Document:

EX-10.1

 

EXHIBIT 10.1

US$350,000,000 Term and Revolving Facilities Agreement

Dated 6 March 2006

Cellcom Israel Ltd.

(the Borrower)

arranged by

Citibank, N.A.

(the Mandated Lead Arranger)

and

Citibank International plc

(as Agent)

1

 

Contents

	 	 	 	 	 
	Section 1 - Interpretation
	 	 	5	 
	 
	 	 	 	 
	1 Definitions and interpretation
	 	 	5	 
	 
	 	 	 	 
	Section 2 - The Facilities
	 	 	17	 
	 
	 	 	 	 
	2 The Facilities
	 	 	17	 
	 
	 	 	 	 
	3 Purpose
	 	 	17	 
	 
	 	 	 	 
	4 Conditions of Utilisation
	 	 	17	 
	 
	 	 	 	 
	Section 3 - Utilisation
	 	 	19	 
	 
	 	 	 	 
	5 Utilisation
	 	 	19	 
	 
	 	 	 	 
	Section 4 - Repayment, prepayment and cancellation
	 	 	21	 
	 
	 	 	 	 
	6 Repayment
	 	 	21	 
	 
	 	 	 	 
	7 Prepayment and cancellation
	 	 	21	 
	 
	 	 	 	 
	Section 5 - Costs of Utilisation
	 	 	24	 
	 
	 	 	 	 
	8 Interest
	 	 	24	 
	 
	 	 	 	 
	9 Interest Periods
	 	 	26	 
	 
	 	 	 	 
	10 Changes to the calculation of Interest
	 	 	27	 
	 
	 	 	 	 
	11 Fees
	 	 	28	 
	 
	 	 	 	 
	Section 6 - Additional payment obligations
	 	 	30	 
	 
	 	 	 	 
	12 Tax gross up and indemnities
	 	 	30	 
	 
	 	 	 	 
	13 Increased costs
	 	 	32	 
	 
	 	 	 	 
	14 Other indemnities
	 	 	33	 
	 
	 	 	 	 
	15 Mitigation by the Lenders
	 	 	34	 
	 
	 	 	 	 
	16 Costs and expenses
	 	 	35	 
	 
	 	 	 	 
	Section 7 - Representations, undertakings and Events of Default
	 	 	36	 
	 
	 	 	 	 
	17 Representations
	 	 	36	 

2

 

	 	 	 	 	 
	18 Information undertakings
	 	 	39	 
	 
	 	 	 	 
	19 Financial covenants
	 	 	43	 
	 
	 	 	 	 
	20 General undertakings
	 	 	46	 
	 
	 	 	 	 
	21 Events of Default
	 	 	52	 
	 
	 	 	 	 
	Section 8 - Changes to Parties
	 	 	58	 
	 
	 	 	 	 
	22 Changes to the Lenders
	 	 	58	 
	 
	 	 	 	 
	23 Assignments and transfer by the Borrower
	 	 	62	 
	 
	 	 	 	 
	Section 9 - The Finance Parties
	 	 	63	 
	 
	 	 	 	 
	24 Role of the Agent and the Mandated Lead Arranger
	 	 	63	 
	 
	 	 	 	 
	25 Conduct of business by the Finance Parties
	 	 	68	 
	 
	 	 	 	 
	26 Sharing among the Finance Parties
	 	 	68	 
	 
	 	 	 	 
	Section 10 - Administration
	 	 	71	 
	 
	 	 	 	 
	27 Payment mechanics
	 	 	71	 
	 
	 	 	 	 
	28 Set-off
	 	 	74	 
	 
	 	 	 	 
	29 Notices
	 	 	74	 
	 
	 	 	 	 
	30 Calculations and certificates
	 	 	76	 
	 
	 	 	 	 
	31 Partial Invalidity
	 	 	77	 
	 
	 	 	 	 
	32 Remedies and waivers
	 	 	77	 
	 
	 	 	 	 
	33 Amendments and waivers
	 	 	77	 
	 
	 	 	 	 
	34 Counterparts
	 	 	78	 
	 
	 	 	 	 
	Section 11 - Governing law and enforcement
	 	 	79	 
	 
	 	 	 	 
	35 Governing law
	 	 	79	 
	 
	 	 	 	 
	36 Enforcement
	 	 	79	 
	 
	 	 	 	 
	Schedule 1 - The Original Lenders
	 	 	80	 
	 
	 	 	 	 
	Schedule 2 - Conditions precedent
	 	 	81	 

3

 

	 	 	 	 	 
	Schedule 3 - Requests
	 	 	83	 
	 
	 	 	 	 
	Schedule 4 - Mandatory Cost formulae
	 	 	85	 
	 
	 	 	 	 
	Schedule 5 – Form of Transfer Certificate
	 	 	88	 
	 
	 	 	 	 
	Schedule 6 - Form of Compliance Certificate
	 	 	90	 
	 
	 	 	 	 
	Schedule 7 - LMA Form of Confidentiality Undertaking
	 	 	91	 
	 
	 	 	 	 
	Schedule 8 - Timetables
	 	 	96	 

4

 

Agreement

Dated 6 March 2006

Between

	(1)	 	Cellcom Israel Ltd. (the Borrower);
	 
	(2)	 	Citibank, N.A. as mandated lead arranger (the Mandated Lead Arranger);
	 
	(3)	 	The Financial Institutions listed in Schedule 1 as lenders (the Original Lenders); and
	 
	(4)	 	Citibank International plc as agent of the other Finance Parties (the Agent).

It is agreed as follows

Section 1 — Interpretation

	1	 	Definitions and interpretation
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement:
	 
	 	 	Additional Cost Rate has the meaning given to it in Schedule 4 (Mandatory Cost formulae).
	 
	 	 	Affiliate means, in relation to any person, a Subsidiary of that person or a Holding
Company of that person or any other Subsidiary of that Holding Company.
	 
	 	 	Agent’s Spot Rate of Exchange means:

	 	(a)	 	prior to the Transfer Date on which Syndication takes place, the rate
agreed between the Borrower, the Agent and the NIS Lenders; and
	 
	 	(b)	 	at any other time, such rate to be agreed between the Borrower and the
Agent,

	 	 	in each case for the purchase of NIS with Dollars or Dollars with NIS on a particular day.
	 
	 	 	Authorisation means an authorisation, consent, approval, resolution, licence, exemption,
filing, notarisation or registration.
	 
	 	 	Availability Period means:

	 	(a)	 	in relation to Facility A, the period commencing on the date of this
Agreement to and including the date falling one Month thereafter; and

5

 

	 	(b)	 	in relation to Facility B, the period commencing on the date of this
Agreement to and including the date falling one Month prior to the Final Repayment
Date.

	 	 	Available Commitment means, in relation to a Facility, a Lender’s Commitment under that
Facility minus:

	 	(a)	 	the amount of its participation in any outstanding Loans under that
Facility; and
	 
	 	(b)	 	in relation to any proposed Utilisation, the amount of its participation in
any Loans that are due to be made under that Facility on or before the proposed
Utilisation Date, other than, in relation to any proposed Utilisation under Facility
B only, that Lender’s participation in any Facility B Loans that are due to be repaid
or prepaid on or before the proposed Utilisation Date.

	 	 	Available Facility means, in relation to a Facility, the aggregate for the time being of
each Lender’s Available Commitment in respect of that Facility.
	 
	 	 	Break Costs means the amount (if any) by which:

	 	(a)	 	the interest which a Lender should have received for the period from the
date of receipt of all or any part of its participation in a Loan or Unpaid Sum to
the last day of the current Interest Period in respect of that Loan or Unpaid Sum,
had the principal amount or Unpaid Sum received been paid on the last day of that
Interest Period;

	 	 	exceeds:

	 	(b)	 	the amount which that Lender would be able to obtain by placing an amount
equal to the principal amount or Unpaid Sum received by it on deposit with a leading
bank in the Relevant Interbank Market for a period starting on the Business Day
following receipt or recovery and ending on the last day of the current Interest
Period.

	 	 	Business Day means a day (other than a Saturday or Sunday) on which banks are open for
general business in London, Tel Aviv and New York.
	 
	 	 	Change means, in relation to a Lender (or any company of which the Lender is a
Subsidiary), the introduction, implementation, repeal, withdrawal or change in, or in the
interpretation, administration or application of, (a) any law, regulation, practice or
concession, or (b) any directive, requirement, request or guidance (whether or not having
the force of law but if not having the force of law, one which applies generally to a
class or category of financial institutions of which the Lender (or that company) forms
part and compliance with which is In accordance with the general practice of those
financial institutions) of the European Community, any central bank including the European
Central Bank, the Financial Services Authority in the United Kingdom, the Bank of Israel,
the Supervisor of Banks in Israel or any other fiscal, monetary, regulatory or other
authority.
	 
	 	 	Commitment means a Facility A Commitment or Facility B Commitment.

6

 

	 	 	Compliance Certificate means a certificate substantially in the form set out in Schedule 6
(Form of Compliance Certificate).
	 
	 	 	Confidentiality Undertaking means a confidentiality undertaking substantially in a
recommended form of the LMA as set out in Schedule 7 (LMA Form of Confidentiality
Undertaking) or in any other form agreed between the Borrower and the Agent.
	 
	 	 	Dangerous Materials means any element or substance (in any form) which is subject to
regulatory control as being hazardous or dangerous or which is capable of causing harm or
damage to the Environment.
	 
	 	 	Default means an Event of Default or any event or circumstance specified in Clause 21
(Events of Default) which would (with the expiry of a grace period, the giving of notice,
the making of any determination under the Finance Documents or any combination of any of
the foregoing) be an Event of Default.
	 
	 	 	Disruption Event means either or both of:

	 	(a)	 	a material disruption to those payment or communications systems or to
those financial markets which are, in each case, required to operate in order for
payments to be made in connection with the Facilities (or otherwise in order for the
transactions contemplated by the Finance Documents to be carried out) which
disruption is not caused by, and is beyond the control of, any of the Parties; or
	 
	 	(b)	 	the occurrence of any other event which results in a disruption (of a
technical or systems-related nature) to the treasury or payments operations of a
Party preventing that, or any other Party:

	 	(i)	 	from performing its payment obligations under the Finance
Documents; or
	 
	 	(ii)	 	from communicating with other Parties in accordance with
the terms of the Finance Documents,

	 	 	 	and which (in either such case) is not caused by, and is beyond the control of,
the Party whose operations are disrupted.

	 	 	Environment means ecological systems, living organisms (including human beings) and all or
any of the following media (whether alone or in combination): air (including air within
buildings or other structures and whether above or below ground); land (including
buildings and any other structures or erections in, on or under it or any soil and
anything below the surface of the land); land covered with water; and water (including
water under or within land or in pipe or sewerage systems and sea, ground and surface
water).
	 
	 	 	Environmental Law means all applicable laws and regulations in force at any time relating
to Environmental Matters or the Environment.
	 
	 	 	Environmental Matters means all or any of:

	 	(a)	 	waste;

7

 

	 	(b)	 	contaminated land;
	 
	 	(c)	 	discharges to land, ground, surface and coastal waters and sewers;
	 
	 	(d)	 	the abstraction of water;
	 
	 	(e)	 	the extraction of natural resources;
	 
	 	(f)	 	emissions to air;
	 
	 	(g)	 	noise, vibration and light;
	 
	 	(h)	 	Dangerous Materials;
	 
	 	(i)	 	common law and nuisance, trespass and negligence;
	 
	 	(j)	 	statutory nuisance;
	 
	 	(k)	 	radiation, radioactive substances and materials; and
	 
	 	(l)	 	the conservation or protection of species, habitats, biodiversity, flora
and fauna.

	 	 	Event of Default means any event or circumstance specified as such in Clause 21 (Events of
Default).
	 
	 	 	Facility means Facility A or Facility B.
	 
	 	 	Facility A means the term loan facility made available under this Agreement as described
in Clause 2 (The Facilities).
	 
	 	 	Facility A Commitment means:

	 	(a)	 	in relation to an Original Lender, the amount set opposite its name under
the heading “Facility A Commitment” in Schedule 1 (The Original Lenders) and the
amount of any other Facility A Commitment transferred to it under this Agreement; and
	 
	 	(b)	 	in relation to any other Lender, the amount of any Facility A Commitment
transferred to it under this Agreement,

	 	 	to the extent not cancelled, reduced or transferred by it under this Agreement.
	 
	 	 	Facility A Loan means a loan made or to be made under Facility A or the principal amount
outstanding for the time being of that loan.
	 
	 	 	Facility B means the revolving loan facility made available under this Agreement as
described in Clause 2 (The Facilities).
	 
	 	 	Facility B Commitment means:

8

 

	 	(a)	 	in relation to an Original Lender, the amount set opposite its name under
the heading “Facility B Commitment” in Schedule 1 (The Original Lenders) and the
amount of any other Facility B Commitment transferred to it under this Agreement; and
	 
	 	(b)	 	in relation to any other Lender, the amount of any Facility B Commitment
transferred to it under this Agreement,

	 	 	to the extent not cancelled, reduced or transferred by it under this Agreement.
	 
	 	 	Facility B Loan means a loan made or to be made under Facility B or the principal amount
outstanding for the time being of that loan.
	 
	 	 	Facility Office means the office or offices notified by a Lender to the Agent in writing
on or before the date it becomes a Lender (or, following that date, by not less than five
Business Days’ written notice) as the office or offices through which it will perform its
obligations under this Agreement.
	 
	 	 	Fee Letter means any letter or letters dated on or about the date of this Agreement
between the Mandated Lead Arranger and the Borrower (or the Agent and the Borrower)
setting out any of the fees referred to in Clause 11 (Fees).
	 
	 	 	Final Repayment Date means the 22nd December 2010.
	 
	 	 	Finance Document means this Agreement, any Fee Letter, the Mandate Letter, any Transfer
Certificate, any Hedging Agreement and any other document designated as such by the Agent
and the Borrower.
	 
	 	 	Finance Party means the Agent, the Mandated Lead Arranger or a Lender.
	 
	 	 	Financial Indebtedness means, in relation to a person, its obligation (whether present or
future, actual or contingent, as principal or surety) for the payment or repayment of
money (whether in respect of interest, principal or otherwise) incurred in respect of:

	 	(a)	 	moneys borrowed or raised;
	 
	 	(b)	 	any bond, note, loan stock, debenture or similar instrument;
	 
	 	(c)	 	any acceptance credit, bill discounting, note purchase, factoring or
documentary credit facility;
	 
	 	(d)	 	the supply of any goods or services which is more than 90 days past the due
date;
	 
	 	(e)	 	any hire purchase agreement, conditional sale agreement or lease, where
that agreement has been entered into primarily as a method of raising finance or
financing the acquisition of an asset;
	 
	 	(f)	 	any guarantee, bond, stand-by letter of credit or other similar instrument
issued in connection with the performance of contracts;

9

 

	 	(g)	 	any interest rate or currency swap agreement or any other hedging or
derivatives instrument or agreement;
	 
	 	(h)	 	any arrangement pursuant to which any asset sold or otherwise disposed of
by that person is or may be leased to or re-acquired by a member of the Group
(whether following the exercise of an option or otherwise);
	 
	 	(i)	 	any guarantee, indemnity or similar insurance against financial loss given
in respect of the obligation of any person;
	 
	 	(j)	 	all obligations to purchase, redeem, retire, defease or otherwise acquire
for value any share capital of any person or any warrants, rights or options to
acquire such share capital in respect of transactions which have the commercial
effect of borrowing or which otherwise finance its or any of its Subsidiaries’
operations or capital requirements; or
	 
	 	(k)	 	any other transactions having the commercial effect of borrowing entered
into by any person to finance its operations or capital requirements.

	 	 	GAAP means generally accepted accounting principles in Israel.
	 
	 	 	Group means the Borrower and its Subsidiaries.
	 
	 	 	Hedging Agreement means any foreign exchange and interest rate hedging agreement entered
into by the Borrower with any of Bank Leumi, Bank Hapoalim B.M., Israel Discount Bank
Ltd., First International Bank of Israel or United Mizrahi Bank Ltd. or any bank or
financial institution rated A or better by Standard and Poor’s after the date of this
Agreement pursuant to which not less than 66 per cent. of any amounts in Dollars
outstanding at any time under this Agreement are hedged.
	 
	 	 	Holding Company means, in relation to a company or corporation, any other company or
corporation in respect of which it is a Subsidiary.
	 
	 	 	Information Memorandum means the document in the form approved by the Borrower concerning
the Group which, at the Borrower’s request and on its behalf, is being prepared in
relation to this transaction and will be distributed by the Mandated Lead Arranger to
selected financial institutions.
	 
	 	 	Interest Period means, in relation to a Loan, each period determined in accordance with
Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in
accordance with Clause 8.3 (Default interest).
	 
	 	 	Law means the Planning and Building Law, 1965 of Israel (as amended from time to time).
	 
	 	 	Lender means:

	 	(a)	 	any Original Lender; and
	 
	 	(b)	 	any bank, financial institution, trust, fund or other entity which has
become a Party in accordance with Clause 22 (Changes to the Lenders),

10

 

	 	 	which in each case has not ceased to be a Party in accordance with the terms of this
Agreement.
	 
	 	 	Lending Rate means the lending rate of each NIS Lender as supplied to the Agent and agreed
with the Borrower prior to such NIS Lender becoming a Party, such rate in any event not to
exceed TELBOR plus 0.30 per cent. per annum.
	 
	 	 	LIBOR means, in relation to any Loan (other than an NIS Loan):

	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for Dollars for the Interest Period of that
Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Agent at its request quoted by the Reference Banks to leading banks
in the London interbank market,

	 	 	as of the Specified Time on the Quotation Day for the offering of deposits in Dollars and
for a period comparable to the Interest Period for that Loan.
	 
	 	 	Loan means a Facility A Loan or a Facility B Loan (including, for the avoidance of doubt,
each NIS Loan).
	 
	 	 	LMA means the Loan Market Association.
	 
	 	 	Majority Lenders means:

	 	(a)	 	if there are no Loans then outstanding, a Lender or Lenders whose
Commitments aggregated more than 66 2/3 % of the Total Commitments
(or, if the Total Commitments have been reduced to zero, aggregate more than
66 2/3 % of the Total Commitments immediately prior to the
reduction); or
	 
	 	(b)	 	at any other time, a Lender or Lenders whose participations in the Loans
then outstanding aggregate more than 66 2/3 % of all the Loans then
outstanding. For this purpose the amount of any NIS Loan shall be its Original Dollar
Amount.

	 	 	Mandate Letter means the mandate letter dated 13 December 2005 pursuant to which the
Borrower appointed the Mandated Lead Arranger to arrange the Facilities.
	 
	 	 	Mandatory Cost means the percentage rate per annum calculated by the Agent in accordance
with Schedule 4 (Mandatory Cost formula).
	 
	 	 	Margin means, subject to Clause 8.4 (Margin Adjustment), 1.05 per cent. per annum.
	 
	 	 	Material Adverse Effect means a material adverse effect on:

	 	(a)	 	the business, condition (financial or otherwise), operations or prospects
of Borrower and/or the Group; or

11

 

	 	(b)	 	the ability of the Borrower to comply with any of its obligations under the
Finance Documents; or
	 
	 	(c)	 	the validity or enforceability of any Finance Document or the rights or
remedies of any Finance Party thereunder.

	 	 	Material Subsidiary means any Subsidiary whose total revenues or total assets (as the case
may be) represent 5 per cent. or more of the total revenues or total assets of the Group
(as ascertained from the most recent financial statements delivered to the Agent pursuant
to Clause 18.1 (Financial statements)).
	 
	 	 	Month means a period starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, except that:

	 	(a)	 	(subject to paragraph (c) below) if the numerically corresponding day is not
a Business Day, that period shall end on the next Business Day in that calendar month
in which that period is to end if there is one, or if there is not, on the immediately
preceding Business Day;
	 
	 	(b)	 	if there is no numerically corresponding day in the calendar month in which
that period is to end, that period shall end on the last Business Day in that calendar
month; and
	 
	 	(c)	 	if an Interest Period begins on the last Business Day of a calendar month,
that Interest Period shall end on the last Business Day in the calendar month in which
that Interest Period is to end.

	 	 	The above rules will only apply to the last Month of any period.
	 
	 	 	NIS Lender means any bank, financial institution, trust, fund or other entity which has
become a Party in accordance with Clause 22 (Changes to the Lenders) and which has
notified the Agent prior to the date on which it becomes a Party hereunder that it agreed
to make available its participation hereunder in NIS and which has not ceased to be a
Party in accordance with the terms of this Agreement.
	 
	 	 	NIS Loan means a Loan which is denominated and/or drawn in NIS pursuant to Clause 5.3.3
(Currency and amount).
	 
	 	 	Original Dollar Amount means, in relation to a Loan, the amount specified in the
Utilisation Request delivered by the Borrower for that Loan adjusted to reflect any
repayment, prepayment, consolidation or division of the Loan.
	 
	 	 	Original Financial Statements means in relation to the Borrower, the audited consolidated
financial statements of the Group for the financial year ended 31 December 2004 together
with any items reflected in the financial statements of the Group for the period ended 30
September 2005.
	 
	 	 	Participating Member State means any member state of the European Communities that adopts
or has adopted the euro as its lawful currency in accordance with legislation of the
European Community relating to Economic and Monetary Union.

12

 

	 	 	Party means a party to this Agreement.
	 
	 	 	Quotation Day means, in relation to any period for which an interest rate is to be
determined, two Business Days before the first day of that period unless market practice
differs in the Relevant Interbank Market, in which case the Quotation Day will be
determined by the Agent in accordance with market practice in the Relevant Interbank
Market (and if quotations would normally be given by leading banks in the Relevant
Interbank Market on more than one day, the Quotation Day will be the last of those days).
	 
	 	 	Reference Banks means the principal London offices of Citibank, N.A. or such other banks
as may be appointed by the Agent in consultation with the Borrower.
	 
	 	 	Relevant Interbank Market means the London interbank market or the Tel Aviv interbank
market.
	 
	 	 	Repeating Representations means each of the representations set out in Clause 17.
	 
	 	 	Screen Rate means the British Bankers’ Association Interest Settlement Rate for Dollars
for the relevant period displayed on the appropriate page of the Telerate screen. If the
agreed page is replaced or service ceases to be available, the Agent may specify another
page or service displaying the appropriate rate after consultation with the Borrower and
the Lenders.
	 
	 	 	Security means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar effect.
	 
	 	 	Selection Notice means a notice substantially in the form set out in Part 2 of Schedule 3
(Requests) given in accordance with Clause 9 (Interest Periods) in relation to Facility A.
	 
	 	 	Specified Time means a time determined in accordance with Schedule 8 (Timetables).
	 
	 	 	Subsidiary means in relation to a company or corporation, a company or corporation:

	 	(a)	 	which is controlled, directly or indirectly, by the first-mentioned company
or corporation;
	 
	 	(b)	 	half or more of the issued share capital of which is beneficially owned,
directly or indirectly, by the first-mentioned company or corporation; or
	 
	 	(c)	 	which is a Subsidiary of another Subsidiary of the first-mentioned company
or corporation,

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

13

 

	 	 	Syndication means the syndication of the Facility by the Agent to selected banks and
financial institutions after the date of this Agreement.
	 
	 	 	Tax and Taxes includes all present and future taxes, charges, imposts, duties, levies,
deductions, withholdings or fees of any kind whatsoever, or any amount payable on account
of or as security for any of the foregoing, by whomsoever on whomsoever and wherever
imposed, levied, collected, withheld or assessed, together with any penalties, additions,
fines, surcharges or interest relating thereto; and Tax and Taxation shall be construed
accordingly.
	 
	 	 	TELBOR means, in relation to any NIS Loan:

	 	(a)	 	the rate which appears on the Reuters screen page TELBOR01 (or if page
TELBOR01 is replaced or the service ceases to be available, the Agent may specify
another page or service displaying the appropriate rate after consultation with the
Borrower and the NIS Lenders); or
	 
	 	(b)	 	(if no screen rate is available for NIS for the Interest Period of that NIS
Loan as set out in (a) above) the cost of funds of each NIS Lender as supplied to the
Agent and agreed with the Borrower (rounded upwards to four decimal places),

	 	 	as of 13:00 p.m. Tel Aviv time on the Quotation Day for the offering of deposits in NIS
and for a period comparable to the Interest Period for that NIS Loan.
	 
	 	 	Telecommunications Licence means the Borrower’s telecommunications licence dated 27 June
1994 (as amended from time to time) issued to it by the State of Israel.
	 
	 	 	Total Commitments means the aggregate of the Total Facility A Commitments and the Total
Facility B Commitments, being US$350,000,000 at the date of this Agreement.
	 
	 	 	Total Facility A Commitments means the aggregate of the Facility A Commitments, being
US$280,000,000 at the date of this Agreement.
	 
	 	 	Total Facility B Commitments means the aggregate of the Facility B Commitments, being
US$70,000,000 at the date of this Agreement.
	 
	 	 	Transfer Certificate means a certificate substantially in the form set out in Schedule 5
(Form of Transfer Certificate) or any other form agreed between the Agent and the
Borrower.
	 
	 	 	Transfer Date means, in relation to a transfer, the later of:

	 	(a)	 	the proposed Transfer Date specified in the Transfer Certificate; and
	 
	 	(b)	 	the date on which the Agent executes the Transfer Certificate.

	 	 	Unpaid Sum means any sum due and payable but unpaid by the Borrower under the Finance
Documents.
	 
	 	 	Utilisation means a utilisation of a Facility.

14

 

	 	 	Utilisation Date means the date of a Utilisation, being the date on which the relevant
Loan is to be made.
	 
	 	 	Utilisation Request means a notice substantially in the form set out in Part 1 of Schedule
3 (Requests).
	 
	 	 	VAT means value added tax and any other tax of a similar nature.

	1.2	 	Construction

	 	(a)	 	Unless a contrary indication appears, any reference in this Agreement to:

	 	(i)	 	the Agent, the Mandated Lead Arranger, any Finance Party,
any Lender or any Party shall be construed so as to include its successors
in title, permitted assigns and permitted transferees;
	 
	 	(ii)	 	assets includes present and future properties, revenues
and rights of every description;
	 
	 	(iii)	 	a Finance Document or any other agreement or instrument
is a reference to that Finance Document or other agreement or instrument as
amended or novated;
	 
	 	(iv)	 	indebtedness includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money, whether
present or future, actual or contingent;
	 
	 	(v)	 	a person includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust or
partnership (whether or not having separate legal personality) or two or
more of the foregoing;
	 
	 	(vi)	 	a regulation includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law) of
any governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or
organisation;
	 
	 	(vii)	 	a provision of law is a reference to that provision as
amended or re-enacted; and
	 
	 	(viii)	 	a time of day is a reference to London time.

	 	(b)	 	Section, Clause and Schedule headings are for ease of reference only.
	 
	 	(c)	 	Unless a contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance Document has
the same meaning in that Finance Document or notice as in this Agreement.
	 
	 	(d)	 	A Default (other than an Event of Default) is continuing if it has not been
remedied or waived and an Event of Default is continuing if it has not been waived.

15

 

	1.3	 	Third party rights

	 	(a)	 	Unless expressly provided to the contrary in a Finance Document, a person
who is not a Party has no right under the Contracts (Rights of Third Parties) Act
1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of this
Agreement.
	 
	 	(b)	 	Notwithstanding any terms of any Finance Document, the consent of any
person who is not a Party is not required to rescind or vary this Agreement at any
time.

	1.4	 	Currency Symbols

	1.4.1	 	Dollar and US$ mean the lawful currency of the United States of America.
	 
	1.4.2	 	NIS means the lawful currency of the State of Israel.

16

 

Section 2 — The Facilities

	2	 	The Facilities
	 
	2.1	 	The Facilities
	 
	2.1.1	 	Subject to the terms of this Agreement, the Lenders make available to the Borrower:

	 	(a)	 	a Dollar term loan facility in an aggregate amount equal to the Total
Facility A Commitments; and
	 
	 	(b)	 	a Dollar revolving loan facility in an aggregate amount equal to the Total
Facility B Commitments.

	2.1.2	 	Without prejudice to Clause 2.1.1 above, the NIS Lenders shall make available their
participations in the Loans only in MS at the Agent’s Spot Rate of Exchange.
	 
	2.2	 	Finance Parties’ rights and obligations
	 
	2.2.1	 	The obligations of each Finance Party under the Finance Documents are several. Failure by a
Finance Party to perform its obligations under the Finance Documents does not affect the
obligations of any other Party under the Finance Documents. No Finance Party is responsible
for the obligations of any other Finance Party under the Finance Documents.
	 
	2.2.2	 	The rights of each Finance Party under or in connection with the Finance Documents are
separate and independent rights and any debt arising under the Finance Documents to a Finance
Party from the Borrower shall be a separate and independent debt.
	 
	2.2.3	 	A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce
its rights under the Finance Documents.
	 
	3	 	Purpose
	 
	3.1	 	Purpose
	 
	3.1.1	 	The Borrower shall apply all amounts borrowed by it under Facility A towards its general
corporate purposes (including, without limitation, refinancing indebtedness and distributions
to its shareholders).
	 
	3.1.2	 	The Borrower shall apply all amounts borrowed by it under Facility B towards its general
corporate purposes (including, without limitation, refinancing existing indebtedness and
distributions to its shareholders).
	 
	3.2	 	Monitoring
	 
	 	 	No Finance Party is bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.
	 
	4	 	Conditions of Utilisation

17

 

	4.1	 	Initial conditions precedent
	 
	 	 	The Borrower may not deliver a Utilisation Request unless the Agent has received all of
the documents and other evidence listed in Schedule 2 (Conditions precedent) in form and
substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders
promptly upon being so satisfied.
	 
	4.2	 	Further conditions precedent
	 
	 	 	The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) if on
the date of the Utilisation Request and on the proposed Utilisation Date:

	 	(a)	 	no Default is continuing or would result from the proposed Loan; and
	 
	 	(b)	 	the Repeating Representations are true.

18

 

Section 3 — Utilisation

	5	 	Utilisation
	 
	5.1	 	Delivery of a Utilisation Request
	 
	 	 	The Borrower may utilise a Facility by delivery to the Agent of a duly completed
Utilisation Request not later than the Specified Time.
	 
	5.2	 	Completion of a Utilisation Request
	 
	5.2.1	 	Each Utilisation Request is irrevocable and will not be regarded as having been duly
completed unless:

	 	(a)	 	it identifies the Facility to be utilised;
	 
	 	(b)	 	the proposed Utilisation Date is a Business Day within the Availability
Period applicable to that Facility;
	 
	 	(c)	 	the currency and amount of the Utilisation comply with Clause 5.3 (Currency
and amount);
	 
	 	(d)	 	the proposed Interest Period complies with Clause 9 (Interest Periods); and
	 
	 	(e)	 	it specifies the account into which the proceeds of the Loan requested
should be credited.

	5.2.2	 	Only one Loan may be requested in each Utilisation Request.
	 
	5.3	 	Currency and amount
	 
	5.3.1	 	The Borrower must specify in a Utilisation Request in relation to a proposed Facility A Loan
the Original Dollar Amount for the Facility A Loan which must not exceed the Available
Facility.
	 
	5.3.2	 	The Borrower must specify in a Utilisation Request the Original Dollar Amount of a proposed
Facility B Loan which must be an amount which must not exceed the Available Facility and which
is a minimum of US$10,000,000 and integral multiples of US$1,000,000 or, if less, the
Available Facility.
	 
	5.3.3	 	Each NIS Lender shall:

	 	(a)	 	if a Facility A Loan has already been drawn prior to such NIS Lender
becoming a Party, make available its participation in that Facility A Loan in Dollars
to the Agent who shall then notionally convert the principal amount of such
participation into NIS at the Agent’s Spot Rate of Exchange on the Transfer Date on
which Syndication takes place. That Facility A Loan shall be deemed to be an NIS Loan
made to the Borrower and shall be denominated in NIS for its duration; and

19

 

	 	(b)	 	in respect of all Facility B Loans, make available its participation in any
Facility B Loan in NIS in accordance with Clause 5.4.2 (Lenders’ participation) at
the Agent’s Spot Rate of Exchange on the Transfer Date on which Syndication takes
place.

	5.3.4	 	If the Agent and the proposed MS Lender do not agree the Lending Rate on or before the
proposed Transfer Date on which Syndication takes place, that proposed NIS Lender shall be
required to participate in the relevant Loan in Dollars and its participation will be treated
as a separate Loan denominated in Dollars during each Interest Period in respect of that Loan.
Each Lender’s participation in that Loan will be determined in accordance with Clause 5.4
(Lenders’ participation).
	 
	5.4	 	Lenders’ participation
	 
	5.4.1	 	If the conditions set out in this Agreement have been met, each Lender shall make its
participation in each Loan available by the Utilisation Date through its Facility Office.
	 
	5.4.2	 	The amount of each Lender’s participation in each Loan will be equal to the proportion borne
by its Available Commitment to the Available Facility immediately prior to making the Loan.
	 
	5.4.3	 	The Agent shall notify each Lender of the amount of each Loan, the Original Dollar Amount
and the amount of its participation in that Loan, in each case by the Specified Time.
	 
	5.4.4	 	The Agent shall also promptly notify the Borrower of the amount of the NIS Loan and the
amount of each NIS Lender’s participation in that NIS Loan.
	 
	5.5	 	Cancellation of undrawn Commitments
	 
	 	 	Any amount of the Total Facility A Commitments and the Total Facility B Commitments which
is undrawn at the end of the Availability Period applicable to that Facility shall be
cancelled.

20

 

Section 4 — Repayment, prepayment and cancellation

	6	 	Repayment
	 
	6.1	 	Repayment of Facility A Loans
	 
	6.1.1	 	The Borrower shall repay the Facility A Loans by paying to the Agent (for the account of the
Lenders) on each date set out in Column 1 below (each a Facility A Repayment Date) the
percentage of the aggregate amount of the Facility A Loans outstanding at the close of
business on the final day of the Availability Period which is set out in Column 2 below
opposite that date.

	 	 	 
	Column 1	 	Column 2
	Facility A Repayment Date
	 	Percentage of the Original Dollar Amount of the Facility A Loans to be repaid
	 
	 	 
	[   ] February 2008
	 	10%
	 
	 	 
	[   ] August 2008
	 	10%
	 
	 	 
	[   ] February 2009
	 	10%
	 
	 	 
	[   ] August 2009
	 	10%
	 
	 	 
	[   ] February 2010
	 	15%
	 
	 	 
	[   ] August 2010
	 	20%
	 
	 	 
	22nd December 2010
	 	25%

	6.1.2	 	The Borrower may not re-borrow any part of Facility A which is repaid.
	 
	6.2	 	Repayment of Facility B Loans
	 
	 	 	The Borrower shall repay each Facility B Loan on the last day of its Interest Period.
	 
	6.3	 	Final Repayment of Facility B
	 
	 	 	All outstanding Facility B Loans shall be repaid in full on or before the Final Repayment
Date.
	 
	6.4	 	NIS Loans
	 
	 	 	If a Loan is an NIS Loan, the Borrower shall repay an amount in NIS which is equal to the
amount in NIS of that NIS Loan on its Utilisation Date to the Agent (for the account of
the NIS Lenders) at the times specified in this Clause 6.
	 
	7	 	Prepayment and cancellation

21

 

	7.1	 	Illegality
	 
	 	 	If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its
obligations as contemplated by this Agreement or to fund or maintain its participation in
any Loan:

	 	(a)	 	that Lender shall promptly notify the Agent upon becoming aware of that
event;
	 
	 	(b)	 	upon the Agent notifying the Borrower, the Commitment of that Lender will
be immediately cancelled; and
	 
	 	(c)	 	the Borrower shall repay that Lender’s participation in the Loans on the
last day of the Interest Period for each Loan occurring after the Agent has notified
the Borrower or, if earlier, the date specified by the Lender in the notice delivered
to the Agent (being no earlier than the last day of any applicable grace period
permitted by law).

	7.2	 	Voluntary cancellation
	 
	 	 	The Borrower may, if it gives the Agent not less than 5 Business Days’ (or such shorter
period as the Majority Lenders may agree) prior notice, cancel the whole or any part
(being a minimum amount of US$20,000,000 and an integral multiple of US$10,000,000) of an
Available Facility. Any cancellation under this Clause 7.2 shall reduce the Commitments of
the Lenders rateably under that Facility.
	 
	7.3	 	Voluntary prepayment of Loans
	 
	7.3.1	 	The Borrower may, if it gives the Agent not less than 15 days’ (or such shorter period as
the Majority Lenders may agree) prior notice, prepay the whole or any part of any Loan (but,
if in part, being an amount that reduces the amount of the Loan by a minimum Original Dollar
Amount of US$20,000,000 and integral multiples of US$10,000,000).
	 
	7.3.2	 	A Facility A Loan may only be prepaid after the last day of the Availability Period (or, if
earlier, the day on which the applicable Available Facility is zero).
	 
	7.3.3	 	Any prepayment of a Facility A Loan under this Clause 7.3 shall satisfy the obligations
under Clause 6.1 (Repayment of Facility A Loans) in inverse order of maturity taken in their
Original Dollar Amount.
	 
	7.4	 	Right of repayment and cancellation in relation to a single Lender
	 
	7.4.1	 	If:

	 	(a)	 	any sum payable to any Lender by the Borrower is required to be increased
under Clause 12.1 (Tax Gross-up); or
	 
	 	(b)	 	any Lender claims indemnification from the Borrower under Clause 12.2 (Tax
indemnity) or Clause 13 (Increased costs),

	 	 	the Borrower may, whilst the circumstance giving rise to the requirement or
indemnification continues give the Agent notice of cancellation of the

22

 

	 	 	Commitment of that
Lender and its intention to procure the repayment of that Lender’s participation in the
Loans.
	 
	7.4.2	 	On receipt of a notice referred to in Clause 7.4.1(a) above, the Commitment of that Lender
shall immediately be reduced to zero.
	 
	7.4.3	 	On the last day of each Interest Period which ends after the Borrower has given notice under
Clause 7.4.1(a) above (or, if earlier, the date specified by the Borrower in that notice), the
Borrower shall repay that Lender’s participation in that Loan.
	 
	7.5	 	Restrictions
	 
	7.5.1	 	Any notice of cancellation or prepayment given by any Party under this Clause 7 shall be
irrevocable and, unless a contrary indication appears in this Agreement, shall specify the
date or dates upon which the relevant cancellation or prepayment is to be made and the amount
of that cancellation or prepayment.
	 
	7.5.2	 	Any prepayment under this Agreement shall be made together with accrued interest on the
amount prepaid and, subject to any Break Costs, without premium or penalty.
	 
	7.5.3	 	The Borrower may not re-borrow any part of Facility A which is prepaid.
	 
	7.5.4	 	Unless a contrary indication appears in this Agreement, any part of Facility B which is
prepaid may be re-borrowed in accordance with the terms of this Agreement.
	 
	7.5.5	 	The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any
part of the Commitments except at the times and in the manner expressly provided for in this
Agreement.
	 
	7.5.6	 	No amount of the Total Commitments cancelled under this Agreement may be subsequently
reinstated.
	 
	7.5.7	 	If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that
notice to either the Borrower or the affected Lender, as appropriate.

23

 

Section 5 — Costs of Utilisation

	8	 	Interest
	 
	8.1	 	Calculation of interest
	 
	8.1.1	 	The rate of interest on each Loan (other than an NIS Loan) for each Interest Period is the
percentage rate per annum which is the aggregate of the applicable:

	 	(a)	 	Margin;
	 
	 	(b)	 	LIBOR; and
	 
	 	(c)	 	Mandatory Cost, if any.

	8.1.2	 	The rate of interest on each NIS Loan for each Interest Period is the percentage rate per
annum which is the aggregate of the applicable:

	 	(a)	 	Margin; and
	 
	 	(b)	 	Lending Rate.

	8.2	 	Payment of interest
	 
	 	 	The Borrower shall pay accrued interest on each Loan on the last day of each Interest
Period (and, if the Interest Period is longer than six Months, on the dates falling at six
monthly intervals after the first day of the Interest Period).
	 
	8.3	 	Default interest
	 
	8.3.1	 	If the Borrower fails to pay any amount payable by it under a Finance Document on its due
date, interest shall accrue on the overdue amount from the due date up to the date of actual
payment (both before and after judgment) at a rate which, subject to sub-clause 8.3.2 below,
is one per cent higher than the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a loan in the currency of the overdue amount for
successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any
interest accruing under this Clause 8.3 shall be immediately payable by the Borrower on demand
by the Agent.
	 
	8.3.2	 	If any overdue amount consists of all or part of a Loan which became due on a day which was
not the last day of an Interest Period relating to that Loan:

	 	(a)	 	the first Interest Period for that overdue amount shall have a duration
equal to the unexpired portion of the current Interest Period relating to that Loan;
and
	 
	 	(b)	 	the rate of interest applying to the overdue amount during that first
Interest Period shall be one per cent. higher than the rate which would have applied
if the overdue amount had not become due.

24

 

	8.3.3	 	Default interest (if unpaid) arising on an overdue amount will be compounded with the
overdue amount at the end of each Interest Period applicable to that overdue amount but will
remain immediately due and payable.
	 
	8.4	 	Margin Adjustment
	 
	8.4.1	 	The Margin shall be adjusted in accordance with the other provisions of this Clause 8.4.
	 
	8.4.2	 	Subject to Clause 8.4.4 below and the other provisions of this Clause 8.4, the Margin shall
be determined by reference to the most recent financial statements provided by the Borrower to
the Agent pursuant to Clause 18.1 (Financial statements) before each Quotation Day for the
Loans and shall apply to the Loans for the whole duration of the next following interest
Period (notwithstanding the delivery of any further financial statements following the
Quotation Day or during the next following Interest Period) such that where the ratio of Net
Debt to EBITDA (each as defined in Clause 19.5 (Definitions)) for the immediately preceding
four quarters set out in Column A below meets the level set for that ratio in Column A below,
the Margin for that Interest Period shall be the interest rate set out in Column B below:

	 	 	 
	Column A	 	Column B
	Net Debt:EBITDA	 	Margin
	Equal to or greater than 2.5:1

	 	1.35 per cent. per annum
	 
	 	 
	Greater than or equal to 1.5:1 but lower than
2.5:1

	 	1.05 per cent. per annum
	 
	 	 
	Less than 1.5:1

	 	0.80 per cent. per annum

	8.4.3	 	For the purposes of Clause 8.4.2, any reduction or adjustment in the Margin shall be advised
by the Agent promptly following receipt of the Borrower’s financial statements and its
Compliance Certificate.
	 
	8.4.4	 	The Margin shall be 1.35 per cent. per annum (plus the amounts referred to in Clause 8.3
(Default Interest)) if an Event of Default (whether waived by the Agent or otherwise) occurs.
	 
	8.4.5	 	Any reduction or increase in the Margin shall, subject to the other provisions of this
Clause 8.4, take effect in respect of the Loans on the first day of the immediately following
Interest Period or, as the case may be, immediately if an Event of Default occurs. This Clause
8.4 shall be without prejudice to the rights of the Agent to increase the Margin upon the
giving of any waiver of or consent to any amendment.
	 
	8.5	 	Notification of rates of interest
	 
	 	 	The Agent shall promptly notify the Lenders and the Borrower of the determination of a
rate of interest under this Agreement.

25

 

	9	 	Interest Periods
	 
	9.1	 	Selection of Interest Periods
	 
	9.1.1	 	The Borrower may select an Interest Period for a Loan in the Utilisation Request for that
Loan or (if the Loan has already been borrowed) in a Selection Notice.
	 
	9.1.2	 	Each Selection Notice for a Facility A Loan is irrevocable and must be delivered to the
Agent by the Borrower not later than the Specified Time.
	 
	9.1.3	 	If the Borrower fails to deliver a Selection Notice to the Agent in accordance with Clause
9.1.2 above, the relevant Interest Period will be one Month.
	 
	9.1.4	 	Subject to this Clause 9, the Borrower may select an Interest Period of 1, 2, 3 or 6 Months
or any other period agreed between the Borrower and the Agent (acting on the instructions of
all the Lenders). In addition the Borrower may select an Interest Period in relation to
Facility A of less than one Month, if necessary to ensure that there are sufficient Facility A
Loans (with an aggregate amount equal to or greater than the percentage of Facility A Loans
required to be repaid pursuant to Clause 6.1.1 (Repayment of Facility A Loans) on the next
Facility A Repayment Date to occur (a Repayment Instalment)) which have an Interest Period
ending on a Facility A Repayment Date for the Borrower to make the repayment due on that date.
	 
	9.1.5	 	An Interest Period for a Loan shall not extend beyond the Final Repayment Date.
	 
	9.1.6	 	Each Interest Period for a Facility A Loan shall start on the Utilisation Date or (if
already made) on the last day of its preceding Interest Period.
	 
	9.1.7	 	A Facility B Loan has one Interest Period only.
	 
	9.1.8	 	At any time prior to the earlier of: (i) the date on which the Agent notifies the Borrower
and the other Finance Parties that Syndication has been completed; and (ii) three Months after
the first Utilisation Date, the Borrower may only select Interest Periods of one Month’s
duration. The Transfer Date of any transfer of a Loan being effected as part of Syndication
may only be the last day of the then current Interest Period in relation that Loan.
	 
	9.2	 	Changes to Interest Periods
	 
	9.2.1	 	Prior to determining the interest rate for a Facility A Loan, the Agent may shorten an
Interest Period for any Facility A Loan to ensure there are sufficient Facility A Loans (with
an aggregate amount equal to or greater than the Repayment Instalment) which have an Interest
Period ending on a Facility A Repayment Date for the Borrower to make the repayment due on
that date.
	 
	9.2.2	 	If the Agent makes any of the changes to an Interest Period referred to in this Clause 9.2,
it shall promptly notify the Borrower and the Lenders.
	 
	9.3	 	Non-Business Days

26

 

	 	 	If an Interest Period would otherwise end on a day which is not a Business Day, that
Interest Period will instead end on the next Business Day in that calendar month (if there
is one) or the preceding Business Day (if there is not).
	 
	9.4	 	Consolidation and division of Facility A Loans
	 
	9.4.1	 	Subject to sub-clause 9.4.2 below, if two or more Interest Periods:

	 	(a)	 	relate to Facility A Loans which are in the same currency; and
	 
	 	(b)	 	end on the same date,

	 	 	those Facility A Loans will, unless the Borrower specifies to the contrary in the
Selection Notice for the next Interest Period, be consolidated into, and treated as, a
single Facility A Loan on the last day of the Interest Period.
	 
	9.4.2	 	Subject to Clause 5.3 (Currency and amount), if the Borrower requests in a Selection Notice
that a Facility A Loan be divided into two or more Facility A Loans, that Facility A Loan
will, on the last day of its Interest Period, be so divided into the amounts specified in that
Selection Notice, being an aggregate amount equal to the amount of the Facility A Loan
immediately before its division.
	 
	10	 	Changes to the calculation of Interest
	 
	10.1	 	Absence of quotations
	 
	 	 	Subject to Clause 10.2 (Market disruption), if LIBOR is to be determined by reference to
the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time
on the Quotation Day, the applicable LIBOR shall be determined on the basis of the
quotations of the remaining Reference Banks.
	 
	10.2	 	Market disruption
	 
	10.2.1	 	If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the
rate of interest on each Lender’s share of that Loan for the Interest Period shall be the
percentage rate per annum which is the sum of:

	 	(a)	 	the Margin;
	 
	 	(b)	 	the rate notified to the Agent by that Lender as soon as practicable and in
any event before interest is due to be paid in respect of that Interest Period, to be
that which expresses as a percentage rate per annum the cost to that Lender of
funding its participation in that Loan from whatever source it may reasonably select;
and
	 
	 	(c)	 	the Mandatory Cost, if any, applicable to that Lender’s participation in
the Loan.

	10.2.2	 	In this Agreement Market Disruption Event means:

	 	(a)	 	at or about noon on the Quotation Day for the relevant Interest Period the
Screen Rate is not available and none or only one of the Reference

27

 

	 	 	 	Banks supplies a
rate to the Agent to determine LIBOR for Dollars for the relevant Interest Period; or
	 
	 	(b)	 	before close of business in London on the Quotation Day for the relevant
Interest Period, the Agent receives notifications from a Lender or Lenders (whose
participations in a Loan exceed 30 per cent. of that Loan) that the cost to it or
them of obtaining matching deposits in the Relevant Interbank Market would be in
excess of LIBOR.

	10.3	 	Alternative basis of interest or funding
	 
	10.3.1	 	If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and
the Borrower shall enter into negotiations (for a period of not more than thirty days) with a
view to agreeing a substitute basis for determining the rate of interest.
	 
	10.3.2	 	Any alternative basis agreed pursuant to sub-clause 10.3.1 above shall, with the prior
consent of all the Lenders and the Borrower, be binding on all Parties.
	 
	10.4	 	Break Costs
	 
	10.4.1	 	The Borrower shall, within five Business Days of demand by a Finance Party, pay to that
Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being
paid by the Borrower on a day other than the last day of an Interest Period for that Loan or
Unpaid Sum.
	 
	10.4.2	 	Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a
certificate confirming the amount of its Break Costs for any interest Period in which they
accrue.
	 
	11	 	Fees
	 
	11.1	 	Commitment fee
	 
	11.1.1	 	The Borrower shall pay to the Agent (for the account of each Lender) a fee computed on a
day-to-day basis at the rate of 40 per cent. of the then applicable Margin on that Lender’s
Available Commitment under Facility B for the Availability Period applicable to Facility B.
	 
	11.1.2	 	The accrued commitment fee is payable on the last day of each successive period of three
Months which ends during the relevant Availability Period, on the last day of that
Availability Period and, if cancelled in full, on the cancelled amount of the relevant
Lender’s Commitment, up to the date of cancellation, at the time the cancellation is
effective.
	 
	11.2	 	Arrangement fee
	 
	 	 	The Borrower shall pay to the Mandated Lead Arranger an arrangement fee in the amount
and at the times agreed in a Fee Letter.

28

 

	11.3	 	Agency fee
	 
	 	 	The Borrower shall pay to the Agent (for its own account) an agency fee in the amount
and at the times agreed in a Fee Letter.

29

 

Section 6 — Additional payment obligations

	12	 	Tax gross up and indemnities
	 
	12.1	 	Tax Gross-up
	 
	 	 	All payments to be made by the Borrower to any Finance Party hereunder shall be made
free and clear of and without deduction or withholding for or on account of Tax unless the
Borrower is required to make such a payment subject to the deduction or withholding of
Tax, in which case the sum payable by the Borrower in respect of which such deduction or
withholding is required to be made shall be increased to the extent necessary to ensure
that, after making the required deduction or withholding, such Finance Party receives and
retains (free from any liability in respect of any such deduction or withholding) a net
sum which it would have received and so retained had no such deduction or withholding been
made or required to be made.
	 
	12.2	 	Tax indemnity
	 
	 	 	Without prejudice to Clause 12.1 (Tax Gross-up), if any Finance Party is required to
make any payment of or on account of Tax or in relation to any sum received or receivable
hereunder (including any sum deemed for purposes of tax to be received or receivable by
such Finance Party whether or not actually received or receivable) or if any liability in
respect of any such payment is asserted, imposed, levied or assessed against any Finance
Party, the Borrower shall, upon demand of the Agent, promptly (and not later than seven
Business Days) indemnify the Finance Party which suffers a loss or liability as a result
against such payment or liability (together with any interest, penalties, costs and
expenses payable or incurred in connection therewith (other than interest and penalties
incurred due to the wilful failure of such Finance Party)) provided that this Clause 12.2
shall not apply to:

	 	(a)	 	any tax imposed on and calculated by reference to the overall net income of
such Finance Party by the jurisdiction in which the Finance Party is incorporated; or
	 
	 	(b)	 	any tax imposed on and calculated by reference to the net income of the
Facility Office of such Finance Party by the jurisdiction in which its Facility
Office is located.

	12.3	 	Tax Notification
	 
	 	 	If, at any time, the Borrower is required by law to make any deduction or withholding
from any sum payable by it hereunder (or if thereafter there is any change in the rates at
which or the manner in which such deductions or withholdings are calculated), the Borrower
shall promptly notify the Agent and the Agent shall promptly notify the other parties to
this Agreement.
	 
	12.4	 	Evidence of Payment of Tax
	 
	 	 	If the Borrower makes any payment hereunder in respect of which it is required to
make any deduction or withholding, it shall pay the full amount required to be deducted or
withheld to the relevant taxation or other authority within the time

30

 

allowed for such
payment under applicable law and shall deliver to the Agent for each Lender, within thirty
days after it has made such payment to the applicable
authority, an original receipt (or a certified copy thereof) issued by such authority
evidencing the payment to such authority of all amounts to be deducted or withheld in
respect of that Lender’s share of such payment.

	12.5	 	Tax and Other Affairs

No provision of this Agreement shall interfere with the right of any Finance Party to
arrange its tax or other affairs in whatever manner it thinks fit, oblige any Finance
Party to claim any credit, relief, remission or repayment in respect of any payment under
Clause 12.1 (Tax Gross-up) in priority to any other credit, relief, remission or repayment
available to it or oblige any Finance Party to disclose any information relating to its
tax or other affairs or any computations in respect thereof.

	12.6	 	Stamp taxes
	 
	 	 	The Borrower shall pay and, within five Business Days of demand, indemnify each
Finance Party against any cost, loss or liability that Finance Party incurs in relation to
all stamp duty, registration and other similar Taxes payable in respect of any Finance
Document.
	 
	12.7	 	Value added tax

	12.7.1	 	All amounts set out, or expressed to be payable under a Finance Document by any Party to a
Finance Party which (in whole or in part) constitute the consideration for VAT purposes shall
be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly,
subject to Clause 12.7.3 below, if VAT is chargeable on any supply made by any Finance Party
to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition
to and at the same time as paying the consideration) an amount equal to the amount of the VAT
(and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).
	 
	12.7.2	 	If VAT is chargeable on any supply made by any Finance Party (the Supplier) to any other
Finance Party (the Recipient) under a Finance Document, and any Party (the Relevant Party) is
required by the terms of any Finance Document to pay an amount equal to the consideration for
such supply to the Supplier (rather than being required to reimburse the Recipient in respect
of that consideration), such Party shall also pay to the Supplier (in addition to and at the
same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will
promptly pay to the Relevant Party an amount equal to any credit or repayment from the
relevant tax authority which it reasonably determines relates to the VAT chargeable on that
supply.
	 
	12.7.3	 	Where a Finance Document requires any Party to reimburse a Finance Party for any costs or
expenses, that Party shall also at the same time pay and indemnify the Finance Party against
all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that
the Finance Party reasonably determines that neither it nor any other member of any group of
which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax
authority in respect of the VAT.

31

 

	13	 	Increased costs
	 
	13.1	 	Increased costs
	 
	13.1.1	 	Subject to Clause 13.3 (Exceptions) the Borrower shall, within five Business Days of a
demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs
incurred by that Finance Party or any of its Affiliates as a result of (i) any Change and/or
or (ii) compliance with any law or regulation made or coming into force after the date of this
Agreement.
	 
	13.1.2	 	In this Agreement Increased Costs means:

	 	(a)	 	a reduction in the rate of return from the Facility or on a Finance Party’s
(or its Affiliate’s) overall capital;
	 
	 	(b)	 	an additional or increased cost;
	 
	 	(c)	 	a reduction of any amount due and payable under any Finance Document; or
	 
	 	(d)	 	any costs attributable to the implementation or application of or
compliance with the “International Convergence of Capital Measurement and Capital
Standards, a Revised Framework” published by the Basel Committee on Banking
Supervision in June 2004 in the form existing on the date of this Agreement (Basel
II) or any other law or regulation which implements Basel II (whether such
implementation, application or compliance is by a government, regulator, Finance
Party or any of its Affiliates),

	 	 	which is incurred or suffered by a Finance Party or any of its Affiliates to the
extent that it is attributable to that Finance Party having entered into its Commitment or
funding or performing its obligations under any Finance Document.
	 
	13.2	 	Increased cost claims
	 
	13.2.1	 	A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall
notify the Agent of the event giving rise to the claim, following which the Agent shall
promptly notify the Borrower.
	 
	13.2.2	 	Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a
certificate confirming the amount of its increased Costs.
	 
	13.3	 	Exceptions
	 
	 	 	Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:

	 	(a)	 	attributable to a deduction or withholding for or on account of Tax from a
payment under a Finance Document required by law to be made by the Borrower;
	 
	 	(b)	 	compensated for by Clause 12.2 (Tax indemnity) (or would have been
compensated for under Clause 12.2 (Tax indemnity) but was not so

32

 

	 	 	 	compensated solely
because any of the exclusions in Clause 12.2 (Tax indemnity) applied);

	 	(c)	 	compensated for by the payment of the Mandatory Cost;
	 
	 	(d)	 	attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation; or
	 
	 	(e)	 	attributable to any change in the rate of, or change in the basis of
calculating taxes on, the overall net income of a Finance Party or any of its
Affiliates imposed in the jurisdiction in which it is established or its Facility
Office is situated.

	14	 	Other indemnities
	 
	14.1	 	Currency indemnity
	 
	14.1.1	 	If any sum due from the Borrower under the Finance Documents (a Sum), or any order, judgment
or award given or made in relation to a Sum, has to be converted from the currency (the First
Currency) in which that Sum is payable into another currency (the Second Currency) for the
purpose of:

	 	(a)	 	making or filing a claim or proof against the Borrower;
	 
	 	(b)	 	obtaining or enforcing an order, judgment or award in relation to any
litigation or arbitration proceedings,

	 	 	the Borrower shall as an independent obligation, within five Business Days of demand,
indemnify each Finance Party to whom that Sum is due against any cost, loss or liability
arising out of or as a result of the conversion including any discrepancy between (A) the
rate of exchange used to convert that Sum from the First Currency into the Second Currency
and (B) the rate or rates of exchange available to that person at the time of its receipt
of that Sum.
	 
	14.1.2	 	The Borrower waives any right it may have in any jurisdiction to pay any amount under the
Finance Documents in a currency or currency unit other than that in which it is expressed to
be payable.
	 
	14.2	 	Other indemnities
	 
	14.2.1	 	The Borrower shall, within five Business Days of demand, indemnify each Finance Party
against any cost, loss or liability incurred by that Finance Party as a result of:

	 	(a)	 	the occurrence of any Event of Default;
	 
	 	(b)	 	a failure by the Borrower to pay any amount due under a Finance Document on
its due date, including without limitation, any cost, loss or liability arising as a
result of Clause 26 (Sharing among the Finance Parties);
	 
	 	(c)	 	funding, or making arrangements to fund, its participation in a Loan
requested by the Borrower in a Utilisation Request but not made by

33

 

	 	 	 	reason of the
operation of any one or more of the provisions of this Agreement (other than by
reason of default or negligence by that Lender alone); or

	 	(d)	 	a Loan (or part of a Loan) not being prepaid in accordance with a notice of
prepayment given by the Borrower.

	14.2.2	 	The Borrower hereby indemnifies and agrees to hold harmless each of the Finance Parties and
in each case each of its and their affiliates and each of their respective officers,
directors, employees, agents, advisors and representatives (each, an Indemnified Party) from
and against any and all claims, damages, losses, liabilities, costs, legal expenses and
expenses (altogether Losses), joint or several, that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with or relating
to any claim, investigation, litigation or proceeding (or the preparation of any defence with
respect thereto) commenced or threatened in relation to the Finance Documents (or the
transactions contemplated hereby or thereby) or any use made or proposed to be made with the
proceeds of the Facility. This indemnity shall apply whether or not such claims,
investigation, litigation or proceeding is brought by any member of the Group, any
shareholders or creditors, an Indemnified Party or any other person, or an Indemnified Party
is otherwise a party thereto, except to the extent such Losses are found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence or wilful misconduct.
	 
	14.3	 	Indemnity to the Agent
	 
	 	 	The Borrower shall promptly indemnify the Agent against any cost, loss or liability
incurred by the Agent (acting reasonably) as a result of:

	 	(a)	 	investigating any event which it reasonably believes is a Default; or
	 
	 	(b)	 	acting or relying on any notice, request or instruction which it reasonably
believes to be genuine, correct and appropriately authorised.

	15	 	Mitigation by the Lenders
	 
	15.1	 	Mitigation
	 
	15.1.1	 	Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to
mitigate any circumstances which arise and which would result in any amount becoming payable
under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax
gross-up and indemnities), Clause 13 (Increased costs) or paragraph 3 of Schedule 4 (Mandatory
Cost formulae) including (but not limited to) transferring its rights and obligations under
the Finance Documents to another Affiliate or Facility Office.
	 
	15.1.2	 	Clause 15.1.1 above does not in any way limit the obligations of the Borrower under the
Finance Documents.
	 
	15.2	 	Limitation of liability

34

 

	15.2.1	 	The Borrower shall indemnify each Finance Party for all costs and expenses reasonably
incurred by that Finance Party as a result of steps taken by it under Clause 15.1
(Mitigation).
	 
	15.2.2	 	A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the
opinion of that Finance Party, to do so might be prejudicial to it.
	 
	16	 	Costs and expenses
	 
	16.1	 	Transaction expenses
	 
	 	 	The Borrower shall promptly on demand pay the Agent and the Mandated Lead Arranger
the amount of all documented costs and expenses (including legal fees) reasonably incurred
by any of them in connection with the negotiation, preparation, printing, execution and
syndication of:

	 	(a)	 	this Agreement and any other documents referred to in this Agreement; and
	 
	 	(b)	 	any other Finance Documents executed after the date of this Agreement.

	16.2	 	Amendment costs

If (a) the Borrower requests an amendment, waiver or consent or (b) an amendment is
required pursuant to Clause 27.9 (Change of currency), the Borrower shall, within five
Business Days of demand, reimburse the Agent for the amount of all costs and expenses
(including legal fees) reasonably incurred by the Agent in responding to, evaluating,
negotiating or complying with that request or requirement.

	16.3	 	Enforcement costs

The Borrower shall, within five Business Days of demand, pay to each Finance Party
the amount of all costs and expenses (including legal fees) incurred by that Finance Party
in connection with the enforcement of, or the preservation of any rights under, any
Finance Document.

35

 

Section 7 — Representations, undertakings and Events of Default

	17	 	Representations
	 
	 	 	The Borrower makes the representations and warranties set out in this Clause 17 to
each Finance Party on the date of this Agreement.
	 
	17.1	 	Status

	 	(a)	 	It is a corporation, duly incorporated and validly existing under the law
of its jurisdiction of incorporation.
	 
	 	(b)	 	It and each of its Subsidiaries has the power to own its assets and carry
on its business as it is being conducted.

	17.2	 	Binding obligations
	 
	 	 	The obligations expressed to be assumed by it in each Finance Document are, subject
to any general principles of law limiting its obligations which are specifically referred
to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation), legal,
valid, binding and enforceable obligations.
	 
	17.3	 	Non-conflict with other obligations
	 
	 	 	The entry into and performance by it of, and the transactions contemplated by, the
Finance Documents do not and will not conflict with:

	 	(a)	 	any law or regulation applicable to it (including, without limitation.
Environmental Law);
	 
	 	(b)	 	its or any of its Material Subsidiaries’ constitutional documents; or
	 
	 	(c)	 	any agreement or instrument binding upon it or any of its Subsidiaries or
any of its or any of its Material Subsidiaries’ assets.

	17.4	 	Power and authority
	 
	 	 	It has the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery of, the Finance Documents to
which it is a party and the transactions contemplated by those Finance Documents.
	 
	17.5	 	Validity and admissibility in evidence
	 
	 	 	All Authorisations required or desirable:

	 	(a)	 	to enable it lawfully to enter into, exercise its rights and comply with
its obligations in the Finance Documents to which it is a party; and
	 
	 	(b)	 	to make the Finance Documents to which it is a party admissible in evidence
in its jurisdiction of incorporation,

36

 

have been obtained or effected and are in full force and effect.

	17.6	 	Governing law and enforcement
	 
	17.6.1	 	The choice of English law as the governing law of the Finance Documents will be recognised
and enforced in its jurisdiction of incorporation.
	 
	17.6.2	 	Any judgment obtained in England in relation to a Finance Document will be recognised and
enforced in its jurisdiction of incorporation.
	 
	17.7	 	Deduction of Tax
	 
	 	 	It is not required under the law of the State of Israel to make any deduction for or
on account of Tax from any payment it may make under any Finance Document to Citibank, NA,
Tel Aviv Branch or, to the extent that any relevant exemption(s) and/or reliefs have been
granted to the Borrower by the relevant Israeli authority in respect of such payment, to
any other Lender.
	 
	17.8	 	No filing or stamp taxes
	 
	 	 	Under the law of its jurisdiction of incorporation it is not necessary that the
Finance Documents be filed, recorded or enrolled with any court or other authority in that
jurisdiction or that any stamp, registration or similar tax be paid on or in relation to
the Finance Documents or the transactions contemplated by the Finance Documents.
	 
	17.9	 	No default
	 
	17.9.1	 	No Default is continuing or might reasonably be expected to result from the making of any
Utilisation.
	 
	17.9.2	 	No other event or circumstance is outstanding which constitutes a default under any other
agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or
any of its Subsidiaries’) assets are subject which might have a Material Adverse Effect.
	 
	17.10	 	No misleading information
	 
	17.10.1	 	The financial projections contained in the Information Memorandum have been prepared on the
basis of recent historical information and on the basis of reasonable assumptions.
	 
	17.10.2	 	All information (as supplemented from time to time and including, without limitation, the
Information Memorandum) that has been or will hereafter be made available to the Finance
Parties by the Borrower or any of its representatives in connection with the transactions
contemplated hereby is and will at all times (subject to any information being supplemented by
the Borrower to ensure that the representation and warranty contained in this Clause 17.10
remains correct) be complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein not misleading in light of the circumstances
under which such statements were or are made.

37

 

	17.11	 	Financial statements
	 
	17.11.1	 	Its Original Financial Statements were prepared in accordance with GAAP consistently
applied.
	 
	17.11.2	 	Its Original Financial Statements fairly represent its financial condition and operations
during the relevant financial year.
	 
	17.11.3	 	There has been no material adverse change in its business, condition (financial or
otherwise), prospects or operations of the Borrower and/or the Group since the date of the
Original Financial Statements (other than the matters referred to in the financial statements
dated 30 September 2005).
	 
	17.12	 	Pari passu ranking
	 
	 	 	Its payment obligations under the Finance Documents rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.
	 
	17.13	 	No proceedings pending or threatened
	 
	 	 	No litigation, arbitration or administrative proceedings of or before any court,
arbitral body or agency (including, but not limited to, investigative proceedings) which,
if adversely determined, might reasonably be expected to have a Material Adverse Effect
have (to the best of its knowledge and belief) been started or threatened against it or
any of its Subsidiaries.
	 
	17.14	 	Solvency
	 
	 	 	There is no (a) corporate action, legal proceeding or other procedure or step
described in paragraph (a) of Clause 21.7 (Insolvency proceedings); or (b) creditors’
process described in Clause 21.8 (Creditors’ process).
	 
	17.15	 	Security
	 
	17.15.1	 	its execution of this Agreement and its
exercise of its rights and performance of its
obligations hereunder will not result in the
existence of nor oblige any member of the Group
to create any Security over all or any of its
present or future revenues or assets.
	 
	17.15.2	 	No Security prohibited under Clause 20.3
(Negative pledge) exists over all or any of its
present or future revenues or assets.
	 
	17.16	 	Material Adverse Effect
	 
	 	 	There has been no occurrence of any event or series of events since the date of the
Original Financial Statements (other than the matters referred to in the financial
statements dated 30 September 2005) which might have a Material Adverse Effect.
	 
	17.17	 	Telecommunications Licence

38

 

	 	 	The Telecommunications Licence is in full force and effect and has not been revoked
or repudiated.
	 
	17.18	 	Immunity
	 
	 	 	It will not be entitled to claim immunity from suit, execution, attachment or the
legal process in any proceedings taken in Israel in connection with the Finance Documents.
	 
	17.19	 	Taxes
	 
	 	 	Except as detailed in the Original Financial Statements and the financial statements
of the Borrower and its Subsidiaries provided pursuant to Clause 18.1 (Financial
statements) (but only to the extent that failure to comply with Taxation laws and/or pay
such Taxes would have a Material Adverse Effect), the Borrower and to the best of the
Borrower’s knowledge and belief each member of the Group has complied with Taxation laws
in all jurisdictions in which it is subject to Taxation and has paid all Taxes due and
payable by it and no claims are being asserted against it in respect of Taxes except for
assessments in relation to the ordinary course of its business or claims contested in good
faith and in respect of which adequate provision has been made and disclosed in the latest
financial statements or information delivered to the Agent under this Agreement.
	 
	17.20	 	Repetition
	 
	 	 	The Repeating Representations are deemed to be made by the Borrower by reference to
the facts and circumstances then existing on the date of this Agreement, the date of each
Utilisation Request and the first day of each Interest Period.
	 
	18	 	Information undertakings
	 
	 	 	The undertakings in this Clause 18 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any Commitment is
in force.
	 
	18.1	 	Financial statements
	 
	 	 	The Borrower shall supply to the Agent in sufficient copies for all the
Lenders:

	 	(a)	 	as soon as the same become available, but in any event within 90 days after
the end of each of its financial years:

	 	(i)	 	its audited consolidated financial statements for that
financial year; and
	 
	 	(ii)	 	the audited financial statements of each Subsidiary for
that financial year; and

	 	(b)	 	as soon as the same become available, but in any event within 60 days after
the end of each quarter of each of its financial years:

	 	(i)	 	its consolidated financial statements for that quarter;
and

39

 

	 	(ii)	 	the financial statements for that quarter of any Material
Subsidiary.

	18.2	 	Compliance Certificate
	 
	18.2.1	 	The Borrower shall supply to the Agent, with each set of financial statements delivered
pursuant to paragraph (a)(i) or (b)(i) of Clause 18.1 (Financial statements), a Compliance
Certificate setting out (in reasonable detail) computations as to compliance with Clause 19
(Financial covenants) as at the date as at which those financial statements were drawn up.
	 
	18.2.2	 	Each Compliance Certificate shall be signed by two directors of the Borrower and, if
required to be delivered with the financial statements delivered pursuant to paragraph (a)(i)
of Clause 18.1 (Financial statements), shall be reported on by the Borrower’s auditors.
	 
	18.3	 	Requirements as to financial statements
	 
	18.3.1	 	Each set of financial statements delivered by the Borrower pursuant to Clause 18.1
(Financial statements) shall be certified by a director of the relevant company as fairly
representing its financial condition as at the date as at which those financial statements
were drawn up.
	 
	18.3.2	 	The Borrower shall procure that each set of financial statements delivered pursuant to
Clause 18.1 (Financial statements) is prepared using GAAP, accounting practices and financial
reference periods consistent with those applied in the preparation of the Original Financial
Statements unless, in relation to any set of financial statements, it notifies the Agent that
there has been a change in GAAP, the accounting practices or reference periods and its
auditors (or, if appropriate, the auditors of the Borrower) deliver to the Agent:

	 	(a)	 	a description of any change necessary for those financial statements to
reflect the GAAP, accounting practices and reference periods upon which the Original
Financial Statements were prepared; and
	 
	 	(b)	 	sufficient information, in form and substance as may be reasonably required
by the Agent, to enable the Lenders to determine whether Clause 19 (Financial
covenants) has been complied with and make an accurate comparison between the
financial position indicated in those financial statements and the Original Financial
Statements.

	 	 	Any reference in this Agreement to those financial statements shall be construed as a
reference to those financial statements as adjusted to reflect the basis upon which the
Original Financial Statements were prepared.
	 
	18.4	 	Information: miscellaneous
	 
	 	 	The Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if
the Agent so requests):

	 	(a)	 	all documents dispatched by the Borrower to its shareholders (or any class
of them) or its creditors generally at the same time as they are dispatched;

40

 

	 	(b)	 	promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current, threatened or pending
against any member of the Group, and which might, if adversely determined, have a
Material Adverse Effect; and
	 
	 	(c)	 	promptly, such further information regarding the financial condition,
business and operations of any member of the Group as any Finance Party (through the
Agent) may reasonably request.

	18.5	 	Notification of default
	 
	18.5.1	 	The Borrower shall notify the Agent of any Default (and the steps, if any, being taken to
remedy it) promptly upon becoming aware of its occurrence.
	 
	18.5.2	 	Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate
signed by two of its directors or senior officers on its behalf certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and the steps, if any, being
taken to remedy it).
	 
	18.6	 	Use of websites
	 
	18.6.1	 	The Borrower may satisfy its obligation under this Agreement to deliver any information in
relation to those Lenders (the Website Lenders) who accept this method of communication by
posting this information onto an electronic website designated by the Borrower and the Agent
(the Designated Website) if:

	 	(a)	 	the Agent expressly agrees (after consultation with each of the Lenders)
that it will accept communication of the information by this method;
	 
	 	(b)	 	both the Borrower and the Agent are aware of the address of and any
relevant password specifications for the Designated Website; and
	 
	 	(c)	 	the information is in a format previously agreed between the Borrower and
the Agent.

	 	 	If any Lender (a Paper Form Lender) does not agree to the delivery of information
electronically then the Agent shall notify the Borrower accordingly and the Borrower shall
supply the information to the Agent (in sufficient copies for each Paper Form Lender) in
paper form. In any event the Borrower shall supply the Agent with at least one copy in
paper form of any information required to be provided by it.
	 
	18.6.2	 	The Agent shall supply each Website Lender with the address of and any relevant password
specifications for the Designated Website following designation of that website by the
Borrower and the Agent.
	 
	18.6.3	 	The Borrower shall promptly upon becoming aware of its occurrence notify the Agent if:

	 	(a)	 	the Designated Website cannot be accessed due to technical failure;
	 
	 	(b)	 	the password specifications for the Designated Website change;

41

 

	 	(c)	 	any new information which is required to be provided under this Agreement
is posted onto the Designated Website;
	 
	 	(d)	 	any existing information which has been provided under this Agreement and
posted onto the Designated Website is amended; or
	 
	 	(e)	 	the Borrower becomes aware that the Designated Website or any information
posted onto the Designated Website is or has been infected by any electronic virus or
similar software.

	 	 	If the Borrower notifies the Agent under paragraph (a) or paragraph (e) above, all
information to be provided by the Borrower under this Agreement after the date of that
notice shall be supplied in paper form unless and until the Agent and each
Website Lender is satisfied that the circumstances giving rise to the notification
are no longer continuing.
	 
	18.6.4	 	Any Website Lender may request, through the Agent, one paper copy of any information
required to be provided under this Agreement which is posted onto the Designated Website. The
Borrower shall comply with any such request within ten Business Days.
	 
	18.7	 	“Know your customer” checks
	 
	18.7.1	 	If:

	 	(a)	 	the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the date of this
Agreement;
	 
	 	(b)	 	any change in the status of the Borrower after the date of this Agreement;
or
	 
	 	(c)	 	a proposed assignment or transfer by a Lender of any of its rights and
obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,

	 	 	obliges the Agent or any Lender (or, in the case of paragraph (c) above, any
prospective new Lender) to comply with “know your customer” or similar identification
procedures in circumstances where the necessary information is not already available to
it, the Borrower shall promptly upon the request of the Agent or any Lender supply, or
procure the supply of, such documentation and other evidence as is reasonably requested by
the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the
case of the event described in paragraph (c) above, on behalf of any prospective new
Lender) in order for the Agent, such Lender or, in the case of the event described in
paragraph (c) above, any prospective new Lender to carry out and be satisfied it has
complied with all necessary “know your customer” or other similar checks under all
applicable laws and regulations pursuant to the transactions contemplated in the Finance
Documents.
	 
	18.7.2	 	Each Lender shall promptly upon the request of the Agent supply, or procure the supply of,
such documentation and other evidence as is reasonably requested by the Agent (for itself) in
order for the Agent to carry out and be satisfied it has

42

 

complied with all necessary “know
your customer” or other similar checks under all applicable laws and regulations pursuant to
the transactions contemplated in the Finance Documents.

	18.8	 	Access to Books and Records
	 
	 	 	Upon the request of the Agent (on the instructions of any Finance Party) the Borrower
shall provide the Agent and any of its or their representatives, professional advisors and
contractors with access to and permit inspection of books and records of any member of the
Group, in each case at reasonable times and upon reasonable notice.
	 
	19	 	Financial covenants
	 
	19.1	 	Debt Cover
	 
	 	 	The ratio of Net Debt to EBITDA, calculated as of each Quarter Date in respect of the
four immediately preceding financial quarters of Borrower ending on that Quarter Date,
will not:

	 	(a)	 	exceed 3:1 at any time prior to the date falling three years after the date
of this Agreement; and
	 
	 	(b)	 	exceed 2.5:1 at any time thereafter.

	19.2	 	Interest Cover
	 
	 	 	The ratio of EBITDA to Net Interest Expense, calculated as of each Quarter Date in
respect of the four immediately preceding financial quarters of the Borrower ending on
that Quarter Date, will not be less than 5:1.
	 
	19.3	 	Amendments
	 
	19.3.1	 	If as a result of any change in the relevant GAAP pursuant to Clause 18.3 (Requirements as
to financial statements) or any event which, in the reasonable opinion of the Borrower or the
Agent (acting on the instructions of the Majority Lenders), will have a material effect on the
financial covenants above, the Borrower or, as the case may be, the Agent believes that the
financial undertakings set out in this Clause 19 need to be amended as a result of any such
change, determination or requirement, the Borrower shall negotiate with the Agent in good
faith to amend the existing financial undertakings so as to provide the Lenders with
substantially the same protections as the financial undertakings set out in this Clause 19
(but which are not materially more onerous).
	 
	19.3.2	 	If the Borrower and the Agent cannot agree such amended financial undertakings within 30
days of that notice, the Borrower and the Agent shall jointly nominate a firm of chartered
accountants to settle the amended financial undertakings, or in default of such nomination the
Agent shall request the Chairman for the time being of the Institute of Chartered Accountants
in England to nominate a firm of chartered accountants for that purpose. Such accountants
shall act as experts and not arbitrators and their decision shall be final and binding on the
parties. The costs of such accountants shall be paid by the Borrower, an estimate of such

43

 

	 	 	costs having been presented to and approved by the Borrower prior to the engagement of such
accountants.

	19.4	 	Determinations
	 
	 	 	The calculation of ratios and other amounts under this Clause 19 shall be made by the
Borrower by reference to the latest financial information of the Borrower.
	 
	19.5	 	Definitions
	 
	 	 	In this Clause 19, the following terms shall have the meanings ascribed to them:
	 
	 	 	Accounting Group means the Borrower and each Subsidiary of the Borrower (a) which is
included in the Borrower’s consolidated financial statements delivered pursuant to Clause
18.1 (Financial statements) or (b) if not included in the consolidated financial
statements delivered pursuant to Clause 18.1 (Financial statements), provided that in each
case any reference to a member of the Accounting Group shall be deemed to be a reference
only to the percentage of
the item concerned corresponding to the percentage shareholding of the Borrower in
the relevant Subsidiary.
	 
	 	 	Capital Lease means at any time, a lease with respect to which the lessee is required
concurrently to recognise the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
	 
	 	 	Cash and Cash Equivalents means:

	 	(a)	 	cash in hand or on deposit with any acceptable bank;
	 
	 	(b)	 	certificates of deposit, maturing within one year after the relevant date
of calculation, issued by an acceptable bank;
	 
	 	(c)	 	any investment in marketable obligations:

	 	(i)	 	issued or guaranteed by the government of the United
States of America, Israel, the United Kingdom, The Netherlands, France,
Germany or any investment in marketable obligations issued or guaranteed by
any agency or department of any of those governments which has an equivalent
credit rating;
	 
	 	(ii)	 	issued or guaranteed by a government other than as set
out in (c)(i) where those marketable obligations are rated AAA by Standard &
Poor’s or FitchIBCA or Aaa by Moody’s Investor Services or any investment in
marketable obligations issued or guaranteed by any agency or department of
any of those governments which has an equivalent credit rating;

	 	(d)	 	open market commercial paper:

	 	(i)	 	for which a recognised trading market exists;
	 
	 	(iii)	 	which is issued in the United States of America, the
United Kingdom, The Netherlands, France or Germany;

44

 

	 	(iv)	 	which matures within one year after the relevant date of
calculation; and
	 
	 	(v)	 	which has a credit rating of either A-1 from Standard &
Poor’s or FitchIBCA or P-1 by Moody’s Investor Services, or, if no rating is
available in respect of the commercial paper, the issuer of which has, in
respect of its long-term debt obligations, an equivalent rating; or

	 	(e)	 	any other instrument, security or investment approved by the Majority
Lenders,

	 	 	in each case, to which any member of the Accounting Group is beneficially entitled at
that time and which, or the proceeds of which, is capable of being applied against Senior
Debt. In this definition, an acceptable bank is (i) Bank Leumi, Bank Hapoalim B.M., Israel
Discount Bank Ltd., First International Bank of Israel, Union Bank of Israel Ltd. or
United Mizrahi Bank Ltd. and their respective subsidiaries, (ii) a commercial bank,
financial institution or trust company which has a rating of A or higher by Standard &
Poor’s or FitchIBCA or A2 or higher by Moody’s Investor Services or a comparable rating from a nationally
recognised credit rating agency for its long-term debt obligations or has been approved by
the Majority Lenders.
	 
	 	 	Consolidated Net Financing Expense means net financing expense for the Accounting
Group on a consolidated basis, calculated in accordance with GAAP.
	 
	 	 	Consolidated Net Income means, in relation to any period, the net income (or loss) of
the Accounting Group for such period (taken as a cumulative whole), as determined in
accordance with GAAP, after eliminating all offsetting debits and credits between the
Accounting Group and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Accounting Group in accordance
with GAAP.
	 
	 	 	Debt means, with respect to any person, without duplication,

	 	(a)	 	its liabilities for money borrowed or raised;
	 
	 	(b)	 	its liabilities for the deferred purchase price of property acquired by
such person (excluding accounts payable arising in the ordinary course of business
but including, without limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
	 
	 	(c)	 	its Capital Lease obligations; and
	 
	 	(d)	 	not more than 50 per cent. of each guarantee or indemnity against financial
loss of such person with respect to liabilities of a type described in any of
paragraphs (a) to (c) above.

In this definition, Debt of any person shall include all obligations of such person
of the character described in paragraphs (a) to (d) above to the extent such person
remains legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.

45

 

EBITDA means Consolidated Net Income for a measurement period, adjusted by:

	 	(a)	 	adding back Consolidated Net Financing Expense for such period;
	 
	 	(b)	 	excluding any exceptional or extraordinary item;
	 
	 	(c)	 	deducting any amount attributable to minority interests; and
	 
	 	(d)	 	adding back taxes, depreciation and amortisation.

	 	 	Net Debt means at any time (without double counting) the aggregate amount of all
obligations of the Accounting Group for or in respect of Debt but:

	 	(a)	 	including, in the case of finance leases, only the capitalised value
therefor; and
	 
	 	(b)	 	deducting the aggregate amount of Cash and Cash Equivalents held by any
member of the Accounting Group at such time.

	 	 	Net Interest Expense means, in relation to any period, the sum (without double
counting but in each case, eliminating all offsetting debits and credits between the
Accounting Group and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Accounting Group in accordance
with GAAP) of:

	 	(a)	 	all interest in respect of Debt of the Accounting Group (including imputed
interest on Capital Lease obligations) deducted in determining Consolidated Net
Income for such period, together with all interest capitalised or deferred during
such period and not deducted in determining Consolidated Net income for such period;
and
	 
	 	(b)	 	all debt discount and expense amortised or required to be amortised in the
determination of Consolidated Net Income for such period,

	 	 	less interest income of the Accounting Group.
	 
	 	 	Quarter Date means the last day of each quarter in a financial year of the Borrower.
	 
	 	 	Senior Debt means any Debt of any member of the Accounting Group other than any Debt
that is fully subordinated to the Facility.
	 
	20	 	General undertakings
	 
	 	 	The undertakings in this Clause 20 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any Commitment is
in force.
	 
	20.1	 	Authorisations
	 
	 	 	The Borrower shall promptly:

46

 

	 	(a)	 	obtain, comply with and do all that is necessary to maintain in full force
and effect; and
	 
	 	(b)	 	supply certified copies to the Agent of,

	 	 	any Authorisation required under any law or regulation of its jurisdiction of
incorporation to enable it to perform its obligations under the Finance Documents and to
ensure the legality, validity, enforceability or admissibility in evidence in its
jurisdiction of incorporation of any Finance Document.
	 
	20.2	 	Compliance with laws
	 
	 	 	The Borrower shall comply in all respects with all laws to which it may be subject
(including, without limitation, Environmental Laws) where non-compliance might have a
Material Adverse Effect.
	 
	20.3	 	Negative pledge
	 
	20.3.1	 	The Borrower shall not (and shall ensure that no other member of the Group will) create or
permit to subsist any Security over any of its assets.
	 
	20.3.2	 	The Borrower shall not (and shall ensure that no other member of the Group will):

	 	(a)	 	sell, transfer or otherwise dispose of any of its assets on terms whereby
they are or may be leased to or re-acquired by any other member of the Group;
	 
	 	(b)	 	sell, transfer or otherwise dispose of any of its receivables on recourse
terms (other than credit card receivables where the maximum aggregate recourse
against the Borrower in any financial year does not exceed the lower of: (i) 4 per
cent. of the aggregate amount of all credit card receivables sold, transferred or
disposed of in that financial year; and (ii) US$10,000,000 (or its equivalent in
another currency or currencies));
	 
	 	(c)	 	enter into any arrangement under which money or the benefit of a bank or
other account may be applied, set-off or made subject to a combination of accounts;
or
	 
	 	(d)	 	enter into any other preferential arrangement having a similar effect,

	 	 	in circumstances where the arrangement or transaction is entered into primarily as a
method of raising Financial Indebtedness or of financing the acquisition of an asset.
	 
	20.3.3	 	Sub-clauses 20.3.1 and 20.3.2 above do not apply to:

	 	(a)	 	any netting or lien or set-off arrangement or charge over deposited assets
entered into by any member of the Group in the ordinary course of opening bank
accounts for the purpose of netting debit and credit balances;
	 
	 	(b)	 	any lien arising by operation of law and in the ordinary course of trading;

47

 

	 	(c)	 	any Security over or affecting any asset acquired by a member of the Group
after the date of this Agreement if:

	 	(i)	 	the Security was not created in contemplation of the
acquisition of that asset by a member of the Group;
	 
	 	(ii)	 	the principal amount secured has not been increased in
contemplation of, or since the acquisition of that asset by a member of the
Group; and
	 
	 	(iii)	 	the Security is removed or discharged within 45 days of
the date of acquisition of such asset;

	 	(d)	 	any Security over or affecting any asset of any company which becomes a
member of the Group after the date of this Agreement, where the Security is created
prior to the date on which that company becomes a member of the Group, if:

	 	(i)	 	the Security was not created in contemplation of the
acquisition of that company;
	 
	 	(ii)	 	the principal amount secured has not increased in
contemplation of or since the acquisition of that company; and
	 
	 	(iii)	 	the Security is removed or discharged within 45 days
months of that company becoming a member of the Group;

	 	(e)	 	any Security created by a member of the Group after the date hereof in
favour of:

	 	(i)	 	a financial institution; or
	 
	 	(ii)	 	a seller of an asset,

	 	 	 	in respect of the acquisition of any asset by such member of the Group and
the Security is created in respect of such asset only and is limited to the
principal amount of Financial Indebtedness provided by such financial institution
or owing to such seller in respect of such acquisition;
	 
	 	(f)	 	any Security securing indebtedness the principal amount of which (when
aggregated with the principal amount of any other indebtedness which has the benefit
of Security given by any member of the Group other than any permitted under
paragraphs (a) to (f) above) does not exceed US$25,000,000 (or its equivalent in
another currency or currencies).

	20.4	 	Disposals
	 
	20.4.1	 	The Borrower shall not (and shall ensure that no other member of the Group will), enter into
a single transaction or a series of transactions (whether related or not) and whether
voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.

48

 

	20.4.2	 	Sub-clause 20.4.1 above does not apply to any sale, lease, transfer or other disposal:

	 	(a)	 	made in the ordinary course of trading of the disposing entity;
	 
	 	(b)	 	of assets in exchange for other assets comparable or superior as to type,
value and quality;
	 
	 	(c)	 	between the Borrower and its Subsidiaries or between two Subsidiaries of
the Borrower; or
	 
	 	(d)	 	where the higher of the market value or consideration receivable (when
aggregated with the higher of the market value or consideration receivable for any
other sale, lease, transfer or other disposal, other than any permitted under
paragraphs (a) and (c) above) does not exceed US$150,000,000 (or its equivalent in
another currency or currencies) in aggregate.

	20.5	 	Merger
	 
	 	 	The Borrower shall not (and shall ensure that no other member of the Group will)
enter into any amalgamation, demerger, merger or corporate reconstruction.
	 
	20.6	 	Change of business
	 
	 	 	The Borrower shall procure that no substantial change is made to the general nature
of the business of the Borrower or the Group from that carried on at the date of this
Agreement.
	 
	20.7	 	Insurance
	 
	 	 	The Borrower shall effect and maintain insurances at its own expense in respect of
all its assets and business of an insurable nature with reputable insurers of good
standing. Such Insurances must provide cover on terms and against all risks which are
normally insured against by other persons owning or possessing similar assets or carrying
on similar businesses.
	 
	20.8	 	Loans and Guarantees
	 
	 	 	The Borrower shall not without the prior written consent of the Majority Lenders:

	 	(a)	 	grant any credit save: (i) in the ordinary course of business; or (ii) to
Material Subsidiaries where such credit does not exceed in aggregate US$20,000,000
(or its equivalent in another currency or currencies); or
	 
	 	(b)	 	give any other guarantee or indemnity other than guarantees or indemnities
in an amount which, when aggregated with all other guarantees and indemnities given
by the Borrower will not exceed at any time, US$50,000,000 (or its equivalent in
other currencies as determined by the Agent).

	20.9	 	Acquisitions

49

 

	 	 	The Borrower shall not (and shall procure that no member of the Group shall) without
the prior written consent of all the Lenders make any acquisition of shares or securities
where the aggregate consideration payable in connection with that acquisition (including
any deferred element) is greater than or equal to US$50,000,000. The provisions of this
Clause 20.9 shall not apply to the acquisition of any shares or securities that: (i) fall
within the definition of Cash and Cash Equivalents in Clause 19.5 (Definitions); or (ii)
form part of the portfolio investments of the Borrower and do not represent more than five
per cent. of the issued share capital of the issuing company and in any event not more
than US$20,000,000 in aggregate at any time.
	 
	20.10	 	Maintenance of Corporate Existence
	 
	 	 	The Borrower shall ensure at all times that it is a corporation, duly incorporated
and validly existing under the law of Israel.
	 
	20.11	 	Payment of Tax
	 
	 	 	The Borrower shall pay and discharge all Taxes and governmental charges payable by or
assessed upon it prior to the date on which the same become overdue unless, and only to
the extent that, such Taxes and charges are material to the Borrower or are contested in
good faith by appropriate proceedings, pending determination of which payment may lawfully
be withheld, and there shall (if the auditors so advise) be set aside adequate reserves
with respect to any such Taxes or charges so contested in accordance with GAAP.
	 
	20.12	 	Transactions with Affiliates
	 
	 	 	The Borrower shall conduct, and shall use its best endeavours to cause each member of
the Group to conduct, all transactions otherwise permitted under this Agreement with any
of their Affiliates and interested parties in accordance with laws applicable to Israeli
public companies (if such member of the Group is an Israeli public company) and (for any
member of the Group which is not an Israeli public company) on terms that are fair and
reasonable and no less favourable to such member of the Group than it would obtain in a
comparable arm’s length transaction with a person not an Affiliate unless the transaction
has been approved by the Borrower in compliance with the laws applicable to it.
	 
	20.13	 	Dividends
	 
	20.13.1	 	The Borrower may make payments by way of dividend in any financial year in an aggregate
amount not exceeding the balance of its retained earnings as detailed in its financial
statements for the financial year ended 31 December 2005 and delivered to it by the Borrower
pursuant to Clause 18.1(a) (Financial statements).
	 
	20.13.2	 	In addition to Clause 20.13.1 above and at any time after 1 January 2006, the Borrower may
make interim or advanced payments by way of dividend in respect of any financial year provided
that the aggregate amount of all dividends paid in respect of the period commencing on 1
January 2006 and ending on the proposed date of payment of the dividend shall not exceed the
lower of:

	 	(a)	 	the aggregate Eligible Dividend Amount for the period commencing 1 January
2006; and

50

 

	 	(b)	 	75 per cent. of the aggregate of the Borrower’s net profit in respect of
the period commencing on 1 January 2006 and ending on the proposed date of payment of
the dividend (as detailed in its financial statements for the same period and
delivered to the Agent by the Borrower pursuant to Clause 18.1(a) (Financial
statements)).

	20.13.3	 	Prior to the final approval of the audited consolidated financial statements for any
financial year, the Borrower may pay interim dividends in the same financial year provided
that:

	 	(a)	 	the aggregate amount of such interim dividends paid in that financial year
shall not exceed 75 per cent. of the net profit already reported in the Borrower’s
most recent quarterly statements delivered pursuant to Clause 18.1(b) (Financial
statements) for such financial year; and
	 
	 	(b)	 	the Borrower will be in full compliance with the provisions of Clause
20.13.2 at the time of final approval of the audited consolidated financial
statements for that financial year.

	20.13.4	 	The Eligible Dividend Amount and Free Cash Flow shall be determined and tested by the Agent
once in respect of each financial year from the financial statements for the relevant
financial year delivered to it by the Borrower pursuant to Clause 18.1(a) (Financial
statements).
	 
	20.13.5	 	As an alternative to Clauses 20.13.1 to Clause 20.13.3 at any time after the Borrower has
made the repayment due to be made by it on the fifth Facility A Repayment Date, the Borrower
shall be entitled to make payments by way of dividend in an amount not exceeding the amount by
which:

	 	(a)	 	the aggregate of Its Cash and Cash Equivalents (as defined in Clause 19.5
(Definitions)) and Free Cash Flow forecasted for the period ending on the Final
Repayment Date (such forecast to be approved by the Agent prior to the payment of any
dividend and in any event not to exceed the amount of the Borrower’s Free Cash Flow
for the equivalent period of the previous financial year);

exceeds

	 	(b)	 	110 per cent. of Total Debt Service for the period commencing on the date
of the proposed dividend and ending on (and including) the Final Repayment Date.

	20.13.6	 	In this Clause 20.13:
	 
	 	 	Eligible Dividend Amount means the lower of:

	 	(a)	 	the Borrower’s net profit in that financial year as detailed in its
financial statements for that financial year and delivered to it by the Borrower
pursuant to Clause 18.1(a) (Financial statements); and
	 
	 	(b)	 	the amount (if any) by which Free Cash Flow for the same financial year
exceeds 110 per cent. of Total Debt Service for the same financial year.

51

 

Free Cash Flow means

	 	(a)	 	EBITDA;
	 
	 	(b)	 	plus or minus any changes in working capital;
	 
	 	(c)	 	minus any items treated as capital expenditure in accordance with GAAP; and
	 
	 	(d)	 	minus any amounts paid or payable by the Borrower in that financial year in
respect of Tax.

	 	 	Total Debt Service means the amount of all repayments or prepayments of principal
accrued and payable in a financial year of the Borrower plus the gross amount of all
interest, commissions, periodic fees and other financing charges accrued and payable by
the Borrower during that period without counting any principal amount repaid and redrawn
In the same financial year under Facility B other than repayments under Facility B which
are due on the Final Repayment Date and excluding any indebtedness of a maturity which is
equal to or greater than one year listed in the Borrower’s financial statements for the
period ending on 31 December 2005.
	 
	20.14	 	Other Financial Indebtedness of the Borrower
	 
	20.14.1	 	The Borrower shall ensure that the repayment terms of the Facility shall not be inferior in
any material respect to the repayment terms of any other Financial Indebtedness of the
Borrower of a maturity which is equal to or greater than one year.
	 
	20.14.2	 	The Borrower shall not prepay or cancel any Financial Indebtedness of the Borrower without
prepaying or cancelling (as the case may be) an equal proportion of the Facility under the
terms of this Agreement.
	 
	20.15	 	The Law
	 
	 	 	The Borrower shall promptly notify the Agent of each demand made under any letter of
indemnification issued by it pursuant to section 202B(b) of the Law in respect of
potential damages claims under section 197 of the Law (an Indemnity).
	 
	21	 	Events of Default
	 
	 	 	Each of the events or circumstances set out in Clause 21 is an Event of Default.
	 
	21.1	 	Non-payment
	 
	 	 	The Borrower does not pay on the due date any amount payable pursuant to a Finance
Document at the place at and in the currency in which it is expressed to be payable
unless:

	 	(a)	 	its failure to pay is caused by a Disruption Event; and
	 
	 	(b)	 	payment is made within 3 Business Days of its due date.

52

 

	21.2	 	Financial covenants
	 
	 	 	Any requirement of Clause 19 (Financial covenants) is not satisfied.
	 
	21.3	 	Other obligations
	 
	21.3.1	 	The Borrower does not comply with any provision of the Finance Documents (other than those
referred to in Clause 21.1 (Non-payment)).
	 
	21.3.2	 	No Event of Default under sub-clause 21.3.1 above will occur if the failure to comply is
capable of remedy and is remedied within 10 Business Days of the Agent giving notice to the
Borrower or the Borrower becoming aware of the failure to comply.
	 
	21.4	 	Misrepresentation
	 
	 	 	Any representation or statement made or deemed to be made by the Borrower in the
Finance Documents or any other document delivered by or on behalf of the Borrower under or
in connection with any Finance Document is or proves to have been incorrect or misleading
in any material respect when made or deemed to be made.
	 
	21.5	 	Cross default
	 
	21.5.1	 	Any Financial Indebtedness of the Borrower or any Material Subsidiary is not paid when due
nor within any originally applicable grace period.
	 
	21.5.2	 	Any Financial Indebtedness of the Borrower or any Material Subsidiary is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result of an event of
default (however described).
	 
	21.5.3	 	Any commitment for any Financial Indebtedness of the Borrower or any Material Subsidiary is
cancelled or suspended by a creditor of the Borrower or any Material Subsidiary as a result of
an event of default (however described).
	 
	21.5.4	 	Any creditor of the Borrower or any Material Subsidiary becomes entitled to declare any
Financial Indebtedness of the Borrower or any Material Subsidiary due and payable prior to its
specified maturity as a result of an event of default (however described).
	 
	21.5.5	 	No Event of Default will occur under this Clause 21.5 if the aggregate amount of Financial
Indebtedness or commitment for Financial Indebtedness falling within sub-clauses 21.5.1 to
21.5.4 above is less than US$10,000,000 (or its equivalent in any other currency or
currencies).
	 
	21.6	 	Insolvency
	 
	21.6.1	 	The Borrower or any Material Subsidiary is unable or admits inability to pay its debts as
they fall due, suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of its creditors
with a view to rescheduling any of its indebtedness.

53

 

	21.6.2	 	The value of the assets of the Borrower or any Material Subsidiary is less than its
liabilities (taking into account contingent and prospective liabilities).
	 
	21.6.3	 	A moratorium is declared in respect of any indebtedness of the Borrower or any Material
Subsidiary.
	 
	21.7	 	Insolvency proceedings
	 
	 	 	Any corporate action, legal proceedings or other procedure or step is taken in
relation to:

	 	(a)	 	the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration, stay of proceedings order or reorganisation (by way of
voluntary arrangement, scheme of arrangement or otherwise) of the Borrower or any
Material Subsidiary other than a solvent liquidation or reorganisation of any
Material Subsidiary;
	 
	 	(b)	 	a composition, compromise, assignment or arrangement with any creditor of
the Borrower or any Material Subsidiary;
	 
	 	(c)	 	the appointment of a liquidator or temporary liquidator (other than in
respect of a solvent liquidation of a Material Subsidiary), receiver, administrative
receiver, administrator, compulsory manager or other similar officer in respect of
the Borrower or any Material Subsidiary or any of their assets; or
	 
	 	(d)	 	enforcement of any Security over any assets of the Borrower or any Material
Subsidiary,

	 	 	or any analogous procedure or step is taken in any jurisdiction provided that no
Event of Default shall occur under this Clause 21.7 to the extent that the relevant
proceedings are commenced by a third party, are dismissed within 30 days after their
commencement and in any event prior to the appointment of any person
referred to in (c) above (other than in the case of a temporary liquidator or other
person appointed on an ex parte application, provided that such appointment is revoked
within 30 days).
	 
	21.8	 	Creditors’ process
	 
	21.8.1	 	Any expropriation, attachment, sequestration, distress or execution affects any asset or
assets of a member of the Group having an aggregate value of US$5,000,000 and is not
discharged within 45 days.
	 
	21.8.2	 	By or under the authority of the Government of Israel (a) the management of the Borrower or
of any Subsidiary is wholly or partially curtailed; or (b) the whole or any part (the
aggregate value of which is fifteen per cent. or more of the value of the whole) of its
revenues or its assets is seized, expropriated or compulsorily acquired; or (c) any action is
taken to prevent, postpone or otherwise adversely affect the obligations of the Borrower
hereunder.
	 
	21.9	 	Ownership of the Group

54

 

	 	 	Any Material Subsidiary is not or ceases to be a Subsidiary of the Borrower.
	 
	21.10	 	Unlawfulness
	 
	 	 	It is or becomes unlawful for the Borrower to perform any of its obligations under
the Finance Documents.
	 
	21.11	 	Repudiation
	 
	 	 	The Borrower repudiates a Finance Document or evidences an intention to repudiate a
Finance Document.
	 
	21.12	 	Material adverse change
	 
	 	 	The occurrence of any event or series of events since the publication of the Original
Financial Statements (other than the matters referred to in the financial statements dated
30 September 2005) which in the opinion of the Agent (acting on the instructions of the
Majority Lenders) might reasonably be expected to have a Material Adverse Effect.
	 
	21.13	 	Failure to Pay Final Judgments
	 
	 	 	A member of the Group fails to comply with or pay any sum due from it under any final
judgement or any final order made or given by any court of competent jurisdiction.
	 
	21.14	 	Telecommunications Licence
	 
	 	 	The Telecommunications Licence ceases to be in full force and effect or is revoked or
repudiated or amended in a manner which in the opinion of the Agent (acting on the
instructions of the Majority Lenders) might reasonably be expected to result in a Material
Adverse Effect.
	 
	21.15	 	Corporate Bond Prospectus
	 
	 	 	The Borrower fails to publish its corporate bond prospectus on or before 1 June 2006
and register such bonds for trading on the Tel-Aviv Stock Exchange on or before 15 June
2006.
	 
	21.16	 	Hedging
	 
	 	 	The Borrower has not entered into a Hedging Agreement on or before the date falling
90 days after the date of this Agreement, and provided the Agent with a certificate of the
CFO of the Borrower confirming the validity of the Hedging Agreement and the principal
terms thereof.
	 
	21.17	 	Indemnities issued under the Law
	 
	21.17.1	 	The aggregate amount of any and all demands made from the Borrower under all Indemnities
(as defined in Clause 20.15 (The Law)) at any time exceeds US$50,000,000 (or its equivalent in
other currencies as determined by the Agent).

55

 

	21.17.2	 	The Agent receives notification pursuant to Clause 20.15 (The Law) of a demand which either
alone or in aggregate equals or exceeds US$50,000,000 (or its equivalent in other currencies
as determined by the Agent).
	 
	21.17.3	 	There is a provision made or note in any financial statements delivered pursuant to Clause
18.1 (Financial statements) in respect of an anticipated demand which either alone or in
aggregate with all other demands is in an amount equal to or exceeding US$50,000,000 (or its
equivalent in other currencies as determined by the Agent).
	 
	21.18	 	Change of control
	 
	21.18.1	 	If Discount Investment Corporation Ltd., IDB Holding Corporation Ltd. and IDB Development
Corporation Ltd. cease to hold or control together at least 51 per cent. of the entire Issued
share capital of the Borrower and/or any person or group of persons acting in concert has or
obtains any right to block or veto any shareholder resolution or other decision of Discount
Investment Corporation Ltd. in relation to the Borrower (excluding customary minority
protection rights applying to companies generally):

	 	(a)	 	the Borrower shall promptly notify the Agent upon becoming aware of that
event;
	 
	 	(b)	 	a Lender shall not be obliged to fund a Utilisation;
	 
	 	(c)	 	if the Majority Lenders so require, the Agent shall, by not less than 5
days’ notice to the Borrower, cancel the Total Commitments and declare all
outstanding Loans, together with accrued interest, and all other amounts accrued
under the Finance Documents immediately due and payable, whereupon the Total
Commitments will be cancelled and all such outstanding amounts will become
immediately due and payable.

	21.18.2	 	For the purpose of sub-clause 21.18.1 above control means directly holding voting share
capital (or the right to appoint management or direct policies by virtue of ownership of share
capital, contract or otherwise) of the Borrower.
	 
	21.18.3	 	For the purpose of sub-clause 21.18.1 above acting in concert means acting together
pursuant to an agreement or understanding (whether formal or informal).
	 
	21.19	 	Acceleration
	 
	 	 	On and at any time after the occurrence of an Event of Default which is continuing
(other than pursuant to Clause 21.18 (Change of control)) the Agent may, and shall if so
directed by the Majority Lenders, by notice to the Borrower:

	 	(a)	 	cancel the Total Commitments whereupon they shall immediately be cancelled;
	 
	 	(b)	 	declare that all or part of the Loans, together with accrued interest, and
all other amounts accrued or outstanding under the Finance Documents be immediately
due and payable, whereupon they shall become immediately due and payable; and/or

56

 

	 	(c)	 	declare that all or part of the Loans be payable on demand, whereupon they
shall immediately become payable on demand by the Agent on the instructions of the
Majority Lenders.

57

 

Section 8 — Changes to Parties

	22	 	Changes to the Lenders
	 
	22.1	 	Assignments and transfers by the Lenders
	 
	 	 	Subject to this Clause 22, a Lender (the Existing Lender) may:

	 	(a)	 	assign any of its rights; or
	 
	 	(b)	 	transfer by novation any of its rights and obligations,

to another bank or financial institution or to a trust, fund or other entity which is
regularly engaged in or established for the purpose of making, purchasing or investing in
loans, securities or other financial assets (the New Lender) without the consent of the
Borrower unless the assignment or transfer is to:

	 	(i)	 	an entity incorporated in a country or whose Facility
Office is in a country which does not have diplomatic ties with the State of
Israel or which is wholly controlled (within the meaning of Clause 7.2.2
(Change of control)) by an entity incorporated in such a country, or
	 
	 	(ii)	 	any New Lender in respect of which payments by the
Borrower in respect of interest are subject to withholding tax rate greater
than 20 per cent.,

provided that in the case of (ii) above the consent of the Borrower shall not be
unreasonably withheld or delayed and the Borrower agrees that it will not be deemed
reasonable to withhold or delay its consent due to the fact that the assignment or
transfer is from a Lender which has received an exemption from withholding tax from the
Israeli income tax authorities to a New Lender which has not received a similar exemption.
The consent of the Borrower shall be deemed to be given if it has not notified the Agent
of its objection to the proposed assignment or transfer on or before the date falling 3
Business Days after notification of it to the Borrower by the Existing Lender. The consent
of the Borrower shall not be required: (a) notwithstanding (ii) above if an Event of
Default has occurred and is continuing; or (b) subject to (i) and (ii) above, the
assignment or transfer is to a Lender or an Affiliate of a Lender.

22.2 Conditions of assignment or transfer

22.2.1 An assignment will only be effective on:

	 	(a)	 	receipt by the Agent of written confirmation from the New Lender (in form
and substance satisfactory to the Agent) that the New Lender will assume the same
obligations to the other Finance Parties as it would have been under if it was an
Original Lender; and
	 
	 	(b)	 	performance by the Agent of all necessary “know your customer” or other
similar checks under all applicable laws and regulations in relation to

58

 

	 	 	 	such
assignment to a New Lender, the completion of which the Agent shall promptly notify
to the Existing Lender and the New Lender.

	22.2.2	 	A transfer will only be effective if the procedure set out in Clause 22.5 (Procedure for
transfer) is complied with.
	 
	22.2.3	 	If:

	 	(a)	 	a Lender assigns or transfers any of its rights or obligations under the
Finance Documents or changes its Facility Office; and
	 
	 	(b)	 	as a result of circumstances existing at the date the assignment, transfer
or change occurs, the Borrower would be obliged to make a payment to the New Lender
or Lender acting through its new Facility Office under Clause 12 (Tax gross-up and
indemnities) or Clause 13 (Increased Costs),

then the New Lender or Lender acting through its new Facility Office is only entitled
to receive payment under those Clauses to the same extent as the Existing Lender or Lender
acting through its previous Facility Office would have been if the assignment, transfer or
change had not occurred, provided that in no circumstances may a Lender change its
Facility Office to a Facility Office in a country which does not have diplomatic ties with
the State of Israel.

	22.3	 	Assignment or transfer fee
	 
	 	 	The New Lender shall, on the date upon which an assignment or transfer takes effect,
pay to the Agent (for its own account) a fee of US$2,000.
	 
	22.4	 	Limitation of responsibility of Existing Lenders
	 
	22.4.1	 	Unless expressly agreed to the contrary, an Existing Lender makes no representation or
warranty and assumes no responsibility to a New Lender for:

	 	(a)	 	the legality, validity, effectiveness, adequacy or enforceability of the
Finance Documents or any other documents;
	 
	 	(b)	 	the financial condition of the Borrower;
	 
	 	(c)	 	the performance and observance by the Borrower of its obligations under the
Finance Documents or any other documents; or
	 
	 	(d)	 	the accuracy of any statements (whether written or oral) made in or in
connection with any Finance Document or any other document,

	 	 	and any representations or warranties implied by law are excluded.
	 
	22.4.2	 	Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

	 	(a)	 	has made (and shall continue to make) its own independent investigation and
assessment of the financial condition and affairs of the Borrower and its related
entities in connection with its participation in this Agreement

59

 

	 	 	 	and has not relied
exclusively on any information provided to it by the Existing Lender in connection
with any Finance Document; and

	 	(b)	 	will continue to make its own independent appraisal of the Creditworthiness
of the Borrower and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is
in force.

	22.4.3	 	Nothing in any Finance Document obliges an Existing Lender to:

	 	(a)	 	accept a re-transfer from a New Lender of any of the rights and obligations
assigned or transferred under this Clause 22; or
	 
	 	(b)	 	support any losses directly or indirectly incurred by the New Lender by
reason of the non-performance by the Borrower of its obligations under the Finance
Documents or otherwise.

	22.5	 	Procedure for transfer
	 
	22.5.1	 	Subject to the conditions set out in Clause 22.2 (Conditions of assignment or transfer) a
transfer is effected in accordance with sub-clause 22.5.3 below when the Agent executes an
otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the
New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable
after receipt by it of a duly completed Transfer Certificate appearing on its face to comply
with the terms of this Agreement and delivered in accordance with the terms of this Agreement,
execute that Transfer Certificate.
	 
	22.5.2	 	The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the
Existing Lender and the New Lender once it is satisfied it has complied with all necessary
“know your customer” or other similar checks under all applicable laws and regulations in
relation to the transfer to such New Lender.
	 
	22.5.3	 	On the Transfer Date:

	 	(a)	 	to the extent that in the Transfer Certificate the Existing Lender seeks to
transfer by novation its rights and obligations under the Finance Documents the
Borrower and the Existing Lender shall be released from further obligations towards
one another under the Finance Documents and their respective rights against one
another under the Finance Documents shall be cancelled (being the Discharged Rights
and Obligations);
	 
	 	(b)	 	the Borrower and the New Lender shall assume obligations towards one
another and/or acquire rights against one another which differ from the Discharged
Rights and Obligations only insofar as the Borrower and the New Lender have assumed
and/or acquired the same in place of the Borrower and the Existing Lender;
	 
	 	(c)	 	the Agent, the Mandated Lead Arranger, the New Lender and other Lenders
shall acquire the same rights and assume the same obligations between themselves as
they would have acquired and assumed had the New Lender been an Original Lender with
the rights and/or obligations

60

 

	 	 	 	acquired or assumed by it as a result of the transfer
and to that extent the Agent, the Mandated Lead Arranger and the Existing Lender
shall each be released from further obligations to each other under the Finance
Documents; and

	 	(d)	 	the New Lender shall become a Party as a “Lender”.

	22.6	 	Copy of Transfer Certificate to the Borrower
	 
	 	 	The Agent shall, as soon as reasonably practicable after it has executed a Transfer
Certificate, send to the Borrower a copy of that Transfer Certificate.
	 
	22.7	 	Disclosure of information
	 
	22.7.1	 	Each Finance Party must keep confidential any information supplied to it by or on behalf of
any Obligor in connection with the Finance Documents. However, a Finance Party is entitled to
disclose information:

	 	(a)	 	which is publicly available, other than as a result of a breach by that
Finance Party of this Clause;
	 
	 	(b)	 	in connection with any legal or arbitration proceedings to the parties to
such proceedings and their counsel or other advisors and to the court or arbitrators
in such proceedings;
	 
	 	(c)	 	if required or requested to do so under any law or regulation;
	 
	 	(d)	 	to a governmental, official banking, taxation or other regulatory
authority;
	 
	 	(e)	 	to its professional advisers;
	 
	 	(f)	 	to the extent allowed under Clause 22.7.2 below;
	 
	 	(g)	 	to its officers, employees and directors;
	 
	 	(h)	 	with the agreement of the Borrower.

	22.7.2	 	A Finance Party may disclose to: (i) an Affiliate; or (ii) any person with whom it may
enter, or has entered Into, any kind of transfer, participation or other agreement in relation
to this Agreement (a participant):

	 	(a)	 	a copy of any Finance Document; and
	 
	 	(b)	 	any information which that Finance Party has acquired under or in
connection with any Finance Document including, without limitation, any information
about the Borrower or the Group.

However, before a participant may receive any confidential information, it must enter
into a Confidentiality Undertaking with the relevant Finance Party.

61

 

	23	 	Assignments and transfer by the Borrower
	 
	 	 	The Borrower may not assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.

62

 

Section 9 — The Finance Parties

	24	 	Role of the Agent and the Mandated Lead Arranger
	 
	24.1	 	Appointment of the Agent
	 
	24.1.1	 	Each other Finance Party appoints the Agent to act as its agent under and in connection with
the Finance Documents.
	 
	24.1.2	 	Each other Finance Party authorises the Agent to exercise the rights, powers, authorities
and discretions specifically given to the Agent under or in connection with the Finance
Documents together with any other incidental rights, powers, authorities and discretions.
	 
	24.2	 	Duties of the Agent
	 
	24.2.1	 	The Agent shall promptly forward to a Party the original or a copy of any document which is
delivered to the Agent for that Party by any other Party.
	 
	24.2.2	 	Except where a Finance Document specifically provides otherwise, the Agent is not obliged to
review or check the adequacy, accuracy or completeness of any document it forwards to another
Party.
	 
	24.2.3	 	If the Agent receives notice from a Party referring to this Agreement, describing a Default
and stating that the circumstance described is a Default, it shall promptly notify the Finance
Parties.
	 
	24.2.4	 	If the Agent is aware of the non-payment of any principal, interest, commitment fee or other
fee payable to a Finance Party (other than the Agent or the Mandated Lead Arranger) under this
Agreement it shall promptly notify the other Finance Parties.
	 
	24.2.5	 	The Agent’s duties under the Finance Documents are solely mechanical and administrative in
nature.
	 
	24.3	 	Role of the Mandated Lead Arranger
	 
	 	 	Except as specifically provided in the Finance Documents, the Mandated Lead Arranger
has no obligations of any kind to any other Party under or in connection with any Finance
Document.
	 
	24.4	 	No fiduciary duties
	 
	24.4.1	 	Nothing in this Agreement constitutes the Agent or the Mandated Lead Arranger as a trustee
or fiduciary of any other person.
	 
	24.4.2	 	Neither the Agent nor the Mandated Lead Arranger shall be bound to account to any Lender for
any sum or the profit element of any sum received by it for its own account.
	 
	24.5	 	Business with the Group

63

 

	 	 	The Agent and the Mandated Lead Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any member of the Group.
	 
	24.6	 	Rights and discretions of the Agent
	 
	24.6.1	 	The Agent may rely on:

	 	(a)	 	any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and
	 
	 	(b)	 	any statement made by a director, authorised signatory or employee of any
person regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify.

	24.6.2	 	The Agent may assume (unless it has received notice to the contrary in its capacity as agent
for the Lenders) that:

	 	(a)	 	no Default has occurred (unless it has actual knowledge of a Default
arising under Clause 21.1 (Non-payment));
	 
	 	(b)	 	any right, power, authority or discretion vested in any Party or the
Majority Lenders has not been exercised.

	24.6.3	 	The Agent may engage, pay for and rely on the advice or services of any lawyers,
accountants, surveyors or other experts.
	 
	24.6.4	 	The Agent may act in relation to the Finance Documents through its personnel and agents.
	 
	24.6.5	 	The Agent may disclose to any other Party any information it reasonably believes it has
received as agent under this Agreement.
	 
	24.6.6	 	Notwithstanding any other provision of any Finance Document to the contrary, neither the
Agent nor the Mandated Lead Arranger is obliged to do or omit to do anything if it would or
might in its reasonable opinion constitute a breach of any law or regulation or a breach of a
fiduciary duty or duty of confidentiality.
	 
	24.7	 	Majority Lenders’ instructions
	 
	24.7.1	 	Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any
right, power, authority or discretion vested in it as Agent in accordance with any
instructions given to it by the Majority Lenders (or, if so instructed by the Majority
Lenders, refrain from exercising any right, power, authority or discretion vested in it as
Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking
any action) in accordance with an instruction of the Majority Lenders.
	 
	24.7.2	 	Unless a contrary indication appears in a Finance Document, any instructions given by the
Majority Lenders will be binding on all the Finance Parties.
	 
	24.7.3	 	The Agent may refrain from acting in accordance with the instructions of the Majority
Lenders (or, if appropriate, the Lenders) until it has received such

64

 

	 	 	security as it may
require for any cost, loss or liability (together with any associated VAT) which it may incur
in complying with the instructions.
	 
	24.7.4	 	In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders)
the Agent may act (or refrain from taking action) as it considers to be in the best interest
of the Lenders.
	 
	24.7.5	 	The Agent is not authorised to act on behalf of a Lender (without first obtaining that
Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.
	 
	24.8	 	Responsibility for documentation
	 
	 	 	Neither the Agent nor the Mandated Lead Arranger:

	 	(a)	 	is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, the Mandated Lead
Arranger, the Borrower or any other person given in or in connection with any Finance
Document or the Information Memorandum; or
	 
	 	(b)	 	is responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or any other agreement, arrangement or
document entered into, made or executed in anticipation of or in connection with any
Finance Document.

	24.9	 	Exclusion of liability
	 
	24.9.1	 	Without limiting sub-clause 24.9.2 below (and without prejudice to the provisions of
sub-clause 27.10(e) (Disruption to Payment Systems etc)), the Agent will not be liable
including, without limitation, for negligence or any other category of liability whatsoever)
for any action taken by it under or in connection with any Finance Document, unless directly
caused by its gross negligence or wilful misconduct.
	 
	24.9.2	 	No Party (other than the Agent) may take any proceedings against any officer, employee or
agent of the Agent in respect of any claim it might have against the Agent or in respect of
any act or omission of any kind by that officer, employee or agent in relation to any Finance
Document and any officer, employee or agent of the Agent may rely on this Clause.
	 
	24.9.3	 	The Agent will not be liable for any delay (or any related consequences) in crediting an
account with an amount required under the Finance Documents to be paid by the Agent if the
Agent has taken all necessary steps as soon as reasonably practicable to comply with the
regulations or operating procedures of any recognised clearing or settlement system used by
the Agent for that purpose.
	 
	24.9.4	 	Nothing in this Agreement shall oblige the Agent or the Mandated Lead Arranger to carry out
any “know your customer” or other checks in relation to any person on behalf of any Lender and
each Lender confirms to the Agent and the Mandated Lead Arranger that it is solely responsible
for any such checks it is required to carry out and that it may not rely on any statement in
relation to such checks made by the Agent or the Mandated Lead Arranger.

65

 

	24.10	 	Lenders’ indemnity to the Agent
	 
	 	 	Each Lender shall (in proportion to its share of the Total Commitments or, if the
Total Commitments are then zero, to its share of the Total Commitments
immediately prior to their reduction to zero) indemnify the Agent, within five
Business Days of demand, against any cost, loss or liability (including, without
limitation, for negligence or any other category of liability whatsoever) incurred by the
Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) (or,
in the case of any cost, loss or liability pursuant to Clause 27.10 (Disruption to Payment
Systems etc.) notwithstanding the Agent’s negligence, gross negligence or any other
category of liability whatsoever but not including any claim based on the fraud of the
Agent) in acting as Agent under the Finance Documents (unless the Agent has been
reimbursed by the Borrower pursuant to a Finance Document).
	 
	24.11	 	Resignation of the Agent
	 
	24.11.1	 	The Agent may resign and appoint one of its Affiliates acting through an office in the
United Kingdom as successor by giving notice to the other Finance Parties and the Borrower.
	 
	24.11.2	 	Alternatively the Agent may resign by giving notice to the other Finance Parties and the
Borrower, in which case the Majority Lenders (after consultation with the Borrower) may
appoint a successor Agent.
	 
	24.11.3	 	If the Majority Lenders have not appointed a successor Agent in accordance with sub-clause
24.11.2 above within 30 days after notice of resignation was given, the Agent (after
consultation with the Borrower) may appoint a successor Agent (acting through an office in the
United Kingdom).
	 
	24.11.4	 	The retiring Agent shall, at its own cost, make available to the successor Agent such
documents and records and provide such assistance as the successor Agent may reasonably
request for the purposes of performing its functions as Agent under the Finance Documents.
	 
	24.11.5	 	The Agent’s resignation notice shall only take effect upon the appointment of a successor.
	 
	24.11.6	 	Upon the appointment of a successor, the retiring Agent shall be discharged from any
further obligation in respect of the Finance Documents but shall remain entitled to the
benefit of this Clause 24. Its successor and each of the other Parties shall have the same
rights and obligations amongst themselves as they would have had if such successor had been an
original Party.
	 
	24.11.7	 	After consultation with the Borrower, the Majority Lenders may, by notice to the Agent,
require it to resign in accordance with sub-clause 24.11.2 above. In this event, the Agent
shall resign in accordance with sub-clause 24.11.2 above.
	 
	24.12	 	Confidentiality
	 
	24.12.1	 	In acting as agent for the Finance Parties, the Agent shall be regarded as acting through
its agency division which shall be treated as a separate entity from any other of its
divisions or departments.

66

 

	24.12.2	 	If information is received by another division or department of the Agent, it may be
treated as confidential to that division or department and the Agent shall not be deemed to
have notice of it.
	 
	24.13	 	Relationship with the Lenders
	 
	24.13.1	 	The Agent may treat each Lender as a Lender, entitled to payments under this Agreement and
acting through its Facility Office unless it has received not less than five Business Days
prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
	 
	24.13.2	 	Each Lender shall supply the Agent with any information required by the Agent in order to
calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost formula).
	 
	24.14	 	Credit appraisal by the Lenders
	 
	 	 	Without affecting the responsibility of the Borrower for information supplied by it
or on its behalf in connection with any Finance Document, each Lender confirms to the
Agent and the Mandated Lead Arranger that it has been, and will continue to be, solely
responsible for making its own independent appraisal and investigation of all risks
arising under or in connection with any Finance Document including but not limited to:

	 	(a)	 	the financial condition, status and nature of each member of the Group;
	 
	 	(b)	 	the legality, validity, effectiveness, adequacy or enforceability of any
Finance Document and any other agreement, arrangement or document entered into, made
or executed in anticipation of, under or in connection with any Finance Document;
	 
	 	(c)	 	whether that Lender has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or in connection
with any Finance Document, the transactions contemplated by the Finance Documents or
any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document; and
	 
	 	(d)	 	the adequacy, accuracy and/or completeness of the Information Memorandum
and any other information provided by the Agent, any Party or by any other person
under or in connection with any Finance Document, the transactions contemplated by
the Finance Documents or any other agreement, arrangement or document entered into,
made or executed in anticipation of, under or in connection with any Finance
Document.

	24.15	 	Reference Banks
	 
	 	 	If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it
is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the
Borrower) appoint another Lender or an Affiliate of a Lender to replace that Reference
Bank.

67

 

	24.16	 	Agent’s Management Time
	 
	 	 	Any amount payable to the Agent under Clause 14.3 (Indemnity to the Agent), Clause 16
(Costs and expenses) and Clause 24.10 (Lenders’ indemnity to the Agent) shall include the
cost of utilising the Agent’s management time or other resources and will be calculated on
the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrower
and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause
11 (Fees).
	 
	24.17	 	Deduction from amounts payable by the Agent
	 
	 	 	If any Party owes an amount to the Agent under the Finance Documents the Agent may,
after giving notice to that Party, deduct an amount not exceeding that amount from any
payment to that Party which the Agent would otherwise be obliged to make under the Finance
Documents and apply the amount deducted in or towards satisfaction of the amount owed. For
the purposes of the Finance Documents that Party shall be regarded as having received any
amount so deducted.
	 
	25	 	Conduct of business by the Finance Parties
	 
	 	 	No provision of this Agreement will:

	 	(a)	 	interfere with the right of any Finance Party to arrange its affairs (tax
or otherwise) in whatever manner it thinks fit;
	 
	 	(b)	 	oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of any claim;
or
	 
	 	(c)	 	oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.

	26	 	Sharing among the Finance Parties
	 
	26.1	 	Payments to Finance Parties
	 
	 	 	If a Finance Party (a Recovering Finance Party) receives or recovers any amount from
the Borrower other than in accordance with Clause 27 (Payment mechanics) and applies that
amount to a payment due under the Finance Documents then:

	 	(a)	 	the Recovering Finance Party shall, within five Business Days, notify
details of the receipt or recovery, to the Agent;
	 
	 	(b)	 	the Agent shall determine whether the receipt or recovery is in excess of
the amount the Recovering Finance Party would have been paid had the receipt or
recovery been received or made by the Agent and distributed in accordance with Clause
27 (Payment mechanics), without taking account of any Tax which would be imposed on
the Agent in relation to the receipt, recovery or distribution; and

68

 

	 	(c)	 	the Recovering Finance Party shall, within five Business Days of demand by
the Agent, pay to the Agent an amount (the Sharing Payment) equal to such receipt or
recovery less any amount which the Agent determines may be retained by the Recovering
Finance Party as its share of any payment to be made, in accordance with Clause 27.5
(Partial payments).

	26.2	 	Redistribution of payments
	 
	 	 	The Agent shall treat the Sharing Payment as if it had been paid by the Borrower and
distribute it between the Finance Parties (other than the Recovering Finance Party) in
accordance with Clause 27.5 (Partial payments).
	 
	26.3	 	Recovering Finance Party’s rights
	 
	26.3.1	 	On a distribution by the Agent under Clause 26.2 (Redistribution of payments), the
Recovering Finance Party will be subrogated to the rights of the Finance Parties which have
shared in the redistribution.
	 
	26.3.2	 	If and to the extent that the Recovering Finance Party is not able to rely on its rights
under sub-clause 26.3.1 above, the Borrower shall be liable to the Recovering Finance Party
for a debt equal to the Sharing Payment which is immediately due and payable.
	 
	26.4	 	Reversal of redistribution
	 
	 	 	If any part of the Sharing Payment received or recovered by a Recovering Finance
Party becomes repayable and is repaid by that Recovering Finance Party, then:

	 	(a)	 	each Finance Party which has received a share of the relevant Sharing
Payment pursuant to Clause 26.2 (Redistribution of payments) shall, upon request of
the Agent, pay to the Agent for account of that Recovering Finance Party an amount
equal to the appropriate part of its share of the Sharing Payment (together with an
amount as is necessary to reimburse that Recovering Finance Party for its proportion
of any interest on the Sharing Payment which that Recovering Finance Party is
required to pay); and
	 
	 	(b)	 	that Recovering Finance Party’s rights of subrogation in respect of any
reimbursement shall be cancelled and the Borrower will be liable to the reimbursing
Finance Party for the amount so reimbursed.

	26.5	 	Exceptions
	 
	26.5.1	 	This Clause 26 shall not apply to the extent that the Recovering Finance Party would not,
after making any payment pursuant to this Clause, have a valid and enforceable claim against
the Borrower.
	 
	26.5.2	 	A Recovering Finance Party is not obliged to share with any other Lender any amount which
the Recovering Finance Party has received or recovered as a result of taking legal or
arbitration proceedings, if:

69

 

	 	(a)	 	it notified that other Finance Party of the legal or arbitration
proceedings; and
	 
	 	(b)	 	the other Finance Party had an opportunity to participate in those legal or
arbitration proceedings but did not do so as soon as reasonably practicable having
received notice and did not take separate legal or arbitration proceedings.

	26.6	 	Waiver of Consequential Damages
	 
	 	 	In no event shall any Finance Party be liable on any theory of liability for any
special, indirect, consequential or punitive damages and the Borrower hereby waives,
releases and agrees (for itself and on behalf of its Subsidiaries) not to sue upon any
such claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in their favour.

70

 

Section 10 — Administration

	27	 	Payment mechanics
	 
	27.1	 	Payments to the Agent
	 
	27.1.1	 	On each date on which the Borrower or a Lender is required to make a payment under a Finance
Document, the Borrower or Lender shall make the same available to the Agent (unless a contrary
indication appears in a Finance Document) for value on the due date at the time and in such
funds specified by the Agent as being customary at the time for settlement of transactions in
the relevant currency in the place of payment.
	 
	27.1.2	 	Payment shall be made to such account in the principal financial centre of the country of
that currency with such bank as the Agent specifies.
	 
	27.2	 	Distributions by the Agent
	 
	 	 	Each payment received by the Agent under the Finance Documents for another Party
shall, subject to Clause 27.3 (Distributions to the Borrower) and Clause 27.4 (Clawback)
be made available by the Agent as soon as practicable after receipt to the Party entitled
to receive payment in accordance with this Agreement (in the case of a Lender, for the
account of its Facility Office), to such account as that Party may notify to the Agent by
not less than five Business Days’ notice with a bank in the principal financial centre of
the country of that currency.
	 
	27.3	 	Distributions to the Borrower
	 
	 	 	The Agent may (with the consent of the Borrower or in accordance with Clause 28
(Set-off)) apply any amount received by it for the Borrower in or towards payment (on the
date and in the currency and funds of receipt) of any amount due from the Borrower under
the Finance Documents or in or towards purchase of any amount of any currency to be so
applied.
	 
	27.4	 	Clawback
	 
	27.4.1	 	Where a sum is to be paid to the Agent under the Finance Documents for another Party, the
Agent is not obliged to pay that sum to that other Party (or to enter into or perform any
related exchange contract) until it has been able to establish to its satisfaction that it has
actually received that sum.
	 
	27.4.2	 	If the Agent pays an amount to another Party and it proves to be the case that the Agent had
not actually received that amount, then the Party to whom that amount (or the proceeds of any
related exchange contract) was paid by the Agent shall on demand refund the same to the Agent
together with interest on that amount from the date of payment to the date of receipt by the
Agent, calculated by the Agent to reflect its cost of funds.
	 
	27.5	 	Partial payments

71

 

	27.5.1	 	If the Agent receives a payment that is insufficient to discharge all the amounts then due
and payable by the Borrower under the Finance Documents, the Agent
shall apply that payment towards the obligations of the Borrower under the Finance
Documents in the following order:

	 	(a)	 	first, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Agent under the Finance Documents;
	 
	 	(b)	 	secondly, in or towards payment pro rata of any accrued interest, fee or
commission due but unpaid under this Agreement;
	 
	 	(c)	 	thirdly, in or towards payment pro rata of any principal due but unpaid
under this Agreement; and
	 
	 	(d)	 	fourthly, in or towards payment pro rata of any other sum due but unpaid
under the Finance Documents.

	27.5.2	 	The Agent shall, if so directed by the Majority Lenders, vary the order set out in
sub-clauses 27.5.1(b) to (d) above.
	 
	27.5.3	 	Clauses 27.5.1 and 27.5.2 above will override any appropriation made by the Borrower.
	 
	27.5.4	 	For the avoidance of doubt, the proportion due to any:

	 	(a)	 	Lender (other than an NIS Lender) shall be the proportion which the
Original Dollar Amount of its participation in the relevant Loans (other than NIS
Loans) bears to the Original Dollar Amount of the relevant Loans; and
	 
	 	(b)	 	NIS Lender shall be the proportion which the amount in NIS of its
participation in the relevant NIS Loan bears to the amount in NIS of the relevant NIS
Loan.

	27.6	 	No set-off by the Borrower
	 
	 	 	All payments to be made by the Borrower under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for) set-off or
counterclaim.
	 
	27.7	 	Business Days
	 
	27.7.1	 	Any payment which is due to be made on a day that is not a Business Day shall be made on the
next Business Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not).
	 
	27.7.2	 	During any extension of the due date for payment of any principal or Unpaid Sum under this
Agreement Interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.
	 
	27.8	 	Currency of account

72

 

	27.8.1	 	Subject to sub-clauses 27.8.2 and 27.8.5 below, Dollars is the currency of account and
payment for any sum due from the Borrower under any Finance Document other than in respect of
an NIS Loan, in which case NIS shall be the currency of account and payment for any sum due
from the Borrower in connection with that NIS Loan.
	 
	27.8.2	 	Each payment in respect of costs, expenses or Taxes shall be made in the currency in which
the costs, expenses or Taxes are incurred.
	 
	27.8.3	 	Any amount expressed to be payable in a currency other than Dollars shall be paid in that
other currency.
	 
	27.8.4	 	A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the
currency in which that Loan or Unpaid Sum is denominated on its due date.
	 
	27.8.5	 	Each payment of interest shall be made in the currency in which the sum in respect of which
the interest is payable was denominated when that interest accrued.
	 
	27.9	 	Change of currency
	 
	27.9.1	 	Unless otherwise prohibited by law, if more than one currency or currency unit are at the
same time recognised by the central bank of any country as the lawful currency of that
country, then:

	 	(a)	 	any reference in the Finance Documents to, and any obligations arising
under the Finance Documents in, the currency of that country shall be translated
into, or paid in, the currency or currency unit of that country designated by the
Agent (after consultation with the Borrower); and
	 
	 	(b)	 	any translation from one currency or currency unit to another shall be at
the official rate of exchange recognised by the central bank for the conversion of
that currency or currency unit into the other, rounded up or down by the Agent
(acting reasonably).

	27.9.2	 	If a change in any currency of a country occurs, this Agreement will, to the extent the
Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary,
be amended to comply with any generally accepted conventions and market practice in the
Relevant Interbank Market and otherwise to reflect the change in currency.
	 
	27.10	 	Disruption to Payment Systems etc.
	 
	 	 	If either the Agent determines (in its discretion) that a Disruption Event has
occurred or the Agent is notified by the Borrower that a Disruption Event has occurred:

	 	(a)	 	the Agent may, and shall if requested to do so by the Borrower, consult
with the Borrower with a view to agreeing with the Borrower such changes to the
operation or administration of the Facilities as the Agent may deem necessary in the
circumstances;

73

 

	 	(b)	 	the Agent shall not be obliged to consult with the Borrower in relation to
any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to
do so in the circumstances and, in any event, shall have no obligation to agree to
such changes;
	 
	 	(c)	 	the Agent may consult with the Finance Parties in relation to any changes
mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it
is not practicable to do so in the circumstances;
	 
	 	(d)	 	any such changes agreed upon by the Agent and the Borrower shall (whether
or not it is finally determined that a Disruption Event has occurred) be binding upon
the Parties as an amendment to (or, as the case may be, waiver of) the terms of the
Finance Documents notwithstanding the provisions of Clause 33 (Amendments and
waivers);
	 
	 	(e)	 	the Agent shall not be liable for any damages, costs or losses whatsoever
(Including, without limitation for negligence or any other category of liability
whatsoever but not including any claim based on the fraud of the Agent) arising as a
result of its taking, or failing to take, any actions pursuant to or in connection
with this Clause 27.10; and
	 
	 	(f)	 	the Agent shall notify the Finance Parties of all changes agreed pursuant
to paragraph (d) above.

	28	 	Set-off
	 
	 	 	A Finance Party may set off any matured obligation due from the Borrower under the
Finance Documents (to the extent beneficially owned by that Finance Party) against any
matured obligation owed by that Finance Party to the Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the obligations are in
different currencies, the Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off.
	 
	29	 	Notices
	 
	29.1	 	Communications in writing
	 
	 	 	Any communication to be made under or in connection with the Finance Documents shall
be made in writing and, unless otherwise stated, may be made by fax or letter.
	 
	29.2	 	Addresses
	 
	29.2.1	 	The address and fax number (and the department or officer, if any, for whose attention the
communication is to be made) of each Party for any communication or document to be made or
delivered under or in connection with the Finance Documents is:

	 	(a)	 	in the case of the Borrower, that identified with its name below;
	 
	 	(b)	 	in the case of each Lender, that notified in writing to the Agent on or
prior to the date on which it becomes a Party; and

74

 

	 	(c)	 	in the case of the Agent, that identified with its name below,

	 	 	or any substitute address or fax number or department or officer as the Party may notify
to the Agent (or the Agent may notify to the other Parties, if a change is made by the
Agent) by not less than five Business Days’ notice.
	 
	29.2.2	 	The addresses referred to in Clause 29.2.1 are as follows:

	 	(a)	 	The Borrower

Cellcom Israel Ltd.

10 Hagavish Street

Netanya

Israel 42140

	 	 	 
	Attention:

	 	Chief Financial Officer and General Counsel
	Fax:

	 	+972 52 998 9701

	 	(b)	 	The Agent

Citibank International plc

European Loans Agency

Capital Markets & Banking Operations

Citigroup Centre

Canada Square

Canary Wharf

London E14 5LB

United Kingdom

	 	 	 
	Attention:

	 	Loans Agency
	Fax:

	 	+44 (0)20 8636 3824

	29.3	 	Delivery
	 
	29.3.1	 	Any communication or document made or delivered by one person to another under or in
connection with the Finance Documents will only be effective:

	 	(a)	 	if by way of fax, when received in legible form; or
	 
	 	(b)	 	if by way of letter, when it has been left at the relevant address or five
Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address; or

	 	 	and, if a particular department or officer is specified as part of its address
details provided under Clause 29.2 (Addresses), if addressed to that department or
officer.
	 
	29.3.2	 	Any communication or document to be made or delivered to the Agent will be effective only
when actually received by the Agent and then only if it is expressly marked for the attention
of the department or officer identified with the Agent’s signature below (or any substitute
department or officer as the Agent shall specify for this purpose).

75

 

	29.3.3	 	All notices from or to the Borrower shall be sent through the Agent.
	 
	29.3.4	 	Any communication or document made or delivered to the Borrower in accordance with this
Clause will be deemed to have been made or delivered to the Borrower.
	 
	29.4	 	Notification of address and fax number
	 
	 	 	Promptly upon receipt of notification of an address or fax number or change of
address or fax number pursuant to Clause 29.2 (Addresses) or changing its own address or
fax number, the Agent shall notify the other Parties.
	 
	29.5	 	Electronic communication
	 
	29.5.1	 	Any communication to be made between the Agent and a Lender under or in connection with the
Finance Documents may be made by electronic mail or other electronic means, if the Agent and
the relevant Lender:

	 	(a)	 	agree that, unless and until notified to the contrary, this is to be an
accepted form of communication;
	 
	 	(b)	 	notify each other in writing of their electronic mail address and/or any
other information required to enable the sending and receipt of information by that
means; and
	 
	 	(c)	 	notify each other of any change to their address or any other such
information supplied by them.

	29.5.2	 	Any electronic communication made between the Agent and a Lender will be effective only when
actually received in readable form and in the case of any electronic communication made by a
Lender to the Agent only if it is addressed in such a manner as the Agent shall specify for
this purpose.
	 
	29.6	 	English language
	 
	29.6.1	 	Any notice given under or in connection with any Finance Document must be in English.
	 
	29.6.2	 	All other documents provided under or in connection with any Finance Document must be:

	 	(a)	 	in English; or
	 
	 	(b)	 	if not in English, and if so required by the Agent, accompanied by a
certified English translation within 30 days of the Agent so requiring and, in this
case, the English translation will prevail unless the document is the
Telecommunications Licence or a constitutional, statutory or other official document.

	30	 	Calculations and certificates
	 
	30.1	 	Accounts

76

 

	 	 	In any litigation or arbitration proceedings arising out of or in connection with a
Finance Document, the entries made in the accounts maintained by a Finance Party are prima
facie evidence of the matters to which they relate.
	 
	30.2	 	Certificates and Determinations
	 
	 	 	Any certification or determination by a Finance Party of a rate or amount under any
Finance Document is, in the absence of manifest error, conclusive evidence of the matters
to which it relates.
	 
	30.3	 	Day count convention
	 
	 	 	Any interest, commission or fee accruing under a Finance Document will accrue from
day to day and is calculated on the basis of the actual number of days
elapsed and a year of 360 days (or, in the case of an NIS Loan, the actual number of
days in that calendar year) or in any case where the practice in the Relevant Interbank
Market differs, in accordance with that market practice.
	 
	31	 	Partial Invalidity
	 
	 	 	If, at any time, any provision of the Finance Documents is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the legality,
validity or enforceability of such provision under the law of any other jurisdiction will
in any way be affected or impaired.
	 
	32	 	Remedies and waivers
	 
	 	 	No failure to exercise, nor any delay in exercising, on the part of any Finance
Party, any right or remedy under the Finance Documents shall operate as a waiver, nor
shall any single or partial exercise of any right or remedy prevent any further or other
exercise or the exercise of any other right or remedy. The rights and remedies provided in
this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
	 
	33	 	Amendments and waivers
	 
	33.1	 	Required consents
	 
	33.1.1	 	Subject to Clause 33.2 (Exceptions) any term of the Finance Documents may be amended or
waived only with the consent of the Majority Lenders and the Borrower and any such amendment
or waiver will be binding on all Parties.
	 
	33.1.2	 	The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by
this Clause.
	 
	33.2	 	Exceptions
	 
	33.2.1	 	An amendment or waiver that has the effect of changing or which relates to:

	 	(a)	 	the definition of “Majority Lenders” in Clause 1.1 (Definitions);

77

 

	 	(b)	 	an extension to the date of payment of any amount under the Finance
Documents;
	 
	 	(c)	 	a reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fees or commission payable;
	 
	 	(d)	 	an increase in or an extension of any Commitment;
	 
	 	(e)	 	a change to the Borrower;
	 
	 	(f)	 	any provision which expressly requires the consent of all the Lenders; or
	 
	 	(g)	 	Clause 2.2 (Finance Parties’ rights and obligations), Clause 22 (Changes to
the Lenders), Clause 26 (Sharing among the Finance Parties) or this Clause 33,

	 	 	shall not be made without the prior consent of all the Lenders.
	 
	33.2.2	 	An amendment or waiver which relates to the rights or obligations of the Agent or the
Mandated Lead Arranger may not be effected without the consent of the Agent or the Mandated
Lead Arranger.
	 
	34	 	Counterparts
	 
	 	 	Each Finance Document may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of the Finance
Document.

78

 

Section 11 — Governing law and enforcement

	35	 	Governing law
	 
	 	 	This Agreement is governed by English law.
	 
	36	 	Enforcement
	 
	36.1	 	Jurisdiction
	 
	36.1.1	 	The courts of England have non-exclusive jurisdiction to settle any dispute arising out of
or in connection with this Agreement (including a dispute regarding the existence, validity or
termination of this Agreement) (a Dispute).
	 
	36.1.2	 	The Parties agree that the courts of England are the most appropriate and convenient courts
to settle Disputes and accordingly no Party will argue to the contrary.
	 
	36.1.3	 	This Clause 36.1 is for the benefit of the Finance Parties only. As a result, no Finance
Party shall be prevented from taking proceedings relating to a Dispute in any other courts
with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent
proceedings in any number of jurisdictions.
	 
	36.2	 	Service of process
	 
	 	 	Without prejudice to any other mode of service allowed under any relevant law, the
Borrower:

	 	(a)	 	irrevocably appoints Capita Trust Secretaries Ltd. of Phoenix House, 18
King William Street, London EC4N 7HE (Reference CELMEN 4542434-0) as its agent for
service of process in relation to any proceedings before the English courts in
connection with any Finance Document; and
	 
	 	(b)	 	agrees that failure by a process agent to notify the Borrower of the
process will not invalidate the proceedings concerned.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

79

 

Schedule 1 — The Original Lenders

	 	 	 	 	 	 	 	 	 
	Name of Original Lender	 	Facility A Commitment	 	Facility B Commitment
	 	 	(US$)	 	(US$)
	Citibank, N.A.
	 	 	280,000,000	 	 	 	70,000,000	 

80

 

Schedule 2 — Conditions precedent

Part 1 — Conditions precedent to initial Utilisation

	1	 	The Borrower
	 
	1.1	 	A copy of the constitutional documents of the Borrower.
	 
	1.2	 	A copy of a resolution of the board of directors of the Borrower:

	 	(a)	 	approving the terms of, and the transactions contemplated by, the Finance
Documents and resolving that it execute the Finance Documents;
	 
	 	(b)	 	authorising a specified person or persons to execute the Finance Documents
on its behalf; and
	 
	 	(c)	 	authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices (including, if relevant, any Utilisation Request
and Selection Notice) to be signed and/or despatched by it under or in connection
with the Finance Documents.

	1.3	 	A specimen of the signature of each person authorised by the resolution referred to in
sub-clause 1.2 above.
	 
	1.4	 	A certificate of the Borrower (signed by a director) confirming that borrowing the Total
Commitments would not cause any borrowing or similar limit binding on it to be exceeded.
	 
	1.5	 	A certificate of an authorised signatory of the Borrower certifying that each copy document
relating to it specified in this Part 1 of Schedule 2 is correct, complete and in full force
and effect as at a date no earlier than the date of this Agreement.
	 
	2	 	Legal opinions
	 
	2.1	 	A legal opinion of Denton Wilde Sapte, legal advisers to the Mandated Lead Arranger and the
Agent in England, substantially in the form distributed to the Original Lenders prior to
signing this Agreement.
	 
	2.2	 	A legal opinion of Yigal Amon & Co, legal advisers to the Mandated Lead Arranger and the
Agent in Israel, substantially in the form distributed to the Original Lenders prior to
signing this Agreement.
	 
	2.3	 	A legal opinion of Herzog Fox Neeman, legal advisers to the Borrower in Israel, substantially
in the form distributed to the Original Lenders prior to signing this Agreement.
	 
	3	 	Other documents and evidence
	 
	3.1	 	Evidence that any process agent referred to in Clause 36.2 (Service of process) has accepted
its appointment.

81

 

	3.2	 	A copy of any other Authorisation or other document, opinion or assurance which the Agent
considers to be necessary or desirable (if it has notified the Borrower accordingly) in
connection with the entry into and performance of the transactions
contemplated by any Finance Document or for the validity
and enforceability of any Finance Document.
	 
	3.3	 	The Original Financial Statements.
	 
	3.4	 	Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11
(Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the first
Utilisation Date.
	 
	3.5	 	The Information Memorandum.
	 
	3.6	 	A copy of the Telecommunications Licence.
	 
	3.7	 	Evidence that the Borrower has appointed legal advisers in Israel to prepare the prospectus
required under Israeli law to register its local bonds as public bonds.

82

 

Schedule 3 — Requests

Part 1 — Utilisation Request

	 	 	 
	From:

	 	CeIlcom Israel Ltd.
	 
	To:

	 	Citibank International plc

Dated: [  ] March 2006

Dear Sirs

Cellcom Israel Ltd. — US$350,000,000 Facility Agreement dated [**      ] (the Agreement)

	 	 	 	 	 
	1	 	We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have
the same meaning in this Utilisation Request unless given a different meaning in this
Utilisation Request.
	 
	 	 	 	 
	2	 	We wish to borrow a [Loan]/[NIS Loan] on the following terms:
	 
	 	 	 	 
	 

	 	Proposed Utilisation Date:
	 	[**          ] (or, if that is
	 

	 	 	 	not a Business Day, the
	 

	 	 	 	next Business Day)
	 
	 	 	 	 
	 

	 	Facility to be utilised:
	 	[Facility A]/[Facility B]
	 
	 	 	 	 
	 

	 	Original Dollar Amount:
	 	[**          ] or, if less, the
	 

	 	 	 	Available Facility
	 
	 	 	 	 
	 

	 	Interest Period:
	 	[**          ]
	 
	 	 	 	 
	3	 	We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is
satisfied on the date of this Utilisation Request.
	 
	 	 	 	 
	4	 	The proceeds of this Loan should be credited to [account].
	 
	 	 	 	 
	5	 	This Utilisation Request is irrevocable.

	 	 	 
	Yours faithfully
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	 

authorised signatory for

	 	 
	Cellcom Israel Ltd.
	 	 

83

 

Part 2 — Selection Notice Applicable to a Facility A Loan

	 	 	 
	From:

	 	Cellcom Israel Ltd.
	 
	To:

	 	Citibank International plc

Dated: [  ] March 2006

Dear Sirs

Cellcom Israel Ltd. — US$350,000,000 Facility Agreement dated [**          ] (the Agreement)

	1	 	We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have
the same meaning in this Selection Notice unless given a different meaning in this Selection
Notice.
	 
	2.	 	We refer to the following Facility A Loan[s] with an Interest Period ending on [**          ].
	 
	3	 	[We request that the above Facility A Loan[s] be divided into [**          ] Facility A Loans
with the following amounts and Interest Periods:]
	 
	 	 	or
	 
	 	 	[We request that the next Interest Period for the above Facility A Loan[s] is [**           ]].
	 
	4	 	This Selection Notice is Irrevocable.

	 	 	 
	Yours faithfully
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	 

authorised signatory for

	 	 
	Cellcom Israel Ltd.
	 	 

84

 

Schedule 4 — Mandatory Cost formulae

	1	 	The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank in relation to the cost of complying with
the minimum reserve requirements.
	 
	2	 	On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall
calculate, as a percentage rate, a rate (the Additional Cost Rate) for each Lender, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to
the percentage participation of each Lender in the relevant Loan) and will be expressed as a
percentage rate per annum.
	 
	3	 	The Additional Cost Rate for any Lender lending from a Facility Office in a Participating
Member State will be the percentage notified by that Lender to the Agent. This percentage will
be certified by that Lender in its notice to the Agent to be its reasonable determination of
the cost (expressed as a percentage of that Lender’s participation in all Loans made from that
Facility Office) of complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that Facility Office.
	 
	4	 	The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom
will be calculated by the Agent as follows:

	 	 	 	 	 
	 

	 	E x 0.01
	 	per cent per annum
	 

	 	 

300
	 	 

	 	 	Where:

	 	E	 	is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Agent as being the average of the most recent rates of
charge supplied by the Reference Banks to the Agent pursuant to paragraph 7 below and
expressed In pounds per £1,000,000.

	5	 	For the purposes of this Schedule:

	 	(a)	 	Special Deposits has the meaning given to it from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of
England;
	 
	 	(b)	 	Fees Rules means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from time to
time in respect of the payment of fees for the acceptance of deposits;
	 
	 	(c)	 	Fee Tariffs means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero

85

 

	 	 	 	rated fee
required pursuant to the Fees Rules but taking into account any applicable discount
rate); and
	 
	 	(d)	 	Tariff Base has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

	6	 	If requested by the Agent, each Reference Bank shall, as soon as practicable after
publication by the Financial Services Authority, supply to the Agent, the rate of charge
payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules
in respect of the relevant financial year of the Financial Services Authority (calculated for
this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that
Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff
Base of that Reference Bank.
	 
	7	 	Each Lender shall supply any information required by the Agent for the purpose of calculating
its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the
following information on or prior to the date on which it becomes a Lender:

	 	(a)	 	the jurisdiction of its Facility Office; and
	 
	 	(b)	 	any other information that the Agent may reasonably require for such
purpose.

	 	 	Each Lender shall promptly notify the Agent of any change to the information provided
by it pursuant to this paragraph.
	 
	8	 	The rates of charge of each Reference Bank for the purpose of E above shall be determined by
the Agent based upon the information supplied to it pursuant to paragraphs 6 and 7 above and
on the assumption that, unless a Lender notifies the Agent to the contrary, each Lenders
obligations in relation to cash ratio deposits and Special Deposits are the same as those of a
typical bank from its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as its Facility Office.
	 
	9	 	The Agent shall have no liability to any person if such determination results in an
Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the Information provided by any Lender or Reference Bank pursuant to paragraphs 3,
6 and 7 above is true and correct in all respects.
	 
	10	 	The Agent shall distribute the additional amounts received as a result of the Mandatory Cost
to the Lenders on the basis of the Additional Cost Rate for each Lender based on the
information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 6 and 7
above.
	 
	11	 	Any determination by the Agent pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.
	 
	12	 	The Agent may from time to time, after consultation with the Borrower and the Lenders,
determine and notify to all Parties any amendments which are required to be made to this
Schedule in order to comply with any change in law, regulation

86

 

	 	 	or any requirements from time
to time imposed by the Bank of England, the Financial Services Authority or the European
Central Bank (or, In any case, any other authority which replaces all or any of its functions)
and any such determination shall, in the absence of manifest error, be conclusive and binding
on all Parties.

87

 

Schedule 5
— Form of Transfer Certificate

Part 1
— Transfer Certificate

To: Citibank International plc as Agent

From: ** [The Existing Lender] (the Existing Lender) and **          [The New
Lender] (the New Lender)

Dated:[  ] March 2006

Cellcom Israel Ltd. — US$350,000,000 Facility Agreement dated [**          ] (the Agreement)

	1	 	We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement
have the same meaning in this Transfer Certificate unless given a different meaning in this
Transfer Certificate.
	 
	2	 	We refer to Clause 22.5 (Procedure for transfer):

	 	(a)	 	The Existing Lender and the New Lender agree to the Existing Lender
transferring to the New Lender by novation all or part of the Existing Lender’s
Commitment, rights and obligations referred to in the Schedule in accordance with
Clause 22.5 (Procedure for transfer).
	 
	 	(b)	 	The proposed Transfer Date is [**          ].
	 
	 	(c)	 	The Facility Office and address, fax number and attention details for
notices of the New Lender for the purposes of Clause 29.2 (Addresses) are set out in
the Schedule.

	3	 	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations
set out in sub-clause 22.4.3 of Clause 22.4 (Limitation of responsibility of Existing
Lenders).
	 
	4	 	This Transfer Certificate may be executed in any number of counterparts and this has the same
effect as if the signatures on the counterparts were on a single copy of this Transfer
Certificate.
	 
	5	 	The New Lender confirms that it is an NIS Lender.*1
	 
	6	 	This Transfer Certificate is governed by English law.

 

			
	*1	 	delete if not applicable

88

 

The Schedule — Commitment/rights and obligations to be transferred

	 	 	 
	**

	 	[insert relevant details]
	 
	**

	 	[Facility Office address, fax number and attention details for notices and account details
for payments]

	 	 	 
	[Existing Lender]

	 	[New Lender]
	 
	By:

	 	By.

This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [**      ].

Citibank international plc

By:          **

89

 

Schedule 6 — Form of Compliance Certificate

	 	 	 
	To:

	 	Citibank International plc as Agent
	 
	From:

	 	Cellcom Israel Ltd.

Dated: [  ] March 2006

Dear Sirs

Cellcom Israel Ltd. — US$350,000,000 Facility Agreement dated [**          ] (the Agreement)

	 	 	 	 	 	 	 	 	 	 	 
	1.	 	We refer to the Agreement. This is a Compliance Certificate.
Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different
meaning in this Compliance Certificate.

	 
	 	 	 	 	 	 	 	 	 	 
	2	 	We confirm that: [Insert details of covenants to be certified]	 		 	 
	 
	 	 	 	 	 	 	 	 	 	 
	3	 	We confirm that no Default is continuing.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Signed:	 	 	 	 	 	 	 	 
	 

	 	 	 	 

Director
	 	 	 	 

Director
	 	 
	 

	 	 	 	of
	 	 	 	of	 	 
	 

	 	 	 	Cellcom Israel Ltd.
	 	 	 	Cellcom Israel Ltd.	 	 

We certify that the figures given in 2 above are true and accurate.

	 	 	 
	 
	 

for and on behalf of

	 	 
	[name of auditors of the Borrower]
	 	 

90

 

Schedule 7 — LMA Form of Confidentiality Undertaking

	 	 	 	 
	 

	 	 
	 

	 	    Letterhead of Lender

To:

**

Re:     The Facility

	 	 	 
	Borrower:

	 	Cellcom Israel Ltd.
	 
	 	 
	Amount:

	 	US$350,000,000
	 
	 	 
	Agent:

	 	Citibank International plc

[insert name of Potential Lender]

Dear Sirs

We understand that you are considering participating in the Facility. In consideration of us
agreeing to make available to you certain information, by your signature of a copy of this letter
you agree as follows:

	1.	 	Confidentiality Undertaking
	 
	 	 	You undertake:

	 	(c)	 	to keep the Confidential Information confidential and not to disclose it to
anyone except as provided for by paragraph 2 below and to ensure that the
Confidential Information is protected with security measures and a degree of care
that would apply to your own confidential information;
	 
	 	(d)	 	to keep confidential and not disclose to anyone the fact that the
Confidential Information has been made available or that discussions or negotiations
are taking place or have taken place between us in connection with the Facility.
	 
	 	(e)	 	to use the Confidential Information only for the Permitted Purpose;
	 
	 	(f)	 	to use all reasonable endeavours to ensure that any person to whom you pass
any Confidential Information (unless disclosed under paragraph 2(b) below)
acknowledges and complies with the provisions of this letter as if that person were
also a party to it; and
	 
	 	(g)	 	not to make enquiries of any member of the Group or any of their officers,
directors, employees or professional advisers relating directly or indirectly to the
Facility.

91

 

	2.	 	Permitted Disclosure
	 
	 	 	We agree that you may disclose Confidential Information:

	 	(a)	 	to members of the Participant Group and their officers, directors,
employees and professional advisers to the extent necessary for the Permitted Purpose
and to any auditors of members of the Participant Group;
	 
	 	(b)	 	where:

	 	(i)	 	requested or required by any court of competent
jurisdiction or any competent judicial, governmental, supervisory or
regulatory body;
	 
	 	(ii)	 	required by the rules of any stock exchange on which the
shares or other securities of any member of the Participant Group are
listed; or
	 
	 	(iii)	 	required by the laws or regulations of any country with
jurisdiction over the affairs of any member of the Participant Group; or

	 	(c)	 	with the prior written consent of us and the Borrower.

	3.	 	Notification of Required or Unauthorised Disclosure
	 
	 	 	You agree (to the extent permitted by law) to inform us of the full circumstances of
any disclosure under paragraph 2(b) or upon becoming aware that Confidential Information
has been disclosed in breach of this letter.
	 
	4.	 	Return of Copies
	 
	 	 	If we so request in writing, you shall return all Confidential Information supplied
to you by us and destroy or permanently erase all copies of Confidential Information made
by you and use all reasonable endeavours to ensure that anyone to whom you have supplied
any Confidential Information destroys or permanently erases such Confidential Information
and any copies made by them, in each case save to the extent that you or the recipients
are required to retain any such Confidential Information by any applicable law, rule or
regulation or by any competent judicial, governmental, supervisory or regulatory body or
in accordance with internal policy, or where the Confidential Information has been
disclosed under paragraph 2(b) above.
	 
	5.	 	Continuing Obligations
	 
	 	 	The obligations in this letter are continuing and, in particular, shall survive the
termination of any discussions or negotiations between you and us. Notwithstanding the
previous sentence, the obligations in this letter shall cease (a) if you become a party to
or otherwise acquire (by assignment or sub participation) an interest, direct or indirect
in the Facility or (b) twelve months after you have returned all Confidential Information
supplied to you by us and destroyed or permanently erased all copies of Confidential
Information made by

92

 

	 	 	you (other than any such Confidential Information or copies which have
been disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or which, pursuant
to paragraph 2 above, are not required to be returned or destroyed).

	6.	 	No Representation; Consequences of Breach, etc
	 
	 	 	You acknowledge and agree that:

	 	(d)	 	neither we nor any of our officers, employees or advisers (each a Relevant
Person) (i) make any representation or warranty, express or implied, as to, or assume
any responsibility for, the accuracy, reliability or completeness of any of the
Confidential Information or any other information supplied by us or any member of the
Group or the assumptions on which it is based or (ii) shall be under any obligation
to update or correct any inaccuracy in the Confidential Information or any other
information supplied by us or any member of the Group or be otherwise liable to you
or any other person in respect to the Confidential Information or any such
information; and
	 
	 	(e)	 	we or members of the Group may be irreparably harmed by the breach of the
terms of this letter and damages may not be an adequate remedy; each Relevant Person
or member of the Group may be granted an injunction or specific performance for any
threatened or actual breach of the provisions of this letter by you.

	7.	 	No Waiver; Amendments, etc
	 
	 	 	This letter sets out the full extent of your obligations of confidentiality owed to
us in relation to the information the subject of this letter. No failure or delay in
exercising any right, power or privilege under this letter will operate as a waiver
thereof nor will any single or partial exercise of any right, power or privilege preclude
any further exercise thereof or the exercise of any other right, power or privileges under
this letter. The terms of this letter and your obligations under this letter may only be
amended or modified by written agreement between us.
	 
	8.	 	Inside Information
	 
	 	 	You acknowledge that some or all of the Confidential Information is or may be
price-sensitive information and that the use of such Information may be regulated or
prohibited by applicable legislation relating to insider dealing and you undertake not to
use any Confidential Information for any unlawful purpose.
	 
	9.	 	Nature of Undertakings
	 
	 	 	The undertakings given by you under this letter are given to us and (without implying
any fiduciary obligations on our part) are also given for the benefit of the Borrower and
each other member of the Group.
	 
	10.	 	Third party rights
	 
	10.1.1	 	Subject to paragraph 6 and paragraph 9 the terms of this letter may be enforced and relied
upon only by you and us and the operation of the Contracts (Rights of Third Parties) Act 1999
is excluded.

93

 

	10.1.2	 	Notwithstanding any provisions of this letter, the parties to this letter do not require the
consent of any Relevant Person or any member of the Group to rescind or vary this letter at
any time.
	 
	11.	 	Governing Law and Jurisdiction
	 
	 	 	This letter (including the agreement constituted by your acknowledgement of its
terms) shall be governed by and construed in accordance with the laws of England and the
parties submit to the non-exclusive jurisdiction of the English courts.
	 
	12.	 	Definitions
	 
	 	 	In this letter (including the acknowledgement set out below):
	 
	 	 	Confidential Information means any information relating to the Borrower, the Group,
and the Facility provided to you by us or any of our affiliates or advisers, in whatever
form, and includes information given orally and any document, electronic file or any other
way of representing or recording information which contains or is derived or copied from
such information but excludes information that (a) is or becomes public knowledge other
than as a direct or indirect result of any breach of this letter or (b) is known by you
before the date the information is disclosed to you by us or any of our affiliates or
advisers or is lawfully obtained by you after that date, other than from a source which is
connected with the Group and which, in either case, as far as you are aware, has not been
obtained in violation of, and is not otherwise subject to, any obligation of
confidentiality;
	 
	 	 	Facility Agreement means the agreement dated [          ] March 2006
pursuant to which the Facility has been made available;
	 
	 	 	Group means the Borrower end its Subsidiaries (as defined in the Facility Agreement);
	 
	 	 	Participant Group means you, each Holding Company and Subsidiaries and each
Subsidiary of any Holding Company (as each such term is defined in the Facility
Agreement); and
	 
	 	 	Permitted Purpose means considering and evaluating whether to enter into the
Facility.

Please acknowledge your agreement to the above by signing and returning the enclosed copy.

	 	 	 
	Yours faithfully
	 	 
	 
	 	 
	 
	 	 
	 

For and on behalf of

	 	 
	**
	 	 

	 	 	 
	To:

	 	**
	 

	 	The Borrower and each other member of the Group

94

 

We acknowledge and agree to the above:

	 	 	 
	 
	 

For and on behalf of

	 	 
	**          [Potential Lender]
	 	 

95

 

Schedule 8 — Timetables

	 	 	 
	Delivery of a duly completed Utilisation

	 	3:00 p.m. London time 4 Business Days
	Request (Clause 5.1 (Delivery of a

	 	prior to the proposed Utilisation Date
	Utilisation Request) or a Selection Notice
	 	 
	(Clause 9.1 (Selection of interest Periods))
	 	 
	LIBOR is fixed

	 	Quotation Day as of 11:00 a.m. London time
	 
	 	 
	Agent notifies the Lenders of the Loan in

	 	9.00 a.m. London time 2 Business
	accordance with Clause 5.4 (Lenders’

	 	Days prior to the proposed Utilisation Date
	participation)
	 	 

96

 

SIGNATURES

The Borrower

CELLCOM ISRAEL LTD.

	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Oren Lieder
 

	 	 	 	By:
	 	/s/ Tal Raz
 

	 	 
	 

	 	Oren Lieder
	 	 	 	 	 	Tal Raz	 	 

The Mandated Lead Arranger and Original Lender

Citibank, N.A.

	 	 	 	 	 
	By:

	 	/s/ Monica Ugido
 

	 	 

The Agent

CITIBANK INTERNATIONAL. PLC

	 	 	 	 	 
	By:

	 	/s/ Monica Ugido
 

	 	 

97

 

[Citibank International plc Letterhead]

Cellcom Israel Ltd.

10 Hagavish Street

Israel 42140

	 	 	 
	Attention:

	 	Chief Financial Officer and General Counsel
	Fax No.:

	 	+972 52 998 9701

	 	 	 
	Dear Sirs

	 	30th
March 2006

US$350,000,000 term and revolving facilities agreement dated 6 March 2006 and made between (1)
Cellcom Israel Ltd. (as Borrower), (2) Citibank, N.A. (as Mandated Lead Arranger), the Original
Lenders named therein and Citibank International plc (as Agent) (the Facility Agreement)

We refer to the Facility Agreement. Words and expressions defined in the Facility Agreement
shall have the same meaning in this letter.

	1	 	In this letter, references to Clauses shall be references to clauses of the Facility
Agreement.
	 
	2	 	We hereby agree that with effect from the date on which you return to us a signed copy of
this letter, Clause 6.1.1 of the Facility Agreement shall be deleted and replaced with the
following:
	 
	6.1.1	 	The Borrower shall repay the Facility A Loans by paying to the Agent (for the account of the
Lenders) on each date set out in Column 1 below (each a Facility A Repayment Date) the
percentage of the aggregate amount of the Facility A Loans outstanding at the close of
business on the final day of the Availability Period which is set out in Column 2 below
opposite that date.

	 	 	 
	Column 1	 	Column 2
	Facility A Repayment Date

	 	Percentage of the Original Dollar Amount of
the Facility A Loans to be repaid
	 
	 	 
	9 March 2008

	 	10%
	 
	 	 
	9 September 2008

	 	10%
	 
	 	 
	9 March 2009

	 	10%
	 
	 	 
	9 September 2009

	 	10%
	 
	 	 
	9 March 2010

	 	15%
	 
	 	 
	9 September 2010

	 	20%
	 
	 	 
	22nd December 2010

	 	25%

	3	 	The Facility Agreement shall continue in full force and effect in accordance with its terms
save as amended by this letter.

 

 

	4	 	This letter may be signed in any number of counterparts and this shall have the same effect
as if the signatures on the counterparts were on a single copy of this letter.
	 
	5	 	This letter shall be governed by and construed in accordance with English law.

Please confirm your agreement to the terms of this letter by signing where indicated below.

Yours faithfully

	 	 	 	 	 	 	 
	/s/ Adi Khambata
 

	 	 	 	/s/ Howard David Batson
 

	 	 
	authorised signatory of
	 	 	 	 	 	 
	Citibank International plc as Agent
	 	 	 	 	 	 

We accept and agree the terms of the letter set out above.

	 	 	 	 	 	 	 
	/s/ Amos Shapira
 

	 	 	 	/s/ Tal Raz
 

	 	 
	for and on behalf of
	 	 	 	 	 	 
	Cellcom Israel Ltd. as Borrower
	 	 	 	 	 	 

 

 

[Citibank International plc Letterhead]

Cellcom Israel Ltd.

10 Hagavish Street

Israel 42140

	 	 	 
	Attention:

	 	Chief Financial Officer and General Counsel
	Fax No.:

	 	+972 52 998 9701

	 	 	 
	Dear Sirs

	 	4th
April 2006

US$350,000,000 term and revolving facilities agreement dated 6 March 2006 and made between (1)
Cellcom Israel Ltd. (as Borrower), (2) Citibank, N.A. (as Mandated Lead Arranger), the Original
Lenders named therein and Citibank International plc (as Agent) (the Facility Agreement)

We refer to the Facility Agreement. Words and expressions defined in the Facility Agreement
shall have the same meaning in this letter.

	1	 	In this letter, references to Clauses shall be references to clauses of the Facility
Agreement.
	 
	2.	 	Notwithstanding the provisions of Clause 5.3(a) of the Facility Agreement, the Borrower
agrees that it will make available to the Agent in Dollars an amount equal to the Commitment
of each NIS Lender on 10 April 2006 (being the proposed Transfer Date on which Syndication is
to take place) (the Dollar Amount). Eighty per cent. of the Dollar Amount is to be applied by
the Agent against the Facility A Loans currently outstanding and the twenty per cent. of the
Dollar Amount is to be applied by the Agent against the Facility B Loans currently
outstanding.
	 
	3	 	Subject to receipt of the Dollar Amount as contemplated in 2 above, the Agent shall make
available to the Borrower, on 10 April 2006, an amount in NIS which the Agent has received
from the NIS Lenders and which is equal to the Dollar Amount at the prevailing Dollar NIS Bank
of Israel representative rate at the commencement of business in Tel Aviv on Monday 10 April
2006 (the NIS Amount). Eighty per cent. of the NIS Amount shall be made available to the
Borrower as a Facility A Loan and twenty per cent. of the NIS Amount shall be made available
to the Borrower as a Facility B Loan.
	 
	4	 	The Facility Agreement shall continue in full force and effect in accordance with its terms
save as amended by this letter.
	 
	5	 	This letter may be signed in any number of counterparts and this shall have the same effect
as if the signatures on the counterparts were on a single copy of this letter. This letter
shall be a Finance Document.
	 
	6	 	This letter shall be governed by and construed in accordance with English law.

Please confirm your agreement to the terms of this letter by signing where indicated below.

 

 

	 	 	 
	Yours faithfully
	 	 
	 
	 	 
	/s/ Adi Khambata
 

	 	 
	authorised signatory of
	 	 
	Citibank International plc as Agent
	 	 

We accept and agree the terms of the letter set out above.

	 	 	 	 	 	 	 
	/s/ Oren Lieder
 

	 	 	 	/s/ Tal Raz
 

	 	 
	for and on behalf of
	 	 	 	 	 	 
	Cellcom Israel Ltd. as Borrower
	 	 	 	 	 	 

 

 

[Citibank International plc Letterhead]

To: Cellcom Israel Ltd.

10 Hagavish Street

Israel 42140

	 	 	 
	Attention:

	 	Chief Financial Officer and General Counsel
	Fax No.:

	 	+972 52 998 9701

9th October 2006

Dear Sirs

US$350,000,000 term and revolving facilities agreement dated 6 March 2006 (as amended from
time to time) and made between (1) Cellcom Israel Ltd. (as Borrower), (2) Citibank, N.A. (as
Mandated Lead Arranger), the Original Lenders named therein and Citibank International plc (as
Agent) (the Facility Agreement)

We refer to the Facility Agreement. Words and expressions defined in the Facility Agreement
shall have the same meaning in this letter.

	1	 	In this letter, references to Clauses shall be references to clauses of the Facility
Agreement.
	 
	2	 	We hereby agree that with effect from the date on which you return to us a signed copy of
this letter, the definition of Total Debt Service in Clause 20.13.6 of the Facility Agreement
shall be deleted and replaced with the following:
	 
	 	 	“Total Debt Service means the amount of all repayments or prepayments of principal
accrued and payable in a financial year of the Borrower plus the gross amount of all
interest, commissions, periodic fees and other financing charges accrued and payable by
the Borrower during that period without counting any principal amount repaid and redrawn
in the same financial year under Facility B other than repayments under Facility B which
are due on the Final Repayment Date and excluding any indebtedness of a maturity which is
less than one year listed in the Borrower’s financial statements for the period ending on
31 December 2005.”
	 
	3	 	The Facility Agreement shall continue in full force and effect in accordance with its terms
save as amended by this letter.
	 
	4	 	This letter may be signed in any number of counterparts and this shall have the same effect
as if the signatures on the counterparts were on a single copy of this letter.
	 
	5	 	This letter shall be governed by and construed in accordance with English law.

 

 

Please confirm your agreement to the terms of this letter by signing where indicated below.

	 	 	 
	Yours faithfully
	 	 
	 
	 	 
	/s/ Adi Khambata
 

	 	 
	authorised signatory of
	 	 
	Citibank International plc as Agent
	 	 

We accept and agree the terms of the letter set out above.

	 	 	 	 	 	 	 
	/s/ Tal Raz
 

	 	 	 	/s/ Oren Lieder
 

	 	 
	for and on behalf of
	 	 	 	 	 	 
	Cellcom Israel Ltd. as Borrower
	 	 	 	 	 	 

 

 

[Citibank International plc Letterhead]

	To:	 	Cellcom Israel Ltd.

10 Hagavish Street

Israel 42140

	 	Attention:  	 	Chief Financial Officer and General Counsel
	 	Fax No.: 	 	+972 52 998 9701

17 January 2007

Dear Sirs

US$350,000,000 term and revolving facilities agreement dated 6 March 2006 (as amended from time to
time) and made between (1) Cellcom Israel Ltd. (as Borrower),
(2) Citibank, N.A. (as Mandated Lead
Arranger), the Original Lenders named therein and Citibank
International plc (as Agent) (the
Facility Agreement)

We refer to the Facility Agreement. Words and expressions defined in the Facility Agreement shall
have the same meaning in this letter.

	1	 	In this letter, references to Clauses shall be references to clauses of the Facility Agreement.
	 
	2	 	We hereby agree that with effect from the date on which you return to us a signed copy of
this letter, Clause 20.13.1 of the Facility Agreement shall be deleted and replaced with the
following:
	 
	 	 	“20.13.1

	 	(a)	 	The Borrower may make payments by way of dividend in any financial year in an
aggregate amount not exceeding the balance of its retained earnings as detailed in
its financial statements for the financial year ended 31 December 2005 and delivered to
it by the Borrower pursuant to Clause 18.1(a) (Financial statements);
	 
	 	(b)	 	In addition to Clause 20.13.1(a) above, the Borrower may make a one-off
payment by way of dividend in respect of the year ending 31 December 2005 in an amount not
exceeding the lower of:

	 	(i)	 	the increase (if any) in the balance of the Borrower’s
retained earnings for the year ending 31 December 2005 following the
restatement of the Borrower’s comparative figures for the year ending 31
December 2005 as published in the financial statements for the first Quarter
Date of 2007 and which is permitted by the introduction of Israeli accounting
standard 27 (the Accounting Standard); and
	 
	 	(ii)	 	NIS 270,000,000 (or its equivalent in any other currency).

	 	(c)	 	in addition to Clauses 20.13.1(a) and (b) above and provided that the
conditions set
out in Clause 20.13.2 and 20.13.3 below would not be breached following the payment
of such dividend, the Borrower may make a one-off payment by way of dividend in
respect of the year ending 31 December 2006 in an amount not exceeding the lower
of:

 

 

	 	(i)	 	the increase (if any) in the balance of the Borrower’s
retained earnings for the year ending 31 December 2006 following the
restatement of the Borrower’s financial statements for the year ending 31
December 2006 as published in the financial statements for the first
Quarter Date of 2007 and which is permitted by the Accounting Standard;
and
	 	 	 	 
	 	(ii)	 	NIS 40,000,000 (or its equivalent in any other currency).”

	3	 	We also hereby agree that with effect from the date on which you return to us a signed
copy of this letter, Clause 19.1 of the Facility Agreement shall be deleted and replaced with
the following:
	 
	 	 	“19.1 Debt Cover
	 
	 	 	The ratio of Net Debt to EBITDA, calculated as of each Quarter Date in respect of the
four immediately preceding financial quarters of the Borrower ending on that Quarter
Date, will not exceed 2.5:1 until all Loans have been repaid in full.”
	 
	4	 	The Facility Agreement shall continue in full force and effect in accordance with its terms save
as amended by this letter.
	 
	5	 	This letter may be signed in any number of counterparts and this shall have the same effect as
if the signatures on the counterparts were on a single copy of this letter.
	 
	6	 	This letter shall be governed by and construed in accordance with English law.

Please confirm your agreement to the terms of this letter by signing where indicated
below.

	 	 	 	 
	Yours faithfully

/s/  Adi Khambata	 	 	 
	 	 	 	 
	authorised signatory of
Citibank
International plc as Agent	 	 	 
	 	 	 	 
	We accept and agree the terms of the letter set out above.
	 	 	 	 
	/s/  Tal Raz	 	/s/  Amos Shapira	 
	 	 	 	 
	for and on behalf of
Cellcom Israel Ltd. as BorrowerEX-10.2

 

EXHIBIT 10.2

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

TRUST DEED

Made and signed in Tel Aviv on December 21, 2005

	 	 	 	 	 	 	 
	Between:

	 	Cellcom Israel Ltd.	 	 	 	 
	 

	 	P.C. 511930125	 	 	 	 
	 

	 	10 Hagavish St., Netanya 42140	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(the “Company”)
	 	 	 	of the one part
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	A n d:

	 	Aurora Fidelity Trust Ltd.	 	 	 	 
	 

	 	Company no. 513605576	 	 	 	 
	 

	 	6 Harakon St., Ramat Gan 52521	 	 	 	 
	 

	 	(the “Trustee”)
	 	 	 	of the other part
	 

	 	 	 	 	 	 

	 	 	 
	Whereas

	 	the Company decided to hold a private issue of a series of registered debentures unlimited in amount (series A), of
NIS 1 principal amount each; and
	 
	 	 
	Whereas

	 	the Trustee is a company limited by shares, incorporated in Israel, whose principal purpose is to engage in trusts; and
	 
	 	 
	Whereas

	 	the Trustee declared that there is no legal impediment to its entering into an engagement with the Company under this
Trust Deed, and that it meets the requirements and qualifying conditions set in the Securities Law, as hereinafter
defined, for acting as a trustee under this Trust Deed; and
	 
	 	 
	Whereas

	 	the Company requested the Trustee to act as trustee on behalf of the holders of Debentures (Series A), and the Trustee
agreed thereto, all subject to and in accordance with the terms of this Trust Deed.

     
Therefore, it is hereby agreed, declared and stipulated between the parties as follows:

	1.	 	Preamble, Interpretation and Definitions

	 	1.1	 	The preamble to this Trust Deed and the appendices attached hereto form an
integral part hereof.
	 
	 	1.2	 	The division of this Trust Deed into clauses and assigning of clause headings is
done solely for convenience and as a means of reference, and may not be used for
purposes of interpretation.
	 
	 	1.3	 	Words stated in this Deed in the plural form import the singular form as well,
and vice versa; words stated in the masculine gender import the feminine gender as well,
and vice versa; and a person imports a corporation as well, wherever this

 

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	Deed does not provide explicitly and/or implicitly otherwise and/or the context or content does not
dictate otherwise.
	 
	 	1.4	 	Terms defined in the debenture certificate and not defined in this Trust Deed
shall have the meaning assigned to them in the debenture certificate.
	 
	 	1.5	 	In this Trust Deed the following terms shall have the meaning appearing alongside
them, unless implied differently by the context or content:
	 
	 	1.6	 	the “Trust Deed” or “this Deed” – this Trust Deed, including the appendices
attached hereto and forming an integral part thereof;
	 
	 	1.7	 	the “Debentures (Series A)” or the “debentures” – a series of registered
debentures (series A) unlimited in amount, of NIS 1 principal amount each, which are to
be issued by the Company under this Trust Deed;
	 
	 	1.8	 	“sum of net financial Indebtedness” known on any date – (a) the sum of the
Company’s indebtedness in respect of credit taken from financial institutions,
institutional investors and other holders of debentures of the Company, less (b)
short-term investments of the Company, including its cash balances and its deposits with
financial institutions, all as stated in the Company’s last financial statements,
audited or reviewed by the Company’s auditors and certified by the Company’s board of
directors prior to that date;
	 
	 	1.9	 	“financial debt” – the Company’s debt in respect of credit from a financial
institution or institutional investor or in respect of a debenture of the Company;
	 
	 	1.10	 	the “Trustee” – the Trustee mentioned at the head of this Deed and/or anyone
acting from time to time as trustee of the holders of the debentures under this Deed;
	 
	 	1.11	 	“register” – the register of holders of Debentures (Series A);
	 
	 	1.12	 	“debenture holder” or “holder” – the person whose name is written at the time in
question in the register as the holder of the debenture, and in the case of several
joint holders, the joint holder whose name is written first in the register;
	 
	 	1.13	 	“debenture certificate” – certificate of a Debenture (Series A), including the
appended “Terms set forth in the back of the page set forth in the back of the page” the
wording of which appears in Addendum A to this Deed;
	 
	 	1.14	 	the “Securities Law” – the Securities Law, 5728-1968, and its regulations as in
force from time to time;
	 
	 	1.15	 	“principal of the debentures” – the principal amount of the unpaid Debentures in
circulation;

- 2 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	1.16	 	“Consumer Price Index” or “index” – the price index known as “the Consumer Price
Index” including fruits and vegetables, published by the Central Bureau of Statistic and
Economic Research, including the same index even if published by another official
organization or institution replacing it, and whether built on the same data as the
existing index or not. If the index is replaced by another index published by an
organization or institution as aforesaid and such organization or institution has not
set the ratio between such index and the replaced index, said ratio shall be set by the
Central Bureau of Statistics. If such ratio is not set as aforesaid, then the Trustee in
consultation with economic experts to be chosen by it will set the ratio between the
other index and the replaced index;
	 
	 	1.17	 	“business day” – any day on which most of the big banks in Israel as well as the
Stock Exchange clearinghouse are open to the public for the execution of transactions;
	 
	 	1.18	 	“special resolution” – as defined in Addendum B to this Deed;
	 
	 	1.19	 	“calendar month” – according to the Gregorian calendar;
	 
	 	1.20	 	the “Stock Exchange” – the Tel Aviv Stock Exchange Ltd.
	 
	 	1.21	 	“EBITDA” in any period – the Company’s earnings before depreciation expenses,
financing, taxes and other deductions, all as stated in the Company’s financial
statements for that period, audited or reviewed by the Company’s auditors and certified
by the Company’s board of directors.

	2.	 	Issuance of the Debentures

	 	2.1	 	The Company will issue a series of registered debentures (series A) unlimited in
amount, of NIS 1 principal amount each, payable in nine equal semi annual installments,
on July 5 of each of the years 2008 to 2012 (inclusive) and on January 5 of each of the
years 2009 to 2012 (inclusive), bearing interest at a rate of 5.0% per annum and linked,
principal and interest, to the Consumer Price Index published for the month of November
2005.
	 
	 	2.2	 	The terms of the debentures will be as set out in this Deed and in the debenture
certificate (including the Terms set forth in the back of the page attached to the
certificate). The wording of the debenture certificate will be as set out in Addendum A
to this Deed.
	 
	 	2.3	 	The debenture certificates will be ready at the Company’s offices for delivery to
those entitled to them within three months from the date of the allotment of the
debentures, and they will be handed over against the return of the relevant
allotment letter to the Company.

- 3 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	2.4	 	Subject to the provisions of clause 2.5 below, the Debentures (Series A) will not
be listed on any stock exchange. Subject to the provisions of the law and to the Stock
Exchange rules, the Company will register the debentures in the name of the Registration
Company of Israel Discount Bank Ltd, and within 30 days from the date of their issuance
they will be registered at the Stock Exchange clearinghouse, which will provide clearing
services for the debentures, and they will also be listed in the computerized trading
system for institutional investors operated by the Stock Exchange (“listing in the
institutional continuous trading system”). Failure to list the debentures in the
institutional continuous trading system as aforesaid owing to an act or omission of the
Company shall be deemed a fundamental breach by the Company. It is hereby clarified that
subject to the provisions of the law and the Stock Exchange rules, other than an
institutional investor as defined in the First Schedule to the Securities Law,
5728-1968, no one may trade in the debentures in the framework of the computerized
trading system for institutional investors as stated.
	 
	 	2.5	 	The Company undertakes, subject to the provisions of any law and the Stock
Exchange rules, to list the debentures on the Stock Exchange on the basis of a
prospectus not later than June 30, 2006 (the “determining date for listing”). If the
debentures are not listed on the Stock Exchange by the determining date for listing,
then –

	 	2.5.1	 	The Company will notify the holders not later than July 5,
2006 that the Debentures (Series A) were not listed as stated. The debentures
will continue to be traded in the computerized trading system for institutional
investors, and the debenture holders will have the right (the “option”), as a
sole relief, to sell to the Company the Debentures (Series A) held by them, as
set out in this clause 2.5.
	 
	 	2.5.2	 	Any holder wanting to exercise the option (the “exerciser”)
will notify the Company in writing (“exercise notice”), not later than July 31,
2006, of his wish to exercise the option, specifying the total principal amount
of the Debentures (Series A) which he wishes to sell to the Company within the
exercise (the “value sold”), and if he is a holder whose name is not listed in
the register, he will attach to his notice a confirmation by the Stock Exchange
member attesting to his ownership of the value sold. The exerciser will attach
to the exercise notice a certificate of exemption from deduction of tax at
source, if such exists.
	 
	 	2.5.3	 	Not later than one business day before September 28, 2006
(“the first exercise date”), each exerciser will sell to the Company, in an
off-floor transaction, one-half of the value sold indicated in his exercise
notice, and
where said one-half is not a sum of principal amount in whole new shekels,
the aforesaid total sum of principal amount will be rounded up to the
nearest new shekel (“the half”). In return, the Company will pay the

- 4 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	exerciser, on the first exercise date, within the off-floor transaction, the
outstanding balance of the unpaid principal of the half, plus linkage
differences, as well as the unpaid interest (together with linkage
differences), to which the exerciser is entitled for the half up to the
first exercise date according to the terms of the Debentures (Series A), and
which was not paid by then
	 
	 	2.5.4	 	Not later than one business day before March 29, 2007 (the
“second exercise date”), each exerciser will sell to the Company, in an
off-floor transaction, the value sold indicated in his exercise notice less the
half (the “balance of the value sold”). In return, the Company will pay to the
exerciser, on the second exercise date, within the off-floor transaction, the
outstanding balance of the unpaid principal of the balance of the value sold,
plus linkage differences, as well as the unpaid interest (together with linkage
differences), to which the exerciser is entitled for the balance of the value
sold up to the second exercise date according to the terms of the Debentures
(Series A) and which was not paid by then.
	 
	 	2.5.5	 	Tax at source will be deducted from the amounts paid by the
Company under this clause, where this is required by law.
	 
	 	2.5.6	 	The exercise notice submitted to the Company may not be
canceled or modified. It is hereby clarified that the interest which the
Company shall pay under the terms of the Debentures (Series A) during the
period between July 31, 2006 and the first exercise date and the second
exercise date, as the case may be, will be paid to whoever are the holders of
Debentures (Series A) on the determining date for the payment of said interest.
	 
	 	2.5.7	 	The Company will notify the holders concerning the manner in
which the half and the balance of the value sold should be transferred to it,
not later than September 15, 2006.
	 
	 	2.5.8	 	If the sum of the value sold by all the exercisers according
to the exercise notices received by the Company will not be less than 90% of
the total principal amount of the Debentures (Series A) in circulation on July
31, 2006, then subject to the provisions of the law and the Stock Exchange
rules, the Company will be entitled to serve notice of the early redemption of
the Debentures (Series A) to take place on April 1, 2007
(the “early redemption
date”). Where the Company so chose –

	 	2.5.8.1	 	The debenture holders will be served a notice in this regard not
later than March 1, 2007, but not earlier than October 1, 2006.
On the date of service of the notice the Company will submit a
report to the Stock Exchange in which it indicates the exact rate

- 5 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	of interest to be paid to the holders on the early redemption
date, calculated on the basis of 365 days in a year.
	 
	 	2.5.8.2	 	On the early redemption date the Company will pay the holders the
balance of the unpaid principal and interest (together with linkage
differences) to which the holders are entitled up to the early
redemption date according to the terms of the Debentures (Series A).

	 	2.6	 	The Debentures (Series A) will stand pari passu among themselves, without any
priority or preference the one over the other.
	 
	 	2.7	 	The Company undertakes not to create liens on its assets, of any nature or kind,
for as long as the Debentures (Series A) have not been fully paid, excluding a fixed
lien on assets to secure credit enabling the purchase of those assets.
	 
	 	2.8	 	The Company undertakes to pay at the times appointed for this purpose in the
debentures the amounts of the principal, the interest and the linkage differences
payable under the debentures, and to comply with all the other conditions and
obligations imposed on it by the terms of the debentures and this Deed.

	3.	 	The Right to Issue Additional Debentures and Other Securities
	 
	 	 	The Company reserves the right to issue at any time additional debentures series or other
securities, with preferred, equal or inferior rights to the Debentures (Series A), whether
they confer or do not confer a right of conversion into shares of the Company and upon such
redemption, interest, linkage terms and other terms as the Company deems fit and subject to
the provision of clause 2.7 above, all as the Company deems fit, at its discretion, without
need of the consent of the Trustee or of the holders of Debentures (Series A) then in
circulation.
	 
	4.	 	The Right to Issue Additional Debentures (Series A)
	 
	 	 	The Company will be entitled, from time to time, at its sole discretion, to issue additional
Debentures (Series A), without need of the consent of the Trustee or of the holders of
Debentures (Series A) then in circulation (“the additional Debentures (Series A)”). Without
derogating from the generality of the above, the Company will be entitled to issue the
additional Debentures (Series A) at the same price or at a higher or lower price than the
price at which earlier debentures from series A were issued.
	 
	 	 	All the terms and provisions applying to the Debentures (Series A) will apply also to the
additional Debentures (Series A); to remove doubt, it is clarified that: (a) the principal of
the additional Debentures (Series A) will be paid, on every date of payment on account of the
principal, proportionally to the remaining number of principal payments; and (b) the
holders of the additional Debentures (Series A) will not be entitled to interest for interest
periods that ended prior to their allotment date.

- 6 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	The Company will notify the Trustee, and the Trustee will notify the debenture holders,
concerning the issuance of additional Debentures (Series A).
	 
	5.	 	Purchase of Debentures by the Company and Related Bodies
	 
	 	 	The Company reserves the right to purchase at any time debentures from this series, at any
price deemed appropriate by it, without derogating from the duty of payment of the balance of
the unpaid debentures in circulation. The purchase of the debentures by the Company will be
deemed as the redemption of those debentures, which will lapse; and if they were listed, then
they will also be canceled and delisted from trade trading system for institutional investors
or on the Stock Exchange, as the case may be, and the Company will not be allowed to reissue
them. It is hereby clarified that if such debentures are purchased by a subsidiary or by an
included company or by a related company of the Company (as this term is defined in the
Securities Law) controlling shareholder in the Company, this shall not be deemed as the
redemption of the debentures that were purchased by the subsidiary, the included company or
the controlling shareholders in the company as aforesaid; however, for as long as the
debentures are held by the subsidiary, the included company, the related company or the
controlling shareholders as aforesaid, they will not confer on their holders the right to
vote in general meetings of the debenture holders or taken into account for the purpose of
determining the presence of a quorum, except if any one of the above is an investor from
among those enumerated in the First Schedule to the Securities Law (in the matter of section
15A(b)(1) of the law), who is not investing on its own behalf (“related institutional
investor”), in which case its vote will be taken into account. It is hereby clarified that a
subsidiary, an included company, a related company or the controlling shareholder as
aforesaid not being related institutional investors will be entitled to participate in such
meetings, without a voting right.
	 
	 	 	The Company will notify the Trustee in any case of the purchase of debentures from this
series by it or by a subsidiary or by an included company or by the controlling shareholder
in the Company (upon learning thereof).
	 
	6.	 	No Collateral
	 
	 	 	The debentures are not secured by any collateral. The Company undertakes not to create liens
as provided in clause 2.7 above.
	 
	7.	 	Immediate payment on the Debentures
	 
	 	 	Subject to the provisions of clause 8 below, the Trustee will be entitled to make call for
the immediate payment on all or any of the unpaid balance of the debentures, and shall be
obligated to do so if required by a special resolution (as defined in Addendum B to this
Deed) passed by the general meeting of the debenture holders, or in a written demand signed
by the holders of more than 50% of the unpaid balance of the principal of the
debentures in circulation, all the aforesaid upon the occurrence of one or more of the
circumstances enumerated below:

- 7 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	7.1	 	The Company does will not pay any amount (whether principal, interest or linkage
differences) due under the terms of the debentures, within seven days from the due date
of that amount according to the terms of the debentures.
	 
	 	7.2	 	A permanent liquidator is appointed to the Company by a court, or the court
issues a final liquidation order in respect of the Company, or a valid resolution is
passed for the voluntary liquidation of the Company.
	 
	 	7.3	 	An application is filed for the Company to make an arrangement with its creditors
under section 350 of the Companies Law, 5759-1999, or a stay of proceedings order is
issued against the Company under the aforesaid section, and where the application is not
filed by the Company – the application or the order is not withdrawn or canceled within
45 days from when it was filed or issued, as the case may be.
	 
	 	7.4	 	The Company is dissolved or expunged for any reason whatsoever, including
expunction or dissolution for the purpose of a merger or in the framework of a share
swap, unless the Trustee is satisfied that the rights of the holders of Debentures
(Series A) will not be prejudiced by such merger or share swap transaction.
	 
	 	7.5	 	If any of the cases enumerated below take place, according to the determination
by the Trustee or in a special resolution passed by the general meeting of the debenture
holders that this may to prejudice or endanger the rights of the debenture holders:

	 	7.5.1	 	A temporary liquidator or temporary receiver is appointed to
the Company by a court, or if the court issues a temporary liquidation order
against the Company, and such appointment or order is not revoked within 30
days from when it was issued.
	 
	 	7.5.2	 	An attachment is imposed on material assets of the Company,
and such attachment is not lifted within 45 days from when it was imposed.
	 
	 	7.5.3	 	An execution act is executed against material assets of the
Company, and such act is not annulled within 45 days from when it was executed.
	 
	 	7.5.4	 	A permanent receiver is appointed to the Company and/or over
all or a material part of its assets, and such appointment is not revoked
within 45 days.
	 
	 	7.5.5	 	The Company discontinues payments and/or gives notice of its
intention to discontinue payments and/or there is, in the Trustee’s opinion, a
real danger that it will discontinue payments and/or cease carrying on its
business and/or it is probable that it will cease carrying on its business.
	 
	 	7.5.6	 	The Company breaches or defaults on any material condition or
obligation imposed on it by the terms of the debentures and this Deed,

- 8 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	and fails to remedy such breach within 14 business days from when it received a
written warning from the Trustee to remedy the breach.
	 
	 	7.5.7	 	The holders of liens on the Company’s assets exercise their
liens on material assets of the Company.
	 
	 	7.5.8	 	A call for an immediate payment is made on another debenture
series that was issued by the Company, not in accordance with a resolution of
the Company.
	 
	 	7.5.9	 	So long as the debentures have not been listed on the Stock
Exchange – if 10 business days have elapsed from when a call for an immediate
payment was made upon a financial debt by a creditor, consequent on a breach of
the Company’s obligations toward such creditor; however, if in the course of
those 10 business days any of the circumstances listed below occurs, no call
for an immediate payment will be made on the Debentures (Series A): (1) an
order is issued for the stay or cancellation of the call for an immediate
payment on the financial debt; (2) the Company and the creditor arrive at an
arrangement in which the call for an immediate payment is canceled, in such
manner that it does not advance the original payment times that were fixed
between such creditor and the Company.
	 
	 	 	 	In this regard, “financial debt” – excluding existing indebtedness of the
Company to banks in their amount on December 31, 2005.
	 
	 	7.5.10	 	Up to the listing of the debentures on the Stock Exchange – the transfer of
control in the Company. In this regard, “control” – as defined in the
Securities Law, except if the identity of the new holder of the controlling
shareholder was approved by a meeting of the holders of Debentures (Series A).
	 
	 	7.5.11	 	Up to the listing of the debentures on the Stock Exchange – any other event
which, in the Trustee’s reasonable opinion, constitutes a material injury
and/or gives rise to a real concern of material injury to the rights of the
holders of Debentures (Series A), including due to events as aforementioned in
the beginning of this clause 7.5.11, coming to the Trustee’s attention pursuant
to notices of the Company served as provided in clause 15.13 below.

	8.	 	Prior Notice Before a Call for Immediate Payment

	 	8.1	 	Notwithstanding the aforesaid in clause 7 above, the Trustee will not make a call
for an immediate payment on the debentures unless the Trustee served the Company prior
written notice of its intention to do so, and the Company failed to
comply with the contents of such notice within 15 days from the receipt thereof
(“the curing period”).

- 9 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	8.2	 	In the prior notice as aforesaid the Company will be required to pay the amount
in arrears, and/or to comply with the other provisions of this Trust Deed or terms of
the debentures the breach of which or noncompliance with which constitute cause for
making a call for an immediate payment, and/or to restore the status quo according to
the event set forth in clause 7 above constituting cause for a call for an immediate
payment, in respect of which the aforesaid notice was served.
	 
	 	8.3	 	Notwithstanding the provisions of clause 8.1 above, if the Trustee is of the
opinion that a delay in making a call for an immediate payment on the Company’s debt, as
stated in clause 8.1 above, will materially endanger the rights of the debenture
holders, it will be entitled to shorten the curing period up to 3 business days, in
order to prevent such danger to the rights of the debenture holders, provided it affirms
this to the Company in a notice served to it simultaneously with the call for an
immediate payment on the debentures.

	9.	 	Claims and Proceedings by the Trustee

	 	9.1	 	Whenever a call for an immediate payment is made on the debentures, the Trustee
will be entitled, at its discretion and without further notice, to institute such
proceedings, including legal proceedings, as it deems fit for protecting the rights of
the debenture holders.
	 
	 	9.2	 	The Trustee shall be obligated to act as provided in clause 9.1 above, if so
required by a special resolution passed by the general meeting of the debenture holders,
or in a written demand signed by the holders of more than 75% of the unpaid balance of
the principal of the debentures in circulation, and in accordance with such resolution
or demand, unless the Trustee deems it unjustified and/or unreasonable to do so in the
circumstances of the case and applies to the appropriate court for instructions in the
matter.
	 
	 	9.3	 	The Trustee may, before instituting any proceedings to convene a meeting of the
debenture holders to issue a special resolution as to which proceedings should be
instituted, and the Trustee will be entitled to reconvene meetings of the debenture
holders for the purpose of receiving instructions in respect of the conduct of such
proceedings.
	 
	 	9.4	 	The stated above shall not prejudice and/or derogate from the Trustee’s right to
initiate legal and/or other proceedings including the receipt of instructions from the
court, even if no call for payment was made on the debentures, all for the protection of
the debenture holders and subject to the provisions of any law.
	 
	 	9.5	 	Subject to the provisions of this Deed, the Trustee is entitled, but not
obligated, to convene a general meeting of the debenture holders at any time, in order
to consider any matter relating to this Deed and/or to obtain its instructions in that
regard.

- 10 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	9.6	 	The Trustee is entitled, but not obligated, at its sole discretion, to delay the
performance of any action under this Deed, for the purpose of applying to the general
meeting of the debenture holders and/or to the court, until it receives instructions
from the general meeting of the debenture holders and/or from the court on how to
proceed.
	 
	 	9.7	 	The application to the general meeting of the debenture holders and/or to the
court will be made in such cases without delay and at the earliest possible and
reasonable date.

	10.	 	Trusteeship of the Receipts

	 	10.1	 	All the receipts received by the Trustee, including as a result of proceedings,
if any, instituted by it against the Company, will be held by it in trust and used by it
for the purposes and according to the order or priorities detailed below:
	 
	 	 	 	First, for defraying the reasonable costs, the payments, the imposts and the
obligations that were expended by the Trustee, imposed on it, or that were incurred
incidentally to or in consequence of the trust execution acts or otherwise in
connection with the terms of this Deed, including the Trustee’s fee (provided it was
not paid by the Company, and without derogating from its obligation to pay the
Trustee’s fee). Subject to the provisions of the law, the balance will be used by
the Trustee, unless the general meeting of the debenture holders directs otherwise
in a special resolution, for the following: first, to pay the debenture holders all
the interest due to them under the terms of the debentures, subject to the linkage
conditions in the debentures, pari passu and pro rata to the amount of the arrears
interest due to each of them, without preference or priority to any of them and
without any preference due to precedence in the time of issuance of the debentures
by the Company or otherwise; second, to pay the debenture holders the principal
amounts due to them under the debentures held by them, whether the time of payment
of the principal has arrived or not, subject to the linkage conditions in the
debentures, pari passu and pro rata to the amounts due to them, without any
preference due to precedence in the time of issuance of the debentures by the
Company or otherwise, and the surplus, if any, will be paid by the Trustee to the
Company or its substitutes, as the case may be. Withholding tax will be deducted
from the payments to the debenture holders, insofar as there is a requirement in law
to do so.
	 
	 	 	 	The payment of the amounts by the Trustee to the debenture holders as stated above,
from the receipts received by it, is subject to prior or equal rights of other
creditors of the Company with respect to said receipts, should there be any such and
in accordance with any law.

- 11 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	11.	 	Authority to Delay the Distribution of Moneys

	 	11.1	 	Notwithstanding the provisions of clause 10 above, if the monetary amount
received as a result of the institution of proceedings as stated above and becoming
distributable at any time as stated in said clause, is less than ten percent (10%) of
the unpaid balance of the principal of the debentures in circulation (subject to the
linkage conditions), the Trustee will not be obligated to distribute it and will be
entitled to invest such amount, wholly or partly, in the permissible investments under
this Deed and to replace such investments from time to time with other permissible
investments, all as he deems appropriate.
	 
	 	11.2	 	When the aforesaid investments with their earnings, together with other moneys,
if any, received by the Trustee for payment to the debenture holders, reach an amount
sufficient for paying at least ten percent (10%) of the unpaid balance of the principal
of the debentures in circulation (subject to the linkage conditions), the Trustee will
pay them to the debenture holders in the manner provided in clause 10 above. That stated
will not apply if a special resolution is passed by the general meeting of holders of
Debentures (Series A) according to which the Trustee is required to distribute such
amount.
	 
	 	11.3	 	If within a reasonable amount of time the Trustee is not in possession of an
amount sufficient for paying at least ten percent of the unpaid balance of the principal
of the debentures as stated, it will be entitled to distribute to the debenture holders
the moneys in his possession.

	12.	 	Distribution Notice
	 
	 	 	The Trustee will notify the debenture holders of the day and place of execution of any
payment from among those referred to in clauses 10 and 11 above, by a prior notice of 14 days
to be served in the manner specified in clause 24 below.
	 
	 	 	After the day specified in the notice, the debenture holders will be entitled to interest at
the rate specified in the debentures, only on the balance of the principal (should there be
any such) after deduction of the amount that was paid or proposed for payment to them as
aforesaid.
	 
	13.	 	Receipts from the Debenture Holders

	 	13.1	 	A receipt issued by a debenture holder for the amounts of the principal, the
interest and the linkage differences paid to him by the Trustee in respect of the
debenture will release the Trustee absolutely with respect to the actual execution of
payment of the amounts specified therein.
	 
	 	13.2	 	A receipt issued by the Trustee for the amounts of the principal, the interest
and the linkage differences deposited with it in favor of the debenture holders in
accordance with the terms of this Deed or the debentures, will be deemed vis-à-vis

- 12 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	the Company as a receipt from the debenture holder regarding the receipt of the
amounts specified therein.

	14.	 	Presentation of a Debenture to the Trustee and Recording of a Partial Payment

	 	14.1	 	A debenture holder will be obligated to present to the Trustee, at the time of a
payment on account of principal, interest or linkage differences under clauses 10, 11
and 12 above, the debenture in respect of which the payment is being made.
	 
	 	14.2	 	The Trustee will record on the debenture certificate a note concerning the
amounts that were paid as aforesaid, and the payment date.
	 
	 	14.3	 	The Trustee will be entitled, in any special case, at its discretion, to waive
the presentation of the debenture, after the debenture holder provided it with an
indemnity letter and/or a security deemed adequate by the Trustee for damages that may
be caused by the non-recording of a note as aforesaid, all as the Trustee deems fit, or
it may maintain records in another manner, at its discretion.

	15.	 	Company’s Undertakings Toward the Trustee
	 
	 	 	The Company hereby undertakes toward the Trustee, up to the date of full payment of the
debentures, as follows:

	 	15.1	 	To persist and conduct its business in an orderly and proper manner, including
making the mandatory payments applying by law to its assets. It is hereby clarified that
the Company’s failure to make such a mandatory payment due to a disagreement in good
faith shall not be deemed a breach of this undertaking.
	 
	 	15.2	 	To notify the Trustee in writing, directly and not later than 2 business days
after learning of the imposition of any attachment on all or a material part of its
assets, and of the appointment of a receiver and/or special administrator and/or
temporary or permanent liquidator over all or a material part of its assets, and of an
action by a holder of a lien on any asset of the Company for the exercise of the lien
registered in its favor, and to take, at its expense, all the necessary steps for
removing such attachment or for canceling such receivership, liquidation or
administration or for annulling the lien exercise actions, as the case may be.
	 
	 	15.3	 	To notify the Trustee in writing, directly and not later than 2 business days
after learning of the occurrence of any of the circumstances enumerated in clause 7
above.
	 
	 	15.4	 	To comply with any other reasonable instruction of the Trustee that is intended
to protect the rights of the debenture holders, all in accordance with the provisions of
this Deed.
	 
	 	15.5	 	To manage its books in accordance with the provisions of any law and generally
accepted accounting principles, and to allow the Trustee or its authorized
representative, upon its demand, to inspect the Company’s books and the

- 13 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	documents serving as references therefor, subject to the Trustee’s undertaking to
keep the information in confidence, except for the conveyance of relevant
information only, at the Trustee’s reasonable discretion, to a meeting of the
debenture holders that was convened for the purpose of receiving a report and/or
passing an ordinary and/or special resolution. The holders undertake toward the
Trustee and the Company to keep in confidence any information brought before them,
for as long as it has not been made public by the Company. In this regard, the
Trustee’s authorized representative denotes anyone appointed by the Trustee for the
purpose of such inspection in a written notice to be served by the Trustee to the
Company prior the aforesaid inspection, said notice to include also the Trustee’s
confirmation that such representative is obligated toward the Trustee and toward the
Company to keep in confidence any information coming to his knowledge in the course
of his activity on the Trustee’s behalf. The Trustee will keep in confidence any
information contained in a book and/or in a document inspected by the Trustee’s
representative as stated.
	 
	 	15.6	 	To furnish to the Trustee a copy of every report which it is obligated to submit
to the Securities Authority, simultaneously with the submission thereof to the
authority, as well as a copy of every document transmitted by the Company to the
debenture holders. In addition the Company will transmit to the Trustee additional
information relating to the Company, upon the Trustee’s reasonable demand, and any
information transmitted to the Trustee will be kept in confidence by it.
	 
	 	15.7	 	To issue to the Trustee, once a year as well as upon demand, a confirmation that
all the payments coming due were made to the debenture holders.
	 
	 	15.8	 	To cause the debentures to be rated by a rating agency throughout the term of the
debentures. In this regard, “rating agency” – as this term is defined in the Second
Schedule to the Securities Regulations (Details of the Prospectus, Its Structure and
Form), 5729-1969.
	 
	 	15.9	 	To enable the Trustee to participate in meetings of the Company’s shareholders,
without a voting right.
	 
	 	15.10	 	For as long as the debentures have not been listed on the Stock Exchange – to
notify the Trustee in writing in the event that a call for an immediate payment is made
on a financial debt of the Company by a creditor pursuant to a breach of the Company’s
obligations toward that creditor, directly and not later than 2 business days after the
Company learned thereof. In this regard, “financial debt” – excluding existing
indebtedness of the Company to banks in their amount on December 13, 2005.
	 
	 	15.11	 	For as long as the debentures have not been listed on the Stock Exchange – the
Company will not distribute a dividend if the Company’s known net financial indebtedness
on the distribution date exceed three times the accumulated EBITDA

- 14 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	in the four last calendar months included in the Company’s financial statements
certified by its board of directors prior to the distribution date. The Company
undertakes to present to the Trustee a written confirmation from the Company’s
accountant, not later than 3 business days before the date of the announcement of a
dividend distribution, concerning its absolute compliance with the above condition.
	 
	 	15.12	 	Up to the listing of the debentures on the Stock Exchange – to notify the
Trustee in writing, directly and not later than 2 business days after learning of any
case in which following the first issue of the debentures under this Deed, the Company
is to assume a new or additional financial debt in a manner that increases by more than
NIS 500 million its known net financial Indebtedness on the date of assumption of such
financial debt.
	 
	 	15.13	 	For as long as the debentures have not been listed on the Stock Exchange, the
Company undertakes to notify the Trustee in writing, directly and not later than two
business days after learning of any occurrence or matter being outside the ordinary
course of the Company’s business in view of their nature, scope or potential
consequence, and which have or could have a material effect on the Company.

	16.	 	Additional Undertakings
	 
	 	 	After a call for an immediate payment is made on the debentures, the Company will perform,
from time to time and whenever so required by the Trustee, all reasonable actions to enable
the exercise of all the powers vested in the Trustee and specifically, the Company will
perform the following actions, insofar as they are reasonable:

	 	16.1	 	Make any declaration and/or sign all documents and/or perform and/or cause the
performance of all actions as necessary and/or required for validating the exercise of
the authorities, the powers and the authorizations of the Trustee and/or its
representatives.
	 
	 	16.2	 	Issue all notices, orders and instructions as the Trustee deems practicable and
which it requires.
	 
	 	16.3	 	For the purposes of this clause – a written notice signed by the Trustee,
confirming that an action required by it, within the framework of its powers, is a
reasonable action, shall be prima facie evidence thereof.

	17.	 	Attorneys

	 	17.1	 	The Company hereby irrevocably appoints the Trustee as its attorney for
implementing and performing in its name and stead all the actions which it is obligated
to perform by the explicit terms of this Deed, and in general to act in the Company’s
name in the exercise of all or a part of the powers vested in the Trustee, and to
appoint any other person as the Trustee deems fit for the

- 15 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	performance of the Trustee’s duties under this Deed of Trust, provided the Company
has not performed the actions which it is obligated to perform by the terms of this
Deed within a reasonable time from the Trustee’s demand.
	 
	 	17.2	 	The appointment under clause 17.1 above shall not obligate the Trustee to perform
any action, and the Company hereby discharges the Trustee in advance in the event that
it does not perform some action as aforesaid in clause 17.1 and/or in the event it is
not performed on time. Additionally, the Company hereby waives in advance any contention
against the Trustee and/or its agents for any damage caused and/or may be caused to the
Company, directly and/or indirectly, due to actions in good faith that were performed by
the Trustee as stated in this clause, excluding negligence and/or mala fides on the part
of the Trustee.

	18.	 	Other Agreements
	 
	 	 	Subject to the provisions of the Securities Law and to the restrictions imposed on the
Trustee in the Securities Law, the fulfillment of the Trustee’s function under this Deed or
its status per se as a trustee shall not prevent the Trustee and/or its parent company and/or
any related company from entering into various contracts with the Company or from executing
any transaction with any third party in the ordinary course of its business, including any
contract or transaction relating to the underwriting, distribution or sale of shares,
debentures or other securities of the Company, provided this does not affect the fulfillment
of the Trustee’s undertakings in this Deed or the Trustee’s competency.
	 
	19.	 	Reports by the Trustee
	 
	 	 	The Trustee will prepare by the end of the second quarter in each calendar year an annual
report concerning the affairs of the trust (“the annual report”). The annual report will set
out the following matters:

	 	19.1	 	Current details of the course of the affairs of the trust during the past
calendar year.
	 
	 	19.2	 	Exceptional events connected with the trust that occurred during the past
calendar year.
	 
	 	19.3	 	The holders may inspect the annual report at the Trustee’s offices during regular
business hours, and they may receive a copy of the report upon demand.
	 
	 	19.4	 	The Trustee will notify the holders of the date of submission of the report by
it, as provided in clause 23 below.
	 
	 	19.5	 	If the Trustee learns of a material breach of the Trust Deed on the Company’s
part, it will notify the holders of the breach and of the steps it has taken for the
prevention thereof or for the fulfillment of the Company’s undertakings, as the case may
be.

- 16 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	20.	 	Trustee’s Fee
	 
	 	 	The Trustee’s fee will be as specified in Addendum C to this Deed.
	 
	21.	 	Powers and Activities

	 	21.1	 	The Trustee is not obligated to inform any part of the signing of this Deed and
may not interfere in any manner in the conduct of the Company’s business or affairs.
	 
	 	21.2	 	The Trustee will exercise in trust the powers, authorizations and authorities
vested in it by this Deed, at its reasonable discretion, and it shall not be liable for
any damage caused due to an error in such discretion, unless it acted negligently or
mala fides.
	 
	 	21.3	 	The Trustee will keep in confidence any information conveyed to it by the Company
and will not make any use thereof save for the purpose of fulfilling its obligations
under the terms of this Deed, including for the purpose of conveying relevant
information only, at its reasonable discretion, to a meeting of the debenture holders
convened to receive a report and/or pass an ordinary and/or special resolution. The
holders undertake toward the Trustee and the Company to keep in confidence the
information brought before them, for as long as it has not been made public by the
Company.
	 
	 	21.4	 	The Trustee may in the course of executing the trust affairs under this Deed act
on the opinion and/or advice of any lawyer, accountant, appraiser, assessor, surveyor,
broker or other expert, whether such opinion and/or advice was prepared at the Trustee’s
request and/or by the Company, and the Trustee will not be liable for any loss or damage
caused as a result of any action and/or omission done by it on the basis of such advice
or opinion, unless the Trustee acted negligently or not in good faith. The Trustee will
allow the Company and the debenture holders to peruse such opinion upon demand.
	 
	 	21.5	 	Any such advice and/or opinion may be given, sent or received by letter, cable,
facsimile and/or any other electronic means for the transmission of information, and the
Trustee shall not be liable for actions done by it on the basis of any advice and/or
opinion and/or knowledge conveyed by one of the methods mentioned above, even if it
contained errors and/or was inauthentic, unless it was possible to discover such errors
in a reasonable examination.
	 
	 	21.6	 	The Trustee will be entitled to appoint an agent/s to act in its stead, be it a
lawyer or someone else, for the purpose of performing or participating in the
performance of special actions that are required in connection with the trust – and
without derogating from the above generalities, the institution of legal proceedings or
representation in merger or spin-off processes of the Company – and to pay any such
agent a fee. The Company shall be entitled to object to such

- 17 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	appointment for any reasonable reason, including in case the agent is competing,
directly and indirectly, with the company’s business.
	 
	 	21.7	 	Subject to the provisions in this Deed, the Trustee will act toward the debenture
holders in accordance with the provisions of the Securities Law, even before the listing
of the Debentures (Series A) on the Stock Exchange.

	22.	 	Indemnification of the Trustee

	 	22.1	 	The Trustee will be entitled to indemnity from the debenture holders and/or from
the Company, as the case may be, for reasonable costs which it incurred and/or will
incur, as the case may be, in connection with actions which it performed and/or will be
required to perform by virtue of its obligation under the terms of the Trust Deed and/or
by law and/or statute and/or by order of a competent authority and/or by demand of the
debenture holders, in the manner specified in the Trust Deed, or by demand of the
Company, but it: will not be entitled to demand indemnity in advance in a matter that
does not brook delay; and where the Trustee is satisfied with an indemnity undertaking –
such indemnity undertaking may include indemnity in respect of liability in torts that
is imposed on the Trustee in a final judgment or in a compromise vis-à-vis a third party
not being a debenture holder, provided that such indemnity undertaking is subject to the
following conditions: 1) the costs in respect of the liability in torts are reasonable;
2) the Trustee acted in good faith and with appropriate care, and such action was done
during the fulfillment of its function and without negligence.
	 
	 	22.2	 	Without derogating from the rights to compensation granted to the Trustee by
law, but subject to the provisions of clause 22.1 above, the Trustee and any receiver,
representative, manager, agent or other person appointed by the Trustee under this Deed,
will be entitled to be indemnified from the moneys received by the Trustee in
proceedings instituted by it or in another manner under this Deed, with respect to
obligations which they assumed, with respect to costs which they incurred incidentally
to the execution of the trust under this Deed, or in connection with such actions as in
their opinion were required for such execution, or in connection with the exercise of
the powers and authorities vested in them by virtue of this Deed, and in connection with
all kinds of legal proceedings, opinions and advice of lawyers and other experts,
negotiations, deliberations, expenses, claims and demands relating to any law or any
thing that was done or not done in any manner in such regard, and the Trustee will be
entitled to withhold the moneys in its possession and to pay out of them the amounts
required as indemnity, provided it did not act negligently.
	 
	 	 	 	Whenever the Trustee is obligated by the terms of the Trust Deed and/or by law
and/or statute and/or by order of a competent authority and/or by demand of the
debenture holders (Series A) and/or by demand of the Company to perform any action,
including but not only the initiation of proceedings or filing of claims at the

- 18 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	demand of the owners of Debentures (Series A), as stated in the Trust Deed, the
Trustee will be entitled to abstain from any such action until it receives an
indemnity letter, to its satisfaction, from the owners of Debentures (Series A) or
any of them, and where the action is performed pursuant to the Company’s demand –
from the Company, in respect of any liability for damages and/or costs that could be
caused to the Trustee, to the Company or to either of them due to the performance of
such action. All the foregoing, except in circumstances in which an urgent action
was required, and abstention from the performance thereof before the receipt of an
indemnity letter as stated would cause damage and/or loss to the holders of
Debentures (Series A).

	23.	 	Notices

	 	23.1	 	Any notice served by the Company and/or the Trustee to the debenture holders will
be sent by registered post to the address of the debenture holders last recorded in the
register, and any notice sent as stated will be deemed to have been served to the
debenture holders at the end of three days from the date of delivery thereof at the post
office.
	 
	 	 	 	The Trustee will send the Company copies of notices and invitations served by it to
the debenture holders.
	 
	 	 	 	The Company will send the Trustee copies of notices and invitations served by it to
the debenture holders.
	 
	 	 	 	However in the event that the debentures are listed on the Stock Exchange or in the
computerized system for trade in institutional securities operated by the Stock
Exchange, a notice by the Company and/or the Trustee to the debenture holders may,
instead of being sent by registered post, be served to the registration company and
by publication in at least two widely circulated daily newspapers published in
Israel in the Hebrew language, and in such case, the day of publication will be
deemed as the day of receipt of the notice by the debenture holders.
	 
	 	23.2	 	Any notice or demand by the Trustee to the Company or by the Company to the
Trustee may be served in a registered letter sent to the address detailed in this Deed,
or to another address of which one party will inform the other in writing, or by a fax
transmission or by messenger, and every such notice or demand will be deemed to have
been received by the addressee as follows: (a) if sent by registered post – at the end
of three business days from the day of its delivery at the post office; (b) if
transmitted by fax (together with verification of receipt by telephone) – at the end of
one business day from the day of its transmission; and (c) if sent by messenger – upon
delivery of the notice or offering thereof to the addressee, as the case may be.

- 19 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	24.	 	Alterations to the Trust Deed; Waiver and Compromise; Modification of Rights

	 	24.1	 	Subject to the provisions of any law, the Company and the Trustee will be
entitled to alter the terms of the Trust Deed (including an alteration in the terms of
the debentures), upon the fulfillment of any of the following:

	 	  24.1.1	 	The Trustee is satisfied that the alteration does not prejudice the rights of
the debenture holders. Notwithstanding the aforesaid, no alteration may be made
to the terms of the Trust Deed and/or the debentures in regards with the
amounts and times of payment, the causes for making a call for an immediate
payment for payment and/or the reports which the Company is required to submit
to the Trustee, except as provided in clause 24.1.2 below.
	 
	 	  24.1.2	 	The debentures holders have agreed to the alteration in a special resolution
(as defined in Addendum B to this Deed) passed in a meeting of the debenture
holders.

	 	24.2	 	The Trustee will be entitled, where he is satisfied that this does not prejudice
the rights of the debenture holders, to waive any nonmaterial breach or nonmaterial
compliance by the Company with any condition of the Deed of Trust (or condition of the
debentures), excluding a breach and/or noncompliance with conditions as stated relating
to the payment of amounts to debenture holders and/or times of payment and /or reports
the Company has to deliver to the Trustee.
	 
	 	24.3	 	Furthermore, the Trustee will be entitled, subject to the provisions of the law,
with prior approval by a special resolution passed in the general meeting of the
debenture holders, whether before or after a call for an immediate payment has been made
on the debentures, to compromise with the Company in connection with any right or claim
of the debenture holders or any of them and to agree with the Company on any settlement
of rights of the debenture holders under the Trust Deed and according to the terms of
the debentures, and inter alia to waive any right or claim of the debenture holders
against the Company.
	 
	 	24.4	 	Notwithstanding the aforesaid, the Trustee will be entitled, at the Company’s
request, from time to time and at any time, until the listing of the debentures on the
Stock Exchange, to make alterations in the Trust Deed and/or in the debentures as
required by the Securities Authority and/or the Stock Exchange and/or any other
governmental authority, insofar as such alterations are necessary for listing on the
Stock Exchange, provided such alterations do not, in the Trustee’s opinion, prejudice
the rights of the debenture holders and/or change the causes for immediate payment and
the amounts and times of payment of the debentures. Up to the listing of the debentures
on the Stock Exchange, the Company will serve the debenture holders written notice of
any such alteration as soon as possible after it was made.

- 20 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	24.5	 	Starting from the date of listing of the debentures on the Stock Exchange, the
Company will issue an immediate report concerning any alteration as stated above in this
clause 24 (including all its sub-clauses) immediately after it was made. So long as the
debentures have not been listed on the Stock Exchange, the Company will serve the
holders notice of any alteration as stated above in this clause 24 (including all its
sub-clauses) immediately after it was made.
	 
	 	24.6	 	Whenever the Trustee exercises its right under this clause, it will be entitled
to require the debenture holders to deliver the debenture certificates to it or to the
Company, for the purpose of recording thereon a note concerning any compromise, waiver,
alteration or amendment as stated, and upon the Trustee’s demand the Company will record
a note as aforesaid. Whenever the Trustee exercises its right under this clause, it will
notify the debenture holders in writing in that regard within a reasonable time.

	25.	 	Register of the Debenture Holders

	 	25.1	 	The Company will maintain and manage in its registered office a register of the
debenture holders, in which will be recorded the names of the debenture holders, their
address and the number and principal amount of the debentures registered in their name.
All transfers of title to the debentures in accordance with the provisions of this Deed
and the debentures will be registered in the register. The Trustee and any debenture
holder will be entitled to inspect the register at any reasonable time. The Company may
close the register from time to time for a period or periods not exceeding 30 days in
the aggregate in a year.
	 
	 	25.2	 	The Company will not be obligated to record in the register of the debenture
holders any notice concerning an explicit, implicit or presumed trust, or any pledge or
lien of any kind, or any equitable right, claim or offset or other right in connection
with the debentures. The Company will recognize solely the title of the person in whose
name the debentures were registered, provided the legal heirs, administrators or
executors of the registered owner and any person becoming entitled to the debentures by
reason of the bankruptcy of the registered owner (and in the case of a corporation – by
reason of its liquidation), will be entitled to be registered as the owner thereof after
providing adequate proof to the Company’s satisfaction of their right to be so
registered.

	26.	 	Release
	 
	 	 	Upon proof to the Trustee’s satisfaction that all the debentures were fully paid and redeemed
(including principal, interest and linkage differences), and upon proof to the Trustee’s
satisfaction that all the obligations or costs incurred by the Trustee in connection with
this Deed were fully defrayed, the Trustee will be obligated, upon the Company’s first
demand, to act with any unredeemed moneys deposited in regard of the debenture in accordance
with the conditions specified in this Deed.

- 21 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	27.	 	Termination of the Trustee’s Office

	 	27.1	 	The Trustee and any trustee replacing it will be entitled to resign from their
office whenever they so desire, after serving the Company a written notice setting out
the reason for the resignation. If the debentures have not been listed on the Stock
Exchange, the Company will convene a meeting of the holders of Debentures (Series A) to
appoint a new trustee, and the Trustee’s resignation will take effect upon the
appointment of the new trustee. The new trustee will be a trust company of one of the
six big banks in Israel or another trustee whose appointment has been approved by a
meeting of the debenture holders.
	 
	 	 	 	If the debentures have been listed on the Stock Exchange, the Trustee’s resignation
will take effect only after it has been approved by the court and from the day
specified in the approval. Upon the resignation of the Trustee, the court will
appoint a new trustee in its place.
	 
	 	27.2	 	The Trustee will transfer to the new trustee all its records concerning holders
of Debentures (Series A), if there are any such, information concerning the payments
that were executed by the Trustee until then, if any such were executed, any report that
was submitted according to the terms of the Trust Deed and any information reasonably
required by the new trustee, and the Trustee will transfer as well to the new trustee
any amount held by it at the time in connection with the Debentures (Series A).
	 
	 	27.3	 	The holders of ten percent (10%) of the balance of the principal amount of the
Debentures (Series A) may convene a general meeting of the debenture holders, which may
resolve, upon a vote of the holders of at least fifty percent (50%) of the balance of
the principal amount of the Debentures (Series A), to dismiss the Trustee.
	 
	 	27.4	 	Without derogating from the aforesaid, the Trustee’s office will expire or
terminate, as the case may be, in the circumstances enumerated in section 35N of the
Securities Law.
	 
	 	27.5	 	Prior to the appointment of a new trustee not being a trust company of a bank,
the Company will provide to the holders details of such trustee’s equity and insurance
arrangements in connection with the fulfillment of its function as trustee.
	 
	 	27.6	 	Without derogating from the aforesaid, the Trustee’s office will terminate if it
becomes apparent that the Trustee is precluded from continuing in office due to a change
in the provisions of the law or the statute applying to its competence to serve as
trustee, including where such preclusion is created in connection with the listing of
the debentures on the Stock Exchange. For this purpose “preclusion” is deemed also a
demand by the Securities Authority to terminate the Trustee’s office. In such case the
Company will appoint a new trustee.

- 22 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	27.7	 	Any new trustee appointed will have the same powers, authorities and other
authorizations and will be able to act, in all respects, as if it had to begin with been
appointed as the Trustee.
	 
	 	27.8	 	The Company will notify the holders upon learning of any event and/or
circumstance by reason of which the Trustee is precluded from continuing in office.

	28.	 	Meetings of the Debenture Holders
	 
	 	 	Meetings of the debenture holders will be conducted as set forth in Addendum B to this Deed.

	29.	 	Financial Statements
	 
	 	 	The Company will submit to the Trustee, for as long as all the debentures have not been fully
paid (including interest and linkage differences):

	 	29.1	 	Audited financial statements of the Company for the fiscal year ended December 31
of the past year, immediately upon the presentation thereof to the Company’s
shareholders and not later than the date on which a public company is required to
publish these statements.
	 
	 	29.2	 	Any semi-annual and quarterly interim report, immediately upon the presentation
thereof to the Company’s shareholders and not later than the date on which a public
company is required to publish these reports, together with the review thereof of the
Company’s accountant.
	 
	 	29.3	 	Certification of the Company’s accountant and/or controller concerning the
payment of any interest and/or principal and the date of payment thereof to the
debentures holders, and the balance of the principal amount of the debentures in
circulation, pursuant to the Trustee’s written request to the Company for such a
certification.
	 
	 	29.4	 	Any immediate report submitted by the Company, immediately upon its publication.
	 
	 	29.5	 	In the event that the debentures are delisted from trade following the listing
thereof, and for as long as all the Debentures (Series A) have not been fully redeemed,
the Company will continue submitting to the Trustee the reports detailed in clauses 29.1
and 29.2 above, at the times when a public company is required to publish these reports.
	 
	 	29.6	 	Reports concerning any change in the rating of the debentures.
	 
	 	29.7	 	The Trustee will allow the holders to inspect the reports, subject to their
undertaking to maintain confidentiality as set out in clause 21.3 above.

- 23 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	30.	 	Investments of Moneys 
	 
	 	 	All the moneys which the Trustee is entitled to invest under this Deed, will be invested by
the Trustee, in a bank/s, in its name or to its order, in investments which under the laws of
the State of Israel are permissible with trust moneys, as it deems appropriate, subject to
the terms of this Trust Deed and provided that any investment in securities is limited to
securities with a rating of not less than AA. If the Trustee does so, it will owe the persons
entitled to those amounts only the proceeds obtained from the realization of the investments,
less related costs, management costs of the trust accounts, commissions and other mandatory
payments applying to the trust account. From such moneys the Trustee will transfer amounts to
the debenture holders who are entitled thereto, as soon as possible after proofs and
certifications are submitted to the Trustee’s complete satisfaction concerning their right to
these amounts, and less the Trustee’s costs and commissions at its customary rate for the
same time.
	 
	31.	 	Miscellaneous
	 
	 	 	Disagreements between the parties to this Trust Deed will be adjudicated exclusively by the
court in Tel Aviv-Jaffa, which is vested with material jurisdiction.
	 
	32.	 	Addresses
	 
	 	 	The parties’ addresses are as set out in the preamble to this Deed, or any other address of
which appropriate written notice is served by one party to the other.
	 
	33.	 	Stamping
	 
	 	 	Stamping of this Deed, if and to the extent required by law, will be done by the Company, at
its expense.

In witness whereof the parties have set their hand hereto:

	 	 	 
	( - )

––––––––––––––––––––––––––––––––

Cellcom Israel Ltd.
	 	( - )

––––––––––––––––––––––––––––––––

Aurora Fidelity Trust Ltd.

I the undersigned, Erez Yitzhaki, Adv., hereby certify that this Trust Deed was signed by Cellcom
Israel Ltd. in accordance with its memorandum and articles, through Messrs. Tal Raz and Oren
Lieder.

	 	 	 
	 
	 	( - )
	 
	 	––––––––––––––––––––––
	 
	 	Erez Yitzhaki, Adv.
	 
	 	License No. 22443

- 24 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

ADDENDUM A – DEBENTURES

CELLCOM ISRAEL LTD.

Debentures (Series A)

A series of registered debentures (series A) unlimited in amount, of NIS 1 principal amount each,
payable in nine equal semi-annual installments, on July 5 of each of the years 2008 to 2012
(inclusive) and on January 5 of each of the years 2009 to 2012 (inclusive), linked principal and
interest to the Consumer Price Index for November 2005 and bearing 5.0% annual interest.

Registered Debentures

Certificate number                     

Total principal amount of the debentures in this certificate NIS                     

Registered owner of the debentures in this certificate                     

	1.	 	This certificate witnesses that Cellcom Israel Ltd. (“the Company”) will pay on July 5 of
each of the years 2008 to 2012 (inclusive) and on January 5 of each of the years 2009 to 2012
(inclusive), to whoever is registered in the Company’s register of debenture holders as the
holder of the debentures in this certificate, 11.11% of the principal amount of this
debenture. The unpaid principal of the debenture will be linked to the Consumer Price Index
for November 2005 and will bear 5.0% annual interest, all in accordance with the terms of the
Trust Deed, the debenture certificate and the terms set forth in the back of the page.
	 
	2.	 	The debentures of this series are issued in accordance with a trust Deed dated December 21,
2005, drawn up and signed between the Company of the one part and Aurora Fidelity Trust
Company Ltd., as the Trustee, of the other part (“the Trust Deed”).
	 
	3.	 	The debenture is issued subject to the terms set forth in the back of the page and to the
terms of the Trust Deed.

––––––––––––––––––––––

Cellcom Israel Ltd.

	 	 	 	 
	Date: 

	 	 	 
	 

	 	 	 

- 25 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

TERMS SET FORTH IN THE BACK OF THE OAGE

	1.	 	General
	 
	 	 	In this Debenture (Series A), the terms below will have the meanings below, unless another
meaning is implied by the context:

	 	 	 
	“the Company” -

	 	Cellcom Israel Ltd.
	 
	 	 
	“the Trust Deed” -

	 	The Trust Deed dated December 21, 2005 between the Company
and Aurora Fidelity Trust Ltd. in connection with the issue
of the Debentures (Series A).
	 
	 	 
	“debentures” or
“Debentures (Series A)”
-

	 	A series of registered debentures (series A) unlimited in
amount, of NIS 1 principal amount each, issued by the
Company pursuant to the Trust Deed.
	 
	 	 
	“the Trustee”

	 	Aurora Fidelity Trust Company Ltd. or any trustee replacing
it, in accordance with the terms of the Trust Deed.
	 
	 	 
	“principal” or

“principal amount” or

“debenture principal” -

	 	The unpaid principal amount of the debentures in circulation.
	 
	 	 
	“the register” -

	 	The register of holders of debentures of the Company, in
which will be recorded all the holders of the debentures.
	 
	 	 
	“debenture holder” -

	 	The person whose name is written at the time in question in
the register as the holder of the debenture, and in the case
of several joint holders – the joint holder whose name is
written first in the register.
	 
	 	 
	“the Securities Law” -

	 	The Securities Law, 5728-1968 and the regulations thereto as
in force from time to time.
	 
	 	 
	“the known index” -

	 	The last known index.
	 
	 	 
	“the base index” -

	 	The index published on December 15, 2005 for the month of
November 2005.
	 
	 	 
	“the payment index” -

	 	The known index on the date of any payment on account of the
principal or the interest.
	 
	 	 
	“Consumer Price Index”
or “index” -

	 	The price index known as “the Consumer Price Index”
including fruits and vegetables, published by the Central
Bureau of Statistic and Economic Research, including the
same index even if published by another official
organization or institution, and including any other index
replacing it, whether built on the same data as the existing

- 26 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 
	 

	 	index or not. If the index is replaced by another index
published by an organization or institution as aforesaid,
and such organization or institution has not set the ratio
between such other index and the replaced index, said ratio
shall be set by the Central Bureau of Statistics. If such
ratio is not set as stated, then the Trustee in consultation
with economic experts to be chosen by it will set the ratio
between the other index and the replaced index;
	 
	 	 
	“the issue date” -

	 	December 22, 2005.
	 
	 	 
	“business day” -

	 	Any day on which most of the big banks in Israel as well as
the Stock Exchange clearinghouse are open to the public for
the execution of transactions.
	 
	 	 
	“the Stock Exchange” -

	 	The Tel Aviv Stock Exchange Ltd.
	 
	 	 
	“sum of net financial
Indebtedness” known on
any date –

	 	(a) the sum of the Company’s indebtedness in respect of
credit taken from financial institutions, institutional
investors and other holders of debentures of the Company,
less (b) short-term investments of the Company, including
its cash balances and its deposits with financial
institutions, all as stated in the Company’s last financial
statements, audited or reviewed by the Company’s auditors
and certified by the Company’s board of directors prior to
that date;
	 
	 	 
	“EBITDA” in any period –

	 	The Company’s earnings before depreciation expenses,
financing, taxes and other deductions, all as stated in the
Company’s financial statements for that period, audited or
reviewed by the Company’s auditors and certified by the
Company’s board of directors.

	 	 	The debentures form an integral part of the Trust Deed, and in case of a contradiction
between them, the provisions of the Trust Deed shall prevail.
	 
	2.	 	Pari Passu and No Liens
	 
	 	 	The debentures will stand pari passu with respect to the amounts payable on them, without any
priority of one debenture from this series over another.
	 
	 	 	The Company undertakes not to create liens on its assets, of any nature or kind, for as long
as the Debentures (Series A) have not been fully paid, excluding a fixed lien on assets to
secure credit enabling the purchase of those assets.
	 
	 	 	The debentures are not secured by any collateral.

- 27 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	3.	 	Payment of the Debenture Principal
	 
	 	 	The principal will be paid in nine equal semi-annual installments, on July 5 of each of the
years 2008 to 2012 (inclusive) and on January 5 of each of the years 2009 to 2012
(inclusive), plus index-linkage differences, as provided in clause 5 below. If the principal
payment date falls on a non-business day, the payment date will be deferred to the first
business day thereafter, and no interest will be paid in respect of such deferral.
	 
	4.	 	Payment of the Interest
	 
	 	 	The unpaid balance of the debenture principal will bear interest at a rate of 5.0% per annum
(“the interest”). The interest will be linked to the Consumer Price Index, in accordance with
the linkage conditions, as provided in clause 5 below.
	 
	 	 	Interest will be paid on January 5 of each of the years 2007 to 2012 (inclusive) and on July
5 of each of the years 2006 to 2012 (inclusive), for the six-month period ended on the last
day before every such date (“the interest period”), except for the first interest period, in
respect of which interest (calculated on the basis of 365 days) will be paid pro rata for the
period beginning on the issue date and ending on July 4, 2006.
	 
	 	 	It is hereby clarified that the first interest payment will be made on July 5, 2006.
Accordingly, the first interest will be at a rate of 2.671%.
	 
	 	 	The last interest payment will be made on July 5, 2012, together with the last payment of the
unpaid principal of the debentures in circulation and against the return of the debenture
certificate to the Company.
	 
	 	 	If the interest payment date falls on a non-business day, the payment date will be deferred
to the first business day thereafter, and no interest will be paid in respect of such
deferral.
	 
	 	 	The Company will deduct from the interest payment any amount it is required to deduct at
source, if at all, in accordance with any law.
	 
	 	 	Subject as provided in clause 7 below, if the Company delays more than five business days
after the appointed day for paying any amount on account of the principal and/or interest as
aforesaid (“the amount in arrears”), such amount will bear, in respect of the entire period
of arrears from the day appointed for payment, arrears interest at the interest rate on
Debentures (Series A) specified at the head of this clause plus 2%, all on an annual basis
(“the arrears interest”). To remove doubt, it is hereby clarified that during the arrears
period, arrears interest will be paid alone (and not in addition to the interest as defined
above). In such case, the Company will notify the holders and will submit to the Stock
Exchange without delay a report indicating the exact interest rate including the arrears
interest.
	 
	5.	 	Principal and Interest Linkage Conditions
	 
	 	 	The debenture principal and the interest thereon will be linked to the Consumer Price Index
in the following manner: If it becomes apparent on the date of any payment on

- 28 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	account of the debenture principal and/or the interest thereon that the payment index has
increased compared to the base index, the Company will pay such amount of the principal
and/or interest increased in proportion to the rate of increase of the payment index over the
base index; however, if it becomes apparent that the payment index is the same as or lower
than the base index, the payment index will be the base index.
	 
	6.	 	Persons Entitled to Principal and Interest Payments

	 	6.1	 	Any payment on account of the principal and/or interest will be paid to the
debenture holders whose names are recorded in the register at the end of the day of
December 24 or June 23, as the case may be, immediately preceding the due date of any
principal and/or interest payment (hereinabove and hereinafter: “the determining day”),
except for the final payment which will be made against the delivery of the debenture
certificate to the Company at least five business days before the date set for the final
payment, at the Company’s registered office and/or at any other place of which the
Company will give notice.
	 
	 	6.2	 	The payment will be made to the entitled persons by check or bank transfer,
crediting the bank account of the persons whose names appear in the register as the
holders of the debentures, the details of which will be provided in writing to the
Company in good time, and in any case not later than 12 days before the date of the
payment on account of the principal and/or interest.
	 
	 	6.3	 	If the person entitled to a payment from the Company fails to provide the details
of the bank account in good time, as aforesaid, the Company will send a check by
registered post to his last address written in the register. The sending of a check to
the entitled person by registered post as stated will be deemed in all respects as
payment of the amount specified in the check on the date of dispatch thereof by post,
provided it is paid upon proper presentation for collection.
	 
	 	6.4	 	A holder wishing to change his instructions concerning the manner of payment, as
stated above, may do so in a notice sent by registered letter to the Company, However,
the Company will comply with such instruction only if it reached its registered office
at least 15 days before the due date of any payment under the debenture. If the notice
is received by the Company after such time, the Company will act in accordance therewith
only with respect to payments with a due date after the payment date immediately
following the day of receipt of the notice.

	7.	 	Non-Payment for a Reason Not Dependent on the Company

	 	 7.1	 	Any amount due to the debenture holder which is not actually paid on the date set
for its payment for a reason not dependent on the Company, whereas the Company was
prepared to make the payment, will stop bearing interest and linkage differences from
the time set for its payment, and the debenture holder will be entitled solely to the
amounts to which he would have been entitled on the day set for making that payment on
account of the principal, interest and linkage.

- 29 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	7.2	 	The Company will deposit with the Trustee, within 15 business days from the date
set for such payment, the amount of the payment that was not made for a reason not
dependent on it, and said deposit will be deemed as the absolute discharge of that
payment, and in case of the discharge of all the amounts due on the debenture, also as
the redemption of the debenture. The Company will notify the holders entitled to such
amount of its deposit with the Trustee. The notice will be sent to the address of the
entitled holder written in the register at the time, not later than at the end of 7
business days from the deposit with the Trustee.
	 
	 	7.3	 	The Trustee will invest any such amount in trust accounts, in its name and to its
order on behalf of those debenture holders, and will invest it in permissible
investments under the laws of the State of Israel and the provisions of the Trust Deed,
all as it deems fit and subject to any law and to the provisions of clause 30 of the
Trust Deed. If the Trustee does so, it will owe the persons entitled to those amounts
only the proceeds obtained from the realization of the investments, less related costs,
management costs of the trust account and any mandatory payments applying to the trust
account and/or to the investment, and it will pay said proceeds to the entitled persons
against presentation of the proofs required by it, to its complete satisfaction.
	 
	 	7.4	 	The Trustee will hold these moneys and invest them in the aforesaid manner until
the end of one year from the final redemption date of the debentures. After this date,
the Trustee will transfer the amounts accumulated with it (including the earnings
derived from their investment), less its fee and costs, to the Company, which will hold
these amounts in trust on behalf of the entitled persons. The Company will confirm to
the Trustee in writing that it is holding the aforesaid amounts which were accepted by
it in trust on behalf of the entitled persons, and it will indemnify the Trustee for
damage of any kind to it caused by the transfer of the moneys as aforesaid, provided the
Trustee acted reasonably. The Company will hold these moneys in trust on behalf of the
entitled debenture holders during a further six years from the day on which it received
them from the Trustee. Moneys that have not been demanded from the Company by a
debenture holder by the end of seven years from the final redemption date of the
debentures, will pass to the Company, which will be entitled to use the remaining moneys
for any purpose whatsoever.

	8.	 	Transfer of the Debentures

	 	8.1	 	For as long as the Debentures (Series A) have not been listed on the Stock
Exchange, they may be transferred only to an investor as this term is defined in the
First Schedule according to section 15A(b)(1) of the Securities Law, or to the Company
or to a subsidiary of the Company, all – subject to the restrictions in law. The
debentures are transferable in respect of any sum of principal amount, provided it is in
whole new shekels. Any transfer of a debenture will be done on the basis of a transfer
instrument in the accepted wording, duly signed by the

- 30 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	registered holder or his lawful representatives, to be delivered to the Company at
its registered office together with the certificate of the transferred debenture and
any other proof required by the Company concerning the transferor’s right to
transfer the debenture.
	 
	 	 	 	Clause 8.1 above will not apply to debentures listed in the trading system for
institutional investors operated by the Stock Exchange, for as long as they are so
listed.
	 
	 	8.2	 	If stamp tax or another mandatory payment applies to the debenture transfer
instrument, proof of the payment thereof by the applicant will be provided to the
Company’s satisfaction.
	 
	 	8.3	 	In case only part of the sum of principal amount of a debenture is transferred,
the debenture certificate will first be split as provided in clause 9 below into the
appropriate number of debenture certificates, such that the total of all the principal
amounts specified therein will be equal to the principal amount specified in the
original debenture certificate.
	 
	 	8.4	 	Following compliance with all these conditions, the transfer will be registered
in the register of the debenture holders.
	 
	 	8.5	 	All the costs and commissions entailed in the transfer will be borne by the
transfer applicant.
	 
	 	8.6	 	Subject to the provision of clause 8.7 below, the Debentures (Series A) will not
be listed on any stock exchange. Subject to the provisions of the law and to the Stock
Exchange rules, the Company will register the debentures in the name of the Registration
Company of Israel Discount Bank Ltd., and within 30 days from the date of their issuance
they will be registered at the Stock Exchange clearinghouse, which will provide clearing
services for the debentures, and they will also be listed in the computerized trading
system for institutional investors operated by the Stock Exchange (“listing in the
institutional continuous trading system”). Failure to list the debentures in the
institutional continuous trading system as aforesaid owing to an act or omission of the
Company shall be deemed a fundamental breach by the Company. It is hereby clarified that
subject to the provisions of the law and the Stock Exchange rules, other than an
institutional investor as defined in the First Schedule to the Securities Law,
5728-1968, no one may trade in the debentures in the framework of the computerized
trading system for institutional investors as stated.
	 
	 	8.7	 	The Company undertakes, subject to the provisions of any law and the Stock
Exchange rules, to list the debentures on the Stock Exchange on the basis of a
prospectus not later than June 30, 2006 (“the determining date for listing”). If the
debentures are not listed on the Stock Exchange by the determining date for listing,
then –

- 31 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	8.7.1	 	The Company will notify the holders not later than July 5,
2006 that the Debentures (Series A) were not listed as stated. The debentures
will continue to be traded in the computerized trading system for institutional
investors, and the debenture holders will have the right (“the option”), as a
sole relief, to sell to the Company the Debentures (Series A) held by them, as
set out in this clause 8.7.
	 
	 	8.7.2	 	Any holder wanting to exercise the option (“the exerciser”)
will notify the Company in writing (“exercise notice”), not later than July 31,
2006, of his wish to exercise the option, specifying the total principal amount
of the Debentures (Series A) which he wishes to sell to the Company within the
exercise (“the value sold”), and if he is a holder whose name is not listed in
the register, he will attach to his notice a confirmation by the Stock Exchange
member attesting to his ownership of the value sold. The exerciser will attach
to the exercise notice a certificate of exemption from deduction of tax at
source, if such exists.
	 
	 	8.7.3	 	Not later than one business day before September 28, 2006
(“the first exercise date”), each exerciser will sell to the Company, in an
off-floor transaction, one-half of the value sold indicated in his exercise
notice, and where said one-half is not a sum of principal amount in whole new
shekels, the sum ofprincipal amount will be rounded up to the nearest new
shekel (“the half”). In return, the Company will pay the exerciser, on the
first exercise date, within off-floor transaction, the outstanding balance of
the unpaid principal of the half, plus linkage differences, as well as the
unpaid interest (together with linkage differences), to which the exerciser is
entitled for the half up to the first exercise date according to the terms of
the Debentures (Series A) and which was not paid by them.
	 
	 	8.7.4	 	Not later than one business day before March 29, 2007 (“the
second exercise date”), each exerciser will sell to the Company the value sold
indicated in his exercise notice less the half (“the balance of the value
sold”). In return, the Company will pay the exerciser, on the second exercise
date, within the off-floor transaction, the outstanding balance of the unpaid
principal of the balance of the value sold, plus linkage differences, as well
as the unpaid interest (together with linkage differences), to which the
exerciser is entitled for the balance of the value sold up to the second
exercise date according to the terms of the Debentures (Series A) and which was
not paid by them.
	 
	 	8.7.5	 	Tax at source will be deducted from the amounts paid by the
Company under this clause, where this is required by law.
	 
	 	8.7.6	 	The exercise notice submitted to the Company may not be
canceled or modified. It is hereby clarified that the interest which the
Company under

- 32 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	the terms of the Debentures (Series A) during the period between July 31,
2006 and the first exercise date and the second exercise date, as the case
may be, will be paid to whoever will be the holders of Debentures (Series A)
on the determining date for the payment of said interest.
	 
	 	8.7.7	 	The Company will notify the holders concerning the manner in
which the half and the balance of the value sold should be transferred to it,
not later than September 15, 2006.
	 
	 	8.7.8	 	If the sum of the value sold by all the exercisers according
to the exercise notices received by the Company will not be less than 90% of
the total principal amount of the Debentures (Series A) in circulation on July
31, 2006, then subject to the provisions of the law and the Stock Exchange
rules, the Company will be entitled to serve notice of the early redemption of
the Debentures (Series A) to take place on April 1, 2007 (“the early redemption
date”). Where the Company so chose –

	 	   8.7.8.1	 	The debenture holders will be served a notice in this regard not
later than March 1, 2007, but not earlier than October 1, 2006. On the
date of service of the notice the Company will submit a report to the
Stock Exchange in which it will indicate the exact rate of interest to
be paid to the holders on the early redemption date, calculated on the
basis of 365 days in a year.
	 
	 	   8.7.8.2	 	On the early redemption date the Company will pay the holders the
balance of the unpaid principal and interest (together with linkage
differences) to which the holders are entitled up to the early
redemption date according to the terms of the Debentures (Series A).

	9.	 	Splitting of Debenture Certificates

	 	9.1	 	Every debenture certificate may be split into a number of debenture certificates,
such that the total of all the principal amounts specified therein is equal to the
principal amount specified in the debenture certificate in respect of which the split is
requested. A split will be executed against the delivery of the relevant certificate at
the Company’s registered office for the execution thereof.
	 
	 	9.2	 	Splitting of debenture certificates as stated will be done on the basis of a
split application signed by the holder of those debenture certificates or his legal
representatives, to be submitted to the Company at its registered office together with
the debenture certificate in respect of which the split is requested.
	 
	 	9.3	 	The split will be executed within fourteen days from the end of the month in
which the certificate was delivered at the Company’s registered office. The new

- 33 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	debenture certificates issued following the split will each be for a principal
amount sums in whole shekels.
	 
	 	    9.4	 	All the costs entailed in the split, including stamp tax and other imposts, if
any, will be borne by the split applicant.

	10.	 	Purchase of Debentures by the Company and Related Companies
	 
	 	 	The Company reserves the right to purchase at any time debentures from this series, at any
price deemed appropriate by it, without derogating from the duty of payment of the balance of
the unpaid debentures in circulation. The purchase of the debentures by the Company will be
deemed as the redemption of those debentures, which will lapse; and if they were listed, then
they will also be canceled and delisted from trade in the trading system for institutional
investors or on the Stock Exchange, as the case may be, and the Company will not be allowed
to reissue them. It is hereby clarified that if such debentures are purchased by a subsidiary
or by an included company or by a related company of the Company (as this term is defined in
the Securities Law) or by the controlling shareholder in the Company, this shall not be
deemed as the redemption of the debentures that were purchased by the subsidiary, the
included company or the controlling shareholder as aforesaid; however, for as long as the
debentures are held by the subsidiary, the included company, the related company or the
controlling shareholder as aforesaid, they will not confer on their holders the right to vote
in general meetings of the debenture holders or taken into account for the purpose of
determining the presence of a quorum, except if any one of the above is an investor from
among those enumerated in the First Schedule to the Securities Law (in the matter of section
15A(b)(1) of the law), who is not investing on its own behalf (“related institutional
investor”), in which case its vote will be taken into account. It is hereby clarified that a
subsidiary, an included company, a related company or the controlling shareholder as
aforesaid not being related institutional investors will be entitled to participate in such
meetings, without a voting right.
	 
	 	 	The Company will notify the Trustee in any case of the purchase of debentures from this
series by it or by a subsidiary or by an included company or by the controlling shareholder
in the Company (upon learning thereof).
	 
	11.	 	Additional Allotments of Debentures from This Series and Other Debentures

	 	11.1	 	The Company will be entitled, from time to time, at its sole discretion, to issue
additional Debentures (Series A), without need of the consent of the Trustee or of the
holders of Debentures (Series A) then in circulation (“the additional Debentures (Series
A)”). Without derogating from the generality of the above , the Company will be entitled
to issue the additional Debentures (Series A) at the same price or at a higher or lower
price than the price at which earlier debentures from series A were issued.
	 
	 	 	 	All the terms and provisions applying to the Debentures (Series A) will apply also
to the additional Debentures (Series A); to remove doubt, it is clarified that: (a)
the

- 34 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	principal of the additional Debentures (Series A) will be paid, on every date of
payment on account of the principal, proportionally to the remaining number of
principal payments; and (b) the holders of the additional Debentures (Series A) will
not be entitled to interest for interest periods that ended prior to their allotment
date.
	 
	 	 	 	The Company will notify the Trustee, and the Trustee will notify the debenture
holders, concerning the issuance of additional Debentures (Series A).
	 
	 	11.2	 	To remove doubt, it is clarified that the Company reserves the right to issue at
any time additional debentures series or other securities, with preferred, equal or
inferior rights to the Debentures (Series A), whether they confer or do not confer a
right of conversion into shares of the Company and upon such redemption, interest and
linkage terms and other terms as the Company deems fit and subject to the provisions of
clause 2 above, all as the Company deems fit, at its discretion, without need of the
consent of the Trustee or of the holders of Debentures (Series A) then in circulation.

	12.	 	Dividend Distribution
	 
	 	 	For as long as the debentures have not been listed on the Stock Exchange – the Company will
not distribute a dividend if the Company’s known net financial indebtedness on the
distribution date exceed three times the accumulated EBITDA in the four last calendar months
included in the Company’s financial statements certified by its board of directors prior to
the distribution date.
	 
	13.	 	Register of the Debenture Holders
	 
	 	 	The Company will maintain and manage in its registered office the register, in which it will
record the names and addresses of the debenture holders, the numbers and principal amount of
the debentures held by them. All transfers of title to the debentures in accordance with the
terms of the debentures and the Trust Deed will be registered in the register. The Trustee
and any debenture holder will be entitled to inspect the register.
	 
	 	 	The Company will not be obligated to record in the register any notice concerning a trust,
pledge, lien or any equitable right, claim or offset or other right in connection with the
debentures. It is expressly clarified that the Company will recognize solely the title of the
person in whose name the debentures are registered in the register, provided the legal heirs,
administrators or executors of the registered owner and any person becoming entitled to the
debentures by reason of the bankruptcy of the registered owner (and in the case of a
corporation – by reason of its liquidation), will be entitled to be registered as the owner
thereof, but only after providing proof to the Company’s satisfaction of their right to be so
registered.

- 35 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	14.	 	Representation by the Trustee
	 
	 	 	The Trustee will represent the debenture holders in any matter arising from the Company’s
obligation toward them according to or in connection with the debentures, and the debenture
holders hereby grant the Trustee an irrevocable power of attorney to act in their name and
stead in every such matter. To remove doubt, the aforesaid shall not derogate from the right
of the debenture holders to dismiss the Trustee in accordance with the provisions of the law
and the Trust Deed. If the Trustee is dismissed aforesaid, the new trustee will be the
attorney under this clause 14.
	 
	15.	 	Compromise and/or Alterations to the Debenture Terms
	 
	 	 	No alteration, waiver and/or compromise in anything pertaining to the terms of the debentures
will be valid, unless made in accordance with the provisions of the Trust Deed.
	 
	16.	 	General Meetings of the Debenture Holders
	 
	 	 	General meetings of the debenture holders will convene and proceed in the manner provided in
Addendum B to the Trust Deed.
	 
	17.	 	Replacement of Debenture Certificates
	 
	 	 	If a debenture share becomes worn or is lost or destroyed, the Company may issue in its stead
a new debenture certificate upon the same terms, subject to such proof, indemnity and
coverage of the expenses incurred by the Company in verifying the title as the Company deems
fit, provided that in the case of wear, the worn debenture certificate is returned to the
Company before the new certificate is issued. Stamp tax and other imposts as well as other
expenses entailed in the issuance of the new certificate will be borne by the applicant for
such certificate.
	 
	18.	 	Notices
	 
	 	 	Except those cases in which this debenture provides otherwise, any notice by the Company
and/or the Trustee to the debenture holders will be served in a registered letter sent to the
debenture holder’s last address appearing in the register, and any notice sent as stated will
be deemed to have been received by the debenture holder at the end of three days from the day
of its delivery at the post office.
	 
	 	 	The Trustee will send the Company copies of notices and invitations served by it to the
debenture holders. Likewise, the Company will send the Trustee copies of notices and
invitations served by it to the debenture holders.
	 
	 	 	However in the event that the debentures are listed, including in the computerized system for
trade in institutional securities operated by the Stock Exchange, a notice by the Company
and/or the Trustee to the debenture holders may, instead of being sent by registered post as
stated above, be served to the registration company and by publication in at least two widely
circulated daily newspapers published in Israel in the Hebrew

- 36 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	language, and in such case, the day of publication will be deemed as the day of receipt of
the notice by the debenture holders.

- 37 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

ADDENDUM B: GENERAL MEETINGS OF THE DEBENTURE HOLDERS

	1.	 	Convening a General Meeting

	 	1.1	 	The Company may convene general meetings of the debenture holders. The notice of
invitation will be sent to the Trustee and to the debenture holders, setting out the
time, day and place at which the meeting is to take place and the business which is to
be conducted therein.
	 
	 	1.2	 	The Trustee may convene general meetings of the debenture holders. The notice of
invitation will be sent to the Company and to the debenture holders, setting out the
time, day and place at which the meeting is to take place and the business which is to
be conducted therein.
	 
	 	1.3	 	The Company or the Trustee shall be obligated to convene a general meeting of the
debentures upon the written requisition of holders representing at least ten percent
(10%) of the unpaid balance of the principal of the debentures in circulation. In such
case, the Trustee or the Company, as the case may be, will be entitled to receive from
the debenture holders requesting the meeting reimbursement of the reasonable costs
entailed in convening the meeting.
	 
	 	1.4	 	Notice of at least fourteen (14) days will be given concerning a general meeting
in which it is proposed to pass an ordinary resolution or which is being convened for
the presentation of a report. Notice of at least twenty one (21) days will be given
concerning a general meeting in which it proposed to pass a special resolution.
Notwithstanding the aforesaid, the Trustee may shorten the period of such notice if it
is of the opinion that the rights of the debenture holders will be prejudiced by the
postponement of the meeting.
	 
	 	1.5	 	Any notice by the Company and/or the Trustee to the debenture holders concerning
the convening of a meeting will be served by registered post to each of the debenture
holders according to their last address appearing in the register, and any notice sent
as stated will be deemed to have been received by the debenture holder at the end of
three (3) days from the day of its dispatch by post.
	 
	 	 	 	However in the event that the debentures are listed on the Stock Exchange, including
in the computerized system for trade in institutional securities operated by the
Stock Exchange, a notice by the Company and/or the Trustee to the debenture holders
concerning the convening of a meeting may, instead of being sent by registered post
as stated above, be served by publication in at least two widely circulated daily
newspapers published in Israel in the Hebrew language, and in such case, the day of
publication will be deemed as the day of receipt of the notice by the debenture
holders.

- 38 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	1.6	 	Every general meeting will be held at the Company’s registered office or at
another address of which the Company will give notice or – where the meeting is being
convened by the Trustee – at an address of which the Trustee will give notice.
	 
	 	1.7	 	No resolution lawfully passed in a meeting of the debenture holders will be
invalidated where, due to an oversight, notice thereof was not served to the holders of
less than 10% of the balance of the unpaid principal of the debentures in circulation,
or where notice thereof was not received by such holders.

	2.	 	Chairman of the Meeting
	 
	 	 	The meeting will be presided over by the Trustee or by another person appointed by the
Trustee to serve as chairman of the meeting. In case the Trustee (or the person appointed by
it for this purpose) is not present at the meeting within half an hour from the time set for
the commencement thereof, the debenture holders present at the meeting will choose one of
their number to serve as chairman of the meeting.

	3.	 	Quorum

	 	3.1	 	Two debenture holders at least, representing at least twenty percent (20%) of the
unpaid balance of the principal of the debentures in circulation, present at a meeting
in which it is proposed to pass an ordinary resolution or which has been convened for
the presentation of a report will be deemed a quorum.
	 
	 	3.2	 	Two debenture holders at least, representing at least fifty percent (50%) of the
unpaid balance of the principal of the debentures in circulation, present at a meeting
in which it is proposed to pass a special resolution will be deemed a quorum.
	 
	 	3.3	 	If a quorum is not present within half an from the time set for the meeting, the
meeting will be adjourned to the same day in the next week (and where such day is not a
business day, to the first business day immediately thereafter), at the same time and
place, or to another day, time or place, if noted in the original invitation to the
meeting, without need of an additional notice to the debenture holders. At an adjourned
meeting, if a quorum is not present within half an hour from the time set for the
meeting, the meeting will be held with any number of participants. Notwithstanding the
aforesaid, in the case of a general meeting in which it is proposed to pass a special
resolution, the adjourned meeting will not be held unless debenture holders representing
at least ten percent (10%) of the unpaid balance of the principal of the debentures in
circulation are present.
	 
	 	3.4	 	The chairman of a general meeting may, with the consent of debenture holders
present at a meeting in which there is a quorum, and representing more than fifty
percent (50%) of the unpaid balance of the principal represented by the holders present
at the meeting, adjourn the meeting, and he shall adjourn the meeting if so

- 39 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	directed by such majority. Only business that was on the agenda of the original
meeting and that was not concluded or not begun may be transacted at an adjourned
meeting.

	4.	 	Voting Rights

	 	4.1	 	Votes in any meeting of the debenture holders will be conducted on a poll.
	 
	 	4.2	 	In a vote, each holder present in person or by proxy will have one vote for every
NIS 1 of the unpaid balance of the debenture held by him. In the case of joint holders,
only the vote of the holder from among them whose name appears first in the register of
the debenture holders and who proposes to vote, in person or by proxy, will be counted.
	 
	 	4.3	 	The chairman of the meeting will not have a further or a casting vote.
	 
	 	4.4	 	The Trustee may participate in a meeting, without a voting right.
	 
	 	4.5	 	The debenture holders will be entitled to participate and vote in a meeting in
person or by proxy, as set out below.
	 
	 	4.6	 	Any instrument appointing a voting proxy (“instrument of appointment”) will be
signed by the appointer or by an attorney authorized to do so in writing, or, where the
appointer is a corporation – in an instrument duly signed by the corporation or by its
authorized representative.
	 
	 	4.7	 	The instrument of appointment, and the power of attorney based on which the
instrument of appointment was signed (if at all), or a copy thereof certified to the
Company’s satisfaction, will be deposited at the Company’s office or at the place
appointed for holding the meeting not less than forty eight (48) hours before the time
set for the meeting at which the person named in the instrument of appointment proposes
to vote. However, the chairman of the meeting may waive this demand for all the
participants in any meeting and accept the aforesaid instruments of appointment and
powers of attorney at the start of the meeting.
	 
	 	4.8	 	An instrument of appointment will be valid also for any adjourned meeting of the
meeting to which it refers, unless stated otherwise in the instrument of appointment.
	 
	 	4.9	 	A vote by virtue of an instrument of appointment will be valid notwithstanding
the death of the appointer, or the revocation of the power of attorney on the basis of
which the instrument of appointment was issued, or the transfer of the right under the
debenture in respect of which the instrument of appointment was issued, unless a written
notice concerning the death, revocation or transfer was received at the office or by the
chairman of the meeting before the vote.

- 40 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	5.	 	Resolutions in General Meeting

	 	5.1	 	Subject to clauses 5.2 and 6 below, all resolutions in general meeting will be
passed as ordinary resolutions. An ordinary resolution will be carried by a simple
majority of the participating votes (excluding abstainers). A special resolution
(“special resolution”) will be carried by a majority of seventy five percent (75%) of
the participating votes (excluding abstainers).
	 
	 	 	 	The required majority in a resolution to dismiss the Trustee is as stated in clause 7
below.
	 
	 	5.2	 	Resolutions on the matters listed below will be passed by the general meeting
solely as a special resolution:

	 	5.2.1	 	An alteration in the terms of the Trust Deed (including an
alteration in the terms of the debentures), where this requires a resolution of
the general meeting of the debenture holders, as provided in clause 24 of the
Trust Deed.
	 
	 	5.2.2	 	A compromise with the Company in connection with any right or
claim of the debenture holders or any of them, or of the Trustee, or any
settlement with the Company in connection with the rights of the debenture
holders or the rights of the Trustee under the Trust Deed or according to the
terms of the debentures, and inter alia a waiver of any right or claim of the
Trustee and/or of the debenture holders against the Company, in accordance with
and subject to the provisions of clause 24 of the Trust Deed.
	 
	 	5.2.3	 	Any other matter which by the terms of the debentures or the
Trust Deed requires a special resolution of the general meeting of the debenture
holders.
	 
	 	5.2.4	 	A call for immediate payment on the debentures.
	 
	 	5.2.5	 	Issuance of instructions to the Trustee.

	 	5.3	 	It is hereby clarified that debenture holders being a controlling shareholder in
the Company, companies controlled by controlling shareholder in the Company and related
and included companies of the Company, as these terms are defined in the law, will not
be counted in the quorum or in the vote of a general meeting convened for the purpose of
passing an ordinary or special resolution, excluding any of the above being a related
institutional investor (as this term is defined in clause 10 of the Terms set forth in
the back of the page), whose vote will be taken into account.
	 
	 	5.4	 	In every general meeting of the debenture holders, minutes will be made of all
the proceedings and resolutions in the meeting. Any minutes signed by the chairman of a
meeting in which resolutions were passed and deliberations took place was

- 41 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	transacted, will be prima facie proof of the matters written therein, and unless
proven otherwise, any resolution passed in such a meeting will be deemed to have been
passed lawfully.
	 
	 	5.5	 	A person or persons appointed by the Trustee or by the Company and any other
person or persons so authorized by the Company, may be present in a general meeting of
the debenture holders (without a voting right).

	6.	 	Dismissal of the Trustee

	 	6.1	 	An invitation to a general meeting of the debenture holders in which it is
proposed to pass a resolution to dismiss the Trustee will be served in the same way as
an invitation to a meeting in which it is proposed to vote on a special resolution.
	 
	 	6.2	 	The required majority in a resolution to dismiss the Trustee is the votes of
debenture holders representing at least fifty percent (50%) of the unpaid balance of the
principal of all the debentures then in circulation.

*****************

- 42 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

ADDENDUM C TO THE TRUST DEED SIGNED ON DECEMBER 21, 2005

BETWEEN CELLCOM ISRAEL LTD.

AND AURORA FIDELITY TRUST COMPANY LTD.

	 	 	The Company will pay the Trustee for its services as trustee in respect of the debenture issue the
following fee:

	 	1.	 	For the first trust year, beginning on the date of the Trust Deed, a fee of NIS 35,000,
payable within 30 days from the end of the month in which the Company receives from the
Trustee a pro forma invoice in respect of this payment. The Trustee will be entitled to
forward to the Company a pro forma invoice immediately after the signing of this Trust Deed.
	 
	 	2.	 	Starting from the second trust year, an annual fee of NIS 18,000. The annual fee will be
payable to the Trustee within 30 days from the end of the month in which the Company receives
from the Trustee a pro forma invoice in respect thereof. The Trustee will be entitled to issue
to the Company a pro forma invoice in respect of each year’s annual fee immediately after the
start of each such year. The annual fee will be linked to the index, according to the rate of
increase of the known index on the date of payment of the annual fee compared to the base
index of the debentures.
	 
	 	3.	 	In respect of participation in general meetings of shareholders and/or debenture holders, NIS
150 per hour.
	 
	 	4.	 	If the Trustee is required to perform special work (such as work required due to a change in
the Company’s structure, or due to the need to engage in actions by reason of the Company’s
noncompliance with its obligations toward the debenture holders or due to the need to engage
in additional actions for the performance of its function as a reasonable trustee in view of
future changes in laws and/or regulations or other binding provisions applying to the
Trustee’s activities), a sum of $150 per hour.
	 
	 	5.	 	It is hereby clarified that where owing to a future change in laws and/or regulations and/or
other binding provisions applying to the Trustee’s actions, the Trustee incurs additional
costs necessitated for the fulfillment of its function as a reasonable trustee (“costs”), the
Company will reimburse the Trustee for its costs. The Trustee will give the Company prior
written notice, before expending these costs, concerning changes as stated in this clause.
	 
	 	6.	 	Additionally, the Trustee will be entitled to reimbursement of all its reasonable costs
incurred in the fulfillment of its duties as trustee, provided that with respect to the costs
of an expert opinion, the Trustee notifies the Company in advance of its intention to receive
an expert opinion.
	 
	 	7.	 	The Trustee’s fee and the aforesaid costs will be paid by the end of the trust under this
Deed, even if a receiver (or a receiver and administrator) has been appointed and

- 43 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

	 	 	 	regardless of whether or not the trust under this Deed is managed under court supervision.
	 
	 	8.	 	VAT, if applicable, will be added to the payments due to the Trustee by the provisions of
this clause, and paid by the Company. The Trustee will issue to the Company a tax invoice in
respect of such payments, within 14 days from date of their payment by the Company to the
Trustee.
	 
	 	9.	 	If the office of the Trustee is terminated or expires during a trust year (except for the
first trust year), the fee paid in respect of the months in which the Trustee did not serve as
trustee on behalf of the debenture holders will be refunded.

- 44 -

 

TRANSLATION FROM HEBREW

THE BINDING VERSION IS THE HEBREW VERSION

ADDENDUM TO THE TRUST DEED

Made and signed in Tel Aviv on February 27, 2006

	 	 	 	 	 	 	 
	Between:

	 	Cellcom Israel Ltd.	 	 	 	 
	 

	 	P.C. 511930125	 	 	 	 
	 

	 	10 Hagavish St., Netanya 42140	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(the “Company”)
	 	 	 	of the one part
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	A n d:

	 	Aurora Fidelity Trust Ltd.	 	 	 	 
	 

	 	Company no. 513605576	 	 	 	 
	 

	 	6 Harakon St., Ramat Gan 52521	 	 	 	 
	 

	 	(the “Trustee”)
	 	 	 	of the other part
	 

	 	 	 	 	 	 

	 	 	 
	Whereas

	 	On December 21 2005 the parties entered into a Trust Deed (“Trust Deed”); and
	 
	 	 
	Whereas

	 	following comments from the Securities Authority the parties wish to amend the provisions of the Trust Deed as set
forth hereunder;

Therefore, it is hereby agreed, declared and stipulated between the parties as follows:

	1.	 	The interpretation to the terms used in this addendum shall be as defined in the Trust Deed.
	 
	2.	 	In article 11.1 to the Trust Deed, the words “less than ten percent (10%)” shall be replaced
with the words “less than five percent (5%)”.
	 
	3.	 	In article 11.2 to the Trust Deed, the words “ten percent (10%)” shall be replaced with the
words “five percent (5%)”.
	 
	4.	 	In article 11.3 to the Trust Deed, the words “ten percent” shall be replaced with the words
“five percent”.
	 
	5.	 	Article 14 to Addendum A to the Trust Deed shall be deleted.
	 
	6.	 	The remainder of the articles of the Trust Deed shall remain in effect without any change.

In witness whereof the parties have set their hand hereto:

	 	 	 
	( - )

––––––––––––––––––––––––––––––––

Cellcom Israel Ltd.
	 	( - )

––––––––––––––––––––––––––––––––

Aurora Fidelity Trust Ltd.

I the undersigned, Liat Menahemi-Stadler, Adv., hereby certify that this Trust Deed was signed by
Cellcom Israel Ltd. in accordance with its memorandum and articles, through Messrs. Amos Shapira
and Tal Raz.

	 	 	 
	 
	 	( - )
	 
	 	––––––––––––––––––––––
	 
	 	Liat Menahemi-Stadler, Adv.
	 
	 	License No. 18656

- 45 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]