engagement agreement shall state that contacting the ombudsman pursuant to
  section 79.1 shall not serve                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|     | (a)  to
  prevent the subscriber from bringing his matter, ab initio, before the competent court;                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | (b)  to
  derogate from the authority of the Licensee to act pursuant to the provisions
  of section 92 with regard to cessation or disconnection of service due to a
  breach of the engagement agreement.                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|80.  | Duty of maintenance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|80.1 | The Licensee
  shall be responsible for maintaining the Network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|80.2 | The Licensee
  shall rapidly repair any malfunction in the service provided to the
  recipients of its services, and shall meet the technical and service quality
  requirements.                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|80.3 | Should the
  subscriber purchase End Equipment from the Licensee or from anyone acting on
  its behalf, the Licensee shall be responsible, without payment on the part of
  the subscriber, for maintaining the End Equipment during the warranty period
  which shall not be less than one year and, thereafter, for payment, for the
  maintenance period defined by the manufacturer, which shall be specified in
  the purchase agreement for the End Equipment. This section shall apply until
  the end of two years from the date of granting the License.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|80.4 | Should the
  subscriber, for the purpose of receiving telecommunications services, use End
  Equipment that was not purchased from the Licensee or from anyone acting on
  its behalf, the Licensee shall not be obligated to maintain this End
  Equipment, unless agreed between the Licensee and the subscriber.                                                                                                                                                                                                                                              

68

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------
|81.  | Call center for repair of malfunctions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|81.1 | The Licensee
  shall maintain a regular service to handle subscriber calls regarding malfunctions
  in receiving its services, and for this purpose it shall operate a staffed
  center for receiving messages and complaints as stated (hereinafter  Call
  Center), including by means of telephone and facsimile and as specified in
  Appendix E to the License. Telephone calls to the center shall be made by
  means of a network access code or other national access code.                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|81.2 | The Licensee
  shall repair any malfunction regarding which a message was given to the Call
  Center, within a response time and pursuant to the requirements as specified
  in Appendix E to the License. Should the location or repair of the
  malfunction require a visit to the premises of a subscriber or a subscriber
  of the service provider, the Licensee shall arrange a time for the visit with
  the subscriber or the subscriber of the service provider, provided that the
  amount of time which the subscriber is asked to wait on the date arranged
  with him shall not exceed that specified in Appendix E.                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|81.3 | Should the
  Call Center receive a complaint of a malfunction that has caused cessation of
  service or a real impairment of the quality of service, the Licensee shall
  send a Team of Employees to begin locating the malfunction and taking
  measures to repair it, all pursuant to the requirements set forth in Appendix
  E to the License.                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|81.4 | Should the
  Licensee believe, after investigation, that the source of the malfunction
  lies with the service provider, the Licensee shall immediately contact the
  service provider, transfer to the service provider the details of the caller
  and the malfunction, and inform the caller thereof with a call number. Should
  a dispute arise between the Licensee and the service provider regarding
  responsibility for repair of the malfunction, they shall cooperate until the
  malfunction is repaired.                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|82.  | End Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|82.1 | The Licensee
  shall ensure that the Network shall support type-approved End Equipment, and
  shall enable the provision of the Licensees services in a proper manner by
  means of said End Equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|82.2 | The Licensee
  shall act pursuant to the technical and service quality requirements,
  including for the following purposes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | integrating
  the Hebrew language into End Equipment and services;
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | preventing
  the interference to other lawfully operating systems;
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | preventing
  interference from other lawfully operating systems;  
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | meeting the
  requirements of the numbering plan;                 
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | safety                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   
|82.3 | The
  Licensee, pursuant to the Directors demand, shall conduct inspections
  without payment to ascertain compliance of End Equipment with Network
  specifications; inspection of End Equipment as stated shall conclude within
  fourteen (14) days from the date of receipt of the Directors demand. Nothing
  in that stated shall serve to derogate from the authority of the Minister to
  empower the Licensee to conduct inspections, for payment, for the purpose of
  obtaining type approval. The Licensee shall give the Director, on demand, the
  standards and specifications of the inspection for type-approval by the Ministry
  of anyone acting on its behalf.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                   

69

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|82.4 | The Licensee
  shall be entitled, pursuant to a subscribers request, to sell, lend or to
  rent to the subscriber type-approved End Equipment (hereinafter in this
  subsection  Sale of End Equipment), provided that all the following are
  fulfilled, all as stated in section 74.2:                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     | (a)  the
  Licensee shall not make the provision of its services conditional on the sale
  of End Equipment or maintenance services for End Equipment, from itself or
  from anyone acting on its behalf;                                                                                                                                                                                                                                                                                                                 
|     | (b)  the
  Licensee shall bring to the attention of the subscriber the fact that he is
  entitled to receive End Equipment or maintenance services from another;                                                                                                                                                                                                                                                                                                                                                          
|     | (c)  subsection
  (a) and (b) shall go into effect at the end of two years from the date of the
  granting of the license.                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|83.  | Access to public emergency services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|83.1 | The Licensee
  shall, at any time and without payment, allow its subscribers and casual
  customers free and quick access to public emergency services (including
  telephone distress call centers) as instructed by the Director, such as:
  Magen David Adom, the Israel Police, the Fire Brigade and others, with
  uniform access codes as determined by the Director, pursuant to the numbering
  plan.                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|83.2 | The Licensee
  shall give appropriate publicity to the access codes to the public emergency
  services, including in a telephone directory, insofar as may be published by
  it, publicity on the internet and notices on public telephones.                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|84.  | Protecting subscriber privacy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|84.1 | Without
  derogating from the provisions of the Law, the Wiretapping Law, 5739  197923,
  the Protection of Privacy Law, 5741 198124 or the provisions of
  any other law regarding protection of a persons privacy, the Licensee shall
  not be entitled to listen to the telecommunications messages of a subscriber,
  including a subscriber of a service provider, without his prior written
  consent, except for the purpose of controlling the quality of the service or
  for the purpose of preventing fraud.

|                                           
|-------------------------------------------
|23
Code of Laws 5739, p. 118; 5755, p. 180.
|                                           
|24
Code of Laws 5741, p. 128; 5760, p. 304.

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------
|84.2 | Subject to
  that stated in section 70, the Licensee, its employees, agents and anyone
  acting on its behalf shall not be entitled to disclose information about its
  subscribers, including subscribers of a service provider, including lists or
  documents that contain their name and address, the details of their accounts,
  their telecommunications messages, the times and destinations thereof or any
  other information pertaining to them (hereinafter: the Subscriber Details)
  except information given  to any party
  that the subscriber or a subscriber of the service provider has authorized
  therefor.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|84.3 | Notwithstanding
  that stated in section 84.2, the Licensee shall be entitled to do the
  following;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|     | (a)  to
  give the subscribers details to a third party for the purpose of collecting
  monies due from the subscriber in respect of the services pursuant to this
  License, provided that the transferred information is required for the
  purpose of collecting monies and drawing up accounts, and the third party has
  undertaken to maintain the privacy of the subscribers pursuant to any law and
  to make use the information solely for the purpose for which the information
  was transferred;                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|     | (b)  to
  transfer the subscribers details to another, insofar as it has these
  details, as authorized by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|85.  | Subscriber billing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|85.1 | The Licensee
  shall submit to the subscriber a bill in accordance with the provision of
  Chapter F  Payment for Services, and Appendix E, Level of Serviced to
  Subscribers.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|85.2 | The Licensee
  shall not be entitled to demand any payment whatsoever for submitting a
  current bill.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|85.3 | A credit
  that is due to the subscriber from the Licensee shall be implemented in the
  subsequent bill, immediately after the subscribers entitlement to the credit
  has been determined, as stated.                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|85.4 | The Licensee
  shall be entitled to collect payment from the subscriber for its services by
  means of another.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|86.  | Information services and directory inquiries for clarifying telephone
  numbers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|86.1 | Subject to
  that stated in Section 84, the Licensee shall provide the general public,
  itself or by means of another, with an information service for clarifying telephone
  numbers, facsimile numbers and addresses of its subscribers, to be given
  without charge by means of at least one of these:                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | A telephone
  information service

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | A telephone
  directory, to be updated once a year (hereinafter: the Directory) and
  distributed to the public.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|86.2 | The Licensee
  shall set forth in agreements with other licensees the methods and rules for
  providing the information service as part of the mutual connectivity
  arrangements between the public telecommunications networks; the terms for
  supplying said service shall be determined by the Licensee, providing that
  the level of service shall meet the technical requirements and quality of
  service for supplying information to subscribers as detailed in Appendix E to
  the license, and that the terms for supplying the service shall be fair and
  non-discriminatory.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|86.3 | Should the
  Licensee publish a directory, the directory may be a common directory to the
  Licensee and other licensees and it may be published as a series of
  directories for different geographic regions.                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|86.4 | A subscriber
  requesting that his details not appear in the directory or information
  service shall inform the Licensee of this in writing, and the Licensee shall
  fulfill the request at no charge.                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|86.5 | The Licensee
  shall supply, without charge, an automatic service with regard to numbers
  that have been changed and are not included in the telephone directory, for a
  period to be determined by the Director.                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|86.6 | In this
  section  other licensees  a telecommunications infrastructure company and
  MRT operator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
|86.7 | Section 86.1
  shall enter into force three (3) months after the date of granting of the
  License, providing that the number of telephone lines operated by the
  Licensee has reached 200,000; otherwise the date shall be postponed until
  said number of lines is achieved.                                                                                                                                                                                                                                                                                                            

72

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|Part C  Termination or Disconnection of Service
|------------------------------------------------
|                                                
|87.                                             
|                                                
|87.1                                            
|                                                
|                                                
|                                                
|                                                

|88.  | Prohibition against termination or disconnection of service                                                                                                                                                                                                                                                                                                                                                                                 
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|88.1 | The Licensee shall not be entitled to disconnect service or to
  terminate service that it is obligated to provide pursuant to this License,
  other than in the event of that stated in this Part or that stated in section
  69 regarding restriction of service in a state of emergency.                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|88.2 | Should service be disconnected or terminated to the subscriber, who
  is also a subscriber of a general licensee for cable broadcasts, the
  continued provision of the services of the general licensee for cable
  broadcasts to said subscriber shall not be impaired.                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|89.  | Disconnection of service at the request of the subscriber                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|89.1 | A subscriber shall be entitled to request that the Licensee
  disconnect service for a period that shall not exceed six (6) months
  (hereinafter  the Disconnection Period); the subscriber shall make his
  request in writing, provided that the Licensee verifies the reliability of
  the request.                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|89.2 | The Licensee shall disconnect the service no later than two working
  days after the date set forth by the subscriber in the request; should the
  subscriber not state a date, the service shall be disconnected no later than
  two working days after the date of delivery of the notification.                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|89.3 | The Licensee shall renew the telecommunications service that was
  disconnected at the end of the Disconnection Period; should the subscriber
  give written notification to the Licensee requesting to renew the
  disconnected telecommunications service before the end of the Disconnection
  Period, the Licensee shall renew the service no later than two working days after
  the date of delivery of the subscribers notification.

73

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|90.  | Termination of service at the request of the subscriber                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|90.1 | A subscriber shall be entitled to request that the Licensee terminate
  the service; the subscribers request shall be made in writing, provided that
  the Licensee verifies the reliability of the request.                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|90.2 | The Licensee shall cease the supply of its services no later than two
  working days after the date set forth by the subscriber in his notification;
  should the subscriber not state a date, the service shall be terminated and
  the charge in respect thereof shall be terminated no later than two working
  days after the date of delivery of the notification to the Licensee.                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|91.  | Disconnection or termination of service for a subscriber of a service
  provider                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|91.1 | Service to a subscriber of a service provider shall be disconnected
  or terminated pursuant to a written request from the service provider. The
  Licensee shall disconnect or terminate service as stated within two working
  days from the date of receipt of the request from the service provider.                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|91.2 | Disconnection or termination of service to a subscriber of a service
  provider who is also a subscriber of the Licensee or of another service
  provider, shall not impair the continued provision to the subscriber of the
  services of the Licensee or of the other provider.                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|92.  | Termination or disconnection of service due to breach of agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|92.1 | The Licensee
  shall be entitled to disconnect or terminate service if any of the following
  occur:                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     | (a)  The subscriber did not pay a payment that he owes for
  service that he received from the Licensee, on the date appointed for payment
  thereof in the engagement agreement;                                                                                                                                                                                                                                                                                                                                                                                           
|     | (b)  The subscriber breached a condition of the engagement
  agreement which has been determined in the agreement to be a substantive
  condition;                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | (c)  The subscriber is making illegal use or is permitting
  another to make illegal use of a telecommunications installation of the
  Licensee or of End Equipment in his possession.                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|92.2 | Service
  shall only be disconnected and service shall only be terminated in the cases
  specified in section 92.1 (a) and (b) after the Licensee has given the
  subscriber advance written notification at least ten (10) days before the
  date of planned disconnection of the service or termination of the service;
  the notification shall state that the subscriber is given an opportunity,
  within a reasonable time to be set forth in the notification, to remedy the
  act or omission in respect of which the service shall be disconnected or
  terminated.

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|92.3 | Notwithstanding
  that stated in section 92.2, the Licensee shall be entitled to disconnect
  service without providing advanced notification to the subscriber if one of
  the following occurs:                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | (a)  The
  subscriber did not pay, for the third time in a period of twelve (12) months,
  the payment with which he was charged for the Licensees services on the date
  appointed therefor in the payment notice;                                                                                                                                                                                                                                                                                                                                                                       
|     | (b)  There
  is a reasonable suspicion of an act of fraud by means of the subscribers End
  Equipment or by means of the characteristics of the End Equipment;                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|92.4 | The Licensee
  shall be entitled to disconnect service if it becomes clear to the Licensee
  that the End Equipment, including End Equipment in the use of a subscriber of
  a service provider, is causing interference in provision of
  telecommunications services to another or interference in the operation of
  the Network, provided that the Licensee gave the subscriber or the service
  provider notice in which it stated the reason for the disconnection and
  demanded that the subscriber act to repair the End Equipment in such manner
  as to cease said interference.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|93.  | Disconnected service due to maintenance operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|93.1 | The Licensee
  shall be entitled to disconnect or temporarily limit services which it is
  obligated to provide if the implementation of essential Network maintenance
  or set up operations so requires (hereinafter  Disconnection Due to
  Maintenance), provided that all the following take place;                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | (a)  The
  duration of the Disconnection Due to Maintenance does not exceed six (6)
  consecutive hours;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | (b)  The
  number of Disconnections Due to Maintenance does not exceed two (2) in the
  course of one year. Notwithstanding that stated, in the first two years from
  the date of the granting of the License, the number of disconnections shall
  not exceed 4 in the course of one year;                                                                                                                                                                                                                                                                                               
|     | (c)  The
  Director or the relevant service recipients have been given advance notices
  at least four (4) days before the planned disconnection.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | (d)  The
  Licensee has done everything possible, in a reasonable manner, so that
  disconnection or limitation of service for the purpose of set up or
  maintenance work is carried during the hours of the day in which consumption
  of the service is low.                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|93.2 | The Director
  shall be entitled to demand of the Licensee a detailed explanation of the
  circumstances requiring Disconnection Due to Maintenance, and the Director
  shall be entitled to demand that the Licensee delay disconnection as stated
  if he realizes, after considering the arguments of the Licensee, that vital
  public interest requires said delay.                                                                                                                                                                                                                   

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|93.3 | Should
  disconnection of service be required for a period of time in excess of six
  (6) hours, due to the necessity of implementing vital Network maintenance or
  set up operations, the Licensee shall request in advance the approval of the
  Director and shall inform the relevant service recipients of the anticipated
  disconnection. The request shall specify the number of service recipients for
  whom the service will be temporarily disconnected, the location in which the
  disconnection is expected, the required maintenance operation and the actions
  taken by the Licensee in order to accelerate these operations and reduce as
  far as possible the duration of the service disconnection.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|93.4 | Should
  disconnection of service or temporary limitation be urgently required for the
  purpose of implementing vital and immediate actions, the Licensee shall
  inform the Director immediately, including by means of telephone, facsimile
  or e-mail, of the urgent disconnection or limitation.                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|93.5 | Notwithstanding
  that stated in sections 93.1 and 93.4, the Licensee shall not be obligated to
  inform the Director or service recipients of Disconnection Due to
  Maintenance, and disconnection as stated shall not be taken into account in
  the matter of the number of permitted disconnections pursuant to section
  93.1, if one of the following occurs:                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     | (a)  the
  duration of the Disconnection Due to Maintenance does not exceed half an
  hour;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (b)  Disconnection
  Due to Maintenance, as stated, is implemented between midnight Saturday night
  or the end of a holiday and 5:00 a.m. the next day.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|94.  | Disconnection of service due to safety hazard                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|94.1 | Should a
  hazard to person or property be discovered resulting from End Equipment
  (hereinafter: Safety Hazard), the Licensee shall be entitled to disconnect
  a subscriber, including a subscriber of a service provider, immediately and
  without advance warning.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|94.2 | Should the
  Licensee disconnect service to a service recipient pursuant to section 94.1,
  it shall immediately inform the service recipient, including by means of oral
  notification, notification by mail, telephone, facsimile or email, or
  notification as stated transferred by means of the service provider of the
  service recipients; the notification shall explain the cause of the
  disconnection.                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|94.3 | Should the
  service recipients notify that the safety hazard has been eliminated, the
  Licensee shall ascertain that there is no safety hazard and it shall renew
  the services to the service recipient, no later than the end of the first
  working day after the day on which the notice of the service recipient was
  given.                                                                                                                                                                                                                                                                                                                                                                                     

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|                      |                                             
|--------------------- | --------------------------------------------
|Part D: Miscellaneous
|                      |                                             
|95.                   | Marketing and collection by means of another

The Licensee
  shall be entitled to implement the marketing and collection involved in
  supplying access service to internet providers by cable modem by means of
  another acting on its behalf, including Telecom Zahav 2001 Limited
  Partnership, Domestic Operator Limited Partnership and Matav Infrastructures
  2001 Limited Partnership, who were the holders of the telecommunications
  infrastructure license that was cancelled pursuant to section 6.4, and the
  broadcasting companies, providing that with regard to the broadcasting
  companies the Licensee shall be so entitled to act so long as it is not
  required to implement a structural separation pursuant to section 16.2.

77

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Chapter F 
Payment for Services

Part A  General

|96.  | Definitions              |                                                                                                                                                                                                   
|---- | ------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                          |                                                                                                                                                                                                   
|96.1 | In this
  Chapter       |                                                                                                                                                                                                   
|     |                          |                                                                                                                                                                                                   
|     | Basket of
  Services  | A number of
  telecommunications services provided by the Licensee which are marketed to
  the subscriber as a package, for which rates are determined pursuant to the
  provisions of section 98;
|     |                          |                                                                                                                                                                                                   
|     | Comprehensive
  Rate  | One rate
  that encompasses all the types of costs and payments included in a variable
  payment that the Licensee applies to the subscriber for a particular service;                            
|     |                          |                                                                                                                                                                                                   
|     | Variable
  Payment -   | A payment
  for the use of a telecommunications service according to usage time or volume
  of traffic;                                                                                           

|97.  | Types of payments                                                                                                                                                                             
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                               
|97.1 | The Licensee
  shall be entitled to collect the following payments from its subscribers:                                                                                                      
|     |                                                                                                                                                                                               
|     | (a)  A
  one-time installation charge for connecting the subscribers premises to the
  Network for the purpose of receiving the Licensees services (hereinafter 
  the Installation Fee);
|     | (b)  Payment
  for connection after disconnection or termination of service;                                                                                                                  
|     | (c)  Payment
  for installing End Equipment;                                                                                                                                                  
|     | (d)  Payment
  for installing additional extensions;                                                                                                                                          
|     | (e)  A
  one-time relocation fee for relocation to other premises;                                                                                                                            
|     | (f)  Payment
  for the sale, loan or renting of End Equipment;                                                                                                                                
|     | (g)  Regular
  periodic payment;                                                                                                                                                              
|     | (h)  Variable
  payment;                                                                                                                                                                      
|     | (i)  Payment
  for the Licensees services;                                                                                                                                                   
|     | (j)  Payment
  for converting the service from one type of service to another type of
  service, including the installation entailed therein;                                                 
|     | (k)  Any
  other payment approved by the Minister or the Director.                                                                                                                            

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|97.2 | The Licensee
  shall be entitled to charge its subscribers for a deposit, in an amount that
  shall not exceed the cost of the End Equipment, for End Equipment that is
  loaned for the use of the subscriber, and it shall be entitled to deduct an
  amount of up to 10% from the deposit in respect of each year of loaning the
  equipment, or part thereof, as stated. The remainder of the deposit, linked
  to the index, shall be returned to a subscriber who has disconnected from the
  service.

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|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Part B  Determining Rates and Publicity
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.                                      | Determining price rates                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.1                                     | The Licensee
  shall determine a rate for each service that it provides to its subscribers;
  the Licensee shall inform the Director of the price rates as stated, before
  the rate becomes valid.                                                                                                                                                                                                                                                                          
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.2                                     | The Licensee
  shall be entitled to determine baskets of services according to the types of
  services included in the basket, 
  periods of time, or according to any other method; the Licensee shall
  be entitled to determine a separate rate for each one of the services
  included in a basket or to determine a comprehensive rate therefor.                                                                                                                        
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.3                                     | The Licensee
  shall offer, without discrimination, every service and every basket of
  services under equal conditions and at a uniform rate according to types of
  subscribers in the entire Service Area; for the purpose of this section,
  Type of Subscribers  a group of subscribers whose characteristics
  distinguish them in a practical and reasonable matter from another group.                                                                            
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.4                                     | The Licensee
  shall enable every subscriber, without discrimination, to transfer from one
  basket of services to another basket of services offered by the Licensee at
  that time; the Licensee shall be entitled to determine conditions for
  implementing the transfer, including regarding payments.                                                                                                                                                                  
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.5                                     | Should the
  Licensee engage with a subscriber regarding a particular basket of services,
  for a defined period of engagement (hereinafter  the Undertaking Period),
  the basket of services and the rates and conditions therefor shall be known
  and set forth in advance for the entire Undertaking Period; the Licensee
  shall be entitled to determine, with regard to a basket of services, the
  various rates which shall apply during the Undertaking Period.
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.6                                     | The Licensee
  shall not make a subscribers transfer from one basket of services to another
  conditional upon the purchase of another service or End Equipment from the
  Licensee or from anyone acting on its behalf.                                                                                                                                                                                                                                                    
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.7                                     | A basket of
  services in which payment has been set in installments for End Equipment or
  for service shall include a payment arrangement in the event that the
  subscriber requests to be released from said basket or to transfer from said
  basket to another basket of services, pursuant to the balance of payments
  that have not yet been paid or pursuant to the remainder of the Undertaking
  Period.                                                         
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|98.8                                     | For rates
  which are determined according to the volume of traffic, charges shall be
  determined as follows:                                                                                                                                                                                                                                                                                                                                                               
|                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                         | (a)  The
  rates shall be stated in NIS per one traffic volume unit;                                                                                                                                                                                                                                                                                                                                                                                                         
|                                         | (b)  A
  traffic volume unit shall be measured by the quantity of Bits, Bytes, words
  or frameworks;                                                                                                                                                                                                                                                                                                                                                                        

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|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | (c) The
  subscriber shall be charged according to outgoing traffic from the subscriber
  or according to incoming traffic or both together with each type of traffic
  costed separately.                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|98.9  | Should the
  Licensee collect payment from the subscriber for the services of another
  licensee, it shall do so pursuant to the rates by which by the other licensee
  offers its services to the public, without any addition, and it shall itemize
  the debit in the account that it submits to the subscriber, except for
  services for which the subscriber is charged pursuant to a comprehensive
  rate.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|98.10 | The Licensee
  shall be entitled to determine different rates for different times of the
  day.                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|98.11 | A charge of
  a variable payment and for supplementary or added value services shall be
  made pursuant to the following rules:                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                              
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|98.12 | The Licensee
  shall not be entitled to collect payment from a subscriber initiating a call
  to the following services: emergency services, collect call services,
  telephone services that are free to the caller, or the Licensees repair
  service.                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|98.13 | In rates
  determined according to duration of call, the charge shall be determined as
  follows:                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                  
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                              
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                              

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|      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Notwithstanding
  that stated in sub-section (a), the Licensee shall be entitled to offer its
  subscribers a basket of services based on a different unit of time, providing
  that at any time the subscriber shall be entitled to transfer to a basket of
  services based on a charge per unit of time of one second; the Licensee shall
  be entitled to determine payment for implementing the transfer; the licensee
  shall include a provision as stated in the framework of the engagement
  agreement and shall detail therein the payment involved in implementing said
  transfer.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|98.14 | The rate
  determined by the Licensee for telephony traffic shall be a uniform rate for
  the same type of call, and it shall be entitled to determine different rates
  for different types of traffic, including according to different dialing
  areas and special telephone services to which the telephony traffic is
  destined, providing that for each type, as stated, a unique prefix or access code
  is allocated enabling the subscriber to distinguish between the different
  types of telephony traffic, and that the following rules are upheld:
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | The rate for
  a call from a subscriber of the licensee to a subscriber of another
  telecommunications infrastructure company shall be an inclusive rate.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Should the
  Licensee allocate telephone numbers to its subscribers on the basis of a
  geographic dialing area, the call rate paid by the subscriber according to
  geographic area shall be identical whether the call is to another subscriber
  of the Licensee or to a subscriber of another telecommunications
  infrastructure company.                                                                                                                                                                                                                                                 
|      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Should the
  Licensee allocate telephone numbers to its subscribers on the basis of a
  national dialing area, the rate for a call from a subscriber of the Licensee
  to a subscriber of another telecommunications infrastructure company in the
  same national area shall be identical to the rate for a call between
  subscribers of the Licensee.                                                                                                                                                                                                                                       
|      | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | The rate for
  a call to a service dialing area, special telephone service and a special
  national telephone call, other than to services pursuant to section 98.12,
  shall be the rate for a local call, other than if the Director has authorized
  the Licensee to charge a different rate to a certain type of service dialing
  areas, pursuant to the numbering plan.                                                                                                                                                                                                                  
|      | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | In this
  section:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | National
  dialing area, geographic dialing area, service dialing area, access
  code, prefix, numbering plan  as defined in Part G  Numbering;                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Local call
   a call made between subscribers of the licensee within the same dialing
  area;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Special
  telephone service  a supplementary or added value service given to the
  subscriber only by dialing an access code or access code and additional
  number, as necessary;                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Special
  national telephone service  a special telephone service given to all
  subscribers of general licensees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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|99.   | Publicizing rates                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|99.1  | The Licensee
  shall make available to any inquirer without charge, on the Internet and in
  the service offices, full and detailed information regarding the up-to-date
  rates for all its services; the Director shall be entitled to instruct the
  Licensee regarding the manner and format for publicizing said rates.                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|99.2  | The Licensee
  shall note on each account submitted to the subscriber the basket of services
  according to which the subscriber is charged.                                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|99.3  | The Director
  shall be entitled to demand, at any time, that the Licensee provide him with
  details of the rates in practice at the Licensee.                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|100.  | Provisions in the engagement agreement                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|100.1 | The Licensee
  shall include a condition in every engagement agreement stating that in the
  event of a contradiction between the provisions relating to the rates and to
  the basket of services specified in the agreements, and the provisions of the
  License in this matter, the provisions of the License shall prevail, and that
  the License is available for the perusal of all subscribers at the service
  center and on the Internet website of the Licensee.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|100.2 | The
  engagement agreement shall include provisions as stated in sections 98.4,
  98.5, 98.6, 98.7 and 98.9, and a provision regarding the manner of collecting
  the payment.                                                                                                                                                                                                                                                                                              

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Part C  Changes in the Rates

|101.  | Changing the rates                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|101.1 | The Licensee
  shall be entitled to change a rate that it has determined, provided that it
  submits written notification to the Director before the date on which the
  rate is to go into effect, specifying the new rates; said change shall be
  subject, mutatis mutandis, to
  the provisions of Part B; for the purpose of this Part, Change  any change
  in a rate that may serve to increase or to decrease the payment that the
  subscriber must pay for the Licensees services.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|102.  | Application of increase or decrease in a rate                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|102.1 | Should any
  rate be changed for the Licensees services, as stated in section 101, the
  change shall not apply to payments for services that the subscriber consumed
  before the date of inception of the change; the provisions of this section
  shall not apply in a case of amendment of a rate pursuant to instructions of
  the Minister under section 105.                                                                                                                            

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Part D  Miscellaneous

|103.                                          | Arrears in payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|103.1                                         | The Licensee
  shall be entitled to charge a subscriber with the payment of arrears
  interest, linkage differentials and collection costs on payments for its
  services for which the subscriber has not paid on the date appointed therefor
  in the engagement agreement between them (hereinafter  the Date of
  Payment).                                                                                                                                                                                                                                                               
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|103.2                                         | The Licensee
  shall state the rate of arrears interest, linkage differentials and
  collection charges in the engagement agreement with the subscriber.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|103.3                                         | The rate of
  arrears interest shall not exceed the rate set forth under the definition of
  Linkage Differentials and Interest in Article 1 of the Adjudication of
  Interest and Linkage Law, 5721  196125, with the addition of
  linkage differentials for the period between the due date for payment and the
  date of actual payment of the stated amount.                                                                                                                                                                                                                             
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|103.4                                         | The Licensee
  shall be entitled to charge a subscriber for payment of collection expenses
  for a service supplied to the subscriber and which has not been paid on the
  date determined for payment in the engagement agreement between them
  (hereinafter: the Debt); the fate of collection expenses shall not exceed
  10% of the Debt, providing at least fourteen (14) days have elapsed since the
  due date of payment, except in a case of non-payment due to refusal of the
  bank or the credit card company to pay a charge which the Licensee has been authorized
  to collect.
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|104.                                          | Charging installation fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|104.1                                         | Should the
  Licensee decide to charge installation fees as these are defined in section
  97.1 (a), it shall be entitled to charge subscribers installation fees only
  for the first connection of the subscribers premises to the Network.                                                                                                                                                                                                                                                                                                                                                   
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|104.2                                         | The Licensee
  shall be entitled to collect the installation fee in a number of payments, on
  the date and at the rates set forth in the engagement agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|104.3                                         | Notwithstanding
  that stated in section 104.1, the Licensee shall be entitled to collect
  installation fees from the subscriber after disconnection of service or
  termination of service pursuant to section 92.                                                                                                                                                                                                                                                                                                                                                                             
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|25 Code
  of Laws 5721, p. 192; 5761, p. 206.
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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|105.  | Impairment of competition or harming consumers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|105.1 | Should the
  Minister find, after having given the Licensee a proper chance to voice its
  arguments, that a rate or payment determined by the Licensee contravenes the
  provisions of the law or the License, or is liable to impair competition or
  to harm consumers, the Minister shall inform the Licensee, noting the
  required amendment, and the Licensee shall act pursuant to the Ministers
  instructions and shall provide the Minister with written notification in
  which the amended rate or payment is specified.                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|105.2 | Should the
  Licensee charge a subscriber pursuant to a rate or payment that contravenes
  the provisions of the License and the rate or the payment has been amended as
  stated, the Licensee shall refund this surplus charge to the subscriber with
  the addition of linkage differentials and interest as defined in section
  103.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|106.  | Preventing fraud                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|106.1 | The Licensee
  shall take reasonable measures to prevent fraud and shall implement a control
  and monitoring system in order to ascertain that the services for which the
  subscriber is charged are actually implemented from the End Equipment
  connected to the Network by means of the interface on the subscribers
  premises, and shall credit the subscriber with a refund of charges collected
  from him in respect of services that he did not consume with the addition of
  linkage differentials and interest as defined in section 103.3.                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|106.2 | The Licensee
  shall disconnect service at the request of the service recipient after the
  service center or the Call Center has received notification from the service
  recipient to the effect that there is a suspicion that another is making
  unauthorized use of the service by means of the internal wiring in his
  premises; the subscriber shall be entitled to submit said notification by
  telephone or in writing, including by fax or by email, and a subscriber of a
  service provider shall submit the notification by means of the service
  provider; upon receiving telephone notification or immediately after receiving
  written notification as stated, the Licensee shall ascertain its credibility
  and shall disconnect the service; disconnection of service as stated and
  reconnection shall be implemented without payment.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|106.3 | The Licensee
  shall cooperate with other licensees, including a licensee for broadcasting,
  in locating and preventing fraud.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|106.4 | The Director
  shall be entitled to give instructions in the matter of taking measures to
  prevent fraud, to locate and handle fraudulent acts, and the Licensee shall
  fulfill the Directors instructions in this matter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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Chapter 7  
Payments from the Licensee, Liability, 
Insurance and Guarantees

Part A  Royalties and Payments

|107.                                         | Payment of Royalties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|107.1                                        | The Licensee
  shall pay royalties as specified in the Telecommunications Regulations
  (Royalties), 5761  200126 or any other regulations that shall
  replace them (hereinafter  the Royalties Regulations).                                                                                                                                                                                                                                                                                                 
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|107.2                                        | The Licensee
  shall pay royalties for periods of three (3) months each, which shall commence
  on January 1st, April 1st, July 1st, and
  October 1st, as the case may be (hereinafter Quarter); the
  payment shall be made within forty-five (45) days from the end of each
  quarter.                                                                                                                                                                                                                       
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|107.3                                        | To each
  payment of royalties pursuant to this section, the Licensee shall attach a
  copy of an unaudited quarterly income statement, signed by the Licensee and
  certified by an accountant. This report shall contain an itemization of the
  calculation of chargeable income in accordance with the Royalties
  Regulations, as well as any other item upon which the Licensee based the
  amount of the royalties.                                                                                         
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|107.4                                        | Upon the
  submission of an annual income statement, audited and signed by the
  Licensees accountant (hereinafter  the Audited Statement), the Licensee
  shall submit a statement drawn up by quarters, specifying the reconciliation
  between the income for which it paid royalties and the income appearing in
  the Audited Statement (hereinafter  Reconciliation Statement).                                                                                                                       
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|107.5                                        | Should it
  transpire that the amount of the royalties that the Licensee is obligated to
  pay, pursuant to the Reconciliation Statement or pursuant to inspections
  implemented by the Ministry, is higher then the amount paid by it in respect
  of a particular quarter, the Licensee shall pay royalty differentials, with
  the addition of linkage differentials and interest, as specified in the
  Royalties Regulations.                                                                                
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|107.6                                        | Should it
  transpire that the amount of the royalties that the Licensee has paid is
  higher than the amount it was to have paid in respect of a particular
  quarter, the Licensee shall be credited with the amount of the surplus
  payments. The surplus payments to which the Licensee is entitled shall be
  offset from the next payment of royalties, with the addition of linkage
  differentials and interest calculated pursuant to the last index published
  before the date of the offset as stated.
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|26
  Compendium of Regulations 5761, p. 958.
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|108.  | Arrears in payment of royalties                                                                                                                                                                                                                                          
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                          
|108.1 | In
  accordance with the provisions of the Royalties Regulations, the Licensee
  shall pay linkage differentials, arrears interest, and collection expenses on
  royalties which were not paid on the date appointed for their payment said
  regulations.               
|      |                                                                                                                                                                                                                                                                          
|109.  | Manner of payment of royalties                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                          
|109.1 | Royalties
  and linkage differentials, arrears interest and the collection expenses
  therefor shall be paid to the Ministry controller by means of a bank transfer
  or deposit in the Ministry account, as the Licensee shall be informed by the
  Ministry controller.
|      |                                                                                                                                                                                                                                                                          
|110.  | Other compulsory payments                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                          
|110.1 | The
  royalties pursuant to this Part shall be in addition to any other fee, tax or
  compulsory payment which the Licensee is obligated to pay under the
  provisions of any law.                                                                                       
|      |                                                                                                                                                                                                                                                                          
|111.  | Prohibition against offsetting royalty payments                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                          
|111.1 | Pursuant to
  the provisions of this chapter, the Licensee shall not be entitled to offset
  any debt that the State owes hit from the royalties payments.                                                                                                               
|      |                                                                                                                                                                                                                                                                          
|112.  | Definitions                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                          
|112.1 | For the
  purposes of this chapter, linkage differentials, interest and arrears
  interest  as defined in the Royalties Regulations.                                                                                                                              

88

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Part B  Liability and Insurance

|113.  | Definitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|113.1 | In this
  Part:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      | Use of the
  License                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|114.  | Liability of the Licensee                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|114.1 | The Licensee
  shall bear liability, pursuant to any law, for any case of death, damage, or
  loss that shall be caused to the body or property of a person, directly or
  indirectly, resulting from use of the License or in consequence of the use
  thereof.                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|114.2 | In making
  use of the License, the Licensee shall take all reasonable measures to
  prevent damage or loss to the body or property of a person, and should said
  damage or loss be caused as a result of the use of the License, the Licensee
  shall repair the damage at its expense and shall compensate the injured
  party, all subject to any law, except a case in which the Minister has
  granted the immunities enumerated in Chapter 9 of the Law, in whole or in
  part.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|114.3 | To preclude
  doubt, nothing stated in this section shall serve to impose on the Licensee
  liability in excess of the tortious liability set forth in torts law or to
  diminish therefrom.                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|115.  | Immunity from liability                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|115.1 | The Minister
  shall be entitled to grant the Licensee the immunities enumerated in Chapter
  9 of the Law, in whole or in part.                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|115.2 | Should the
  Minister decide to grant the Licensee immunities pursuant to Chapter 9 of the
  Law, his decision shall be published in an announcement in the Gazette.                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|116.  | Implementing an insurance contract                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|116.1 | The Licensee
  shall, at its own expense, implement an insurance contract  with an authorized insurer in Israel,
  pursuant to the conditions set forth in section 117, and it shall furnish a
  copy thereof to the Director within ninety (90) days from the date of the
  granting of the License.                                                                                                                                                                                 

89

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|116.2                                        | The Licensee
  shall indemnify the State for any monetary liability with which it shall be
  charged vis-à-vis a third party as a result of the use of the License or in
  consequence of the use thereof. Indemnification pursuant to this section
  shall be insured by the Licensee with liability insurance, as this is defined
  in the Insurance Contract Law, 5741  198127.                                                                                                                                                                                                                                                                                                                                                                  
|-------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|116.3                                        | The Licensee
  shall insure itself, its employees and its contractors against any monetary
  liability that it may owe pursuant to any law due to damage caused to the
  body or property of a person as a result of the use of the License or in
  consequence of the use thereof, and against any loss or damage that shall be
  caused to the Network.                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|116.4                                        | The Licensee
  shall furnish the Director with an opinion from an attorney on behalf of the
  insurer, confirming that the insurance contract covers everything required
  pursuant to section 116 and 117 without any stipulation; the Licensee shall
  attach a copy of the insurance contract and the attachments thereto to said
  opinion; said documents shall be furnished to the Director within seven (7)
  days from the date of the signing of the insurance contract.                                                                                                                                                                                                                                                                    
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|117.                                         | Conditions regarding the insurance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|117.1                                        | The
  insurance contract shall set forth the insurance period and it shall contain
  a stipulation that at the end of the period set forth therein the insurance
  contract shall be automatically extended unless it is canceled as stated in
  section 117.6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|117.2                                        | The Licensee
  shall present to the Director, upon his demand, confirmation from the insurer
  to the effect that the insurance is valid, that there are no arrears in the
  Licensees payments for insurance premiums and that there are no pending
  notifications regarding cancellation, suspension, restriction, amendment or
  termination of validity of the insurance contract.                                                                                                                                                                                                                                                                                                                                                             
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|117.3                                        | The
  insurance contract shall set forth a condition whereby in any case in which
  the insurer wishes to cancel the insurance contract due to nonpayment of the
  insurance premiums, it shall be obligated to notify the Director and the
  Licensee to that effect in advance, no less than ninety (90) days before it
  intends  actually to cancel the
  contract (hereinafter in this section  Cancellation Notice).                                                                                                                                                                                                                                                                                                                        
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|117.4                                        | Should the Licensee
  receive a Cancellation Notice, the Licensee shall act immediately to remove
  the cause of the cancellation or it shall act immediately to obtain an
  alternative insurance contract as stated in section 117.6, and it shall
  notify the Director of the action it has taken for that purpose; should the
  cause of cancellation be nonpayment of insurance premiums on the part of the
  Licensee, the Director shall be entitled to pay the insurance premiums in
  place of the Licensee, and he shall be entitled to exercise the bank
  guarantee or any part thereof for the purpose of covering the amounts he
  expended for that purpose, without derogating from his right to collect them
  in any other manner.
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|27
  Code of Laws 5741, p. 94, 5748, p. 216.
|                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

90

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|117.5 | Should the
  Licensee wish to cancel the insurance contract, it shall notify the Director
  to that effect at least forty five (45) days before it intends to cancel the
  contract in practice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|117.6 | Should the
  Licensee agree to cancellation of the insurance contract by the insurer or
  should it wish to cancel the insurance contract itself, the Licensee shall
  enter into an alternative insurance contract with an insurer licensed in
  Israel in such manner that commencement of the validity of the alternative
  insurance contract shall be simultaneous with expiration of the validity of
  the previous contract; the new insurance contract shall be submitted to the
  Director together with an opinion as stated in section 116.4, at least thirty
  (30) days before commencement of its validity and the provisions of this
  section shall apply thereto.                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|118.  | Remedy for breach of a condition vis-à-vis insurance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|118.1 | If the
  Licensee has not entered into an insurance contract, or should it transpire
  that the insurance contract it has made has been canceled or has expired, and
  the Licensee has not entered into an alternative insurance contract as stated
  in section 117, the Director shall be entitled to engage in an insurance
  contract in its stead and to pay the insurance premiums, and he shall be
  entitled to exercise the bank guarantee to cover the amounts he expended for
  that purpose, without derogating from his right to collect them in any other
  manner. Nothing in the provisions of this section shall serve to derogate
  from the authority to cancel, restrict or suspend the License due to
  nonperformance of the Licensees undertaking regarding the insurance
  contract.

91

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Part C  Guarantee for Fulfillment of the
License Conditions

|119.  | The guarantee and its purpose                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|119.1 | The Licensee
  shall furnish the Director with a bank guarantee in accordance with the
  provisions of section 20 of the Telecommunication Infrastructure Regulations.                                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|119.2 | The
  guarantee shall serve to secure fulfillment of the License conditions by the
  Licensee, to ensure payment of monetary sanctions pursuant to section 113 and
  compensation and indemnification of the State for any damage, payment, loss
  or expense that it may incur  directly or indirectly  as a result or in
  consequence of non-fulfillment of the License conditions, in whole or in
  part, in timely fashion and in full, or as a result or in consequence of
  cancellation, restriction or suspension of the License.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|119.3 | For the
  purpose of exercise of the guarantee in sections 120, 121 and 123, the
  guarantee  in whole or in part.                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|120.  | Exercising the guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|120.1 | Without
  derogating from the generality of that stated in section 119.2, the Director
  shall be entitled to exercise the guarantee, including in each one of the
  cases specified below:                                                                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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|121.  | Manner of exercising the guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|121.1 | The Director
  shall be entitled to exercise the guarantee, provided that he has warned the
  Licensee that if, within a specified period of time, the Licensee does not
  remedy the act or omission which is the subject of the warning, the guarantee
  shall be exercised.                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|121.2 | Should the
  guarantee be exercised, the Licensee shall provide a new guarantee, or it
  shall make the balance up to the amount of the original guarantee,
  immediately upon receiving the Directors demand.                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|121.3 | The Licensee
  shall be entitled to appeal the decision of the Director to exercise the
  guarantee before the Minister within fifteen (15) days of the date on which
  the Directors decision was brought to its attention; should an appeal be
  submitted, exercise of the guarantee shall be delayed until the decision of
  the Minister.                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|122.  | Validity of the guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|122.1 | The
  guarantee shall be renewed periodically and shall be valid as long as the
  License is valid, and in the event of cancellation of the License or
  non-extension of the validity of the license as stated in section 13, for a
  period of two years from the date of the end of the validity of the License
  or until the Licensee has discharged all its obligations pursuant to the
  License to the satisfaction of the Director, whichever is the latest.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|122.2 | Should the
  Director see that the Licensee has not discharged its obligations pursuant to
  the License within sixty (60) days of termination of the validity of the
  guarantee, the Director shall be entitled to demand that the Licensee extend
  the validity of the guarantee or furnish a new guarantee for a period
  determined by the Director, and the provisions of this Part shall also apply
  to the new guarantee.                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|122.3 | Should the
  Director see, to his satisfaction, that the Licensee has discharged all its
  obligations pursuant to the License, including with regard to Period of the
  End of the Service as defined in section 11, he shall be entitled to give his
  consent to cancellation of validity of the guarantee before the date as
  stated in subsection 122.1.                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|123.  | Retaining remedies                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|123.1 | Nothing in
  the exercise of the guarantee shall serve to derogate from the authority to
  cancel, restrict or suspend the License.                                                                                                                                                                                                                                                                                                                                  

93

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|123.2 | Nothing in
  the amount of the guarantee shall serve to limit the scope of the Licensees
  liability vis-à-vis the State for the full payment of damages incurred by the
  State, the obligation for which payment applies to the Licensee pursuant to
  the License or pursuant to any law.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                              
|123.3 | Nothing in
  the exercise of the guarantee shall serve to derogate from the possibility of
  claiming from the Licensee in any other manner payment of damages that it
  owes pursuant to the License or to claim another remedy pursuant to any law.                                        

94

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Chapter 8 
Supervision and Reporting

Part A  Supervising the Operations of the
Licensee

|124.  | Supervisory authority                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|124.1 | For the
  purpose of this Part and Part B, the Director  as defined in the
  supervisory regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|124.2 | The Director
  shall be entitled to supervise the operations of the Licensee and everything
  pertaining to implementing the License and to fulfilling the provisions of
  the Law, the Ordinance or regulations, orders and the provisions thereunder,
  pursuant to the provisions of the supervisory regulations and the provisions
  of the License.                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|125.  | Maintaining confidentiality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|125.1 | The Director
  and anyone dealing on his behalf with supervisory activities vis-à-vis the
  Licensee shall not disclose any information or document (for the purpose of
  this section  Information) that has reached them by virtue of their
  function, to a person who is not qualified to receive it, unless it has been
  made public or if its disclosure is required for the purpose of implementing
  their function pursuant to this License or pursuant to any law. The
  obligation to maintain confidentiality shall apply to everyone who has been
  given information in accordance with the provisions of this section.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|125.2 | The Director
  shall be entitled to provide information to the Anti-Trust Commissioner, to
  the Consumer Protection Commissioner, to the Central Bureau of Statistics and
  to any other authority competent to receive the information for the purpose
  of performing their obligations and implementing their authority pursuant to
  law.                                                                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|126.  | Entry into premises and perusal of documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|126.1 | For the
  purpose of implementing supervision as stated in this Part, the Director or
  anyone acting on his behalf in the supervision of the Licensee, shall be
  entitled:                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

95

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|      | (e)                                                                                                                                                                                                                                                                                                                                                                            | to instruct
  the Licensee to submit to him, upon his demand, reports for the purpose of
  setting policy, at the time, in the format and in the manner that he shall
  determine.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                   
|127.  | Cooperation                                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                               
|127.1 | The Licensee
  shall cooperate with the Director or anyone acting on his behalf in the
  supervisory actions in everything pertaining to supervising the Licensees
  operations and, inter alia,
  shall provide them, upon their demand, with any information in its possession
  or under its control which they require for the purpose of implementing the
  supervision.

96

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Part B  Reporting and Rectifying Defects

|128.  | Submitting reports                                                                                                                                                                                                                                                                                                                                                                          
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|128.1 | The Licensee
  shall submit to the Director the reports specified in this Part, in the
  format and at the times set forth below.                                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|128.2 | Each report
  shall reflect the correct facts which are relevant to the subject of the
  report, being up-to-date for the period to which the report relates.                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|128.3 | Every report
  shall be submitted in three (3) copies, printed and arranged in a manner that
  is easy to read, bearing a date and signed by the Licensee or anyone that it
  has specially authorized therefor; the report shall be submitted in the
  format which the Director shall instruct, including with regard to the
  contents, structure and manner of submission of the report.
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|128.4 | The Director
  shall be entitled to demand that the Licensee redo or complete a report that
  it has submitted, including if the Director finds that it is missing required
  details or details which, in the opinion of the Director, the Licensee should
  have included in the report.                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|129.  | Types of reports and date of their submission                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|129.1 | Once a year,
  no later than within the period determined for each report following the end
  of the calendar year, the Licensee shall furnish the Director with the
  following annual reports, describing the activities in the period from
  January to December during the past year:                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                         
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                         
|      | (c)                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                             
|      | (d)                                                                                                                                                                                                                                                                                                                                                                                         
|      | (e)                                                                                                                                                                                                                                                                                                                                                                                         
|      | (f)                                                                                                                                                                                                                                                                                                                                                                                         

97

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|129.2 | The Licensee
  shall furnish the Director with the following reports upon his demand:                                                                                                                                                                                                                    
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                          
|      | (a)                                                                                                                                                                                                                                                                                                      
|      | (b)                                                                                                                                                                                                                                                                                                      
|      | (c)                                                                                                                                                                                                                                                                                                      
|      | (d)                                                                                                                                                                                                                                                                                                      
|      | (e)                                                                                                                                                                                                                                                                                                      
|      | (f)                                                                                                                                                                                                                                                                                                      
|      | (g)                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                          
|129.3 | Once every
  quarter, no later than one month from the end of the quarter, the Licensee
  shall furnish the Director with the following reports:                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                          
|      | (a)                                                                                                                                                                                                                                                                                                      
|      | (b)                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                          
|129.4 | The Director
  shall be entitled to add or deduct periodic, annual or quarterly reports, and
  to demand that the Licensee submit special reports, as he shall instruct.                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                          
|129.5 | The Licensee
  shall furnish the Director, upon his demand, any additional data that shall
  be required for the purpose of supervising the operations of the Licensee and
  any information required by the Ministry for the purpose of regularizing the
  field of telecommunications and broadcasting.

98

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|130.  | Notification of defect                                                                                                                                                                                                                                        
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                               
|130.1 | Should the
  Director find flaws or defects in the operations of the Licensee, he shall so
  inform the Licensee in writing.                                                                                                                                  
|      |                                                                                                                                                                                                                                                               
|130.2 | Should the
  Licensee receive notification as stated, it shall submit to the Director in
  writing, within thirty (30) days from the date of receiving the notification,
  its response including details of the measures it has taken to rectify the
  flaws.

99

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Part C  Enforcing Compliance with the
License and its Conditions

|131.                                                      | Exceptions committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|131.1                                                     | The Minister
  shall appoint a committee of three members who shall be authorized to approve
  an exception for the Licensee to the provisions of sections 31, 60, 68 and 74
  regarding the date of connecting applicants, regarding the obligation to
  connect every applicant or regarding the rate of setup or the date of
  activation of a service (hereinafter  the Exceptions Committee); the
  Exceptions Committee shall be composed of three representatives of the
  public, from the fields of economics, engineering or law; one of said public
  representatives may be a member of the Ministry; the Minister shall appoint
  the Committee Chairman from among its members; should one of the committee
  members be prevented from participating in one of its meetings, the Minister
  shall be entitled to appoint a substitute therefor.
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|131.2                                                     | The Director
  shall be invited to all the meetings of the Exceptions Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|131.3                                                     | The
  Exceptions Committee shall determine its working arrangements and procedures
  for submitting requests for approval of an exception as stated in section
  131.1, and shall inform the Licensee to that effect.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|131.4                                                     | In
  accordance with the provisions of Regulation 10 of the Telecommunications
  Regulations (Franchises) 5748  198728, the Minister shall be
  entitled to instruct the granting of reasonable remuneration for the chairman
  and members of the committee, at a rate to be determined by order of the
  Minister with the consent of the Minister of Finance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|132.                                                      | Deferring an appointed date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|132.1                                                     | An
  obligation imposed on the Licensee in this License, for the fulfillment of
  which a date has been appointed, shall be fulfilled by the Licensee on the
  appointed date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|132.2                                                     | The Director
  shall be entitled to approve a general request by the Licensee for a
  deferment of the timetable for implementation of an obligation (hereinafter
  in this section  Deferment) pursuant to the License, for a period that
  shall not exceed twelve (12) months, if he is convinced that one of the
  following obtains:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|28
  Compendium of Regulations 5748, p. 113; 5762, p. 78.
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

100

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|      | (c)                                                                                                                                                                                                                                                                          | The
  Deferment shall advance the competition in the field of telecommunications
  and broadcasting;                                                     
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|      | (d)                                                                                                                                                                                                                                                                          | The
  Deferment derives from the circumstances entailed in a State of Emergency, as
  defined in section 69, or from preparations for such circumstances.
|      |                                                                                                                                                                                                                                                                              |                                                                                                                                                          
|132.3 | Should the
  circumstances specified in section 132.2 occur, the Minister shall be
  entitled, at the request of the Licensee, to enable additional deferments
  beyond the period set forth in section 132.2, if he is convinced that special
  circumstances warrant this.
|      |                                                                                                                                                                                                                                                                             
|133.  | Monetary sanctions                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                             
|133.1 | The
  Directors shall be entitled to impose on the Licensee monetary sanctions at
  the rate, at the time and in the manner set forth in Chapter G1 of the Law.                                                                                                             

101

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Chapter 9   Miscellaneous

|134.  | The License as an exhaustive document                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|134.1 | The rights,
  obligations and authority of the Licensee in everything pertaining to the
  setup, implementation and operation of the Network, and the provision of the
  Licensees services, originate in the law and in the License and they derive
  solely therefrom.                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|134.2 | The Licensee
  may not claim the existence of any right, obligation, or authority pertaining
  to that stated in section 134.1 based on information, a promise, undertaking,
  representation, proposal, publication, protocol, discussion or declaration
  made beyond the scope of the License, whether in writing, orally or in
  another manner, whether before the granting of the License or after the
  granting thereof, excluding written interpretation given by the Minister
  pursuant to section 2.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|134.3 | To preclude
  doubt, nothing in that stated shall derogate from the lawful rights which the
  broadcasting company had before the granting of the License.                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|135.  | Holding and returning the License documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|135.1 | The Licensee
  shall enable the public to peruse the updated License documents at the
  service offices and on its Internet website, the Licensee shall be entitled
  to implement this also by way of referral to the website of the Ministry of
  Communications so long as the Ministry publishes the License on its Internet
  website.                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|135.2 | Should the
  license and its appendices be presented for perusal by the public, the public
  shall not be enabled to study the following documents:                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|135.3 | The original
  License documents are the property of the State and they are deposited with
  the Licensee as long as the License shall be valid; should the License be canceled
  or expire, the Licensee shall return said documents to the Director.                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|135.4 | The Ministry
  shall be entitled to publicize the License, other than the appendices
  specified in section 135.2, at the time and in the manner that it shall see
  fit.                                                                                                                                                                                                                                                                                                                                       

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|136.  | Reservation of liability                                                                                                                                                                                                                                                                                                                                                                                                                       
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|136.1 | Nothing in
  the Ministers or the Directors authority to approve or supervise the data
  pursuant to this License, including the use of said authority, shall impute
  to them any liability whatsoever imputed under law or the License to the
  Licensee, and nothing therein shall impair, derogate from, remove, or
  diminish the liability of the Licensee as stated.                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|136.2 | Any
  authorization, permit or license given to the Licensee for the purpose of
  this License or in the framework thereof, whether given before or after the
  granting of the License, shall not impute to the State any liability
  vis-à-vis the Licensee.                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|137.  | Manner of sending notification                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|137.1 | Notification
  pertaining to this License or the implementation thereof shall be given in
  writing and shall be sent by mail, by messenger or by facsimile; a message
  sent by mail shall be presumed to have reached its destination by the end of
  forty eight (48) hours from the time of its submission for dispatch. The sender
  shall verify, with the addressee, receipt of notification sent in another
  manner as stated.        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|137.2 | Any
  notification from the Licensee to the Minister shall be delivered through the
  Director.                                                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|137.3 | The address
  of the Licensee for the purpose of receiving notifications pursuant to this
  section is: 25 Hasivim St., Kiryat Matalon, Petach Tikva 49170; the Licensee
  shall inform the Director of any change occurring in said address.                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|138.  | Activities in the area of the civil administration for Judea, Samaria
  and Gaza                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|138.1 | The Minister
  shall be entitled to set forth in the License instructions regarding the
  implementation of telecommunications operations and the provision of
  telecommunications services that are required for the purpose of providing broadcasts
  to Israeli citizens and residents in Israeli settlements in Judea, Samaria
  and the Gaza Strip, after having given the Licensee a proper opportunity to
  state arguments before him.

103

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List of Appendices

|Subject                                                                     |  | Page
|--------------------------------------------------------------------------- |  | ----
|                                                                            |  |     
|Appendix B  Service Area and Milestones in Provision of Services           |  |     
|                                                                            |  |     
|Appendix D  List of the Licensees Services                                |  |     
|                                                                            |  |     
|Appendix E  Level of Services for the Subscriber                           |  |     
|                                                                            |  |     
|Appendix F  Rules of access to international telecommunications
  services |  |     

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Appendix B 
Service Area and Milestones in Provision of Services

|1.                                                        | Service Area                                                                                                                                                                                                                                                                                                                                                                                      
|--------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          | The Service
  Area of the Licensee shall include all areas of the franchise that were
  included in all franchises of companies linked with the Licensee which were
  franchisees and which operated during the franchise period as three brands;
  in this matter, Franchise Area shall be as defined in the first Addendum to
  the Telecommunications Regulations (Franchises) 5748  198729.
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|2.                                                        | Milestones in provision of the services                                                                                                                                                                                                                                                                                                                                                           
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          | With regard
  to the provision of telecommunications services, other than infrastructure
  services for a general licensee for cable broadcasts, the following
  provisions shall apply:                                                                                                                                                                                                          
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          | In this
  section, Date of Granting the License                                                                                                                                                                                                                                                                                                                                                
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          | a.                                                                                                                                                                                                                                                                                                                                                                                                
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          | b.                                                                                                                                                                                                                                                                                                                                                                                                
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   
|29
  Compendium of Regulations 5748, p. 113; 5762, p. 612
|                                                          |                                                                                                                                                                                                                                                                                                                                                                                                   

105

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| | c. |  | To preclude
  doubt, and in accordance, inter alia,
  with sections 68, 83 and 84 in the body of the License, it is clarified that
  the above milestones are subject to the duty of egalitarianism and
  non-discrimination, i.e., when service is provided in a particular town, it
  must be provided to all who request it in an equal and non-discriminatory
  manner.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |  |                                                                                                                                                                                                                                                                                                                                                                            

106

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Appendix D  List of the Licensees Services

|1.  | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|1.1 | This
  Appendix describes the services of the Licensee, with a brief description of
  each service.                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|1.2 | The
  provision of each service includes initial installation / operation services,
  maintenance and upkeep, including identifying and repairing malfunctions, and
  operating a center for receiving notification of malfunctions, relocation,
  transfer to another or change of name, temporary termination of the service
  and its renewal afterwards, and withdrawal of service, as the case may be.                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|1.3 | The services
  of the Licensee shall support the parameters for communications services
  which have been determined by the Ministry and the international
  standardization organizations; service quality indices shall be as stated in
  Appendix E  Level of Services for the Subscriber, and Appendix C 
  Engineering Plan; should service quality indices have been determined in the
  service file approved by the Director, these shall replace that stated in
  this Appendix regarding that service.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2.  | List of services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2.1 | Basic
  services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|No. | Name of
  service | Description of service                                                                                                                                                                                                         | Start of
  provision of
  service                      | Indices for service
  quality                                | Comments                                                                                                                                                                                                            
|--- | ----------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------ | ------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | Basic telephone   | Telephone calls to and
  from subscribers of the Licensee to any 
  other suitable telephone or end equipment in another public
  telecommunications network, in Israel or the world (by means of an
  international operator) | Within 12 months of the
  date of granting the license | According to service
  quality indices for telephony service | Bifilar analogue
  interface, PRA interface, IP interface, other suitable interface or Soft
  Phone software application.                                                                                           
|2.  | Videophone        | Combined telephone and
  video calls to and from the Licensees subscribers to subscribers of another
  public telecommunications network, in Israel and the world (by means of an
  international operator)                   | In the future                                          | According to service
  quality indices for telephony service | Bifilar analogue
  interface, PRA interface, IP interface, other suitable interface or Soft Phone
  software application. Videophone  dependent on the subscriber having access
  to the appropriate end equipment.

107

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|3. | Access to emergency
  services                              | Free call to the emergency
  services set forth in the numbering plan, such as Police, Fire  Brigade and Ambulance | Within 12 months of
  granting the license | According to service
  quality indices for telephony service                                                                        | The caller will be
  directed to the emergency call center according to the definition of the
  emergency service provider and location of the subscriber                                                    
|-- | ----------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | Infrastructure service 
  distribution of cable broadcasts | Use of the Licensees
  infrastructure by a general licensee for cable broadcasts                                  | Existing                                   | In accordance with the
  general license for cable broadcasts and the terms of the license                                          |                                                                                                                                                                                                              
|5. | Access to ISPs                                              | Providing a subscriber
  with access service to ISPs at various speeds as detailed in section 3                    | Existing                                   | Average data transfer rate
  (including during peak hours) according to class of service as defined in
  section 3 of the Appendix. | Access by means of cable
  modem; selection of ISP by the subscriber; the data transfer rate shall be
  stated in the subscribers engagement agreement, in accordance with his
  order.                     
|6  | Data communications                                         | Data transfer by
  interfaces suitable for communication between computers, based on IP
  infrastructures          | November 2003                              | Pursuant to service
  quality indices for data communications services                                                              | Different rates;  various communications regimes 
  synchronous and asynchronous. PTP and PTMP services.  PTP and public telecommunications network
  switching services. Various levels of service quality.
|7. | Digital transmission                                        | Broadband PTP lines by
  digital interface, with a variety of transmission rates and interfaces.                   | November 2003                              | Pursuant to service
  quality indices for transmission services                                                                     | Different rates                                                                                                                                                                                              
|8. | Optical transmission                                        | Broadband optical link in
  an optical interface with a variety of possibilities                                   | November 2003                              | Pursuant to service
  quality indices for transmission services                                                                     | Single wavelength, number
  of wavelengths or dark fiber. Switched or direct. Controlled or
  non-controlled. PTP and PTMP services.                                                                         
|9. | Video distribution                                          | Transmission of visual
  signals with a variety of possibilities.                                                  | On granting the License.                   | Pursuant to service
  quality indices for transmission services                                                                     | A variety of methods of
  encoding and interface. Switching or direct. Controlled or non-controlled.
  PTP and PTMP services.                                                                                

108

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|10. | Private and virtual data
  communication network VPN | A private and virtual
  network in the public telecommunications network for data transfer, in
  interfaces appropriate to communication between computers, on the basis of IP
  infrastructures.                                            | In the future | Pursuant to service
  quality indices for transmission services                 | Various communications
  regimes  synchronous and asynchronous. Varied levels of service quality. A
  variety of services at level 2 and 3 of OSI model.                                                           
|--- | ---------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11. | Disaster recovery                                    | Backing up organizational
  applications  operating a server with the standard organizational
  applications and databases, operating as a shadow of the organizations
  existing systems and capable of replacing them at short notice. | In the future | Pursuant to service
  quality indices for internet services                     |                                                                                                                                                                                                                     
|12. | Remote access to an
  organization network           | Providing access for
  subscribers to link up to a private network                                                                                                                                                                           | In the future | Service quality indices as
  relevant  telephony services or internet services | The service shall be given
  in a number of options, including: access by means of internet; access by
  cable modem; access by means of the telephony network; or by means of a modem
  over the telephony network.

109

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|2.2 | Supplementary
  services
|--- | ------------------------

|No. | Name of
  service                    | Description of service                                                                                                                                                                                                                                                                                                                                                                      | Start of
  provision of
  service | Indices for service
  quality                                | Comments                                                                                                                  
|--- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------
|1.  | Call waiting                         | Sound indicating to a
  telephone subscriber that there is a second incoming call                                                                                                                                                                                                                                                                                                           | In the future                     | Pursuant to service
  quality indices for telephony services |                                                                                                                           
|2.  | Permanent blocking of call
  waiting | Permanent blocking of the
  call waiting service                                                                                                                                                                                                                                                                                                                                            | In the future                     | Pursuant to service
  quality indices for telephony services |                                                                                                                           
|3.  | Temporary blocking of call
  waiting | Blocking the next
  telephone call from the sound indication of the call waiting service                                                                                                                                                                                                                                                                                                    | In the future                     | Pursuant to service
  quality indices for telephony services | By dialing the appropriate
  code from the end equipment                                                                  
|4.  | Follow me                            | Referral of an incoming
  telephone call to a different telephone number, permanently, when the number
  is engaged or when there is no reply, as chosen by the subscriber                                                                                                                                                                                                                  | In the future                     | Pursuant to service
  quality indices for telephony services | Pursuant to instructions
  from the end equipment (the appropriate code for operation and another code
  for cancellation)
|5.  | Repeat dial                          | When making a telephone
  connection, on receipt of an engaged or call waiting signal, it is possible
  to dial the service access code and replace the handset. As soon as the
  telephone line that ahs been called is free an automatic signal shall be
  given to the subscriber by means of a special tone, and on lifting the
  handset the call to the number dialed is put through. | In the future                     | Pursuant to service
  quality indices for telephony services |                                                                                                                           
|6.  | Last call                            | When making a telephone
  connection, dialing the service access code causes the number of the last
  subscriber to call the subscriber to be dialed.                                                                                                                                                                                                                                       | In the future                     | Pursuant to service
  quality indices for telephony services |                                                                                                                           
|7.  | Caller identification                | Display of the telephone
  number of the subscriber initiating the call                                                                                                                                                                                                                                                                                                                     | In the future                     | Pursuant to service
  quality indices for telephony services | Requires the appropriate
  end equipment with a digital interface                                                         
|8.  | Blocked identification               | Dialing the appropriate
  code blocks transfer of information identifying the caller to the subscriber
  called                                                                                                                                                                                                                                                                             | In the future                     | Pursuant to service
  quality indices for telephony services |                                                                                                                           

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|9.  | Blocking outgoing
  telephone calls | Permanent blocking of
  calls as detailed below, at the subscribers request: General blocking of
  outgoing calls; Blocking calls to services requiring special payment;
  Blocking calls to voice information services; Blocking access to dial-up
  internet; Blocking international service. | In the future | Pursuant to service
  quality indices for telephony services | There shall be no total
  blocking for access to another telecommunications infrastructure company or
  MRT operator                                                 
|--- | ----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------- | ------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | Blocking incoming
  telephone calls | Blocking incoming calls,
  at the subscribers request, as detailed below: Black list  calls from this
  list shall not be answered; White list  only calls from this list shall be
  answered. Blocking of anonymous calls: which do not have identification of
  the calling subscriber.     | In the future | Pursuant to service
  quality indices for telephony services | Blocking shall be for
  certain telephone numbers; there shall be no total  blocking of access to another telecommunications infrastructure
  company or MRT operator
|11. | Call transfer                       | Transferring incoming
  telephone calls to a permanent, pre-defined telephone number                                                                                                                                                                                                             | In the future | Pursuant to service
  quality indices for telephony services | A rigid, pre-programmed
  service.                                                                                                                                 
|12. | Conference call                     | Adding a third person to a
  call between two subscribers, implemented by the calling subscriber                                                                                                                                                                                                 | In the future | Pursuant to service
  quality indices for telephony services |                                                                                                                                                                      
|13. | Recorded announcement               | At the subscribers
  request                                                                                                                                                                                                                                                                    | In the future | Pursuant to service quality
  indices for telephony services | A personal, pre-recorded
  announcement heard by people calling the subscribers telephone number                                                                    
|14. | Collect call                        | Collect call service                                                                                                                                                                                                                                                                             | In the future | Pursuant to service
  quality indices for telephony services | The call shall be made at
  the expense of the subscriber receiving the call, and with his consent. The
  service is provided manually or automatically.             
|15. | Telephony service expense
  control | Enabling subscribers to
  control their expenses                                                                                                                                                                                                                                                 | In the future | Pursuant to service
  quality indices for telephony services | A variety of services:
  credit restriction service; pre-paid service.                                                                                               

111

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|16. | Voice mail                     | Allocating a personal
  voice mail box to the subscriber for storage and retrieval of voice messages
  received                                                                                           | In the future | Pursuant to service
  quality indices for telephony services | Telephone calls are
  transferred to the voice mail when the subscribers telephone line is engaged
  or if the call is not answered                                                                                                                                                  
|--- | ------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|17. | Hotline                        | Switched PTP telephony                                                                                                                                                                                    | In the future | Pursuant to service
  quality indices for telephony services | Enables a telephone
  subscriber to make contact with another, pre-determined telephone number
  merely by raising the handset, without dialing, immediately or after a delay                                                                                                         
|18. | Tour properties                | An incoming telephone call
  is transferred automatically to another number in the tour group if the
  dialed telephone number is engaged                                                                 | In the future | Pursuant to service
  quality indices for telephony services | A variety of options,
  including: Linear tour - the call is transferred up to the last line in the
  tour group; Circular tour - a call skipping past the last line in the group
  returns to the first line in the group; 
  Tour by load distribution (in a number of alternatives)
|19. | Freephone service              | The initiator of a call to
  a freephone number is not charged for the cost of the call; the subscriber
  receiving the call is charged for the cost of the call.                                         | In the future | Pursuant to service
  quality indices for telephony services | The service will be
  available to any static or MRT telephone subscriber. The service includes the
  possibility of blocking calls from certain areas and receiving reports on
  calls.                                                                                              
|20. | Split charge service           | The initiator of a
  telephone call to the subscribers split charge number is charged a reduced
  cost for the call; the subscriber receiving the call is charged with the
  balance of the cost of call | In the future | Pursuant to service
  quality indices for telephony services | The service will be
  available to any static or MRT telephone subscriber. The service includes the
  possibility of blocking calls from certain areas and receiving reports on
  calls.                                                                                              
|21. | Real-time charge
  information | Transmitting real-time
  information on the cost of the call to the subscribers end equipment                                                                                                            | In the future | Pursuant to service
  quality indices for telephony services | Requires appropriate end
  equipment with a digital interface                                                                                                                                                                                                                         

112

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|22. | Personal telephone number                              | The use of a single
  telephone number to get hold of the subscriber by means of any of the
  subscribers telephone communication devices (such as cellular, home line,
  office line etc.) | In the future | Pursuant to service
  quality indices for telephony services              | The service will be
  available to any static or MRT telephone subscriber. The service combines all
  the subscribers means of communication, even if some of these are not
  provided by the Licensee                                                                                                                                      
|--- | ------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|23. | Simulated line                                         | The allocation of the
  telephone number without installing a line, in order to receive calls                                                                                                | In the future | Pursuant to service
  quality indices for telephony services              | Incoming calls are
  directed to a selected telephone number in any public telecommunications
  network                                                                                                                                                                                                                                      
|24. | Mass traffic centers                                   | Routing large quantities
  of telephone calls to a defined destination (massing calling handling)                                                                                            | In the future | Prevents impairment of network
  performance during the incident          | The service is given to
  prevent impairment of network as the result of false traffic that the network
  cannot handle, and will be given in a number of options, including: for the
  use of state and public entities during an emergency or mass disaster; for
  radio and television games; as a remote voting or public opinion service
|25. | Voice information about
  changes to telephone numbers | Receiving an announcement
  about the new number when the old number is dialed                                                                                                               | In the future | Pursuant to service
  quality indices for telephony services              |                                                                                                                                                                                                                                                                                                                                              
|26. | Multi-line                                             | A multi-user line - a
  number of users on a single telephone line                                                                                                                           | In the future | Pursuant to service
  quality indices for telephony services              | For each user there is a
  unique ring tone; possibility of a code for outbound dialing                                                                                                                                                                                                                                                      
|27. | Nuisance identification                                | Identification of nuisance
  callers                                                                                                                                                         | In the future | Pursuant to service
  quality indices for telephony services              | Requires dialing a special
  code immediately after the call                                                                                                                                                                                                                                                                                 
|28. | Secured line                                           | Providing a secured
  telephone or data communication line                                                                                                                                   | In the future | Service quality indices as
  relevant - telephony service or data service | Among the services: for
  telephony or data encryption; virtual network protection (VPNs) for telephony
  or data                                                                                                                                                                                                                            

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|29. | Virtual private telephone
  networks (VPNs) including Centrex       | Virtual private networks,
  including a simulated private exchange (Centrex) in the public telephony
  network, with suitable interfaces to the telephony network | In the future | Pursuant to service
  quality indices for telephony services | A variety of network
  properties; a variety of numbering options; inclusion of subscribers to other
  public telecommunications networks by means of mutual connectivity and by
  conversion of telephone numbers, whether by end equipment linked to the other
  network or by the exchange in another network by agreement with the Licensee
  of the other network
|--- | ------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|30. | Random dial up access to
  an ISP                                   | Random access to an
  Internet provider by means of the computer and a modem connected to a
  telephone line                                                      | In the future | Pursuant to service
  quality indices for telephony services | By means of a virtual POP.
  Selection of the ISP shall be by means of the service screens.  Charge for the Internet access shall be by
  means of the telephone bill.                                                                                                                                                                                                
|31. | Direct dial up access to
  an ISP                                   | Direct access to an ISP by
  means of a computer and modem connected to a telephone line, to Internet
  access service providers                                  | In the future |                                                              | By means of virtual
  POP.  A recognized subscriber paying
  directly to the Internet service provider                                                                                                                                                                                                                                                                
|32. | Access to pay services                                              | Telephone access to
  services at a special additional charge                                                                                                     | In the future | Pursuant to service
  quality indices for telephony services | Conditional on approval of
  a service file conforming to the policy document on the subject of premium
  services                                                                                                                                                                                                                                                    
|33. | Access to the suppliers of
  a voice information service            | Telephone access to a
  voice information service at a special additional charge                                                                                  | In the future | Pursuant to service
  quality indices for telephony services | Conditional on approval of
  a service file conforming to the policy document on the subject of premium
  services                                                                                                                                                                                                                                                    
|34. | Bridging services between
  telephony and Internet (click and talk) | Giving the subscriber the
  possibility of having a telephone conversation while operating Internet
  applications                                                | In the future | Pursuant to service
  quality indices for telephony services |                                                                                                                                                                                                                                                                                                                                                                       

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Added value services

|No. | Name of
  service                 | Description of service                                                                                                                                                                                                                                                  | Start of
  provision of
  service                      | Indices for service
  quality                                                                                                                                | Comments                                                                                                                                                                                                                
|--- | --------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | Merged messages                   | The transfer of voice
  messages, video messages or fax messages to an e-mail box, indicating that
  messages have been received by SMS or pager. Retrieval of messages from a
  static or mobile telephone, transfer of messages, display and retrieval of
  messages. | In the future                                          | Voice messages  pursuant
  to service quality indices for telephony services; other messages  pursuant
  to service quality indices for internet services` | The service is available
  to subscribers of any public telecommunications network in Israel. The
  service combines all the subscribers means of communication, even if some of
  these are not given by the Licensee.
|2.  | Speaking clock                    | Obtaining the exact time
  by means of a recorded response, 24 hours a day.                                                                                                                                                                                             | In the future                                          | Distinction (resolution)
  of a minute; precision of transfer signal between minutes  plus or minus one
  second.                                           | By speed dialing.                                                                                                                                                                                                       
|3.  | Wake-up service                   | A mechanized telephone
  reminder or wake-up service                                                                                                                                                                                                                    | In the future                                          | Precision of plus or minus
  one minute                                                                                                                      |                                                                                                                                                                                                                         
|4.  | Multi-participant call            | A telephone conference
  call to a number of participants (more than 3)                                                                                                                                                                                                 | In the future                                          | Pursuant to service
  quality indices for telephony services                                                                                                 | A variety of types of
  telephone or video conference: adding a the subscriber to a conversation
  between two subscribers is implemented by the caller.  Multi participant conference                                  
|5.  | Short messages                    | Giving a subscriber the
  possibility of transmitting and receiving telecommunications messages in the
  form of text or multimedia messages                                                                                                                            | In the future                                          | Pursuant to service
  quality indices for Internet services                                                                                                  | SMS, MMS messages                                                                                                                                                                                                       
|6.  | Video conference                  | Operating a video
  conference service.  For domestic or
  international services (by means of an international operator)                                                                                                                                               | In the future                                          | Pursuant to service
  quality indices for transmission services                                                                                              | The service shall be
  provided to a number of standards, protocols and service qualities                                                                                                                               
|7.  | Directory inquiries               | An information service for
  clarifying telephone numbers (including fax and MRT) and e-mail addresses                                                                                                                                                                  | Within 36 months of the
  date of granting the license | Response to 90% of
  inquiries within 10 seconds.  Maximum
  waiting time 20 seconds                                                                         | Pursuant to section 95 in
  the body of the License                                                                                                                                                                     
|8.  | Pre-paid service (dialing
  card) | Implementing telephone
  calls inside Israel, from Israel to abroad and from abroad to Israel (by
  means of an international operator), and charging a single, predetermined
  account identified by a card number or personal code                                    | In the future                                          | Pursuant to service
  quality indices for telephony services                                                                                                 | The services provided in a
  number of ways: recognized subscriber or anonymous subscriber; prepaid or
  paid retroactively; various options for limiting destinations                                                  

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|Note: |                                                                                                                                                                                                                                                                               
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Service
  quality indices for the different services relate to the service quality
  indices defined in Appendix E - Level of Services To Subscribers, and
  Appendix C - Engineering Plan according to the nature of the service
  (telephony, Internet, data, transmission).
|     | Services
  shall be provided in a variety of service quality arrangements (SLA - Service
  Level Agreement) at the subscribers choice.                                                                                                                                       

|3.         Levels and rates of
  service with regard to service no. 5 in the list of basic services:
|----------------------------------------------------------------------------------------------------
|                                                                                                    

|Class of
  service | Downstream
  data rate | Upstream data
  rate | Comments                                   
|------------------ | ---------------------- | -------------------- | -------------------------------------------
|A                  | 64 Kb/s                | 64 Kb/s              | Symmetrical
  rate,
  corresponding to ISDN
|B (1/2)            | 128 Kb/s               | 64/128 Kb/s          | Corresponding
  to double
  ISDN           
|C                  | 150 Kb/s               | 64 Kb/s              | Subdivision
  based on
  upstream rate     
|D (1/2)            | 256 Kb/s               | 64/128 Kb/s          | Subdivision
  based on
  upstream rate     
|E (1/2/3)          | 500 Kb/s               | 64/128/256
  Kb/s    | Subdivision
  based on
  upstream rate     
|F (1/2/3)          | 750 Kb/s               | 64/128/256
  Kb/s    | Subdivision
  based on
  upstream rate     
|G (1/2)            | 1000 Kb/s              | 128/256 Kb/s         | Subdivision
  based on
  upstream rate     
|H (1/2)            | 1500 Kb/s              | 128/256 Kb/s         | Subdivision
  based on
  upstream rate     
|I (1/2/3)          | 2000 Kb/s              | 128/256/500
  Kb/s   | Subdivision
  based on
  upstream rate     
|J (1/2/3)          | 2500 Kb/s              | 128/256/500
  Kb/s   | Subdivision
  based on
  upstream rate     

116

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| | Comments:                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
  characters A  J are used solely for the purpose of demonstration. The class
  of service shall be ranked and marked with appropriate names. The Licensee
  shall be entitled to offer an additional class of service, provided that it
  notifies the Director to that effect at least 30 days before operating the
  additional class of service.

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Appendix E  Class of
Services for the Subscriber

|1. | Subscriber billing
|-- | ------------------
|   |                   
|   | a.                
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   | b.                
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   
|   | c.                
|   |                   
|   |                   
|   |                   
|   |                   
|   |                   

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|   |                    | (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | At the subscribers request, the Licensee shall produce a bill
  containing details of calls, and it shall be entitled to make a reasonable
  charge for doing so.                                                                                                                                                 
|-- | ------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                    
|   | d.                 | Reliability control of billing                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                    | The Licensee
  shall implement ongoing control, by means of the customer billing system, of
  the accuracy of the bills and any problem that arises upon examination shall
  be handled and rectified immediately. In the event of a malfunction in
  issuing the bills, the data shall be restored to its previous situation, to
  the state preceding issuance of the bills in the computer system. After
  locating and rectifying the malfunction, the bills shall be re-issued.
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                    
|2. | Quality of service
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                    
|   | a.                 | Installation, relocation, and service termination times                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                    
|   |                    | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | No later
  than 12 months from the date of receipt of the License, service to the
  subscriber shall be installed or relocated within 14 days from receipt of the
  request for 80% of the requests. In any case, the time for installation shall
  not exceed 90 days from submission of the request.             
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | That stated
  shall apply to every town that is connected, in whole or in part, to the
  network at the time of receipt of the request.                                                                                                                                                                            
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | With regard
  to towns in areas that have not yet been connected to the network, the times
  set forth in Appendix B, section 2, shall apply.                                                                                                                                                                      
|   |                    | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | The service
  in the subscribers premises shall not be provided before 7:00 a.m. and no
  later than 10:00 p.m., and no later than 3:00 p.m. on Fridays and the eve of
  holidays. The subscribers waiting time for a technicians visit on the date
  arranged with the subscriber shall not exceed three hours.
|   |                    | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | The balance
  of usage rights and the balance of the deposit amount for end equipment shall
  be returned to a subscriber who requests termination or disconnection of
  service within 30 days from the date of the request.                                                                                      
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                    
|   | b.                 | Repair times                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                    
|   |                    | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Malfunctions
  regarding which notification has been received by telephone at the call
  center or the service center shall be repaired no later than 4 working days
  from the date of receipt of notification.                                                                                                   
|   |                    | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 80% of the
  malfunctions shall be repaired on the same working day on which notification
  was received.                                                                                                                                                                                                          
|   |                    | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | The repairs
  call center shall be available every day of the week other than days of rest,
  as defined in the Administration of Rule and Justice Ordinance, 5708  194830                                                                                                                                        

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| | c. | Providing information and responses to oral and written inquiries and
  clarifications
| | -- | --------------------------------------------------------------------------------------
| |    |                                                                                       
| |    | (1)                                                                                   
| |    | (2)                                                                                   
| |    | (3)                                                                                   
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    | (4)                                                                                   
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    | (5)                                                                                   
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| | d. | Handling public inquiries and complaints                                              
| |    |                                                                                       
| |    | (1)                                                                                   
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       
| |    |                                                                                       

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| |     |                                        | Solving the
  problem                                                                                                                                                                                                                                                                                                                                                        
| | --- | --------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                        | Providing a
  response to the service recipient                                                                                                                                                                                                                                                                                                                              
| | (2) | Indices for
  handling public inquiries
| |     | (a)                                     | Level of
  handling of a complaint                                                                                                                                                                                                                                                                                                                                           
| |     |                                         | The response
  time for complaints shall be up to 14 working days, with responses given to
  5% of the inquiries within one month.                                                                                                                                                                                                                                           
| |     | (b)                                     | Indices for
  quality of the service                                                                                                                                                                                                                                                                                                                                         
| |     |                                         |                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                         |                                                                                                                                                                                                                                                                                                                                                                             
| |     | (c)                                     | Inquiries
  that shall be clarified by the senior levels                                                                                                                                                                                                                                                                                                                     
| |     |                                         | In any case
  in which the response of the supervisor in charge of handling public
  inquiries does not satisfy the inquirer, the inquiry shall be transferred to
  the managerial level, which shall re-examine the inquiry and respond directly
  to the inquirer. In any case, a response shall be given to the inquirer or
  within 30 days from the date of his inquiry.

|   |                                                                                   |                                                                                                                                                                                                                          |                                                                                                                                                                          | 
|-- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|3. | Indices for quality of service given to a general licensee for cable
  broadcasts
|   |                                                                                   |                                                                                                                                                                                                                          |                                                                                                                                                                          | 
|   | a.                                                                                | Definition:                                                                                                                                                                                                             
|   |                                                                                   | Effective  Malfunction                                                                                                                                                                                                | A
  malfunction with a direct and immediate effect on the viewing quality of a
  single subscriber or group of subscribers of a general licensee for cable
  broadcasts.
|   |                                                                                   |                                                                                                                                                                                                                         
|   | b.                                                                                | Levels of
  severity of effective malfunctions and time of repairing the malfunctions:                                                                                                                                  
|   |                                                                                   | The table of
  levels of severity of effective malfunctions defines the types of
  malfunctions quantitatively according to number of households affected
  thereby, and the maximum time for repairing the malfunction.
|   |                                                                                   |                                                                                                                                                                                                                          |                                                                                                                                                                          | 

|Type of malfunction | Number of affected
  households | Maximum time for
  repairing the
  malfunction
|------------------- | ------------------------------- | ----------------------------------------------
|A                   | 1  20                          | 24 hours                                      
|B                   | 21  100                        | 12 hours                                      
|C                   | 250  101                       | 8 hours                                       
|D                   | 251 and over                    | 5 hours                                       

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|4. | End to end performance:                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Telephony service -the grade of service shall be and
  customary in static telephony networks.                                                                                                                                                                                                                                                                                                                                               
|   | Internet service - Internet services to be
  provided on a best effort basis, with definition of the peak information
  rate in the upstream and downstream channels.                                                                                                                                                                                                                                                                      
|   | Data service - data services shall be provided at a
  variety of levels of end-to-end performance, including on a best effort 
  basis.                                                                                                                                                                                                                                                                                                    
|   | Transmission service - transmission services
  shall be provided at an error rate better than 106.                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | Response times                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Telephony service - the time to establish the connection
  shall be no more than six seconds The delay in the network shall be no
  greater than 150 milliseconds per call starting and ending within the
  network, 18 msec for a call starting or ending in mutual connectivity to
  another public telecommunications network.Internet service - there
  is no defined obligation since the services is given on a best effort 
  basis.
|   | Data service - according to class of service and
  service level agreement (SLA) with the customer.                                                                                                                                                                                                                                                                                                                                          
|   | Transmission service - there is no
  significant to this parameter.                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | Reliability and availability                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The
  Licensees services shall be given at a level of reliability and
  availability:                                                                                                                                                                                                                                                                                                                                                       
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | c.                                                                                                                                                                                                                                                                                                                                                                                                                                           

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Appendix F  Rules of
access to international
telecommunications services31

|1. | Definitions                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | In this
  appendix, the words and expressions below shall have the meaning appearing
  alongside them, unless another meaning can be deduced from the written
  language or context:
|   |                                                                                                                                                                                     
|   | Affiliated
  subscriber                                                                                                                                                           
|   |                                                                                                                                                                                     
|   | Chance
  caller                                                                                                                                                                   
|   |                                                                                                                                                                                     
|   | Selected
  operator                                                                                                                                                               
|   |                                                                                                                                                                                     
|   | Short
  dialing code                                                                                                                                                              
|   |                                                                                                                                                                                     
|   | Subscriber
  affiliation                                                                                                                                                          
|   |                                                                                                                                                                                     
|   | Outgoing IO
  call                                                                                                                                                                
|   |                                                                                                                                                                                     
|   | Incoming IO
  call                                                                                                                                                                
|   |                                                                                                                                                                                     
|   | IO service                                                                                                                                                                        

---

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|2.                                                                                                                                                                                                                                                                                       | Access to the IO service                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1                                                                                                                                                                                                                                                                                      | The Licensee
  shall provide the subscriber with access to the IO service of an
  international operator by means of these access codes:                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                         | (a)     A
  three-digit (or four-digit) access code for direct dialing;                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                         | (b)     A
  four-digit (or five-digit) access code for dialing various services of the
  international operator.                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2.2                                                                                                                                                                                                                                                                                      | An
  affiliated subscriber who has chosen a selected operator by the process
  described in this Appendix shall be able to obtain IO service through the
  international system of the selected operator, both by means of the short
  dialing code and by means of dialing an access code.                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2.3                                                                                                                                                                                                                                                                                      | Should the
  Licensee enable its subscribers to use another short dialing prefix (such as
  +) instead of the prefix 00 (hereinafter: Special Prefix), all the
  provisions and rules applying to the short dialing prefix 00 shall apply to
  the special prefix.                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3.                                                                                                                                                                                                                                                                                       | Subscriber access to outgoing IO calls:                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3.1                                                                                                                                                                                                                                                                                      | The Licensee
  shall enable the subscriber to act as one of these, with regard to outgoing
  IO calls, as detailed below:                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                         | (a)     As
  an affiliated subscriber;                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                         | (b)     As
  a blocked subscriber;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                         | (c)     As
  a chance caller only.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4.                                                                                                                                                                                                                                                                                       | Blocking outgoing international calls and removing the block                                                                                                                                                                                                                                                                                                                                                                                                                               
|4.1                                                                                                                                                                                                                                                                                      | The Licensee
  shall block outgoing IO calls, and shall be entitled also to block incoming
  IO collect calls for any subscriber requesting that access to international
  services be blocked or to a subscriber whose international service for
  outgoing IO calls has been suspended or disconnected, pursuant to the rules
  laid down in the regulations under the Law and in the License; the Licensee
  shall not be entitled to block incoming IO calls, other than collect calls.
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4.2                                                                                                                                                                                                                                                                                      | Should
  outgoing IO calls be blocked at the subscribers request, the Licensee shall
  remove the block as detailed below:                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(a)     If
  the subscriber wishes to become affiliated, he shall note the international
  operator he has chosen as his selected operator by signing the appropriate
  form; notification given by fax shall be seen in this respect as written
  notification given by the subscriber.
|                                                                                                                                                                                                                                                                                        
|(b)     If
  the subscriber wishes to be a chance caller he shall inform the Licensee of
  this; should notification be given verbally the Licensee shall verify the
  applicants identity.                                                                                            

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|4.3                                                                                                                                                               | The Licensee
  shall block or unblock IO calls at the subscribers request in accordance
  with the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                 
|(a)     70%
  - within 1 working day of receipt of notification; requests received after
  15:00 shall be seen as having been received the following working day;
|(b)     20%
  - within two working days of receipt of notification;                                                                                              
|(c)     the
  remainder - within four working days.                                                                                                              
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.4                                                                                                                                                               | The Licensee
  shall verify that a subscriber whose outgoing IO calls have been blocked is
  not able to make outgoing calls using the dialing codes 00. 01X, 188
  and 18XY, or any codes replacing them.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.5                                                                                                                                                               | The Licensee
  shall be entitled to charge a reasonable fee for blocking or unblocking
  outgoing IO calls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.6                                                                                                                                                               | Notwithstanding
  that stated in section 4.5, the Licensee shall enable all its new
  subscribers, without charge, to block outgoing IO calls prior to operating
  its services for the subscriber.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.7                                                                                                                                                               | The Licensee
  shall verify that every subscriber whose access to outgoing IO calls has been
  blocked shall receive an appropriate tone on dialing the dialing preface or
  access code to international services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.8                                                                                                                                                               | Should a
  subscriber who has chosen a selected operator request that outgoing IO calls
  be blocked, the Licensee shall so inform the selected operator within seven
  (7) working days of the date of blocking the calls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5.                                                                                                                                                                | Choice of a selected operator by the subscriber                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5.1                                                                                                                                                               | A subscriber
  shall be entitled to inform an international operator in writing, by a signed
  form authorized by the Director, of its choice as the selected operator
  through which he wishes to receive international telecommunications services
  using the short dialing codes 00 and 188; the form shall include details
  of the subscriber - first and last names or name of corporation, identity
  number or corporation identification number, address and telephone numbers
  for which the subscriber wishes to choose the international operator as
  selected operator, and the date and time at which the subscribers
  instruction was received; the form shall clarify that only one selected
  operator may be chosen for each telephone number and shall conform with the
  requirements set forth in this respect in the license of the international
  operator (hereinafter: the Affiliation Form).
|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5.2                                                                                                                                                               | A subscriber
  shall be entitled at any time to change his selected operator by written notification
  on an affiliation form; the subscriber shall not be required to make any
  payment for his first requested affiliation, however for any change in
  affiliation the Licensee shall be entitled to charge the subscriber a
  reasonable fee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|5.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | The selected
  operator shall send the Licensee notification regarding the fact that it has
  been chosen by the subscriber as selected operator (hereinafter: Notice of
  Affiliation); notice of affiliation shall include the subscribers details -
  first and last names or name of corporation, address and telephone numbers
  for which the subscriber wishes to choose the international operator as
  selected operator, and the date and time noted on the affiliation form signed
  by the subscriber; the selected operator shall give notices of affiliation to
  the License pursuant to the signed affiliation forms in its possession;
  notices of affiliation shall be given in the form of magnetic media files or
  in another form agreed between the Licensee and the international operators; should
  the Licensee be given two or more notices of affiliation relating to the same
  telephone number, the Licensee shall act pursuant to the notice of
  affiliation marked with the later date and time.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|5.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Should a
  person submit an application to become a subscriber to a telephony service of
  the Licensee, he shall be required to note in his application the
  international operator with whom he wishes to engage as selected operator, by
  means of an affiliation form; the Licensee shall give the selected operator
  the details of the affiliated subscriber as given in the affiliation form in
  the framework of the changes file as referred to in section 5.5 (d); the
  Licensee shall enable all its new subscribers to choose a selected operator,
  or to block outgoing IO calls, or enable the subscriber to receive IO
  services as a chance caller only.                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|5.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | For the
  purpose of implementing the process of determining a selected operator, and
  without derogating from that stated about, the Licensee shall act as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(a)     The
  Licensee shall enable all subscribers who have subscriber lines, other than
  lines in a PCM group, lines relating to a tour group and ISDN lines with more
  than one number per line, to determine a particular selected operator for
  certain subscriber lines and a different selected operator for the
  subscribers other lines.                                                                                                                                                                                                                                                                                                                                  
|(b)     The
  Licensee shall implement subscriber affiliation within one working day of
  receiving notice of affiliation from the selected operator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(c)     The
  Licensee shall report to the international operator on completion of
  affiliation of subscribers, including changes in affiliation, at the time and
  in the format agreed between the Licensee and the international operator;
  this report shall include details of the subscriber - first and last names or
  name of corporation, address and telephone numbers affiliated to the
  international operator.                                                                                                                                                                                                                                                         
|(d)     Every
  day the Licensee shall give each international operator a daily file of
  changes in subscriber affiliation (hereinafter: the Changes File)
  containing the details of the subscribers who have been affiliated to or
  taken away from the international operator that day.  The changes file shall be given at the
  time and in the format agreed between the Licensee and the international
  operator.  The files shall include the
  details of the subscriber, and at least these: first and last names or
  corporation name, identity number or corporation identification number,
  address and telephone numbers affiliated to the international operator.
|(e)     The
  Licensee shall be entitled to apply to the Director to permit it, in certain
  cases, to determine rules and restrictions with regard to the subscriber affiliation;
  the Licensee shall detail the reasons, technical or operational, underlying
  its request; should the Director, at his professional discretion, consent to
  the Licensees request as stated, the Director shall determine the period of
  time for which the rule or restriction shall be valid.                                                                                                                                                                                                 
|(f)     The
  Licensee shall give the Director a quarterly report, in writing, by the 15th
  of the month following the end of the quarter; the information in the report
  shall be correct as of the last day of the calendar quarter prior to the date
  of the report and shall include the following:                                                                                                                                                                                                                                                                                                                                                                              

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| | (1) | The number
  of subscribers for whom international telecommunications services are
  blocked;                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                             
| | (2) | The number
  of subscribers connected to international services by means of a short
  dialing code or by means of a special code, for each of the international
  operators;
| |     |                                                                                                                                                                             
| | (3) | The number
  of subscribers connected to international services as chance callers only.                                                                                     

|(g)     Should
  there be differences of opinion between international operators or between
  the Licensee and an international operator with regard to the choice of a
  selected operator by the subscriber, the matter shall be subject to the
  decision of the Director or an independent arbitrator appointed by the
  Director at his sole discretion.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                             
|6.                                                                                                                                                                                                                                                                                                                                                           
|6.1                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                             
|6.2                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                             
|6.3                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                             
|(a)     Affiliation
  to a selected operator - what is the process and how to apply for an
  affiliation form;                                                                                                                                                                                                                                               
|(b)     How
  to dial an overseas number when the subscribers short access code is
  blocked;                                                                                                                                                                                                                                                               
|(c)     Options
  for blocking and unblocking overseas dialing;                                                                                                                                                                                                                                                                                              
|(d)     Where
  to apply for clarification of additional issues - telephone numbers of the
  service centers of the international operators.                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                             
|7.                                                                                                                                                                                                                                                                                                                                                           
|7.1                                                                                                                                                                                                                                                                                                                                                          

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|7.2 | The
  technical, operational and commercial arrangements between the Licensee and
  any international operator shall enable all subscribers to receive the
  following:                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                               
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                               
|7.3 | For the
  purpose of implementing that stated in this Appendix, the Licensee shall do, inter alia, the following:                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                               
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (f)                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                               
|7.4 | The rate of
  payments of the international operators in respect of implementation of
  mutual connectivity, as stated, shall be determined in negotiation between
  the Licensee and the international operators; should the parties not reach an
  agreement, the Minister shall set forth instructions in these matters, after
  giving the parties suitable opportunity to present their arguments to him.

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