Document:

10-Q

Exhibit 10.2  

Agreement  

Drawn up and signed in
Tel Aviv on July 10, 2007  

– Between – 

	 	
Ampal Industries Inc.

An American company registered in the State of Delaware,

Represented by its authorized signatories, Ms Irit Iluz and Mr. Yoram Firon

Whose address is c/o Ampal Israel Ltd, 111 Arlozorov Street, Tel Aviv

Fax: 036080101

(Hereinafter: "the Seller") 

As party of the first part; 

– And – 

	 	1. 	Phoenix
Holdings Ltd.

(Corporation Number 520017450)

Of 53 Derech Hashalom Street, Tel Aviv

Fax: 03-5734516

Represented by its authorized signatories, Messrs Yaheli Shefi and Ehud Shapira

(Hereinafter: "the Phoenix"). 

	 	2. 	Golden
Meybar (2007) Ltd 
(Corporation Number 513991380)

Of 38 Hamasger Street, Tel Aviv

Fax: 03-6394114

Represented by its authorized signatories, Yitzhak
Meyuchas and Sharon Bar

(Hereinafter: "Golden")

(The Phoenix and Golden, jointly and severally, hereinafter: "the Buyer";

and each thereof "the Individuals of the Buyer").  

As party of the second part;
(Hereinafter:
“the Parties”);  

	Whereas 	 The
Seller declares and undertakes vis-à-vis the Buyer that:  

	 	A. 	              It
is the sole owner and holder of 100% of the shares of Am-Hal Ltd (“the
               Company” as defined in this Agreement hereunder), all indirectly by
means                of subsidiaries that are wholly owned by the Seller, distributed as
detailed in                this Agreement hereunder; and that 

	 	B. 	              The
Seller, by means of the companies in the group, as defined hereunder,
               operates the sheltered housing facility known as Ad 120 – Rishon
Lezion                (hereinafter: “the Rishon Lezion Facility”) and that it
is a partner                in the Hod Hasharon Partnership that operates the sheltered
housing facility                known as Ad 120 – Hod Hasharon (hereinafter: “the
Hod Hasharon                Facility”) and that it is a partner in the Ramat Hahayal
Partnership, which                is the developer for the construction of the sheltered
housing facility known as                Ad 120 – Ramat Hahayal (hereinafter: “the
Ramat Hahayal                Facility”). 

	And whereas 	 The
Buyer is interested in purchasing from the Seller all of the latter’s holdings in
the Company and in receiving the transfer of the capital note, all against payment of the
consideration that will be paid to the Seller and subject to the remaining terms and
provisions detailed hereunder in this Agreement;  

	And whereas 	 The
Seller is interested in selling all of its holdings to the Buyer and in transferring the
capital note to the Buyer subject to receipt of the consideration from the Buyer and
subject to the remaining terms and provisions detailed hereunder in this Agreement;  

It has therefore been
declared, stipulated and agreed between the parties as follows:  

	1.  	Preamble,
Appendix and Interpretation

	 	1.1. 	The
Preamble of this Agreement and any Appendix appended thereto constitute an
               inseparable part thereof. 

	 	1.2. 	The
section headings are for purposes of convenience only, and neither they nor
               the drafts that have been exchanged between the Parties shall have any
weight in                the interpretation of this Agreement. According to the context
of the matter,                any statement made in the singular shall also be construed
as pertaining to the                plural and vice versa; and any statement made in the
masculine gender shall also                be construed as pertaining to the feminine
gender and vice versa. 

	2.  	Definitions

        In
this Agreement the following terms shall have the meanings appearing alongside them: 

	 			
	 	2.1.	Phoenix Option -	as defined in Section 4.2.2 hereunder.

- 2 -

	 			
	 	2.2.	Ampal 1966 -	Ampal Protected Housing (1966) Ltd (Private Company 510467640).
	 	 
	 	2.3.	Ampal 1994 -	Ampal Protected Housing (1994) Ltd (Private Company 512072430).
	 	 
	 	2.4.	Ampal 1998 -	Ampal Protected Housing (1998) Ltd (Private Company 512663675).
	 	 
	 	2.5.	Ampal Israel -	Ampal Israel Ltd (Public Company 520026220)
	 	 
	 	2.6.	Ampal Development -	Ampal Development (Israel) Ltd (Public Company 520002387)
	 	 
	 	2.7.	Bank Hapoalim's Authorization -	Authorization from Bank Hapoalim to transfer control of the Company to the Buyer
	 	 
	 	2.8.	Bank Hapoalim -	Bank Hapoalim Ltd
	 	 
	 	2.9.	The Law -	Israeli law or US law respectively, as applicable and in accordance with the context.
	 	 
	 	2.10.	This Agreement -	This Agreement, including all the appendixes hereto
	 	 
	 	2.11.	The Company -	Am-Hal Ltd (Private Company 511343717).
	 	 
	 	2.12.	The Israel Corporation -	The Israel Corporation Ltd (Public Company 520028010).
	 	 
	 	2.13.	The Determining Date -	The date on which all the suspending conditions have been met, as stated in Section 3 hereunder.

				
		2.14.	The Sold Shares -	25,200  ordinary  shares of Ampal 1994, par value NIS 1 each,
constituting  100%  of the  registered,  issued  and  paid-up
share capital of Ampal 1994,  and 35,700  ordinary  shares of
Ampal 1998,  par value NIS 1 each,  constituting  100% of the
registered, issued and paid-up share capital of Ampal 1998.

	 			
	 	2.15.	The Land in Hod Hasharon -	the land in Hod Hasharon known as Block 6446, Parcel 357, on which the Hod Hasharon Facility is located.
	 	 
	 	2.16.	The Land in Rishon Lezion -	The land in Rishon Lezion known as Block 3925, Parcel 600, on which the Rishon Lezion Facility is located.

- 3 -

				
		2.17.	The Land in Ramat Hahayal -	the land in Ramat  Hahayal,  Tel Aviv,  known as Block 6338,  Parcel 60, on  which the Ramat Hahayal Facility is located.

				
		2.18.	The Partner Parties or
The Partner Party -  	 
As  applicable,   (1)  Pertaining  to  the  Hod  Hasharon
Partnership  and to the Hod  Hasharon  General  Partner - the
Partner  Parties,  Pardes  Margalit Ltd  ("Pardes  Margalit")
and Shlomo A. Angel Ltd ("Angel"),  who are the  shareholders
in the  General  Partner  - Hod  Hasharon  and which are also
limited  partners in the Hod  Hasharon  Partnership,  and (2)
Pertaining  to  the  Ramat  Hahayal  Partnership  and  to the
Ramat  Hahayal  General  Partner - the Partner  Party,  A. S.
Uri  Investments  and Assets  (2000) Ltd ("Uri"),  which is a
shareholder  in the  General  Partner  -  Ramat  Hahayal  and
which  is  also  a  limited  partner  in  the  Ramat  Hahayal
Partnership.

				
		2.19.	The Guarantees for the Company's Customers - 	Guarantees    that   the   Seller   and/or   the   Israel
Corporation   and/or   Ampal   Development   and/or   H.   L.
Management  has signed as  appendixes  to the  deposit  track
agreements  of some of the  Company's  customers and that are
detailed in the list  attached to the  Agreement  as Appendix 0.

				
		2.20.	The General Partner -
Hod Hasharon -  	 
Ad  120  Management  Hod  Hasharon  (1996)  Ltd  (Private
Company  512417387),  which is the General Partner in the Hod
Hasharon Partnership.

				
		2.21.	The General Partner -
Ramat Hahayal - 	 
Ad  120  Ramat  Hahayal  (Management)  Ltd  (Private  Company
511367286),  which  is  the  General  Partner  in  the  Ramat
Hahayal Partnership.

				
		2.22.	The Partnerships - 	The  Hod   Hasharon   Partnership   and  the  Ramat   Hahayal Partnership,  jointly  or  severally,   respectively  and  as relevant.

				
		2.23.	The General Partners -	The General  Partner - Hod Hasharon  and the General  Partner - Ramat Hahayal,  jointly or severally,  respectively  and as relevant.

				
		2.24.	The Lien in favor of Ampal Development -  	A second  degree lien  equivalent  to the lien in favor of H.
L.  Management,  in favor of Ampal  Development,  on the Land
in Rishon Lezion, as per Deed  33449/1992/0003,  and which is
intended to guarantee the Company's  undertaking  to repay to
Ampal  Development  all the loans  and/or  credit  that Ampal
Development  provided  in the  Company's  favor  or  for  the
Company   in   accordance   with   the   terms  of  the  lien
documents.

- 4 -

				
		2.25.	The Lien in favor of H. L. Management - 	A  second  degree  lien  equivalent  to the  lien in favor of
Ampal  Development,  in  favor  of H. L.  Management,  on the
Land in  Rishon  Lezion,  as per  Deed  14851/1990/0001,  and
which is intended to guarantee the Company's  undertaking  to
repay to H. L.  Management  all the loans and/or  credit that
H. L.  Management  provided in the Company's favor or for the
Company by virtue of the lien documents.

	 			
	 	2.26.	The Suspending Conditions -	As the said term is defined in Section 3.1 hereunder.
	 	 
	 	2.27.	The Holding Companies -	Ampal 1966, Ampal 1994 and Ampal 1998.
	 	 
	 	2.28.	The Activity Companies -	The Company, the General Partners and the Partnerships.
	 	 
	 	2.29.	The Companies in the Group -	The Holding Companies and the Activity Companies.
	 	 
	 	2.30.	H. L. Management -	H. L. Management and Consulting (1986) Ltd
	 	 
	 	2.31.	The Company's Customers -	The residents of the sheltered housing facilities in Rishon Lezion and/or Hod Hasharon, as applicable.
	 	 
	 	2.32.	The Closing Date -	The closing date of the deal that is the object of this contract, which will be at 10:00 on the fifth business day after the Determining Date.
	 	 
	 	2.33.	The Company's Shares -	All the Company's issued share capital, which stands at 600 ordinary Company shares par value NIS 1.0 each, half of which are held by Ampal 1966 and the other half by Ampal 1994.

				
		2.34.	 Free and Clear -	with  regard  to  shares  or  assets - free and  clear of any
debt,   lien,   attachment   or  other   third   party  right
whatsoever,   including,   but  without   prejudice   to  the
generality  of the  aforesaid,  purchase  options,  right  of
first   refusal   or   right  of   first   opportunity,   and
trusteeship for others.

- 5 -

	 			
	 	2.35.	Third Party -	anyone who is not one of the Parties to this Agreement.
	 	 
	 	2.36.	The Hod Hasharon Partnership -	Ad 120 Hod Hasharon - Limited Partnership (Partnership Number 550015952).
	 	 
	 	2.37.	The Ramat Hahayal Partnership -	Ad 120 Ramat Hahayal - Limited Partnership (Partnership Number 5502197455).
	 	 
	 	2.38.	The Capital Deed -	a capital deed in the sum of $5,734,607 that was given by the Seller to Ampal 98, a copy whereof is attached to this Agreement as Appendix 2.38.

				
		2.39.	The Dollar Rate -  	The latest  representative  rate of the  dollar  that was
published  by the Bank of Israel  before  the date of payment
as per  this  Agreement.  If,  during  a  given  period,  the
representative  rate of the US dollar is not  published,  the
Dollar  Rate on the  relevant  date will be the  arithmetical
mean   between  the  highest   selling  rate  at  which  Bank
Hapoalim  Ltd (the  Main  Branch)  will  sell US  dollars  to
residents  of Israel  who do not have any  special  rights or
exemptions,   and  the  lowest  buying  rate  at  which  Bank
Hapoalim  Ltd (the  Main  Branch)  will buy US  dollars  from
residents  of Israel  who do not have any  special  rights or
exemptions at that time.

				
		2.40.	The Tile Lawsuit - 	The  lawsuit - Hod  Hasharon  Partnership  versus A.  Epstein
and Sons  (1995)  Ltd et al, at the Tel Aviv  District  Court
(Civil Case  2028/04) in  connection  with  falling  tiles at
the Hod Hasharon Facility.

				
		2.41.	The Tenants Lawsuit -  	A lawsuit that was filed by some of the  Company's  Customers
against  the  Hod  Hasharon  Partnership,   the  Company  and
others,  inter  alia in  connection  with  its  intention  of
selling the Sold Shares to Mishan,  at the Tel Aviv  District
Court (Civil Case 1450/07).

				
		2.42.	The Countersuit -  	The  countersuit  that was filed by the  Seller et al against the Plaintiffs in the Tenants Lawsuit.

	3.  	Suspending
Conditions

	 	3.1. 	The
performance of the deal that is the object of this Agreement is contingent
               on the fulfillment of all the conditions detailed hereunder, cumulatively
               (“the Suspending Conditions”): 

	 	3.1.1. 	Obtaining
authorization from the Antitrust Commissioner as per the Antitrust                Law,
5748-1988 (hereinafter: “the Commissioner”) for the Parties to
               contract as per this Agreement (hereinafter: “the Commissioner’s
               Authorization”).  

- 6 -

	 	
It
is clarified that should the Commissioner make the deal that is the object of this
Agreement contingent and/or make the granting of his authorization contingent on
obtaining an exemption for binding arrangements and/or not grant an exemption from
obtaining authorization for binding arrangements and/or make his approval of the Merger
contingent on other conditions (hereinafter: “the Commissioner’s terms”),
the Parties shall perceive the conditions in this Section as a condition that is met only
if the Parties have agreed, in advance and in writing, that the Suspending Condition that
is the object of this Section was met in accordance with the Commissioner’s
Conditions. It is clarified that each Party will be permitted, at its exclusive
discretion, to accept or reject the Commissioner’s Conditions, and each Party will
inform the other of same within 7 days from the date of the answer from the Commissioner. 

	 	3.1.2. 	Obtaining
authorization from Bank Hapoalim, subject to the foregoing in Section                7.2
hereunder.  

	 	3.2. 	Should
the Determining Date not take place within 90 days from the date of
               signing of this Agreement (hereinafter: “the First Performance Date”),
               or by the first extension date (as defined hereunder), if it was extended
or the                additional extension date (as defined hereunder), if it was
extended (or on a                later date as shall be agreed upon in writing between
the Parties), this                Agreement will not enter into effect at all and will be
null and void and                neither of the Parties will have any contention and/or
claim and/or demand                vis-à-vis the other Party in respect of the
Agreement and/or in respect                of the failure thereof to enter into effect as
stated, unless the Suspending                Condition was not fulfilled if either of the
Parties breached his undertaking as                stated in Section 3.3 hereunder, and
the Seller returns to each of the                Individuals of the Buyer half of the
advance, as defined in Section (10.2),                which was transferred thereby in
accordance with its dollar value, within 15                days from the date upon which
it becomes apparent that this Agreement is not                entering into effect and
that it is null and void as aforesaid, and to the bank                account whose
details are given to the Seller by each of the Individuals of the                Buyer as
stated. Notwithstanding
the aforesaid, should any of the conditions enumerated in Section 3.1 above not be
fulfilled by the first date for performance, because the Commissioner’s Authorization
has not yet been given or because of clarifications at the office of the Commissioner (for
example, if the authorization is given on conditions that either of the Parties did not
agree to), or for any other reason whatsoever, which is not a breach of this Agreement,
the first date for performance will be extended by an additional 60 days (above and
hereinafter: “the First Extension Date”) and moreover, each Party will be
permitted to inform the other Party in writing, once and once only, of an additional
extension of an additional 30 days from the First Extension Date (above and hereinafter:
“the Additional Extension Date”).

- 7 -

	 	3.3. 	Each
of the Parties, as relevant, undertakes to cooperate with the other Party
               and to do his best and to do all that is reasonably required in order to
fulfill                the Suspending Conditions, on the earliest possible date, after
the signing of                this Agreement. 

	4.  	The
Seller’s Representations and Declarations  

	 	
The
Seller hereby declares, undertakes and affirms vis-à-vis the Buyer that all the
representations and undertakings hereunder are correct and complete as at the date of
signing the of this Agreement and as at the Closing Date (subject to the foregoing in
Section 4.16.1 hereunder):  

	 	4.1. 	The
Seller and the Holding Companies

	 	4.1.1. 	Xs
is a private company registered in the State of Delaware, USA. As detailed
               hereunder, the Seller is the sole and exclusive owner, directly or
indirectly,                of the Holding Companies and of the Company.  

	 	4.1.2. 	Ampal
1994 is a private company registered in Israel whose number is 512072430.  

	 	4.1.3. 	Ampal
1998 is a private company registered in Israel whose number is 512663675.  

	 	4.1.4. 	Ampal
1966 is a private company registered in Israel whose number is 510467640.  

	 	4.1.5. 	Ampal
1994, Ampal 1998 and Ampal 1966 serve as holding companies exclusively,
               solely for the purpose of holding all the shares in the Company as
described in                this Agreement and they have no business activity and/or
undertakings whatsoever                and/or any debts whatsoever and/or any assets
whatsoever, apart from their                holdings in the Company and apart from that
which is described in the audited                financial statements hereunder (included
in Appendix (4.9.1) to this Agreement).  

	 	4.1.6. 	As
at the date of signing of this Agreement the Seller is the sole and exclusive
               owner of 2,000 ordinary shares, par value NIS 1 each, in Ampal 1994,
               constituting 100% of the issued and paid-up capital of Ampal 1994; up to
the                Closing Date Ampal 1994 will allocate the entire balance of its
registered share                capital to the Seller in such a manner that after the
allocation as stated and                as at the Closing Date the Seller will be the
exclusive holder of 25,200                ordinary shares par value NIS 1 each in Ampal
1994, constituting 100% of                registered, issued and paid-up capital of Ampal
1994. All the Seller’s                shares in Ampal 1994 are Free and Clear and
have been paid up in full. Apart                from the aforesaid no person and no body
whatsoever, either directly or                indirectly, has any shares and/or rights
whatsoever in Ampal 1994, including any                right to purchase and/or receive
by way of allocation shares and/or rights in                Ampal 1994 and/or any
security or other right that is exercisable and/or                convertible, either
directly or indirectly, into shares and rights in Ampal                1994.  

- 8 -

	 	4.1.7. 	As
at the date of signing of this Agreement the Seller is the sole and exclusive
               owner of 1,000 ordinary shares, par value NIS 1 each, in Ampal 1998,
               constituting 100% of the issued and paid-up capital of Ampal 1998; up to
the                Closing Date Ampal 1998 will allocate the entire balance of its
registered share                capital to the Seller in such a manner that after the
allocation as stated and                as at the Closing Date the Seller will be the
exclusive holder of 35,700                ordinary shares par value NIS 1 each in Ampal
1998, constituting 100% of                registered, issued and paid-up capital of Ampal
1998. All the Seller’s                shares in Ampal 1998 are Free and Clear and
have been paid up in full. Apart                from the aforesaid no person and no body
whatsoever, either directly or                indirectly, has any shares and/or rights
whatsoever in Ampal 1998, including any                right to purchase and/or receive
by way of allocation shares and/or rights in                Ampal 1998 and/or any
security or other right that is exercisable and/or                convertible, either
directly and/or indirectly, into shares and rights in Ampal                1998.  

	 	4.1.8. 	Ampal
1998 is the sole and exclusive owner of 242,910,000 ordinary shares, par
               value NIS 0.001 each, in Ampal 1966, constituting 100% of the issued and
paid-up                capital of Ampal 1996; All the Seller’s shares in Ampal 1996
are Free and                Clear and have been paid up in full. Apart from the aforesaid
no person and no                body whatsoever, either directly or indirectly, has any
shares and/or rights                whatsoever in Ampal 1966, including any right to
purchase and/or receive by way                of allocation shares and/or rights in Ampal
1966 and/or any security or other                right that is exercisable and/or
convertible, either directly and/or indirectly,                into shares and rights in
Ampal 1966.  

	 	4.1.9. 	Ampal
1996 is the sole and exclusive owner of 300 ordinary shares, par value NIS
               1 each, in the Company, constituting 50% of the Company’s issued and
               paid-up capital; All of Ampal 1996‘s shares in the Company are Free
and                Clear and have been paid up in full.  

	 	4.1.10. 	Ampal
1994 is the sole and exclusive owner of 300 ordinary shares, par value NIS
               1 each, in the Company, constituting 50% of the Company’s issued and
               paid-up capital; All of Ampal 1994‘s shares in the Company are Free
and                Clear and have been paid up in full.  

	 	4.1.11. 	All
the issued capital of the Companies in the Group (insofar as the Companies
               are concerned) has been duly issued and is paid up in full.  

- 9 -

	 	4.2. 	The
Company and the Remaining Activity Companies

	 	4.2.1. 	The
Company is a private company registered in Israel whose number is 511343717.  

	 	4.2.2. 	In
a loan agreement from December 1, 2005 the Company granted the Israel Phoenix
               Assurance Association Ltd, as it was known at the time (hereinafter:
               “Phoenix Insurance”) and Hadar Insurance Company Ltd
(hereinafter:                “Hadar”), in equal parts, an option for the
purpose of such a quantity                of Company shares that would constitute 19.9%
(fully diluted and after the                exercise of the option) of the Company’s
share capital at the time the                option is exercised (hereinafter in this
Agreement: “the Phoenix                Option”) at an agreed-upon exercise
price. The Phoenix Option period is                four years beginning on the date of
signing of the aforementioned Loan                Agreement. Phoenix Insurance and Hadar
undertook not to exercise the Phoenix                Option for the period up to the
Closing Date. This undertaking on the part of                Phoenix Insurance and Hadar
is attached to this Agreement as Appendix 4.2.2.  

	 	4.2.3. 	Apart
from the foregoing in Sections 4.1.9 and 4.1.10 above and the Phoenix
               Option no person and no body whatsoever, either directly or indirectly,
has any                shares and/or rights whatsoever in the Company, including any
right to purchase                and/or receive by way of allocation shares and/or rights
in the Company and/or                any security or other right that is exercisable
and/or convertible, either                directly and/or indirectly, into shares and
rights in the Company.  

	 	4.2.4. 	The
Company is the sole and exclusive owner of 8 ordinary shares, par value NIS
               1 each, in the General Partner – Hod Hasharon, constituting 80% of
the                General Partner Hod Hasharon’s issued and paid-up capital; All of
the                Company’s shares in the General Partner – Hod Hasharon are
Free and                Clear and have been paid up in full. The remaining 20% of General
Partner –               Hod Hasharon’s issued and paid-up share capital is held
by the Partner                Parties, Pardes Margalit and Angel.  

	 	4.2.5. 	Apart
from the aforesaid no person and no body whatsoever has any shares and/or
               rights whatsoever in the General Partner – Hod Hasharon, including
any                right to purchase and/or receive by way of allocation shares and/or
rights in                the General Partner – Hod Hasharon and/or any security or
other right that                is exercisable and/or convertible, either directly and/or
indirectly, into                shares and/or rights in the General Partner – Hod
Hasharon.  

	 	4.2.6. 	The
Company is a limited partner in the Hod Hasharon Partnership. The Company is
               a partner with 81.99% of the capital in the Hod Hasharon Partnership and
81.99%                of the rights to the profits of the Hod Hasharon Partnership. 0.01%
of the                capital of the Hod Hasharon Partnership and of the right to profits
of the Hod                Hasharon Partnership is held by the General Partner – Hod
Hasharon. The                remaining 18% in the Hod Hasharon Partnership and of the
right to share in the                profits of the Hod Hasharon Partnership are held by
the Partner Parties, Pardes                Margalit and Angel.  

- 10 -

	 	4.2.7. 	Apart
from the aforesaid no person and no body whatsoever has any rights
               whatsoever in the Hod Hasharon Partnership, including any right whatsoever
to                purchase and/or receive by way of allocation rights in the Hod Hasharon
               Partnership or any other right that is exercisable and/or convertible,
either                directly and/or indirectly, into rights in the Hod Hasharon
Partnership.  

	 	4.2.8. 	The
Company is the sole and exclusive owner of 75 ordinary shares, par value NIS
               1 each, in the General Partner – Ramat Hahayal, constituting 75% of
the                General Partner Ramat Hahayal’s issued and paid-up capital; All
of the                Company’s shares in the General Partner – Ramat Hahayal
are Free and                Clear and have been paid up in full. The remaining 25% of
General Partner –               Ramat Hahayal’s issued and paid-up share
capital is held by the Partner                Party, Uri.  

	 	4.2.9. 	Apart
from the aforesaid no person and no body whatsoever has any shares and/or
               rights whatsoever in the General Partner – Ramat Hahayal, including
any                right to purchase and/or receive by way of allocation shares and/or
rights in                the General Partner – Ramat Hahayal and/or any security or
other right that                is exercisable and/or convertible, either directly and/or
indirectly, into                shares and/or rights in the General Partner – Ramat
Hahayal.  

	 	4.2.10. 	The
Company is a limited partner in the Ramat Hahayal Partnership. The Company
               is a partner with a 74.975% of the capital in the Ramat Hahayal
Partnership and                74.975% of the rights to the profits of the Ramat Hahayal
Partnership. 0.1% of                the capital of the Ramat Hahayal Partnership and of
the right to profits of the                Ramat Hahayal Partnership is held by the
General Partner – Ramat Hahayal.                The remaining 24.925% of Ramat
Hahayal Partnership’s capital and the right                to share in the profits
of the Ramat Hahayal Partnership is held by the Partner                Party, Uri.  

	 	4.2.11. 	Apart
from the aforesaid no person and no body whatsoever has any rights
               whatsoever in the Ramat Hahayal Partnership, including any right
whatsoever to                purchase and/or receive by way of allocation rights in the
Ramat Hahayal                Partnership or any other right that is exercisable and/or
convertible, either                directly and/or indirectly, into rights in the Ramat
Hahayal Partnership.  

	 	4.2.12. 	Apart
from the foregoing in Appendix 4.2.12, no body whatsoever has any right or
               claim (actual or potential) to the right of first refusal or tag-along
right in                a sale or any other similar right in connection with the sale of
the Sold                Shares.  

- 11 -

	 	4.3. 	The
Rishon Lezion Facility

	 	4.3.1. 	The
Company is the holder of the ownership rights in the Land in Rishon Lezion
               as stated in the Land Registry Extract attached to the Agreement as
Appendix                4.3.1. On the Land in Rishon Lezion the Company built the Rishon
Lezion                Facility, which is operated by the Company. The Company is the sole
and                exclusive owner of the Land in Rishon Lezion and the Rishon Lezion
Facility                subject to the rights of the Company’s Customers who reside
in the Rishon                Lezion Facility in accordance with the agreements that were
signed with them,                the Rishon Lezion Tenants (as defined hereunder) in
accordance with the                agreements that were signed with them and the Meuhedet
Health fund, in                accordance with the agreement that was signed with it.  

	 	4.3.2. 	Apart
from the mortgages and caveats registered in the Land Registry Extract,
               Appendix 4.3.1, and save as detailed in this Agreement, the Land in Rishon
               Lezion is Free and Clear.  

	 	4.3.3. 	Unless
and insofar as specified otherwise in Appendix 4.3.3 to this Agreement:  

	 	a) 	The
Seller does not know of any material defect, malfunction or fault (including
               a concealed fault) in the Rishon Lezion Facility and/or in the systems
thereof.  

	 	b) 	The
Seller does not know that construction constituting construction in
               contraventions of the provisions of any law, including a building
deviation, was                performed in the Rishon Lezion Facility and/or in any part
thereof, or that the                Rishon Lezion Facility, including all the parts
thereof, is not duly constructed                in accordance with the authorizations and
permits and that no irregular use was                made thereof according to law, and
the Seller did not receive any claims of                building deviations as stated.  

	 	c) 	The
Seller does not know of any intention to prepare or to alter an urban
               building plan that applies to the Land in Rishon Lezion, which could
adversely                alter the Company’s rights in the Land in Rishon Lezion, or
compromise                them(as the term “compromise” is defined in Section
197 of the                Planning and Building Law, 5725-1965).  

	 	4.3.4. 	On
June 7, 1992 an agreement for the management and operation of the Neve Amit
               Ad 120 – Rishon Lezion Long-Term Care Unit was signed between the
Company                and the Meuhedet Health Fund (hereinafter: “the Meuhedet
Health Fund                Agreement”). The Meuhedet Health Fund Agreement and all
the appendices                thereto are attached to this Agreement as Appendix 4.3.4.
The Meuhedet Health                Fund Agreement is in full force and effect and has not
been cancelled. The                Seller does not know of any grounds for the
cancellation thereof. The Seller has                not received and does not know of the
existence (actual or potential) of                contentions and/or claims and/or
demands on the part of the Meuhedet Health Fund                pertaining to the validity
of the Meuhedet Health Fund Agreement and/or a                failure to uphold any of
the terms thereof. The Meuhedet Health Fund’s debt                to the Company as
at June 30, 2007 stands at around NIS 400,000 and the Seller                does not know
of any reason whatsoever for that debt not to be repaid to the                Company in
full.  

- 12 -

	 	4.3.5. 	The
Company rents space in the Rishon Lezion Facility to various service
               operators (above and hereinafter: “the Rishon Lezion Tenants”).
All                the agreements with the Rishon Lezion Tenants are detailed in the list
attached                as Appendix 4.3.5 to this Agreement, true copies thereof were
given to the Buyer                and they are in effect and have not been cancelled. The
Seller does not know of                any grounds for the cancellation of any of them.
The Seller has not received and                does not know of the existence (actual or
potential) of contentions and/or                claims and/or demands on the part of the
Rishon Lezion Tenants pertaining to the                validity of the agreements with
them and/or a failure to uphold any of the terms                thereof.  

	 	4.3.6. 	Neither
the Company nor any party acting on its behalf, directly or indirectly,
               has given any undertaking to any third party whomsoever, including and
without                prejudice to the generality of the aforesaid, rights of ownership,
leasehold,                easement, franchise, and the like, pertaining to any areas
whatsoever in the                Land in Rishon Lezion, save as detailed explicitly in
this Agreement.  

	 	4.3.7. 	The
Company’s Rishon Lezion/2/27/7/1 Ad 120 plan which pertains, inter
               alia, to the addition of two floors to the building in Rishon Lezion, was
               submitted to the District Committee and, as at the date of this Agreement,
the                plan has been deposited for objections. Save as stated otherwise in
Appendix                4.3.7 to this Agreement, the Seller does not know that objections
against the                said plan have been filed, nor does the Seller know of any
grounds whatsoever                that would prevent it from being accepted.  

	 	4.4. 	The
Hod Hasharon Facility

	 	4.4.1. 	In
accordance with an agreement from January 14, 1997 for the purchase of the
               Land in Hod Hasharon from Pardes Margalit and Angel (the Partner Parties),
a                copy whereof is attached to the Agreement as Appendix 4.4.1
(hereinafter:                “the Agreement for the Purchase of the Land in Hod
Hasharon”), the Hod                Hasharon Partnership is entitled to be registered
as the owner of the Land in                Hod Hasharon. The Agreement for the Purchase
of the Land in Hod Hasharon is in                full force and effect and has not been
cancelled. The Seller does not know of                any grounds for the cancellation
thereof. The Seller has not received and, save                as is detailed in this
Agreement, does not know of the existence (actual or                potential) of
contentions and/or claims and/or demands on the part of Pardes                Margalit
and Shlomo Angel that are valid and that pertain to the validity of the
               Agreement for the Purchase of the Land in Hod Hasharon and/or a failure to
               uphold any of the terms thereof. The Hod Hasharon Partnership is the sole
and                exclusive owner of the Land in Hod Hasharon and the Hod Hasharon
Facility                subject to the rights of the Company’s Customers who reside
in the Hod                Hasharon Facility in accordance with the agreements that were
signed with them                and the Hod Hasharon Tenants (as defined hereunder) in
accordance with the                agreements that were signed with them.  

- 13 -

	 	4.4.2. 	The
Hod Hasharon Partnership has upheld all its undertakings in accordance with
               the Agreement for the Purchase of the Land in Hod Hasharon, apart from the
               payment of the balance of the Consideration in the sum of around
$1,037,000 (one                million and thirty seven thousand United States dollars)
(as at March 31, 2007)                to the Partner Parties. Apart from making the
payment as stated, which has not                yet been performed with the consent of
the Partner Parties, there is nothing                under any law, contract or
otherwise, to prevent the completion of the Agreement                for the Purchase of
the Land in Hod Hasharon, and to register the Land in Hod                Hasharon in the
name of the Hod Hasharon Partnership.  

	 	4.4.3. 	Apart
from making the payment of the balance to the Partner Parties as stated in
               Section 4.4.2 above, the full Consideration has been paid and every
payment in                respect of an in connection with the purchase of the Land in
Hod Hasharon has                been performed, and the Hod Hasharon Partnership does not
owe any sums                whatsoever in respect of the purchase of the Land in Hod
Hasharon. The Seller                does not know of any demand for payment whatsoever in
connection with the                purchase of the Land in Hod Hasharon.  

	 	4.4.4. 	Apart
from the mortgages and the caveats registered in the Land Registry Extract
               attached to the Agreement as Appendix 4.4.4 and subject to the foregoing
in this                Agreement and in the Agreement for the Purchase of the Land in Hod
Hasharon, the                Land in Hod Hasharon is Free and Clear.  

	 	4.4.5. 	The
Hod Hasharon Facility was built by the Hod Hasharon Partnership on the Land
               in Hod Hasharon and is operated thereby.  

	 	4.4.6. 	Unless
and insofar as specified otherwise in Appendix 4.4.6 to this Agreement:  

	 	A. 	The
Seller does not know of any material defect, malfunction or fault (including
               a concealed fault) in the Hod Hasharon Facility and/or in the systems
thereof,                apart from the matter of the falling marble tile cladding in
respect whereof the                Tile Lawsuit was filed.  

- 14 -

	 	B. 	The
Company has commenced proceedings for reinforcing all the tile cladding
               (interior and exterior) in the Hod Hasharon Facility. (“the
Renovation Work                – Tiles”).  

	 	C. 	The
Seller does not know that construction constituting construction in
               contraventions of the provisions of any law, including a building
deviation, was                performed in the Hod Hasharon Facility and/or in any part
thereof, or that the                Hod Hasharon Facility, including all the parts
thereof, is not duly constructed                in accordance with the authorizations and
permits and that no irregular use was                made thereof according to law, and
the Seller did not receive any claims of                building deviations as stated.  

	 	D. 	The
Seller does not know of any intention to prepare or to alter an urban
               building plan that applies to the Land in Hod Hasharon, which could
adversely                alter the Company’s rights in the Land in Hod Hasharon, or
compromise                them(as the term “compromise” is defined in Section
197 of the                Planning and Building Law, 5725-1965).  

	 	4.4.7. 	The
Hod Hasharon Partnership rents space in the Hod Hasharon Facility to various
               service operators (above and hereinafter: “the Hod Hasharon Tenants”).
               All the agreements with the Hod Hasharon Tenants are in effect and have
not been                cancelled. The Seller does not know of any grounds for the
cancellation of any                of them. The Seller has not received and does not know
of the existence (actual                or potential) of valid contentions and/or claims
and/or demands on the part of                the Hod Hasharon Tenants pertaining to the
validity of the agreements with them                and/or a failure to uphold any of the
terms thereof.  

	 	4.4.8. 	Neither
the Hod Hasharon Partnership nor any party acting on its behalf,                directly
or indirectly, has given any undertaking to any third party whomsoever,
               including and without prejudice to the generality of the aforesaid, rights
of                ownership, leasehold, easement, franchise, and the like, pertaining to
any areas                whatsoever in the Land in Hod Hasharon, save as detailed
explicitly in this                Agreement and in the Agreement for the Purchase of the
Land in Hod Hasharon.  

	 	4.4.9. 	Under
an agreement dated June 18, 2003 between the Company and U. Dori
               Engineering Work Ltd (hereinafter: “U. Dori”), a copy whereof
was                given to the Buyer, U. Dori sold its rights and obligations in the Hod
Hasharon                Partnership and its shares in the General Partner Hod Hasharon to
the Company,                (such that after the sale the Company holds 80% of the
General Partner Hod                Hasharon’s issued and paid up share capital and
81.99% of the voting rights                in the Hod Hasharon Partnership). The
aforesaid agreement is in full force and                effect and has not been
cancelled. The Seller does not know of any grounds for                the cancellation
thereof. The Seller has not received and does not know of the                existence
(actual or potential) of contentions and/or claims and/or demands on                the
part of the U. Dori pertaining to the validity of the agreement therewith
               and/or a failure to uphold any of the terms thereof. Apart from an
undertaking                by the Company to indemnify U. Dori that is included in the
aforementioned                agreement, and in respect whereof there is no (actual or,
to the Seller’s                knowledge, potential) grounds for indemnification,
the Parties to the                aforementioned agreement have upheld and are upholding
all their undertakings                under the aforementioned agreement.  

- 15 -

	 	4.5. 	The
Purchase of Building Rights in Hod Hasharon

	 	4.5.1. 	On
November 26, 2002, an agreement was signed between the Hod Hasharon
               Partnership and Cohen Development Darad Limited Partnership, a true copy
whereof                has been given to the Buyer, whereby the Hod Hasharon Partnership
purchased                building rights for a principal area of 350 m(2) which
has not yet                been utilized and which is adjacent to part of Parcel 356 in
Block 6446 in Hod                Hasharon (hereinafter: “the Agreement for the
Purchase of the Building                Rights in Hod Hasharon”).   

	 	
On
May 28, 2007, an additional agreement was                signed between the Hod Hasharon
Partnership and Cohen Development Darad Limited                Partnership, a true copy
whereof has been given to the Buyer, whereby the Hod                Hasharon Partnership
purchased building rights for an area of 200 m2 in Hod                Hasharon
(hereinafter: “the Second Agreement for the Purchase of the                Building
Rights in Hod Hasharon”). Both the said agreements in this section
               will be referred to hereunder as “the Agreement for the Purchase of
the                Building Rights in Hod Hasharon”). 

	 	4.5.2. 	The
Agreements for the Purchase of the Building Rights in Hod Hasharon are in
               full force and effect and have not been cancelled. The Seller does not
know of                any grounds for the cancellation thereof. The Seller has not
received and does                not know of the existence (actual or potential) of valid
contentions and/or                claims and/or demands on the part of Cohen Development
Darad Limited Partnership                pertaining to the validity of the Agreements for
the Purchase of the Building                Rights in Hod Hasharon and/or a failure to
uphold any of the terms thereof.  

	 	4.6. 	The
Land in Ramat Hahayal

	 	4.6.1. 	The
Ramat Hahayal Partnership owns the rights in the Land in Ramat Hahayal under
               agreements from April 7, 2005, and addenda thereto from October 5, 2006
and July                4, 2007 attached to this Agreement as Appendix 4.6.1, which are
contingent on                Suspending Conditions that must be met by the date to be
agreed upon from time                to time between the Parties and which shall be no
later than April 6, 2009, and                which have not yet been met. These
agreements are in full force and effect and                have not been cancelled. The
Seller does not know of any grounds for the                cancellation of these
agreements (subject to the fulfillment or non-fulfillment                of the
Suspending Conditions therein). The Seller has not received and does not
               know of the existence (actual or potential) of valid contentions and/or
claims                and/or demands on the part of any of the Other Parties to the said
agreements                pertaining to the validity of these agreements and/or a failure
to uphold any of                the terms thereof.  

- 16 -

	 	4.6.2. 	The
full Consideration has been paid and every payment in respect of an in
               connection with the purchase of the Land in Ramat Hahayal has been made,
and the                Ramat Hahayal Partnership does not owe any sums whatsoever in
respect of the                purchase of the Land in Ramat Hahayal and does not know of
any demand for                payment whatsoever in connection with the purchase of the
Land in Ramat Hahayal,                apart from a demand for the payment of a
capitalization fee in the sum of around                NIS 14,229,000 (plus VAT) (“the
Capitalization Fee”) that was recently                made by the Israel Land
Administration, as a condition for granting its consent                for the issuing of
a building permit for the Project in Ramat Hahayal and the                transfer of the
rights from Etz Hazayit Ltd (“Etz Hazayit”) to the                Ramat Hahayal
Partnership and to Uri, and in connection whereof the Ramat                Hahayal
Partnership contracted with Etz Hazayit and Uri in the addendum to the
               said agreement from June 28, 2007, and with Uri in the addendum to the
agreement                for the partnership in the land from June 28, 2007, and the
Company sent Uri the                letter dated June 24, 2007 and received the letter
from Uri dated June 24, 2007,                and the Ramat Hahayal Partnership and Uri
submitted, by means of Etz Hazayit, a                reservation and counter-assessment
vis-à-vis the Israel Land                Administration’s assessment (all as
detailed in the said documents, true                copies whereof are presented in
Appendix 4.6.2 to this Agreement).  

	 	4.6.3. 	Neither
the Ramat Hahayal Partnership nor any party acting on its behalf, has
               given any undertakings to any third party whomsoever, including and
without                prejudice to the generality of the aforesaid, rights of ownership,
leasehold,                easement, franchise, and the like, pertaining to any areas
whatsoever in the                Land in Ramat Hahayal and, save as detailed otherwise in
Appendix 4.6.3, the                Land in Ramat Hahayal is Free and Clear (and, inter
alia, all the Ramat                Hahayal Partnership’s rights to guarantee Uri’s
undertakings                vis-à-vis the bank under the agreement for the
partnership in the land                have been mortgaged in favor of the First
International Bank of Israel).  

	 	4.6.4. 	Uri
(by means of an affiliated contracting company on its behalf – S. G.
               S.) has begun building the foundation for the Ramat Hahayal Facility on
the Land                in Ramat Hahayal, inter alia in connection with a
contracting agreement                between the Partnership and S. G. S., a true copy
whereof has been given to the                Buyer.  

- 17 -

	 	4.7. 	Agreement,
Lack of Preclusion and Authorizations

	 	4.7.1. 	The
Seller’s certified organs have approved the Seller’s contracting
               in this Agreement including all the Appendices thereto, and the
fulfillment of                all the Seller’s undertakings under this Agreement
and, apart from these                authorizations and the fulfillment of the Suspending
Conditions mentioned in                Section 3.1 above, the Seller has no need,
including as per the articles of                incorporation thereof and under any law
and under American law, to obtain any                additional authorizations whatsoever
for the purpose of its entry into this                Agreement and the fulfillment of
all its undertakings thereunder. The wording of                the decisions by the Seller’s
certified organs as aforesaid is attached to                this Agreement as Appendix
4.7.1 and signed copies of the said decisions will be                attached to this
Agreement on the Closing Date.  

	 	4.7.2. 	The
signatures of the signatories of this Agreement on the Seller’s behalf
               on this Agreement and on any document accompanying this Agreement are
binding on                the Seller, and this Agreement, including and all the terms
thereof, are binding                on the Seller for all intents and purposes.  

	 	4.7.3. 	Apart
from Bank Hapoalim’s Authorization and the fulfillment of the
               remaining the Suspending Conditions, there is no need for the consent
and/or                authorization of any third party whomsoever, including, but without
prejudice to                the generality of the aforesaid, of any government authority
in Israel or abroad                or of any or all of the Partner Parties, for the Seller’s
entry into this                Agreement and for the fulfillment of all the Seller’s
undertakings                thereunder, in full and on time.  

	 	4.7.4. 	The
Seller’s entry into this Agreement and the fulfillment of all the
               Seller’s undertakings thereunder in no way contravene and do not
constitute                a breach of any law whatsoever (including US law) that applies
to the Seller                and/or to any of the Companies in the Group and/or of the
documents of                incorporation of the Seller and/or those of any of the
Companies in the Group                and/or of an administrative order and/or verdict
and/or other decision that                applies to the Seller or the provisions of any
law or any agreement whatsoever                that the Seller and/or any of the
Companies in the Group are a party to, and do                not require the approval or
consent of any third party whomsoever, save those                expressly cited in this
Agreement. The Seller has not performed and does not                know of any act that
is liable to foil the fulfillment of this Agreement and                there is no legal
or contractual or other impediment precluding the fulfillment                of all the
Seller’s undertakings under this Agreement, in full and on time.  

	 	4.7.5. 	Since
the date of incorporation of the Seller, and of each of the Companies in
               the Group, they have been duly incorporated and there is no decision or
               dissolution order or winding-up order or receivership order or any similar
order                whatsoever, applicable to any thereof and, to the best of the Seller’s
               knowledge, no person or body has the intention of demanding the
dissolution,                winding-up or receivership of the Seller and/or of any of the
Companies in the                Group, and, to the best of the Seller’s knowledge,
there is no reason                and/or grounds that are liable to cause same.  

- 18 -

	 	4.7.6. 	True
copies of the registration certificates, name change certificates,
               memoranda and articles of association and/or partnership agreements of
each of                the above, up-to-date as at the date of signing of this Agreement,
are attached                to the Agreement and marked as Appendices 4.7.6A – 4.7.6D.  

	 	4.8. 	Directors
and Shareholders

	 	4.8.1. 	A
complete list of the directors of each of the Members of the Group that is a
               company (“the Directors”) and of the active contacts of the
Partner                Parties, is attached as Appendix 4.8.1 to this Agreement.  

	 	4.8.2. 	The
Company’s Board of Directors does not have any committees whatsoever.  

	 	4.8.3. 	Apart
from the agreement with the Partner Parties there is no shareholders
               agreement, voting agreement or any other agreement or other undertaking in
               connection with shares and/or rights, the holding thereof, the transfer
thereof,                restrictions on the transfer thereof, or the use of the rights
granted by the                power thereof (including the appointment of directors) that
the Seller and/or                any of the Members of the Group is a party to in all
matters pertaining to the                Members of the Group, including foundation
agreements and/or voting agreements                and/or cooperation agreements.  

	 	4.9. 	Financial
Statements

	 	4.9.1. 	Appendix
4.9.1 contains true copies of the Company’s audited financial
               statements, the audited financial statements of Ampal 1966, Ampal 1994 and
Ampal                1998 for the years 2004, 2005 and 2006 and the Company’s
financial                statements as at March 31, 2007 and the audited financial
statements of the                Ramat Hahayal Partnership as at December 31, 2006
(hereinafter: “the                Financial Statements”). The Financial
Statements were prepared amid the                consistent implementation of the
accepted rules of accounting in Israel or the                US (US GAAP) and they
reflect, properly and in accordance with the accepted                rules of accounting
in Israel or the US, the corporate status of these                companies, their assets
and their liabilities, the results of their business                activities and the
changes in the cash flow and equity capital of each of them                for the said
years and for the three-month period that ended on March 31, 2007,
               respectively, as applicable, and they include all the allowance that must
be                made in accordance with the said rules.  

- 19 -

	 	4.9.2. 	Since
March 31, 2007 no adverse change has occurred in the activity of the
               Members of the Group, their assets or their liabilities and the Members of
the                Group are conducting their business during the ordinary course of
business, and                as was customary at the said companies prior to March 31,
2007, and none of the                Members of the Group has assumed any liability
outside its normal course of                business.  

	 	4.9.3. 	Save
as detailed in Appendix 4.9.3, there is no legal proceeding or quasi-legal
               proceeding at any court, arbitration or before any judiciary body or
               quasi-judiciary body, that the Seller (with regard to the activity of the
               Members of the Group) and/or any of the Members of the Group is party to,
there                is no verdict or other material ruling by a court of law, arbitrator
or                judiciary body or quasi-judiciary body whatsoever, that the Seller or
any of the                Members of the Group is party to that has not been completed in
full up to the                date of signing of the Agreement.  

	 	4.9.4. 	Apart
from the debt balance in favor of Ampal Israel in the sum of $1,317,841 as
               at March 31, 2007 (which will be repaid by the Company to Ampal Israel on
the                Closing Date and on the occasion thereof), none of the Members of the
Group has                any agreement whatsoever and/or any undertaking whatsoever
and/or any debt                whatsoever vis-à-vis the Seller and/or interested
parties in the Seller                and/or officers in the Seller or any party
affiliated therewith (excluding, to                dispel all doubt, the Activity
Companies), and any agreement, undertaking or                debt as stated (if and
insofar such exist) shall be null and void on the Closing                Date.  

	 	4.9.5. 	On
June 30, 2003, the Seller extended a loan in the sum of $5,734,607 to Ampal
               98, as per the Capital Note, a copy whereof is attached to this Agreement
as                Appendix 4.9.5.  

	 	4.10. 	Guarantees
and Credits

	 	4.10.1. 	The
Holding Companies and the Activity Companies did not furnish any guarantees
               and/or undertakings to guaranty, apart from as detailed in this Agreement
and                apart from the guarantees that the Company gave to the Company’s
Customers.  

	 	4.10.2. 	The
Seller did not furnish any guarantees and/or undertakings to guaranty the
               Company’s debts and undertakings apart from as detailed in this
Agreement.  

	 	4.10.3. 	Apart
from as detailed in this Appendix 4.10.3 and as detailed in this
               Agreement, there is no third party that is a guarantor and/or that has
               undertaken to indemnify others in connection with and/or for any of the
Members                of the Group.  

- 20 -

	 	4.10.4. 	There
are no loans and/or credits that were extended to Ampal Development or
               H.L. Management in favor of the Company, apart from the guarantees that
were                extended by Ampal Israel or, as relevant, H.L. Management or the
Israel                Corporation to the Company’s Customers.  

	 	4.11. 	Employees

	 	4.11.1. 	Appendix
4.11.1 includes complete details of the identity and salary composition                of
all of the employees of the Members of the Group, with the monthly
               remuneration paid to them, including all the benefits in respect whereof
and                including all the rights to the payment of a bonus, if and insofar as
such                exist, cost NIS 240,000 per annum in 2006 (in terms of employer’s
costs).                True copies of all the employment agreements of the said
employees, and all the                documents related thereto, were give to the Buyer.  

	 	4.11.2. 	The
Members of the Group are not a party to any collective agreements or
               collective arrangements.  

	 	4.11.3. 	All
the payments, deductions and monetary deposits that the Members of the Group
               are obligated to perform and/or to pay, as applicable, to the employees of
the                Group and/or in connection therewith, under any law and/or agreement,
in respect                of the employment thereof and/or the termination of the
employment thereof, for                any period of employment thereof, were paid by the
relevant Members of the Group                and/or were deposited in the appropriate
funds and/or were allowed in the                Financial Statements.  

	 	4.12. 	Bank
Accounts

	 	
Complete
details of all the bank accounts of any type and kind whatsoever of the Members of the
Group and all the balances thereof, are detailed in Appendix 4.12 to this Agreement.
Apart from these bank accounts the Members of the Group do not have any additional bank
accounts of any type and kind whatsoever. 

	 	4.13. 	Insurance

	 	4.13.1. 	A
list of the insurance policies in the framework of the Company and the Members
               of the Group are insured is detailed in Appendix 4.13.1 to this Agreement.
The                aforementioned insurance policies are valid, the premiums have in
respect of the                aforementioned insurance policies have been paid and are
being paid in full                and/or allowance in respect whereof are included in the
most recent Financial                Statements of the Members of the Group.  

- 21 -

	 	4.13.2. 	The
Members of the Group will continue to pay the insurance premiums on time and
               shall not cancel any of the aforementioned insurance policies, until after
the                Closing Date of the deal.  

	 	4.14. 	The
Normal Course of Business, the Distribution of a Dividend and the                Equity
Capital Deficit

	 	4.14.1. 	Beginning
on March 31, 2007 and until the Closing Date, no actions that deviate                from
the normal course of business was performed or will be performed at any of
               the Members of the Group, that were not given expression in this Agreement
and                no incident whatsoever that altered or is liable to materially and
adversely                alter the financial situation of any of the Members of the
Group, either on its                own or in conjunction with other incidents.  

	 	4.14.2. 	Beginning
on March 31, 2007 and until the Closing Date, none of the Members of                the
Group has announced or distributed, and none of them shall announce or
               distribute, any dividend whatsoever, and none of them has conducted or
will                conduct any other distribution whatsoever to the shareholders and/or
the                partners therein, in which it will transfer monies or any payments
whatsoever to                them in any other fashion (save in respect of debts in
existence on the date of                signing of this Agreement, as per the terms
thereof on the date of signing of                this Agreement). There is no dividend
that was announced by any of the Members                of the Group and not yet been
paid in full to the shareholders and/or the                partners.  

	 	4.14.3. 	Beginning
on March 31, 2007 and until the Closing Date, each of the Members of                the
Group will continue to conduct its business in the normal course of
               business, and will not assume any material undertaking and will not make
any                material administrative decision save for the purpose of fulfilling
its                undertakings under existing agreements.  

	 	4.15. 	The
Company’s Customers

	 	4.15.1. 	Up-to-date
wordings of the Company’s Customers agreement pertaining to the                Hod
Hasharon Facility and the Rishon Lezion Facility are attached to this
               Agreement as Appendix 4.15.1A and 4.15.1B. Save as detailed otherwise in
               Appendix 4.151.C, the Seller does not know of any material errors, or the
               granting of any unusual rights to the Company’s Customers, in the
framework                of the Customer Agreements that preceded the said agreements and
that could harm                the Company or the future operation thereof.  

	 	4.15.2. 	Apart
from the Tenants Lawsuit and as detailed in Appendix 4.15.2, the Seller
               (or the Company and the managers thereof) does not know of any intention
on the                part of the Company’s Customers to file an additional lawsuit
or additional                lawsuits against the Company or in connection with the
operation thereof.  

- 22 -

	 	4.16. 	General

	 	4.16.1. 	The
Seller is aware of the fact that its declarations and representations in the
               Agreement constitute the basis for the Buyer’s entry into the
Agreement and                for the Consideration that the Buyer undertook to pay in
this Agreement and the                Seller declares that the declarations and
representations in this Section 4 and                in the Appendices thereto include
every detail that is important to a reasonable                investor purchasing the
Sold Shares under this Agreement, and do not include any                misleading detail
(as the said term is defined in the Securities Law, 5718-1968                [sic]
[translator’s note – the Hebrew year 5718 began on September 26,
               1957 and ended on September 15, 1958] or incorrect detail and affirms that
the                representations will be correct and will be in effect on the Closing
Date as                well, subject to a list of changes that will be attached by the
Seller on the                Closing Date and will be attached to this Agreement as
Appendix 4.16.1.  

	 	4.16.2. 	All
the Seller’s declarations and representations in this agreement are
               cumulative and the forgoing in one or more thereof shall not derogate from
the                generality of any other representation, declaration or undertaking.  

	5.  	The
Buyer’s Representations and Declarations

	 	
Each
of the Individuals of the Buyer hereby declares, undertakes and affirms vis-à-vis
the Seller that all the representations and undertakings hereunder are correct and
complete (insofar as they are known to the said the Individuals of the Buyer, or to the
Buyer, as applicable):  

	 	5.1. 	The
Phoenix is a company limited by shares registered in Israel in the books of
               the Registrar of Companies as a limited liability company whose number is
               520017450. 

	 	5.2. 	Golden
is a company limited by shares registered in Israel in the books of the
               Registrar of Companies as a limited liability company whose number is
513991380. 

	 	5.3. 	The
Buyer has the complete authority to enter into this Agreement, and this
               Agreement is valid and binding on the Buyer under any law, subject to the
               approval by the Commissioner and the remaining Suspending Conditions. 

	 	5.4. 	The
Buyer has performed due diligence on the Members of the Group, including
               examinations that the Buyer found necessary to perform and subject to the
               correctness and integrity of all the Seller’s representations and the
               information that the Buyer received from the Seller, has found the Sold
Shares,                the Members of the Group and the operation thereof suitable for
its needs. 

- 23 -

	 	5.5. 	The
Buyer is purchasing the Sold Shares in accordance with and on the basis of
               the examinations that it performed as stated in Section 5.4 above subject
to the                Seller’s representations, declarations and undertakings as
stated in                Section 4 above (the Seller’s representations, declarations
and                undertakings shall be referred to hereinafter as: “the
               Representations”) and subject to the correctness and integrity of the
               Representations and the fulfillment of all the Seller’s undertakings
in                this Agreement, in full and on time, and the Buyer will have no
contentions                and/or claims and/or demands from the Seller. 

	 	5.6. 	Cancelled
by agreement. 

	 	5.7. 	All
the certified organs of each of the Individuals of the Buyer have approved
               the Buyer’s contracting in this Agreement including all the
Appendices                thereto, and the fulfillment of all the Buyer’s
undertakings under this                Agreement and, apart from these authorizations and
the fulfillment of the                Suspending Conditions mentioned in Section 3.1
above, the Individuals of the                Buyer have no need, including as per the
articles of incorporation thereof and                under any law, to obtain any
additional authorizations whatsoever for the                purpose of entering into this
Agreement and the fulfillment of all its                undertakings thereunder, apart
from the Commissioner’s approval and the                fulfillment of the remaining
Suspending Conditions. The wording of the decisions                by the certified
organs of each of the Individuals of the Buyer is attached to                this
Agreement as Appendices 5.7A and 5.7B. Signed copies of the said decisions
               will be attached to this Agreement on the Closing Date. 

	 	5.8. 	The
signatures of the signatories of this Agreement on the Buyer’s behalf
               are binding on the Buyer, and this Agreement, including and all the terms
               thereof, are binding on the Buyer for all intents and purposes. 

	 	5.9. 	Apart
from Bank Hapoalim’s Authorization and the fulfillment of the
               remaining Suspending Conditions, there is no need for the consent and/or
               authorization of any third party whomsoever, including that of any
government                authority in Israel or abroad, for the Buyer’s entry into
this Agreement                and for the fulfillment of all the Buyer’s
undertakings thereunder, in full                and on time. 

	 	5.10. 	The
Buyer is aware of the existence of a cumulative debt in the sum of
               $1,317,841 (as at March 31, 2007) that the Company owes Ampal Israel, and
that                this debt, as it shall be on the Closing Date, will be paid by the
Company to                Ampal Israel on the occasion and on the Closing Date. 

	 	
On
the Closing Date the Buyer will provide the Company with monies that will enable the
repayment of every debt detailed in this Section above, on the Closing Date. The
provision of the monies by the Buyer will not affect the Consideration and the payment
thereof and the payment of the Consideration under this Agreement does not constitute
repayment of the aforementioned debt out of the Consideration, and it will be repaid as
detailed above in this Section. 

- 24 -

	 	5.11. 	The
Buyer’s entry into this Agreement and the fulfillment of all the                Buyer’s
undertakings thereunder in no way contravene and do not constitute                a
breach of any law whatsoever that applies to the Buyer (subject to obtaining
               the Commissioner’s Approval and the fulfillment of the remaining
Suspending                Conditions) and/or of the documents of incorporation of the
Buyer and/or of an                administrative order and/or verdict and/or other
decision that applies to the                Buyer. The Buyer has not performed and does
not know of any act that is liable                to foil the fulfillment of this
Agreement. 

	 	5.12. 	Since
the date of incorporation of the Individuals of the Buyer, they have been
               duly incorporated and there is no decision or dissolution order or
winding-up                order or receivership order or any similar order whatsoever,
applicable to any                thereof and, to the best of the Buyer’s knowledge,
there is no reason                and/or grounds that are liable to cause same. 

	 	5.13. 	The
Buyer is in possession of the financial capability required in order uphold
               its undertakings under this Agreement. 

	 	5.14. 	All
the Buyer’s declarations and representations in this agreement are
               cumulative and the forgoing in one or more thereof shall not derogate from
the                generality of any other representation, declaration or undertaking. 

	 	5.15. 	The
Buy is aware of the fact that its declarations and representations in the
               Agreement constitute the basis for the Seller’s entry into the
Agreement                and declares that the declarations and representations in this
Section 5 and in                the Appendices thereto do not include any misleading or
incorrect detail. 

	6.  	The
transaction

	 	
Subject
to the fulfillment of the Suspending Conditions detailed in this Agreement, the payment
of the Consideration and the remaining terms and provisions detailed in this Agreement,
the Buyer hereby undertakes to buy from the Seller (in equal parts among the Individuals
of the Buyer) and the Seller hereby undertakes to sell and transfer to the Buyer (in
equal parts among the Individuals of the Buyer) the Sold Shares and the Rights in the
Capital Deed, Free and Clear.  

	7.  	The
Execution of the Agreement

	 	7.1. 	Each
Party undertakes vis-à-vis the other Party to perform all the
                    actions, to sign all the documents and to exercise all the voting
rights and the                     powers of control of each Party, and to see that said
rights and powers are                     exercised, in order to grant full effect to the
terms of this Agreement and to                     carry out the provisions thereof on
time. 

- 25 -

	 	7.2. 	Immediately
after the signing of this Agreement the Parties will contact Bank
                    Hapoalim in order to obtain Bank Hapoalim’s Authorization.
Should Bank                     Hapoalim’s Authorization not be obtained by the
First Performance Date, the                     Seller will be permitted, at its
exclusive and unreserved discretion, but                     subject to the Buyer’s
consent (which shall not be withheld for                     unreasonable reasons) to act
to replace the loans extended to the Company by                     Bank Hapoalim,
including by means of obtaining other loans that fully or                     partially
replace them from one of the other leading banks (or financial
                    institutions), on terms that are no less favorable for the Company
than those of                     the loan from Bank Hapoalim (“the Alternative
Funding”), thereby                     obviating the need for obtaining Bank Hapoalim’s
Authorization which, from                     that day forward, will no longer be
considered a Suspending Condition for the                     implementation of the
transaction that is the object of this Agreement. 

	8.  	Management
of the Members of the Group during the Period between the Date                     of
Signing of the Agreement and the Closing Date

	 	
During
the period between the date of signing of this Agreement and the Closing Date (and
without prejudice to the remaining provisions of this Agreement pertaining to the said
period):  

	 	8.1. 	The
Seller will inform the Buyer in writing and in advance of any draft motion
               at the General Meeting and/or the Board of Directors of any of the Members
of                the Group. 

	 	8.2. 	The
Seller will inform the Buyer in writing and in advance of any action and/or
               contractual arrangement and/or the provision of an undertaking by any the
               Members of the Group that is material and/or that is outside the normal
course                of business of any of the Members of the Group. 

	 	8.3. 	The
Members of the Group will not pass any resolutions and/or perform actions
               and/or enter into contractual arrangements as stated in Section 8.2 above,
save                for the purpose of fulfilling and/or exercising their undertakings
and/or their                rights under existing agreements. 

	 	8.4. 	Without
prejudice to the provisions of Section 8.3 above, the Members of the                Group
will not submit any document and will not commence or hold any proceeding
               (whether in a court of law or elsewhere) in the framework of the Tenants
Lawsuit                without the Buyer’s consent (and the Buyer will give its
consent within no                more than seven days or within a shorter timeframe,
noting the circumstances of                the matter and the dates allocated by the
court and will not refuse to grant its                consent to any proceeding that is
necessary in order to protect the rights of                the Members of the Group for
unreasonable reasons). To remove all doubt it is                hereby clarified that the
aforesaid does not constitute the assumption of any                liability whatsoever
on the part of the Buyer for the proceedings of the Tenants                Lawsuit before
the Closing Date. 

- 26 -

	9.  	Closing
Actions

	 	
On
the Closing Date the Parties will meet at the offices of M. Firon & Co, attorneys and
notaries, at 16 Abba Hillel Street in Ramat Gan or at any other location to be agreed
upon by the Parties, and will perform the following actions (with all the actions being
considered integrated and performed simultaneously, and no action will be valid unless
all the actions are was performed and completed together):  

	 	9.1. 	The
Parties will present the Commissioner’s Approval and Bank                Hapoalim’s
Authorization to each other (insofar as its status as a                Suspending
Condition as stated in Section 7.2 above has not been cancelled), as                is
required in Section 3.1 above, which will be attached to his Agreement as
               Appendices 9.1.A and 9.1B, respectively. 

	 	9.2. 	The
Seller will give the Buyer the following documents (and it is clarified that
               the documents detailed hereunder were made for the benefit of the Buyer,
and the                Buyer is permitted, according to its exclusive discretion, to
waive in writing                any of the documents detailed hereunder, in full or in
part): 

	 	9.2.1. 	An
original copy of the decisions by the Seller’s authorized organs, in the
               wording of Appendix 4.7, confirming the contractual arrangement between
the                Parties in the Agreement and of Ampal 1998 and Ampal 1994, confirming
the                transfer of the Sold Shares and the endorsement of the Capital Deed
from the                Seller to the Buyer,  

	 	9.2.2. 	Original
share transfer deeds, signed by the Seller, for the transfer of half of
               the Sold Shares from the Seller to each of the Individuals of the Buyer,
in the                wording attached hereto as Appendices 9.2.2A and 9.2.2B, and an
original copy,                duly signed, of the Shareholders Registry of Ampal 1994 and
Ampal 1998, whereby                each of the Individuals of the Buyer is registered as
the holder of half of the                Sold Shares, in the wording attached hereto as
Appendices 9.2.2C and 9.2.2D.  

	 	9.2.3. 	Letters
of resignation and written waivers of claims on the part of all the
               directors at the Members of the Group, including Ms Irit Iluz and Mr.
Yoram                Firon of the Board of Directors of Ampal 1994, Ms Irit Iluz and Mr.
Yoram Firon                of the Board of Directors of Ampal 1998, Ms Irit Iluz and Mr.
Yoram Firon of the                Board of Directors of Ampal1966, Messrs Jack Bijio,
Amit Mantzour and Yoram                Firon of the Company’s Board of Directors,
Messrs Jack Bijio, Amit Mantzour                and Yoram Firon of the Board of Directors
of the General Partner – Hod                Hasharon, and letters of resignation of
Messrs Jack Bijio, Amit Mantzour and                Yoram Firon of the General Partner
– Ramat Hahayal, attached hereto as                Appendices 9.2.3A to 9.2.3E.  

	 	9.2.4. 	Duly
signed notices to the Registrar of Companies in connection with the
               transfer of half of the Sold Shares from the Seller to each of the
Individuals                of the Buyer, in the wording attached hereto as Appendices
9.2.4A and 9.2.4B.  

- 27 -

	 	9.2.5. 	The
Seller will furnish the Buyer with a Deed of Endorsement of the Capital Deed
               from the Seller to the Buyer, in respect of the Capital Deed, such that
the                Buyer will be entitled to all the rights derived from the Capital
Deed,                including the right to repayment of the Capital Deed in accordance
with the                terms thereof, in the wording attached to this Agreement as
Appendix 9.2.5, duly                signed by the Seller.  

	 	9.2.6. 	The
Seller will either furnish the Buyer with Bank Hapoalim’s Authorization
               or furnish the Buyer with the Seller’s notification stating that the
Seller                has acted in accordance with the foregoing in Section 7.2 above
(including full                details of the Alternative Financing).  

	 	9.2.7. 	The
Seller will furnish the Buyer with the original authorization signed by the
               Seller defined in Appendix 4.16.1 with regard to the changes that have
occurred,                if and insofar as changes have occurred, in the Seller’s
Representations in                Section 4 above.  

	 	9.3. 	The
Buyer will give the Seller the following documents and will perform the
               following actions(and it is clarified that the documents detailed
hereunder and                the actions detailed hereunder are being performed for the
benefit of the                Seller, and the Seller is permitted, according to its
exclusive discretion, to                waive in writing any of the documents and/or
actions detailed hereunder, in full                or in part): 

	 	9.3.1. 	Payment
of the balance of the Consideration to the Seller, as defined in Section
               10.3 hereunder.  

	 	9.3.2. 	The
Buyer will transfer to the Seller the entire sum of the debt as at the
               Closing Date as stated in Section 5.10 above, in order for the Company to
be                able to repay the entire said debt, as described in Section 5.10 above,
once the                said debt has been updated as at the Closing Date and the Company
will repay the                entire updated sum of the debt and will pay it to the
Seller.  

	 	9.3.3. 	Each
of the Individuals of the Buyer will transfer to the Seller original copies
               of the authorized organs thereof, approving the entry into the Agreement
by the                Parties and the purchase of half of the Sold Shares from the
Seller, which shall                be attached to this Agreement as Appendices 5.7A and
5.7B.  

	10.  	The
Consideration

	 	10.1. 	In
return for the Sold Shares and the endorsement of the Capital Deed, the Buyer
               will pay the Seller a sum in NIS equal to $29,300,000 (twenty nine million
and                three hundred thousand United States dollars) in accordance with the
Dollar Rate                that is known on the actual date of payment (hereinafter:
“the                Consideration”). 

- 28 -

	 	10.2. 	On
or around June 17, 2007, the Buyer transferred the sum of $1,000,000 (one
               million United States dollars) to the Seller as an advance on account of
the                Consideration (hereinafter: “the Advance”). Should the
provisions of                Section 3.2 above apply and should this Agreement not enter
into effect as                stated in the said Section, the Seller will return the sum
of the Advance to the                Buyer, as stated in Section 3.2 above. 

	 	10.3. 	The
balance of the Consideration, in the sum of $28,300,000 (twenty eight
               million three hundred thousand united states dollars) ((hereinafter: “the
               Balance of the Consideration”) will be paid to the Seller by the
Buyer (in                equal parts by each of the Individuals of the Buyer) by bank
transfer to the                Seller’s bank account at the main branch of Bank
Hapoalim, branch number                600, whose particulars will be given to the Buyer
by the Seller up to three                business days before the Closing Date. The
Parties will act jointly on the                Closing Date in order to obtain
confirmation of the performance of the transfer                from the transferring bank
(or banks) and from the receiving bank. 

	11.  	Indemnification
in respect of the Guarantees to the Company’s                Customers

	 	11.1. 	Since
the Seller and/or Ampal Israel and H.L. Management and/or the Israel
               Corporation have provided guarantees to the Company’s Customers, and
since                the Seller and/or Ampal Israel have undertaken to indemnify H.L.
Management                and/or the Israel Corporation in respect of the guarantees to
the Company’s                Customers that they provided, without prejudice to the
Buyer’s undertakings                vis-à-vis the Seller under this
Agreement, the Buyer undertakes to                indemnify and/or compensate the Seller
and/or Ampal Israel for any sum that the                Seller and/or Ampal Israel is
ordered to pay, by a verdict whose implementation                was not suspended, to
H.L. Management and/or the Israel Corporation and/or to                any of the Company’s
Customers, in accordance with the Letters of Guarantee                to the Company’s
Customers. The Seller and/or Ampal Israel will be entitled                to
indemnification as stated provided they notified the Buyer in writing of the
               demand for indemnification from H.L. Management and/or the Israel
Corporation                and/or any of the Company’s Customers immediately upon
receipt of the first                demand of same, and have attached the letters of
demand in accordance with the                Guarantees, and all the relevant documents
and information. The Seller and/or                Ampal Israel will not pay the demand or
claim or arrive at a settlement in                connection thereto or transfer it to
arbitration or mediation under Sections 79                (A) – (C) of the Courts
Law, without obtaining the Buyer’s advance and                written consent and
without enabling the Buyer to represent them and defend                itself in their
name in any proceedings, including by granting a power of                attorney in all
matters related to the demand or claim as stated. 

	 	
The
wording of the Letters of Guarantees to the Company’s Customers and the list of
Guarantees to the Company’s Customers is attached hereto as Appendices 11.1A and
11.1B to this Agreement. 

- 29 -

	 	11.2. 	The
Buyer agrees that in order to guarantee the Buyer’s undertaking in all
               matters related to the undertakings vis-à-vis H.L. Management
and/or                vis-à-vis the Israel Corporation as stated in Section 11.1
above, the                lien in favor of H.L. Management will remain in effect, and
this for as long as                the Buyer and H.L. Management have not arrived at
another agreement in writing,                signed by the Parties, or as long as the
undertakings for which H.L.                Financing’s [sic] guarantees were given
have not expired. 

	 	11.3. 	The
Buyer agrees that in order to guarantee the Buyer’s undertaking in all
               matters related to the undertakings vis-à-vis the Seller and/or
               vis-à-vis Ampal Israel as stated in Section 11.1 above, the lien in
favor                of Ampal Development will remain in effect, and this for as long as
the Buyer                and the Seller and/or Ampal Israel have not arrived at another
agreement in                writing, signed by the Parties, or as long as the
undertakings for which the                Seller’s and/or Ampal Israel’s
guarantees were given have not expired. 

	12.  	Special
Provisions regarding the Tenants Lawsuit and regarding the Payment                of the
Capitalization Fee

	 	12.1. 	As
of the Closing Date, the Buyer will assume the management of the                Tenants’ Lawsuit
by the Company, but not the management of the Countersuit.                The Seller’s
signature on this Agreement also constitutes the Seller’s                irrevocable
consent, as of the Closing Date and thereafter, to cease the                management of
the Countersuit, whether in the framework of a settlement                agreement or
otherwise, immediately upon receipt of the Buyer’s first                demand to do
so, for any reason and for no reason. Moreover, and even after the                Closing
Date, the Seller will continue to coordinate the entire proceeding in                the
framework of the Countersuit with the Buyer in accordance with its
               undertakings under Section 8.4 above. To remove all doubt it is hereby
clarified                that the aforesaid does not constitute the assumption of any
liability                whatsoever on the part of the Buyer for the management of the
said Countersuit. 

	 	12.2. 	The
Seller will cooperate with the Company and the Buyer will ensure that the
               Company and the Partnership cooperate with the Seller, and all of them
together                will act to the best of their ability to do all that is
reasonably necessary in                order to reduce the sum of the Capitalization Fee
(as this term is defined in                Section 4.6.2 above) which will have to be
paid in a final manner to the Israel                Land Administration, including by
continuing the proceedings described in                Section 4.6.2 above (hereinafter:
“the Final Sum of the Capitalization                Fee”) as well as the fact
that the one who will bear the Final Sum of the                Capitalization Fee will be
Uri and not the Partnership, and the foregoing in                Appendix 12.2 to this
Agreement will also apply. 

- 30 -

	13.  	Indemnification
and Liability for Representations

	 	13.1. 	Without
prejudice to the provisions of Section 12.2, the Seller undertakes to
               indemnify the Buyer in respect of any payment, expense or damage, apart
from                indirect or consequential damage (jointly – “Damage”)
that is                incurred by the Buyer: [A] Should it become apparent that a
representation that                was given to the Buyer by the Seller in the framework
of this Agreement is                incorrect. [B] In consequence of any liability to pay
that is created, or any                payment that was made by the Company stemming from
grounds, an act or an                omission that took place on a date prior to the
Closing Date, and which was not                expressed in the Company’s Financial
Statements or in respect whereof no                allowance was made in the Financial
Statements as stated, including and without                prejudice to the generality of
the aforesaid, in respect of income tax or VAT                debts. However, it is
clarified that in the matter the of income tax or VAT                debts as stated,
“damage” means only payments that the Company is                ordered to pay
to the relevant tax authorities, as per a peremptory ruling, in                respect of
the period up to December 31, 2006, and all also subject to the                foregoing
in the remaining subsections of this Section 13 hereunder                (hereinafter:
“the Indemnification of the Buyer”). 

	 	13.2. 	It
is hereby clarified and agreed by the Buyer that the Indemnification of the
               Buyer will be limited to a sum of damages equal to 100% of the sum of the
               Consideration stated in Section 10.1 above and will apply only to sums of
direct                damage in excess of direct damage in the sum of $1,500,000 (one
million and five                hundred thousand United States dollars) cumulatively and
subject to the fact                that the material inaccuracy of the relevant
representation and the damage that                was caused in respect whereof was
discovered within 36 (thirty six) months from                the date of signing of the
Agreement. 

	 	13.3. 	It
is likewise clarified and agreed by the Buyer that the Buyer will not be
               permitted to make any contention and/or claim and/or demand vis-à-vis
the                Seller and/or any party acting on the Seller’s behalf, in respect
of damage                as stated after three months have passed from the date of
discovery of the                significant and material incorrectness of any of the
Representations as stated. 

	 	13.4. 	The
Buyer declares and affirms that it will not be entitled to any compensation
               and/or indemnification from the directors at the Seller and/or from the
               directors on the Seller’s behalf who served on the Board of Directors
               and/or on the board of the Members of the Group, save in the case of
criminal                negligence, or God forbid, criminal acts. 

	 	13.5. 	Should
the demand for indemnification stem from a claim by a third party, the
               Buyer will be entitled to indemnification as stated, provided it notified
the                Seller in writing of the demand for indemnification immediately upon
receipt of                the first demand in connection with the claim, with the
addition of the letters                of demand an all the relevant documents and
information. Should the Seller                assume full and unconditional
Indemnification of the Buyer (or, as applicable,                of a one of the Members
of the Group) as stated, by written notice to the Buyer,                the Buyer and/or
the Members of the Group will not pay the demand or the claim                and will not
reach a settlement in connection therewith or transfer it to                arbitration
or mediation as per Section 79 (A) – (C) of the Courts Law,                without
obtaining the Seller’s advance and written consent. Under such
               circumstances, the Buyer will enable the Seller to represent it and/or the
               Members of the Group, to defend itself in their name in any proceedings,
               including by granting a power of attorney in all matters related to the
demand                or claim as stated. 

- 31 -

	 	13.6. 	Additionally,
in cases where the damage that was incurred by one of the Members                of the
Group is insured (and, in this matter, the Buyer agrees to maintain
               insurance policies at the Activity Companies in a scope and on terms
according                to its discretion), the Buyer will notify the insurance
companies of the damage                and, if possible, will fulfill the demands by
virtue of the policies for the                activation of the insurance. The sums that
are received from the insurance                policies, after deduction of all the sums
that are necessary in order to                maintain the insurance policies in the
condition thereof prior to the demand                (including a discount due to an
absence of claims) will be deducted from the sum                of the indemnification
that the Seller must pay the Buyer as per this Section. 

	14.  	Taxes
and Expenses

	 	14.1. 	Each
of the Parties will bear all the tax payments applicable thereto in respect
               of the deal that is the object of this Agreement and/or in connection
therewith. 

	 	14.2. 	Each
Party exclusively will bear its expenses in connection with this Agreement
               and all matters stemming therefrom, including and without prejudice to the
               generality of the foregoing, the payment of attorneys’ fees and
               consultants’ fees. 

	15.  	Confidentiality

	 	15.1. 	Until
the Determining Date, and save as is required by law (including the
               application to the Commissioner), the Parties will maintain
confidentiality with                regard to this Agreement and the terms thereof. 

	 	15.2. 	Without
prejudice to the generality of the foregoing in Section 15.1 above , it                is
agreed that a press release with regard to the drawing up of the Agreement
               and publication, up to the Closing Date and/or in connection with the
closing of                the deal that is the object of this Agreement, among the
Residents of the                Facilities in Rishon Lezion and Hod Hasharon, with regard
to the drawing up of                the Agreement and/or in connection with the
negotiations for the drawing up                thereof, will be made amid advance and
written coordination between the Parties,                and all apart from the notice
that the Seller and/or any of the companies                affiliated thereto, including
Ampal American Israel Corporation is required to                give according to US law,
and which will be worded thereby according to their                discretion. 

- 32 -

	16.  	Miscellaneous

	 	16.1. 	No
conduct on the part of either of the Parties shall be deemed a waiver of any
               of the rights thereof under this Agreement or under any law, or as a
waiver, or                as consent on the part thereof to any breach whatsoever or the
non-fulfillment                of any term whatsoever, unless the waiver, consent,
postponement, change,                cancellation or addendum was made expressly and in
writing and signed by the                said Party. 

	 	16.2. 	In
the relations between the Parties to this Agreement and the Substitutes
               thereof, the provisions of this Agreement shall take precedence over the
               provisions of any conditional law. 

	 	16.3. 	No
changes or amendments in this Agreement shall be valid unless they were made
               in a written document signed by all the Parties to this Agreement. 

	 	16.4. 	This
Agreement, upon the signing thereof, contains all the accords and/or
               understandings between the Parties in connection with the topics mentioned
               therein, unless otherwise stated in this Agreement, and it cancels all the
               documents that were exchanged between the Parties prior to the signing
thereof. 

	 	16.5. 	The
Parties to this Agreement participated together in the negotiations and in
               wording this Agreement. In the event of a lack of clarity or a question
with                regard to the meaning or interpretation of any given section, this
Agreement                will be interpreted as having been worded by all the Parties and
no conclusion                will be drawn or burden of proof imposed for or against any
Party whatsoever by                virtue of the fact that a given provision of the
Agreement was worded by that                Party. 

	 	16.6. 	This
Agreement and any matter related to this Agreement and stemming therefrom,
               including, without prejudice to the generality of the aforesaid, the
               interpretation and/or execution and/or breach and/or validity and/or
legality                and/or annulment thereof, will be governed solely, exclusively
and absolutely by                the laws of the State of Israel. 

	 	16.7. 	The
Parties have selected the competent Tel Aviv District Court in the exclusive
               and sole jurisdiction between them for any matter involving and related to
this                Contract [sic], the execution thereof, the interpretation thereof
etc. 

	 	16.8. 	This
Agreement may be signed by any given Party by facsimile and such a
               signature will be binding for all intents and purposes. 

- 33 -

	17.  	Addresses
and notices

	 	17.1. 	The
addresses of the Parties to this Agreement are as specified in the Preamble
               thereto. 

	 	17.2. 	Any
notice sent by registered mail to the address of one of the Parties in the
               Preamble (or any other address announced by the Party in writing to the
other                Party) shall be deemed to have reached the addressee within 72 hours
from the                time it was sent and, if delivered by hand, at the time of
delivery thereof. Any                notice sent by facsimile shall be deemed to have
reached its destination within                one business day from the time of
transmission thereof. Notice to the Buyer will                be sent with a copy to Ehud
Arad, Attorney at Law, from the Yossi Avraham, Arad                & Co law office, 3
Daniel Frish Street, Tel Aviv (fax: 03-6963801) and                notices to the Seller
will be sent with a copy to Raphael Melman, Attorney at                Law, from the
Firon & Co law office, 16 Abba Hillel Silver Street, Ramat Gan                (fax:
03 – 7540011). 

- 34 -

And in witness whereof
the Parties have signed these presents  

		
	The Seller: 	The Buyer: 

	/s/ Irit Eluz

/s/ Yoram Firon 
——————————————

Ampal Industries Inc 	/s/ Yaheli Shefi

/s/ Daniel Vaknin
——————————————

The Phoenix Investment 
and Finance Company Ltd  	/s/ Yitzhak Meyuhas

/s/ Sharon Bar
——————————————

Golden Meybar
 (2007) Ltd 

I,
the undersigned, Raphael Melman, Adv, of 16 Abba Hillel Silver Street, Ramat Gan, hereby
confirm that the aforementioned Agreement was duly signed by Ampal Industries Inc
(“the Seller”) by means of Ms Irit Eluz and Mr. Yoram Firon, who were
authorized to sign the aforementioned Agreement in the name of the Seller, in accordance
with the Seller’s Articles of Incorporation. 

	/s/ Raphael Melman
——————————————

Raphael Melman, Adv.		

	 	
I,
the undersigned, Michal Noy, Adv, of 53 Derech Hashalom st., Givatayim, hereby confirm
that the aforementioned Agreement was duly signed by Phoenix Holdings Ltd(“the
Phoenix”) by means of Yaheli Shefi and Daniel Vaknin, who were authorized to sign
the aforementioned Agreement in the name of the Phoenix, in accordance with the Phoenix’s
Articles of Incorporation.  

	/s/ Michal Noy
——————————————

Michal Noy (Ginusar), Adv		

I,the undersigned, Yael Dayan, Adv,
of 38, Hamasger st., Tel Aviv, hereby confirm that the aforementioned Agreement was duly
signed by Golden Meybar 2007 Ltd (“Golden”) by means of Yitzhak Meyuhas and
Sharon Bar, who were authorized to sign the aforementioned Agreement in the name of
Golden, in accordance with Golden’s Articles of Incorporation.  

	/s/  Yael Dayan
——————————————

Yael Dayan, Adv		

- 35 -Exhibit 10.1

    
      

    

     

    Exhibit
      10.1

       

      WAIVER,
        CONSENT AND SECOND AMENDMENT
        TO TERM CREDIT AGREEMENT

      

       

      THIS
        WAIVER, CONSENT
        AND SECOND AMENDMENT
        TO TERM CREDIT AGREEMENT (this
        “Agreement”),
        is
        made and entered into as of August 7, 2007 (the “Effective
        Date”),
        by
        and among James River Coal Company, a corporation organized under the laws
        of
        Virginia (“JRCC”),
        and
        certain of JRCC’s Subsidiaries identified on the signature pages hereof, as
        borrowers (such Subsidiaries, together with JRCC, are referred to hereinafter
        each individually as a “Borrower”,
        and
        collectively, jointly and severally, as the “Borrowers”),
        and
        the other credit parties hereto, identified on the signature pages hereof
        as
        Guarantors (together, the Borrowers and Guarantors, the “Credit
        Parties”),
        the
        lenders party hereto from time to time (the “Lenders”),
        Morgan Stanley Senior Funding, Inc. (“MS”),
        a
        corporation formed under the laws of Delaware, as
        administrative agent for the Lenders (in such capacity, together with its
        successors and assigns, if any, the “Administrative
        Agent”)
        and as
        sole-bookrunner and lead arranger (in such capacity, the “Lead
        Arranger”),
        and
        Morgan Stanley & Co. Incorporated, as collateral agent for the Lenders (in
        such capacity, together with its successors and assigns, if any, the
“Collateral
        Agent”).
        

      

      W
        I T N E S S E T H:

       

      WHEREAS,
        the
        Borrowers, the other Credit Parties signatory thereto, the Lenders and L/C
        Issuers party thereto, and the Administrative Agent are parties to that certain
        Term Credit Agreement, dated as of February 26, 2007 (as amended, restated,
        supplemented and revised from time to time, the “Credit
        Agreement”),
        pursuant to which the Lenders have committed to make certain loans
        and
        other extensions of credit to the Borrowers upon the terms and conditions
        set
        forth therein; and

       

      WHEREAS, the
        Borrowers have requested that the Lenders make certain changes to the Credit
        Agreement and that the Lenders consent to certain actions of the Borrowers;
        and

       

      WHEREAS,
        the
        Lenders are willing, upon and subject to certain conditions, to amend the
        Credit
        Agreement in certain respects, all in accordance with and subject to the
        terms
        and conditions set forth herein.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises, the covenants and agreements contained herein,
        and other good and valuable consideration, the receipt and sufficiency of
        which
        are hereby acknowledged, the parties hereto do hereby agree that capitalized
        terms used herein and not otherwise defined herein shall have the meanings
        given
        to such terms in the Credit Agreement and as follows:

       

      1.     Waiver.
        The
        Administrative Agent and the undersigned Lenders, subject to the terms and
        conditions of this Agreement, including without limitation the conditions
        to
        effectiveness specified in Section
        8
        below,
        hereby waive any Default or Event of Default solely occurring by reason of
        the
        Borrower’s failure to comply with (a) the Minimum Consolidated EBITDA covenant
        set forth in Section
        10.01
        solely
        for the period ending on June 30, 2007 and (b) the Leverage Ratio covenant
        set
        forth in Section
        10.02
        solely
        for the period ending on June 30, 2007.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      2.    Consent.
        (a)
Subject
        to the limitations set forth in Section
        9.05(e)
        of the
        Credit Agreement (as amended hereby), the Required Lenders hereby consent
        to
        JRCC’s issuance and/or sale of shares of common stock in JRCC (the “Equity
        Issuance”)
        under
        the Registration Statement on Form S-3 filed by JRCC with the Securities
&
Exchange Commission on June 7, 2007 (the “Shelf
        Registration”). 

       

      (b)    The
        parties hereto further agree that notwithstanding Section 3.01 and Section
        3.02
        of the Credit Agreement and Section 3.01 and Section 3.02 of the Revolving
        Credit Agreement, at least fifty percent (50%) of the Net Offering Proceeds
        of
        any Equity Issuance shall be, upon receipt, segregated into a Cash Management
        Account and offered as a mandatory prepayment to the Term Lenders (the “Equity
        Repayment”). Any Term Lender may, in its discretion, notify the Borrower, in
        writing within ten (10) Business Days, that such Term Lender does not want
        to
        accept such Term Lender’s pro rata share of the Equity Repayment. In the event
        any Term Lender sends such a notice, such Term Lender’s pro rata share of the
        Equity Repayment may be retained by JRCC, or used by Borrowers for any corporate
        purpose (including, without limitation, to prepay, purchase or otherwise
        redeem
        the 9.375% Senior Notes due 2012); provided however,
        that no
        prepayment of Indebtedness, other than the Obligations under the Credit
        Agreement and the obligations under the Revolving Credit Agreement, shall
        be
        permitted if, after giving effect to such prepayment on a pro forma basis,
        any
        Default or Event of Default shall have occurred. Notwithstanding the above,
        no
        Equity Repayment shall be required in connection with up to an aggregate
        amount
        of $40,000,000 of the Net Offering Proceeds of any Equity Issuance occurring
        prior to March 30, 2008. 

       

      3.     Amendments
        to the Credit Agreement. 

       

      (a)    Section
        1.01
        of the
        Credit Agreement, Definitions,
        is
        hereby amended by adding the following definitions in the appropriate
        alphabetical order:

       

      “Disqualified
        Equity Interest”
means
        any Equity Interest which, by its terms (or by the terms of any security
        into
        which it is convertible or for which it is exchangeable), or upon the happening
        of any event, (a) matures (excluding any maturity as the result of an optional
        redemption by the issuer thereof) or is mandatorily redeemable, pursuant
        to a
        sinking fund obligation or otherwise, or is redeemable at the option of the
        holder thereof, in whole or in part, on or prior to the date six months after
        the earlier of the Maturity Date or the date that the Commitments and the
        Obligations hereunder are no longer outstanding, or (b) is convertible into
        or
        exchangeable (unless at the sole option of the issuer thereof) for (i) debt
        securities or (ii) any Equity Interest referred to in (a) above, in each
        case at
        any time on or prior to the date six months after the earlier of the Maturity
        Date or the date that the Commitments and the Obligations hereunder are no
        longer outstanding, or (c) contains any repurchase obligation which may come
        into effect prior to payment in full of all Obligations.

      

      “Mandated
        Capital Expenditures”
means
        the amount of any Capital Expenditures required to be made by the Credit
        Parties
        as the result of any law or regulation, directive, guideline or decision
        of any
        Governmental Authority (including without limitation the Mine Improvement
        and
        New Emergency Response Act of 2006 and MSHA safety initiatives implemented
        in
        2006 and 2007); provided that the aggregate amount of all such Capital
        Expenditures shall not exceed $5,000,000 within any consecutive period of
        twelve
        months. 

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      “Minimum
        Liquidity”
means
        cash and Cash Equivalents of the Credit Parties held in Cash Management Accounts
        plus
        Revolving Availability. 

      

      “Minimum
        Liquidity Threshold”
has
        the
        meaning ascribed to such term in Section 10.04.

      

      “Second
        Amendment Date”
means
        the effective date of the Waiver, Consent and Second Amendment to Term Credit
        Agreement dated as of August __, 2007.

      

      “Shelf
        Registration”
means
        that certain Registration Statement on Form S-3 filed by JRCC with the
        Securities & Exchange Commission on June 7, 2007. 

       

      (b) Section
        1.01 of the Credit Agreement, Definitions,
        is
        hereby amended by deleting the definitions of “Applicable
        Margin”,
        “Applicable
        Payment Fee”
and
        “Applicable
        Reduction Fee”
and
        substituting in lieu thereof the following:

      

      "Applicable
        Margin”
means,
        three and three quarter percentage points (3.75%) in the case of Base Rate
        Loans
        and four and three quarter percentage points (4.75%) in the case of LIBOR
        Rate
        Loans. 

      

      “Applicable
        Payment Fee”
means
        (a) on or prior to the 2nd
        anniversary of the Second Amendment Date, three percentage points, (b) on
        or prior to the 3rd
        anniversary of the Second Amendment Date, two percentage points, and
        (c) after the 3rd
        anniversary of the Second Amendment Date zero percentage points, in each,
        case,
        times the amount of the Term Loan B Loans being paid for any reason other
        than
        (i) payments from Excess Cash Flow under Section
        3.02(d)
        and
        (ii) payments from Net Casualty/Condemnation Proceeds under Section
        3.02(a).
        

       

      “Applicable
        Reduction Fee”
means
        (a) on or prior to the 2nd
        anniversary of the Second Amendment Date, three percentage points, (b) on
        or prior to the 3rd
        anniversary of the Second Amendment Date, two percentage points, and
        (c) after the 3rd
        anniversary of the Second Amendment Date zero percentage points, in each
        case
        times the amount of the Term Letter of Credit Commitment being reduced for
        any
        reason other than (i) reductions due to mandatory payments from Excess Cash
        Flow under Section
        3.02(d)
        or
        (ii) reductions due to mandatory payments from Net Casualty/Condemnation
        Proceeds under Section
        3.02(a).

       

      (c)     Section
        3.01
        of the
        Credit Agreement, Voluntary
        Prepayments/Reductions of the Commitments,
        is
        hereby amended by inserting
        the following as a new Section 3.01(d).

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      

        "Prepayment
          of Obligations. If the Borrower pays after acceleration or prepays all
          or any
          portion of the Obligations, whether voluntarily or involuntarily and whether
          before or after acceleration of the Obligations, the Borrower shall pay
          to the
          Administrative Agent, for the benefit of Lenders as liquidated damages
          and
          compensation for the costs of being prepared to make funds available hereunder
          an amount equal to the Applicable Prepayment Fee multiplied by the principal
          amount of the Obligations paid after acceleration or prepaid. The Credit
          Parties
          agree that the Applicable Prepayment Fee is a reasonable calculation of
          the
          Lenders' lost profits in view of the difficulties and impracticality of
          determining actual damages resulting from an early repayment of the Obligations.
          Notwithstanding anything contained hereunder, including but not limited
          to the
          provisions of Sections 3.01(a), 3.01(b) and 3.01(c), the Borrower shall
          not be
          permitted to make any voluntary prepayment of the Obligations or reduction
          in
          the Term Letter of Credit Commitments prior to the 1st anniversary of the
          Second
          Amendment Date."

      

       

      (d)    Section
        9.05
        of the
        Credit Agreement, Limitation
        on Issuance of Equity Interests,
        is
        hereby amended by deleting the word “or” following clause (c) thereof and
        inserting the following new clause (e) immediately following clause (d)
        thereof:

       

      “or
        (e)
        issuances of Equity Interests (other than Disqualified Equity Interests)
        consisting solely of common stock of JRCC, under the Shelf Registration to
        the
        holders of any Indebtedness in exchange for, or as a redemption or repayment
        of,
        any or all such Indebtedness.”

       

      (e)    Section
        9.15,
        Securities
        Accounts; Deposit Accounts,
        of the
        Credit Agreement is hereby amended by deleting such Section in its entirety
        and
        inserting the following in lieu thereof:

       

      “SECTION
        9.15 Securities
        Accounts; Deposit Accounts.
        Subject
        to the Security Agreement and except as permitted by SECTION 5.01(v), it
        shall
        not establish or maintain any Securities Account, Deposit Account or similar
        account unless the Collateral Agent shall have received a Control Agreement
        in
        respect of such Securities Account, Deposit Account or similar account;
provided that,
        this
        requirement shall not apply to (A) any Deposit Account with an average daily
        balance of less than $100,000, so long as the aggregate daily balances in
        all
        such accounts do not exceed $1,000,000, (B) any payroll, withholding tax
        or
        other fiduciary account or (C) any account for payment of workers compensation
        and employment claims. Each Credit Party shall comply in all material respects
        with the provisions of each Control Agreement to which it is a
        party.

       

      (f)    Section
        9.18,
        Minimum
        Revolver Availability Covenant.
        The
        Credit Agreement is hereby amended by inserting the following as a new Section
        9.18. 

       

      “It
        shall
        not permit Revolving Availability to be less than $10,000,000 at any time,
        unless and until Consolidated EBITDA for the twelve (12)-month period ended
        on
        the last date of any fiscal quarter ending on or after September 30, 2008
        as
        reported under Section 10.01 is greater than $75,000,000, from and after
        which
        date this Section 9.18 shall no longer apply.”

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (g)    Section
        10.01,
        Minimum
        Consolidated EBITDA,
        of the
        Credit Agreement is hereby amended by deleting such Section in its entirety
        and
        inserting the following in
        lieu
        thereof:

       

      “SECTION
        10.01    Minimum
        Consolidated EBITDA.
        The
        Credit Parties  shall
        not
        permit Consolidated EBITDA:

       

      (a)     for
        the
        nine (9) month period ending as of September 30, 2007 to be  less
        than
$19.0
        million,
        and

       

      (b)    for
        the
        twelve (12)-month period ending on any date set forth in the  table
        below to be less than the amount set forth opposite such date:

       

      

      
        	
                Measurement
                  Period Ending

                 

              	
                Consolidated
                  EBITDA

                 

              
	
                December 31,
                  2007

              	
                23.2

              
	
                March
                  31, 2008

              	
                24.1

              
	
                June
                  30, 2008

              	
                34.5

              
	
                September
                  30, 2008

              	
                40.4

              
	
                December 31,
                  2008

              	
                47.0

              
	
                March
                  31, 2009

              	
                54.1

              
	
                June
                  30, 2009

              	
                61.3

              
	
                September
                  30, 2009

              	
                72.2

              
	
                December 31,
                  2009

              	
                78.9

              
	
                March
                  31, 2010

              	
                78.9

              
	
                June
                  30, 2010

              	
                78.1

              
	
                September
                  30, 2010

              	
                76.5

              
	
                December 31,
                  2010

              	
                78.8

              

      

      

       

      (h)    Section
        10.02,
        Leverage
        Ratio,
        of the
        Credit Agreement is hereby amended by deleting such Section in its entirety
        and
        inserting the following in lieu thereof:

       

      “SECTION
        10.02     Leverage
        Ratio.
        The
        Credit Parties shall not permit  the
        Leverage Ratio for the Credit Parties as of any date set forth in the table
        below to be  greater
        than the amount set forth opposite such date:

       

      

      
        	
                Measurement
                  Period Ending

                 

              	
                Leverage
                  Ratio

                 

              
	
                September
                  30, 2007

              	
                4.5x

              
	
                December 31,
                  2007

              	
                4.9x

              
	
                March
                  31, 2008

              	
                5.0x

              

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      
        	
                Measurement
                  Period Ending

                 

              	
                Leverage
                  Ratio

                 

              
	
                June
                  30, 2008

              	
                3.6x

              
	
                September
                  30, 2008

              	
                3.0x

              
	
                December 31,
                  2008

              	
                2.6x

              
	
                March
                  31, 2009

              	
                2.2x

              
	
                June
                  30, 2009

              	
                2.0x

              
	
                September
                  30, 2009

              	
                1.7x

              
	
                December 31,
                  2009

              	
                1.5x

              
	
                March
                  31, 2010

              	
                1.5x

              
	
                June
                  30, 2010

              	
                1.5x

              
	
                September
                  30, 2010

              	
                1.6x

              
	
                December 31,
                  2010

              	
                1.5x

              

      

      

      (i)    Section
        10.03,
        Capital
        Expenditures,
        of the
        Credit Agreement is hereby amended by deleting such Section in its entirety
        and
        inserting the following in lieu thereof:

       

      “SECTION
        10.03     Capital
        Expenditures.
        The
        Credit Parties shall not make or agree to make any Capital Expenditure (other
        than Mandated Capital Expenditures) for the most recently ended Fiscal Year
        that
        would cause the aggregate amount of all such Capital Expenditures made by
        the
        Credit Parties to exceed the amount set forth opposite such Fiscal
        Year:

      

      
        	
                Fiscal
                  Year Ending

              	
                Capital
                  Expenditures (other than Mandated Capital
                  Expenditures)

              
	
                December 31,
                  2007

              	
                $56.1
                  million

              
	
                December 31,
                  2008

              	
                $56.1
                  million

              
	
                December
                  31, 2009 and each Fiscal Year thereafter

              	
                $66.0
                  million

              

      

      

      provided,
        however,
        to the
        extent that actual Capital Expenditures (exclusive of Mandated Capital
        Expenditures) for any Fiscal Year are less than the maximum amount set forth
        above for such Fiscal Year, such unused amount may be carried forward and
        used
        only in the next Fiscal Year (where it shall be deemed to be spent
        last).”

      

      (j)    Section
        10.04,
        Minimum
        Liquidity Threshold.
        The
        Credit Agreement is hereby amended by adding a new Section 10.04 as
        follows:

       

      “SECTION
        10.04    Minimum
        Liquidity Threshold.
        The
        Credit Parties shall not permit the Minimum Liquidity for the Credit Parties
        to
        be less than the amount set forth below (the “Minimum
        Liquidity Threshold”).

       

      
        	
                Measurement
                  Date

              	
                Minimum
                  Liquidity

              
	
                At
                  all times beginning from and after August 7, 2007 

              	
                $10
                  million

              
	
                On
                  December 31, 2007 

              	
                $25
                  million

              
	
                On
                  March 31, 2008 

              	
                $20
                  million

              
	
                At
                  all other times 

              	
                $10
                  million

              

      

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

      provided,
        however,
        that if
        as of the end of any fiscal quarter ended on or after September 30, 2008
        that
        the Credit Parties’ Consolidated EBITDA for the twelve (12)-month period ending
        on the most recent date set forth in Section 10.01 is more than $75,000,000,
        then from and after such date, the Credit Parties shall no longer be required
        to
        meet the Minimum Liquidity Threshold. 

      

      (k)    Section
        11.01(a),
        Failure
        to Make Payments When Due,
        of the
        Credit Agreement is hereby amended by deleting such Section in its entirety
        and
        inserting the following in lieu thereof:

       

      “SECTION
        11.01(a)    Failure
        to Make Payments When Due.
        The
        Borrowers shall fail to pay (i) any principal or interest when due, or
        (ii) any fees, Lender Expenses or any other monetary Obligation, and such
        failure shall continue for a period of three (3) Business Days after such
        amount
        was due (in each case, whether by scheduled maturity, required prepayment,
        acceleration, demand or otherwise, including, in each instance the Applicable
        Payment Fee and the Applicable Reduction Fee).”

       

      (l)    Section
        11.02,
        Remedies,
        is
        hereby amended by adding the following sentence at the end of such
        section:

       

      “For
        the
        avoidance of doubt, the parties agree that for purposes of determining the
        amount of the Obligations due and payable as of any date, the Applicable
        Reduction Fee and the Applicable Payment Fee shall be due and payable with
        any
        such reduction, termination, acceleration or exercise of remedies.”

       

      4.    Affirmation
        and Acknowledgment of the Borrowers.  The
        Borrowers hereby ratify and confirm all of their Obligations to the Lenders,
        including, without limitation, the Loans, and the Borrowers hereby affirm
        their
        absolute and unconditional promise to pay to the Lenders all indebtedness,
        obligations and liabilities in respect of the Loans, the Letters of Credit,
        and
        all other amounts due under the Credit Agreement and the other Loan Documents
        as
        amended hereby. The Borrowers hereby confirm that the Obligations are and
        remain
        secured pursuant to the Loan Documents and pursuant to all other instruments
        and
        documents executed and delivered by the Borrowers as security for the
        Obligations.

       

      5.    No
        Other Waivers, Amendments or Consents.

       

      Except
        for the waiver in Section
        1,
        the
        consents in Section
        2
        hereof
        and the amendments
        expressly set forth and referred to in Section
        3
        hereof,
        the Credit Agreement shall remain unchanged and in full force and effect.
        The
        waiver and consents contained herein shall not extend beyond the terms expressly
        set forth herein for such waiver and consents, nor impair any right or power
        accruing to the Administrative Agent or any Lender with respect to any other
        Default or Event of Default or any Default or Event of Default which occurs
        after the date hereof. Nothing in this Agreement is intended or shall be
        construed to be a novation of any Obligations or any part of the Credit
        Agreement or any of the other Loan Documents or to affect, modify or impair
        the
        continuity or perfection of the Administrative Agent’s Liens under the Credit
        Agreement and Loan Documents.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      6.    Representations,
        Warranties and Covenants.
        To
        induce the undersigned Lenders to enter into this Agreement, the Credit Parties
        hereby warrant, represent and covenant to and with to the Lenders and the
        Administrative Agent that:
        (a)
        this Agreement has been duly authorized, executed and delivered by the Credit
        Parties; (b) this Agreement and the Credit Agreement as amended hereby
        constitute legal, valid and binding obligations of the Credit Parties,
        enforceable in accordance with their respective terms; (c) after giving effect
        to this Agreement, no Default or Event of Default has occurred and is continuing
        as of this date; (d) no approval or consent of, or filing with, any governmental
        agency or authority is required to make valid and legally binding the execution,
        delivery or performance by the Credit Parties of this Agreement or the Credit
        Agreement as amended hereby; and (e) after giving effect to this Agreement,
        all
        of the representations and warranties made by the Credit Parties in the Credit
        Agreement are true and correct in all material respects on and as of the
        date of
        this Agreement (except to the extent that any such representations or warranties
        expressly referred to a specific prior date and except for changes therein
        expressly permitted or expressly contemplated by the Credit Agreement or
        the
        other Loan Documents). Any breach by the Credit Parties of any of its
        representations, warranties and covenants contained in this Section
        7
        shall be
        an Event of Default under the Credit Agreement.

       

      8.    Conditions
        to Effectiveness.
        This
        Agreement shall not become effective unless and until the Administrative
        Agent
        has received (a) payment from the Borrowers of an amendment fee in an amount
        equal to 0.125% times
        the
        Commitments, (b) one or more counterparts of this Agreement, duly executed,
        completed and delivered by the Borrowers, the other Credit Parties and the
        Required Lenders and (c) a fully-executed amendment to the Revolving Credit
        Agreement, in the form attached hereto as Exhibit A.

       

      9.    Reimbursement
        of Expenses.
        The
        Borrowers hereby agree to reimburse the Administrative Agent on demand for
        all
        reasonable fees and reasonable out-of-pocket costs and expenses (including
        without limitation the reasonable and actual fees and expenses of its counsel)
        incurred by the Administrative Agent in connection with the negotiation,
        documentation and consummation of this Agreement and the other documents
        executed in connection herewith and the transactions contemplated
        hereby.

       

      10.       
        Governing
        Law.
        THIS
        AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
        OF
        THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID
        STATE
        AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

       

      11.       
        Severability
        of Provisions.
        Any
        provision of this Agreement which is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof or affecting the validity or enforceability of such provision
        in any other jurisdiction. To the extent permitted by applicable law, the
        Borrowers hereby waive any provision of law that renders any provision hereof
        prohibited or unenforceable in any respect.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

       

      12.       
        Counterparts.
        This
        Agreement may be executed in any number of several counterparts, all of which
        shall be deemed to constitute but one original and shall be binding upon
        all
        parties, their successors and permitted assigns. Delivery of an executed
        signature page of this Agreement by facsimile transmission or electronic
        transmission shall be as effective as delivery of a manually executed
        counterpart hereof.

       

      13.      
        Entire
        Agreement.
        The
        Credit Agreement as amended through this Agreement embodies the entire agreement
        between the parties hereto relating to the subject matter thereof and supersedes
        all prior agreements, representations and understandings, if any, relating
        to
        the subject matter thereof. 

       

      14.       
        No
        Strict Construction.
        The
        parties hereto have participated jointly in the negotiation and drafting
        of
        this
        Agreement.
        In the
        event an ambiguity or question of intent or interpretation arises, this
Agreement
        shall be
        construed as if drafted jointly by the parties hereto and no presumption
        or
        burden of proof shall arise favoring or disfavoring any party by virtue of
        the
        authorship of any provisions of this Agreement.

       

      15.       
        No
        Third Party Reliance.
        This
        Agreement is solely for the benefit of the parties signatory hereto, their
        successors and permitted assigns. No waiver, consent or amendment pursuant
        to
        this Agreement may be relied upon by any third parties. 

       

      16.        
        Release.
        The
        Credit Parties hereby remise, release, acquit, satisfy and forever discharge
        the
        Lenders, the Administrative Agent, the Collateral Agent, and the L/C Issuer
        and
        their respective agents, employees, officers, directors, predecessors, attorneys
        and all others acting or purporting to act on behalf of or at the direction
        of
        the Lenders, the Administrative Agent, the Collateral Agent, or the L/C Issuer
        of and from any and all manner of actions, causes of action, suit, debts,
        accounts, covenants, contracts, controversies, agreements, variances, damages,
        judgments, claims and demands whatsoever, in law or in equity, which any
        of such
        parties ever had or now has against the Lenders, the Administrative Agent,
        the
        Collateral Agent, and the L/C Issuer their respective agents, employees,
        officers, directors, attorneys and all persons acting or purporting to act
        on
        behalf of or at the direction of the Lenders or the Administrative Agent
        (“Releasees”),
        for,
        upon or by reason of any matter, cause or thing whatsoever arising from,
        in
        connection with or in relation to the Credit Agreement or any of the other
        Loan
        Documents (including this Agreement) through the date hereof. Without limiting
        the generality of the foregoing, the Credit Parties waive and affirmatively
        agree not to allege or otherwise pursue any defenses, affirmative defenses,
        counterclaims, claims, causes of action, setoffs or other rights they do,
        shall
        or may have as of the date hereof, including, but not limited to, the rights
        to
        contest any conduct of the Lenders, Administrative Agent or other Releasees
        on
        or prior to the date hereof.

       

      

      

      [Remainder
        of page intentionally blank; next page is signature page] 

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        the
        parties have caused this Consent and Second Amendment to Revolving Credit
        Agreement to be duly executed by their respective officers or representatives
        thereunto duly authorized, as of the date first above written.

       

      

       

      
        	 	
                BORROWERS:

                 

              
	 	
                JAMES
                  RIVER COAL COMPANY

                 

              
	 	
                By:
                   /s/ Peter T.
                  Socha                                   
                  

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title: 
                  CEO

                 

              
	 	
                JAMES
                  RIVER COAL SERVICE COMPANY

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                LEECO,
                  INC.

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                TRIAD
                  MINING, INC.

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              

      

      
        
          JAMES
            RIVER COAL COMPANY

          WAIVER,
            CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

          SIGNATURE
            PAGE

          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      
        	 	
                 

                 

                TRIAD
                  UNDERGROUND MINING, LLC

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  Member

                 

              
	 	
                BLEDSOE
                  COAL CORPORATION

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                JOHNS
                  CREEK ELKHORN COAL CORPORATION

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                JAMES
                  RIVER COAL SALES, INC.

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                BLEDSOE
                  COAL LEASING COMPANY

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              

      

      

      
        
          

          JAMES
            RIVER COAL COMPANY

          WAIVER,
            CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

          SIGNATURE
            PAGE

          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      
        	 	
                BLUE
                  DIAMOND COAL COMPANY

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                MCCOY
                  ELKHORN COAL CORPORATION

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	 
	 	
                GUARANTORS:

                 

              
	 	
                BDCC
                  HOLDING COMPANY, INC.

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                EOLIA
                  RESOURCES, INC.

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              

      

      
        
          

          JAMES
            RIVER COAL COMPANY

          WAIVER,
            CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

          SIGNATURE
            PAGE

          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      
        	 	
                SHAMROCK
                  COAL COMPANY, INCORPORATED

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                JOHNS
                  CREEK COAL COMPANY

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              
	 	
                JOHNS
                  CREEK PROCESSING COMPANY

                 

              
	 	
                
                  By:
                     /s/ Peter T.
                    Socha                                   
                    

                

              
	 	
                Name:
                  Peter T. Socha

              
	 	
                Title:
                  CEO

                 

              

      

      
        
          

          JAMES
            RIVER COAL COMPANY

          WAIVER,
            CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

          SIGNATURE
            PAGE

          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      
        	 	
                LENDER:

                 

                MORGAN
                  STANLEY SENIOR FUNDING, INC.

                 

              
	 	
                _________________________________________

                 

              
	 	
                By:  
                  /s/ Gavin
                  Balera                                                   
                  

              
	 	
                Name: 
                  Gavin Balera

              
	 	
                Title: 
                  Authorized Signatory

                 

              
	 	
                COLLATERAL
                  AGENT

                 

              
	 	
                MORGAN
                  STANLEY & CO. INCORPORATED

                 

              
	 	
                
                  By:  
                    /s/ Gavin
                    Balera                                                   
                    

                

              
	 	
                Name:
                  Gavin Balera

              
	 	
                Title:
                  Authorized Signatory

                 

              
	 	 

      

      

      
        
          

          JAMES
            RIVER COAL COMPANY

          WAIVER,
            CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

          SIGNATURE
            PAGE

          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      

      
        	 	
                LENDER:

                 

              
	 	
                 
                  Sandelman Finance 2006-1, Ltd.

                 

              
	 	
                By:  
                  /s/ Michael Pascutti

              
	 	
                Name:
                  Michael Pascutti

              
	 	
                Title: 
                  Head of Relative Value

                 

              

      

      

      

       

      

       

      

       

       

       

       

       

       

       

      

        
          
            

            JAMES
              RIVER COAL COMPANY

            WAIVER,
              CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

            SIGNATURE
              PAGE

            
            

          

          
            15

            
              

            

          

          
            
            

          

        

      

        

        
          	 	
                  LENDER:

                   

                
	 	
                   
                    Sandelman Finance 2006-2, Ltd.

                   

                
	 	
                  By:  
                    /s/ Michael Pascutti

                
	 	
                  Name:
                    Michael Pascutti

                
	 	
                  Title: 
                    Head of Relative Value

                   

                

        

        

         

        
           

          

            
              
                

                JAMES
                  RIVER COAL COMPANY

                WAIVER,
                  CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

                SIGNATURE
                  PAGE

                
                

              

              
                15

                
                  

                

              

              
                
                

              

            

        

         

        
          

            

            
              	 	
                      LENDER:

                       

                    
	 	
                       
                        Trilogy Portfolio Company.

                       

                    
	 	
                      By:  
                        /s/ Paul Girechbera

                    
	 	
                      Name:
                        Paul S. Girechbera

                    
	 	
                      Title: 
                        Principal

                       

                    

            

            

            

             

           

           

          
             

             

             

            

              
                
                  

                  JAMES
                    RIVER COAL COMPANY

                  WAIVER,
                    CONSENT AND SECOND AMENDMENT TO TERM CREDIT AGREEMENT

                  SIGNATURE
                    PAGE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]