Document:

Exhibit 4.9

 

B.
Communications Ltd. Indenture for Debentures (Series C)

 

Table of Contents

 

	Section No.	 	Subject	 	Page
    No.
	1.	 	Preamble;
    Interpretation; Definitions	 	2
	 	 	 	 	 
	2.	 	General	 	5
	 	 	 	 	 
	3.	 	Issuance
of Debentures
	 	6
	 	 	 	 	 
	4.	 	Purchase
of Debentures by Company and/or Affiliated Holder
	 	10
	 	 	 	 	 
	5.	 	Company’s
Undertakings
	 	10
	 	 	 	 	 
	6.	 	Collateral
	 	21
	 	 	 	 	 
	7.	 	Use
of Proceeds from Issuance
	 	23
	 	 	 	 	 
	8.	 	Order
of Priority
	 	27
	 	 	 	 	 
	9.	 	Right
    to Immediate Repayment and/or Realization of Collateral	 	27
	 	 	 	 	 
	10.	 	Claims
and Proceedings by the Trustee
	 	32
	 	 	 	 	 
	11.	 	Trust
    for Proceeds	 	33
	 	 	 	 	 
	12.	 	Authority
to Demand Financing
	 	34
	 	 	 	 	 
	13.	 	Authority
to Delay Distribution of Funds
	 	34
	 	 	 	 	 
	14.	 	Notice
of Distribution; Non-Payment for Reasons Beyond the Company’s Control; Deposit with Trustee
	 	35
	 	 	 	 	 
	15.	 	Receipt
from Debenture Holders and Trustee
	 	37
	 	 	 	 	 
	16.	 	Presentation
    of Debenture to Trustee and Recording a Partial Payment	 	37
	 	 	 	 	 
	17.	 	Investment
of Funds
	 	37
	 	 	 	 	 
	18.	 	Company’s
Undertakings Towards Trustee
	 	38
	 	 	 	 	 
	19.	 	Additional
Undertakings
	 	40
	 	 	 	 	 
	20.	 	Reporting
by the Trustee
	 	40
	 	 	 	 	 
	21.	 	Trustee’s
    Fee 	 	41
	 	 	 	 	 
	22.	 	Trustee’s
Powers
	 	43
	 	 	 	 	 
	23.	 	Trustee’s
Authority to Engage Agents
	 	44

 

     

     

    

 

	24.	 	Indemnification
of Trustee
	 	45
	 	 	 	 	 
	25.	 	Notices
    	 	49
	 	 	 	 	 
	26.	 	Changes
to Terms of Debentures, Indenture
	 	50
	 	 	 	 	 
	27.	 	Register
of Debenture Holders
	 	51
	 	 	 	 	 
	28.	 	Certificates;
Splitting of Certificates
	 	51
	 	 	 	 	 
	29.	 	Reporting
to Trustee
	 	52
	 	 	 	 	 
	30.	 	Attorneys-in-Fact
	 	53
	 	 	 	 	 
	31.	 	Applicability
of Securities Law
	 	53
	 	 	 	 	 
	32.	 	Meetings
of Debenture Holders
	 	53
	 	 	 	 	 
	33.	 	Contradiction
between the Provisions of the Indenture, the Prospectus and the Shelf Offering Report
	 	53
	 	 	 	 	 
	34.	 	General	 	54
	 	 	 	 	 
	35.	 	Trustee’s
Liability
	 	54
	 	 	 	 	 
	36.	 	Other
Agreements
	 	54
	 	 	 	 	 
	37.	 	Addresses	 	54
	 	 	 	 	 
	38.	 	Applicable
Law and Exclusive Jurisdiction
	 	54
	 	 	 	 	 
	39.	 	MAGNA
    Certification	 	55

 

     

     

    

 

Indenture

 

For
Debentures (Series C)

 

Dated
September 14, 2016

 

By
and between

 

B.
Communications Ltd.

Located
at 2 Dov Friedman Street, Ramat Gan

Tel:
03-9240000

Fax:
03-7530075

(Hereinafter,
the “Company”)

Of
the first part;

 

And

 

Reznik
Paz Nevo Trusts Ltd.

Company
No. 51-368347-4

Located
at 14 Yad Harutzim Street, Tel Aviv

(Hereinafter,
the “Trustee”)

 

Of
the second part;

 

WHEREAS,
on August 28, 2016, the Board of Directors of the Company approved the publication of a shelf prospectus (hereinafter, the “Prospectus”
or “Shelf Prospectus”) pursuant to which the Company is to issue, in the context, inter alia, of shelf
prospectus reports, Debentures (Series C) non-convertible into Company shares (hereinafter, the “Debentures”);
and

 

WHEREAS,
Midroog Ltd. has announced a rating of Aa3 for the issuance of the Company’s Debentures in an aggregate of up to NIS 1.9
billion par value; and

 

WHEREAS,
the Trustee is a company limited by shares and lawfully incorporated in Israel, whose objective is to engage in trusts; and

 

WHEREAS,
the Trustee declares that no preclusion exists under the Law (as defined below) or other law to contract with the Company under
this Indenture, including with respect to conflicts of interest preventing such engagement with the Company, and that it complies
with the qualification requirements and conditions provided in the Law (as defined below) to serve as a trustee under this Indenture;
and

 

WHEREAS,
the Trustee has no material interest in the Company and the Company has no personal interest in the Trustee; and

 

WHEREAS,
the Company declares that no preclusion exists under any applicable law and/or agreement to issue the Debentures, and to contract
with the Trustee under this Indenture; and

 

    	 	1	 

     

    

 

WHEREAS,
the Company has requested that the Trustee serve, subject to the issuance of the Debentures (Series C), as trustee to holders
of the Debentures (Series C) to be issued in this context, and the Trustee has agreed thereto, all subject to and in accordance
with the terms of this Indenture, and no preclusion exists under applicable law and/or agreement for the Company to issue the
Debentures (Series C), and all approvals for the issuance of the Debentures (Series C) have been received, all except as detailed
in the shelf prospectus report to be published by the Company, as aforementioned; and

 

WHEREAS,
the Trustee has agreed to execute this Indenture and to act as trustee to the Debenture holders; and

 

WHEREAS,
the parties wish to set forth the terms of the Debentures (Series C) in this Indenture, in light of the Company’s intention
to offer the Debentures (Series C) to the public for the first time, in accordance with the Shelf Prospectus, as shall be detailed
in the shelf prospectus report to be published by the Company (hereinafter, the “Shelf Prospectus Report”)
such that this Indenture shall apply with respect to the Debentures (Series C) only;

 

NOW,
THEREFORE, the parties stipulate and agree as follows:

 

	1.	Preamble;
                                         Interpretation; Definitions 

 

		1.1.	The
                                         preamble of this Indenture and the annexes and schedules hereto constitute an integral
                                         part hereof.

 

		1.2.	The
                                         sections and headings of this Indenture are for convenience and reference only, and are
                                         not to be considered for purposes of interpretation.

 

		1.3.	Any
                                         statement in this Indenture in the plural includes the singular, and vice versa. Any
                                         statement in the male gender includes the female gender and vice versa. Any statement
                                         with respect to a person includes corporate entities, all unless this Indenture contains
                                         an explicit and/or implicit provision to the contrary and/or if the context or contents
                                         dictate otherwise.

 

		1.4.	In
                                         the event of a contradiction between the Indenture and the accompanying documents and
                                         the provisions of the Shelf Prospectus, the provisions of the Indenture shall prevail,
                                         subject to the TASE Rules and Regulations.

 

    	 	2	 

     

    

 

		1.5.	In
                                         this Indenture, the following terms shall have the meanings set forth below unless the
                                         context or contents dictate otherwise:

 

	“The
    Company” -	B.
                                                                                                                                                                                                 Communications Ltd.;

         

	“Bezeq”
    -	Bezeq
    the Israel Telecommunication Corp. Ltd., Public Company No. 520031931;
	“This
    Indenture” or “Indenture” -	This
        Indenture and the amendments hereto, if any, including the annexes and schedules attached hereto and forming an integral
        part hereof;

         

	“Trustee”
    -	The
    Trustee designated in the heading of this Indenture and/or any person serving from time to time as a trustee for the Debenture
    Holders under this Indenture.
	“Prospectus”
    or “Shelf Prospectus” -	The
    Company’s Shelf Prospectus published in August 2016;
	“Offering
    Report” or “Shelf Offering Report” - 	The
    offering report in accordance with Section 23A of the Law (as defined below), which shall include all the details required
    for the Debentures (Series C) offering, including the structure of the offered units, in accordance with the provisions of
    applicable law and the TASE Rules and Regulations in effect at the time;
	“Investee
    Company” -	As
    such term is defined in the Securities Regulations (Annual Financial Statements), 5770-2010;
	“Companies
    Law” -	The
        Companies Law, 5759-1999 and the amendments promulgated thereunder from time to time;

         

	“Law”
    or “Securities Law” - 	The
        Securities Law, 5728-1968 and the amendments promulgated thereunder from time to time;

         

	“Register”
    -	Register
        of Debenture Holders, as provided in Section 35H2 of the Law and as set forth in Section 26 of this Indenture.

         

	“TASE”-	The
    Tel Aviv Stock Exchange Ltd.
	“Principal”
    -	The
    total nominal value of the Debentures (Series C).
	“Ordinary
    Resolution” -	A
        resolution adopted at a General Meeting of the Debenture holders at which holders of Debentures with at least twenty-five
        percent (25%) of the balance of the nominal value of the Debentures (Series C) in circulation were present, in person
        or by proxy, or at such an adjourned meeting at which any number of participants were present, and which was adopted (whether
        at the original or adjourned meeting) by a simple majority of the participating votes, without abstaining votes;

         

	“Special
    Resolution” -	A
        resolution adopted at a General Meeting of Debenture holders at which holders of Debentures with at least fifty percent
        (50%) of the balance of the nominal value of the Debentures (Series C) in circulation were present, in person or by proxy,
        or at such an adjourned meeting at which holders of at least twenty percent (20%) of such balance were present, and which
        was adopted (whether at the original or adjourned meeting) by a majority of holders of at least two-thirds of the balance
        of the nominal value of the Debentures represented at the vote, with the exception of abstaining votes which will not
        be taken into account in the number of votes cast;

         

 

    	 	3	 

     

    

 

	“Nominee
    Company” -	The
        Nominee Company of Bank Hapoalim Ltd. or another nominee company in its place, at the Company’s sole discretion,
        provided that all of the Company’s securities shall be registered in the name of such nominee company;

         

	“Debenture
    Series” or “Series C” or “Debentures”	The
        registered Debenture series to be called Debentures (Series C) of the Company, whose terms shall be in accordance with
        the Debenture (Series C) certificate and the initial Offering Report of the Debentures (Series C) to be issued from time
        to time by the Company at its sole discretion;

         

	“Debenture
        Holders” and/or “Debenture Owners” and/or “Holders” –

         
	As
    the term “Holder,” “Debenture Holder” is defined in the Securities Law;
	“Trading
        Day” –

         
	A
    day on which trading takes place on TASE.
	“Stock
    Exchange Clearing House” - 	The
    Tel Aviv Stock Exchange Clearing House Ltd.;
	“B.
        Communications” -

         
	B.
        Communications (SP2) Ltd., Private Company No. 514405398; a wholly-owned subsidiary of the Company (through B. Communications
        (SP1) Ltd., Private Company No. 514405414, (hereinafter, “B. Communications 1”) a direct wholly-owned
        subsidiary of the Company, which directly wholly owns B. Communications). The Company notes that as of the execution of
        this Indenture, all of Bezeq’s shares held by B. Communications were registered in the name of Mishmeret Trust Services
        Company Ltd. trustee for the International Debentures, as defined below (hereinafter, the “Trustee for the International
        Debentures”) in accordance with the terms of the International Debentures;

         

	“International
    Debentures” -	Debentures
    Dollar Series 144A (TASE Security No.: 1131226) issued by the Company.

 

    	 	4	 

     

    

 

	2.	General
                                         

 

		2.1.	Appointment
                                         of Trustee

 

		2.1.1.	The
                                         Company hereby appoints the Trustee as the first trustee for the Debenture Holders (Series
                                         C) under Chapter E1 of the Securities Law, including for those eligible for payments
                                         under the Debentures that were not paid after becoming due and payable.

 

		2.1.2.	In
                                         the event that the Trustee is replaced by another trustee, the alternate trustee shall
                                         serve as trustee for the Debenture Holders pursuant to Chapter E1 of the Securities Law,
                                         including for those eligible for payment under the Debentures which were not paid after
                                         becoming due and payable.

 

		2.1.3.	Effective
                                         date of position:

 

The
trust for the Debenture Holders and the Trustee’s duties under the terms of this Indenture shall come into effect on the date
of issuance of the Debentures under this Indenture by the Company.

 

	 	2.2.	Term
                                         of position; expiration of term; resignation; dismissal 

 

	 	2.2.1.	The
                                         first trustee shall serve as of the date stated in Section 2.1 above and its position
                                         shall end on the date of convening of a Holders’ Meeting (hereinafter, “First
                                         Appointment Meeting”) which the Trustee shall convene no later than 14 days
                                         from the date of submittal of the annual report on the affairs of the trust, pursuant
                                         to Section 35H1(a) of the Law. To the extent the First Appointment Meeting approves (by
                                         a simple majority) the continued tenure of the first trustee, the first trustee shall
                                         continue to serve as trustee until the end of the additional appointment term determined
                                         in the resolution of the First Appointment Meeting (which may be until the date of the
                                         final payment of the Debentures).
	 	 	 
	 	2.2.2.	To
                                         the extent the First Appointment Meeting and/or later meeting limit the Trustee’s
                                         additional appointment term, the Trustee’s term of appointment shall conclude upon
                                         the adoption of a resolution by the Holders to continue the Trustee’s term and/or
                                         the appointment of another trustee in lieu thereof.
	 	 	 
	 	2.2.3.	Notwithstanding
                                         the provisions of this Section 2, the appointment, replacement, term, expiration of term,
                                         resignation and dismissal of the Trustee shall be governed by the provisions of the Law.
	 	 	 
	 	2.2.4.	Notwithstanding
                                         the foregoing, a resolution to dismiss the Trustee shall be adopted at a Meeting in which
                                         [Debenture] Holders holding at least fifty percent (50%) of the balance of the nominal
                                         value of the Debentures in circulation (Series C) at the appointed date of the Meeting
                                         are present, in person or by proxy, or at an adjourned meeting in which [Debenture] Holders
                                         of at least ten percent (10%) of such balance are present, in person or by proxy, by
                                         a majority of at least 75% of those participating in the vote, not including abstaining
                                         votes.

 

    	 	5	 

     

    

 

	 	2.3.	The
                                         Trustee’s duties shall be in accordance with applicable law and this Indenture.
	 	 	 
	 	2.4.	Nothing
                                         in the Trustee’s execution of this Indenture is an expression thereby of the nature of
                                         the securities offered or the worthiness of investing therein.
	 	 	 
	 	2.5.	The
                                         Trustee shall represent the Debenture Holders on any matter arising from the Company’s
                                         undertakings towards them, and shall be entitled, to such end, to exercise the rights
                                         afforded to Holders under the Law or this Indenture. The Trustee may institute any proceeding
                                         to protect the rights of the Holders in accordance with applicable law and the provisions
                                         of this Indenture. Subject to the provisions of applicable law, the Trustee shall not
                                         be required to notify any party of the execution of this Indenture.
	 	 	 
	 	2.6.	Subject
                                         to the provisions of applicable law, the Trustee is not required to act in any manner
                                         not explicitly stated herein, such that it is not required to ensure that it is informed
                                         of any information, including information about the Company and/or in connection with
                                         the Company’s ability to fulfill its undertakings towards the Debenture Holders.
	 	 	 
	 	2.7.	Subject
                                         to the provisions of applicable law and the provisions of this Indenture, the Trustee
                                         undertakes, upon executing this Indenture, to keep confidential any information it receives
                                         from the Company and/or an affiliated company and/or any party on their behalf (hereinafter,
                                         the “Information”) and not to disclose it to any other party or use
                                         it, unless such disclosure or use is required in order to perform the duties of its position
                                         under the Securities Law, in accordance with the Indenture or a court order. It is hereby
                                         clarified that the transmittal of the Information to Holders of the Debentures (Series
                                         C), including by means of public publication for the purpose a decision pertaining to
                                         their rights under the Debenture or for the purpose of reporting on the state of the
                                         Company, shall not constitute a breach of such confidentiality undertaking. The confidentiality
                                         undertaking hereinabove shall apply to any agent of the Trustee and to any consultant
                                         appointed thereby.
	 	 	 
	 	2.8.	The
                                         Trustee may rely, in the context of its capacity as Trustee, upon any written document,
                                         instructions, notice, request, understanding or approval which is presumably signed or
                                         issued by any individual or entity believed by it, in good faith, to have been signed
                                         or issued thereby.
	 	 	 
	 	2.9.	The
                                         Trustee shall provide the Company with written notice of any change in the Trustee’s
                                         contact details within 7 business days of such change.
	 	 	 
	 	2.10.	It
                                         is clarified that nothing in the termination of the Trustee’s term will derogate from
                                         the rights, claims or disputes which the Company and/or Holders of the Debentures (Series
                                         C) may have against the Trustee, for a cause of action that existed prior to the date
                                         of termination of its term as Trustee, and the foregoing does not release the Trustee
                                         from any liability under applicable law. Furthermore, nothing in the termination of the
                                         Trustee’s term shall derogate from any rights, claims or disputes which the Trustee has
                                         against the Company and/or the Debenture Holders, if at all, whose cause of action existed
                                         prior to the date of termination of its term as Trustee, and nothing in the foregoing
                                         releases the Company and/or the Debenture Holders from any liability under applicable
                                         law.

 

	3.	Issuance
                                         of Debentures

 

	 	3.1.	General

 

		3.1.1.	The
                                         Company intends to issue, in accordance with the Shelf Offering Report, registered Debentures
                                         (Series C) par value NIS 1 each (hereinafter, the “Debentures (Series C)”).
                                         The principal of the Debentures (Series C) shall be payable in five installments, as
                                         follows: (a) Four equal installments, each at 7.5% of the principal of the Debentures
                                         (Series C), payable on November 30 of each of the years 2020 to 2023 (inclusive); (b)
                                         One installment at 70% of the principal of the Debentures (Series C), payable on November
                                         30, 2024.
	 	 	 
		3.1.2.	The
                                         Debentures (Series C) shall bear annual interest at a fixed rate to be determined in
                                         an interest-rate auction, which shall not exceed the maximum interest rate determined
                                         in the Offering Report. Interest on the outstanding balance, as it may be from time to
                                         time, of the principal amount of the Debentures (Series C) shall be paid as of May 2017,
                                         bi-annually on May 31 and November 30 of each of the years 2017 to 2024, such that the
                                         first payment of interest shall be made on May 31, 2017 and the last payment shall be
                                         made on November 30, 2024.

 

Interest
shall be paid for the six-month period ending on the relevant interest payment date, with the exception of the first interest
period, which shall be made on May 31, 2017 and shall be paid for the period commencing on the first Trading Day after the day
of the auction in which the Debentures (Series C) are offered to the public and ending on the aforementioned payment date, which
shall be paid in accordance with the interest determined in the auction and calculated on the basis of 365 days in a year.

 

		3.1.3.	The
                                         principal amount of the Debentures (Series C) and the interest thereon shall not be linked
                                         to any currency or index.

 

		3.1.4.	Arrears
                                         interest: any payment on account of principal and/or interest that is made in arrears
                                         for a period exceeding seven (7) business days from the scheduled date for payment under
                                         the terms of the Debentures, for reasons depending on the Company, shall bear arrears
                                         interest as of the scheduled payment date and up to the actual payment date. In this
                                         respect, “Arrears Interest” means additional interest at an annual
                                         rate exceeding by 3% the interest on the Debentures at the relevant time, calculated
                                         pro rata for the period from the scheduled payment date to the actual payment date. In
                                         the event that Arrears Interest is paid, the Company shall give immediate notice of the
                                         Arrears Interest rate and the interest rate to be paid, which includes the interest bearing
                                         on the Debentures together with the Arrears Interest, and of the payment date of the
                                         total interest for such period, at least two (2) Trading Days prior to such payment.

 

    	 	6	 

     

    

 

		3.1.5.	In
                                         the event that after the initial issuance of the Debentures (Series C) the Debenture
                                         series is expanded by the Company, holders of such Debentures (Series C), which are issued
                                         as part of the expansion of the series, shall not be entitled to payment on account of
                                         the principal and/or interest on such Debentures, whose scheduled payment dates occur
                                         prior to their aforementioned date of issuance.

 

		3.1.6.	With
                                         respect to the Company’s right to early redemption of the Debentures (Series C),
                                         see Section 9 of the Terms on the Reverse Side. 

 

	 	3.2.	Issuance
                                         of additional Debentures and expansion of series; leverage restriction

 

		3.2.1.	The
                                         Company reserves the right to issue additional series of debentures and/or to expand
                                         the Debentures (Series B) series at any time (whether by private placement or public
                                         offering), at its sole discretion and without requiring the consent of the Trustee and/or
                                         debenture holders (provided that a notice thereof is given to the Trustee, as set forth
                                         below) and subject to fulfillment of the terms below:

 

A1.
With respect to issuances of additional Debentures (Series B) of the Company, the scope of additional issuances (in the aggregate)
shall not exceed an additional NIS 100 million par value beyond the scope of the Debentures (Series B) as of the date of execution
of this Indenture (as of such date, the Series has a par value of NIS 677,350,000); A2. With respect to issuances of new
debenture series (including the expansion of such new debenture series) – the duration terms of such series shall be longer
than the duration terms of the Debentures (Series C) in effect on the date of issuance of such series; their final repayment date
shall occur after the final repayment date of the Debentures (Series C), and the new debenture series shall not be secured by
any collateral and shall not have priority over the Debentures (Series C) in creditor ranking upon insolvency. Except as stated
above, the Company may issue new debenture series on such terms as it may determine.

 

The
expansion of the Debentures (Series B), the issuance of new series and the expansion of the new series shall hereinafter jointly
be called, the “Additional Issuance.”

 

B.
The aggregate scope of: (1) the par value of all series of the Company’s debentures does not include the total par value
of the Debentures (Series C) in circulation with the addition of (2) the total par value of the Debentures (Series C) issued beyond
the amount of NIS 1,900,000,000 par value of the Debentures (Series C), to the extent issued, shall not exceed NIS 1,177,350,000
par value.

 

Prior
to the date of the Additional Issuance, the Company shall furnish the Trustee with approval by the senior financial officer of
the Company of its fulfillment of the aforementioned conditions.

 

    	 	7	 

     

    

 

		3.2.2.	The
                                         Company may expand the Debentures (Series C) at any time, at its sole discretion, provided
                                         that:

 

(1)    
The aggregate scope of the Debentures (Series C) shall not exceed NIS 2,300,000,000 par value (hereinafter, the “Maximum
Sum of Series C”). Notwithstanding the foregoing, to the extent the Company assumes additional financial debt as set
forth in Section 5.3 below, the maximum sum of the series shall be reduced in accordance with the principal amount of the additional
financial debt;

 

(2)    
No grounds exist for demanding the immediate repayment of the Debentures (including as a result of such expansion);

 

(3)    
An expansion of the Debentures (Series C) will not affect the rating of the expanded debentures series after the series is
expanded, as it was prior to the expansion of the debenture series;

 

(4)    
After the series is expanded, in accordance with the last financial statements published by the Company prior to the date
of the expansion, the Company meets all the financial covenants provided in Section 5.5 below;

 

(5)    
The aggregate sum of: (1) the par value of all the debenture series of the Company, not including the total par value of the
Debentures (Series C) in circulation, together with (2) the total par value of the Debentures (Series C) issued beyond the amount
of NIS 1,900,000,000 par value of the Debentures (Series C), to the extent issued; and together with (3) the total par value of
the Debentures (Series C) issued as part of such series expansion, shall not exceed NIS 1,177,350,000 par value.

 

In
the event of a series expansion, as aforementioned, the Company shall provide the Trustee or publish, prior to the actual expansion,
prior confirmation by the rating company that the current rating of the Debentures (Series C) will not be adversely affected by
the issuance of the additional debentures by way of the expansion of the series. In addition, at least one business day prior
to the actual expansion of the series, the Trustee shall be furnished with (a) approval by the senior financial officer of the
Company confirming the Company’s fulfillment of the terms in subsections (1), (3) and (4) above together with relevant calculations
and supporting documents; and (b) confirmation by the senior financial officer of the Company that no grounds for immediate repayment
of the Debentures (Series C) exist.

 

		3.2.3.	For
                                         the avoidance of doubt, the issuance of additional Debentures within the Debentures (Series
                                         C) shall be made in the context of the Indentures and the provisions of the Indenture
                                         shall apply thereto. In addition, the existing Debentures (Series C) and additional debentures
                                         from the same series (as of the date of issuance thereof) shall form a single series
                                         for all intents and purposes. The Company shall submit a request to TASE to list such
                                         additional debentures for trade, when offered. The additional Debentures (Series C) shall
                                         not afford a right to payment of the principal amount and/or interest with respect to
                                         the Debentures (Series C) whose scheduled date for payment occurs prior to the date of
                                         issuance thereof.

 

    	 	8	 

     

    

 

		3.2.4.	Without
                                         derogating from the foregoing, and subject to the terms set forth in Section 3.2.2, the
                                         Company reserves the right to issue additional debentures of the Debentures (Series C)
                                         series by way of expanding the Debentures (Series C) at a discount rate that is different
                                         from the discount rate of the Debentures (Series C) in circulation at the time (if at
                                         all). In the event that the discount rate determined for the Debentures (Series C) as
                                         a result of an expansion of the series is different from the discount rate of the Debentures
                                         (Series C) in circulation at the time (if at all), the Company shall, prior to expanding
                                         the series, apply to the tax authority for its confirmation that with respect to the
                                         withholding tax on the discount fees with respect to the debentures, a uniform discount
                                         rate shall be determined in accordance with a formula weighting the various discount
                                         rates for the Debentures (Series C), to the extend any exist. In the event such confirmation
                                         is received, the Company shall, prior to the date of expansion of the series, calculate
                                         the weighted discount rate with respect to all the Debentures of the series, and it shall
                                         publish in an immediate report, prior to such expansion of the series, of the uniform
                                         weighted discount rates for the entire Debenture series, and tax shall be deducted on
                                         the repayment dates of the Debentures (Series C) in accordance with such weighted discount
                                         rate and the law. If no such confirmation is received, the Company shall, prior to issuing
                                         debentures as a result of the expansion of the series, release an immediate report of
                                         such non-confirmation and advising that the uniform discount rate is to be the highest
                                         discount rate that was created with respect to the Debentures (Series C). The Stock Exchange
                                         members shall withhold tax upon repayment of the Debentures, in accordance with the discounted
                                         rate so reported. Therefore, circumstances are possible in which the Company will withhold
                                         tax with respect to discounted fees, at a rate that is higher than the discounted fees
                                         determined for a party holding Debentures (Series C) prior to the expansion of the series.
                                         In such instance, a taxpayer who held the Debentures prior to the expansion of the series
                                         and up to the repayment thereof, shall be entitled to file a tax report to the tax authority
                                         and to receive reimbursement of the tax deducted from the discount fees, to the extent
                                         it is entitled to such reimbursement by law.

 

		3.2.5.	The
                                         Company may not issue additional series of debentures other than as set forth in Section
                                         3.2 above. The Company notes that an additional debenture series exists as of the date
                                         of execution hereof which was issued by the Company – International Debentures.
                                         See Section 7 below for details of the repayment of the International Debentures.

 

		3.2.6.	Nothing
                                         in the Company’s right to expand a series, as aforementioned, exempts the Trustee
                                         from examining such issuance, insofar as such an obligation is imposed on the Trustee
                                         under applicable law. In addition, the foregoing does not derogate from the rights of
                                         the Trustee and the holders of the Debentures (Series C) under this Indenture, including
                                         their right to demand immediate repayment of the Debentures, as set forth hereinbelow
                                         or in accordance with the provisions of applicable law.

 

    	 	9	 

     

    

 

	4.	Purchase
                                         of Debentures by Company and/or Affiliated Holder

 

		4.1.	Subject
                                         to any lawful provision, the Company reserves the right to purchase Debentures (Series
                                         C) in circulation from time to time to time, at any time and any price it so determines,
                                         without derogating from its repayment obligation. The Company shall issue an immediate
                                         report of any such a purchase by the Company. The Debentures purchased by the Company
                                         shall be cancelled and shall be de-listed from the TASE, and the Company shall not be
                                         entitled to re-issue them. In the event the debentures are purchased as part of trading
                                         on TASE, the Company shall submit a request to the Stock Exchange Clearing House to withdraw
                                         the Debenture certificates. Nothing in the foregoing shall derogate from the Company’s
                                         right to make early redemption of the Debentures (as set forth in Section 9 of the Terms
                                         on the Reverse Side). Notwithstanding the foregoing, the Company shall not be entitled
                                         to purchase such debentures as long as it does not meet the financial condition in Section
                                         5.6 below, only after the cure period provided in Section 5.6 has ended and/or as long
                                         as grounds for immediate repayment exist.

 

		4.2.	Subject
                                         to applicable law, any (direct or indirect) subsidiary, affiliated company, investee
                                         company or controlling shareholder of the Company, relatives of the controlling shareholders
                                         (as such term is defined in the Securities Law), a company controlled by one of them
                                         or a company controlled by the Company (with the exception of the Company, with respect
                                         to which Section 4.1 above shall apply) (hereinafter, “Affiliate Holder”)
                                         may purchase and/or sell Debentures (Series C), at any time and from time to time, including
                                         by way of an issuance by the Company. The Company shall release an immediate report of
                                         such a purchase and/or sale which was brought to the Company’s attention. The Debentures
                                         which are held by an Affiliate Holder shall be deemed an asset of the Affiliate Holder.
                                         They shall not be de-listed from TASE and shall be transferable like the remaining Debentures
                                         of the Company (subject to the provisions of the Indenture and Debenture).

 

		4.3.	Nothing
                                         in this Section 4 shall, in and of itself, obligate the Company or the Debenture Holders
                                         to purchase debentures or sell the debentures in their possession.

 

While
held by such Affiliate Holder, the Debentures shall not grant the Affiliate Holder voting rights at meetings of Debenture Holders,
and they shall not be taken into account in establishing the existence of a legal quorum for opening such meetings.

 

	5.	Company’s
                                         Undertakings 

 

		5.1.	General
                                         

 

Until
the full, final and precise payment of the debt under the terms of the Debenture, and the fulfillment of all the Company’s
remaining undertakings towards the Debenture Holders, the Company undertakes as follows:

 

		5.1.1.	The
                                         Company hereby undertakes to pay all the principal amounts, interest (including arrears
                                         interest to the extent it applies and additional interest due to a change in rating and/or
                                         a violation of a financial covenant, to the extent applying) in accordance with the terms
                                         of the Debentures, and to fulfill all other conditions and undertakings applying thereto
                                         under the terms of the Debentures and this Indenture. In the event a date of payment
                                         on account of the principal amount and/or interest occurs on a day that is not a business
                                         day, the payment date shall be deferred to the first subsequent business day, without
                                         any additional payment or interest.

 

    	 	10	 

     

    

 

		5.1.2.	The
                                         Company undertakes to list the Debentures (Series C) for trade on TASE. The Debentures
                                         (Series C) shall be listed for trade on TASE under the name of the nominee company as
                                         it appears in the Indenture.

 

		5.1.3.	The
                                         Company undertakes that this Section 5 below shall apply until the full, final and precise
                                         payment of the Debentures (Series C) in accordance with the terms of the Debentures (Series
                                         C) and the fulfillment of all the Company’s remaining undertakings towards the
                                         holders of the Debentures (Series C) under the terms of the Indenture and the Debentures
                                         (Series C).

 

		5.2.	Company’s
                                         Undertakings With Respect to Bezeq Shares

 

		5.2.1.	The
                                         Company undertakes to refrain from creating in favor of any third party a lien of any
                                         ranking whatsoever over its direct and/or indirect holdings of 691,361,036 shares of
                                         Bezeq, including any of the rights accompanying such shares (hereinafter, the “Undertaken
                                         Shares”) without the prior consent of the holders of the Debentures (Series
                                         C) by a special resolution (hereinafter, “Negative Lien Undertaking”).
                                         As of the date of execution hereof, the Undertaken Shares represent 25% of Bezeq’s
                                         total issued and paid-up capital. Nothing in the foregoing constitutes an undertaking
                                         that the Negative Lien Undertaking shall apply to a particular percentage of Bezeq’s
                                         issued and paid-up capital, and it pertains only to the number of Undertaken Shares specified
                                         above, whether the percentage the Undertaken Shares represent out of Bezeq’s issued
                                         and paid-up capital exceeds or is less than 25%. In addition, the Company undertakes
                                         that to the extent bonus shares are allocated to the Company by virtue of the Undertaken
                                         Shares, the Negative Lien Undertaking shall also apply to such bonus shares and they
                                         shall be included under the definition of the Undertaken Shares. To the extent such bonus
                                         shares are allocated to the Company, the Company shall include a disclosure of the allocation
                                         in the financial statements for the period in which the bonus shares were issued, which
                                         shall include details of the aggregate number of Undertaken Shares as of the date of
                                         such statement.

 

		5.2.2.	The
                                         Company shall include a disclosure in its quarterly and/or annual financial statements,
                                         as applicable, of its fulfillment of the undertaking in this Section hereinabove. The
                                         Company clarifies that to date, the Company directly and/or indirectly holds an additional
                                         number of Bezeq shares which are not subject to the Negative Lien Undertaking, and that
                                         all additional Bezeq shares in addition to the Undertaken Shares which are held by the
                                         Company (directly and/or indirectly) shall not be subject to the Negative Lien Undertaking.

 

    	 	11	 

     

    

 

		5.2.3.	The
                                         Company declares that as of the date of execution of this Indenture, 714,169,560 Bezeq
                                         shares held by B. Communications, including the Undertaken Shares, are encumbered in
                                         favor of the holders of the International Debentures (as part of the lien marked as Lien
                                         No. 3 in B. Communication’s register with the Registrar of Companies) to secure
                                         the Company’s undertakings to holders of the International Debentures. It is clarified
                                         that with respect to such existing lien, the Trustee is relying on the representations
                                         of the Company and B. Communications, as set forth above, without being required to make
                                         any examination in the matter.

 

		5.2.4.	The
                                         Company, B. Communications 1 and B. Communications, by signing the bottom of this Indenture,
                                         declare that as of the date of execution of this Indenture, the Undertaken Shares are
                                         owned by B. Communications and, except as set forth in Section 5.2.1. above, B. Communications
                                         has not created and/or neither the Company and/nor B. Communications 1 and/nor B. Communications
                                         have undertaken to create any lien on the Undertaken Shares, including on any of the
                                         rights accompanying such shares and/nor have they vested any rights in the Undertaken
                                         Shares. In addition, the Company, B. Communications 1 and B. Communications, by signing
                                         the bottom of this Indenture, declare, as of the date of execution of this Indenture,
                                         that they have not created or undertaken to create a floating lien over all of their
                                         assets.

 

		5.2.5.	The
                                         aforementioned Negative Lien Undertaking shall take effect only after the early and full
                                         redemption of the International Debentures is completed and the existing lien recorded
                                         in their favor on the Undertaken Shares is removed. For further details, see Section
                                         7 below.

 

		5.2.6.	The
                                         Company further undertakes to refrain from making any disposition of the Undertaken Shares
                                         without the prior consent of the holders of the Debentures (Series C) by a special resolution.
                                         “Disposition” shall mean to refrain from encumbering or pledging, in any
                                         way and manner and for any purpose whatsoever, and not to sell, transfer, assign or transmit,
                                         for or without consideration, and not to permit another to perform any of the aforementioned
                                         actions in connection with the Undertaken Shares, with the exception of the transfer
                                         and/or sale to the Company and/or to an entity wholly owned by the Company, directly
                                         or indirectly, and/or among themselves. Notwithstanding the foregoing, and subject to
                                         the provisions of applicable law and/or permit, the Company may sell all or a portion
                                         of the Undertaken Shares to any third party (i.e. which is not the Company and/or an
                                         entity wholly owned by the Company), provided that in such instance, the Company uses
                                         the net proceeds it receives from such sale, less the taxes, expenses and deductions
                                         entailed in the sale of such shares (hereinafter, the “Net Sale Proceeds”),
                                         to make full or partial early redemption, of the Debentures (Series C) (exclusively)
                                         in accordance with the provisions of this Indenture. Notwithstanding the foregoing, the
                                         Company may, at its discretion, use the Net Sale Proceeds, in whole or in part, as applicable,
                                         to make payments of the principal and interest amounts of the Debentures (Series C) (exclusively)
                                         which are set for the next 18 months after the sale date (in accordance with the amortization
                                         schedule of such Debentures) (hereinafter, the “Next Payments”). The
                                         Company shall make full or partial early redemption with the balance of the Net Sale
                                         Proceeds, to the extent remaining, as applicable.

 

    	 	12	 

     

    

 

Should
the Company elect to earmark the Net Sale Proceeds (in whole or in part) for making the Next Payments, the Company shall deposit
the entire amount required for the Subsequent Payments in the trust account within no more than 3 business days from receiving
such proceeds, and the Trustee shall transfer such funds to the nominee company for the purpose of making the Subsequent Payments.

 

Early
redemption as set forth in this Section 5.2.6 (whether by means of the entire Net Sale Proceeds or by means of the balance of
the Net Sale Proceeds remaining after deducting the amount required for the Next Payments) shall be made within 120 days of the
consummation of the sale of all or part of the Undertaken Shares and the receipt of the Net Sale Proceeds by the Company. Section
9.2 of the Terms on the Reverse Side shall apply to such early redemption.

 

It
is clarified that the Company’s undertakings to transfer the amount required for making the Next Payments to the trust account
or for making early redemption out of and by means of the Net Sale Proceeds constitutes a contractual undertaking which is not
secured by a mechanism which would ensure the performance of such undertakings. To the extent the Company fails to perform such
undertakings, the Trustee shall not be able to prevent a breach of such undertakings, but may take the measures available to it
under law and the Indenture, including in order to retroactively enforce performance of the Company’s undertakings.

 

		5.2.7.	The
                                         Company shall include a disclosure in its quarterly and/or annual financial statements,
                                         as applicable, of its fulfillment of the undertaking in this Section 5.2.6 above. In
                                         addition, to the extent the Company sells all or part of the Undertaken Shares, the Company
                                         shall release an immediate report, within one business day of the completion of the sale,
                                         concerning the sale, the net proceeds received by the Company and concerning the purpose
                                         towards which the Net Sales Proceeds shall be applied, in accordance with Section 5.2.6
                                         above.

 

		5.3.	Restriction
                                         on assumption of additional debt 

 

    	 	13	 

     

    

 

The
Company undertakes to refrain from assuming additional debt, with the exception of:

 

		a.	Financial
                                         debt in an amount (principal) which does not exceed NIS 400 million;

 

		b.	The
                                         financial debt is not secured by any collateral and does not have priority over Debentures
                                         (Series C) in creditor ranking upon insolvency.

 

		c.	The
                                         total par value of the Debentures (Series C) together with the total principal amount
                                         of the additional debt together with the (principal) amount of the new debt which the
                                         Company intends to assume does not exceed an aggregate of NIS 2.3 billion.

 

It
is clarified that the possibility of assuming debt as set forth in this Section and the condition above pertains exclusively to
the nominal value of debentures which have not yet been actually issued and not to the exchange of issued debentures.

 

“Debt”
– loans from financial institutions and other bodies, short-term credit and current maturities and loans (for the avoidance
of doubt, the definition of the term “Debt” does not include debentures, with respect to which the restriction set
forth in Section 3.2 above shall apply).

 

The
Company shall include a disclosure in the quarterly and/or annual financial statements, as applicable, of its compliance with
the restriction in this Section 5.3 hereinabove and hereinbelow (in connection with the subsidiaries, as set forth below).

 

To
the extent the Company intends to issue Debt, it shall notify the Trustee and furnish the Trustee with approval by the senior
financial officer of the Company of its fulfillment of the terms set forth in this Section above.

 

The
Company further undertakes to cause its wholly-owned subsidiaries, including B. Communications and B. Communications 1 to refrain
from issuing Debt and/or issuing any debenture series.

 

B.
Communications and B. Communications 1, by signing the bottom of this Indenture, undertake to refrain from issuing Debt and/or
issuing any debenture series.

 

		5.4.	Control
                                         of Bezeq

 

The
Company undertakes to hold (directly and/or indirectly) at least 25% of Bezeq’s issued and paid-up capital, unless a regulatory
permit/approval is received to reduce such shareholding percentage (including a permit/approval not to hold Bezeq shares at all),
in which case the aforementioned undertaking shall apply to the lower shareholding percentage so approved, or will not apply at
all (to the extent the permit/approval grants approval not to hold Bezeq shares at all).

 

    	 	14	 

     

    

 

In
addition, to the extent the decrease in the Company’s shareholdings in Bezeq falls below the percentage specified below
due to the sale of all or part of the Undertaken Shares, the foregoing shall not constitute a breach of the aforementioned undertaking,
provided that the Company used the Net Sale Proceeds in accordance with the provisions of Section 5.2.6 hereof.

 

The
Company shall include a disclosure in the quarterly and/or annual financial statements, as applicable, for its shareholding percentage
in Bezeq’s issued and paid-up share capital as of the date of the statement. To the extent the aforementioned percentage
falls below 25%, the Company shall indicate whether a regulatory permit/approval has been given for such decrease.

 

		5.5.	Control
                                         in the Company 

 

By
signing the bottom of this Indenture, the ultimate controlling shareholder of the Company, Eurocom Communications Ltd., undertakes
to refrain from transferring control of the Company (directly or indirectly) to a party which has not been authorized in advance
by the necessary regulatory entities, to the extent such approvals are required, at the relevant time.

 

“Holding;”
“Control” - as defined in the Companies Law.

 

To
the extent control of the Company is transferred, as aforementioned, the Company shall include a disclosure in the report it is
to publish regarding the change in control, whereby prior approval has been received from all such necessary regulatory entities
for the party to which control of the Company was transferred.

 

		5.6.	Minimum
                                         equity

 

The
Company undertakes that its equity (capital attributed to the Company’s shareholders, without non-controlling interests)
(hereinafter, the “Equity”) according to its last consolidated financial statements published, shall not be
less than NIS 650 million for the duration of two or more consecutive calendar quarters (hereinafter respectively, “Minimum
Equity” and “Cure Period”).

 

The
Company shall include a disclosure in the quarterly and/or annual financial statements, as applicable, regarding its fulfillment
of the undertaking in this Section 5.6.

 

Adjustment
of interest rate in the event of a drop below the Minimum Equity

 

In
the event the Equity is less than NIS 750 million during the Cure Period, an interest adjustment shall be made as follows:

 

The
annual interest rate applicable to the balance of the outstanding principal amount of the Debentures shall increase by 0.25% per
annum, with respect to the period commencing one business day after the end of the Cure Period; i.e. one business day after the
publication of the second consecutive financial statements from which it arises that the Equity fell below the Minimum Equity
(hereinafter, “Deviation Date”) and up to full payment of the balance of the outstanding principal of the Debentures
(Series C) or up to the date of publication of a revised financial statement whereby the Company’s Equity is equal to or
exceeds the Minimum Equity, whichever comes first.

 

    	 	15	 

     

    

 

It
is clarified that the interest rate will not be increased as a result of further drops, if any, below the Minimum Equity, after
the interest rate is increased as set forth above.

 

The
procedure for adjusting the interest rate shall be as follows:

 

		■	In
                                         the event such a deviation occurs, the Company shall issue an immediate report no later
                                         than the end of one business day after the Deviation Date, noting: a. the fact of the
                                         deviation and the Deviation Date; b. the exact interest rate applicable to the balance
                                         of the principal amount of the Debentures (Series C) for the period from the commencement
                                         of the current interest period up to the Deviation Date (the interest rate shall be calculated
                                         on the basis of 365 days in a year) (hereinabove and hereinafter in this Section, “Original
                                         Interest Rate” and “Original Interest Period,” respectively);
                                         c. the exact interest rate applicable to the balance of the principal amount of the Debentures
                                         (Series C) from the Deviation Date up to the next actual interest payment date (the interest
                                         rate shall be calculated on the basis of 365 days in a year) (hereinafter in this Section,
                                         the “Adjusted Interest Rate”); d. the weighted interest rate which
                                         the Company shall pay holders of the Debentures (Series C) on the next interest payment
                                         date; e. the annual interest rate reflected by the weighted interest rate; f. the annual
                                         interest rate and the annual interest rate per period, to the extent the terms of the
                                         Debentures determine that the interest thereon shall be payable on more than one date
                                         per year (the interest per period shall be calculated as the annual interest divided
                                         by the number of interest payments in a year), for the subsequent periods.

 

		■	If
                                         the deviation period commences during the days commencing four days prior to the scheduled
                                         date of payment of any interest and ending on the next interest payment date after such
                                         date (hereinafter, the “Deferral Period”), the Company shall, on the
                                         next interest payment date, pay holders of the Debentures (Series C) the Original Interest
                                         Rate (as it appears in the original terms of the security) only, and the additional payment
                                         arising from the relevant addition of interest during the Deferral Period (hereinafter
                                         in this Section, “Deferred Interest Addition”) shall be paid on the
                                         next interest payment date.

 

		■	Notwithstanding
                                         the foregoing, if following the drop below the Minimum Equity, the amount of equity increases
                                         to or exceeds the Minimum Equity, the interest rate payable by the Company to the Debenture
                                         Holders on the next relevant interest payment date shall be reduced, with respect to
                                         the period commencing on the date of publication of the financial report (quarterly financial
                                         report or financial statement) from which it arises that the Company’s Equity is
                                         equal to or higher than the Minimum Equity (hereinafter in this Section, “Correction
                                         Date”), such that the interest rate applicable to the balance of the outstanding
                                         principal amount of the Debentures for the period commencing on the Correction Date is
                                         the Original Interest Rate, without any addition.

 

    	 	16	 

     

    

 

		5.7.	Restriction
                                         on distribution

 

The
Company undertakes not to distribute a dividend to its shareholders and/or perform a buyback of its shares and/or any other distribution
as defined in the Companies Law unless all the conditions provided in subsections (a) through (f) below are satisfied:

 

		a.	The
                                         distribution will not cause a downgrade in the rating of the Debentures (Series C).

 

		b.	The
                                         Company is not in violation of any of the covenants provided in Sections 5.3-5.6 above.

 

		c.	No
                                         grounds for immediate repayment exist at the time a resolution to make a distribution
                                         is adopted, and no such grounds exist as a result of such distribution.

 

		d.	The
                                         Company’s Equity (as defined in Section 5.6 above) post-distribution is not less
                                         than NIS 800 million.

 

		e.	No
                                         “warning signs” exist on the date of the resolution to make a distribution,
                                         as set forth in Regulation 10(B)(14) of the Securities Regulations (Periodic and Immediate
                                         Reports), 5730-1970, with the exception of the warning signs pertaining to “negative
                                         cash flow from current activity.”

 

		f.	Until
                                         full repayment of the principal of the Debentures (Series C), the Company shall not distribute
                                         a dividend exceeding 75% of the balance of the Company’s distributable surpluses
                                         (the surplus balance or surpluses accrued in the last two years, in accordance with the
                                         definitions provided in the Companies Law) in accordance with its consolidated financial
                                         statements. In addition, the Company shall not make a distribution if it recorded an
                                         aggregate net loss in the last four quarters preceding the distribution date, on the
                                         basis of its last financial statements and/or the quarterly financial report published
                                         prior to the distribution date.

 

Notwithstanding
the foregoing, the restrictions set forth in this subsection (f) shall not apply with respect to the balance of the Company’s
profits/surpluses which are distributable in accordance with the provisions of the Companies Law, the Company’s financial
statements as of June 30, 2016 (i.e. a total of NIS 416 million which shall be excluded from the distribution restrictions under
this subsection (f); for the avoidance of doubt, the restrictions provided in subsections (a) through (e) shall apply with respect
to such distribution).

 

    	 	17	 

     

    

 

In
the event of a change in the Company’s accounting reporting method which results in the Company’s investment in Bezeq
being presented on a market value basis, and in a manner which results in a commensurate increase in the Company’s equity,
the Company’s undertakings with respect to equity restrictions in connection with a distribution, as set forth in this subsection
5.7, shall continue to be calculated on the basis of the Company’s current financial reporting method.

 

No
later than 2 business days after a resolution to make a distribution is adopted by the Company’s Board of Directors and/or
General Meeting, as applicable, and at least 2 business days prior to the actual distribution, the Company shall furnish the Trustee
with a signed approval by the senior financial officer of the Company of its compliance with the conditions set forth in this
Section above, to which a rating report or the rating company’s confirmation of compliance with the condition in subsection
(a) above shall be attached. It is clarified that a report or confirmation by the rating company, as aforementioned, shall be
deemed to be service to the Trustee for purposes of this section.

 

		5.8.	Except
                                         as stated in section 5.7 above, and upon repayment of the International Debentures, the
                                         Company shall have no further restrictions on a dividend distribution, other than as
                                         set forth in this Indenture and the restrictions prescribed by law. Until the full, final
                                         and precise repayment of the debt in accordance with the terms of the Debentures, and
                                         the fulfillment of the Company’s remaining undertakings towards the Debenture Holders,
                                         the Company undertakes to ensure, insofar as it is in its control, that at least one
                                         rating company authorized by the Commissioner of Capital Markets continues to rate the
                                         Debentures for the entire term of the Debentures. It is clarified that to the extent
                                         the Debentures are rated by several rating companies, the Company shall be entitled to
                                         cease such rating activity of any of the rating companies, at its sole discretion, and
                                         the Trustee and/or Debenture Holders shall not have any dispute in this respect, provided
                                         that the Debentures are rated by at least one rating company at such time. In the event
                                         the rating company is replaced or the Debentures are no longer rated by all the rating
                                         companies, the Company shall, subject to the dates prescribed by applicable law, release
                                         an immediate report regarding the replacement of such rating company, and the reasons
                                         for such replacement. In the event the rating activity is terminated, the Company shall
                                         publish the reasons for such termination, insofar as the reasons are published or disclosed
                                         to it in writing by the rating company.

 

Adjustment
of interest in the event of a downgrade in the rating of the Debentures (Series C) (Israeli rating)

 

Should
the rating of the Debentures (Series C) be downgraded to A2.il (Israeli rating of Midroog Ltd. (hereinafter, “Midroog”)
or a corresponding rating of another rating company) (hereinafter, “Deviation Rating”) or to a lower rating,
by all the rating companies that rate the Company, the interest rate shall be adjusted as follows:

 

		5.9.	If
                                         the Deviation Rating is not upgraded to a rating above A2.il (Israeli rating of Midroog
                                         or a corresponding rating of another rating company) by the end of six months from the
                                         date of publication of the rating report showing the Deviation Rating (hereinafter, the
                                         “Cure Period”), the annual interest rate applicable to the balance
                                         of the outstanding principal amount of the Debentures shall be increased by 0.25% per
                                         annum and by 0.25% per annum for each additional downgrade below the Deviation Rating,
                                         up to a rating of Baa2.il (Israeli rating of Midroog or a corresponding rating of another
                                         rating company (hereinafter, the “Additional Deviation Rating”) up
                                         to a cumulative rate of 1% per year in total. Any increase in the interest rate shall
                                         apply separately with respect to the period commencing one business day after the end
                                         of the Cure Period, which shall apply, mutatis mutandis, to any downgrade (hereinafter,
                                         the “Deviation Date”), and up to the full repayment of the balance
                                         of the outstanding principal of the Debentures (Series C) or up to the date of publication
                                         of a revised rating report by any of the Israeli rating companies, whereby the rating
                                         of the Debentures rose above the Deviation Rating or the relevant Additional Deviation
                                         Rating, as applicable, whichever comes first.

 

    	 	18	 

     

    

 

The
procedure for adjusting interest, with respect to each interest adjustment separately, mutatis mutandis, is as follows:

 

		5.10.	In
                                         the event that the rating is downgraded to a Deviation Rating or an Additional Deviation
                                         Rating, as set forth in Section 5.9 above, no later than the end of one business day
                                         after the Deviation Date, the Company shall release an immediate report indicating the
                                         following: a. the deviation and the Deviation Date; b. the precise interest rate bearing
                                         on the balance of the principal of the Debentures (Series C) for the period commencing
                                         as of the current interest term and up to the Deviation Date (the interest rate will
                                         be calculated on the basis of 365 days in a year) (hereinabove and hereinafter in this
                                         Section, the “Original Interest” and “Original Interest Term,”
                                         respectively); c. the precise interest rate applicable to the balance of the principal
                                         of the Debentures (Series C) as of the Deviation Date and up to the next actual interest
                                         payment date (the interest rate shall be calculated on the basis of 365 years in a year)
                                         (hereinafter in this Section, the “Adjusted Interest”); d. the weighted
                                         interest rate payable by the Company to holders of the Debentures (Series C) on the next
                                         interest payment date; e. the annual interest rate reflected from the weighted interest
                                         rate; f. the annual interest rate and the annual interest rate per period, to the extent
                                         the terms of the Debentures provide that the interest thereon shall be paid more than
                                         once per year (the interest rate per period shall be calculated as the annual interest
                                         divided by the number of interest payments in a year) for the subsequent terms.

 

In
the event the date of commencement of the deviation term occurs during the period commencing four days prior to the scheduled
date of payment of any interest and ending on the interest payment date proximate to such time (hereinafter, the “Deferral
Period”), the Company shall, on the next interest payment rate, pay holders of the Debentures (Series C) the Original
Interest (as it appears in the original terms of the security) only, and the additional payment arising from the relevant interest
addition during the Deferral Period (hereinafter in this Section, “Deferred Interest Addition”) shall be paid
on the subsequent interest payment date.

 

    	 	19	 

     

    

 

		5.11.	Notwithstanding
                                         the foregoing, in the event that following the rating downgrade to the deviation rating
                                         or below, the rating of the Debentures is upgraded to a rating that is above the deviation
                                         rating or the additional deviation rating, as applicable, the interest rate payable by
                                         the Company to the Debenture Holders on the next relevant interest payment date shall
                                         be decreased, in accordance with the levels set forth in Section 5.10 above, with respect
                                         to the period commencing on the date of publication of the rating report from which it
                                         arises that the rating of the Debentures was upgraded, as aforementioned (hereinafter
                                         in this Section, “Correction Date”), such that the interest rate applicable
                                         to the balance of the outstanding principal amount of the Debentures with respect to
                                         the period commencing on the Correction Date shall be the Original Interest, without
                                         any addition.

 

In
such event, the Company shall act in accordance with the foregoing, mutatis mutandis.

 

		5.12.	Restriction
                                         on exceptional transactions with a holder of control

 

As
long as the Company is in violation of the financial covenants and terms in Sections 5.2-5.7 above (hereinafter in this Section,
the “Terms”) and as long as the grounds for demanding the repayment of the Debentures exist, the Company shall
not enter into a new Extraordinary Control Holder Transaction (as defined below) (which is not an extension of an existing transaction
on terms identical to those of the existing transaction) without the Debenture Holders’ approval by an ordinary resolution.

 

In
this respect, “Extraordinary Control Holder Transaction” means an extraordinary transaction as defined in section
1 of the Companies Law, which satisfies all of the following: (a) the transaction is with the holder of control in a company or
with another person in which the holder of control therein has a personal interest at the time; (b) the transaction does not fall
under one of the dispensations provided in the Companies Regulations (Reliefs in Transactions with Interested Parties), 5760-2000,
or such other dispensations as may be prescribed by law from time to time in connection with transactions with a holder of control.

 

Without
derogating from the approvals required by applicable law, the foregoing shall not apply to: (1) a transaction which the Company
declares is intended to remedy the Company’s violation of the grounds for immediate repayment of the Debentures and included
a signed approval by the senior financial officer of the Company detailing how the transaction is expected to remedy such violation
and/or grounds. The Trustee shall rely on the aforementioned officer’s approval without being required to verify the correctness
thereof; (2) transactions in connection with the term of office or employment of a holder of control in the Company which do not
deviate from the Company’s lawfully approved compensation policy, in effect at the relevant time; (3) any transaction which
takes effect only after the full repayment of the Debentures (Series C); (4) transactions which constitute an extension of an
existing transaction on terms identical to those of the current transaction.

 

    	 	20	 

     

    

 

As
of the time the Company fails to comply with the Terms or as of the time the grounds for immediate repayment of the Debentures
arise, the Company shall furnish the Trustee with approval by the senior financial officer of the Company immediately after the
publication of any annual financial statement of the Company and no later than the tenth day of each year, that no Extraordinary
Control Holder Transaction, as set forth in this Section 5.12, has been executed.

 

The
restrictions under this Section shall also apply in circumstances in which the Company ceases to be a public company, as such
term is defined in the Companies Law.

 

		5.13.	Ratio
                                         of unconsolidated equity to total unconsolidated balance sheet

 

Ratio
of unconsolidated equity to total unconsolidated balance sheet: the Company’s equity shall not be less than 15% of the total
balance sheet in accordance with the Company’s audited or reviewed (unconsolidated) financial statements (or, alternatively,
the quarterly financial report figures, as elected by the Company), as the case may be, for two or more consecutive calendar quarters.
(“Unconsolidated figures” are in accordance with the rules required under Regulation 9C of the Securities Regulations
(Periodic and Immediate Reports), 5730-1079, mutatis mutatis).

 

An
evaluation of the Company’s compliance with the financial covenant above shall be made by the Company each quarter in accordance
with the last reviewed or audited financial statements (or alternatively, the quarterly financial report, as elected by the Company)
published by the Company, on the date of publication of each such statement, as long as the Debentures (Series C) are in circulation.

 

The
Company shall include a disclosure in the annual and/or quarterly financial statements, as applicable, of its fulfillment of the
undertaking in this Section 5.13.

 

	6.	Collateral

 

		6.1.	The
                                         Debentures (Series C) shall not be secured by any collateral with the exception of the
                                         interest cushion as set forth in Section 6.2 below, and the foregoing shall not derogate
                                         from the Company’s undertaking to a negative lien on Bezeq shares, as set forth
                                         in Section 5.2 above.

 

		6.2.	Interest
                                         cushion

 

		6.2.1.	To
secure the full and accurate fulfillment of all the Company’s undertakings with respect to the Debentures (Series C) under
this Indenture, and to secure the full and accurate payment of the amounts due and to become due to holders of the Debentures
(Series C) from the Company together with all the amounts due under the Indenture, including payments of the principal amount
of the Debentures (Series C), interest (and arrears interest, to the extent it applies) and additional amounts which the Company
shall be required to pay under this Indenture. The Company undertakes that out of the proceeds it receives from the issuance of
the Debentures (Series C), an amount equal to the next interest payment (“Interest Cushion Amount”) shall be deposited
in the Trust Account (as defined below), and the Trust Account and Interest Cushion Amount shall serve as collateral for holders
of the Debentures (Series C) up to the full repayment of the Debentures (Series C).

 

		6.2.2.	Upon
                                         publication of an immediate report by the Company regarding the results of the initial
                                         issuance of the Debentures, the Company shall furnish the Trustee with written approval
                                         by the senior financial officer of the Company regarding the Interest Cushion Amount,
                                         including the appropriate calculation in an active Excel file.

 

		6.2.3.	In
                                         the event that on the morning of the 2nd day of each calendar month following
                                         a particular interest payment date, and, if such date is not a business day – then
                                         on the following business day (hereinafter, “Cushion Completion Date”),
                                         the amount deposited in the Interest Cushion account is lower than the amount of the
                                         next interest payment following the Cushion Completion Date, the Company shall transfer
                                         to the Interest Cushion Account an amount equal to the amount required to ensure that
                                         the amount deposited in the Trust Account on the Cushion Completion Date is equivalent
                                         to the amount of the next interest payment following the Cushion Completion Date (hereinafter,
                                         the “Current Cushion Amount”), within 4 business days of the Cushion
                                         Completion Date.

 

In
the event that the amount deposited in the Interest Cushion account on the Cushion Completion Date is higher than the amount of
the Current Cushion Amount, the Company shall be entitled to receive the difference between the amount in the Trust Account and
the Current Cushion Amount.

 

On
the Cushion Completion Date, the Company shall furnish the Trustee with an approval by the senior financial officer of the Company,
together with a calculation in an active Excel file, of the Current Cushion Amount.

 

		6.2.4.	In
                                         the event that the Debentures (Series C) is expanded in the future, the Company shall
                                         furnish to the Trustee, within 2 business days from the actual date of expansion of the
                                         series, written approval by the senior financial officer of the Company, together with
                                         an active Excel file calculation, of the Interest Cushion Amount remaining after the
                                         expansion of the series and shall deposit in the Trust Account, as a condition to receiving
                                         the balance of the proceeds from the Company’s expansion of the series, any amount
                                         that is required to complete the amount deposited at the time in the Trust Account to
                                         the Interest Cushion Amount in existence after such series expansion.

 

    	 	21	 

     

    

 

		6.2.5.	It
                                         is clarified that the non-deposit of the Interest Cushion Amount in the Trust Account
                                         shall constitute grounds for immediate repayment of the balance of the Debentures (Series
                                         C) in circulation.

 

		6.2.6.	Without
                                         derogating from the provisions of Section 6.2.5 above, for the avoidance of doubt, it
                                         is clarified that the Company’s undertaking to transfer the Interest Cushion Amount
                                         to the Trust Account is not secured by a mechanism which would ensure the performance
                                         of such undertaking. In the event the Company fails to satisfy its undertaking to transfer
                                         the funds to the Trust Account, the Trustee will not have the ability to prevent a breach
                                         of such undertaking, but rather to take the measures available to it under law and the
                                         Indenture, to retroactively enforce the Company’s compliance with its undertaking.
                                         In addition, in such instance the grounds for immediate repayment of the Debentures shall
                                         apply.

 

		6.2.7.	Following
                                         the full and final repayment of the Debentures (Series C), the Company shall be entitled
                                         to receive any amount remaining in the Trust Account, less the Trustee’s fees and
                                         expenses, including the costs related to the Trust Account.

 

		6.3.	For
                                         the avoidance of doubt, it is clarified that the Trustee shall not be bound by any obligation
                                         to evaluate, and the Trustee has not actually evaluated the requirement to provide securities
                                         in order to secure payments to the Debenture Holders. The Trustee was not requested to
                                         perform, nor has it actually performed financial, accounting or legal due diligence with
                                         respect to the Company’s or subsidiaries’ state of affairs. Upon entering into
                                         this Indenture, and with the Trustee’s consent to serve as Trustee for the Debenture
                                         Holders, the Trustee is not offering its opinion, explicitly or implicitly, as to the
                                         Company’s ability to fulfill its undertakings towards the Debenture Holders and regarding
                                         the financial value of the collateral provided and/or to be provided (to the extent provided)
                                         to secure the Company’s undertakings under this Indenture, and the foregoing is
                                         not included in its duties. Nothing in the foregoing derogates from the Trustee’s obligations
                                         under applicable law or the Indenture, nor from its obligation (insofar as such an obligation
                                         applies to the Trustee under applicable law) to evaluate the impact of any changes occurring
                                         to the Company as of and after the date of the issuance, to the extent any such changes
                                         may adversely affect the Company’s ability to fulfill its undertakings towards the Debenture
                                         Holders. In the event collateral is provided by the Company in connection with a debenture
                                         offering, the Trustee shall be bound by the provisions of the Law in this respect and,
                                         inter alia, the Trustee shall, from time to time and at least once per year, evaluate
                                         the validity of such collateral.

 

		6.4.	Subject
                                         to the provisions of Section 5.2 above, the Company and any subsidiary (including B.
                                         Communications) may, from time to time, sell, encumber, lease, assign, furnish or otherwise
                                         transfer all or a portion of its assets without the consent of the Trustee and/or the
                                         Debenture Holders, and the Company and/or B. Communications are not required to notify
                                         the Trustee and/or Debenture Holders of the performance of such actions specified above
                                         in connection with their assets, other than in accordance with the requirements applying
                                         to any of them by law.

 

    	 	22	 

     

    

 

	7.	Use
                                         of Proceeds from Issuance

 

		7.1.	The
                                         proceeds from the issuance shall be used to make full early redemption of the International
                                         Debentures (hereinafter, “Early Redemption”) and of the entire debt
                                         to the hedging entities with which the Company contracted in connection with the issuance
                                         of the International Debentures to hedge the Company’s dollar exposure in connection
                                         with the International Debentures (hereinafter, “Hedging Entities”),
                                         and to remove the liens and collateral provided to secure the International Debentures
                                         and to secure the Hedging Entities, including the lien on Bezeq shares, and for the transfer
                                         of shares of B. Communications owned by the Company to the Company’s name.

 

		7.2.	The
                                         Company represents that: (1) as of the date of execution of this Indenture, the total
                                         amount required for the full Early Redemption of the International Debentures (net of
                                         the International Debentures wholly owned by the Company’s wholly owned subsidiaries,
                                         which shall be cancelled prior to the Early Redemption), and the removal of the lien
                                         on the Bezeq shares, which includes the Early Redemption fees with respect to the principal
                                         of the debt and capitalized interest up to February 15, 2017, in accordance with the
                                         provisions of the indenture for the International Debentures, aggregates to NIS 2.9 billion;
                                         (2) pursuant to the indenture for the International Debentures, the Company may make
                                         full Early Redemption of the International Debentures; (3) pursuant to the indenture
                                         for the International Debentures, the Company may remove the lien on Bezeq shares after
                                         making full Early Redemption of the International Debentures or, alternatively, after
                                         it deposits the full amount required for the Early Redemption of the International Debentures
                                         with the trustee for the International Debentures, Mishmeret Trust Services Company Ltd.
                                         (hereinafter, “Trustee for the International Debentures”).

 

		7.3.	The
                                         net issue proceeds, less the issuance expenses (hereinafter, “Issue Proceeds”)
                                         shall be deposited by the issuance coordinator in the trust account, as defined below.
                                         The Issue Proceeds, less the Interest Cushion Amount (hereinafter, “Net Issue
                                         Proceeds”) shall be used to make Early Redemption and for repayment of the
                                         entire debt to the Hedging Entities, and for the removal of all the collateral furnished
                                         for the benefit of the Trustee for the International Debentures to secure the International
                                         Debentures and the Hedging Entities.

 

“Trust
Account” means an account to be opened by the Trustee in its name, in trust for the holders of the Debentures (Series
C), in one of the five largest banks. The Trustee shall have sole signature rights therein and a sole first-ranking fixed charge,
unlimited in amount and for the benefit of the Trustee for the holders of the Debentures (Series C), shall be recorded on all
of the Company’s rights in the account and sub-accounts prior to transferring the Issue Proceeds to the account. In addition,
a sole first-ranking floating charge, unlimited in amount and for the benefit of the Trustee for the holders of the Debentures
(Series C), shall be recorded over all the funds and/or deposits and/or securities deposited therein from time to time, including
the profits and/or proceeds thereon and accrued in the account from time to time. All the costs entailed in opening the account
and managing and closing the account shall be borne by the Company. The policy for managing the funds in such account and the
implementation thereof shall be in accordance with Section 17 of this Indenture, and the Trustee shall not be responsible towards
the Debenture Holders and/or the Company for any loss occurring as a result of the investments.

 

    	 	23	 

     

    

 

		7.4.	The
                                         Net Issue Proceeds shall be used in accordance with the following mechanism:

 

		a.	The
                                         Net Issue Proceeds shall be transferred from the Trust Account to all or some of the
                                         Hedging Entities, and shall be used for closing a hedging position with them (with some
                                         of the Hedging Entities the Company shall perform a separate accounting and shall close
                                         the hedging position using independent funding sources), for the conversion thereof from
                                         shekels to US dollars and for closing the hedging position, payment of fees and terminating
                                         the hedging agreements, all in accordance with the agreements executed with the Hedging
                                         Entities (“Hedge Closure Process”). The transfers to the Hedging Entities
                                         shall be made in accordance with the Company’s instructions, which shall include
                                         the amount to be transferred to each Hedging Entity and the full details required for
                                         making the transfers, as well as confirmation that such entities constitute all the existing
                                         Hedging Entities in connection with the International Debentures (hereinafter, the “Transfer
                                         Instructions”). In addition and notwithstanding the foregoing, with respect
                                         to a portion of the Hedging Entities (which are non-Israeli entities), the Company may
                                         request to transfer the funds for closing the hedging position out of the Company’s
                                         account (directly or indirectly), in accordance with a certificate of no withholding
                                         tax in the Company’s possession in this respect, and in such event the Trustee
                                         shall transfer to the Company, as instructed thereby and to the account directed by the
                                         Company, the portion of the Net Issue Proceeds required for the transfer to (one or more
                                         of) the Hedging Entities, prior to furnishing any of the documents and/or performing
                                         the actions specified below, and the Company shall transfer such amount to the relevant
                                         Hedging Entity. The Company shall include with the transfer instructions irrevocable
                                         instructions by the Company to each Hedging Entity (or an equivalent document, signed
                                         by the Company, which shall include such irrevocable instructions) directing that any
                                         amount which the Hedging Entity is required to return to the Company upon completion
                                         of the Hedge Closure Process, including after repayment of the Company’s debt to
                                         any Hedging Entity out of the funds in its possession, if at all (hereinafter, “Net
                                         Dollar Issue Proceeds”) shall be transferred directly by the Hedging Entity
                                         to the Trust Account, signed in the original by the Company. It is clarified that the
                                         Trustee shall rely on the Transfer Instructions so furnished to it by the Company without
                                         being required to make any examination in the matter. In addition, to the extent a shekel
                                         balance remains in the Trust Account after completing the Hedge Closure Process, the
                                         Trustee shall convert such shekel balance into US dollars, in accordance with the Company’s
                                         instructions and for the purpose of the transfer thereof to the Trustee for the International
                                         Debentures, and such amount shall be added to the Net Dollar Issue Proceeds.

 

    	 	24	 

     

    

 

		b.	The
                                         Company undertakes that the Net Dollar Issue Proceeds shall be deposited in the Trust
                                         Account.

 

		c.	The
                                         Trustee shall transfer the Net Dollar Issue Proceeds to the trust account managed in
                                         the name of the Trustee for the International Debentures, subject to the satisfaction
                                         of the following terms:

 

		1.	The
                                         Company releases an immediate report regarding the full early redemption of the International
                                         Debentures, in accordance with the terms thereof.

 

		2.	The
                                         Company furnishes the Trustee with an officer’s confirmation of the amount required
                                         for the full repayment of the International Debentures and the removal of all the liens
                                         created to secure the International Debentures and the Hedging Entities (hereinafter,
                                         the “Repayment Amount”).

 

		3.	In
                                         the event the Net Dollar Issue Proceeds is lower than the Repayment Amount, the Company
                                         deposits in the Trust Account an amount equal to the difference between the Net Dollar
                                         Issue Proceeds and the Repayment Amount (hereinafter, the “Difference”)
                                         or, alternatively, the Company furnishes the Trustee with proof of the transfer of the
                                         Difference directly to the Trustee for the International Debentures, and also confirmation
                                         by the Trustee for the International Debentures that such Difference was received in
                                         its account.

 

		4.	A
                                         deed of release is received (hereinafter, “Deed of Release”) from
                                         the Trustee for the International Debentures, specifying the following:

 

		1.	Names
                                         of the Hedging Entities.

 

		2.	Details
                                         of all the bank accounts (including the bank account number and the branch at which the
                                         account is managed) regarding which the rights of the Company and/or B. Communications
                                         and/or any other company therein are encumbered in favor of the Trustee for the International
                                         Debentures and/or in which the Trustee for the International Debentures has been granted
                                         signatory rights.

 

		3.	Details
                                         of all the liens and collateral created in favor of the holders of the International
                                         Debentures and the Hedging Entities, including the registers in which they were registered
                                         and the numbers thereof (hereinafter, the “Liens”).

 

		4.	The
                                         number of Bezeq shares encumbered in favor of holders of the International Debentures
                                         and the Hedging Entities, including the method and location in which they are held (certificate
                                         shares [or] electronically, and the details of the account in which the electronic shares
                                         are deposited).

 

    	 	25	 

     

    

 

		5.	Confirmation
                                         by the Trustee for the International Debentures that upon deposit of the Repayment Amount
                                         (to be detailed in the Deed of Release and which is to be identical to the amount specified
                                         in the officer’s confirmation in Section 7.4.c above) in the account of the Trustee
                                         for the International Debentures, details of which are to be provided in the Deed of
                                         Release, the Trustee for the International Debentures shall furnish the Trustee with
                                         all the documents required for the removal of the liens, final, original signed versions
                                         of which are to be appended to the Deed of Release:

 

		5.1.	Letters
                                         to the Registrar of Companies directing the removal of all the Liens.

 

		5.2.	The
                                         bank’s instructions or signed bank forms pertaining to the revocation of all the
                                         powers of the Trustee for the International Debentures in connection with such accounts,
                                         including the removal of the Trustee for the International Debentures as an authorized
                                         signatory in such accounts.

 

		5.3.	A
                                         letter of revocation of the irrevocable instructions provided to Bezeq in connection
                                         with the encumbered Bezeq shares.

 

		5.4.	A
                                         letter of revocation of the irrevocable instructions provided to B. Communications in
                                         connection with the encumbered Bezeq shares.

 

		5.5.	An
                                         original approval from the Hedging Entities for the removal of all the Liens. It is noted
                                         that the Company is responsible for providing such an approval.

 

		5.6.	The
                                         documents required for the transfer of shares of B. Communications to the Company’s
                                         name (including with the Registrar of Companies).

 

		5.7.	An
                                         Acknowledgement of Satisfaction and Discharge document addressed to the Company, as required
                                         under the terms of the International Debentures, which shall be prepare by an attorney
                                         of the Company who is familiar with the law governing the International Debentures.

 

		d.	Upon
                                         satisfaction of all the terms set forth in Section 4 above, the Trustee shall provide
                                         the Trustee for the International Debentures with the Repayment Amount (or a portion
                                         thereof, to the extent the Company transfers the Difference directly to the Trustee for
                                         the International Debentures, as set forth in Section c.3 above), which shall be specified
                                         in the officer’s approval and the Deed of Release, against receipt of: (1) all
                                         the documents specified in Sections 5.1 through 5.7 above, signed in the original; (2)
                                         all the share certificates for the encumbered Bezeq shares which are certificate shares,
                                         and a transfer deed signed “blank” deposited with the Trustee for the International
                                         Debentures; (3) share certificates of B. Communications shares.

 

    	 	26	 

     

    

 

		e.	The
                                         Trustee shall submit to the Register of Companies all the lien release documents and
                                         the documents required for the transfer of B. Communications shares in the Company’s
                                         name in the Registrar of Companies registers, and shall submit the remaining documents
                                         it received, as set forth in subsection (d) above, to the Company. The Company undertakes
                                         to submit all the documents and perform all the actions required for the purpose of (1)
                                         revoking all the powers of the Trustee for the International Debentures in the bank accounts
                                         encumbered in such Trustee’s favor, including its signatory rights in such accounts;
                                         (2) revocation of the letter of instruction furnished to Bezeq in connection with Bezeq
                                         shares encumbered in favor of the Trustee for the International Debentures, and the letter
                                         of instruction provided to B. Communications in connection with the encumbered Bezeq
                                         shares; (3) the transfer of B. Communications shares to the Company’s name; (4)
                                         any additional action to be performed for the release of the liens created in favor of
                                         the Trustee for the International Debentures; all within 21 business days from the date
                                         of transfer of the Repayment Amount to the Trustee for the International Debentures.
                                         The Company shall furnish the Trustee with confirmation by the Company’s attorney
                                         or its internal legal counsel stating that all the actions specified above have been
                                         taken, and that all the liens and collateral provided to secure the International Debentures
                                         and the Hedging Entities have been removed and released, no later than 4 business days
                                         from the end of the aforementioned period, and it shall publish, on such date, an immediate
                                         report regarding the removal of all the liens and collateral provided to secure the International
                                         Debentures and the Hedging Entities.

 

		f.	In
                                         the event that any of the conditions specified in Section 7(c) 4 are not satisfied within
                                         100 days from the date of issuance, the debentures shall be subject to forced early redemption,
                                         in full, at their nominal value together with interest accrued as of the date the Debentures
                                         (Series C) were listed for trade and up to the forced redemption date, in accordance
                                         with the interest that is determined in an auction with respect to the issuance of the
                                         Debentures (Series C). The aforementioned forced redemption shall be subject, mutatis
                                         mutandis, to the deadlines and procedures prescribed in Section 9.2 of the Terms
                                         on the Reverse Side (except in connection with the amount payable in the event of early
                                         redemption, in accordance with this Section (f), which shall be made in accordance with
                                         the foregoing).

 

	8.	Order
                                         of Priority 

 

All
the Debentures (Series C) shall be of equal ranking with respect to the amounts due thereon, pari passu among themselves
and without preference or priority of any kind.

 

	9.	Right
                                         to Immediate Repayment and/or Realization of Collateral

 

		9.1.	Upon
                                         the occurrence of one or more of the circumstances set forth below, and for the duration
                                         of their existence, the Trustee and the Debenture Holders may demand the immediate repayment
                                         of the balance of the amount owing to the holders under the Debentures, or to realize
                                         the collateral furnished to secure the Company’s undertakings towards the holders
                                         in accordance with the Debentures, and the provisions of Section 9.2 shall apply, as
                                         applicable:

 

		9.1.1.	The
                                         Company fails to make any of the payments it is required to pay in connection with the
                                         Debentures, or fails to comply with another fundamental undertaking provided in favor
                                         of the Debenture Holders, and such breach is not remedied within 10 days of occurring.

 

		9.1.2.	The
                                         Company makes a decision to liquidate (other than liquidation as a result of a restructuring
                                         of the Company and/or as a result of a merger with another company, as set forth in Section
                                         9.1.20 below).

 

		9.1.3.	A
                                         final and permanent liquidation order is issued by a court against the Company, or a
                                         permanent liquidator is appointed to the Company;

 

		9.1.4.	A
                                         temporary liquidation order is issued by the court or a temporary liquidator is appointed
                                         for the Company, or any similar judicial decision is rendered and such order or decision
                                         is not vacated within 45 days of the date of such order or decision, as applicable. Notwithstanding
                                         the foregoing, the Company shall not be given any cure period in connection with applications
                                         or orders filed or issued, as applicable, by the Company or with its consent.

 

		9.1.5.	An
                                         attachment is imposed on all or the majority of the Company’s assets or an execution
                                         action is performed against all or the majority of the Company’s assets, and such
                                         attachment or action is not removed or cancelled, as applicable, within 45 days of being
                                         imposed or executed. Notwithstanding the foregoing, the Company shall not be given any
                                         cure period in connection with applications or orders filed or issued, as applicable,
                                         by the Company or with its consent.

 

		9.1.6.	A
                                         motion is filed for receivership or for the appointment of a (temporary or permanent)
                                         receiver for the Company and/or for all or a majority the Company’s assets, or
                                         an order for the appointment of a temporary receiver is issued, and are not dismissed
                                         or vacated within 45 days of being filed or issued, as applicable; or if an order for
                                         the appointment of a permanent receiver is issued with respect to all or a portion of
                                         the Company’s assets. Notwithstanding the foregoing, the Company shall not be given
                                         any cure period in connection with applications or orders filed or issued, as applicable,
                                         by the Company or with its consent.

 

“Majority
of the Company’s assets” – assets or a number of assets comprising more than 50% of the Company’s balance
sheet.

 

    	 	27	 

     

    

 

		9.1.7.	The
                                         Company files with the court a motion for an order to freeze proceedings or such an order
                                         is issued, or the Company files with the court a motion for a settlement or arrangement
                                         with its creditors under Section 350 of the Companies Law (except for the purpose of
                                         a merger with another company, as set forth in Section 9.1.20 below and/or a company
                                         restructuring and split which are not prohibited under this Indenture, and other than
                                         arrangements between the Company and its shareholders which are not prohibited under
                                         this Indenture and which shall not affect the Company’s ability to repay the Debentures
                                         (Series C)); or a motion is filed with the court under Section 350 of the Companies Law
                                         against the Company (without its consent) and is not dismissed or vacated within 45 days
                                         of being filed.

 

		9.1.8.	TASE
                                         suspends trading in the Debentures, other than suspension due to ambiguity, as provided
                                         in the Part Four of TASE Rules and Regulations, and the suspension of trade is not cancelled
                                         within 55 days.

 

		9.1.9.	The
                                         Company’s equity (capital attributed to the shareholders of the Company, without
                                         non-controlling rights) on the basis of its last consolidated financial statements published
                                         (financial reporting on the basis of the quarterly financial report or quarterly financial
                                         results or financial statement, as applicable) falls below NIS 650 million over the course
                                         of two or more consecutive calendar quarters.

 

		9.1.10.	A
                                         demand is made for the immediate payment of another series of debentures issued by the
                                         Company or another financial obligation (including other cumulative financial obligations,
                                         which are not debentures) exceeding NIS 300 million.

 

		9.1.11.	The
                                         Debentures (Series C) cease to be rated by all the rating companies rating the Debentures
                                         (Series C) for a period exceeding 60 consecutive days, and no other alternative Israeli
                                         rating is given during the aforementioned period.

 

		9.1.12.	The
                                         Company breaches its undertakings in connection with the Bezeq shares, as set forth in
                                         Section 5.2 above.

 

		9.1.13.	The
                                         Company expands the Debentures (Series C) in a manner that is not compliant with the
                                         Company’s undertakings in connection with a series expansion, as set forth in Section
                                         3.2 above.

 

		9.1.14.	The
                                         Company is dissolved or written-off for any reason whatsoever, including a dissolution
                                         or write-off for purposes of a merger or as part of a share exchange transaction, with
                                         the exception of a merger in which the surviving company assumes all of the Company’s
                                         undertakings towards the holders of the Debentures (Series C) as set forth in Section
                                         9.1.21 below.

 

		9.1.15.	The
                                         Company fundamentally breaches the terms of the Debentures or the Indenture, or fails
                                         to perform any of its material undertakings in such context, and such breach is not remedied
                                         within 10 days of the breach.

 

    	 	28	 

     

    

 

		9.1.16.	It
                                         becomes apparent that any of the Company’s representations in the Debentures or Indenture
                                         are incorrect and/or incomplete, and, if the breach is curable, such breach is not remedied
                                         within 14 days of occurring.

 

		9.1.17.	The
                                         Company ceases or announces its intent to cease conducting its business as shall be from
                                         time to time, or the Company ceases or announces its intention to cease its payments.

 

		9.1.18.	There
                                         is a material worsening in the Company’s state of affairs compared with such status on
                                         the date of issuance, and there is a material concern that the Company will be unable
                                         to repay the Debentures in a timely manner.

 

		9.1.19.	The
                                         Company fails to publish a financial statement it is required by law or the provisions
                                         of this Indenture to publish, within 30 days of the last date on which it is required
                                         to make such publication.

 

		9.1.20.	A
                                         merger of the Company is performed without the prior consent of the Debenture Holders,
                                         by an ordinary majority, unless the surviving company declares to the Debenture Holders,
                                         including by means of the Trustee, at least ten business days prior to the date of the
                                         merger, that the surviving company has assumed all of the undertakings towards the Debenture
                                         Holders and that there is no reasonable concern that the surviving company of the Company
                                         will be unable to perform the undertakings vis-à-vis the Debenture Holders following
                                         such merger.

 

		9.1.21.	The
                                         Debentures (Series C) are de-listed from TASE.

 

		9.1.22.	The
                                         control undertaking in the Company, as set forth in Section 5.5 above, is breached.

 

		9.1.23.	The
                                         Company performs a distribution (as defined in the Companies Law) which does not comply
                                         with the terms of Section 5.7 above.

 

		9.1.24.	A
                                         material concern exists that the Company will be unable to perform its material undertakings
                                         towards the Debenture Holders.

 

		9.1.25.	The
                                         Company breaches its undertaking to complete the Interest Cushion Amount as set forth
                                         in Section 6.2.3 above.

 

		9.1.26.	The
                                         Company expands the Debentures (Series C) or issues a new series of debentures or expands
                                         a new series of debentures contrary to the provisions of Section 3.2 above.

 

		9.1.27.	The
                                         Company expands the Debentures (Series C) contrary to the provisions of Section 3.2 above.

 

		9.1.28.	The
                                         Company breaches any of its undertakings in Section 5.2 above.

 

		9.1.29.	The
                                         Company breaches the undertaking in Section 5.4 or 5.3 above.

 

    	 	29	 

     

    

 

		9.1.30.	A
                                         “going concern” note is made in the Company’s financial statements and/or its
                                         quarterly financial results, as the case may be, for two consecutive quarters. A “going
                                         concern” means: a “going concern” note arising from substantial doubts
                                         regarding the Company’s ability to repay its obligations in the foreseeable future.

 

		9.1.31.	A
                                         transaction is executed contrary to the provisions of Section 5.12 above.

 

		9.1.32.	The
                                         majority of the Company’s assets are sold, as such term is defined in Section 9.1.6
                                         above (other than with respect to the sale of the Undertaken Shares and the mechanism
                                         provided in Section 5.2.6 above in this respect; i.e. to the extent that if not for the
                                         sale of the Undertaken Shares, the sale performed would not have fallen under the definition
                                         of a sale of “the majority of the Company’s assets,” no grounds for
                                         immediate repayment will exist under this Section).

 

		9.1.33.	The
                                         Company ceases to be a reporting company, as such term is defined in the Securities Law.

 

		9.1.34.	The
                                         Company’s rating falls below Baa2.il (Israeli rating by Midroog or the equivalent
                                         by another rating company, unless the Company has liquid funds to fully repay its fixed
                                         debt for the subsequent 18 months after such downgrade, in accordance with their amortization
                                         schedule (hereinafter, “Cash Flow Period”).

 

“Liquid
Funds” means cash and cash equivalents, including investments in marketable securities of the Company and/or wholly-owned
subsidiaries. The Company shall furnish the Trustee with a confirmation by the Company’s senior financial officer regarding
its liquid funds, together with a projected cash flow report indicating the Company’s ability to repay all of the Company’s
anticipated obligations during the Cash Flow Period.

 

		9.1.35.	The
                                         Company fails to satisfy its undertaking under Section 5.13 of this Indenture.

 

In
such instances, the provisions of Section 9.2 below shall apply.

 

For
the avoidance of doubt, it is clarified that nothing in the aforementioned right to immediate repayment and/or immediate repayment
and/or realization of collateral derogates from or affects any other or additional relief available to the Debenture Holders or
Trustee under the terms of the Debentures and this Indenture or under law, and the failure to make the debt immediately repayable
upon the occurrence of any of the events specified in Section 9.1 above shall not constitute a waiver of the rights of the Debenture
Holders or the Trustee, as aforementioned.

 

    	 	30	 

     

    

 

		9.2.	Upon
                                         the occurrence of any of the events specified in Section 9.1 above and in accordance
                                         with the provisions included therein, including the subsections thereof:

 

		9.2.1.	The
                                         Trustee shall be required to convene a meeting of holders of the Debentures (Series C)
                                         whose agenda includes the adoption of a resolution to demand the immediate repayment
                                         of the entire outstanding balance of the Debentures (Series C) and/or the realization
                                         of the collateral due to the occurrence of any of the events specified in Section 9.1
                                         above, and it shall be required to convene such a meeting upon the demand of one or holders
                                         of Debentures (Series C) holding at least 5% of the balance of the nominal value of the
                                         Debentures (Series C), whose agenda includes the adoption of a resolution regarding the
                                         immediate repayment of the entire outstanding balance of the Debentures (Series C) and/or
                                         the realization of collateral (to the extent provided) due to the occurrence of any of
                                         the events specified in Section 9.1 above. The date for convening such meeting shall
                                         be 21 days after being notified (or a shorter time period in accordance with the provisions
                                         of Section 9.2.5 below).

 

		9.2.2.	The
                                         holders’ aforementioned resolution to demand the immediate repayment of the Debentures
                                         and/or to realize the collateral, shall be adopted at a meeting at which Holders who
                                         hold at least fifty percent (50%) of the balance of the nominal value of the Debentures
                                         of such series were present, by a majority of Holders holding the balance of the nominal
                                         value of the Debentures who are represented at the vote or by such majority at an adjourned
                                         meeting at which Holders who hold at least twenty percent (20%) of such balance were
                                         present.

 

		9.2.3.	Should
                                         any of the events specified in Sections 9.1 hereinabove not be cancelled or removed by
                                         the date of the Meeting, and a resolution is adopted at such Meeting of Debenture Holders
                                         in accordance with Section 9.2.2 above, the Trustee shall be required, without delay,
                                         to demand the immediate repayment of the entire outstanding balance of the Debentures
                                         (Series C) and/or to realize the collateral.

 

		9.2.4.	Notwithstanding
                                         the provisions of this Section 9.2, the Trustee or Debenture Holders may not demand the
                                         immediate repayment of the Debentures and may not realize collateral until after the
                                         time period prescribed in the subsections of Section 9.1 above, to the extent prescribed,
                                         has passed, during the course of which the Company may perform an action or adopt a resolution
                                         as a result of which the grounds for immediate repayment or the realization of collateral
                                         (hereinafter, “Cure Period”) cease to exist, and the grounds did not
                                         cease to exist. However, the Trustee may shorten the Cure Period if it believes that
                                         it may materially affect the Holders’ rights.

 

		9.2.5.	Notwithstanding
                                         the provisions of this Section 9.2, the Trustee or the Holders shall only demand the
                                         immediate repayment of the Debentures and realize collateral after giving the Company
                                         written notice 10 days prior to the Debentures (Series C) becoming immediately repayable
                                         or the realization of the collateral (hereinafter, “Notice Period”)
                                         of their intention to do so. However, neither the Trustees nor the Holders of the Debentures
                                         (Series C) are obligated to do so if there is reasonable concern that such notice will
                                         affect the possibility of demanding the immediate repayment of the Debentures and/or
                                         realizing collateral.

 

    	 	31	 

     

    

 

		9.2.6.	A
                                         copy of the notice of convening the Meeting, as aforementioned, which is sent by the
                                         Trustee to the Company immediately upon publication of the notice or publication of the
                                         summons to the meeting on the Magna system, shall constitute prior written notice to
                                         the Company of the Trustee’s intention to act as aforementioned.

 

		9.2.7.	The
                                         Trustee shall notify the Debenture Holders of the occurrence of an event which constitutes
                                         grounds for immediate repayment immediately after actually becoming aware of such event.
                                         Such notice shall be published in accordance with the provisions of Section 25 below.

 

		9.2.8.	The
                                         Trustee may, at its discretion, shorten the aforementioned 21 days (in Section 9.2.1
                                         hereof) and/or the aforementioned 10-day notice period (in Section 9.2.5) should it believe
                                         that any postponement of the Meeting jeopardizes the rights of the holders of the Debentures
                                         (Series C).

 

		9.2.9.	Nothing
                                         herein derogates or makes conditional the rights of the Trustee or the holders of the
                                         Debentures (Series C) in accordance with Section 35.i.1 of the Securities Law or the
                                         provisions of the law.

 

		9.2.10.	Nothing
                                         in the right to immediate repayment and/or realization of collateral, as set forth in
                                         this Section above, and/or the immediate repayment derogates or affects any other or
                                         additional relief available to the holders of the Debentures (Series C) under the terms
                                         of the Debenture (Series C) and the provisions of this Indenture and/or the law.

 

	10.	Claims
                                         and Proceedings by the Trustee

 

		10.1.	In
                                         addition to any provision in the Indenture and as an independent right and power, the
                                         Trustee may, without further notice, institute all such proceedings, including legal
                                         proceedings and requests for instructions, as it so determines and subject to the provisions
                                         of applicable law, for the purpose of protecting the rights of the Debenture Holders.

 

Nothing
in the foregoing prejudices and/or derogates from the Trustee’s right to institute legal and/or other proceedings, regardless
of whether immediate payment of the Debentures was demanded, all for the protection of the rights of the Debenture Holders and/or
of the purpose of issuing any order concerning the Trustee’s affairs and subject to applicable law. Notwithstanding the
provisions of this Section 10, it is clarified that the right to demand immediate repayment shall only arise in accordance with
the provisions of Section 9 above and not by virtue of this Section 10.

 

		10.2.	The
                                         Trustee shall be required to act as set forth in Section 10.1 above if so required by
                                         an ordinary resolution adopted by a General Meeting of Debenture Holders, unless it determines,
                                         under the circumstances, that it is not just and/or reasonable to do so and applies to
                                         the relevant court for instructions on the matter at the first reasonable opportunity.

 

    	 	32	 

     

    

 

		10.3.	The
                                         Trustee may, prior to instituting such proceedings, convene a meeting of Debenture Holders
                                         in order for the Holders to decide, in an ordinary resolution, which proceedings are
                                         to be instituted for the purpose of realizing their rights under this Indenture. The
                                         Trustee may further re-convene a meeting of Debenture Holders for the purpose of receiving
                                         instructions in connection with the conduct of the proceedings. The Trustee shall take
                                         action in such instances without delay and at the first reasonable opportunity. For the
                                         avoidance of doubt, it is clarified that the Trustee may not delay the immediate repayment
                                         so decided upon by the meeting of Debenture Holders under Section 9 above, unless the
                                         event with respect to which the resolution to demand immediate repayment is cancelled
                                         or removed. It is clarified that notwithstanding the provisions of Section 10.1 above,
                                         the Trustee shall only file a motion for the liquidation of the Company after an ordinary
                                         resolution is adopted in the matter by a General Meeting of Debenture Holders.

 

		10.4.	Subject
                                         to the provisions of this Indenture, the Trustee may, but is not obligated to, convene
                                         a General Meeting of Debenture Holders at any time in order to discuss and/or receive
                                         its instructions on any manner pertaining to this Indenture. For the avoidance of doubt,
                                         it is clarified that the Trustee may not delay execution of the immediate repayment so
                                         resolved by the meeting of General Holders pursuant to Section 9 above, unless the event
                                         with respect to which the resolution to demand immediate repayment was adopted is cancelled
                                         or removed.

 

		10.5.	Whenever
                                         the Trustee is required under this Indenture to perform any action, including instituting
                                         proceedings or filing claims at the demand of the Debenture Holders, as set forth in
                                         this Section, the Trustee may refrain from taking any such action until receiving instructions
                                         from the meeting of Debenture Holders and/or instruction from the court to which the
                                         Trustee applied, at its discretion, for instructions in the event it believed there to
                                         be a need for such instructions. For the avoidance of doubt, it is clarified that the
                                         Trustee may not delay the immediate repayment or realization of collateral given (if
                                         given) as resolved by a meeting of Debenture Holders in accordance with Section 9 above,
                                         unless the event with respect to which the resolution to demand immediate repayment is
                                         cancelled or removed.

 

	11.	Trust
                                         for Proceeds

 

All
proceeds received by the Trustee, with the exception of the Trustee’s fees and payment of any debt towards the Trustee, in any
manner whatsoever including, without limitation, as a result of a demand for immediate repayment of the Debentures and/or as a
result of proceedings it institutes, if at all, inter alia, against the Company, will be held thereby in trust and shall
be used by the Trustee for the following purposes and according to the following order of priority:

 

First,
for settling reasonable expenses, payments, levies and liabilities disbursed by the Trustee, imposed thereon, or incurred through
or as a result of the actions entailed in performing the duties of the trust or in another manner in connection with the terms
of the Indenture, including the Trustee’s fee.

 

    	 	33	 

     

    

 

Second,
to pay any other amount under the Indemnification Undertaking (as such term is defined in Section 24 below).

 

Third,
for payment to Holders who bore payments pursuant to Section 24.4.1.2 below.

 

Fourth,
to pay Debenture Holders the arrears interest owing to them (if at all), principal and/or interest in arrears owing to them under
the terms of the Debentures, pari passu and pro rata to the principal and/or interest amounts in arrears owing to
each of them without preference or priority with respect to any of them.

 

Fifth,
to pay the Debenture Holders for the principal and/or interest amounts in arrears owing to them under the terms of the Debentures
held by them pari passu and - with respect to the principal – regardless of whether the due date of the principal
amounts has arrived and – with respect to the interest – the interest amounts which the Company was required to pay
(and had not yet paid) for the period with respect to which the interest has not yet been paid and up to the date on which the
Debentures become immediately payable, and there shall be no preference by reason of priority in time of issuance of the Debentures
by the Company or in another manner. The Trustee shall pay the excess, if any, to the Company or its designees, as applicable.

 

Withholding
tax shall be deducted from the payments to the Debenture Holders, insofar as such deductions are required by applicable law.

 

It
is clarified that in the event the Company is required to bear any of the expenses but fails to do so, the Trustee shall act to
obtain such amounts from the Company and, upon succeeding in doing so, shall hold such amounts in Trust and shall use them for
the purposes and in accordance with the order of priority set forth in this Section.

 

	12.	Authority
                                         to Demand Financing

 

The
Trustee may direct the Company in writing to transfer to the Trust Account, for the Debenture Holders and in lieu of payment thereto,
all or portion of the next payment (interest and/or principal), which the Company shall furnish to the Trustee on the date provided
herein for the subsequent payment (and not prior to such time), in order to finance the proceedings and/or expenses and/or Trustee’s
fee under this Indenture. The Company shall comply with the Trustee’s notice and it shall be deemed to have fulfilled its
undertaking towards the Holders if it transfers the amounts demanded by the Trustee to the account whose details are provided
in the Trustee’s notice. Nothing in the foregoing releases the Company from its obligations to pay the aforementioned expenses
and fees whenever it is required to bear such amounts under this Indenture and applicable law.

 

It
is clarified that notwithstanding the provisions of Section 11 above and this Section 12, the Trustee shall take reasonable measures
to collect the expense reimbursement which the Company is required to bear under the Indenture, and any amount received from the
Company in this respect shall be used by the Trustee in accordance with the order of priority set forth in Section 11 above.

 

	13.	Authority
                                         to Delay Distribution of Funds

 

		13.1.	Notwithstanding
                                         the provisions of Section 11 above, should the monetary amount received as a result of
                                         the institution of the proceedings specified above and which is available for distribution
                                         at any time, as set forth in such section, be less than NIS 1 million, the Trustee shall
                                         not be obligated to distribute such amount and may invest all or portion thereof in investments
                                         permitted under this Indenture, as set forth in Section 17.

 

		13.2.	When
                                         the aforementioned investments and the profits thereon, together with other funds which
                                         shall reach the Trustee for purposes of payment thereof to the Debenture Holders reach,
                                         if at all, an amount which is sufficient to pay a minimum of NIS 1 million, the Trustee
                                         shall pay such amount to the Debenture Holders as set forth in Section 11 above. In the
                                         event that the Trustee is not in possession of an amount that is sufficient to pay at
                                         least NIS 1 million as aforementioned, within a reasonable amount of time, the Trustee
                                         shall distribute to the Debenture Holders the funds in its possession, and in any case
                                         no later than once every three months. Notwithstanding the foregoing, the Debenture Holders
                                         may, by an ordinary resolution, require the Trustee to pay them the amounts accumulated
                                         therewith including if such amounts do not total NIS 1 million. Notwithstanding the foregoing,
                                         the Trustee’s fee and expenses shall be paid out of such funds immediately upon
                                         their due date, including if the amounts which reached the Trustee are lower than the
                                         aforementioned total.

 

    	 	34	 

     

    

 

	14.	Notice
                                         of Distribution; Non-Payment for Reasons Beyond the Company’s Control; Deposit
                                         with Trustee

 

		14.1.	The
                                         Trustee shall notify the Debenture Holders of the date and place in which any of the
                                         payments specified in Sections 11 and 12 above shall be made. Such a notice shall be
                                         delivered in the manner prescribed in Section 25 below prior to such payment.

 

After
the date specified in the notice, the Debenture Holders shall be entitled to interest thereon according to the rate indicated
in the Debentures, exclusively on the outstanding balance of the principal amount (if any) less the amount paid or proposed to
be paid to them, as aforementioned.

 

		14.2.	Funds
                                         distributed in accordance with Section 14.1 above shall be deemed to be payment on account
                                         of the repayment [of the Debentures].

 

		14.3.	Any
                                         sum payable to a Debenture Holder which was not actually paid on the due date for payment
                                         for a reason beyond the Company’s control, even though the Company was ready to
                                         pay such amount in a timely fashion, shall cease to bear interest as of such due date,
                                         and the Debenture Holder shall be entitled only to the amounts to which it was entitled
                                         on the due date for such payment on account of the principal and the interest.

 

    	 	35	 

     

    

 

		14.4.	The
                                         Company shall deposit with the Trustee within 15 business days from the due date for
                                         payment thereof, the payment amount that was not paid in a timely manner, as set forth
                                         in Section 14.3 above, and shall notify the Debenture Holders of such deposit. The aforementioned
                                         deposit shall be deemed to be payment of such amount and, in the event of payment of
                                         all the amounts due with respect to the Debenture, also as the redemption of such Debentures.

 

		14.5.	The
                                         Trustee shall invest the funds remitted thereto, as set forth in Section 14.4 above,
                                         in trust accounts issued in its name and for the deposit of the Trustee, in investments
                                         permitted to a Trustee under this Indenture (as set forth in Section 17 below). To the
                                         extent that the Trustee has complied with the foregoing, it shall owe the parties entitled
                                         to such amounts only the proceeds received from the realization of such investment, less
                                         the Trustee’s fees, expenses and reasonable expenditure related to such investment and
                                         the management of the trust accounts, reasonable fees and mandatory payments applying
                                         to the trust account. The Trustee shall remit amounts out of the aforementioned funds
                                         to Debenture Holders entitled thereto as soon as possible after it is presented with
                                         reasonable proofs and approvals evidencing their right to such amounts, less the Trustee’s
                                         expenses, fees, mandatory payments and the Trustee’s fee.

 

		14.6.	The
                                         Trustee shall hold such funds and shall invest them in the aforementioned manner up to
                                         two years after the final repayment date of the Debentures. After such date, the Trustee
                                         shall remit to the Company the amounts stated in Section 14.5 above, including the profits
                                         from the investment less the Trustee’s expenses, other expenses incurred in accordance
                                         with this Indenture (including fees paid to service providers and so forth), to the extent
                                         any remain in the Trustee’s possession at the time. The Company shall hold such
                                         amounts in trust for the Debenture Holders entitled to such amounts, and the provisions
                                         of Sections 14.5 above shall apply with respect to amounts remitted thereto by the Trustee,
                                         as set forth above, mutatis mutandis. Upon remittance of the funds from the Trustee
                                         to the Company, the Trustee shall be exempt from payment of such amounts to the Debenture
                                         Holders entitled thereto.

 

		14.7.	The
                                         Company shall confirm for the Trustee in writing the remittance and receipt of such sums
                                         in trust for the aforementioned Debenture Holders, and shall indemnify the Trustee for
                                         monetary damage incurred thereby following and as a result of the transfer of such funds,
                                         unless the Trustee acted with gross negligence (with the exception of negligence that
                                         is exempt under the law in effect from time to time), in bad faith or fraudulently.

 

		14.8.	The
                                         Company shall hold such sums in trust for the Debenture Holders entitled to such amounts
                                         for one additional year after they were remitted to it by the Trustee, and shall not
                                         make any use thereof and shall invest such amounts in accordance with this Indenture.
                                         Amounts not demanded from the Company by a Debenture Holder by the end of seven years
                                         from the final repayment date of the Debentures shall be remitted to the Company, and
                                         it shall be entitled to use the remaining funds for any purpose whatsoever.

 

    	 	36	 

     

    

 

	15.	Receipt
                                         from Debenture Holders and Trustee

 

		15.1.	A
                                         receipt from the Trustee concerning the deposit of the principal and interest sums therewith
                                         in favor of the Debenture Holders shall release the Company entirely in connection with
                                         payment of the amounts indicated therein.

 

		15.2.	A
                                         receipt from a Debenture Holder for the principal and interest sums paid thereto by the
                                         Trustee for the Debentures shall release the Trustee and Company entirely with respect
                                         to actual payment of the amounts indicated therein.

 

		15.3.	Amounts
                                         distributed as set forth in Section 14 above shall be deemed payment on account of the
                                         repayment of the Debentures.

 

	16.	Presentation
                                         of Debenture to Trustee and Recording a Partial Payment

 

		16.1.	The
                                         Trustee may demand that a Debenture Holder present it, upon payment of any interest or
                                         partial payment of the principal and interest in accordance with Sections 13, 14 and
                                         15 above, the Debenture Certificates with respect to which the payments are made, and
                                         the Debenture Holder shall be required to present such Debenture Certificate, provided
                                         that this shall not obligate the Debenture Holders to make any payment and/or expense
                                         and/or impose on the Debenture Holders any responsibility and/or liability.

 

		16.2.	The
                                         Trustee may make a note on the Debenture Certificates of amounts so paid and the date
                                         of payment.

 

		16.3.	The
                                         Trustee may, in any special circumstance, at its discretion, forego presentation of the
                                         Debenture Certificate after receiving from the Debenture Holder an indemnification letter
                                         and/or guarantee that it deems satisfactory, for damages that are liable to occur due
                                         to the failure to make such a note, all as it deems fit.

 

		16.4.	Notwithstanding
                                         the foregoing, the Trustee may, at its discretion, keep records with respect to such
                                         partial payments in another manner.

 

	17.	Investment
                                         of Funds

 

All
of the funds which the Trustee may invest hereunder shall be invested by the Trustee in an Israeli banking entity rated by a rating
company no lower than an (AA2.il) rating of Midroog Ltd. or the equivalent, in its name or to its deposit, at its discretion,
in bonds of the Government of Israel rated by a rating company no lower than an (AA2.il) rating by Midroog Ltd. or the equivalent,
or in daily bank deposits as it deems fit. To the extent that the Trustee has complied with the foregoing, the Trustee shall owe
parties entitled to such amounts only the proceeds received from the liquidation of the investments, less the Trustee’s fees and
expenses and the commissions and expenses pertaining to such investment and the management of the trust accounts and the commissions,
and less the mandatory payments applying to the trust account, and the Trustee shall act with respect to the remaining funds in
accordance with the provisions of the Indenture, as the case may be.

 

    	 	37	 

     

    

 

	18.	Company’s
                                         Undertakings Towards Trustee

 

The
Company undertakes towards the Trustee as follows, for as long as the Debentures have not yet been fully paid:

 

		18.1.	To
                                         continue managing the Company’s businesses in a proper and orderly manner.

 

		18.2.	To
                                         keep regular account books in accordance with generally accepted accounting principles
                                         and to safeguard the books and the documents serving as evidence, and, subject to applicable
                                         law, to enable the Trustee or any authorized representative of the Trustee to inspect,
                                         at any reasonable time as shall be coordinated in advance with the Company, and no later
                                         than seven business days of receiving the Trustee’s request, any such accounting
                                         book and/or document which the Trustee wishes to inspect. In this respect, an authorized
                                         representative of the Trustee means any person appointed by the Trustee for purposes
                                         of such inspection, by written notice which the Trustee shall furnish to the Company
                                         prior to such inspection.

 

		18.3.	Subject
                                         to the provisions of Section 2.8 above and to the extent it is not contrary to applicable
                                         law and/or agreement, to cause the senior financial officer of the Company to provide
                                         the Trustee and/or the authorized representative thereof, as set forth in Section 18.2,
                                         no later than seven business days of receiving the Trustee’s request, any explanation,
                                         document, calculation or information in the Trustee’s possession and which can
                                         be reasonably prepared, which pertains to the Company, its business and/or its assets
                                         which the Trustee believes to be reasonably required for the purpose of examinations
                                         being conducted by the Trustee to protect the Debenture Holders.

 

		18.4.	To
                                         provide the Trustee written notice, as soon as possible and within no later than 2 business
                                         days, of the occurrence of any of the events enumerated in Section 9.1 above (inclusive
                                         of it subsections) or of the Company’s material knowledge that such an event is
                                         about to occur, without taking into account the cure periods provided in Section 9.1
                                         (inclusive of subsections), to the extent any exist in such subsections.

 

		18.5.	To
                                         furnish the Trustee with a copy of any document or information which the Company furnishes
                                         the Debenture Holders, if at all. The Company shall further furnish the Trustee or its
                                         authorized representative, who shall be an attorney or accountant by profession (and
                                         regarding which a notice of appointment thereof shall be furnished to the Company by
                                         the Trustee upon the appointment thereof), additional information pertaining to the Company
                                         (including explanations, documents and calculations pertaining to the Company, its business
                                         affairs or its assets) in its possession or which can be reasonably prepared, and shall
                                         also direct its accountant and legal advisors to do so, upon the Trustee’s reasonable
                                         written request, no later than seven business days of receiving the Trustee’s request,
                                         to the extent the Trustee reasonably believes that such information is necessary for
                                         the purpose of implementing and exercising the authority, powers and authorizations of
                                         the Trustee and/or its authorized representative under this Indenture, including information
                                         required to protect the rights of the Debenture Holders, provided that the Trustee acts
                                         in good faith, subject to the confidentiality obligations provided herein.

 

    	 	38	 

     

    

 

		18.6.	To
                                         summon the Trustee to its general meetings (whether ordinary general meetings or extraordinary
                                         general meetings of the Company’s shareholders) without a right to vote at such
                                         meetings.

 

		18.7.	To
                                         furnish the Trustee, at its demand, with documents and/or details and/or information
                                         reasonably required by the Trustee, at its reasonable discretion, no later than seven
                                         business days of receiving the Trustee’s request, for the purpose of implementing
                                         and exercising the authority, powers and authorizations of the Trustee and/or its agent
                                         under the Indenture, subject to the provisions of Section 18.5 above.

 

		18.8.	Immediately
                                         after the publication of any annual financial statement of the Company and by no later
                                         than April 10 of each year, and for as long as this Indenture remains valid, the Company
                                         shall furnish the Trustee with an approval signed by the Company CEO or a senior financial
                                         officer of the Company stating that, to the best of his knowledge, during the period
                                         commencing from the date of the Indenture and/or the date of granting the previous approval
                                         to the Trustee, whichever is later, and up to the date of the current approval, the Company
                                         is not in breach of this Indenture, including the terms of the Debenture, unless explicitly
                                         indicated otherwise therein. Such approval shall include specific reference to Sections
                                         5.2-5.8 of this Indenture.

 

		18.9.	No
                                         later than ten business days after publication of the Company’s financial statement
                                         for June 30 and after publication of the Company’s annual financial statements,
                                         the Company shall furnish the Trustee with an approval signed by an officer of the Company
                                         regarding the Company’s compliance with the undertakings in Section 5.2 of this
                                         Indenture, to which an updated report of liens from the Company’s and B. Communications’
                                         registers at the Registrar of Companies shall be attached.

 

		18.10.	To
                                         provide the Trustee with the reports and filings as set forth in Section 29 below.

 

		18.11.	To
                                         perform all the actions which are necessary and/or reasonably required under applicable
                                         law to confer validity on the exercise of the powers, authorities and authorizations
                                         of the Trustee and/or its agents in accordance with this Indenture.

 

		18.12.	To
                                         furnish the Trustee, at its first written demand, with written confirmation signed by
                                         the senior financial officer of the Company that all the payments to the Debenture Holders
                                         have been made in a timely manner, and regarding the balance of the nominal value of
                                         the Debentures in circulation.

 

		18.13.	The
                                         Company shall further notify the Trustee in writing of any change in its address and/or
                                         name. Publication of such information on the Magna system shall be deemed to be a notice
                                         to the Trustee for purposes of this Section.

 

    	 	39	 

     

    

 

		18.14.	To
                                         furnish the Trustee, no later than 30 days from the date of issuance of the Debentures
                                         (Series C) pursuant to a prospectus and/or from the date of an expansion of the Debentures
                                         (Series C), an original copy of the Debenture certificate.

 

It
is clarified that the provisions of Section 2.8 above shall also apply to information which is provided to the Trustee and/or
its authorized representative in accordance with this Section 18 hereinabove.

 

	19.	Additional
                                         Undertakings

 

		19.1.	In
                                         the event a resolution is passed to demand immediate repayment in accordance with Section
                                         9.2 above, the Company undertakes: (1) to remit to the Debenture Holders and to pay the
                                         Trustee all the amounts due and/or to be due to them under the Indenture, whether or
                                         not their due date for payment has arrived (“Acceleration”), within 7 days
                                         of the Trustee’s first written demand; and (2) to provide the Trustee, at its demand,
                                         any affidavit or statements and/or to sign any document and/or perform and/or cause the
                                         performance of all the reasonable actions which are necessary and/or reasonably required
                                         and by law to confer validity on the exercise of the powers, authorities and authorizations
                                         of the Trustee and/or its agents which are required to enforce the Company’s undertaking
                                         as provided in this Section 19.1, and for the realization of collateral (to the extent
                                         given).

 

		19.2.	In
                                         the event a resolution is passed to demand immediate payment in accordance with Section
                                         9.2 above, the Trustee and/or Debenture Holders, at their sole discretion, shall be entitled:
                                         (1) to demand the immediate payment of all the amounts which the Company undertook to
                                         accelerate, as set forth in Section 19.1 above; (2) immediately take all the measures
                                         it deems appropriate for the purpose of realizing and enforcing (all or a portion of)
                                         the collateral in its possession, to secure repayment of all or a portion of the amounts
                                         due to the Holders and the Trustee under the Indenture, in any reasonable manner it deems
                                         fit and effective; (3) to realize, in full or in part, any collateral given to the Trustee
                                         for the Debenture Holders in any manner decided upon and in accordance with the applicable
                                         law in the territory relevant to each collateral; (4) to appoint, through the court,
                                         a trustee or receiver or managing receiver over all or part of the encumbered assets.

 

	20.	Reporting
                                         by the Trustee

 

		20.1.	The
                                         Trustee shall, each year as of the date prescribed therefor in the law, and in the absence
                                         of such date, by the end of the second quarter of each calendar year, prepare and deliver
                                         to the Authority and TASE an annual report regarding the affairs of the trust (“Annual
                                         Report”).

 

		20.2.	The
                                         Annual Report shall include the details prescribed from time to time by the Law. The
                                         filing of such Annual Report with the Authority and TASE shall be deemed the furnishing
                                         of the Annual Report to the Company and Debenture Holders.

 

    	 	40	 

     

    

 

		20.3.	The
                                         Trustee shall be required to submit a report with respect to actions it performed in
                                         accordance with Chapter E1 of the Law, upon the reasonable request of Holders holding
                                         at least ten percent (10%) of the balance of the nominal value of the debentures of such
                                         series, within a reasonable period of time from the date of demand, all subject to the
                                         duty of confidentiality which the Trustee owes the Company, as set forth in Section 35j(d)
                                         of the Law.

 

		20.4.	The
                                         Trustee shall notify the Company prior to reporting, pursuant to Section 35h1.

 

	21.	Trustee’s
                                         Fee 

 

		21.1.	The
                                         Trustee shall be entitled to payment of fees and expenses in connection with the performance
                                         of its duties, as set forth below. Should a trustee be appointed in lieu of the Trustee
                                         whose term of office has ended pursuant to Sections 35b(a1) or 35n(d) of the Securities
                                         Law, the Holders of the Debentures (Series C) shall bear the increase in the fee of the
                                         new trustee so appointed over the fee paid to the prior trustee, if such difference in
                                         fee is unreasonable, and the provisions of the relevant law at the time of such replacement
                                         shall apply.

 

		21.2.	The
                                         Holders shall bear such difference in amount by way of setting off the pro rata portion
                                         of the difference from each payment which the Company remits to the Debenture Holders
                                         in accordance with the terms of the Indenture and the remittance thereof by the Company
                                         directly to the Trustee.

 

		21.3.	The
                                         Debenture Holders shall participate in payment of the Trustee’s fee and the reimbursement
                                         of its expenses in accordance with the provisions of Section 24 of the Indenture (indemnification
                                         of Trustee).

 

		21.4.	The
                                         Company shall pay the Trustee a fee for its services, in accordance with the Indenture,
                                         as follows:

 

		21.4.1.	For
                                         the first year of trust, commencing from the date of issuance of the Debentures (Series
                                         C) or a portion thereof, an annual fee of NIS 50,000 for each year of the trust. For
                                         each year of the trust as of the second trust year onwards, or any portion thereof, an
                                         annual fee of NIS 40,000.

 

		21.4.2.	If
                                         additional debentures are issued in addition to the initial issuance of Debentures (Series
                                         C), or the series is otherwise expanded, the Trustee’s annual fee shall be increased
                                         by an amount that reflects the rate of increase in the trade volume of the series, in
                                         a fixed manner until the end of the term of the trust.

 

The
amounts in Section 21.3 above shall be called, the “Annual Wages.”

 

		21.5.	The
                                         Trustee shall further be entitled to reimbursement of reasonable expenses disbursed,
                                         defined as follows: amounts disbursed by the Trustee in the performance of its duties
                                         and/or by virtue of the powers vested therein under this Indenture, including expenses
                                         and costs pertaining to the notification and convening of a meeting of Debenture Holders
                                         and expenses pertaining to couriers and trips, and including newspaper publications related
                                         to the notification of a meeting, provided that with respect to the expenses of an expert
                                         opinion, as detailed in the Indenture, the Trustee provides prior notice of its intention
                                         to obtain an expert opinion.

 

    	 	41	 

     

    

 

		21.6.	The
                                         Trustee shall be entitled to further payment of NIS 500 per each hour of work for special
                                         actions it is required to perform in its capacity as a trustee (all subject to the Indenture),
                                         including:

 

		(a)	Actions
                                         arising from the Company’s breach of the provisions of the Indenture;

 

		(b)	Actions
                                         pertaining to the immediate repayment of the Debentures and/or actions in connection
                                         with a resolution of a meeting of Debenture holders to demand the immediate repayment
                                         of the Debentures, including all the implications thereof;

 

		(c)	Special
                                         actions it is required or shall be required to perform in the performance of its duties
                                         under the Indenture and/or in connection with the rights of the Debenture Holders and
                                         for the purpose of protecting such rights, including the convening of meetings of Debenture
                                         Holders;

 

		(d)	Special
                                         actions, including, without limitation, actions required as a result of a restructuring
                                         of the Company or an action required due to or as a result of a demand of the Company
                                         or for the purpose of performing its duties as a reasonable trustee, or as a result of
                                         a change in laws and/or the provisions of the Law (including, without limitation, regulations
                                         promulgated under Amendments 50 and 51 to the Securities Law) and/or regulations and/or
                                         other binding provisions applying to the Trustee’s function, pursuant to which the Trustee
                                         shall be required to perform actions and/or examinations and/or prepare additional reports.
                                         The Company shall bear all the reasonable expenses incurred by the Trustee as a result
                                         of the foregoing, including its reasonable fees for such actions;

 

		(e)	Actions
                                         pertaining to the registration or cancellation of the registration of collateral in a
                                         registry that is maintained in accordance with applicable law, in addition to evaluation,
                                         control and supervision, enforcement etc. of undertakings (such as restrictions on the
                                         Company’s freedom of action, encumbrance of assets and so forth) assumed or to
                                         be assumed by the Company or to be assumed for or on behalf of the Company, for the purpose
                                         of securing other undertakings assumed by or on behalf of the Company (such as payments
                                         under the terms of the Debentures) towards Debenture Holders, including with respect
                                         to the nature of the terms of such collateral and undertakings and the fulfillment thereof.

 

		21.1.	The
                                         amount set forth in this Section 21 shall be paid to the Trustee within 30 business days
                                         of the issuance of a payment demand by the Trustee.

 

		21.2.	For
                                         each shareholders meeting in which the Trustee participates, including for its attendance
                                         at a meeting that was adjourned due to the absence of a proper legal quorum, the Trustee
                                         shall be paid an additional sum of NIS 600 per meeting.

 

    	 	42	 

     

    

 

		21.3.	VAT,
                                         if it applies, shall be added to each of the aforementioned amounts and shall be paid
                                         by the Company.

 

		21.4.	All
                                         the amounts set forth in this Section 21 shall be linked to the Consumer Price Index
                                         know on the date of issuance of the Debentures (Series C), but in any case, no amount
                                         that is lower than the amounts stipulated in this Section 21 shall be paid.

 

		21.5.	All
                                         the amounts specified in this Section 21 shall take priority over monies due to the Debenture
                                         Holders.

 

		21.6.	The
                                         Trustee’s fee shall be paid for the period concluding at the end of the trust term
                                         under the terms of the Indenture, including if a receiver and/or managing receiver is
                                         appointed for the Company and/or if the management of the trust under the Indenture is
                                         overseen by the court.

 

	22.	Trustee’s
                                         Powers

 

		22.1.	The
                                         Trustee may, in the scope of performing the affairs of the trust hereunder, commission
                                         an expert opinion and/or the written advice of any attorney, accountant, appraiser, valuator,
                                         surveyor, real estate agent or other expert (hereinafter, “Advisors”),
                                         and to act in accordance with the findings thereof, whether such opinion and/or advice
                                         was prepared at the request of the Trustee and/or the Company, and the Trustee will not
                                         be responsible for any loss or damage that may be caused as a result of any act or omission
                                         committed by the Trustee in reliance on such advice or opinion, unless the Trustee acted
                                         with gross negligence (with the exception of negligence that is exempt by the law in
                                         effect from time to time) and/or in bad faith and/or maliciously. The Company shall bear
                                         the full reasonable wages and expenses of hiring the Advisors so appointed, provided
                                         that – to the extent possible under the circumstances of the matter and insofar
                                         as it does not prejudice the rights of the Holders of the Debentures (Series C) - the
                                         Trustee shall provide the Company with prior notice of its intention to obtain such expert
                                         opinion or advice together with details of the requested fee and the purpose of the expert
                                         opinion or advice, and provided that such fee does not exceed the reasonable and customary
                                         limits. It is clarified that publication of the results of the meeting of holders regarding
                                         a resolution to appoint Advisors, as aforementioned, shall constitute adequate notice
                                         to the Company in this respect. In addition, the Trustee may settle the reasonable fees
                                         of such an Advisor (including in advance) at the Company’s expense and the Company
                                         shall reimburse the Trustee for such expenses immediately upon its first demand.

 

		22.2.	In
                                         addition, at the Company’s request and as necessary and practicable under the circumstances
                                         of the matter, and insofar as it does not prejudice the Holders’ rights, the Trustee
                                         and the Company shall agree on a list of not more than three such Advisors who have the
                                         relevant reputation and expertise, to whom the Trustee will turn to receive price quotes
                                         for their appointment as advisors. The Company shall select one offer out of the offers
                                         submitted, and shall be entitled to negotiate the offers with the advisors, provided
                                         that this shall not delay actions which the Trustee believes are to be performed in order
                                         to protect the rights of the holders of the Debentures (Series C), including by means
                                         of such Advisors. Nevertheless, the foregoing shall not apply if a particular Advisor
                                         is appointed by a meeting of Debenture Holders and if the delay entailed in the aforementioned
                                         process may harm the holders’ rights.

 

    	 	43	 

     

    

 

		22.3.	Any
                                         such advice and/or opinion may be given, sent or received by way of letter, telegram,
                                         facsimile, e-mail and/or any other electronic means for the transmission of information,
                                         and the Trustee will not be responsible for acts it performed in reliance on advice and/or
                                         an opinion or information transmitted in one of the forms mentioned above, even though
                                         errors occurred therein and/or they were not authentic, unless such errors could have
                                         been discovered through reasonable examination, provided that it did not act with gross
                                         negligence (with the exception of negligence that is exempt under the law in effect from
                                         time to time) and/or in bad faith and/or maliciously. It is clarified that the documents
                                         shall be transferable, on the one hand, and the Trustee may rely on them, on the other
                                         hand, only when they are legible and no difficulty in reading them arises. In any other
                                         instance, the Trustee shall be responsible for demanding the documents in a manner which
                                         enables proper legibility and comprehension.

 

		22.4.	The
                                         Trustee shall not be obliged to notify any party about the execution of this Indenture,
                                         nor may it interfere in any manner in the management of the Company’s business
                                         or its affairs. Nothing in this section limits the Trustee in actions in is required
                                         to perform under the Indenture.

 

		22.5.	The
                                         Trustee shall exercise in the trust the powers, authorizations and authority vested therein
                                         under this Indenture at its sole discretion, and shall not be responsible for any damage
                                         that is caused as a result of an error in such discretion, unless the Trustee acted with
                                         gross negligence (other than negligence that is exempt under the law in effect from time
                                         to time) and/or in bad faith and/or maliciously.

 

	23.	Trustee’s
                                         Authority to Engage Agents

 

Subject
to a prior notice to the Company, and provided that it does not, in the Trustee’s opinion, prejudice the rights of the Debenture
Holders, the Trustee will be entitled to appoint an agent/s to act in its stead, whether an attorney or another party, in order
to perform or to participate in the performance of special acts to be performed in connection with the trust, and to pay reasonable
remuneration to every such agent, including, without derogating from the generality of the foregoing, the institution of legal
proceedings or representation in the merger or split of the Company. The Company may oppose such an appointment within 3 business
days in the event that the agent is in competition, directly or indirectly, with the Company’s business (including companies included
in the Company’s consolidated financial statements). It is clarified that the appointment of such an agent shall not derogate
from the Trustee’s responsibility for its actions and those of its agents. The Trustee shall also be entitled to pay, at the Company’s
expense, the reasonable remuneration of each such agent, and the Company shall reimburse the Trustee for such expense upon its
demand, provided that prior to the appointment of such an agent the Trustee notifies the Company in writing of the appointment
together with details of the agent’s fee and the purpose of the expert opinion or advice, and provided that such agent fee
does not exceed the reasonable and customary limits. It is clarified that publication of a resolution of Debenture Holders regarding
the appointment of agents shall constitute a notice, as aforementioned, provided that the Trustee shall furnish the Company with
all such information and details prior to such appointment. For the avoidance of doubt, the Company shall not reimburse the Trustee
for the fees or expenses of an agent which performed the ordinary actions which the Trustee is required to perform under this
Indenture, insofar as the performance of such actions is included in the wages which the Trustee receives from the Company in
accordance with Section 21 above. For the avoidance of doubt, in the event the Debentures become immediately payable, the actions
which the Trustee is required to take with respect thereto shall not be deemed to be ordinary actions which the Trustee is required
to perform under this Indenture, for purposes of this Section.

 

    	 	44	 

     

    

 

	24.	Indemnification
                                         of Trustee

 

		24.1.	The
                                         Company and the Debenture Holders (on the relevant effective date, as set forth in Section
                                         24.5 below, each with respect to its undertaking as provided in Section 24.3 below) hereby
                                         undertake to indemnify the Trustee and all officers thereof, and its employees, shareholders,
                                         agent or expert appointed under this Indenture and other parties on behalf of the Trustee
                                         under this Indenture and/or pursuant to a resolution that is adopted at a meeting of
                                         Debenture Holders (“Indemnitees”), provided that there no double compensation
                                         or indemnification in the same matter:

 

		24.1.1.	For
                                         any reasonable expense, damage, payment and/or monetary charge, pursuant to a judgment
                                         or arbitral award (with respect to which no stay of execution was issued) or pursuant
                                         to a concluded settlement (and to the extent the settlement pertains to the Company,
                                         the Company’s consent to the settlement was given) on grounds related to actions performed
                                         or withheld by the Indemnitees (as the case may be) or which they are required to perform
                                         under the provisions of this Indenture and/or under law and/or instruction of a competent
                                         authority and/or applicable law and/or at the request of the Debenture Holders and/or
                                         at the Company’s request, all in connection with this Indenture; and

 

		24.1.2.	With
                                         respect to remuneration to the Indemnitees and reasonable expenses disbursed and/or to
                                         be disbursed in the performance and/or exercise of the powers and authorizations under
                                         this Indenture or law in connection with such actions which they reasonably deem to be
                                         necessary in the performance of the foregoing and/or in connection with the exercise
                                         of the powers and authorizations conferred hereunder, and in connection with all manners
                                         of legal proceedings, legal and other expert opinions, negotiations, discussions, insolvency
                                         proceedings, collection proceedings, debt arrangements, debt status evaluation, valuations,
                                         expenses, and travel and/or other expenses, provided that they are reasonable, including
                                         for the purpose of examining and/or handling and/or exercising any of the assets encumbered
                                         under the collateral (if at all), in claims and demands pertaining to any matter performed
                                         and/or not performed in any manner in connection with the foregoing.

 

    	 	45	 

     

    

 

The
foregoing is provided that:

 

		(a)	The
                                         matter with respect to which the indemnification is required cannot be delayed (without
                                         prejudicing their right to demand indemnification retroactively if and to the extent
                                         their eligibility arises);

 

		(b)	No
                                         final judicial ruling has been rendered establishing that the Indemnitees acted in bad
                                         faith;

 

		(c)	No
                                         final judicial rule has been rendered establishing that the Indemnitees acted in excess
                                         of their duties and/or other than in accordance with the provisions of the Indenture
                                         and/or the law;

 

		(d)	No
                                         final judicial ruling has been rendered establishing that the Indemnitees were grossly
                                         negligent (other than negligence that is exempt by the law in effect from time to time);

 

		(e)	No
                                         final judicial ruling has been rendered which established that the Indemnitees acted
                                         maliciously;

 

		(f)	The
                                         Indemnitees provided the Company with written notice, immediately after becoming aware
                                         of any such claim and/or demand, and allowed the Company to conduct the proceedings (other
                                         than in instances in which the proceedings are being administered by the Trustee’s insurance
                                         company or if the company is faced with a conflict of interest).

 

It
is clarified that even if it is asserted against the Indemnitees that they are not entitled to indemnification due to the provisions
of subsections (b) - (e) above, the Indemnitees shall be entitled, immediately upon their first demand, to payment of the amount
owing to them under the Indemnification Undertaking. Should it be found in a final judicial ruling that the Indemnitees are not
entitled to indemnification due to any of the conditions specified in subsections (b) through (e) above, the Indemnitees shall
return the indemnification amounts paid to them.

 

The
indemnification undertakings in this Section 24.1 shall be called “Indemnification Undertaking.”

 

    	 	46	 

     

    

 

		24.2.	Without
                                         derogating from the validity of the Indemnification Undertaking in Section 24.1 above
                                         and subject to the Securities Law, any time the Trustee is required, under the terms
                                         of the Indenture and/or the law and/or instruction of a competent authority and/or applicable
                                         law and/or the demand of the Debenture Holders and/or a demand of the Company, to perform
                                         an action, including, without limitation, instituting proceedings or filing claims at
                                         the request of the Debenture Holders, as set forth herein, the Trustee may refrain from
                                         performing such action until such time as a monetary deposit is received from the Company,
                                         to its satisfaction, and, in the event the Company fails, for any reason, to provide
                                         a financial deposit from the Debenture Holders to cover the Indemnification Undertaking
                                         (the “Financing Cushion”). The Trustee shall, on the effective date
                                         (as set forth in Section 24.5 below), submit the Debenture Holders a request to remit
                                         to the Trustee the Financing Cushion amount on a pro rata basis (as such term is defined
                                         below). To the extent the Debenture Holders fail to actually remit the entire Financing
                                         Cushion amount, the Trustee shall be under no obligation to take any action or institute
                                         the relevant proceedings. Nothing in the foregoing releases the Trustee from taking immediate
                                         action as necessary to prevent the rights of the Debenture Holders from being materially
                                         adversely affected.

 

		24.3.	The
                                         Indemnification Undertaking

 

		24.3.1.	Shall
                                         apply to the Company in the event of (1) actions that were taken and/or required in accordance
                                         with this Indenture or for the protection of the Debenture Holders’ rights; and (2) actions
                                         performed and/or required at the Company’s demand.

 

		24.3.2.	Shall
                                         apply to the Holders who held the relevant Debentures on the effective date (as set forth
                                         in Section 24.5 below) in the event of (1) actions performed at the Debenture Holders’
                                         demand (with the exception of such actions taken at the Holders’ demand, on the grounds
                                         enumerated in this Indenture, for the protection of the Debenture Holders’ rights); and
                                         (2) non-payment by the Company of all or a portion of the Indemnification Undertaking
                                         amount, as applicable, applying thereto under subsection 24.1 above (subject to the provisions
                                         of Section 24.7 below). It is clarified that no payment under this subsection (2) shall
                                         derogate from the Company’s obligation to bear the Indemnification Undertaking
                                         in accordance with Section 24.3.1.

 

		24.4.	In
                                         the event that the Company fails to pay the amounts required to cover the Indemnification
                                         Undertaking amount and/or in the event the indemnification obligation applies to the
                                         Holders by virtue of Section 24.3.2 above and/or the Holders were requested to deposit
                                         the Financing Cushion amount pursuant to Section 24.2 above, the following provisions
                                         shall apply:

 

		24.4.1.	The
                                         funds shall be collected in the following manner:

 

		24.4.1.1.	First
                                         – the amount shall be funded out of the interest and/or principal amounts which
                                         the Company is require to pay to all Debenture Holders after the date of the required
                                         action, and the provisions of Section 11 above shall apply;

 

    	 	47	 

     

    

 

		24.4.1.2.	Second
                                         – should the Trustee believe that the amounts deposited in the Financing Cushion
                                         are insufficient to cover the Indemnification Undertaking, the Holders who held [Debentures]
                                         on the effective date (as set forth in Section 24.5 below) shall deposit the missing
                                         amount with the Trustee on a pro rata basis (as such term is defined below). The amount
                                         deposited by each Debenture Holder shall bear annual interest at a rate equal to the
                                         fixed interest on the Debentures and shall be paid in the order of priority as set forth
                                         in Section 11 above.

 

“Pro
Rata” means: the pro rata portion of the Debentures held by the Holder on the relevant effective date, as set forth in
Section 24.5 below, out of the total nominal value in circulation at the time. It is clarified that the calculation of the pro
rata portion shall remain fixed including if there is a change in the nominal value of the Debentures held by the Holder after
such date.

 

		24.5.	The
                                         effective date for establishing a Holder’s liability under the “Indemnification
                                         Undertaking” and/or payment of the Financing Cushion shall be as follows:

 

		24.5.1.	In
                                         the event the Indemnification Undertaking and/or payment of the Financing Cushion is
                                         required as a result of a decision or urgent action required in order to prevent the
                                         Debenture Holders’ rights from being materially adversely affected, without a prior resolution
                                         by a meeting of Debenture Holders – the effective date for liability shall be the
                                         end of the Trading Day of the day on which the action is taken or the decision adopted,
                                         and if such day is not a Trading Day, then the preceding Trading Day.

 

		24.5.2.	In
                                         the event the Indemnification Undertaking and/or payment of the Financing Cushion are
                                         required as a result of a resolution by a meeting of Debenture Holders – the effective
                                         date for liability shall be the effective date for participating in the meeting (as such
                                         date is indicated in the notification) and shall also apply to a Holder who was not present
                                         or did not participate in the Meeting.

 

		24.6.	No
                                         payment by the Holders, in lieu of the Company, of any amount applying to the Company
                                         under this Section 24, shall release the Company from its responsibility to bear such
                                         payment.

 

    	 	48	 

     

    

 

		24.7.	The
                                         reimbursement of Holders of Debentures (Series C) who bore payments under this Section
                                         shall made in the order of priority set forth in Section 11 above.

 

	25.	Notices

 

		25.1.	Notices
                                         by the Company and/or Trustee to Debenture Holders (including Debenture Holders registered
                                         in the register maintained by the Company) shall be issued by way of an immediate report
                                         via the Securities Authority’s Magna system, and, exclusively in the instances specified
                                         below, also by way of publishing the notice in two daily newspapers with a wide distribution,
                                         which are published in Israel and in Hebrew: (a) an arrangement or settlement pursuant
                                         to Section 350 of the Companies Law; (b) a merger. Any notice so published or sent shall
                                         be deemed to have been issued to the Debenture Holder on such date of publication via
                                         the Magna system.

 

		25.2.	The
                                         Trustee may instruct the Company and the Company shall be required to immediately report,
                                         in the Trustee’s name and via the Magna system, any report to the Debenture Holders as
                                         provided verbatim and in writing by the Trustee to the Company. The Company shall be
                                         entitled to add, in a separate report, its comments and/or response to such report. Any
                                         notice so published shall be deemed to have been issued to the Debenture Holder on such
                                         date of publication via the Magna system.

 

		25.3.	Should
                                         the Company cease to be a “reporting company” as defined in the Law, any
                                         notice by the Company and/or the Trustee for the Debenture Holders shall be sent by registered
                                         mail to the last address of the registered holders of the Debentures, as specified in
                                         the register. Any notice so issued shall be deemed to have been delivered to the Debenture
                                         Holders 3 business days after having been sent by registered mail.

 

		25.4.	Copies
                                         of notices and notifications sent by the Company to the Debenture Holders shall also
                                         be sent to the Trustee. It is clarified that such notices and notifications do not include
                                         the Company’s ongoing reports to the public. Copies of the notices and notifications
                                         provided by the Trustee to the Debenture Holders shall also be sent by the Trustee to
                                         the Company. Publication of such notices via the Magna system shall be in lieu of issuance
                                         thereof to the Trustee or Company, as set forth in this Section, as the case may be.

 

		25.5.	Notices
                                         or demands by the Trustee to the Company or vice versa may be sent by registered mail
                                         to the address designated in the Indentures, or to another address as instructed by one
                                         party to the other in writing, or by courier, facsimile (together with telephone confirmation
                                         of receipt by the recipient) and/or by e-mail, with confirmation by a return e-mail (not
                                         automatic) by the recipient, and any such notice or demand shall be deemed to have been
                                         received by the recipient three business days after having been sent by registered mail,
                                         or upon confirmation of receipt by e-mail, or upon telephone confirmation of receipt
                                         of the fax, or on the first Business Day after having been delivered or offered to the
                                         recipient by the courier, as the case may be.

 

    	 	49	 

     

    

 

		25.6.	Should
                                         the Company cease to be a “reporting company” as defined in the Law, any
                                         notice by the Company and/or the Trustee for the Debenture Holders shall be sent by registered
                                         mail to the last address of the registered holders of the Debentures, as specified in
                                         the register. Any notice so issued shall be deemed to have been delivered to the Debenture
                                         Holders 3 Business Says after having been sent by registered mail.

 

	26.	Changes
                                         to Terms of Debentures, Indenture

 

		26.1.	Subject
                                         to the provision of the law and the regulations promulgated thereunder, the Trustee may,
                                         from time to time and at any time, if it believes that doing so will not prejudice the
                                         rights of the Debenture Holders or that doing so is for the benefit of the Debenture
                                         Holders, waive any breach or non-performance by the Company of any of the terms of the
                                         Debentures or this Indenture. It is clarified that the provisions of this Section 26.1
                                         shall not apply to the following matters:

 

Dates
and payments under the terms of the Debentures, a reduction in the interest rate stipulated in the terms of the Debenture, grounds
for demanding immediate repayment, the Company’s undertaking to meet the financial covenants under Section 5.5 above, restrictions
on distribution pursuant to Section 67 above, restrictions on a series expansion as set forth in Section 3.2.2 above, the creation
of a lien contrary to Section 5.2 above. Subject to the provisions of law and with prior approval by a special resolution of the
meeting of holders of Debentures (Series C), the Trustee may, whether before or after the principal amount of the Debentures becomes
payable, settle with the Company in connection with any right or claim of all or any of the Debenture Holders and agree with the
Company on any arrangement of their rights, including waiving any right or claim thereof and/or of all or any one of the Debenture
Holders towards the Company.

 

		26.2.	Subject
                                         to the provisions of the Law and the regulations promulgated thereunder, the Company
                                         and the Trustee may, whether before or after the principal amount of the Debentures becomes
                                         payable, amend the Indenture and/or the terms of the Debentures upon the occurrence of
                                         one of the following:

 

		26.2.1.	Other
                                         than with respect to a change in the payment dates under the Debenture, the interest
                                         rates (including the interest rates on a downgrade or non-fulfillment of the financial
                                         covenants for the purpose of a change in interest) grounds for demanding immediate repayment,
                                         the negative lien, the financial covenants, restrictions on distribution, restrictions
                                         on a series expansion, and with the exception of a change in the Trustee’s identity or
                                         fees or in order to appoint a trustee in lieu of the Trustee whose term of office has
                                         ended, if the Trustee is convinced that the change does not adversely affect the Debenture
                                         Holders, and with the exception of the matters specified in Section 26.1 above.

 

    	 	50	 

     

    

 

		26.2.2.	The
                                         proposed change is approved in a special resolution of a meeting of holders of the Debentures
                                         (Series C).

 

		26.3.	The
                                         Company shall provide the Debenture Holders with a written notice of any such change
                                         as set forth in Section 26.1 or Section 26.2 above as soon as possible after being made.

 

		26.4.	To
                                         the extent the Trustee’s right under this Section is exercised, the Trustee shall be
                                         entitled to demand that the Debenture Holders provide it or the Company with the Debenture
                                         Certificates, in order to record a note of any such waiver, settlement, modification
                                         or amendment and, at the Trustee’s request, the Company shall record such a note in the
                                         certificates that are furnished thereto. To the extent the Trustee’s right under
                                         this Section is exercised, it shall notify the Debenture Holders thereof in writing without
                                         delay and as soon as possible.

 

		26.5.	Without
                                         derogating from the foregoing, the terms of the Debentures shall also be amendable in
                                         the framework of a settlement or arrangement which has been approved by the court pursuant
                                         to Section 350 of the Companies Law.

 

	27.	Register
                                         of Debenture Holders 

 

		27.1.	The
                                         Company shall keep and maintain at its registered offices a register of Debenture Holders
                                         in accordance with the provisions of the Securities Law, which shall be open for inspection
                                         to any person.

 

		27.2.	The
                                         Company shall not be required to enter any notice in the Register of Debenture Holders
                                         concerning an explicit, implicit or presumed trust, or a pledge or lien of any kind or
                                         any equitable right, action or setoff or other right with respect to the Debentures.
                                         The Company shall only acknowledge the ownership of the person in whose name the Debentures
                                         were registered. The legal heirs, administrators or executors of the registered Holder
                                         and any person who shall be entitled to the Debentures due to the bankruptcy of any registered
                                         Holder (and if it is a corporation – due to its dissolution) may be registered
                                         as the Holders thereof after providing proofs which the Company deems to suffice to prove
                                         their right to be registered as Holders thereof.

 

	28.	Certificates;
                                         Splitting of Certificates

 

		28.1.	A
                                         single certificate shall be issued with respect to the Debentures registered in the name
                                         of a single holder, or several certificates shall be issued, at its request (the certificates
                                         in this Section shall hereinafter be called, the “Certificates”) each
                                         one in a minimum amount of NIS 1,000 (One Thousand) par value (hereinafter, the “Minimum
                                         Quantity”).

 

    	 	51	 

     

    

 

		28.2.	Any
                                         Debenture Certificate may be split into several Certificates, wherein the total nominal
                                         value of the Debentures included therein is equal to the amount of the nominal value
                                         of the Debentures included in the Certificate it is proposed to split, provided that
                                         the nominal value of each Certificate is not less than the Minimum Quantity. The split
                                         shall be made on the basis of a request to make a split, signed by the registered owner
                                         of the Debentures the subject of the Certificate whose split is requested, against delivery
                                         of the Certificate whose split is requested to the Company at its registered office.
                                         The split shall be made within 30 days of the end of the month in which the Certificate
                                         is submitted together with a request to make such split, to the Company at its registered
                                         office. The new debenture certificates issued as a result of the split shall be nominal
                                         amounts, in whole New Israeli Shekels each. All the costs incurred in the split, including
                                         taxes and levies, if any, shall be borne by the party requesting the split.

 

	29.	Reporting
                                         to Trustee

 

		29.1.	In
                                         addition to the provisions of Section 18 above, the Company shall prepare and furnish
                                         to the Trustee, as long as all the Debentures have not been repaid:

 

		29.1.1.	The
                                         Company’s audited financial statements for the fiscal year ending on December 31
                                         of the preceding year, immediately after the publication thereof by the Company. The
                                         publication by the Company of such statements via the Magna system shall be deemed the
                                         transmittal of such statements to the Trustee. 

 

		29.1.2.	The
                                         Company’s reviewed quarterly financial statements, immediately after the publication
                                         thereof by the Company. The publication by the Company of such statements via the Magna
                                         system shall be deemed the transmittal of such statements to the Trustee. 

 

		29.1.3.	A
                                         copy of any document which the Company furnishes to the Debenture Holders.

 

		29.1.4.	Reporting
                                         of any change in the rating of the Debentures or a cessation of the rating.

 

		29.1.5.	Any
                                         document, report or notice which the Company is required to transmit to the Trustee under
                                         applicable law.

 

		29.2.	Should
                                         the Company become a non-reporting company, as defined below, the Company shall provide
                                         the Trustee with annual, quarterly and immediate reports as provided in the consolidated
                                         circular of the Ministry of Finance – Capital Market, Insurance and Savings Division
                                         - Provisions for the Investment of Institutional Entities in Non-Government Bonds, in
                                         effect from time to time. It is clarified that nothing in the foregoing derogates from
                                         any reporting obligation applying or to apply to the Company under applicable law. 

 

    	 	52	 

     

    

 

In
this Section, a “non-reporting company” is a company which is not a “reporting company,” as defined
in the Securities Law, and is not a company traded on a stock exchange overseas, as specified in the Second or Third Schedule
of the Securities Law.

 

The
publication by the Company of such reports and/or notices and/or filings via the Magna system shall be deemed the transmittal
thereof to the Trustee.

 

	30.	Attorneys-in-Fact
                                         

 

The
Company hereby appoints the Trustee for the Debentures as its attorney-in-fact to implement and perform, in its name and place,
all of the actions it is required to perform under the terms of this Indenture, and generally to act in its name with respect
to those actions which the Company is required to perform under this Indenture and fails to perform them or to exercise a portion
of the powers vested in it, and to appoint any other person as the Trustee deems fit to perform its duties under this Indenture,
provided that the Company has not performed the actions which it is required to perform under the terms of the Indenture within
a reasonable period of time, as determined by the Trustee, from the date of the Trustee’s demand, provided that it acted
reasonably.

 

The
appointment pursuant to this Section does not oblige the Trustee to perform any act, and the Company hereby releases the Trustee
and its agents in advance in the event that they do not perform any act, and the Company waives in advance any claim against the
Trustee and/or its agents with respect to any damage incurred and/or likely to be incurred by the Company, directly and/or indirectly,
by virtue of an act not performed by the Trustee and its agents in a timely manner.

 

	31.	Applicability
                                         of Securities Law

 

With
respect to any matter not mentioned herein, and with respect to any contradiction between the provisions of the Law and its regulations
(which may not be made conditional) and this Indenture, the parties shall act in accordance with the Law and the regulations thereunder.

 

	32.	Meetings
                                         of Debenture Holders

 

The
general meetings of Debenture Holders shall be convened and conducted in accordance with the terms specified in the Second
Schedule to this Indenture.

 

	33.	Contradiction
                                         between the Provisions of the Indenture, the Prospectus and the Shelf Offering Report
                                         

 

In
the event of a contradiction between the provisions of this Indenture (inclusive of its various appendices) and the provisions
in the Company’s prospectus in connection with the Debentures (Series C), the provisions of this Indenture shall prevail.

 

    	 	53	 

     

    

 

	34.	General

 

Without
derogating from any other provision of this Indenture and the Debentures, no waiver, extension, discount, silence or abstaining
from action (“waiver”) by the Trustee or Company with respect to the non-performance or partial or incorrect
performance of any undertaking under this Indenture and the Debenture, shall be deemed to be a waiver by the Trustee or Company,
as the case may be, of any right, but rather as consent limited to the particular instance in which it was granted. Without derogating
from the other provisions of this Indenture and the Debenture, any modification of the Trustee’s or Company’s undertakings,
as aforementioned, shall require the Trustee’s or Company’s prior written consent (“written” includes fax or
e-mail). No other consent which is not in writing shall be deemed to be consent. The Trustee’s and Company’s rights under
this Agreement are independent of one another, and are in addition to any right vested and/or to be vested in the Trustee and/or
the Company.

 

	35.	Trustee’s
                                         Liability

 

		35.1.	Notwithstanding
                                         the provisions of applicable law and the Indenture, a Trustee who acted in the performance
                                         of its duties in good faith and within a reasonable amount of time and clarified the
                                         facts which a reasonable Trustee would have clarified in the circumstances of the matter,
                                         shall not be liable towards a Debenture Holder for damage caused thereto as a result
                                         of the Trustee exercising discretion under Section 35h(d1) or 35i1 of the Law, unless
                                         the claimant proves that the Trustee acted with gross negligence. It is clarified that
                                         should any conflict arise between the provisions of this Section and another provision
                                         of the Indenture, the provisions of this Section shall prevail.

 

		35.2.	Should
                                         the Trustee act in good faith and without negligence in accordance with the provisions
                                         of Sections 35h(d2) and 35h(d3) of the Law, it shall not be liable for the performance
                                         of such action.

 

	36.	Other
                                         Agreements

 

Subject
to the provisions of the Law and the restrictions imposed by law on the Trustee, the performance of the Trustee’s duties hereunder,
or its very status as Trustee, shall not preclude it from contracting with the Company in various agreements or from entering
into transactions in the ordinary course of its business, provided that this does not affect the performance of the Trustee’s
duties under the Indenture and its capacity as trustee.

 

	37.	Addresses

 

The
parties’ addresses are as designated in the preamble hereto, or any other address regarding which a notice is issued to the other
party in writing.

 

	38.	Applicable
                                         Law and Exclusive Jurisdiction

 

This
Indenture and the appendices hereto shall be governed exclusively by Israeli law. The competent courts in Tel Aviv-Jaffa shall
have sole and absolute jurisdiction to adjudicate matters connected to this Indenture.

 

    	 	54	 

     

    

 

	39.	MAGNA
                                         Certification

 

By
its signature on this Indenture, the Trustee authorizes the Company’s electronic authorized signatories at the time to file
a report on the Magna website regarding its execution of this Indenture, to the extent required by law.

 

IN
WITNESS WHEREOF, the parties hereto affix their signature:

 

 

	B.
    Communications Ltd.	 	Reznik
    Paz Nevo Trusts Ltd.

 

I,
the undersigned, Ami Barlev, Adv., confirm that this Indenture was duly signed by B. Communications, in accordance with its bylaws,
by Messrs. Doron Turgeman and Itzik Tadmor, whose signatures bind the Company in connection with this Indenture.

 

 

	 	Ami
    Barlev, Adv.

 

    	 	55	 

     

    

 

Attention:

Reznik
Paz Nevo Trusts Ltd.

 

We,
the undersigned, B. Communications (SP2) Ltd. and B. Communications (SP1) Ltd. (hereinafter, the “Subsidiaries”)
each individually affirm and undertake, inter alia, in accordance with the Board of Directors’ resolutions of September
14, 2016, that:

 

	1.	We
                                         shall comply with the provisions of this Indenture in connection with the Bezeq shares
                                         (as defined in the Indenture), and irrevocably agree and undertake to refrain from encumbering
                                         the Undertaken Shares, as defined in Section 5.2 above, in addition to any bonus share
                                         allocated to us with respect to the Undertaken Shares, to the extent allocated. We are
                                         aware that such undertaking is irrevocable, as it is given to secure the rights of third
                                         parties, all subject to this Indenture.

 

	2.	We
                                         hereby declare that we have neither created nor undertaken to create any lien on the
                                         Undertaken Shares, including on any of the rights accompanying such shares and/nor vested
                                         any rights in the Undertaken Shares, all with the exception of the lien in favor of the
                                         International Debentures (as defined in the Indenture), as set forth in the Indenture.

 

 

	 	B.
    Communications (SP1) Ltd.
	 	 
	 	 
	 	B.
    Communications (SP2) Ltd.

 

I,
Adv. Ami Barlev, attorney for B. Communications (SP1) Ltd., hereby confirm that Messrs. Doron Turgeman and Itzik Tadmor have signed
this Indenture and they are authorized, by their joint signatures, to bind B. Communications (SP1) Ltd. by law and in accordance
with its incorporation documents. I hereby confirm that the resolutions of B. Communications (SP1) Ltd. and its above undertakings
were adopted in accordance with applicable law and its incorporation documents.

 

 

	 	Ami
    Barlev, Adv.

 

I,
Adv. Ami Barlev, attorney for B. Communications (SP2) Ltd., hereby confirm that Messrs. Doron Turgeman and Itzik Tadmor have signed
this Indenture and they are authorized, by their joint signatures, to bind B. Communications (SP2) Ltd. by law and in accordance
with its incorporation documents. I hereby confirm that the resolutions of B. Communications (SP2) Ltd. and its above undertakings
were adopted in accordance with applicable law and its incorporation documents.

 

 

	 	Ami
    Barlev, Adv.

 

    	 	56	 

     

    

 

Attention:

Reznik
Paz Nevo Trusts Ltd.

 

We,
the undersigned, Eurocom Communications Ltd. hereby affirm and undertake, inter alia, in accordance with the Board of Directors’
resolutions of September 14, 2016, that we shall comply with the provisions of Section 5.4 of this Indenture. We are aware that
such undertaking is irrevocable, as it is given to secure the rights of third parties, all subject to this Indenture.

 

 

	 	Eurocom
    Communications Ltd.

 

I,
Adv. Meital Hillel Abramov, attorney for Eurocom Communications Ltd., hereby confirm that Mr. Ami Barlev signed this Indenture
before me and that he is authorized, by his signature, to bind Eurocom Communications Ltd., in accordance with its incorporation
documents. I hereby confirm that the resolutions of Eurocom Communications Ltd. and its above undertakings were adopted in accordance
with applicable law and its incorporation documents.

 

 

	 	Meital
    Hillel Abramov, Adv.

 

    	 	57	 

     

    

 

B.
Communications Ltd.

 

First
Schedule

Debenture
(Series C) Certificate

 

The
Debentures hereby issued are payable in 5 equal installments in the years 2020 through 2024 (inclusive), and bear annual interest
as set forth below.

 

Registered
Debentures (Series C) 

 

Certificate
Number [_____]

Aggregate
par value of the Debentures in this certificate NIS [______]

The
registered owner of the Debentures in this certificate [______]

 

		1.	This
                                         Debenture evidences that B. Communications Ltd. (the “Company”) shall
                                         repay the principal amount of the Debentures in this Certificate in five (5) payments
                                         as follow: (a) 4 equal payments at a rate of 7.5% of the principal amount of the Debentures
                                         (Series C), each of which at a rate of 7.5% of the principal amount of Debentures (Series
                                         C), payable on November 30 on each of the years 2020 to 2023 (inclusive); (b) one payment
                                         at a rate of 70% of the principal amount of the Debentures (Series C), payable on November
                                         30, 2024. The first repayment date shall occur on November 30, 2020 to the party who
                                         was the registered holder (as defined in the Terms on the Reverse Side) of the Debenture
                                         on the effective date of payment thereof, all subject to the Terms on the Reverse Side
                                         and the Indenture dated September 12, 2016, between the Company and Reznik Paz Nevo Trusts
                                         Ltd. and/or any party serving from time to time as trustee for the Debenture Holders
                                         under the Indenture (the “Trustee” and “Indenture,”
                                         respectively).

 

		2.	This
                                         Debenture shall bear interest at the annual interest rate published in the Company’s
                                         immediate report regarding the results of the initial issuance of the Debentures (Series
                                         C), payable on such dates and on such terms as are set forth in the Terms on the Reverse
                                         Side.

 

		3.	This
                                         Debenture is not linked to any currency or index.

 

		4.	This
                                         Debenture is issued as part of Series C of the Debentures whose terms are identical to
                                         the terms of this Debenture, subject to the terms set forth on the Terms on the Reverse
                                         Side and the Indenture executed between the Company and the Trustee, and they are not
                                         encumbered in any way as of the date of the initial issuance.

 

		5.	It
                                         is clarified that the provisions of the Indenture shall form an integral part of the
                                         provisions of this Debenture and shall be binding on the Company and the Holders of the
                                         Debentures included in the aforementioned series. In the event of a contradiction between
                                         the provisions of this Certificate and the provisions of the Indenture, the provisions
                                         of the Indenture shall prevail.

 

		6.	Payment
                                         of the principal and the last interest payment shall be made against the furnishing of
                                         the Debenture to the Company at its registered office, on the date of payment, as set
                                         forth in the Terms on the Reverse Side or at any other place so directed by the Company.
                                         The Company’s notice shall be issued no later than five business days prior to
                                         the date of payment.

 

    	 	58	 

     

    

 

		7.	All
                                         the Debentures of such series shall rank pari passu, without preference or priority
                                         of any kind.

 

		8.	The
                                         Company may issue from time to time and at any time (whether by private placement or
                                         public offering), at its sole discretion and without requiring the consent of the Debenture
                                         Holders or the Trustee, including a related holder of the Company, debentures of a different
                                         type or other series of debentures or other securities of any type whatsoever, with or
                                         without rights accompanying the purchase of shares of the Company, the terms of interest,
                                         repayment and such other terms as the Company deems fit, whether they take preference
                                         over, are equal to or are inferior to the terms of the Debentures. In addition, the Company
                                         reserves the right to increase the series from time to time at its sole discretion, in
                                         accordance with applicable law and subject to the provisions of Section 2.2 of the Terms
                                         on the Reverse Side. Notwithstanding the foregoing, to the extent the Company issues
                                         an additional debenture series and such additional series is not backed by collateral
                                         (and for as long as it is not backed by collateral), the rights of the additional series
                                         upon dissolution shall not take priority over those of the Debentures (Series C).

 

		9.	Any
                                         transfer of the Debentures is subject to the transfer restrictions set forth in Section
                                         7 of the Terms on the Reverse Side of the Debenture Certificate.

 

Signed
by the Company on September 14, 2016.

 

 

	 	B.
    Communications Ltd.

 

By:

 

Authorized
signatory: Doron Turgeman, CEO      Authorized signatory: Itzik Tadmor, CFO

 

I,
the undersigned, Ami Barlev, Adv. confirm that this Debenture Certificate was duly signed by B. Communications Ltd. in accordance
with its bylaws, by means of Messrs. Doron Turgeman and Itzik Tadmor, and their signatures bind the Company for purposes of this
Debenture.

 

 

	 	Ami
    Barlev, Adv.

 

    	 	59	 

     

    

 

Terms
on Reverse Side

 

	1.	General

 

In
this Debenture, the following terms shall have the meanings as forth below, unless another meaning is implied by the context.

 

	“Initial
    Debenture Offering Report” -	 	An
        offering report pursuant to which the Debentures (Series C) shall be initially offered.

         

	“Debenture
        Holders” and/or “Debenture Owners” and/or “Holders” - 

         
	 	As
    defined in Section 1.5 of the Indenture above.
	“Business
    Day” or “Banking Business Day” -	 	As
        defined in the Banking Directives (Service to Customer)
        (Interest Calculation Methods), 5751-1990.

         

	“Principal”
    -	 	The
        total nominal value of the Debentures (Series C).

         

	“Nominee
    Company” -	 	The
        Nominee Company of Bank Hapoalim Ltd. or any other nominee company with which the Company contracts at its sole discretion,
        provided that all of the Company’s securities shall be registered in the name of such nominee company;

         

	“Debentures”
    or “Debenture Series” or “Relevant Series”	 	The
        registered Debenture series to be called Debentures (Series C) of the Company, whose terms shall be in accordance with
        the Debenture (Series C) Certificate and the Initial Offering Report of the Debentures (Series C), to be issued from time
        to time by the Company at its sole discretion;

         

	“Trading
    Day” -	 	A
        day on which trading takes place on TASE.

         

	“Stock
    Exchange Clearing House” - 	 	The
        Tel Aviv Stock Exchange Clearing House Ltd.;

         

	“TASE”-	 	The
        Tel Aviv Stock Exchange Ltd.

         

	“Prospectus”
    or “Shelf Prospectus”	 	As
    defined in Section 1.5 of the Indenture.

 

    	 	60	 

     

    

 

The
terms of the Debentures (Terms on the Reverse Side) form an integral part of the Indenture, and the provisions of the Indenture
shall be deemed to have been explicitly included in these Debenture terms. In the event of a contradiction between the provisions
of the Debenture and the provisions of the Indenture, the provisions of the Indenture shall prevail. In the event of an inconsistency
between the provisions of the Debenture and Chapter 2 of the Prospectus in connection with a particular matter, the provisions
of the Debenture pertaining to such matter shall prevail, subject to TASE Rules and Regulations.

 

	2.	The
                                         Debentures

 

		2.1.	The
                                         Company intends to issue, in accordance with the Shelf Offering Report, registered Debentures
                                         (Series C) par value NIS 1 each (hereinafter, the “Debentures (Series C)”).
                                         The Debentures (Series C) shall be repayable (principal) in five (5) annual installments,
                                         all as set forth in Sections 3 through 5 below.

 

		2.2.	Expansion
                                         of series

 

With
respect to a series expansion, see Section 3.2 of the Indenture.

 

		2.3.	Issuance
                                         of additional securities

 

With
respect to the issuance of additional securities, see Section 3.2 of the Indenture.

 

	3.	Principal

 

		3.1.	Principal
                                         of the Debentures (Series C)

 

The
Company intends to issue, in accordance with the Shelf Offering Report, registered Debentures (Series C) par value NIS 1 each
(hereinafter, the “Debentures (Series C)”). The Debentures (Series C) shall be repayable (principal) in five
(5) installments, as follows: (a) four equal installments at 7.5% of the principal of the Debentures (Series C), each of which
at a rate of 7.5% of the principal of the Debentures (Series C), payable on November 30 of each of the years 2020 to 2023 (inclusive);
(b) One installment at 70% of the principal of the Debentures (Series C), payable on November 30, 2024, such that the first payment
on account of the principal of the Debentures shall be paid on November 30, 2020 and the last payment shall be made on November
30, 2024 (hereinafter, “Initial Offering Report for Debentures (Series C)” or “Initial Offering Report”
and “Initial Offering of Debentures (Series C),” as applicable). 

 

	4.	Interest

 

		4.1.	The
                                         Debentures (Series C) shall bear annual interest at a fixed rate to be determined in
                                         an interest-rate auction, which shall not exceed the maximum interest rate determined
                                         in the Offering Report. Interest on the outstanding balance of the principal amount of
                                         the Debentures (Series C), as it may be from time to time, shall be paid as of May 2017,
                                         bi-annually on May 31 and November 30 of each of the years 2017 to 2024 (inclusive),
                                         such that the first payment of interest shall be made on May 31, 2017 and the last payment
                                         shall be made on November 30, 2024.

 

    	 	61	 

     

    

 

		4.2.	The
                                         interest rate with respect to the first interest term of the Debentures and the annual
                                         interest on the basis of which it is determined shall be specified in the report to be
                                         released by the Company regarding the results of the interest-rate auction.

 

		4.3.	The
                                         interest payable on each interest payment date shall be calculated on the basis of the
                                         annual interest rate, divided into the number of payments in a year. The Company shall
                                         determine, in a report on the results of the issuance, the annual interest and the rate
                                         thereof, divided into the number of payments in a year.

 

		4.4.	The
                                         interest on the Debentures (Series C) shall be payable in semi-annual installments for
                                         the interest term ending on the payment date (hereinafter, “Interest Term”).
                                         The first Interest Term of the Debentures (Series C) shall commence one Trading Day after
                                         the auction day which shall be specified in the Initial Offering Report and shall conclude
                                         on the first interest payment date. Any additional Interest Term pertaining to the Debentures
                                         (Series C) shall commence on the first day after the end of the immediately preceding
                                         Interest Term and shall conclude at the end of the Interest Term (i.e. on the payment
                                         date immediately following the date of commencement thereof). The interest for the first
                                         Interest Term shall be calculated in accordance with the number of days in such period
                                         on the basis of 365 days in a year.

 

		4.5.	The
                                         last date of payment of the interest on the balance of the outstanding principal amount
                                         of the Debentures (Series C) shall be paid together with the last payment on account
                                         of the principal amount of the Debentures (Series C), against presentation of debenture
                                         certificates from the same series to the Company.

 

		4.6.	Arrears
                                         Interest: any payment on account of principal and/or interest that is made with a delay
                                         of more than seven (7) Business Days from the scheduled date of payment thereof under
                                         the terms of the Debentures, for reasons dependent on the Company, shall bear arrears
                                         interest as of the scheduled date for payment and up to the actual date of payment. In
                                         this respect, “arrears interest” means annual additional interest
                                         of 3% in addition to the interest on the Debentures at the relevant time, calculated
                                         pro rata for the period as of the scheduled date of payment and up to the actual date
                                         of payment. If arrears interest is paid, the Company shall release an immediate report
                                         at least 2 business days prior to such payment, in which it shall give notice of the
                                         arrears interest rate and the interest rate payable, which includes the interest rate
                                         bearing on the Debentures together with the arrears interest, and the payment date of
                                         the total interest for such period.

 

    	 	62	 

     

    

 

	5.	Payments
                                         of Principal and Interest of the Debentures

 

		5.1.	Payments
                                         on account of the principal and/or interest of the Debentures shall be made to the persons
                                         whose names are entered as holders in the Register of Holders of Debentures (Series C),
                                         as specified in the Initial Offering Report in accordance with TASE Rules and Regulations
                                         in effect at the time (hereinafter, “Effective Date”), except for the
                                         last payment of principal and interest, which shall be made to the persons whose names
                                         are entered in the Register on the date of payment and which shall be made against delivery
                                         of the debenture certificates of such series to the Company on the day of the payment,
                                         at the Company’s registered office or at any other place of which the Company gives notice.
                                         The Company’s aforementioned notice shall be published no later than five (5) Business
                                         Days before the date of the last payment.

 

It
is clarified that any person not registered in the Register of Holders of Debentures (Series C) on the Effective Date shall
not be entitled to payment of interest for the interest period beginning before that date.

 

		5.2.	If
                                         the date of payment on account of principal and/or interest falls on a day that is not
                                         a Business Day, the payment date shall be deferred to the first Business Day after such
                                         day, with no additional payment, and the Effective Date for determining entitlement to
                                         redemption and interest shall not be changed by reason thereof.

 

		5.3.	The
                                         payment to entitled persons shall be made by check or by a bank transfer crediting the
                                         bank account of the persons whose names are entered in the Register of Holders of Debentures
                                         (Series C), as specified in the details which shall be provided to the Company in writing
                                         in a timely manner, as provided in Section 27 of the Indenture and Section 5.5 below.
                                         If the Company is unable to pay any amount to the persons entitled thereto for any reason
                                         beyond its control, the provisions of Sections 14.3-14.8 of the Indenture shall apply.
                                         

 

		5.4.	A
                                         Holder of Debentures (Series C) shall notify the Company of the details of the bank account
                                         for crediting such Holder with payments under the Debentures from such series as aforementioned,
                                         or of a change in the details of the aforementioned bank account or in his address, as
                                         the case may be, in a registered letter to the Company. The Company shall be required
                                         to comply with such instruction of the Holder 15 Business Days after the Holder’s
                                         notice reaches the Company. 

 

		5.5.	In
                                         the event a Debenture Holder who is entitled to such payment fails to furnish to the
                                         Company details of his bank account in a timely manner, any payment on account of principal
                                         and interest shall be made in a check sent by registered mail to his last address recorded
                                         in the register of the relevant series. The sending of a check by registered mail, as
                                         aforementioned, shall be deemed in all respects as payment of the amount written thereon
                                         on the date of dispatch thereof by mail, provided the check is paid when properly presented
                                         for collection.

 

    	 	63	 

     

    

 

		5.6.	Any
                                         mandatory payment required by law shall be deducted from any payment on account of the
                                         Debentures (Series C).

  

	6.	Non-Payment
                                         for a Reason Beyond the Company’s Control

 

With
respect to non-payment for a reason beyond the Company’s control, see Sections 14.3-14.8 of the Indenture.

 

	7.	Transfer
                                         of Debentures

 

		7.1.	The
                                         Debentures are transferable with respect to any nominal amount, provided that it shall
                                         be in whole New Israeli Shekels. Any transfer of the Debentures (held by a registered
                                         holder) shall be made by a deed of transfer drawn up in the accepted form for transferring
                                         shares, duly signed by the registered owner or his legal representatives and by the transferee
                                         or his legal representatives, which shall be delivered to the Company at its registered
                                         office together with the Certificates of the Debentures which are being transferred on
                                         the basis thereof, as well as any other reasonable proof as requested by the Company
                                         in evidence of the transferor’s right to transfer them.

 

		7.2.	Subject
                                         to the foregoing, any procedural provisions contained in the Company’s articles regarding
                                         the method of transfer of shares shall apply, mutatis mutandis, to the transfer
                                         and endorsement of the Debentures.

 

		7.3.	If
                                         any mandatory payment applies to the deed of transfer of the Debentures, including taxes
                                         and other levies, the Company shall be given reasonable proof of the payment thereof
                                         by the party proposing the transfer.

 

		7.4.	If
                                         only a portion of the nominal amount of the principal of the Debentures in this Certificate
                                         is transferred, the Debenture shall first be split, in accordance with Section 8 below,
                                         into the number of Debenture Certificates necessitated thereby (up to a reasonable number
                                         as determined by the Company), such that the aggregate of the principal amounts specified
                                         in those Certificates is equal to the principal amount specified in the aforementioned
                                         Debenture Certificate.

 

		7.5.	Following
                                         the fulfillment of all the aforementioned conditions, the transfer shall be recorded
                                         in the Register, and the Company shall be entitled to demand that a note of such transfer
                                         be made on the transferred Debenture Certificate which shall be given to the transferee,
                                         whereby it shall be offered a new debenture certificate in lieu thereof, and all the
                                         conditions set forth in the Indenture and the transferred Debenture Certificate shall
                                         apply, such that whenever the word “Holder” appears it shall be deemed to
                                         refer to the transferee, and such transferee shall be deemed a Holder for purposes of
                                         the Indenture for the relevant series.

 

		7.6.	All
                                         the expenses and fees entailed in the transfer shall be borne by the party proposing
                                         the transfer.

 

    	 	64	 

     

    

 

	8.	Split
                                         of Debenture Certificates

 

With
respect to a split of debenture certificates, see Section 28 of the Indenture.

 

	9.	Early
                                         Redemption of Debentures (Series C)

 

		9.1.	Early
                                         Redemption Due to De-Listing from Stock Exchange 

 

Should
TASE decide to de-list the Debentures which have not yet been repaid because the value of the series of the Debenture (Series
C) has fallen below the amount determined in the Stock Exchange’s guidelines for de-listing, the Company shall make early redemption
and shall act as follows:

 

		(a)	Within
                                         45 days of the TASE Board of Directors’ decision to de-list the Debentures, as aforementioned,
                                         the Company shall announce an early redemption date on which a Debenture Holder may redeem
                                         such Debentures. An announcement of the early redemption date shall be published in an
                                         Immediate Report which shall be sent to the Authority and the TASE and in two daily newspapers
                                         with a wide distribution in Israel and in Hebrew, and shall be given in writing to all
                                         registered Holders of the Debenture.

 

		(b)	The
                                         early redemption date shall occur no earlier than 17 days from the date of publication
                                         of the notice and no later than 45 days from such date, but not in the period between
                                         the due date for payment of the interest and the actual date of payment.

 

		(c)	On
                                         the early redemption date, the Company shall redeem the Debentures whose redemption has
                                         been sought by the Holders thereof. The proceeds of the redemption shall not be less
                                         than the nominal value of the Debentures together with interest accrued up to the actual
                                         payment date, as set forth in the terms of the Debentures.

 

		(d)	Nothing
                                         in an early redemption date, as aforementioned, shall prejudice the redemption rights
                                         provided in the Debentures for any Debenture Holders who do not redeem the Debentures
                                         on such early redemption date. However, the Debentures (Series C) shall be de-listed
                                         from TASE and they shall be subject, inter alia, to the resulting tax implications.

 

		(e)	Early
                                         redemption of the Debentures, as aforementioned, shall not afford any of the Holders
                                         of the Debentures so redeemed the right to the principal or the interest for the period
                                         following the redemption date.

 

    	 	65	 

     

    

 

		9.2.	Early
                                         Redemption at Company Initiative 

 

The
Company may, at its sole discretion, make early redemption (in whole or in part), of the Debentures (Series C), at any time but
not before at least 60 days have passed from the date the Debentures (Series C) of the Company are listed for trade. In such instance,
the following provisions shall apply, all subject to the guidelines of TASE and the provisions of the TASE Rules and Regulations
and the directives promulgated thereunder, in effect at the relevant date:

 

		(a)	The
                                         frequency of the early redemptions shall not exceed one redemption per quarter.

 

		(b)	In
                                         the event early redemption is determined in a quarter in which a due date for payment
                                         of interest is also determined, or a date for payment of partial redemption or final
                                         redemption, the early redemption shall be made on the date scheduled for such payment.

 

In
this respect, “quarter” means each of the following periods: January-March; April-June; July-September; and October-December.

 

		(c)	The
                                         minimal amount of each early redemption shall not be less than NIS 1 million. Notwithstanding
                                         the foregoing, the Company may make early redemption in an amount that is less than NIS
                                         1 million, provided that the frequency of the redemptions shall not exceed a single redemption
                                         per year.

 

		(d)	Any
                                         amount that is repaid early by the Company shall be repaid with respect to all the Debenture
                                         Holders, pro rata in accordance with the nominal value of the held Debentures.

 

		(e)	Upon
                                         the adoption of a resolution of the Company’s Board of Directors pertaining to early
                                         redemption, as aforementioned, the Company shall release an immediate report with a copy
                                         to the Trustee no less than seventeen (17) days and no more than forty-five (45) days
                                         prior to the early redemption date.

 

		(f)	The
                                         early redemption date shall not occur in the period between the effective date for payment
                                         of interest on the Debentures (Series C) and the date of actual payment of interest.
                                         In such immediate report, the Company shall publish the principal amount to be paid through
                                         early redemption as well as the interest accrued on the aforementioned principal amount
                                         up to the early redemption date, according to the provisions below.

 

		(g)	Early
                                         redemption for a portion of the relevant Debenture series shall not take place if the
                                         amount of the last redemption is less than NIS 3.2 million.

 

		(h)	On
                                         a date of partial early redemption, if any, the Company shall announce in an immediate
                                         report: (1) the partial redemption rate in terms of the outstanding, unpaid balance;
                                         (2) the partial redemption rate in terms of the original series; (3) the interest on
                                         the redeemed portion upon partial redemption; (4) the interest to be paid upon the partial
                                         redemption, calculated with respect to the outstanding, unpaid balance; (5) update of
                                         the partial redemption rates remaining, in terms of the original series; (6) the effective
                                         date for entitlement to early redemption of the principal amount of the Debentures, which
                                         will be six (6) days prior to the date scheduled for the early redemption.

 

    	 	66	 

     

    

 

		(i)	Prior
                                         to making early redemption as set forth in this Section, the Company shall provide the
                                         Trustee with an approval signed by the Company’s senior officer confirming its
                                         compliance (or lack thereof) with the financial covenants provided in Sections 5.6 and
                                         5.13 of the Indenture.

 

		(j)	Partial
                                         early redemption shall be made pari passu to each of the Debenture Holders in
                                         accordance with the nominal value of the Debentures held thereby on the effective date.
                                         On a date of partial early redemption, if at all, the Company shall pay Holders of the
                                         Debentures (Series C) the interest accrued exclusively with respect to the redeemed portion
                                         of the partial redemption and not with respect to the entire outstanding, unpaid balance,
                                         all as part of the partial early redemption amount to be determined under subsection
                                         (k) below.

 

		(k)	The
                                         amount to be paid to Holders of the Debentures (Series C) in the event of early redemption
                                         shall be the highest of the following: (1) market value of the Debentures subject to
                                         early redemption, which will be determined according to the average closing price of
                                         the Debentures in the thirty (30) Trading Days preceding the date of adoption of the
                                         board resolution regarding the early redemption; (2) the liability value of the Debentures
                                         subject to early redemption, i.e. the principal amount together with interest up to the
                                         actual early redemption date; (3) the cash flow balance of the Debentures subject to
                                         early redemption (principal plus interest) discounted according to the Government Debentures
                                         Yield (as defined below) plus interest of 1% per annum, and alternatively 1.5% in the
                                         event of early redemption arising from the sale of Bezeq shares, as set forth in this
                                         Indenture. Discounting of the Debentures (Series C) subject to early redemption will
                                         be calculated as of the early redemption date up to the date of the last payment scheduled
                                         for the Debentures (Series C) that are subject to early redemption.

 

In
this respect, the “Government Debentures Yield” means the average return (gross) for redemption, during a period
of seven Business Days, ending two Business Days prior to the date of the early redemption notice, of three series of unlinked
government debentures whose average lifetime is the closest to the average lifetime of the Debentures (Series C) on the relevant
date.

 

	10.	Purchase
                                         of Debentures by the Company and/or Affiliated Holder

 

In
this respect, see Section 4 of the Indenture.

 

    	 	67	 

     

    

 

	11.	Restrictions
                                         on Distribution

 

It
is clarified that the Company is not subject to any restriction under the Indenture or the Debentures (Series C) in connection
with a distribution (as such term is defined in the Companies Law, including with respect to a buyback) except as set forth in
Section 5.7 of the Indenture.

 

	12.	General
                                         Provisions

 

		12.1.	The
                                         principal and interest amount are payable and transferable without consideration for
                                         any existing or future equitable rights or right of setoff or counterclaim between the
                                         Company and a former Holder, including the original holder of the Debentures.

 

		12.2.	Any
                                         person who shall be entitled to the Debentures due to bankruptcy or liquidation proceedings
                                         of a Debenture Holder may, after providing proofs which the Company deems to suffice,
                                         from time to time, be registered in the Register as the Holder of the Debentures, or,
                                         subject to the terms set forth above in this Certificate, transfer them.

 

		12.3.	The
                                         Debenture Holders may exercise their rights under the Debentures and the Indenture by
                                         means of the Trustee or on the basis of a resolution of the general meeting of Debenture
                                         Holders in the manners specified in the Debenture and the Indenture.

 

		12.4.	The
                                         provisions of the Indenture, including the right to demand the immediate repayment of
                                         the Debentures, as set forth in Section 9 of the Indenture, shall form an integral part
                                         of this Debenture.

 

	13.	Changes
                                         to the Terms of the Debentures and the Indenture

 

In
this respect, see Section 26 of the Indenture.

 

	14.	General
                                         Meetings of Debenture Holders 

 

The
general meetings of the Debenture Holders shall convene and be conducted in accordance with the provisions of the Second Schedule
to the Indenture.

 

	15.	Receipts
                                         as Proof

 

In
this respect, see Section 15 of the Indenture.

 

	16.	Replacement
                                         of Debenture Certificates

 

If
any Debenture Certificate is worn, lost or destroyed, the Company may issue in its place a new Debenture Certificate, on the same
terms as the Debentures (Series C) and subject to proof, indemnification and coverage of reasonable expenses incurred by the Company
in clarifying the title to the Debentures, as the Company deems fit, provided that, in case of wear, the worn Debenture Certificate
is returned to the Company prior to the issuance of the new Certificate. Taxes, levies and other expenses entailed in issuing
the new Certificate, insofar as they apply, shall be borne by the party requesting such Certificate.

 

	17.	Notices

 

In
this respect, see Section 25 of the Indenture.

 

    	 	68	 

     

    

 

Second
Schedule to Indenture

 

Subject
to the provisions of the Securities Law, the convening of a Meeting of Debenture Holders, the conduct thereof and various terms
with respect thereto shall be as follows:

 

Convening
of Meeting

 

	1.	The
                                         Trustee shall convene a Meeting of Holders no later than fourteen (14) days of the filing
                                         of the second annual report on the state of affairs of the trust (pursuant to Section
                                         20 of the Indenture). The Meeting shall be convened no later than sixty (60) days from
                                         the date of filing the aforementioned report. The agenda of such Meeting shall include
                                         the appointment of the Trustee for the term to be determined, a discussion of the annual
                                         report on the affairs of the trust and any other matter on the agenda, as set forth in
                                         Section 35.l.2 of the Securities Law.

 

	2.	The
                                         Trustee shall convene a Meeting of the Debenture Holders if it deems it necessary, or
                                         upon the written request of Holders of Debentures, holding, jointly or severally, at
                                         least five percent (5%) of the outstanding balance of the nominal value of the Debentures
                                         in circulation. 

 

	3.	If
                                         the request to convene a Meeting is made by Debenture Holders, the Trustee may demand
                                         from the requesting parties indemnification, including in advance, for the reasonable
                                         expenses entailed therein.

 

	4.	A
                                         Trustee who is requested to convene a Meeting of Holders in accordance with Section 2,
                                         shall convene the meeting within 21 days from the date the request to convene the Meeting
                                         was submitted to it, for the date scheduled in the notice, provided the date of convening
                                         shall not be earlier than seven days and not later than 21 days after the date of the
                                         notification. However, the Trustee may advance the date of the Meeting to at least one
                                         day after the date of the notice, if it deems this necessary for protecting the rights
                                         of the Holders and subject to the provisions of Section 21 below; and if the Trustee
                                         does so, it shall explain in the report regarding the notification of the Meeting the
                                         reasons for advancing its date.

 

	5.	The
                                         Trustee may, at its reasonable discretion, change the date of convening of the Meeting
                                         notified thereby, including advancing the date of the Meeting to at least one day after
                                         the date of the notification, if it deems this necessary for protecting the rights of
                                         the Holders and subject to the provisions of Section 21 below.

 

	6.	The
                                         Trustee may determine that the Meeting is to take place by electronic means.

 

	7.	If
                                         the Trustee does not convene a Holders’ Meeting, pursuant to a Holder’s request, within
                                         the time specified in Section 4 above, the Holder may convene the Meeting, provided the
                                         date of convening is within 14 days from the end of the period within which the Trustee
                                         should have provided notification of the Meeting, and the Trustee shall bear the expenses
                                         incurred by the Holder in convening the Meeting.

 

    	 	69	 

     

    

 

	8.	If
                                         a Meeting of Debenture Holders does not take place as set forth in Section 1 or 2 above,
                                         the court may, at a Holder’s request, order the convening thereof.

 

	9.	To
                                         the extent the court orders as set forth in Section 8 above, the Trustee shall bear the
                                         reasonable expenses incurred by the applicant in the court proceeding, as determined
                                         by the court.

 

	10.	The
                                         Company may, at any time, provide notification of a Meeting of Debenture Holders upon
                                         coordination with the Trustee. Should the Company convene such a meeting, it shall be
                                         required to send the Trustee an immediate written notice of the place, date and time
                                         of the Meeting and the items to be discussed thereat, and the Trustee or a representative
                                         thereof shall be entitled to participate in such meeting without any voting right. Such
                                         a meeting shall be convened for the date stipulated in the notice, provided that the
                                         convening date shall not be earlier than 7 days and not later than 21 days from the date
                                         of notification.

 

	11.	To
                                         the extent there is no possibility of convening a Meeting of Holders or conducting such
                                         meeting in the manner determined therefor in the Indenture or the Law, the court may,
                                         at the request of the Company, Debenture Holder entitled to vote at a Meeting or the
                                         Trustee, issue an order for a Meeting to be convened and conducted in the manner so determined
                                         by the court, and to such end it may issue supplementary instructions as it deems fit.
                                         

 

Defects
in Convening

 

	12.	The
                                         court may, at the request of a Holder, order the cancellation of a resolution adopted
                                         at a Meeting of Holders which was convened or conducted without the conditions prescribed
                                         therefor in the Law or under this Indenture having been satisfied.

 

	13.	In
                                         the event the defect in convening pertains to the notice regarding the location or date
                                         of the Meeting, a Holder who attends such Meeting despite such defect, shall not be entitled
                                         to demand the cancellation of the resolution.

 

Notice
of Convening a Meeting

 

	14.	Notice
                                         of a Holders’ Meeting shall be published in accordance with the provisions of Chapter
                                         G1 of the Law (“Electronic Reporting”) and shall be delivered to the
                                         Company by the Trustee prior to the Electronic Reporting and in accordance with the regulations.

 

	15.	The
                                         notification shall include the agenda, the proposed resolutions and arrangements with
                                         respect to written votes, in accordance with Sections 29 and 31 below.

 

Meeting
Agenda

 

	16.	The
                                         Trustee shall determine the agenda of the Holders’ Meeting, and shall include therein
                                         items for which the convening of the Holders’ Meeting was necessary pursuant to
                                         Sections 1 and 2 above, and any matter requested by a Holder, as set forth in Section
                                         18.

 

    	 	70	 

     

    

 

	17.	In
                                         the event a meeting is convened as set forth in Section 10 above, the Company shall determine
                                         the agenda of the Meeting.

 

	18.	One
                                         or more Holders holding at least five percent (5%) of the balance of the nominal value
                                         of the Debenture series may request the Trustee to include a matter on the agenda of
                                         a Holders’ Meeting to be convened in the future, provided that the matter is suitable
                                         to be considered at such Meeting.

 

	19.	Only
                                         resolutions with respect to matters on the agenda shall be adopted at a Holders’
                                         Meeting.

 

Place
of Convening Meeting

 

	20.	Any
                                         Meeting of the Debenture Holders shall be held in Israel, at the Company’s offices or
                                         at another venue of which the Company and/or the Trustee give notice. The Trustee may
                                         change the address of the Meeting. The Company shall bear the expenses of convening the
                                         Meeting at the alternative venue.

 

Effective
Date for Ownership of Debentures

 

	21.	Holders
                                         entitled to participate and vote at Holders’ Meetings must have held Debentures on the
                                         date specified in the decision to convene the Holders’ Meeting. 

 

Chairman
of the Meeting 

 

	22.	At
                                         any Holders’ Meeting, the Trustee or whoever is appointed by it shall act as chairman
                                         of the Meeting.

 

	23.	The
                                         Trustee shall prepare minutes of the Meeting of the Debenture Holders, and shall keep
                                         them at its registered office for a period of seven (7) years from the date of the Meeting.
                                         Such minutes of the Meeting may be prepared by way of a recording. Minutes which have
                                         been prepared in writing shall be signed by the chairman of the Meeting. All minutes
                                         signed by the chairman of the Meeting shall be prima facie evidence of their contents.
                                         The Register of Minutes shall be kept at the Trustee’s registered office, and shall be
                                         open to the inspection of the Debenture Holders and the Company during work hours and
                                         upon prior coordination, and a copy thereof shall be sent to each Debenture Holder so
                                         requesting. The Trustee may delay the submittal of any minutes to any party whatsoever
                                         if it believes, at its sole discretion, that the transmittal of all or a portion of the
                                         minutes may harm or cause a violation of the rights of the holders of the Debentures
                                         (Series C).

 

	24.	The
                                         declaration of the chairman of the Meeting that a resolution was accepted or rejected,
                                         unanimously or by a particular majority, shall be prima facie proof thereof.

 

	25.	The
                                         Company (and/or a party on its behalf, including any officer thereof) is not entitled
                                         to receive minutes of the conversations and discussions at a portion of the Meetings
                                         of Debenture Holders which are conducted without the Company or at Holders’ Meetings
                                         which are conducted without the Company. 

 

    	 	71	 

     

    

 

Legal
Quorum; Adjourned or Continuing Meeting

 

	26.	A
                                         Meeting of the Debenture Holders shall be opened by the chairman of the Meeting, after
                                         he has established that the legal quorum required for any of the items on the Meeting’s
                                         agenda, as provided below, is present:

 

		26.1.	Subject
                                         to the provisions of the Securities Law regarding a legal quorum that may not be made
                                         conditional and the provisions of the Indenture, and subject to the legal quorum for
                                         adopting a special resolution, the legal quorum required for convening a Meeting of Debenture
                                         Holders shall be at least two Debenture Holders, present in person or by proxy, holding
                                         at least twenty five percent (25%) of the balance of the nominal amount of the Debentures
                                         in circulation, within the first half hour from the time scheduled for the start of the
                                         Meeting, except if otherwise required by the Law. 

 

		26.2.	If
                                         a legal quorum is not present at the end of half an hour from the time set for the start
                                         of a Holders’ Meeting, the Meeting shall be adjourned to another date being no earlier
                                         than two Business Days after the date set for holding the original Meeting, or one Business
                                         Day, if the Trustee considers this necessary for protecting the rights of the Holders.
                                         If the Meeting is adjourned, the Trustee shall explain in the report concerning the convening
                                         of the Meeting the reasons for its adjournment.

 

		26.3.	Subject
                                         to the provisions of the Securities Law regarding a legal quorum which may not be made
                                         conditional and the provisions of the Indenture, and subject to the legal quorum for
                                         adopting a special resolution, if a legal quorum is not present at the end of half an
                                         hour from the time set for an adjourned Meeting, as provided in Section 26.2 above, the
                                         Meeting shall be held with any number of participants, except if required otherwise by
                                         the Securities Law.

 

		26.4.	Notwithstanding
                                         the provisions of Section 26.3 above, if a Holders’ Meeting was convened at the request
                                         of Holders, as set forth in Section 2 above, the adjourned Holders’ Meeting shall
                                         be held only if Debenture Holders in the minimum number required for convening such a
                                         Meeting, as set forth in such Section, are present (i.e. at least five percent (5%) of
                                         the balance of the nominal amount of the Debentures in circulation).

 

	27.	Pursuant
                                         to a decision of the Trustee or a resolution carried by a simple majority of the votes
                                         cast at a Holders’ Meeting at which a quorum was present, the continuation of the
                                         original meeting or the consideration or adoption of a resolution on a matter set out
                                         in the agenda shall be deferred to another time and place, as decided by the Trustee
                                         or resolved by such Meeting (“Continuing Meeting”). No matters may be
                                         considered at a Continuing Meeting other than matters which were on the agenda and regarding
                                         which no resolution was adopted.

 

If
the continuation of a Holders’ Meeting is deferred without any change in its agenda, notices for the new session of the Continuing
Meeting shall be issued as soon as possible and no later than 12 hours before the Continuing Meeting. Notices as provided shall
be issued in accordance with Sections 14 and 15 above.

 

    	 	72	 

     

    

 

Participation
and Voting

 

	28.	The
                                         Trustee may, at its reasonable discretion and subject to the provisions of applicable
                                         law, split the Meeting into class meetings and determine the parties who may participate
                                         at each class Meeting.

 

	29.	A
                                         Debenture Holder may vote at a Holders’ Meeting, alone or by proxy, and in a voting
                                         instrument in which it shall specify the manner of its vote, in accordance with Section
                                         31 below.

 

	30.	Any
                                         resolution at a Holders’ Meeting shall be carried on a poll.

 

	31.	The
                                         Trustee shall send a voting instrument to all Debenture Holders. A Debenture Holder may
                                         specify in the voting instrument the manner of its vote and send it to the Trustee.

 

A
voting instrument, in which the Holder has specified the manner of his vote, reaching the Trustee by the deadline set for that
purpose, shall be deemed presence at the Meeting for purposes of the existence of a quorum, as provided in Section 26 above.

 

A
voting instrument received by the Trustee, as set forth above, with respect to a certain matter regarding which no vote has been
held at the Holders’ Meeting, shall be deemed to be an abstention at such Meeting with respect to a resolution to conduct
an adjourned Holders’ Meeting pursuant to Section 27 above, and it shall be counted in the adjourned Holders’ Meeting
to be held in accordance with Sections 27 or 26.3 and 26.4 above.

 

	32.	Each
                                         NIS 1 nominal value of the Debentures represented at a vote shall grant a single vote.
                                         In the case of joint Holders of a Debenture, only the vote of the person listed first
                                         among them in the Register shall be accepted. 

 

	33.	A
                                         Debenture Holder may use part of his votes to vote for a proposed resolution, use another
                                         part to vote against, and use yet another part to abstain, all as he deems fit.

 

	34.	A
                                         Debenture Holder which is a subsidiary, affiliated company or investee company of the
                                         Company, or a controlling shareholder in the Company, his relative or a corporation controlled
                                         by either of them, shall not be taken into account for the purpose of determining the
                                         quorum at a Holders’ Meeting, and their votes shall not be counted among the votes cast
                                         at such Meeting.

 

	Resolutions	

 

	35.	Resolutions
                                         of Holders’ Meeting shall be adopted by a simple majority, unless another majority
                                         is prescribed by Law or the Indenture.

 

	36.	Abstentions
                                         shall not be taken into account in the number of votes cast.

 

    	 	73	 

     

    

 

	37.	A
                                         proposed resolution on a matter with respect to which no provisions regarding the specific
                                         majority required have been provided below shall be decided by a simple majority.

 

Voting
and Actions by Proxy/Representative 

 

	38.	An
                                         instrument appointing a proxy shall be in writing under the hand of the appointing party
                                         or his representative duly authorized in writing in regard. If the appointing party is
                                         a corporation, the appointment shall be made in writing under the seal of the corporation,
                                         together with the signature of the corporation’s authorized signatories. 

 

	39.	The
                                         instrument of appointment of a proxy shall be drawn up in any form deemed acceptable
                                         by the Trustee.

 

	40.	A
                                         proxy need not himself be a Debenture Holder.

 

	41.	An
                                         instrument of appointment and a power of attorney or other certificate based on which
                                         the instrument of appointment was signed, or a certified copy of such a power of attorney,
                                         shall be delivered to the Trustee up to the commencement of the Meeting, unless specified
                                         otherwise in the notification of the Meeting.

 

	42.	The
                                         Trustee shall participate in the Meeting by means of its employees, officers, functionaries
                                         or such other person so appointed thereby, but it shall not have any voting right.

 

	43.	The
                                         Company and any other person other than the Trustee shall be precluded from participating
                                         in Meetings of the Debenture Holders or any part thereof, as decided by the Trustee or
                                         by a simple majority of Debenture Holders. Notwithstanding the provisions of this Section
                                         43, the Company may be present at the opening of a Meeting for the purpose of presenting
                                         its position in connection with any matter on the agenda of the Meeting and/or presenting
                                         a particular matter (as the case may be).

 

Application
to Debenture Holders 

 

	44.	The
                                         Trustee and one or more Holders holding at least five percent (5%) of the balance of
                                         the nominal value of the Debentures of such series in circulation may, by means of the
                                         Trustee, apply in writing to Holders in order to convince them as to their manner of
                                         voting on the matters up for consideration at such Meeting (hereinafter, “Position
                                         Notice”).

 

	45.	In
                                         the event a Holders’ Meeting is notified as set forth in Section 2 above, the Holder
                                         may request the Trustee to publish a Position Notice on its behalf to the other Debenture
                                         Holders, in accordance with Chapter F1 of the Law. 

 

	46.	The
                                         Trustee or Company may send a Position Notice to Debenture Holders in response to a Position
                                         Notice sent in accordance with Sections 44 and 45 above, or in response to another inquiry
                                         to the Debenture Holders.

  

    	 	74	 

     

    

 

Conflict
of Interest Examination 

 

	47.	If
                                         a Meeting of Debenture Holders is convened, the Trustee shall conduct an examination
                                         to determine the existence of a conflict of interest among the Debenture Holders, be
                                         it an interest arising from their holding of the Debentures or another interest, as determined
                                         by the Trustee (“conflicting interest”), in accordance with applicable
                                         law in effect at the time. The Trustee may require a Holder participating in the Meeting
                                         to notify it, before the vote, of another interest he has, as well as of a conflicting
                                         interest, as aforementioned. The Trustee shall rely exclusively on such declarations
                                         and shall not be required to make any further investigation or examination. 

 

	48.	Without
                                         derogating from the generality of the foregoing, each of the following shall be deemed
                                         as having a conflicting interest:

 

		48.1.	A
                                         Holder who is an Affiliate Holder (as this term is defined in Section 4.2 of the Indenture).

 

		48.2.	A
                                         Holder who served as an officer of the Company immediately prior to the event underlying
                                         the resolution in the Meeting.

 

		48.3.	Any
                                         Holder the Trustee has determined has a “conflicting interest” as provided
                                         hereinafter, subject to applicable law and/or directive of a competent authority, and
                                         inter alia: Any Holder declaring in writing to the Trustee that he has a material,
                                         personal interest which lies outside the interest of the body of Debenture Holders at
                                         the Meeting of the Debenture Holders. Any Holder who fails to submit such a declaration
                                         in writing after being requested to do so by the Trustee, shall be deemed to have declared
                                         that he has such a personal interest, and the Trustee shall determine that he is a Holder
                                         with a conflicting interest. Without derogating from the provisions of this Section,
                                         the Trustee shall examine whether a Holder has a “conflicting interest” also
                                         taking into account that Holder’s holdings in other securities of the Company and/or
                                         securities of any other corporation relevant to the resolution that is being submitted
                                         to the Meeting for approval (as set out in the voting instrument), according to the declaration
                                         of that Holder.

 

	49.	The
                                         existence of a conflicting interest shall be determined also on the basis of a general
                                         test of conflicts of interest which the Trustee shall conduct. Furthermore, for the avoidance
                                         of doubt, it is clarified that the provisions regarding the definition of Debenture Holders
                                         having a conflicting interest shall not derogate from the provisions of the law, the
                                         case law and the binding guidelines of the Securities Authority relating to the definition
                                         of debenture holders having a conflicting interest, as applying at the time of the examination.

 

	50.	For
                                         purposes of the aforementioned conflict-of-interest examination, the Trustee may rely
                                         on a legal opinion commissioned by it, which shall be subject to the provisions of the
                                         Indenture as to the bearing of expenses.

 

	51.	It
                                         is clarified that a conflict-of-interest examination as aforementioned, insofar as it
                                         is required in the Trustee’s opinion, shall be conducted separately for each resolution
                                         on the agenda of the Meeting and separately for each Meeting. It is further clarified
                                         that the declaration of a Holder as having a conflicting interest in any resolution or
                                         at any Meeting, shall not in itself prove the existence of a conflicting interest of
                                         that Holder in another resolution on the agenda of the Meeting or a conflicting interest
                                         in other Meetings.

 

    	 	75	 

     

    

 

	52.	In
                                         counting the votes cast at a Holders’ Meeting, the Trustee shall not take into account
                                         the votes of Holders who did not comply with its request as provided in Section 48.3
                                         above, or of Holders which it found have a conflict of interest as defined above. Notwithstanding
                                         the foregoing, if the total holdings of the participants in a vote who are not Holders
                                         having a conflicting interest is less than five percent (5%) of the balance of the nominal
                                         amount of the Debentures, the Trustee shall take into account, in the count of the votes
                                         cast, also the votes of the Holders having a conflicting interest.

 

Convening
a Holders’ Meeting for Consultation Purposes

 

	53.	Nothing
                                         in Section 2, 4, 7, 16, 18 and 19 shall derogate from the Trustee’s authority to
                                         convene a Holders’ Meeting, if it deems it necessary to consult with them. The
                                         notification of such Meeting shall not specify items on the agenda and the date of the
                                         Meeting shall be at least one day after the date of the notification.

 

No
vote shall take place and no resolutions shall be adopted at such a Meeting, and such Meeting shall not be subject to the provisions
of Section 2, 4, 7, 16, 18, 19, 29, 31, 8, 9, 15, 27, 26, 45 and 21, and as provided by law.

 

 

76Exhibit

Exhibit 10.1

        
FIRST AMENDMENT TO THE LEAR CORPORATION
2009 LONG-TERM STOCK INCENTIVE PLAN
(Amended and Restated as of January 1, 2014)

THIS FIRST AMENDMENT to the Lear Corporation 2009 Long-Term Stock Incentive Plan (Amended and Restated as of January 1, 2014) (the “Plan”) was approved on November 16, 2016, by the Compensation Committee of the Board of Directors of Lear Corporation, pursuant to the authority reserved to it under Section 15.1 of the Plan, effective as of January 1, 2017.

WITNESSETH THAT:

		
	1.
	The final sentence of Section 6.7 of the Plan is hereby deleted and replaced with the following:

“Notwithstanding anything herein to the contrary, the Committee may, in its sole discretion, permit a Participant to satisfy such Participant’s tax withholding obligation by tendering Shares having a Fair Market Value equal to the amount required to be withheld or other greater amount up to the maximum statutory rate under applicable law, as applicable to such Participant, if such other greater amount would not result in adverse financial accounting treatment, as determined by the Committee (including in connection with the effectiveness of FASB Accounting Standards Update 2016-09).”

		
	2.
	Section 16.2 of the Plan is hereby deleted in its entirety and replaced with the following:

“Share Withholding. With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event arising as a result of Awards granted hereunder, the Company may satisfy the withholding requirement for supplemental wages, in whole or in part, by withholding Shares having a Fair Market Value (determined on the date the Participant recognizes taxable income on the Award) equal to the amount required to be withheld or other greater amount up to the maximum statutory rate required to be collected on the transaction under applicable law, as applicable to the Participant, if such other greater amount would not result in adverse financial accounting treatment, as determined by the Committee (including in connection with the effectiveness of FASB Accounting Standards Update 2016-09). The Participant may elect, subject to the approval of the Committee, to deliver the necessary funds to satisfy the withholding obligation to the Company, in which case there will be no reduction in the Shares otherwise distributable to the Participant.”

		
	3.
	Except to the extent hereby amended, the Plan shall remain in full force and effect.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00270-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00270-of-00352.parquet"}]]