Document:

exhibit_10-bb.htm

    
      

      

    

     

    Exhibit
10bb

     

    Final
Version

     

    Credit
Agreement

     

    Entered
into in Tel-Aviv on January 31, 2010

     

    by and
among

     

    012 Smile Telecom Ltd.
(formerly, Ampal Investments and Communication 2009 Ltd.) (the
"Borrower") p.c. No. 514350024

     

    and

     

    Bank
Leumi l'Israel Ltd. ("Leumi")

     

    Bank
Discount l'Israel Ltd. ("Discount")

     

    each
individually referred to hereinafter as the "Lender" and together as the
"Lenders"

     

    and

     

    Bank Leumi L'Israel Ltd.
("Bank Coordinator")

     

    
      	
              Whereas

            	
              On
      November 16, 2009, an agreement was signed between the Borrower (through
      its founder – Merhav-Ampal Energy Ltd.) - and 012 Smile Communication Ltd.
      and Ampal Energy Ltd., for the sale of the assets, activities and
      obligations of Smile 012 Communication Ltd., to the Borrower, that was
      amended on January 26, 2010 – all as detailed in the aforesaid agreement
      (as amended);

            

    

     

    
      	
              Whereas

            	
              the
      Borrower has approached the Lenders, seeking to enter an agreement with
      them whereby they will jointly provide it with part of the Credit required
      to finance the above agreement;

            

    

     

    
      NOW
THEREFORE IT IS DECLARED AND STIPULATED AMONG THE PARTIES AS
FOLLOWS:

      
 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    

    
      
        	
                1.

              	
                Definitions and
      Interpretation

              

      

       

      
        	
                 
      

              	
                1.1

              	
                The
      following terms will have the meaning set out opposite them, unless the
      context requires otherwise. Terms not defined in this Agreement will be
      given the meaning given to them in the Credit Documents (as defined
      hereunder).

              

      

       

      
        	
                 
      

              	
                1.1.1

              	
                "Institutional
      Loan" - a loan from institutional entities (the "Financial Institutions")
      in a sum of NIS. 220,000,000 which Merhav intends to take by the Closing,
      in order to provide the Independent Resources as defined hereunder, it is
      hereby clarified that in the event that the Borrower has obtained sums by
      virtue of Section 11.4 of the Acquisition Agreement, then for the purpose
      of this Agreement, the  amount set out above will decrease by an
      amount equal to 22% of the sums that the Borrower has received according
      to Section 11.4 hereunder (the "Reduced Total "), and the Loan will be
      considered as having been provided, ab initio, at the
      Reduced Total and the Financial Institutions' settlement time table as
      determined in Section 10.4.2.1 hereunder, will change accordingly. It is
      hereby clarified that the above calculations, including the change in the
      Financial Institutions' time table, are prepared for the purpose of this
      Agreement only and have no bearing or influence on the relationships
      between the Financial Institutions and Merhav and on the payments that
      Merhav is to pay to the Financial Institutions in accordance with the
      Agreement with them.

              

      

       

      
        	
                 
      

              	
                1.1.2

              	
                Ampal
      American - Ampal American Israel
Corporation.

              

      

       

      
        	
                 
      

              	
                1.1.3

              	
                "Independent
      Resources" - a sum of NIS.400,000,000 (four hundred million new Israeli
      shekels) derived from investment in the Borrower's share capital or from
      subordinate loans which the Borrower will use to make the payments to
      Smile on account of the purchase
consideration.

              

      

       

      
        	
                 
      

              	
                1.1.4

              	
                "Stakeholder"
      - As this term is defined in the Securities Law other than the Borrower's
      subsidiary companies.

              

      

       

      
        	
                 
      

              	
                1.1.5

              	
                "Financial
      Statements" - The Borrower's annual or quarterly Financial Statements, as
      the case may be, on a consolidated basis, prepared in New Shekels,
      consistently in accordance with generally accepted accounting principals,
      audited (in respect of periods concluding on December 31) or reviewed (in
      respect of periods concluding on other dates) as is customary in respect
      of reports of this kind, by the Borrower's accountants and any other
      report or explanation required according to relevant standard accounting
      procedures or by authorized
authorities.

              

      

       

      
        	
                 
      

              	
                1.1.6

              	
                "Financial
      Statements - Solo" - The Borrower's annual or quarterly Financial
      Statements as the case may be, on an individual basis, prepared in New
      Shekels, consistently in accordance with generally accepted accounting
      principals, approved on behalf of the Borrower by the Chief Financial
      officer of the Company (CFO) or by the
CEO.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                1.1.7

              	
                "The
      Credit" - the loans provided to the Borrower from time to time in
      accordance with this Agreement by one of the
  Lenders.

              

      

       

      
        	
                 
      

              	
                1.1.8

              	
                "Provisions
      of the Law" - any provision of the law or legislation in Israel or abroad,
      a provision from the Bank of Israel, and any other competent authority in
      Israel or abroad, agreed to by one of the Lenders and the Bank of Israel
      or by one of the Lenders and any other competent authority in Israel or
      abroad, as may be in force from time to
time.

              

      

       

      
        	
                 
      

              	
                1.1.9

              	
                the
      "Holding" - as this term is defined in the Securities
  Law.

              

      

       

      
        
          	 	
                  1.1.10

                	
                  "Subordinated
      Loans" - loans provided or to be provided to the Borrower by Merhav,
      Stakeholders in Merhav or a corporation controlled by any of the aforesaid
      in respect of which Merhav or a  Stakeholder or a corporation
      controlled by any of them, as the case may be, and the Borrower, undertake
      in writing to the Lenders, are not discharged before full settlement of
      the Credit, including by way of offset, except in accordance with the
      provisions of this Agreement (including by payments to Merhav in
      accordance with the provisions of Section 10.4
  hereunder).

                

        

         

        
          	 	
                  1.1.11

                	
                  "Known
      Agreement Index" means - the monthly Index for December 2009 published on
      January 15, 2010 at the level of
105.2.

                

        

         

      

      
        	
                 
      

              	
                1.1.12

              	
                "Acquired
      Assets" - as [the term] "Acquired Assets" is defined in the Purchase
      Agreement and subject to and in accordance with all provisions of the
      Purchase Agreement related thereto.

              

      

       

      
        	
                 
      

              	
                1.1.13

              	
                this
      "Agreement" - this Agreement and all its annexes, in such form as it will
      be from time to time.

              

      

       

      
        	
                 
      

              	
                1.1.14

              	
                the
      "Purchase Agreement" - the agreement drawn up and entered on November 16,
      2009 between the Borrower (through its founder - Merhav Ampal Energy Ltd.)
      Smile and Merhav, for the acquisition of part of Smile's operations,
      assets and obligations by the Borrower, as amended on January 26,
      2010.

              

      

       

      
        	
                 
      

              	
                1.1.15

              	
                the
      "Guarantor" - each of: Merhav and Ampal
  American.

              

      

       

      
        	
                 
      

              	
                1.1.16

              	
                "Operating
      Profit to service the Debt" (EBITDA) means - the total cumulative
      operating profit, according to the Borrower's Financial Statements
      (consolidated), in each of the four consecutive calendar quarters, the
      conclusion of which is the date for assessing the latest quarterly or
      annual Financial Statements, as the case may be (the "Final Date") (for
      the avoidance of doubt, operating profit is after payment of management
      fees to Merhav), before finance costs/income (interest, linkage
      differential, exchange rate differential, commissions and the differential
      calculated on the activated loans, at fair value), and before taxes, plus
      depreciation and write-downs recorded in that period and after excluding
      capital gains/losses, excluding bonuses in respect of options granted to
      employees, excluding one-off expenses arising from reorganization; and
      with the total of the aforesaid cumulative amount being linked to changes
      in the Known Index where the base index is the index known on the Final
      Date and the revised index is the index known on the review date or on the
      relevant Assessment Date.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                1.1.17

              	
                the
      "Licenses" - a general license for the Borrower to provide Bezeq
      International services, a general license to 012 Telecom Ltd. to provide
      domestic Bezeq land-line services, a special license for the Borrower to
      provide internet access services, a special license for the Borrower to
      provide end-user services and any other license that may arise in place
      thereof, or other license the termination or suspension of which may have
      a harmful effect on the Borrower's businesses, but not including a license
      whose termination or suspension as aforesaid, has a negligible effect on
      the Borrower's businesses.

              

      

       

      
        	
                 
      

              	
                1.1.18

              	
                "Subsidiaries"
      - as this term is defined in the Securities
Law.

              

      

       

      
        	
                 
      

              	
                1.1.19

              	
                "Companies
      Law" - the Companies Law, 1999-5759, as amended from time to
      time.

              

      

       

      
        	
                 
      

              	
                1.1.20

              	
                "Securities
      Law" - the Securities Law, 1968-5728, as amended from time to
      time.

              

      

       

      
        	
                 
      

              	
                1.1.21

              	
                the
      "Accounts" - an account as specified below, opened by the Borrower with
      each of the Lenders, which serves solely to provide and manage the Credit
      as defined above, as well as an account that may replace an account
      specified hereunder, but only if it serves solely to manage the Credit, as
      defined above:

              

      

       

      
        	
                 
      

              	
                1.1.21.1

              	
                Leumi
      - account no. 75920/01 at Branch
800

              

      

       

      
        	
                 
      

              	
                1.1.21.2

              	
                Discount
      - account no. 91885843 at Branch
10.

              

      

       

      
        
          	
                   
      

                	
                  
                    1.1.22

                  

                	
                  
                    "Business
      Day" - any day except Saturday, public holidays, the two days of Rosh
      Hashana, the eve of Yom Kippur and Yom Kippur, the first and eight days of
      Succoth, Purim, the first and seventh days of the Passover, Independence
      Day, Shavuot Festival, the Ninth of Av and also excluding any day that is
      determined by the Bank Commissioner not to be a bank Business
      Day.

                  

                

        

         

      

      
        	
                 
      

              	
                1.1.23

              	
                "Closing
      Day" the day on which the Credit is provided by a Closing in accordance
      with this Agreement. It is hereby clarified that the Closing Day will not
      take place on a day on which the Index is published or during the two days
      prior to or after, a day on which the Index is
  published.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                1.1.24

              	
                "Total
      Debt Service Ratio" means - the quotient reached by dividing: (A) the
      cumulative total of the Borrower's residual obligations (consolidated) to
      the Financial Institutions and other Lenders, other than suppliers' credit
      provided to the Borrower in its normal course of business, on commercial
      terms that are customary in that field, and other than obligations in
      respect of Subordinated Loans, as of the Assessment Date, less repayments
      made to Lenders, to the extent made, on the Assessment Date, and less cash
      and cash equivalents (including negotiable bonds) mortgaged by the
      Borrower in favor of one of such entities as such will be on the
      Assessment Date (it is hereby clarified that to the extent that the
      Assessment Date is a date on which the Borrower will have taken the Loan
      (including having made use thereof or withdrawn thereon, on account of the
      lines of credit provided to it) from a Financial Institution - the amounts
      of the aforementioned loan/usage/withdrawal, will be included in the
      balance of the obligations) by (B), the Operating Profit to service the
      Debt, according to the data in the Borrower's Financial Statements
      (consolidated) to the Final Date, as defined in Section 1.1.16
      above.

              

      

       

    

    
      	
               
      

            	
              1.1.25

            	
              "Debt
      Service Ratio" means - the quotient arrived at by dividing: (A), the
      difference between the Operating Profit to service the Debt and the lower
      of the following amounts: 70 million NIS. linked to the Known Index in the
      Agreement or the cumulative total of net cash flow to be utilized for the
      investment activities as appears in the Borrower's Financial Statements
      (consolidated) in the  report on cash flow during the relevant
      quarters; where the aforesaid cumulative total is linked to changes in the
      Known Index and where the base index is the known index on the Final Date
      and the revised index is the index known on the date of checking or on the
      relevant Assessment Date. (For this purpose, "net cash flow" means - cash
      flow to be used to acquire fixed property, equipment and other assets,
      less cash flow arising from the sale of fixed assets, equipment and other
      assets), by (B),
      the Total for servicing the Debt for the 12 consecutive months commencing
      immediately after the Assessment
Date.

            

    

     

    
      
        	
                 
      

              	
                1.1.26

              	
                "Inclusive
      Total Debt Service Ratio" means - the quotient arrived at by dividing:
      (A), the difference between the Operating Profit to service the Debt and
      the lower of the following amounts: 70 million NIS. linked to the Known
      Index in the Agreement or the cumulative total of net cash flow to be
      utilized for the investment activities as appears in the Borrower's
      Financial Statements (consolidated) in the cash flow report during the
      relevant quarters; where the aforesaid cumulative total is linked to
      changes in the Known Index and where the base index is the Known Index on
      the Final Date and the revised index is the Index known on the date of
      checking or on the relevant Assessment Date. (For this purpose, "net cash
      flow" means - cash flow to be used to acquire fixed property, equipment
      and other assets, less cash flow arising from the sale of fixed assets,
      equipment and other assets), by (B), the Total for
      servicing the inclusive Debt for the 12 consecutive months commencing
      immediately after the Assessment
Date.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                1.1.27

              	
                "Index"
      means - the Consumer Price Index including fruit and vegetables, issued by
      the Central Bureau of Statistics in
Israel.

              

      

       

      
        	
                 
      

              	
                1.1.28

              	
                "Financial
      Institution" - means any one of the following entities: banks, including
      auxiliary corporations as defined in the Banking Law (Licensing)
      1981-5741, entities which are subject to the Law of Joint Investment in
      Trusts, 1994-5754, corporations which are subject to the Law Controlling
      Financial Services (Kupat Gemel) 2005-5765,
      an insurance corporation as defined in the Law Supervising Insurance
      Businesses 1981-5741, or any corporation similar to the aforementioned
      which is incorporated outside Israel and which is supervised by a
      competent authority in the country of incorporation and has
      debentures.

              

      

       

      
        	
                 
      

              	
                1.1.29

              	
                "Assessment
      Date" - any date of repayment of interest or principal of the Credit
      according to the Credit repayment timetable, 7 days prior to any
      settlement date to Financial Lenders as referred to in Section 10.4.2.1,
      and on any date on which the Borrower will take Credit (including
      utilization or withdrawal on account of the lines of Credit provided to it
      (to the extent provided)), in a sum that exceeds 5 million NIS. from a
      Financial institution. The first Assessment Date will take place on
      December 31, 2010 or 7 Business Days prior to the first date for making
      payments to Financial Institutions or the first date of taking Credit from
      a Financial Institution as aforesaid, whichever is the
      earlier.

              

      

       

      
        	
                 
      

              	
                1.1.30

              	
                "Merger"
      - a Merger pursuant to the first chapter of the eighth section, or the
      third chapter of the ninth section, of the Companies Law, or any act the
      result of which is the acquisition of most of the Borrower's assets by an
      individual or corporation.

              

      

       

      
        	
                 
      

              	
                1.1.31

              	
                "Credit
      Documents" - all of the following: (a) This Agreement (with its annexes);
      (b) the Securities Documents; (c) all requests to be provided with Credit
      A as defined in Section 5.1; (d) all requests to provide Credit B as
      defined in Section 5.2; (e) all requests to provide Credit C as defined in
      Section 5.3; (f) the General Conditions; (g) all resolutions, approvals,
      documents and agreements, relating to the provision of the Credit and its
      administration (including with respect to opening the Accounts) signed by
      the Borrower or by anyone on its behalf or delivered by the Borrower or by
      anyone on its behalf, all of them being in such style, on such conditions
      and in such form as is to the Lenders from time to time; and (h) every
      agreement or other document signed by the Borrower in favor of any one of
      the  Lenders in connection with the provision of the Credit by
      such Lender.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                1.1.32

              	
                "Securities
      Documents" - all of the following: (a) agreements and forms testifying to
      the floating charge; (b) documents and forms testifying to a lien on the
      Accumulation Account as defined in Section 10.4.2.2; (c) the documents and
      forms testifying to a lien on shares in the Borrower in accordance with
      Section 8.5; (d) the documents and forms testifying to a lien on shares on
      012 Telecom Ltd. in accordance with Section 8.7; (e) Owners Guarantees;
      (f) the documents and forms testifying to a lien on certain rights under
      the Purchase Agreement in accordance with Section 8.2 hereunder; and the
      documents and forms testifying to a lien on the rights to reimbursement of
      the Owners Loans in accordance with Section 8.6. And, all documents
      related to the aforementioned liens and
  guarantees.

              

      

       

      
        	
                 
      

              	
                1.1.33

              	
                "Event
      of Breach" - any event or circumstance, the happening of which constitutes
      grounds for the immediate repayment of the Credit in accordance with the
      Credit Documents. It is hereby clarified that if such event is only
      determined at the end of a period (to the extent that the situation has
      not reverted to its previous condition or the event has not been
      rectified) the Lender will be entitled to demand the immediate settlement
      of the Credit, such event will be considered as an Event of Breach even
      prior to the elapse of the period indicated
  therefor.

              

      

       

      
        	
                 
      

              	
                1.1.34

              	
                "Merhav"
      - Merhav Ampal Energy Ltd.

              

      

       

      
        	
                 
      

              	
                1.1.35

              	
                "Free
      and Clear" - Free and Clear of any lien, pledge, encumbrance, charge,
      debt, claim or any other right of any type or kind of any third party
      whatsoever.

              

      

       

      
        	
                 
      

              	
                1.1.36

              	
                "Total
      Debt Service" means - the cumulative amount of payments of financial
      charges to Financial Institutions, in respect of the Borrower's
      obligations (consolidated)
      existing on the Assessment Date, in respect of anticipated financial
      charges for the 12 consecutive months starting immediately after the
      Assessment Date, together with the cumulative amount of payments on
      account of principal repayments to Financial Institutions the repayment of
      which occurs in the aforementioned 12 month period. It is hereby clarified
      that payments actually repaid on the Assessment Date will not be reckoned
      in the total of Debt servicing.

              

      

       

      
        	
                 
      

              	
                1.1.37

              	
                "Inclusive
      Total Debt Service" means - the cumulative amount of payments of financial
      charges to Financial Institutions, in respect of the Borrower's
      obligations (consolidated)
      existing on the Assessment Date, together with payments to Lending
      Institutions as defined in Section 1.1.46 hereunder, as such are
      anticipated for the 12 consecutive months commencing immediately after the
      Assessment Date, together the cumulative amount of payments on account of
      repayment of principal to Financial Institutions (for the avoidance of
      doubt, including in respect of payments to Lending Institutions as defined
      in Section 1.1.46 hereunder) the repayment of which occurs in the
      aforementioned 12 month period. It is hereby clarified that payments
      actually repaid on the Assessment Date and payments to Lending
      Institutions effected 7 Business Days after the Assessment Date will not
      be reckoned in the total of Inclusive Debt
  servicing.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                1.1.38

              	
                "Smile"
      - 012 Smile Communications Ltd.

              

      

       

      
        	
                 
      

              	
                1.1.39

              	
                "Owners
      Guarantees" - the Guarantees specified in Section 8.4, in the format
      attached as Annex
      1.1.39.

              

      

       

      
        	
                 
      

              	
                1.1.40

              	
                "Applicable
      Interest" the rate of interest before the addition of any kind of profit,
      used by Leumi to establish the interest to its customers for providing
      credit - in an amount, of such kind and for such period as are identical
      to the amount, kind and period of the relevant Credit, and this on the
      date that such credit is provided, renewed or replaced, as the case may be
      (the "Determining Date"). The aforesaid applies both in respect of credit
      bearing interest at a fixed rate and credit bearing interest at a variable
      rate. In the event that the relevant credit bears interest that includes a
      component of customarily basic interest whatsoever, that is likely to
      change during such credit period (for example - credit based on Prime
      interest) the Applicable Interest will be at the aforesaid interest rate
      plus or minus the fixed rate (the "Fixed Supplement") when the rate of the
      Fixed Supplement will be determined on the Determining Date; thus the
      Applicable Interest will be in accordance with the principals detailed
      above in this sub-Section and the rate of the Fixed Supplement will vary
      above or below the aforementioned basic interest during that credit
      period. A notification by Leumi regarding the Applicable Interest will be
      binding on the Borrower and may not be protested or
    appealed.

              

      

       

      
        	
                 
      

              	
                1.1.41

              	
                "Rate
      of Participation" - the percentage set out below in respect of each
      Lender:

              

      

       

      
        	
                 
      

              	
                Bank
      Leumi L'Israel Ltd. - 80%

              

      

       

      
        	
                 
      

              	
                Bank
      Discount L'Israel Ltd. - 20%

              

      

       

      
        	
                 
      

              	
                or
      as such may vary as stated in Section 2.1.6 or 5.3.5
      hereunder.

              

      

       

      
        	
                 
      

              	
                1.1.42

              	
                "Control"
      - as this term is defined in the Securities
Law.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                1.1.43

              	
                "Related
      Corporation" - a corporation, including a partnership or promoter, in
      which the Borrower has Control as well as any corporation (including a
      partnership or promoter) whose obligations the Borrower guarantees towards
      any entity whatsoever or in respect of the failure of such corporation
      (including a partnership or promoter) to comply with a debt or
      obligations, [the Borrower] has undertaken to indemnify any entity
      whatsoever.

              

      

       

      
        	
                 
      

              	
                1.1.44

              	
                "Area
      of Business" - means the field of communications in Israel only, including
      television services through the infrastructure of the internet or a
      similar service. It is clarified that apart from television services
      through the infrastructure of the internet, any investment or provision of
      services in the field of media, including television, will not be included
      in the Area of Business.

              

      

       

      
        	
                 
      

              	
                1.1.45

              	
                "General
      Conditions" - the general conditions of each of the Lenders for opening
      and managing the Account, and, also, with respect to Leumi, the
      Accumulation Account as defined in Section
  10.4.2.2.

              

      

       

      
        	
                 
      

              	
                1.1.46

              	
                "Payments
      to Financial Institutions" - the cumulative total of payments of interest
      and principal that Merhav must pay in respect of the Financial
      Institutions' loan, during the relevant
period.

              

      

       

      
        	
                 
      

              	
                1.1.47

              	
                "Closing"
      - the closing (completion) of the transaction that is the subject of the
      Purchase Agreement.

              

      

       

    

     

    
      	
               
      

            	
              1.2

            	
              General:
      relationship between
documents

            

    

     

    
      	
               
      

            	
              1.2.1

            	
              Headings
      in this Agreement are added for the sake of convenience only and are
      intended for its interpretation.

            

    

     

    
      	
               
      

            	
              1.2.2

            	
              The
      preamble and appendixes to this Agreement constitute an integral part
      hereof.

            

    

     

    
      	
               
      

            	
              1.2.3

            	
              Every
      reference in this Agreement to an annex or Section will be understood,
      except if the context requires otherwise, as a reference to an annex or
      Section in this Agreement,
respectively.

            

    

     

    
      	
               
      

            	
              1.2.4

            	
              Any
      information, reporting, notice, demand, agreement or application pursuant
      to this Agreement, shall be given in writing even if no written request is
      specified as aforesaid.

            

    

     

    
      	
               
      

            	
              1.2.5

            	
              Subject
      to the provisions of Section 1.2.6 hereunder, the provisions of this
      Agreement are in addition to the provisions of other credit agreements and
      do not derogate therefrom.

            

    

     

    
      	
               
      

            	
              1.2.6

            	
              In
      the event of a specific contradiction between the provisions of this
      Agreement and the provisions of any of its annexes or between the
      provisions of this Agreement and provisions of any other credit
      agreements, the provisions of this Agreement will
  prevail.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              Consortium's
      Rules

            

    

     

    Subject
to the fulfillment of the Borrower's undertakings under this Agreement and to
the fulfillment of the preconditions detailed in Section 4 hereunder, in
accordance with the Borrower' requests to be provided with credit according to
this Agreement, each of the  Lenders will provide the Borrower, at the
Rate of Participation, the Credit specified in Section 5 hereunder.

     

    
      	
               
      

            	
              2.1.2

            	
              The
      Borrower undertakes that any borrowings in respect of the Credit to be
      provided to the Borrower in accordance with the provisions of this
      Agreement, will be effected from each one of the  Lenders in
      parallel and that this will be at the Rate of Participation and on
      identical terms. Furthermore, the Borrower undertakes that each repayment
      of the Credit (including early settlement under Section 6 hereunder) as
      well as any reduction in the outstanding amount or the renewed outstanding
      amount as stated in Section 5.3.5 or 5.3.11 hereunder, will be implemented
      with each of the  Lenders in parallel and at the Rate of
      Participation.

            

    

     

    
      	
               
      

            	
              2.1.3

            	
              For
      the removal of doubt, the Lenders and the Bank Coordinator are obligated
      to verify that the amounts of the Credit provided in accordance with the
      provisions of this Agreement or the amounts of repayment, actually comply
      with the Rate of Participation that applies to each of the Lenders, or are
      on terms that are identical for each of the Lenders and that the
      responsibility for this is enforced on the
  Borrower.

            

    

     

    
      	
               
      

            	
              2.1.4

            	
              Unless
      specifically stated to the contrary, it is hereby clarified that any
      payment to the  Lenders or to the Bank Coordinator according to
      the provisions of this Agreement will be implemented without offset, lien,
      cross-claim or any other right from any source and that the sums to be
      paid to each of the  Lenders or the Bank Coordinator will be
      Free and Clear.

            

    

     

    
      	
               
      

            	
              2.1.5

            	
              Unless
      specifically stated to the contrary, the obligations and rights of the
      Lenders under the Credit Documents are individual, are not reciprocal, are
      not inter-connected and are not dependent on one another. None of the
      Lenders will bear the costs of a breach of the obligations in this
      Agreement by one of the other Lenders. A breach of the obligations
      contained in the Credit Documents by one of the Lenders, does not
      constitute, of itself, a breach of the other Lenders' obligations, and
      unless specifically stated to the contrary, will not affect the
      obligations and rights of the other
Lenders.

            

    

     

    
      	
               
      

            	
              2.1.6

            	
              Notwithstanding
      the aforesaid, it is hereby agreed that if on the Closing Day, Bank
      Discount does not provide its full part of the Credit according to the
      Rate of Participation which applies to it, pursuant to a breach of this
      Agreement or due to one of the events specified in Section 7 hereunder,
      applying to it, or for any other reason - Leumi will provide, in its
      place, the full part of credit as aforesaid, Leumi's Rate of Participation
      will change accordingly and such Lender will cease to be a party to this
      Agreement. It is hereby clarified that an occurrence such as the aforesaid
      will not, of itself, constitute a ground for non-provision of the Credit
      by the remaining Lenders in accordance with the Rate of Participation for
      each Lender.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              2.1.7

            	
              In
      any event that the agreement of the Lenders is required according to the
      Credit Documents, the notice in respect of agreeing or refusing to give
      their agreement, will be issued to the Borrower by the Bank
      Coordinator.

            

    

     

    
      	
               
      

            	
              2.1.8

            	
              A
      notice concerning exercise of the right to make immediate settlement of
      the Credit or part thereof, or the right to increase the rate of interest
      according to Section 5.4 hereunder or in the matter of taking measures to
      exercise a security out of the Securities, will be issued to the Borrower
      or to a Guarantor, as the case may be, by the Bank Coordinator. It is
      specifically clarified that notwithstanding anything stated in this
      Agreement (including Section 2.15 above), exercise of the rights detailed
      above in this Section 2.18, will apply pro rata to all the
      Lenders.

            

    

     

    
      	
               
      

            	
              2.1.9

            	
              Each
      of the parties will appoint someone to represent it and to act on its
      behalf in all matters relating to the implementation of this Agreement
      (the "Representatives"). The following persons will serve as the initial
      Representatives of the Parties: (a) for Leumi or the Bank Coordinator -
      the head of Leumi's communications department; (b) Discount - the business
      manager. Details of how to communicate with each of the Representatives
      are as specified in Section 19.3
hereunder.

            

    

     

    
      
        	 	
                2.1.10

              	
                Each
      of the parties will be entitled to replace its Representative by giving a
      notice, in writing, to the other parties which includes contact details
      for the new Representative on its behalf, and the date of replacing the
      Representatives.

              

      

       

      
        	 	
                2.1.11

              	
                Each
      of the Lenders and the Bank Coordinator will be entitled to rely on any
      notice or instruction given in the name of the Representative. None of the
      Lenders or the Bank Coordinator will be required to obtain any further
      proof of the genuineness of any fact, issue or calculation included in any
      notice or instruction given to it by one of the other Lenders'
      Representatives or a Representative of the Bank
    Coordinator.

              

      

       

      
        	 	
                2.1.12

              	
                The
      Lenders hereby declare to the Borrower that as of the date of entering
      this Agreement, there is no restriction or impediment, of any kind
      whatsoever, to providing all the amounts of credit under this Agreement to
      the Borrower, in full and on the due dates, including on the assumption of
      the adoption of any anticipated regulations (including Basel
      II).

              

      

       

      
        	 	
                2.1.13

              	
                The
      Lenders hereby undertake that exercising their rights under the liens
      specified in Sections 8.1, 8.5 and 8.7 hereunder, including their
      actualization, will not cause any adverse effect whatsoever to the
      provision of services under the Licenses, and in any event, exercise of
      their rights as aforesaid will be subject to all the limitations existing
      in law and in the Licenses in connection
  therewith.

              

      

       

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              3.

            	
              Object

            

    

     

    The
provision of the Credit to the Borrower on the Closing Day will serve the
Borrower solely for the purpose of acquiring the activities, assets and
obligations of Smile in accordance with the provisions of the Purchase Agreement
and subject to its terms.

     

    
      	
              4.

            	
              Preconditions
      for providing the Credit on the Closing
  Day

            

    

     

    The
provision of any amount on the Closing Day on account of the Credit under the
provisions of this Agreement is conditional upon the fulfillment of all the
following pre-conditions (which, if not stated specifically hereunder are due to
be fulfilled on the Closing Day), to the complete satisfaction of the
Lenders:

     

    
      	
               
      

            	
              4.1.1

            	
              The
      Borrower will have provided to the Lenders, two Business Days prior to the
      Closing Day, a letter from the Borrower's attorney relating to the Loans
      and including its confirmation that all consents, authorizations,
      approvals and other requirements (to the extent required) have been
      received in accordance with the Provisions of the Law and in accordance
      with the Borrower' incorporation documents for the purpose of entering the
      Purchase Agreement and for the implementation of the Credit Documents in
      accordance with and subject to, the provisions
  thereof.

            

    

     

    
      	
               
      

            	
              4.1.2

            	
              On
      the Closing Day, the Borrower will have deposited the Independent
      Resources in its account with the Bank Coordinator and signed on the
      irrevocable instructions attached as Annex 4.1.2 to this
      Agreement. The Independent Resources will be transferred by the Bank
      Coordinator to Smile together with the transfer of the amounts of the
      Credit, as stated in Section 5
hereunder.

            

    

     

    
      	
               
      

            	
              4.1.3

            	
              The
      Borrower will have effected (signed on) the Securities, as detailed in
      Section 8 hereunder, in favor of the
Lenders.

            

    

     

    
      	
               
      

            	
              4.1.4

            	
              The
      Guarantors will have signed the Owners Guarantees, as detailed in Section
      8.4 hereunder, in favor of the
Lenders.

            

    

     

    
      	
               
      

            	
              4.1.5

            	
              Merhav
      will have activated the liens as detailed in Sections 8.5 and 8.6
      hereunder, in favor of the Lenders.

            

    

     

    
      	
               
      

            	
              4.1.6

            	
              The
      Borrower will have fulfilled all its obligations under the Credit
      Documents.

            

    

     

    
      	
               
      

            	
              4.1.7

            	
              Cancelled

            

    

     

    
      
        	 	
                4.1.8

              	
                No
      Event of Breach will have taken place and/or will there be, to the
      Lenders' knowledge, any great likelihood of there being an Event of
      Breach.

              

      

       

      
        	 	
                4.1.9

              	
                The
      Borrower's board of directors will have passed the resolution in the form
      attached as Annex
      4.1.9 and the Borrower's attorney will have signed a confirmation
      in the form and on the terms that are acceptable to the
      Lenders.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                4.1.10

              	
                The
      Borrower will have opened the Accounts and signed on the authorizations,
      confirmations and declarations required by any of the Lenders to that
      end.

              

      

       

      
        	 	
                4.1.11

              	
                The
      Closing Day will be not later than
22.6.2010.

              

      

       

      
        	 	
                4.1.12

              	
                If
      and to the extent that the Borrower is aware, that one of the conditions
      of the conditions prescribed in this Section has not been fulfilled, the
      Borrower will give notification thereof to the Lenders immediately after
      it becomes aware of the non-fulfillment of such
  condition.

              

      

       

    

    
      	
              5.

            	
              The
      Credits and their Conditions

            

    

     

    Subject
to that stated heretofore and hereinafter in this Agreement, at the behest of
the Borrower, the Lenders will provide the Borrower, on the Closing Day, credit
in NIS up to a total cumulative amount (for each of the Lenders) of NIS 800
million, split as detailed below. Each Lender will provide the Borrower with a
portion of any credit in accordance with the Rate of Participation of such
Lender:

     

    
      	
               
      

            	
              5.1

            	
              Loan
      A, in the amount of (overall for each of the Lenders) NIS 500 million
      which will be provided on the Closing
Day.

            

    

     

    
      	
               
      

            	
              5.1.1

            	
              The
      principal of Loan A will be linked to the Index and will be settled in 14
      continuous and equal, semi annual instalments (with the addition of
      linkage differences for each instalment). The first principal payment with
      respect to Loan A will apply upon the lapse of 6 months from the date of
      providing Loan A and the final payment will apply upon the lapse of 84
      months from the date of the provision up thereof (“The Final Credit
      Settlement Date”).

            

    

     

    
      	
               
      

            	
              5.1.2

            	
              Loan
      A will bear annual interest at a fixed rate of 2% above the Applicable
      Interest with the addition of index linkage differences. As an indication
      only, the Lenders confirm that as at the date of the signing of this
      Agreement, the Applicable Interest is [2.2]
%.

            

    

     

    
      	
               
      

            	
              5.1.3

            	
              The
      interest on Loan A will be paid every three months, commencing from the
      lapse of three months from the date of providing the
  loan.

            

    

     

    
      	
               
      

            	
              5.1.4

            	
              The
      remaining terms and conditions of Loan A will be as detailed in the Loan
      Application, Annex
      5.1.4 to this Agreement.

            

    

     

    
      	
               
      

            	
              5.2

            	
              Loan
      B, in the overall cumulative amount (for all the Lenders) of NIS 200
      million which will be provided on the Closing
  Day.

            

    

     

    
      	
               
      

            	
              5.2.1

            	
              The
      principal of Loan B will be linked to the index and will be settled in one
      instalment at the final credit settlement
date.

            

    

     

    
      	
               
      

            	
              5.2.2

            	
              Loan
      B will bear annual interest at a fixed rate of 2% above the Applicable
      Interest with the addition of index linkage differences. As an indication
      only, the Lenders confirm that as at the date of the signing of this
      Agreement, the Applicable Interest is [3.1]
%.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              5.2.3

            	
              The
      interest on Loan B will be paid every three months, commencing from the
      lapse of three months from the date of providing the
  Loan.

            

    

     

    
      	
               
      

            	
              5.2.4

            	
              The
      remaining terms and conditions of Loan B will be as detailed in the Loan
      Application, Annex 5.2.4 to this
Agreement.

            

    

     

    
      	
               
      

            	
              5.3

            	
              The
      line of Credit C, under the terms and conditions as detailed below, and in
      an overall and cumulative amount (for all Lenders) of NIS 100 million (the
      “Outstanding Renewed Amount”), which will be exploited in full, on the
      Closing Day.

            

    

     

    
      	
               
      

            	
              5.3.1

            	
              Line
      of Credit C will be exploited by the Borrower by means of taking out an
      unlinked loan in NIS, (each loan will be designated a “Loan C”) for a
      period of 3, 6 or 12 months, at the Borrower's choice (each of the periods
      will hereinafter be designated – “The period of Loan C”) as long as the
      date of final settlement of the loans that will be provided within the
      line of Credit C, will commence after the lapse of 42 months from the
      Closing Day (the “Final Loan C Settlement
  Date”).

            

    

     

    
      	
               
      

            	
              5.3.2

            	
              Each
      application to be provided with a Loan C will be submitted by the Borrower
      to the Lenders at least 4 Business Days prior to the date requested for
      providing the loan.

            

    

     

    
      	
               
      

            	
              5.3.3

            	
              The
      total cumulative amount of the unpaid balance of Loan C will not exceed,
      at any time whatsoever, the Outstanding Renewed Amount or the Revised
      Outstanding Renewed Amount, as the case may
be.

            

    

     

    
      	
               
      

            	
              5.3.4

            	
              At
      the behest of the Borrower, as detailed above, the Lenders will put at the
      disposal of the Borrower the requested amount (each Lender in accordance
      with its Rate of Participation) as long as in addition to that stated in
      the sub-section of Section 5.3, the following terms and conditions will
      ensue cumulatively: a) If upon the date of providing the (new) loan, there
      is an unpaid balance of Loan C, the settlement date of which occurs at
      that time, the (new) loan will be initially used to settle the principal
      of Loan C, the settlement date of which occurs at that time, and if the
      amount of the (new) loan will be higher than the unpaid balance of Loan C,
      the settlement date of which occurs at that time, or, at that time, there
      is no applicable date of settlement of Loan C; then the balance of the
      (new) loan will serve the Borrower solely for the execution of investments
      in the Area of Business and b), up to that point in time, no instance of a
      breach has occurred and c) the cumulative amount of the unsettled balance
      of Loan C that will be conducted by each Lender immediately after
      providing the requested (new) loan, will not exceed the Rate of
      Participation of each Lender of the cumulative unsettled balance of Loan C
      that will be conducted by each Lender immediately after providing the
      requested (new) loan, and d) at that time, there is no limitation, as
      detailed in Section 7 below, on the part of any of the
      Lenders.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              5.3.5

            	
              It
      is hereby agreed that, other than at the time of providing the loans on
      the Closing Day, with respect to which that stated in Section 2.1.6 above
      applies, should any of the Lenders not put at the disposal of the
      Borrower, the loan as detailed in Section 5.3 above, (whether as a result
      of the breach of this contract by the Borrower or whether a limitation, as
      detailed in Section 7 below, exists), this fact in itself will not
      constitute a ground for non-provision of the Credit by the remaining
      Lenders. It is hereby clarified that should an event as stipulated above
      occur, as of that date, the Outstanding Renewed Amount or the Revised
      Outstanding Amount, as the case may be, will automatically be reduced by
      the total of the amount not provided by the Lender as stated above, as
      well as, commencing from such date, the Rate of Participation of the
      Lenders will be updated in accordance with the ratio that will be in place
      at that time (immediately after providing the loan by the remaining
      Lenders, or part thereof), whether the unsettled balance of the Credit
      with each of the Lenders or the total amount of the unsettled balance of
      the Credit.

            

    

     

    
      	
               
      

            	
              5.3.6

            	
              The
      principal of each Loan C will be settled in one instalment at the end of
      the period of the respective Loan
C.

            

    

     

    
      	
               
      

            	
              5.3.7

            	
              Loan
      C will bear annual interest at a fixed rate of 2% above the Applicable
      Interest.

            

    

     

    
      	
               
      

            	
              5.3.8

            	
              The
      interest on Loan C will be paid every three months, commencing from the
      lapse of three months from the date of providing the applicable
      loan.

            

    

     

    
      	
               
      

            	
              5.3.9

            	
              The
      remaining terms and conditions of Loan C that will be provided on the
      Closing Day will be as detailed in the Loan Application, Annex 5.3.9 to
      this Agreement. The remaining terms and conditions of Loan C that will be
      provided thereafter will be as detailed in the Loan Application to be
      signed by the Borrower with each Lender as is acceptable at that time to
      such Lender.

            

    

     

    
      	
               
      

            	
              5.3.10

            	
              The
      Borrower will pay the Lenders (to each Lender in accordance with the rate
      of the Lender’s Participation), with respect to the unexploited balance of
      Line of Credit C, non exploitation commission as detailed in Annex 12 of
      this Agreement. The commission will be calculated on the balance of the
      unexploited Line of Credit C. The checking of the total unexploited Line
      of Credit C will be carried out on a daily basis and the payment of the
      commission with respect thereto, will be carried out retrospectively at
      the end of each calendar quarter. It is hereby clarified that should that
      stated in Section 5.3.5 be upheld, then commencing from that date, the
      Borrower will cease paying non exploitation commission to the Lender who
      has not provided its share in the new Loan C, as detailed in the above
      stated Section 5.2.5.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              5.3.11

            	
              At
      any time at which there will be an unexploited balance of Line of Credit
      C, the Borrower will be at liberty to notify the Lenders in writing that
      it is the Borrower’s desire to reduce the amount of the Line of Credit C
      by the amount of the unexploited balance or part thereof. Commencing from
      the date of the receipt of the above stated notification, the amount of
      the Outstanding Renewed Amount will be irreversibly reduced accordingly.
      (the “Revised Outstanding Renewed
Amount”).

            

    

     

    
      	
               
      

            	
              5.4

            	
              Notwithstanding
      the aforesaid, should an instance of a breach occur, in respect of which a
      period [to remedy] is determined, only at the end of that period (to the
      extent that the situation has not reverted to its former state or the
      incident has not been rectified), will the Lender be entitled to demand
      the immediate settlement of the Credit, then, commencing from the date of
      the occurrence of the incident as stated and up to the earliest of the
      following dates: the date upon which the situation reverted to its former
      situation, or the date upon which the incident was rectified or the date
      upon which the Lenders issued a Letter of Waiver with respect to the
      breach (should such have been issued), or the date upon which the Lenders
      demanded the immediate settlement of the Credit, the interest rate
      determined for Loan A, Loan B and Loan C will increase by 2% per annum
      above the rate of interest determined for such loan, in accordance with
      Section 5.1.2 or 5.2.2. above, respectively, as such will be at that point
      in time. That stated in this sub-section above will not apply in the case
      of that stipulated in Section 11.3 or 11.2
  occurring.

            

    

     

    
      	
               
      

            	
              5.5

            	
              It
      is hereby clarified that in any case that the immediate settlement of the
      Credit will be demanded, on any date whatsoever, then, from that date, the
      unexploited balance of the Credit will bear arrears
    interest.

            

    

     

    
      	
               
      

            	
              5.6

            	
              The
      Bank Coordinator will inform the Borrower and each of the Lenders
      regarding the change in the rate of interest by virtue of Section 5.4
      above and the Bank Coordinator’s notification obligates the Borrower and
      the Lenders.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              Early
      Settlement of the Credit

            

    

     

    
      	
               
      

            	
              It
      is hereby agreed that Article 13 (b) of the Mortgage Law, 5727 – 1967 will
      not apply and that the Borrower will be at liberty to settle, by means of
      early settlement, the lines of Credit or any part thereof, subject to the
      following cumulative terms and
conditions:

            

    

     

    
      	
               
      

            	
              6.1

            	
              The
      order of the execution of early settlement will be as
    follows:

            

    

     

    
      	
               
      

            	
              6.1.1

            	
              The
      settlement of Loan C.

            

    

     

    
      	
               
      

            	
              6.1.2

            	
              If,
      at the date of the execution of the early settlement, there is no
      unsettled balance of Loan C – the settlement of Loan
  B.

            

    

     

    
      	
               
      

            	
              6.1.3

            	
              If,
      at the date of the execution of the early settlement, there is no
      unsettled balance of Loan C or Loan B, the settlement of Loan A by means
      of settlement on account of each of the outstanding principal instalments
      of Loan A in an equal manner, thus each instalment will be reduced by an
      identical amount. In the stated case, no changes in the dates of the
      payments and in the period of Loan A, will apply. Upon the execution of
      early settlement the Lenders will provide the Borrower with a new
      settlement time-table and this will obligate the
  Borrower.

            

    

     

    
      	
               
      

            	
              6.2

            	
              The
      amount that will be settled by means of early settlement will not be less
      than NIS 5 million.

            

    

     

    
      	
               
      

            	
              6.3

            	
              The
      early settlement will only be done upon a date for the payment of
      interest.

            

    

     

    
      	
               
      

            	
              6.4

            	
              The
      early settlement of the New Israeli Shekel, index linked credit can only
      be executed after the lapse of one year from the date of providing the
      Credit, and this on a calendar date that overlaps with the date of the
      provision thereof (and should this date not be a Business Day, then the
      general terms informing the matter of the bringing forward or moving back
      to coordinate a Business Day, will
apply.).

            

    

     

    
      	
               
      

            	
              6.5

            	
              The
      Borrower will notify the Lenders in writing regarding the execution of the
      early settlement, 7 Business Days in
advance.

            

    

     

    
      	
               
      

            	
              6.6

            	
              On
      the date of the early settlement, the Borrower will pay the Lenders the
      full amounts of the interest and the commissions that have accumulated up
      to that time.

            

    

     

    
      	
               
      

            	
              6.7

            	
              On
      the date of the execution of the early settlement, commission that will be
      calculated in accordance with the formula appearing in Annex 6.7, will be
      paid to each of the Lenders.

            

    

     

    
      	
               
      

            	
              6.8

            	
              The
      early settlement by the Borrower will be carried out in a manner that will
      maintain the relevant Rate of Participation of each of the Lenders in the
      remaining credit.

            

    

     

    
      	
               
      

            	
              6.9

            	
              Any
      notification issued by the Borrower regarding the intention of the
      Borrower to carry out early settlement will be non-revolving and
      irreversible.

            

    

     

    
      	
               
      

            	
              6.10

            	
              With
      the exception of amounts that will settle Loan C, by means of early
      settlement and which, at the behest of the Borrower, will be provided anew
      [by the Lenders], subject to and in accordance with that stated in Section
      5.3.2 above, any amount that will be settled by means of early settlement
      will not be provided anew [by the
Lenders].

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              Change
      in the Ownership of the Borrower

            

    

     

    
      	
               
      

            	
              7.1

            	
              In
      any case that as a result of any change in the Provisions of the Law (as
      defined hereinafter), as well as in any case that as a result of the
      fulfilment of a demand, provision or request of any kind – issued to or
      referred to any of the Lenders by the Bank of Israel or by any other
      qualified Authority, or as a result of the fulfilment of any undertaking
      on the part of any of the Lenders to the Bank of Israel or to any other
      qualified Authority, whether the fulfilment of the stated undertaking, the
      provision, the demand or the request results from any change whatsoever in
      the law as stated or whether it results from an agreement that has been
      drawn up or will be drawn up from time to time, between any of the Lenders
      and the Bank of Israel, or other qualified
  Authority:

            

    

     

    
      	
               
      

            	
              7.1.1

            	
              The
      Lenders, all or part thereof, will be obligated to hold or deposit liquid
      assets of any type or the amounts or value of the liquid assets, that any
      of the Lenders is obligated to hold or deposit, will be raised;
      or

            

    

     

    
      	
               
      

            	
              7.1.2

            	
              The
      amounts of the Credit that any of the Lenders is at liberty to grant or to
      continue to maintain will be limited or reduced, or the amounts of the
      deposits that any of the Lenders is at liberty to deposit with others
      [will be limited or reduced]; or

            

    

     

    
      	
               
      

            	
              7.1.3

            	
              Any
      demands whatsoever will be imposed or will apply to any of the Lenders (or
      there is a change that, in the opinion of any of the Lenders, results in,
      from the point of view of the Lender, stricter requirements whatsoever)
      with respect to the ratio of the reserves of the relevant Lender, on the
      one hand, to the Credit the relevant Lender is at liberty to grant or to
      continue to maintain, or to the assets or deposits that the relevant
      Lender is permitted to hold or to receive – on the other hand;
      or

            

    

     

    
      	
               
      

            	
              7.1.4

            	
              Should
      interest payments, fines, levies, or other payments be imposed or apply to
      any of the Lenders, or should any of the Lenders be required to pay such
      (or, should a change occur that, in the opinion of any of the Lenders,
      constitutes, from that Lender’s point of view, stricter requirements for
      these payments).

            

    

     

    
      	
               
      

            	
              And
      such Lender will determine that, as a result of the above stated, the cost
      or the expenses of such Lender will increase with respect to the provision
      of the Credit (in whole or in part) or with respect to the continued
      existence of the Credit (in whole or in part), or should the amounts of
      the principal and the interest that that Lender is entitled to receive
      with respect to the loan, will decrease, then such Lender will be at
      liberty to refuse to put the Credit, in whole or in part, at the disposal
      of the Borrower – the Borrower will pay such Lender, from time to time,
      upon the first demand, such an amount which will, in the opinion of the
      Lender, indemnify for the increase in the costs and expenses of such
      Lender with respect to the Credit or regarding the reduction in the
      principal and the interest as stated, and the amount of the
      indemnification, as will be determined by such Lender, from time to time,
      as stated, will obligate the Borrower. It is clarified that the Lender in
      this matter will be at liberty to make use of its rights in accordance
      with the above stated, on condition that at the same time, the Lender will
      make use of the identical rights granted to the Lender with respect to
      other customers who were granted credit of such type, by such Lender, in a
      similar scope to the Credit and which was characterized in a similar
      classification in all matters related to the matter of requirements for
      reporting to the Bank of Israel.

            

    

     

    
      
        	
                 
      

              	
                For
      the purpose of this Section 7, the term “any change in the Provisions of
      the Law” – including a change as stated in the interpretation of the
      Provisions of the Law, by the Court or other Authority of the State as
      stated, qualified to this end or charged with the execution or the
      upholding of the Law, Regulation or Provision or Rule as
      stated.

              

      

       

      
        	
                 
      

              	
                7.2

              	
                If,
      at any time whatsoever, any of the Lenders will determine (and the stated
      determination of such Lender will obligate the Borrower) that as a result
      of any amendment whatsoever to the Law, the provision of the Credit, in
      whole or in part, at the disposal of the Borrower, or – if the Credit, in
      whole or in part, has been put at the disposal of the Borrower – the
      continued existence of the Credit, will become, for such Lender, illegal,
      then such Lender is at liberty to refuse to put the Credit, in whole or in
      part, at the disposal of the Borrower, or – if the Credit, in whole or in
      part, has already been put at the disposal of the Borrower – such Lender
      will be entitled to demand, of the Borrower, the settlement of the
      unsettled portion of the Credit (together with interest up to the actual
      date of settlement) and the Borrower hereby undertakes to repay all the
      above stated amounts, to such Lender, within 90 days of the date of first
      demand in writing on the part of such Lender as long as in the above
      stated demand, it will be stipulated that it is based on the provisions of
      this Section and an appropriate explanation will be attached to it. It is
      clarified that in the stated case, the Borrower will not be required to
      pay early settlement commission or other payments with respect to the
      early settlement. It is also explicitly clarified that, in the above
      stated case, the Borrower will not be required to also settle the parallel
      credit granted by the remaining Lenders should the illegality not be
      relevant to them.

              

      

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              8.

            	
              Guarantees

            

    

     

    
      	
               
      

            	
              The
      guarantees detailed in this Section below, that will be produced for the
      Lenders, will serve to guarantee the full and precise settlement of the
      Credit and of all the remaining amounts owing and that will be owing to
      any of the Lenders by the Borrower, in accordance with the Credit
      Documents and also to guarantee any debt or other undertaking, from any
      source whatsoever, of the Borrower with respect to any of the
      Lenders:

            

    

     

    
      	
               
      

            	
              8.1

            	
              General
      first ranking floating charge, without limitations on the amount, on all
      the existing and future assets and rights of the Borrower and a first
      ranking fixed charge, without limitation in the amount, on the unpaid
      share capital and the equity of the Borrower (the "Floating Charge”). The
      Charge will be imposed on the assets, the rights, the unpaid share capital
      and the equity, they being free and clear, with the exception of
      “Permitted Liens”, as this term is defined in the Purchase
      Agreement.

            

    

     

    
      	
               
      

            	
              8.2

            	
              First
      ranking fixed charge on all the rights of the Borrower in accordance with
      the Purchase Agreement to receive amounts of indemnification in accordance
      with the provisions of Section 11.4 of the Purchase Agreement as well as
      the receipt of indemnity amounts in accordance with alternatives (i) and
      (ii) of Section 11.2 of the Purchase Agreement. The Borrower will
      transfer, to each of the Lenders, irrevocable instructions signed by the
      Borrower and referred to Smile and authorized by its signature, in the
      wording attached hereto as Annex 8.2, to transfer any amount that will be
      owing to the Borrower in accordance with the stated clauses of the
      Purchase Agreement, directly to the Borrower' account with each of the
      Lenders in accordance with its Rate of Participation. It is agreed that
      amounts that will be received in accordance with Section 11.4 of the
      Purchase Agreement will be handled as follows – a total of 66.66% of this
      amount will be used for the early settlement of the Credit under the terms
      and conditions as detailed in Section 6 above, with the following change:
      The Credit that will be settled against Loan C that was granted within the
      framework of Credit C will not be provided anew, and the Outstanding
      Amount or the Revised Outstanding Amount, as is appropriate, will be
      reduced accordingly, and the balance can be used by the Borrower for any
      purpose whatsoever, including distribution to shareholders, directly or
      indirectly, in the Borrower, in any manner whatsoever, and without any
      limitations whatsoever. Amounts that will be received in accordance with
      the alternatives (i) and (ii) of Section 11.2 of the Purchase Agreement
      will be used in full for the early settlement of the Credit under the
      conditions as detailed in Section 6 above with the following change: The
      Credit that will be settled against Loan C that was granted within the
      framework of Credit C will not be provided anew, and the Outstanding
      Amount or the Outstanding Renewed Amount, as is appropriate, will be
      reduced accordingly.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              8.3

            	
              First
      ranking fixed charge on account of the accumulation as defined in Section
      10.4.2.2. below, on all the monies credited or to be credited in favor of
      the accumulation account and all the Borrower's rights in respect thereof.
      As well as a first ranking fixed charge on account of the securities
      linked to the accumulation account on all the securities and the rights
      charged and which will be charged to the credit of the securities account
      and all the Borrower's rights with respect
  thereto.

            

    

     

    
      	
               
      

            	
              8.4

            	
              Unlimited
      permanent guarantee of the amount that will be signed on by Merhav and
      unlimited permanent guarantee of the amount that will be signed on by
      Ampal American Israel Corporation in the wording attached as Annex 1.1.39, which, in
      spite of that stated at the beginning of this Section 8, will only
      guarantee the amounts as will be detailed in the letter of guarantee. The
      Borrower undertakes to produce to the Lenders by no later than March 15,
      2010, an authorization from Ampal American Israel Corporation's lawyer
      attesting to the fact that the guarantee is valid and obligates Ampal
      American Israel Corporation under the applicable
  law.

            

    

     

    
      	
               
      

            	
              8.5

            	
              Second
      ranking fixed charge after charges that will be created for the benefit of
      the Institutions, on all Merhav shares existing on the Closing Day, and on
      all the rights derived therefrom and relating thereto, including and
      without derogating from the stated generality, the rights to receive
      dividends or any other distribution with respect to the shares as well as
      the undertaking on the part of Merhav to create, for the benefit of the
      Lenders, a charge of the ranking as detailed above, on all additional
      shares that it will receive (directly or indirectly) in the Borrower and
      this together with the receipt thereof. It is hereby agreed that the
      charge will be subject to the limitations detailed in Annex 8.5 to this
      Agreement; it is clarified that as long as the Lenders have not realized
      the above stated charge, all the amounts or assets that Merhav will
      receive from the Borrower in the wake of a “distribution” (as defined in
      the Companies Law), with respect to Merhav’s shares in the Borrower, will
      be released to Merhav for its
requirements.

            

    

     

    
      	
               
      

            	
              8.6

            	
              First
      ranking fixed charge on all the rights of Merhav to the Borrower with
      respect to the loans provided by Merhav to the Borrower as well as the
      undertaking by Merhav to create, for the benefit of the Lenders, a charge
      of the ranking as detailed above, on all the rights for the repayment of
      the additional loans that will be granted to the Borrower, and this
      together with their being provided. It is agreed that Merhav will be at
      liberty to use the amounts received under the provisions of Section 10.4.2
      below for the purpose of the payments to the Financial
      Institutions.

            

    

     

    
      	
               
      

            	
              8.7

            	
              First
      ranking fixed charge on all the shares that will be transferred on the
      Closing Day to the ownership of the Borrower in 012 Telecom Ltd. and all
      the rights derived therefrom and related thereto, including, and without
      derogating from the stated generality, the rights to receive dividends or
      any other distribution with respect to the shares. It is hereby agreed
      that as long as no Instance of Breach has occurred, the Borrower will be
      at liberty to use the cash dividend amounts that will be transferred to
      the Borrower from 012 Telecom Ltd., for any purpose, subject to the
      provisions of this Agreement.

            

    

     

    
      	
               
      

            	
              8.7.1

            	
              The
      Borrower undertakes that by no later than the lapse of 30 days from the
      Closing Day, Article 37a will be added to the 012 Telecom Ltd. Articles of
      Association, in the following wording: “That stated in Articles 36 and 37
      will not apply to the realization of any charge whatsoever created and /
      or which will be created with respect to the shares in the company, in
      whole or in part, for the benefit of a banking institution. For the
      avoidance of doubt, it is clarified that any realization of a charge as
      stated, will be executed subject to obtaining the approval of the Minister
      as defined in the special general license issued to the company for the
      provision of internal land line based Bezeq services on December 21, 2005,
      as amended and / or will be amended from time to time.” “Banking Institution” –
      as defined in the Banking Law (Licensing) 5741 –
  1981.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              9.

            	
              Declarations
      by the Borrower

            

    

     

    
      	
               
      

            	
              The
      Borrower declares and undertakes to the Lenders as
  follows:

            

    

     

    
      	
               
      

            	
              9.1

            	
              The
      Borrower is a private company incorporated and registered in accordance
      with the laws of the State of
Israel.

            

    

     

    
      	
               
      

            	
              9.2

            	
              On
      the Closing Day, there are no claims, arbitration, discussions or
      administrative process pending against the Borrower, with the exception of
      an application to authorize an arrangement under Article 350 of the
      Companies Law 5759 – 1999, of December 15, 2009 and the Borrower is not
      aware of any claim, arbitration, discussions or administrative process
      pending against Smile with the exception of the above stated application
      and the claims detailed in the Purchase Agreement and all its appendixes
      and with the exception of that as detailed in Annex 9.2 of this Agreement.
      Furthermore, no information has been received by the Borrower with respect
      to the intention to open a process, as stated, against the Borrower or
      against Smile.

            

    

     

    
      	
               
      

            	
              9.3

            	
              On
      the Closing Day, there is no lien or mortgage of any kind on the assets of
      the Borrower, (subject to that stated in Section 8.1 above), there is no
      undertaking on the part of the Borrower to create a lien or mortgage of
      any kind on any of the assets of the Borrower, and no entity whatsoever
      has a right of financial security or other right in any of the assets of
      the Borrower and there is no undertaking on the part of the Borrower to
      impart, to any entity whatsoever, rights of financial security or similar
      right in any of the assets of the Borrower, with the exception of liens
      created and / or which will be created by the Borrower in favor of the
      Lenders under the terms of this Agreement, and the current second ranking
      charge in favor of the Institutions with respect to the loan by the
      Institutions that will be subject to limitations as detailed in Annex 9.3 to this
      Agreement.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              9.4

            	
              Neither
      the Borrower nor Merhav have any ground for the cancellation of the
      Purchase Agreement in accordance with the grounds for cancellation
      detailed therein. It is clarified that should the Borrower and / or Merhav
      are aware of a ground as stated up to the Closing Day, then even if the
      Borrower will decide to not realize its right to cancel the Purchase
      Agreement, the Borrower must inform the Lenders in writing regarding the
      ground as soon as possible after becoming aware of the ground for the
      first time, and the Lenders will be entitled not to provide credit and to
      cancel this Agreement.

            

    

     

    
      	
               
      

            	
              9.5

            	
              As
      at the Closing Day, all the agreements, the permits and the authorizations
      required with respect to the execution of the Purchase Agreement, have
      been given to the Borrower by the Anti Trust Authority as well as by the
      Ministry of Communications and no additional authorizations whatsoever are
      required from other regulatory
authorities.

            

    

     

    
      	
               
      

            	
              9.6

            	
              Merhav
      is the holder of 100% of the issued share capital of the Borrower, and is
      the sole direct controlling shareholder in the
  Borrower.

            

    

     

    
      	
               
      

            	
              9.7

            	
              The
      Borrower has the legal powers, the authority and the rights to
      contractually associate under this Agreement and to fulfil all its
      provisions and conditions, and all the Borrower's undertakings under this
      Agreement which are, in the framework thereof or in connection therewith,
      are legal, effective, valid, obligating and enforceable on the Borrower in
      accordance with all its terms and
conditions.

            

    

     

    
      	
               
      

            	
              9.8

            	
              All
      the agreements, the authorities, the permits and the authorizations
      required under the Provisions of the Law, in accordance with the
      Borrower’s documents of incorporation, in accordance with the Purchase
      Agreement, and in accordance with any other agreement that the Borrower or
      the controlling shareholders in the Borrower is a party to, for the
      purpose of contractually associating in the Purchase Agreement and the
      execution thereof in accordance with the provisions thereof, for the
      purpose of the signing of this Agreement by the Borrower, for the purpose
      of obtaining credit from each of the Lenders in accordance with this
      Agreement, for the purpose of creating the Securities in favor of each of
      the Lenders as detailed in this Agreement and for the purpose of granting
      priorities to the Lenders over third parties with respect to the above
      stated Securities (with the exception of the permitted liens existing over
      the mortgaged assets within the framework of the floating charge as
      stipulated in Section 8.1 above and with the exception of the lien on the
      Borrower’s shares, as stated in Section 8.5 above, which will be only of
      second ranking) and for the purpose of the execution of all that stated in
      this Agreement.

            

    

     

    
      	
               
      

            	
              9.9

            	
              That
      by the Closing Day, the authorization of the Court will be obtained with
      respect to the application of December 15, 2009, submitted by the Borrower
      under Article 350 of the Companies Law and that the confirmation of the
      Borrower’s attorney of the fact that up to the Closing Day, no objections
      to the execution of the arrangement were submitted to the Court and that
      the period for the submission thereof, by law, has ended, will also be
      obtained. That the Borrower has carried out all the actions and has taken
      all the decisions and authorizations required for the purpose of the
      signing the Credit Documents and the execution thereof, and that the
      signing on the part of the Borrower on these documents obligates the
      Borrower to all intents and purpose. That each of the Credit Documents,
      after they will be signed by the other parties to the Agreement, will
      constitute an obligating and valid legal undertaking on the part of the
      Borrower, and will be enforceable on the Borrower in accordance with the
      terms and conditions thereof.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              9.10

            	
              There
      is no limitation or exclusion under the law or in accordance with any
      agreement for the upholding of all the undertakings of the Borrower in
      accordance with this Agreement, and there is no limitation and / or
      exclusion as stated for the provision of the Securities in accordance with
      this document and that there are no limitations to the realization of the
      Securities in accordance with this document, on the part of any of the
      Lenders, with the exception of limitations in accordance with the Licenses
      and the limitations as stated in Annex 8.5 to this
      Agreement.

            

    

     

    
      	
               
      

            	
              9.11

            	
              The
      Purchase Agreement has been legally signed and, as at the Closing Day, is
      valid, to all intents and the purpose, and obligates all the parties to it
      in accordance with its terms and
conditions.

            

    

     

    
      	
               
      

            	
              9.12

            	
              That
      all the information and the documents handed over to the Lenders or to the
      Bank Coordinator or to anyone acting of their behalf, in accordance with
      the Credit Documents, were correct, in full and precise at the time of the
      handing over thereof.

            

    

     

    
      	
               
      

            	
              9.13

            	
              With
      the exception of their undertakings in accordance with the Purchase
      Agreement, no undertaking has been given on the part of the Borrower and /
      or on the part of the controlling shareholders in the Borrower, with
      respect to Smile, and the purchase consideration will be paid in full by
      means of the Credits and by means of the Independent
      Resources.

            

    

     

    
      	
               
      

            	
              9.14

            	
              The
      Borrower is not in possession of information, that is not in the public
      domain, with respect to Smile or with respect to the Acquired Assets and /
      or with respect to the Purchase Agreement, which was not brought to the
      attention of the Lenders, and which, to the best of the Borrower’s
      understanding, if it had been brought to the attention of any of the
      Lenders, would have lead to the Lenders, all or some thereof, to refrain
      from providing the Credit for the benefit of the Borrower, or would have
      lead to their not agreeing to rely on the Securities detailed in this
      Agreement.

            

    

     

    
      	
               
      

            	
              9.15

            	
              To
      the best of the Borrower’s knowledge, no Instance of Breach has
      occurred.

            

    

     

    
      	
               
      

            	
              9.16

            	
              As
      at the date of the signing of this Agreement, all the terms and conditions
      and all the representations detailed therein, with the exception of the
      terms and conditions that are to be upheld after this date, are being
      upheld. The Borrower is not in breach of the terms and conditions and
      undertakings detailed in this Agreement. With respect to all the terms and
      conditions that must be upheld in accordance with this Agreement, after
      the date of the signing of this Agreement, there is no exclusion to
      executing and / or upholding them in full and on
  time.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              Additional
      Undertakings on the Part of the
Borrower.

            

    

     

    
      	
               
      

            	
              Without
      derogating from the Provisions of the Law and the provisions of the Credit
      agreement, the Borrower undertakes, to each of the Lenders, to uphold the
      following undertakings, at all times up to the settlement of all the
      Credit amounts:

            

    

     

    
      	
               
      

            	
              10.1

            	
              Financial
      Information

            

    

     

    
      	
               
      

            	
              The
      Borrower undertakes to submit to each of the
  Lenders:

            

    

     

    
      	
               
      

            	
              10.1.1

            	
              No
      later than April 7 each year, the annual Financial Statements as at
      December 31 of the previous year. The following will be attached to the
      above stated Financial Statements: a). A confirmation, in the name of the
      Borrower, from the Chief Financial Officer (CFO) or from the Chief
      Executive Officer (CEO) of the Borrower, in accordance with which, the
      Borrower has complied with all the financial bench marks detailed below.
      b). Details of the relevant data and an exhaustive explanation with
      respect to the manner of the calculation of the Borrower complying with
      the financial bench marks. c). Solo Financial Statements referring to
      December 31 of the previous year, insofar as the Borrower customarily
      does, during the period related to the matter, draw up solo Financial
      Statements as stated, including for its internal use and d). Details of
      the Related Corporations existing as at December 31 of the previous
      year.

            

    

     

    
      	
               
      

            	
              10.1.2

            	
              No
      later than 61 days after the end of each quarter, the Financial Statements
      relating to the preceding quarter, as well as: Details of the unsettled
      balance of Loan A, of Loan B and of Loan C as was the situation on the
      last day of the preceding quarter, with respect to each of the Lenders
      separately, details of the management fees paid by the Borrower during the
      course of the preceding quarter, insofar as this is not detailed in the
      Financial Statements relating to the matter, and insofar that, at the
      Closing Day, the Borrower selected the alternative as detailed in Section
      5.3.2 – details of the unexploited balance of the Line of Credit C that
      was (insofar as it was), on the last day of the preceding quarter, with
      respect to each of the Lenders separately. Furthermore, the following will
      be attached to the above stated Financial Statements: a). A confirmation,
      in the name of the Borrower, from the Chief Financial Officer (CFO) or
      from the Chief Executive Officer (CEO) of the Borrower, in accordance with
      which, the Borrower has complied with all the financial bench marks
      detailed below. b). Details of the relevant data and an exhaustive
      explanation with respect to the manner of the calculation of the Borrower
      complying with the financial bench marks. c). Details of the Related
      Corporations existing as at the end of the quarter to which the Financial
      Statements refer, as stated.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.1.3

            	
              No
      later than 2 days prior to the Assessment Date, all the relevant data for
      the purpose of the calculation of the compliance of the Borrower with the
      benchmarks stipulated in Sections 10.3 and 10.4.2, signed, in the name of
      the Borrower, by the Chief Financial Officer (CFO) or by the Chief
      Executive Officer (CEO) of the
Borrower.

            

    

     

    
      	
               
      

            	
              10.1.4

            	
              Should
      the Borrower not draw up solo Financial Statements, for any particular
      fiscal year, then the Lenders will be at liberty to demand of the
      Borrower, and the Borrower will be obliged to arrange for the Lenders, a
      presentation – on a date that will be set in coordination with the Lenders
      and the Borrower, but no later than May 31 – with respect to the solo
      financial data of the Borrower for such fiscal year, accompanied by
      explanations and notes insofar as will be demanded by the Lenders in that
      context.

            

    

     

    
      	
               
      

            	
              10.1.5

            	
              Should
      one of the Lenders notify the Borrower that, in accordance with the
      demands of the Bank of Israel, the submission of Financial Statements is
      required at an earlier date than any date stipulated above, the Borrower
      undertakes to bring the submission of the Financial Statement forward to
      such date.

            

    

     

    
      	
               
      

            	
              10.1.6

            	
              The
      Borrower confirms that it has been informed of the demands of the Bank of
      Israel with respect to the submission of Financial Statements on time and
      that a delay in the submission of the Statements is likely to cause any of
      the Lenders, inter alia additional costs and / or to obligate any of them
      to make a provision in their books.

            

    

     

    
      	
               
      

            	
              10.1.7

            	
              The
      Borrower will submit, to the Lenders, a report regarding any management
      agreement or other agreement that gives the controlling shareholders in
      the Borrower the right to any payment whatsoever from the Borrower or from
      the companies under its control, immediately after the signing thereof.
      For the avoidance of doubt, it is hereby clarified that there is nothing
      stated in this Section to permit the payment of any payment whatsoever to
      the controlling shareholders in the Borrower, except in accordance with,
      and subject to, the limitations detailed in Section 10.4
      below.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.1.8

            	
              The
      Borrower will submit, to the Lenders, a copy of every authorization,
      notification, report or any other document that the Borrower is obliged to
      submit to the Registrar of Companies and / or to the Securities Authority
      and / or to the Stock Exchange in Tel Aviv and / or to the Ministry of
      Communications and / or to any other Authority and which is intrinsic for
      the purpose of examining capability of the Borrower to meet its
      obligations in accordance with this Agreement and this as soon as possible
      after the producing thereof to such entity. If the notification or the
      report are published on the date of the submission thereof to the relevant
      Authority, on the Authority’s website, the Borrower will inform the
      Lenders in writing regarding the submission of the report or notification,
      as stated, to the relevant Authority and submit a copy thereof to any of
      the Lenders, at its behest.

            

    

     

    
      	
               
      

            	
              10.1.9

            	
              The
      Borrower will submit to the Lenders, at the end of 30 days after the
      Closing Day, a proforma report of the Borrower that will reflect the
      execution of the Purchase Agreement, signed in the name of the Borrower,
      by the Chief Financial Officer (CFO) or by the Chief Executive Officer
      (CEO) of the Borrower.

            

    

     

    
      	
               
      

            	
              10.1.10

            	
              The
      Borrower will submit to any of the Lenders, at the reasonable demand of
      the Lender, subject to and in accordance with the Provisions of the Law,
      reports, documents, information and clarifications which, in the opinion
      of such Lender, are relevant for the purpose of the management of the
      Credits, the charges and the Securities, insofar as will be demanded by
      the Lenders including, but without derogating from the generality of the
      above stated, any information and documents with respect to the business
      and the financial state of the Borrower and of the corporations under its
      control and the Financial Statements of the corporations under the control
      of the Borrower, insofar as the above stated corporations generally draw
      up, at that time, Financial Statements on a separate
  basis.

            

    

     

    
      	
               
      

            	
              10.1.11

            	
              The
      Borrower undertakes to transfer to the Lenders, a notification, in any
      case that the Borrower will become aware of the occurrence of an Instance
      of Breach, and this close to the time of the Borrower becoming aware of
      the breach.

            

    

     

    
      	
               
      

            	
              10.1.12

            	
              The
      Borrower will submit, to the Lenders, a copy of every notification or
      essential material that the Borrower will submit to its shareholders in
      their capacity as shareholders in the Borrower (that is, any material that
      the shareholders in the company have a right to peruse, as stated in
      Article 184 of the Companies Law), close to the time of the stated
      submission.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.1.13

            	
              The
      Borrower will transfer to the Lenders, any notification in writing
      received from a Government or Administrative Authority, with respect to
      the Licenses or any one thereof, with respect to a breach or apparent
      breach of the terms and conditions of the Licenses or any one thereof, the
      cancellation, suspension thereof or intrinsic change thereto, and this
      immediately after the receipt of the above stated
      notification.

            

    

     

    
      	
               
      

            	
              All
      the documents and the data required of the Borrower in accordance with
      this Section 10.1 will be drawn up to the satisfaction of the Bank
      Coordinator. In order only to eliminate doubt, it is hereby clarified
      that, subject to the remaining provisions of this Agreement, the handing
      over of the above stated documents and information is subject to the
      obligation of banking confidentiality customary in
  Israel.

            

    

     

    
      	
               
      

            	
              10.2

            	
              Access
      to Data

            

    

     

    
      	
               
      

            	
              The
      Borrower will enable the Lenders, including their employees and office
      holders (hereinafter – the “Representatives of the Lenders”), access to
      the books, documents, data or other information whatsoever in its
      possession, and the Borrower will also enable the Lenders or the
      representatives of the Lenders as stated, to obtain copies of the stated
      material, insofar as the matter will be deemed by the Lenders or their
      Representatives required to execute this Agreement or to manage the Credit
      and the Securities or to protect the rights of the Lenders in accordance
      with the Credit Documents.

            

    

     

    
      	
               
      

            	
              In
      addition, the Borrower will enable the Lenders' professional consultants
      nominated with the consent of the Borrower who have entered into
      confidentiality undertakings towards it, access to its books, documents,
      data or information of any kind in its possession, and will also enable
      the aforesaid consultants to be provided with copies of such material to
      the extent that it seems to the consultant, a relevant requirement for the
      purpose of providing the services that they have agreed with it, to the
      Lenders in connection with its executing this Agreement or managing the
      Credit and Securities or protecting the Lenders' rights according to the
      Credit Documents.

            

    

     

    The
Borrower will not refuse to give its agreement to the appointment of any
consultant whatsoever for reasons that are not reasonable. Furthermore, in any
case of refusal, the Borrower will justify its refusal in writing. The Borrower
hereby agrees in advance that Leumi Partners Investigations Ltd., will serve as
an consultant subject to its signature on a non disclosure agreement in a
wording acceptable to the Borrower and to that fact that the workers who will be
employed to this end at Leumi Partners Investigations Ltd. will not carry out
work for, or with respect to, any of the Borrower’s competitors, within the
framework of which, the above stated workers will be in contact with any of the
competitors or the office holders therein.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              In
      addition, the Borrower will cooperate and will cause the office holders,
      consultants and relevant workers acting on behalf of the Borrower, to
      cooperate with the Lenders, their consultants or representatives of the
      Lenders as stated, will meet with them from time to time and will transfer
      to them any information or material as stated, all as the Lenders, their
      consultants, or representatives will deem necessary for them, and subject
      to the above stated limitations.

            

    

     

    
      	
               
      

            	
              The
      Borrower declares that there is nothing in the appointment of the
      consultants acting on behalf of the Lenders as stated, and in the reports
      or information of any kind whatsoever, that will be handed over by those
      same consultants to the Lenders, in order to release the Borrower from any
      obligation whatsoever imposed on the Borrower, with respect to the
      Lenders, in accordance with the Credit Documents, whether an undertaking
      to transfer reports and information or with respect to any other
      undertaking whatsoever, or in order to impose on the Lenders or on the
      representatives of the Lenders or on the consultants acting on their
      behalf, any obligation whatsoever, or any liability with respect to the
      Borrower – with the exception of the obligation of confidentiality imposed
      on the consultants as will be detailed in the non disclosure agreement
      that will be signed by them as stated above – or in order to constitute a
      waiver of any kind on the part of the Lenders, or any estoppel whatsoever
      with respect to the Lenders or other allegations and such
      forth.

            

    

     

    
      	
               
      

            	
              In
      order to only eliminate doubt, it is hereby clarified that, subject to the
      remaining provisions of this Agreement, the handing over of the documents
      and the information as stated above is subject to the obligation of
      banking confidentiality applicable in
Israel.

            

    

     

    
      	
               
      

            	
              10.3

            	
              Undertaking to Comply
      with the Financial Benchmarks (an Example of the Manner of the Examination
      Attached as Annex 10.3)

            

    

     

    
      	
               
      

            	
              The
      Borrower undertakes to the Lenders to comply with each of the financial
      benchmarks detailed in this sub-section below, which will be examined at
      each Assessment Date:

            

    

     

    
      	
               
      

            	
              10.3.1

            	
              The
      Operating Profit to service the Debt (EBITDA) of the Borrower will not be
      less than a total of NIS 220 million, this amount being linked to the
      index, commencing from the Known Agreement
  Index.

            

    

     

    
      	
               
      

            	
              10.3.2

            	
              In
      accordance with the data of each of the calendar quarters detailed below,
      the Debt Service Ratio of the Borrower will not be less than the value
      stipulated in the following table with respect to such
      quarter.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	 	
              With
      Respect to Q1

            	 	 	
              With
      Respect to Q2

            	 	 	
              With
      Respect to Q3

            	 	 	
              With
      Respect to Q4

            	 
	
              2010

            	 	 	 	 	 	1.230	 	 	 	1.230	 	 	 	1.251	 
	
              2011

            	 	 	1.251	 	 	 	1.281	 	 	 	1.281	 	 	 	1.322	 
	
              2012

            	 	 	1.322	 	 	 	1.361	 	 	 	1.361	 	 	 	1.434	 
	
              2013

            	 	 	1.434	 	 	 	1.510	 	 	 	1.510	 	 	 	1.547	 
	
              2014

            	 	 	1.547	 	 	 	1.582	 	 	 	1.582	 	 	 	1.614	 
	
              2015

            	 	 	1.614	 	 	 	1.648	 	 	 	1.648	 	 	 	 	 

    

     

    
      	
               
      

            	
              It
      is clarified that the unsettled balance of the principal of Loan C will be
      deducted from the Debt Service
Ratio.

            

    

     

    
      	
               
      

            	
              10.3.3

            	
              In
      accordance with the data of each of the calendar quarters detailed below,
      the Debt Service Ratio of the Borrower will not exceed the value
      stipulated in the following table with respect to such
      quarter.

            

    

     

    
      	 
      	 	
              With
      Respect to Q1

            	 	 	
              With
      Respect to Q2

            	 	 	
              With
      Respect to Q3

            	 	 	
              With
      Respect to Q4

            	 
	
              2010

            	 	 	 	 	 	3.830	 	 	 	3.830	 	 	 	3.651	 
	
              2011

            	 	 	3.651	 	 	 	3.425	 	 	 	3.425	 	 	 	3.208	 
	
              2012

            	 	 	3.208	 	 	 	2.981	 	 	 	2.981	 	 	 	2.786	 
	
              2013

            	 	 	2.786	 	 	 	2.111	 	 	 	2.111	 	 	 	1.936	 
	
              2014

            	 	 	1.936	 	 	 	1.752	 	 	 	1.752	 	 	 	1.587	 
	
              2015

            	 	 	1.587	 	 	 	1.410	 	 	 	1.410	 	 	 	1.246	 

    

    

     

    
      	
               
      

            	
              It
      is clarified that for the purpose of the examination of the compliance on
      the part of the Borrower with all of the financial benchmarks detailed in
      Sections 10.3.1, 10.3.2 and 10.3.3 above, in each of the quarters in 2010,
      the cumulative Operating Profit to service the Debt (EBITDA) as at the
      Closing Day, will be taken when adjusted by an annual
      calculation.

            

    

     

    
      	
               
      

            	
              The
      financial benchmarks laid down in Sections 10.3.1, 10.3.2 and 10.3.3 above
      (“The
      Benchmarks”), are based on accounting standards, accounting rules,
      estimates and accounting policies (“Financial Reporting”) as
      implemented in the most recent Financial Statements of the Borrower, as at
      the date of this document (“The Most Recent
      Statements”).

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              A
      different financial reporting from that on which the drawing up of the
      most recent Statements was based, including, but not limited to, in the
      wake of the implementation of the International Financial Reporting
      Standards (IFRS), new / other / any financial reporting standards in
      Israel or abroad, a change in estimates and / or a change in financial
      reporting policies (all the above stated will be hereinafter called,
      jointly and severally - “New Financial
      Reporting”), is likely to bring about changes which will have
      ramifications on the benchmarks.

            

    

     

    
      	
               
      

            	
              Therefore,
      the Borrower agrees as follows:

            

    

     

    
      	
               
      

            	
              At
      any time that it will transpire in the perception of the Lenders, at their
      sole discretion, that changes have been made and / or are about to be made
      to the Borrower’s Financial Statements, in the wake of the New Financial
      Reporting, they will be at liberty, after consulting with the Borrower and
      upon obtaining the agreement of the Borrower, to determine what are the
      changes required in the benchmarks (“The Amended Benchmarks”)
      in order to adjust them to the stated changes, and this with the intention
      of adjusting them to the original financial purpose for which the
      benchmarks were determined.

            

    

     

    
      	
               
      

            	
              Should
      the Bank Coordinator inform the Borrower what the amended benchmarks are –
      these will obligate the Borrower commencing from the date of the
      submission of the notification by the Bank Coordinator and will view this
      appendix as if it includes, commencing from the date of the submission of
      the notification by the Bank Coordinator, the Amended
      Benchmark.

            

    

     

    
      	
               
      

            	
              It
      is hereby agreed that in any case that a difference of opinion between the
      Borrower and the Lenders will become apparent, with respect to the changes
      required in the benchmarks in the wake of the New Financial Reporting, the
      parties will appoint an expert who is an independent auditor, belonging to
      one of the big five auditing firms in Israel, who will determine what the
      Amended Benchmarks are and his ruling will obligate the parties. The
      Borrower will bear the cost of the fees of the above stated
      expert.

            

    

     

    
      	
               
      

            	
              10.4

            	
              Undertakings
      with respect to Payments to
Stakeholders

            

    

     

    
      	
               
      

            	
              10.4.1

            	
              With
      the exception of that detailed in Sections 10.4.2 and 10.4.3 below, the
      Borrower and any Related Corporation, will not pay, directly or
      indirectly, in any manner whatsoever, to any of the Stakeholders in the
      Borrower or to a relative of an Stakeholder and / or to a corporation
      (including a partnership or enterprise) under the control of any of them,
      (not through the Borrower) and / or to a corporation (including a
      partnership or enterprise) under the control of any of them together with
      others (not through the Borrower) and / or to a third party who will
      replace them or act on their behalf, dividends, repayments of owners
      equity, salary, expenses, management fees, consultancy fees, participation
      fees, commissions or and amount owing and / or will be owing to them, with
      respect to any other ground whatsoever, whether in money or money
      equivalents, and will also not allow then to withdraw a monetary amount or
      monetary equivalent amount, as stated, without obtaining the prior written
      agreement of the Lenders. In spite of that stated in this Section above,
      it is hereby agreed that the Borrower as well as a Related Corporation,
      will be entitled to pay the CEO of the Borrower or of a Related
      Corporation, salary with respect to his office at the Borrower or at a
      Related Corporation and also to pay a director in the Borrower or in the
      Related Corporation, or to a Stakeholder or to the relatives of the
      Stakeholder, as the case may be, acceptable salary with respect to his
      position as a director or other officer in the Borrower or in the Related
      Corporation. Furthermore, the Borrower or the Related Corporation will be
      at liberty to pay amounts to the Stakeholders and their relatives, as
      stated above, with respect to transactions and contractual associations
      that are conducted in the course of the regular business of the Borrower
      or the Related Corporation and of the Stakeholder and under market
      conditions.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.4.2

            	
              It
      is hereby agreed that the Borrower will be at liberty to pay Merhav
      payments as detailed below subject to the upholding of all the following
      terms and conditions in
accumulation:

            

    

    
       

      
        	
                 
      

              	
                10.4.2.1

              	
                 On
      every date of institutional payments as detailed in the settlement table
      attached as Annex 10.4.2.1 to this Agreement, or as will be amended in
      accordance with that stated in Section 1.1.1. (“Financial Institutions
      Settlements Time Table”), the amount of payment to Financial
      Institutions relevant at that date. It is hereby agreed that in the case
      that Merhav will alter the terms and conditions of the Financial
      Institutions loan and, as a result thereof, the amounts that will be
      required to be settled with the Financial Institutions every three months
      will be lower than the amounts detailed in the Financial Institutions
      Settlements Time Table, and also in the case that Merhav will replace the
      loan from the Financial Institutions with credit from another financial
      institution, and the amounts that it will be required to settle with
      respect thereto, every three months, will be lower than the amounts
      detailed in the Financial Institutions Settlements Time Table, the
      Financial Institutions Settlements Time Table will be replaced in
      accordance with the amended or replaced credit terms and conditions as is
      appropriate, and the new Financial Institutions Settlements Time Table
      will apply and obligate from such date. At the date of the replacement of
      the Financial Institution Settlements Time Table as stated above, the
      parties will sign on an amendment to this Agreement for the purpose of
      changing the definition of the loan from the Financial Institutions and
      the institutional payments
accordingly.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                  
                    10.4.2.2

                  

                	
                   By
      no later than 2 Business Days prior to the date of the execution of the
      payments to Financial Institutions in accordance with sub-section 10.4.2.1
      above, the Borrower will deposit, in a separate account, (the
      “Accumulation Account”) which will be conducted in the name of the
      Borrower at the Central Tel Aviv Branch (800) of the Bank Coordinator, an
      identical amount to the amount of the payments to the Financial
      Institutions for such date. The obligation of the Borrower to deposit the
      amounts as stated in the sub-section will be until the amounts that will
      be accumulated in the accumulation account will reach the accumulated
      amount – as the above stated amount will be estimated by the Bank
      Coordinator – of the interest that the Borrower will have to pay to the
      Lenders with respect to Loan A, Loan B and Loan C at two consecutive
      payments dates of each of the above stated loans, that apply after the
      date of the execution of the payment to the Financial Institutions related
      to the matter.

                

        

      

       

      
        	
                 
      

              	
                10.4.2.3

              	
                 Together
      with the first deposit in favor of the accumulation account, the Borrower
      will create, in favor of the Lenders, a fixed charge of first ranking, on
      the accumulation account and on all the monies that will be deposited into
      the stated account and all the rights with respect thereto, for the
      purpose of guaranteeing its debts and undertakings with respect to the
      Lenders regarding the Credit Documents. The charge will be in the wording
      and under the terms and conditions as will be acceptable to the Bank
      Coordinator and the company will produce for the Bank Coordinator, upon
      the creation of the lien, any authorization and agreement as will be
      demanded by the Bank Coordinator.

              

      

       

      
        	
                 
      

              	
                In
      this matter it is clarified that:

              

      

       

      
        	
                 
      

              	
                The
      Borrower will be at liberty to invest the monies in the accumulation
      account in short term banking deposits, short term loans, or negotiable
      securities or negotiable Exchange Traded Notes issued by the State of
      Israel. To this end, the values of the short term banking deposits and /
      or the securities and / or the Exchange Traded Notes will be considered in
      accordance with their closing price on the Tel Aviv Stock Exchange, 2
      Business Days prior to each payment date to Financial Institutions.
      Surpluses that will accumulate over and above the amounts required as
      stated in Section 10.4.2.2. above, will be able to be withdrawn by the
      Borrower.

              

      

      
         

         

        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    
       

      
        	
                 
      

              	
                10.4.2.4

              	
                 As
      at the [date of the] Financial Statements known at the date of the
      relevant payment to the Financial Institutions, the overall Debt Service
      Ratio will not be less that the value stipulated in the following table,
      with respect to the quarter that is the subject of the above stated
      Financial Statements:

              

      

       

    

    
      	 
      	 	
              With
      Respect to Q1

            	 	 	
              With
      Respect to Q2

            	 	 	
              With
      Respect to Q3

            	 	 	
              With
      Respect to Q4

            	 
	
              2010

            	 	 	 	 	 	1.293	 	 	 	1.293	 	 	 	1.209	 
	
              2011

            	 	 	1.209	 	 	 	1.146	 	 	 	1.146	 	 	 	1.183	 
	
              2012

            	 	 	1.183	 	 	 	1.161	 	 	 	1.161	 	 	 	1.216	 
	
              2013

            	 	 	1.216	 	 	 	1.274	 	 	 	1.274	 	 	 	1.306	 
	
              2014

            	 	 	1.306	 	 	 	1.336	 	 	 	1.336	 	 	 	1.365	 
	
              2015

            	 	 	1.365	 	 	 	1.394	 	 	 	1.394	 	 	 	 	 

    

     

    
      
        	
              	
                 
      

              	It is hereby clarified that the unsettled balance of the principal of
      Loan C will be offset from the Debt Service
Ratio.

      

       

      
        
           

          
            	
                     
      

                  	
                    
                      10.4.2.5

                    

                  	
                     As
      at the [date of the] Financial Statements known at the date of the
      relevant institutional payment, the total Debt Service Ratio will not
      exceed the value stipulated in the following table, with respect to the
      quarter that is the subject of the above stated Financial
      Statements:

                  

 

        

      

    

    
      
        	 
      	 	
                With
      Respect to Q1

              	 	 	
                With
      Respect to Q2

              	 	 	
                With
      Respect to Q3

              	 	 	
                With
      Respect to Q4

              	 
	
                2010

              	 	 	 	 	 	3.377	 	 	 	3.377	 	 	 	3.219	 
	
                2011

              	 	 	3.219	 	 	 	3.043	 	 	 	3.043	 	 	 	2.850	 
	
                2012

              	 	 	2.850	 	 	 	2.801	 	 	 	2.801	 	 	 	2.619	 
	
                2013

              	 	 	2.619	 	 	 	1.999	 	 	 	1.999	 	 	 	1.833	 
	
                2014

              	 	 	1.833	 	 	 	1.672	 	 	 	1.672	 	 	 	1.514	 
	
                2015

              	 	 	1.514	 	 	 	1.356	 	 	 	1.356	 	 	 	1.199	 

      

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
           

          
            
              	
                       
      

                    	
                      
                        10.4.2.6

                      

                    	
                       As
      at the date of the payment of the relevant Institutional payments, the
      amount of the Operating Profit to service the Debt will not be less than
      an amount of NIS 230 million, with this amount being linked to the Known
      Agreement Index.

                    

            

             

          

        

      

      
        	
                 
      

              	
                It
      is clarified that for the purpose of the examination of the compliance of
      the Borrower with each of the financial benchmarks detailed in Sections
      10.4.2.4, 10.4.2.5, 10.4.2.6 above, in each of the quarters applicable
      during 2010, the cumulative Operating Profit to service the Debt (EBITDA)
      from the Closing Day will be taken, it being adjusted by an annual
      calculation.

              

      

       

      
        	
                 
      

              	
                10.4.2.7

              	
                 Commencing
      from the lapse of 36 months from the Closing Day (and after the payment to
      the Financial Institutions and the payment to the Lenders due at that
      point in time) and as long as Loan C, insofar as such exists, has not been
      settled, the payment to the Financial Institutions will be dependent, in
      addition to that stated heretofore and hereinafter, upon obtaining the
      prior authorization of the Lenders, in writing, for the execution thereof.
      The Lenders will not withhold such authorization, provided that the
      Borrower satisfies them, prior to the execution of the payments to the
      Financial Institutions, with respect to the Borrower’s ability to settle
      the unsettled balance of the principal of Loan C, in full and on
      time.

              

      

       

      
        	
                 
      

              	
                10.4.2.8

              	
                 At
      the first date upon which the payment to the Financial Institutions will
      be executed, the Lenders will be in possession of the Financial Statements
      referring to the preceding quarter, and the data that will be included in
      the Financial Statements as stated, will indicate the fact that the
      Borrower was an active company during a minimum period of three
      months.

              

      

       

      
        	
                 
      

              	
                10.4.2.9

              	
                 The
      Borrower has complied with all its obligations to each of the Lenders in
      accordance with the Credit
Documents.

              

      

       

      
        	
                 
      

              	
                10.4.2.10
      

              	
                No
      Instance of Breach has occurred.

              

      

       

      
         

        
          	
                   
      

                	
                  
                    10.4.3

                  

                	
                  
                    Furthermore,
      it is hereby agreed that the Borrower will be entitled to pay Merhav, a
      Stakeholder in the Borrower (as defined in the Securities Law) or bodies
      related to them, management fees, the cumulative total of which, in a
      calendar year, will not exceed NIS 15 million, linked to the Known
      Agreement Index (the “Maximum Management Fee Amount”) as well as the
      payment of the Value Added Tax, against an invoice that Merhav will
      produce to the Borrower, with respect to the interest paid on the
      Subordinate Loans, subject to all the following terms and conditions: (a)
      The terms and conditions detailed in Sections 10.4.2.9 and 10.4 2 10 will
      be upheld, (b) the Lenders will be in possession of Financial Statements
      indicating the fact that the Borrower was an active company during a
      minimum period of three months. It is hereby clarified that the amount of
      the management fees refers to each calendar year separately. Should
      management fees not be paid in a particular year – not as result of the
      Borrower failing to comply with the terms and conditions detailed in
      Sections 10.4.2.9 and 10.4 2 10 above – all or part thereof, the Borrower
      will be entitled to pay them subject to the upholding of the terms and
      conditions as stated above, only in the subsequent
    year.

                  

                

        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          	
                   
      

                	
                  10.4.4

                	
                  
                    The
      Borrower and any Related Corporation will not carry out, directly or
      indirectly, exceptional transactions as defined in the Companies Law
      (including provision of loans by the Borrower or a Related Corporation),
      with any of the Stakeholders in the Borrower, or a relative of a
      Stakeholder and / or with a corporation under the control of any of them
      (not through the Borrower) and / or with a corporation under the control
      of any of them together with others (not through the Borrower) and / or
      with a third party that will replace them or act on their behalf, without
      obtaining the prior authorization of the Lenders. It is clarified that, in
      the matter of the definition of “exceptional transactions”, the market
      conditions and the regular course of business will be examined relative to
      each of the parties to the
transaction.

                  

                

        

         

      

    

    
      	
               
      

            	
              10.5

            	
              Conducting
      the Business of the Borrower.

            

    

     

    
      	
               
      

            	
              10.5.1

            	
              The
      Borrower will not alter the field of its activities from the Area of
      Business except subject to that stated in Section 10.5.2
      below.

            

    

     

    
      	
               
      

            	
              10.5.2

            	
              The
      Borrower undertakes that, without the prior written agreement of the
      Lenders, the Borrower will not carry out significant investments that are
      not in the Area of Business, except after obtaining the prior written
      agreement of the Lenders. In the matter of this Section 10.5.2,
      “significant investments” – investments of an annual cost of a cumulative
      total exceeding NIS 5 million (linked to the Known Agreement Index), in
      each calendar year.

            

    

     

    
      	
               
      

            	
              10.5.3

            	
              For
      the avoidance of doubt, and without derogating from the obligations of the
      Borrower detailed in the remaining Sections of this Agreement, or in the
      Security Documents, it is hereby clarified that all the activities
      purchased by the Borrower in accordance with the Purchase Agreement will
      be carried out and managed by the Borrower directly and will, at all
      times, be under the ownership of the
Borrower.

            

    

     

    
      	
               
      

            	
              10.5.4

            	
              The
      Borrower undertakes that any corporation that the Borrower is, or will be,
      a Stakeholder therein, including partnerships that the Borrower will,
      directly or indirectly, be the owners thereof, at a rate of 5% and over,
      will only deal in activities in the Area of
  Business.

            

    

     

    
      	
               
      

            	
              10.5.5

            	
              The
      Borrower undertakes not to execute, not to undertake to execute, and not
      to institute any procedures whatsoever to execute a Merger (with the
      exception of in accordance with the application submitted to the Court on
      December 12, 2009, for an arrangement in accordance with Article 350 of
      the Companies Law 5759 – 1999) without obtaining the prior written
      authorization of the Lenders for this purpose. To this end, the Borrower
      undertakes to transfer to the Lenders, immediately, any information and
      document, required by the Lenders, at their discretion, with respect to
      the requested Merger, in order for them to determine their position with
      respect to the Merger.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.5.6

            	
              The
      Borrower undertakes that no Related Corporation will create, for the
      benefit of any entity whatsoever, a lien of any kind whatsoever, on its
      assets or on part thereof, including on equity and non-paid up share
      capital.

            

    

     

    
      	
               
      

            	
              10.5.7

            	
              The
      Borrower undertakes that it will not sign any guarantee to secure debts or
      undertakings of a corporation (including a partnership or venture) in
      which the Borrower is not a controlling shareholder, with respect to any
      entity, and neither will the Borrower undertake to indemnify any entity
      whatsoever with respect to the non-upholding of a debt or undertaking of
      the corporation (including a partnership or venture) as stated, with
      respect thereto, without obtaining the prior written authorization of the
      Lenders.

            

    

     

    
      	
               
      

            	
              10.6

            	
              Undertaking to Produce
      Valuation

            

    

     

    
      	
               
      

            	
              The
      Borrower will produce for the Lenders, at their behest, in which the
      Lenders will stipulate that it derives from a provision or demand from the
      Bank of Israel, and no more than once a year, an assessment of the value
      of the Borrower, (by cash flow capitalization, DCF, and in accordance with
      additional requirements that will be laid down by the Bank Coordinator in
      light of the provisions or demands of the Bank of Israel, as such will be
      from time to time), by an independent value assessor, who will be agreed
      upon by the Lenders in advance. For the avoidance of doubt, it is
      clarified that the Borrower will bear all the costs related to the value
      assessment as stated.

            

    

     

    
      	
              11.

            	
              Immediate
      Settlement

            

    

     

    It is
agreed that in each of the events detailed hereunder, the Lenders (as required
by each of them) are entitled to adopt one or more of the reliefs detailed
hereunder. For the avoidance of doubt, it is clarified that if the Lenders
abstain from adopting a specific relief, this will not detract from their right
to do so on any future occasion; all at their discretion and without time
limitation. Notwithstanding the aforesaid, it is hereby agreed that
notwithstanding the occurrence of an Event of Breach, the Lenders, not having
adopted any of the reliefs available to them and the Event of Breach having been
rectified or no longer subsisting by the date on which the Lenders seek to adopt
any of the reliefs available to them, then the Lenders will not be entitled to
adopt such reliefs. It is clarified that nothing in the aforesaid shall derogate
from the Lenders' rights to adopt any relief whatsoever in respect of another
Event of Breach, if and to the extent there is such:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              Not
      to provide the Borrower with any additional credit that they have
      undertaken to provide under this
Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              To
      demand the immediate payment of the balance of the undischarged Credit or
      part thereof, together with linkage differentials, exchange rate
      differentials, interest cumulative up to such time and not yet paid,
      expenses, other obligations and commission that have accumulated up to
      such time and have not been paid, plus arrears of interest applicable to
      such credit (but arrears of interest will only be paid on the Credit
      actually provided up to immediate settlement and applicable from such date
      to the extent that it has not been paid), as well as any additional sum
      which is, in the Lenders' opinion, available to them in respect of any
      damage caused to them pursuant to early settlement of the
      Credit;

            

    

     

    
      	
               
      

            	
              (c)

            	
              To
      increase the rate of interest applicable to the Credit, or any part
      thereof, as specified in Section 5.4
above;

            

    

     

    It is
further clarified that the Events/circumstances specified above in the
sub-sections of this Section 11 (as may be amended by the parties in writing
from time to time) and the Events entitling the demand for immediate settlement
as detailed in the debenture charge entered into by Telecom under Section 8.7
above and the floating debenture charge entered into under Section 8.1 above as
amended by the parties from time to time (the "Credit Grounds"), are the sole
grounds for establishing the right of the Lenders to demand immediate
settlement. It is hereby clarified that if grounds are found other than the
Credit Grounds, in other documents that are not referred to above, they will not
be applicable in respect of the Credit.

     

    These are the
Events:

     

    
      	
               
      

            	
              11.1

            	
              If
      the Borrower does not pay to any of the Lenders any amount whatsoever that
      is due to any of them according to the Credit Documents on the date
      determined for its payment and if such amount is not paid within 7
      Business Days from the payment
date.

            

    

     

    
      	
               
      

            	
              11.2

            	
              If  a
      sequestration or any action by the Execution Office is imposed on the
      Borrower's assets or the assets of any Related Corporation or on part
      thereof or if the Execution Office initiates any action in respect
      thereof, in a sum that exceeds 20 million NIS., linked to the Known
      Agreement Index and it is not rescinded within 45 days, of if the sum is
      less than 20 million NIS. linked to the Known Agreement Index, and it is
      not rescinded within 90 days.

            

    

     

    
      	
               
      

            	
              11.3

            	
              If
      an application is issued for a liquidation or the prior appointment of a
      provisional liquidator, receiver, special administrator or freezing
      processes or the granting of an order to seize assets, and no objection to
      such application is submitted within 30 days, or the objection is
      overruled, or if a winding-up order is issued against the Borrower or a
      Related Corporation, or a freezing
order.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              11.4

            	
              If
      the Borrower or a Related Corporation requests that a winding-up order be
      served on it, or a freezing order, or if the Borrower or a Related
      Corporation convenes a meeting of creditors for an arrangement with it,
      (unless the Lenders' prior written agreement has been given for a meeting
      of creditors in order to make a change in structure or for reorganization)
      or if the Borrower or a Related Corporation resolves on dissolution, or
      commits an act of bankruptcy.

            

    

     

    
      	
               
      

            	
              11.5

            	
              If
      the Borrower or a Related Corporation resolves on a Merger, or a division
      or an arrangement, or if control or ownership of the Borrower changes,
      directly or indirectly compared with that which is detailed in Section 9.5
      above, without the Borrower having obtained the prior written agreement
      therefore, of the Lenders.

            

    

     

    
      	
               
      

            	
              "Splitting"
      - as defined in Part E(2) of the Income Tax Ordinance (New Version) or any
      Provision of the Law that succeeds
it.

            

    

     

    
      	
               
      

            	
              "Arrangement"
      - as defined in Sections 350 and 351 of the Companies Law 1999-5759, or
      any Provision of the Law that may succeed
it.

            

    

     

    
      	
               
      

            	
              11.6

            	
              If
      the Borrower's or a Related Corporation's business activities or
      commercial activity is discontinued and not recommenced within six months
      from the date of discontinuation.

            

    

     

    
      	 	
              11.6a

            	
              If
      the Borrower or a Related Corporation infringes or fails to fulfill the
      undertakings under the Credit Documents in a way that is not mentioned in
      any of the other sub-Sections of this Section 11 and which, in the opinion
      of one of the Lenders, is a fundamental undertaking towards it, and the
      breach thereof is not rectified within 30 days from the date on which the
      Lenders give warning thereof in
writing.

            

    

     

    
      	
               
      

            	
              11.7

            	
              If
      is clarified that there is a declaration or confirmation by the Borrower
      contained in the Credit Documents, that is "fundamental" in the sense that
      had the Lender been aware of it on the date of providing the Credit to the
      Borrower, the Lenders would not have given the Credit, whether contained
      above in this Agreement or contained in any of the other Credit
      Documents.

            

    

     

    
      	
               
      

            	
              11.8

            	
              If
      the Borrower issues bearer securities without the Lenders' prior written
      agreement.

            

    

     

    
      	
               
      

            	
              11.9

            	
              If
      a License/franchise that the Borrower or a Related Corporation has
      received, is rescinded or postponed, or if there is any change is made in
      the conditions of the License/franchise that the Borrower of the Related
      Corporation has received, which is, in the opinion of the Lenders,
      fundamental, and, in the opinion of any of the Lenders, pursuant to such
      change or rescission, as the case may be, there is less likelihood of the
      Credit being repaid in full and on
time.

            

    

     

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                
                  11.10
      

                

              	
                If
      at any time, an event or circumstance should occur that would, in the
      opinion of the Lenders, threaten or endanger, in a fundamental way, the
      likelihood of full and timely repayment of the Credit to the Lenders,
      including the aforesaid circumstances that could result in there being a
      high probability of an adverse effect on the financial position and/or the
      activities and/or the businesses of the Borrower, or if, in the opinion of
      the Lenders, there is a high probability that such event or circumstance
      is expected to occur, whether the occurrence of the event or circumstances
      as aforesaid is dependent on the Borrower or not;  but only if,
      to the extent that the event or circumstance is dependent on the Borrower,
      after the lapse of 30 days from the date on which the Lenders have given
      the Borrower notification of its existence, the Borrower has failed to
      establish, to the Lenders' complete satisfaction, that the measures
      required to assure the likelihood of the Lenders' being repaid in full and
      on time, have been adopted.

              

      

      
        
           

          
            	
                     
      

                  	
                    
                      11.11 
      

                    

                  	
                    If
      an event of any kind occurs, the result of which could entitle a Financial
      Institution, in accordance with any document whatsoever signed and/or to
      be signed by the Borrower or by a Related Corporation, to require the
      immediate settlement of the indebtedness and obligations of the Borrower
      or of a Related Corporation towards such entity, the cumulative total of
      which is not lower than 50 million NIS., and also if such entity does not
      exercise the aforesaid entitlement - on condition that the Financial
      Institution has not issued to the Borrower or the Related Corporation,
      within 25 days from the occurrence of the event, a written confirmation
      according to which it does not require immediate settlement of the Credit
      due to the occurrence of the event.

                  

          

          
            
               

              
                	
                         
      

                      	
                        
                          11.12 
      

                        

                      	
                        If
      a Financial Institution has required immediate settlement of the
      indebtedness and obligations of the Borrower or of a Related Corporation
      towards such entity, the cumulative total of which is not lower than 10
      million NIS. (linked to the Known Agreement
  Index).

                      

              

            

          

        

      

    

    
      
         

        
          	
                   
      

                	
                  
                    11.13

                  

                	
                  If
      an application is submitted against any one of the Guarantors, for
      liquidation or the prior appointment of a provisional liquidator, a
      receiver, a special administrator or the freezing of proceedings or the
      granting of an order for the appropriation of assets, and an objection to
      such request is not submitted within 30 days or if the objection is
      rejected, or if a winding-up order or an order to freeze proceedings is
      issued against any of the
Guarantors.

                

        

        
          
             

            
              	
                       
      

                    	
                      
                        11.14

                      

                    	
                      If
      Ampal American adopts a resolution regarding Merger, Splitting or
      Arrangement without obtaining the prior written approval of the Lenders
      therefore. In this regard, "Arrangement" is as defined in Section 11.5
      above and "Splitting", as defined in Part E(2) of the Income Tax Ordinance
      (New Version) or any Provision of the Law that succeeds it, excluding
      however, transactions in the normal course of Ampal American's
      business.

                    

            

             

            
              
                 

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                
                  	
                           
      

                        	
                          
                            11.15 
      

                          

                        	
                          If
      Ampal American breaches or does not fulfill any of its obligations
      whatsoever towards the Lenders, detailed in Annex 11.15 of this
      Agreement and the breach is not remedied within 30 days from the date on
      which the Lenders give warning thereof in
  writing.

                        

                

                
                  
                     

                    
                      	
                               
      

                            	
                              
                                11.16 
      

                              

                            	
                              In
      the event that a Financial Institution requires immediate settlement of
      the indebtedness and obligations of Ampal American towards such entity,
      the cumulative total of which is not lower than 100 million NIS. (linked
      to the Known Agreement Index).

                            

                    

                     

                    
                      If any of
the events whatsoever detailed in Section 11 above, should occur, for which a
remedial period is determined, the Bank will give its clients prior written
notice of its requirement for immediate settlement, and the Bank will be
entitled to require immediate settlement only if the Event of Breach has not
been remedied by the end of the remedial period. However, if the Bank is of the
opinion that its rights under the Credit Agreement are likely to be materially
impaired as a result of its postponing its actions during the remedial period,
the Bank will be entitled to require immediate settlement immediately upon the
occurrence of the Event of Breach. For the avoidance of doubt, the remedial
period will be calculated from the date on which the Event of Breach occurs and
not from the date of the Bank's notification, except in cases specifically noted
to the contrary in Section
11.

                    

                  

                

              

            

          

        

      

    

    
      
         

        
          	12. 	
                  Commission

                

        

         

      

    

    The
Borrower will pay the Lenders the commissions specified in Annex 12 to this Agreement. In
addition, the Borrower will pay to each of the Lenders, the other commissions
involved in the management of the Borrower's Accounts and in managing the
amounts of Credit and the Securities, as is customary from time to time with the
Lenders.

     

    It is
agreed that additional commissions will be charged in the event of any changes
in the Credit Documents after their signing, if any from time to time, and in
such sums as will be agreed between the Lenders and the Borrower.

     

    
      
        
          	13. 	
                  Authorization
      to charge an Account

                

        

         

      

    

    
      	
               
      

            	
              13.1

            	
              The
      Borrower hereby grants irrevocable consent to debit the Accounts at each
      of the Lenders with the amounts due therefore according to the provisions
      of this Agreement, whether the relevant Account is in credit or in
      debit.

            

    

     

    
      	
               
      

            	
              13.2

            	
              If
      one of the Lenders implements a right of offset available to it under one
      of the Credit Documents or under any other source, in respect of the
      amounts lodged with such Lender, (a) it will use the offset amount to
      settle the Credit, in respect of which it has exercised the right to
      offset as aforesaid, with all the Lenders at the Rate of Participation of
      each of them, and (b) the offset amount will not reduce the amount of
      Credit with the Lender that exercises the right of offset, by an amount
      that exceeds the Rate of Participation of such Lender in its amount of
      Credit.

            

    

     

    The
provisions of this Section constitute an irrevocable instruction by the Borrower
to transfer offset sums to the other Lenders for settlement of the balance of
the relevant undischarged amounts of Credit at the Rate of Participation of each
of the Lenders.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        	14. 	
                
                  Management
      of the Accounts and their
  computation

                

              

      

    

     

    
      	
               
      

            	
              14.1

            	
              Each
      of the Lenders will manage the Accounts and will carry out computations in
      accordance with their customary procedures regarding credit and each
      amount that is repaid by the Borrower to such Lender. In the absence of
      any obvious error, prima
      facie, any written notification given by any of the Lenders in
      respect of the management of the Accounts and their computation as
      specified in this Section, will constitute prima facie evidence of
      the accuracy of its content.

            

    

     

    
      	
               
      

            	
              14.2

            	
              The
      Borrower declares in respect of the relationship between it and each of
      the Lenders, in any legal or administration proceeding regarding the
      Credit Documents: (a) in the absence of any obvious error, prima facie, the
      Accounts managed by such Lender and the computations carried out by it in
      respect of these Accounts constitute prima facie evidence of
      the accuracy of their content, and (b) a declaration by an authorized
      Representative of the Bank Coordinator in respect of the Applicable
      Interest for the periods to which it refers, constitutes a conclusive
      presumption of the accuracy of its
content.

            

    

     

    
      	
              15.

            	
              The
      Bank Coordinator

            

    

     

    
      	
               
      

            	
              15.1

            	
              Appointment of the
      Bank Coordinator and its
powers

            

    

     

    
      
        	
                 
      

              	
                15.1.1
      

              	
                
                  Each
      of the Lenders appoints the Bank Coordinator to act on its behalf in
      accordance with the powers extended to the Bank Coordinator as specified
      in the Credit Documents.

                

              

      

       

      
        
          
            
              	
                       
      

                    	
                      15.2

                    	
                      The
      powers, rights and authority extended to the Bank Coordinator in this
      Agreement are solely of an administrative nature. Without derogating from
      the generality of the aforesaid, the Bank Coordinator will not have the
      power to bind any of the Lenders by any obligation whatsoever under the
      Credit Documents and will not be entitled to sign on them on behalf of the
      Lenders. The Bank Coordinator will not have the power to represent any of
      the Lenders or to bind any of them in any legal or administrative
      proceeding related to the Credit
Documents.

                    

            

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

          

          
            	
                     
      

                  	15.1.3 	
                    
                      
                        The
      Bank Coordinator is entitled to exercise its powers in accordance with
      this Agreement through its employees or
      representatives.

                      

                    

                  

          

           

          
            
              
                	
                         
      

                      	
                        15.2

                      	
                        The Bank Coordinator's
      responsibilities

                      

              

               

            

            
              	
                       
      

                    	15.2.1	
                      
                        
                          The
      Bank Coordinator, its employees, functionaries, directors, share holders
      or representatives will not be held responsible to any of the Lenders in
      any regard of: (a) the validity, reliability or enforceability of the
      Credit Documents; (b) the collection of amounts owing to the Lenders under
      the Credit Documents; and (c) the accuracy of any declaration or
      representation that is given, whether in writing or orally, relating to
      the Credit Documents.

                        

                      

                    

            

            
               

              
                	
                         
      

                      	15.2.2	
                        The
      Bank Coordinator will not be held responsible for its acts or omissions
      relating to the Credit Documents, other than an act or omission as
      aforesaid that constitutes extreme negligence or is perpetrated
      maliciously. The parties undertake not to initiate any proceeding or
      request for indemnification or other relief under any law, against the
      Bank Coordinator's employees, functionaries, directors, shareholders or
      representatives in respect of any claim they may have against any of them
      (even if based on extreme negligence or a malicious act by one of them)
      under the Credit Documents.

                      

              

              
                 

                
                  	
                           
      

                        	15.2.3	
                          
                            
                              Each
      of the Lenders undertakes to indemnify the Bank Coordinator, in accordance
      with the Rate of Participation, for any claim, expense, loss or payment
      imposed on it that arises, directly or indirectly, from its appointment or
      from the performance of its office (except in the event of extreme
      negligence or a malicious act by the Bank
      Coordinator).

                            

                          

                        

                

                
                   

                  
                    	
                             
      

                          	15.2.4	
                            
                              
                                The
      Bank Coordinator is entitled to perform any action or to refrain from the
      performance of any action, the performance of or refraining from which, as
      the case may be, constitutes, in its opinion, a breach of any law applying
      to it or which is required for the fulfillment of any condition under law
      applying to it. Without derogating from the generality of the aforesaid,
      the Bank Coordinator is entitled to refrain from disclosing information in
      his possession relating to the Borrower, if, in its opinion, such
      disclosure constitutes a breach of the confidentiality undertakings
      applying to it or a breach of any law or that could constitute the basis
      for a claim against
it.

                              

                            

                          

                  

                

              

            

          

        

      

    

     

    
      	
              16.

            	
              Amendments,
      changes and waivers

            

    

     

    
      	
               
      

            	
              16.1

            	
              Except
      as specifically stated to the contrary, in every instance where there is a
      requirement for the Lenders' agreement or approval under this Agreement or
      the Security Documents or in an instance where there is a requirement for
      their agreement in respect of a waiver in relation to the provisions of
      this Agreement or of the Security Documents, the intention is for
      agreement to be given through the Bank Coordinator to implement the action
      requiring the agreement of the Lenders. In any instance in which the
      Borrower is required to implement an action pursuant to an instruction,
      request etc. from the Lenders under this Agreement or the Security
      Documents, the intention is for the request, instruction etc. given
      through the Bank Coordinator.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              16.2

            	
              It
      is specifically clarified that any notice, confirmation or agreement given
      by the Bank Coordinator to the Borrower will be conclusively presumptive
      as if given on behalf of the
Lenders.

            

    

     

    
      	
               
      

            	
              16.3

            	
              Any
      provision included in the Credit Documents can be amended or changed only
      in a document testifying to the amendment or change is signed by the
      Borrower and by each of the
Lenders.

            

    

     

    
      	
               
      

            	
              16.4

            	
              The
      amendment of a provision that bestows rights of any kind to the Bank
      Coordinator, a change to or waiver thereof, or an amendment, change or
      waiver of additional obligations imposed  on the Bank
      Coordinator or an extension of the existing obligations, will not come
      into effect without the Bank Coordinator's written agreement to the said
      amendment, change or waiver.

            

    

     

    
      	
               
      

            	
              16.5

            	
              A
      waiver by one of the Lenders of a prior breach or the non-performance of
      one or more the Borrower's obligations or the non-fulfillment of any
      condition whatsoever under the Credit Documents, will not be considered as
      agreeing to a further breach or to the further non-fulfillment of any such
      condition or obligation; the failure of the Lenders to exercise any right
      whatsoever available to them under the Credit Documents or according to
      any law, will not be regarded as a waiver of such
  right.

            

    

     

    No
easement or waiver of any condition whatsoever of these conditions, will be
binding on the Lenders, unless given in writing.

     

    
      
        	
                17.  

              	
                
                  Change
      in the parties; the Bank Coordinator's obligations and
      rights

                

              

      

       

    

    
      
        	
                 
      

              	
                17.1

              	
                The
      Borrower

              

      

      
         

      

    

    
      	
               
      

            	
              The
      rights and obligations of the Borrower included in the Credit Documents,
      cannot be transferred without the agreement of all the
      Lenders.

            

    

     

    
      	
               
      

            	
              17.2

            	
              The
      Lenders

            

    

    
       

      
        	
                 
      

              	17.2.1	
                
                  
                    Each
      of the Lenders is entitled at its exclusive discretion, to transfer its
      rights under the Credit Documents, in whole or in part, to Financial
      Institutions in Israel (a "Transferee"), on condition that the Transferee,
      as aforesaid, is subject to all components of the Credit (Loan A/Loan B/
      Loan C and the Outstanding Renewed Amount) and the remaining cumulative
      unsettled balances of all credit (plus any Outstanding Renewed Amount or
      any of the Revised Outstanding Renewed Amount, as the case may be)
      immediately after the implementation of the transfer, both with the
      Transferor and the Transferee shall not fall below 12.5% of the balance of
      Cumulative unsettled balance of all the Credits plus the total unused
      amount of Credit C with each of the Lenders, as it will be at that time.
      The Borrower and the other Lenders will take all actions and sign all
      documents required to bring the transfer transaction as aforesaid into
      effect or to refine it, to release the transferring Lender from its
      transferred obligations and to transfer them to the Transferee or to
      bestow the transferred rights on the Transferee. It is hereby agreed that
      in any event where the Transferee is not a banking corporation in Israel,
      the Lenders will be entitled to implement the transfer transaction as
      aforesaid only after receiving the Borrower's prior written consent. For
      the purpose of this Section 17.2, "transfer" - the transfer of rights or
      obligations by a sale, check, endorsement, transfer or lien in any way
      whatsoever, either in whole or in part, either directly or indirectly
      (including by way of a sale of rights to participate in the above rights
      (participations) or in any other manner). The transfer can be made to one
      Transferee or to a number of Transferees, on the same date or from time to
      time.

                  

                

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        
          
             

            
              	
                       
      

                    	
                    	
                      
                        
                          The
      transfer as aforesaid in this Section 17.2.1 above, shall not be
      implemented unless a prior written notice has been issued to the Borrower
      not less than 3 Business Days in advance and the Transferee has accepted
      the transferor's obligations under this
    Agreement.

                        

                      

                    

            

             

          

        

        
          	
                   
      

                	17.2.2	
                  
                    
                      A
      Lender will be entitled, at any time, to reveal Information, (as defined
      hereunder) regarding a transfer transaction to any person or entity that
      corresponds to the definition of a "Transferee" when the Lender is
      conducting or is likely to be conducting with it, negotiations to
      implement a transfer transaction. Furthermore, such Lender will be
      entitled to reveal Information to anyone advising him and/or anyone on
      behalf of such person or entity and to companies involved in [the field
      of] credit rating, for the purpose of rating the rights. Disclosure of
      Information will be subject to the recipient of the Information signing a
      confidentiality undertaking, in a form that is acceptable to the Lenders
      and to the Borrower. For the purpose of this Section, "Information" means
      - any information currently in the Lender's possession or that is likely
      to be in its possession in the future, including information that is
      passed to the Lender by the Borrower, which, in the Lender's opinion, is
      essential or desirable to be passed regarding the transfer transaction,
      including information regarding the Credit, the Loans and any other
      banking service given or to be given to the Borrower, information on the
      liens and Securities given or to be given to secure [the Loans] and
      information regarding the
Borrower.

                    

                  

                

        

         

        
          
            
              	
                       
      

                    	
                    	
                      
                        
                          It
      is hereby agreed that notwithstanding the aforesaid, the Lender will be
      entitled to transfer this Agreement to others without a confidentiality
      undertaking needing to be
signed.

                        

                      

                    

            

             

          

        

         

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          	
                   
      

                	17.2.3 	
                  
                    
                      In
      the event of a transfer of part of the rights of one of the Lenders, the
      proportion of the relevant Rate of Participation of such Lender between it
      and the Transferee will be pro
rata.

                    

                  

                

        

         

      

    

    
      	
               
      

            	
              17.3

            	
              Third
      parties

            

    

     

    This
Agreement is not intended to impart, does not impart and shall not be
interpreted as imparting, any right whatsoever to a person who is not a party to
this Agreement, even though it is specifically referred to by name in this
Agreement for any purpose whatsoever. None of this Agreement's provisions shall
be interpreted as applying to the benefit of any person who is not a party to
this Agreement.

     

    
      	
              18.

            	
              Expiration
      of the validity of the
Agreement

            

    

     

    If, by
and including 22.6.2010, the prior conditions for the provision of the Credit
have not all been fulfilled, this Agreement will be void ab initio, without the
requirement for any action on the part of any of the parties hereto. In such
event, as of the date of expiration, the Lenders will not be obliged to provide
the Credit to the Borrower under this Agreement and all those actions taken up
to such date, to the extent taken, will be annulled ab initio, and no party will
have any claim or demand in respect thereof against the other
parties.

     

    
      	
              19.

            	
              Miscellaneous

            

    

     

    
      	
               
      

            	
              19.1

            	
              The
      Borrower agrees that the Lenders and the Bank Coordinator may share any
      information regarding it amongst and between themselves, including any
      document that any one of the Lenders or the Bank Coordinator receives or
      any information regarding its commercial situation or its financial
      situation, and there will be no contention in respect
    thereof.

            

    

     

    
      	
               
      

            	
              19.2

            	
              In
      the event that a provision from the Credit Documents' provisions is
      determined to have been rescinded, is unlawful or unenforceable, this will
      not affect the validity of the remaining provisions in the Credit
      Documents.

            

    

     

    
      	
               
      

            	
              19.3

            	
              Any
      notice sent by one of the parties to any of the others, will be considered
      to have reached its destination on the date of hand delivery, one Business
      Day after delivery by facsimile – on condition that confirmation of its
      receipt has been confirmed by telephone, or within three Business Days
      from the date on which it is sent by registered mail.
  

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The parties' addresses for the purpose of this Agreement will be
as specified hereunder (unless advised otherwise):

     

    To
the Lenders:

     

    
      	
              Bank
      Leumi L'Israel Ltd.

              Attention:
      Head of Communications Department

              Tel:
      03-514-8398

              Fax:
      03-514-9017

              Address:
      Yehuda Halevi 34, Tel-Aviv

               

            	
              Bank
      Discount L'Israel Ltd.

              Attention:
      Business Manager

              Tel:
      03-514 4724

              Fax:
      03 -514-4053

              Address
      Yehuda Halevi 23, Tel Aviv

            
	
              Bank
      Coordinator

            	 
      
	
              Bank
      Coordinator – Bank Leumi L'Israel Ltd.

              Attention:
      Head of Communications Department

              Tel:
      03-514-8398

              Fax:
      03-514-9017

              Address:
      Yehuda Halevi 34, Tel-Aviv

               

            	 
      

    

    The
Borrower:

     

    Attention:
Deputy Finance Director

    Tel:
072-2002021

    Fax:
072-2002060

    Address:
Hasivim 25, Petach Tikvah, 49170

     

    
      	
               
      

            	
              19.4

            	
              This
      Agreement may be signed on one page containing the signatures of all the
      parties, and may be signed on separate pages which, when attached to this
      Agreement, will, together, constitute the parties' valid signing
      thereon.

            

    

     

    
      	
               
      

            	
              19.5

            	
              The
      Credit Documents will be governed by the laws of the State of Israel and
      the courts of Tel-Aviv-Jaffo will have exclusive
    jurisdiction.

            

    

     

    
      	
               
      

            	
              19.6

            	
              This
      Agreement will be considered as a draft by all the
  parties.

            

    

     

    
      	
               
      

            	
              19.7

            	
              This
      Agreement and the Credit Documents contain, embody, merge and cause all
      the conditions agreed upon by the parties. No pledges, agreements, written
      or verbal, undertakings or representations in connection therewith, given
      or made by the parties prior to the date of executing this Agreement,
      shall increase the parties' obligations and rights as set out in this
      Agreement and the other Credit Documents or arising therefrom, or derogate
      from or change them, and the parties will not be bound by them as of the
      date of signing this Agreement.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF the parties have validly signed on the date set out in the
preamble to this Agreement

     

    
      	
              Bank
      Leumi L'Israel Ltd.

               

              By:
      /s/ Rina Vahaba

                     /s/
      Gadi Sivani                                                          

              
                 

                
                  
      

              

            	
              Bank
      Discount L'Israel Ltd.

               

              By:
      /s/ Natalia Hagendorf

                     /s/
      Orit Alster  

               

              
                
      

                                                                 

            
	
              Bank
      Coordinator - Bank Leumi L'Israel Ltd.

               

                                                                                        By:
      /s/ Rina Vahaba

                                                                                              /s/
      Gadi Sivani

                                                       
      

                
                                                 

            
	
              012
      Smile Telecom Ltd.

               

              By:
      /s/ Irit Eluz

                     /s/
      Yoram Fironexhibit_10-cc.htm

    
      

      

    

    Exhibit
10cc

     

    Final Version for
Signing

    Loan
Agreement

    Drawn up
and signed in Tel Aviv on the 31st day
in the month of January 2010

    

    Between

    Harel
Insurance Company Ltd.

    Public
Company Number 520004078

    

    Dikla
Insurance Company Ltd.

    Public
Company Number 5200030503

    

    Harel
Pension Funds Management Ltd

    Private
Company Number 512267592

    

    Harel
Gemel Ltd.

    Private
Company Number 512205204

    

    Atidit
Pension Funds Ltd.

    Private
Company Number 512867367

    

    Gilad
Comprehensive Pension Fund Ltd.

    Private
Company Number 512242215

    

    Manof
Pension Fund Management Ltd.

    Private
Company Number 512262577

    

    Savings
Fund for the Regular Army – Pension Fund Management Company Ltd.

    Private
Company Number 511033060

    

    At the
Address: 3, Abba Hillel Street, Ramat Gan

    (Hereinafter
all together: Harel)

    

    Menora
Mivtachim Insurance Ltd.

    Public
Company Number 52-004254-0

    At the
Address: 115, Allenby Street, Tel Aviv

    

    Menora
Mivtachim Pension Ltd.

    Private
Company Number 51-224581-2

    At the
Address: 7, Jabotinsky Street, Ramat Gan

    

    Menora
Mivtachim Gemel Ltd.

    Private
Company Number 51-279022-1

    At the
Address: 115, Allenby Street, Tel Aviv

    

    (Hereinafter
all together: Menora)

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      (Hereinafter, Harel and Menora together:
The Lender)

    

     

    Of
the First Part;

    And
Between

    

    Merhav
Ampal Energy Ltd.

    Private
Company Number 513754077

    At the
Address: 10, Abba Eban Street, Hertzlia

    (Hereinafter:
The Company or the Borrower)

    

    Of
the Second Part;

    

    And
Between

    

    012
Smile Telecom  Ltd.

    (Previously
Ampal Investments and
Communications 2009 Ltd)

    Private
Company Number 514350024

    At the
Address: 25, HaSivim Street, Petach Tikva

    (Hereinafter:
The New
Smile)

    Of
the Third Part;

    

    
      	
              Whereas:

            	
              The
      Lender is a private company incorporated in Israel and the indirect owner
      of the control of that company is Mr. Yossi
  Maiman;

            

    

    

    
      	
              And
    Whereas:

            	
              New
      Smile (through its founders: Merhav Ampal Energy Ltd.) has entered into an
      agreement with 012 Smile Communications Ltd., Company Number: 512832742
      (Old Smile) for
      the purchase of the Old Smile communications activities through the
      Purchase Agreement signed by them both (the Purchase
      Agreement);

            

    

    

    
      	
              And
    Whereas:

            	
              The
      parties have agreed that the Lender shall extend to the Borrower, a loan
      to the sum of NIS 220,000,000 for the purposes of financing the purchase
      of Old Smile activities as stated above (when NIS 20,000,000 from that
      loan sum shall be deposited as a Safety Cushion as such is explained
      below) subject to and in accordance with that stipulated in the provisions
      to this Agreement;

            

    

    

    Therefore,
the parties declare, stipulate and agree as follows:

    

    
      	
              1.
      Preamble, Appendices, Headings and
Definitions

            

    

    

    
      	
               
      

            	
              1.1.
      The Preamble to this Agreement and the Appendices thereto constitute an
      integral part thereof.

            

    

    

    
      	
               
      

            	
              1.2.
      Section headings in this Agreement and in the Appendices thereto, are
      solely for the purposes of

                 convenience
      and shall not serve for the purposes of interpreting this
      Agreement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              1.3.
      That stated in the masculine shall also refer to the feminine and vice
      versa; that stated in the singular shall also refer to the plural and vice
      versa.

            

    

    

    
      	
               
      

            	
              1.4.
      The terms listed below shall have the definitions given alongside those
      terms, unless the context obliges
otherwise.

            

    

    

    
      	
              Ampal
      American

            	
              Ampal
      American Israel Corporation, EIN Number 13-0435685, is a limited share
      company incorporated in accordance with the Laws of the State of New York.
      The Company’s shares are listed for trading on the NASDAQ and dual listed
      on the Tel Aviv Stock Exchange. The Company, which is controlled by Mr.
      Yossi Maiman, has indirect, whole ownership of the
    Borrower.

            

    

    

    
      	
              Old Smile or the Vendor

            	
              As
      such is defined in the Preamble to this
  Agreement

            

    

    

    
      	
              The Purchased
      Activities

            	
              All
      the activities conducted by Old Smile in the field of communications,
      including, inter
      alia, internet services, international telephone calls and land
      line communications, all subject to and as stipulated in the Purchase
      Agreement.

            

    

    

    
      	
              The
      Collateral

            	
              All
      the collateral pledged for the purposes of securing payment of the Loan,
      including that stipulated in Section 4
below.

            

    

    

    
      	
              The Loan

            	
              The
      Loan principal and interest, with added index differentials and any
      additional payment imposed upon the Borrower in accordance with the
      provisions to this Agreement and/or all
Law.

            

    

    

    
      	
              The Bank
      Accounts

            	
              The
      Safety Cushion Account – The
      bank account in the Borrower’s name, number 107361/26, at the Union Bank
      of Israel Ltd., branch number 062 in Ramat Gan, into which the Security
      Cushion shall be deposited and mortgaged to the Lender as stipulated in
      Section 2.14 below; and the Designated Account,
      which is the bank account in the Borrower’s name, number 107360/28 at the
      Union Bank of Israel Ltd., branch number 062 in Ramat Gan, into which the
      monies that shall be transferred to the Borrower from New Smile shall be
      deposited as stipulated in Section 4.1.5
below.

            

    

    

    
      	
              The
Index

            	
              The
      Consumer Price Index including fruit and vegetables, published by the
      Israeli Central Bureau of Statistics and Economic Research and including
      that Index even if it is published by a different official body and any
      official Index that shall come in its place either if such is based on the
      same data on which the aforementioned Index is based or if not. If another
      index replaces the aforementioned Index, the Central Bureau of Statistics
      and Economic Research shall determine the relationship between the
      aforementioned Index and the index that replaces it and if that
      relationship is not determined by the Central Bureau of Statistics and
      Economic Research, the relationship shall be determined by whomsoever
      shall be appointed to fulfill that task by the State of
      Israel.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              The Base
      Index

            	
              The
      Consumer Price Index for the month of December 2009 as published on
      January 15, 2010 at 105.2 points.

            

    

    

    
      	
              The Determining
      Index

            	
              The
      Consumer Price Index published immediately before the date for the
      repayment of the Loan and/or any part thereof, but which shall be no lower
      than the Base Index.

            

    

    

    
      	
              Loan Extension
      Date

            	
              The
      date for the pledging of all the collateral stipulated in Section 4.1
      below shall be January 31, 2010 and as stipulated in that Section as
      follows:

            

    

    
      	
               
      

            	
               

              To
      remove doubt, the Loan shall be extended only along with and subject to
      the completion of the purchase of the Purchased Activities in accordance
      with the Purchase Agreement and the fulfillment of all the commitments
      made by the parties therein.

            

    

    

    
      	
              The
    Lender

            	
              The
      Loan shall be extended to the Borrower through a number of separate
      sources of financing (the Lender Individuals) and
      divided up as stipulated in Appendix 4.2 to
      this Agreement and each Individual shall finance only that Individual’s
      part in the Loan. However, Menora Mivtachim Insurance Ltd. shall represent
      all Menora Individuals in the Lender Individuals and Harel Insurance
      Company Ltd. shall represent all the Harel Individuals in the Lender
      Individuals and to expedite that purpose, inter alia, Menora
      Mivtachim Insurance Ltd. and Harel Insurance Company Ltd. shall be those
      entitled to issue and receive the various notices to the Borrower by dint
      of this Agreement and they shall be those entitled to notify of a demand
      for the immediate repayment of the loan on behalf of all the Loan
      Individuals and they are those who shall realize the collateral for all
      the Loan Individuals and they are those who shall be authorized to release
      the collateral with the repayment of the Loan on behalf of all the Loan
      Individuals, they are those who shall be authorized to make any changes or
      waiver in reference to the provisions to this Agreement and they are those
      who shall be authorized to make any change, arrangement or compromise or
      the like thereof in connection with the Loan that is the subject of this
      Agreement. However, it is clarified that repayment of the Loan shall be
      executed by the Lender to each of the Lender Individuals in accordance
      with each Loan Individual’s relative part in the Loan as such is
      stipulated in Section
      4.2.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              Any
      decision made by the Loan Individuals in any matter pertaining to and/or
      arising from this Agreement shall be made unanimously, subject to that
      stipulated in Sections 4.1.5 and 8.3 below in reference to the division of
      the monies received on account for the early repayment of the Loan among
      the Loan Individuals.

            

    

    

    
      	
              Index
    Linked

            	
              Any
      sum, concerning which this Agreement determines shall be paid Index Linked
      or with additional index differentials, shall be paid with additional
      index differentials for the rise in the
      Index, beginning with the Base Index and up to the Determining Index, but
      such shall be no less than the Base Index, which is stipulated as follows:
      On every payment date as aforementioned, if it becomes apparent that the
      new Index is higher than the Base Index, every payment as aforementioned
      shall be multiplied by the ratio between the New Index and the Base Index
      (or in other words, the sum to be paid shall be multiplied by the New
      Index and the figure received after that calculation shall be divided by
      the Base Index). If it becomes apparent that the New Index is the same as
      or lower than the Base Index, each payment as aforementioned shall be made
      at its nominal value (or in other words, under all circumstances, no less
      than the Base Index).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              The Loan
      Principal

            	
              NIS
      220,000,000 (two hundred and twenty million New Israeli
      Shekels).

            

    

    

    
      	
              Interest on the
      Loan

            	
              The
      annual interest linked to the Index at the rate stipulated in Appendix 5 – Payments
      Appendix, as attached to this
Agreement.

            

    

    

    
      	
              Late Payment
      Interest

            	
              As
      stipulated in the Payments Appendix

            

    

    

    
      	
              Loan
    Period

            	
              Twelve
      (12) years, beginning on the date on which the Loan Principal was placed
      at the Lender’s disposal.

            

    

    

    
      	
              BLL

            	
              Bank
      Leumi LeIsrael Ltd. and the Israel Discount Bank
  Ltd.

            

    

    

    
      	
              EMG

            	
              The
      East Mediterranean Gas Company – a limited share private company
      incorporated in accordance with the Laws of the State of Egypt, in which
      the Lender has holdings, which reach 12.5 % of that Company’s issued and
      allocated equity capital.

            

    

    

    
      	
              EBITDA

            	
              Operating
      profit (before interest and taxes), with additional depreciation and
      deductions in accordance with the audited annual financial reports or the
      reviewed quarterly reports for New
Smile.

            

    

    

    
      	
              The Licenses or
      the

            	
               

            

    

    
      	
              Significant
      Licenses for the

            	
               

            

    

    
      	
              Company’s
      Activities

            	
              The
      general license granted to New Smile permitting the provision of
      international telephone services, the general license for 012 Telecom Ltd.
      permitting the provision of domestic land line telephony services in
      Israel, the special license granted to New Smile permitting the provision
      of internet access services, the special license granted to New Smile
      permitting the provision of network termination services and any other
      license, which shall come in their stead, or any other license, the
      cancellation or suspension of which might have an adverse effect on New
      Smile’s commercial activities, with the exception of a license, the
      cancellation or suspension of which as aforementioned shall have a
      negligible effect on New Smile’s commercial
  activities.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  2.
      The  Declarations and Representations made by the
      Borrower

                

        

        

        The
Borrower and New Smile hereby declare together and separately to the Lender,
that each of their representations and declarations made in this Section 2 and
below, is true and accurate in every detail (notwithstanding that stated above,
the representations given below in reference to the Borrower are given solely by
the Borrower). The Borrower hereby confirms that the Borrower is aware that the
Lender has entered into this Agreement with the Borrower while relying fully on
the representations and declarations stipulated in this Section 2
below:

        

        2.1.

        

        
          	
                   
      

                	
                  2.1.1.

                	
                  The
      Borrower is a limited share, private company incorporated in accordance
      with the Laws of the State of
Israel.

                

        

        

        
          	
                   
      

                	
                  2.1.2.

                	
                  The
      Borrower’s issued and allocated share capital is controlled through
      holdings linkages by Mr. Yossi Maiman, as explained in detail in Appendix 2.1.2 to this
      Agreement.

                

        

         

        2.2.

        

        
          	
                   
      

                	
                  2.2.1.

                	
                  New
      Smile is a limited share, private company incorporated in accordance with
      the Laws of the State of Israel.

                

        

        

        
          	
                   
      

                	
                  2.2.2.

                	
                  The
      Borrower is the owner and sole holder of the 1,000 regular shares, each
      with a nominal value of NIS 1.00, in New Smile, which constitutes the
      entire equity capital issued and allocated for New Smile (hereinafter:
      The New Smile
      Shares).

                

        

        

        
          	
                   
      

                	
                  2.2.3.

                	
                  New
      Smile is a designated company established specifically for the purposes of
      the purchase of the Purchased Activities and apart from the Purchased
      Activities, the receipt of financing from BLL (for the payment of some of
      the compensation to Old Smile for the purchase of the Purchased
      Activities) and the licenses from the Ministry of Communications required
      for the activities, New Smile has no other assets or
      obligations.

                

        

        

        
          	
                   
      

                	
                  2.2.4.

                	
                  The
      Borrower’s rights to the New Smile Shares are clear of any debt,
      obligation, lien, mortgage and/or third party rights of any type
      whatsoever, with the exception of the rights accruing to BLL as stipulated
      in this Agreement below.

                   

                  Without
      derogation from the generality of that stated, the Borrower has not
      undertaken to transfer and/or sell and/or use as collateral and/or
      mortgage the Borrower’s rights to the New Smile Shares and/or any part
      thereof and/or to grant any rights to purchase the rights to the New Smile
      Shares, to any person and/or corporation whatsoever and no person and/or
      corporation has any right to first refusal in connection with the
      Borrower’s rights to the New Smile Shares, with the exception of a fixed,
      second mortgage on New Smile Shares to the benefit of
  BLL.

                

        

         

        
          	
                   
      

                	
                  2.2.5.

                	
                  There
      is no restriction and/or prohibition and/or preclusion in accordance with
      the provisions to all Law and/or any agreement whatsoever, either written
      or verbal and no agreement from a third party whatsoever is required in
      order to create a first mortgage to the benefit of the Lender covering the
      Borrower’s entire rights to New Smile Shares, with the exception of that
      which is by dint of the relevant licenses for the Purchased Activities,
      which to the best of the Borrower’s knowledge, make the realization of the
      mortgage on New Smile Shares conditional upon the receipt of prior
      permission from the Minister of
Communications.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        2.3.

        

        
          	
                   
      

                	
                  2.3.1.

                	
                  EMG
      is a limited share, private company incorporated in accordance with the
      Laws of the State of Egypt and the Borrower holds 12.5% of EMG”s issued
      share capital.

                

        

        

        
          	
                   
      

                	
                  2.3.2.

                	
                  The
      Borrower’s rights to EMG shares are clear of any debt, commitment, lien,
      mortgage and/or third party rights of any type whatsoever, with the
      exception of a conditional commitment made as part of the partnership
      agreement and the shareholders agreement (which are part of the series of
      agreements signed by the EMG shareholders either directly or indirectly
      during 2007 (the EMG
      Agreements).

                   

                  Without
      any derogation from the generality of that stated, the Borrower has not
      undertaken to transfer and/or sell and/or use as collateral and/or
      mortgage the rights to the EMG Shares and/or any part thereof and/or to
      grant rights for the purchase of the rights to the EMG shares to any
      person and/or corporation whatsoever and no person and/or corporation has
      a right to first refusal in connection with the EMG Shares, with the
      exception of that which is part of the EMG
  Agreements.

                

        

         

        
          	
                   
      

                	
                  2.3.3.

                	
                  There
      is no restriction and/or prohibition and/or preclusion in accordance with
      the provisions to all Law and/or any agreement whatsoever, either written
      or verbal and no agreement from a third party whatsoever is required in
      order to create negative mortgage to the benefit of the Lender on all the
      Borrower’s rights to EMG Shares.

                

        

        

        
          	
                   
      

                	
                  2.4.

                	
                  Ampal
      American, the Borrower and New Smile have the power and theauthority to
      enter into this Agreement and fulfill the commitments stipulated therein
      and they have undertaken all the steps and activities required in order to
      lawfully approve the arrangements made through this Agreement and the
      fulfillment of all the commitments stipulated therein, including the
      taking of all the required decisions, to the extent that such are required
      in accordance with their articles of incorporation and the receipt of all
      the required approvals from their authorized
  bodies.

                

        

        

        
          	
                   
      

                	
                  2.5.

                	
                  All
      the commitments imposed upon the Borrower and upon New Smile in accordance
      with this Agreement are legal commitments and have the validity that
      obliges the Borrower and New Smile in accordance with the conditions
      thereto.

                

        

        

        
          	
                   
      

                	
                  2.6.

                	
                  The
      Borrower’s and New Smile’s entry into this Agreement and the fulfillment
      of their obligations as stated therein, do not contradict and shall not
      contradict: (a) their articles of incorporation; (b) any Law, regulation,
      order, license or official instruction whatsoever applicable to them or
      obliging them and/or (c) the agreements between their shareholders and/or
      (d) any agreement, mortgage, letter or other document to which they are
      party or which oblige them.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  2.7.

                	
                  The
      Borrower and New Smile have the fitness to repay all their
      commitments.

                

        

        

        
          	
                   
      

                	
                  2.8.

                	
                  True
      as of the reviewed financial reports for Ampal American dated September
      30, 2009, Ampal American’s equity capital stood at some USD
      223,000,000.

                

        

        

        
          	
                   
      

                	
                  2.9.

                	
                  The
      financial reports for Ampal American dated September 30, 2009 and
      published on the Israel Securities Authority’s Magna2 Distribution Site
      are an accurate reflection of Ampal American’s status, its rights and
      commitments for the period or date as appropriate, to which they refer and
      they were drawn up in accordance with standard accounting practices. From
      September 30, 2009 to the date on which this Agreement is signed, there
      has been no significant change for the worse in Ampal American’s status,
      in comparison with the aforementioned financial
  reports.

                

        

        

        
          	
                   
      

                	
                  2.10.

                	
                  No
      significant legal processes and/or quasi legal processes and/or
      administrative processes are pending against the Borrower and/or against
      New Smile and/or against Ampal American and the Borrower and/or New Smile
      and/or Ampal American are not aware of any significant investigations
      whatsoever against the Borrower and/or New Smile and/or Ampal American,
      and/or of any significant legal processes (including mediation processes,
      regulatory processes and/or investigations known to the Borrower and/or to
      New Smile) pertaining to the Borrower and/or New Smile and/or Ampal
      American, through which any of them or all of them together might have a
      negative effect on the Borrower’s ability to fulfill this Agreement, with
      the exception of in reference to New Smile – as stipulated in the
      financial reports for Old Smile dated December 31, 2008 and September 30,
      2009, as stipulated in Appendix 7.3 to the Purchase Agreement, which for
      the sake of convenience is hereby attached as Appendix 10.2a to this
      Agreement and as such is stipulated in Appendix 10.2b to this Agreement,
      with the exception of the references to Ampal American – as stipulated in
      the financial reports for Ampal American dated September 30, 2009 and the
      reports to the public issued by Ampal American after that
      date.

                

        

        

        
          	
                   
      

                	
                  2.11.

                	
                  In
      reference to the Borrower and/or New Smile and/or Ampal American and/or
      their commercial interests there has been no submission of any petition
      for bankruptcy and/or the appointment of a receiver and/or a trustee
      and/or a special manager and/or a provisional liquidator and/or
      preliminary liquidator and/or a permanent liquidator and the Borrower
      and/or New Smile and/or Ampal American have no knowledge of any cause to
      submit any such petition as
aforementioned.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  2.12.

                

        

        

        
          	
                   
      

                	
                  2.12.1.

                	
                  At
      the same time and as a condition to the extension of the Loan, New Smile
      shall complete the execution of the purchase of all the Purchased
      Activities as such are defined above and shall fulfill all its commitments
      to the Vendor made as part of the purchasing transaction for the Purchased
      Activities. The Borrower and New Smile have no knowledge of any demand
      and/or claim and/or cause by the Vendor against them for non-fulfillment
      of their commitments in full and on
time.

                

        

        

        
          	
                   
      

                	
                  2.12.2.

                	
                  True
      as of the date on which this Agreement is signed, all the conditions to
      the Purchase Agreement have been met and an order has been handed down by
      the Tel Aviv District Court in accordance with Section 350 to the
      Companies Law, which approves the transfer of the agreements made with Old
      Smile’s customers and suppliers to New
Smile.

                

        

        

        
          	
                   
      

                	
                  2.12.3.

                	
                  To
      ensure the closing of the transaction in accordance with the Purchase
      Agreement, no further action or fulfillment of any additional condition is
      required, with the exception of the payment of that due for the receipt of
      the assets, which are the subject of the Purchase
    Agreement.

                

        

        

        
          	
                   
      

                	
                  2.12.4.

                	
                  The
      rights and assets accruing to New Smile (immediately upon the closure of
      the transaction for the purchase of the Purchased Activities), including
      the rights to Purchased Activities shall be clear of all debt, commitment,
      lien, mortgage and/or third party rights of any type whatsoever, with the
      exception of: (a) Permitted Liens as that term is defined in the Purchase
      Agreement and (b) the mortgages and collateral pledged to BLL and the
      Lender as stipulated explicitly in this
  Agreement.

                

        

        

        
          	
                   
      

                	
                  2.12.5.

                	
                  Without
      derogation from the generality of that stated, New Smile has not
      undertaken and shall not undertake to transfer and/or to sell not within
      the usual business framework and/or use as collateral and/or to mortgage
      its rights to the Purchased Activities and/or any part thereof and/or to
      grant rights not through a normal business framework for the purchase of
      the rights to the Purchased Activities to any person and/or corporation
      whatsoever, and no person and/or corporation has a right to first refusal
      in connection with the rights to the Purchased Activities, with the
      exception of the mortgages to BLL as such are stipulated in this
      Agreement.

                

        

        

        
          	
                   
      

                	
                  2.12.6.

                	
                  There
      is no restriction and/or prohibition and/or preclusion in accordance with
      the provisions to all Law and/or any agreement whatsoever, either written
      or verbal and no agreement from a third party whatsoever is required in
      order to create a current second mortgage to the benefit of the Lender
      covering all the assets of New Smile, with the exception of agreement from
      BLL, which was given as stipulated in Section 4.1.2 below and with the
      exception of the need for approval from the Minister of Communications. It
      must also be noted that to the best of the Borrower’s knowledge,
      realization of the floating mortgage is conditoinal upon the fact that it
      will not cause any damage whatsoever to the provision of services by New
      Smile, including as pertains to the level of services, their scope,
      availability and quality.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  2.12.7.

                	
                  The
      Purchased Activities are the only activities undertaken by New Smile. New
      Smile shall have no other significant activities beyond the activities in
      the field of communications, unless prior, written permission for such is
      received from the Lender.

                

        

        

        
          	
                   
      

                	
                  2.12.8.

                	
                  With
      the closure of the transaction for the purchase of the Purchased
      Activities, New Smile shall hold all the licenses and permits required for
      the purposes of its activities and interests pertaining to the Purchased
      Activities and New Smile is not aware of any cause for the non-renewal of
      the licenses and/or permits – to the extent that their periods are limited
      – at the end of those periods.

                

        

        

        
          	
                   
      

                	
                  2.13.

                

        

        

        
          	
                   
      

                	
                  2.13.1.

                	
                  New
      Smile has received or shall receive financing for the purchase of the
      Purchased Activities from BLL to the overall sum of NIS
      800,000,000.

                

        

        

        
          	
                   
      

                	
                  2.13.2.

                	
                  To
      secure the financing it shall receive from BLL, the Borrower and New
      Smile, as appropriate, have undertaken to pledge collateral to the benefit
      of BLL as such is stipulated below and all such is subject to and is
      stipulated in the Agreement to the benefit of BLL attached to this
      Agreement as Appendix
      2.13.2 (the BLL
      Agreement).

                

        

        

        
        

        
          
          

          
            
              	
                       
      

                    	
                      2.13.2.1.

                    	First, floating mortgage to an unlimited sum, on all the assets and
      rights held by New Smile, including all the fruits
thereof.

            

             

          

        

        
          	
                   
      

                	
                  2.13.2.2.

                	
                  Second,
      fixed mortgage on the Borrower’s shares in New
  Smile.

                

        

        

        
          	
                   
      

                	
                  2.13.2.3.

                	
                  First,
      fixed mortgage on the Borrower’s rights to the owners’ loans placed at and
      which shall be placed at New Smile’s
disposal.

                

        

        

        
          	
                   
      

                	
                  2.13.2.4.

                	
                  Mortgage
      on the bank account managed by New Smile at BLL, in which specified sums
      shall be deposited and all such as stipulated in the Agreement made with
      BLL.

                

        

        

        
          	
                   
      

                	
                  2.13.2.5.

                	
                  Guarantee
      for the loan to the benefit of BLL against the debts owed by New
      Smile.

                

        

        

        
          	
                   
      

                	
                  2.13.2.6.

                	
                  Guarantee
      provided by Ampal American to BLL, against the debts owed by New
      Smile.

                

        

        

        
          	
                   
      

                	
                  2.13.2.7.

                	
                  First,
      fixed mortgage, for the receipt of specified payments from the Vendor in
      accordance with the Purchase
Agreement.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  2.13.2.8.

                	
                  First,
      fixed mortgage on the shares held by New Smile in the 012 Telecom Ltd.,
      Private Company Number 513701169 – a subsidiary company wholly owned by
      New Smile.

                

        

        

        
        

        
          
            	
                     
      

                  	
                    2.13.3.

                  	
                    In
      addition, to secure the financing to be received from BLL, New Smile has
      undertaken to comply with the covenants set out in Section 10.3 to the BLL
      Agreement and Ampal American has undertaken vis-à-vis BLL, to comply with
      the covenants set out in Appendix 11.15 to the BLL Agreement.

                     

                    Ampal
      American and New Smile undertake to comply with the covenants agreed
      between them and BLL and such shall mean that non-compliance with any of
      the covenants listed above, which shall result in BLL making a demand for
      immediate repayment of the loan extended by BLL to New Smile shall be
      considered a breach of the commitments made by the Borrower in accordance
      with this Agreement and such shall constitute cause for the issuing of a
      demand for immediate repayment of the remaining balance of the loan, as
      stipulated in Section 9 below.

                    
                       

                      That
      stated in this Section, shall also apply to any new agreement between New
      Smile and BLL, pursuant to additional undertakings or more stringent
      conditions to the undertakings listed in this Section
      above.

                    

                  

          

           

        

        
          	
                   
      

                	
                  2.14.

                

        

        

        
          	
                   
      

                	
                  2.14.1.

                	
                  The
      Borrower’s rights to the bank account, clear of all debt, commitment,
      sequestration, mortgage and/or any third party rights of any type
      whatsoever, including rights to set off and lien – without derogation from
      the generality of that stated; the Borrower undertakes not to transfer
      and/or sell and/or use as collateral and/or mortgage those rights to the
      bank account.

                

        

        

        
          	
                   
      

                	
                  2.14.2.

                	
                  There
      is no restriction and/or prohibition and/or preclusion in accordance with
      the provisions of all Law and/or any agreement whatsoever, either written
      or verbal and no agreement from a third party whatsoever is required in
      order to create a first mortgage to the benefit of the Lender covering all
      Borrower’s rights to the Safety Cushion
account.

                

        

        

        
          	
                   
      

                	
                  2.14.3.

                	
                  The
      banks where the accounts are managed shall have no rights to set off or
      lien against the Borrower’s debts to those banks – from credit balances as
      such shall be extant from time to time in the Bank Accounts and such in
      accordance with the letters from the banks hereby attached as Appendix
  2.13.4.

                

        

        

        
          	
                   
      

                	
                  2.14.4.

                	
                  The
      Borrower has no knowledge, which is not public knowledge, in connection
      with New Smile or in connection with the Purchased Activities, which has
      not been drawn to the attention of the Lender, when to the best of the
      Borrower’s understanding, if that knowledge had been brought to the
      Lender’s attention the Lender would have abstained from extending credit
      to the Borrower in accordance with this
  Agreement.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            	
                     
      

                  	
                    2.14.5.

                  	
                    There
      is no significant information in reference to the Borrower, which does not
      appear in the reports to the public made by Ampal American and which in
      the Borrower’s opinion, if it had been brought to the attention of the
      Lender, would have sufficed to have caused the Lender to abstain from
      extending credit in accordance with this
  Agreement.

                  

          

        

         

        
          	
                  3.
      The Declarations Made by the Lender

                

        

        

        Each of
the Lender Individuals declares that in reference to each Lender Individual’s
part in the Loan, each of the representations and declarations stipulated in
this Section 3 below, is true and accurate in all the details therein. The
Lender hereby confirms that the Lender is aware that Borrower has entered into
this Agreement, relying entirely upon the representations and declarations made
by the Lender and stipulated in this Section 3 as follows:

        

        
          	
                   
      

                	
                  3.1.

                	
                  The
      Lender is a limited share company incorporated and in existence in
      accordance with the Laws of the State of Israel and fit in accordance with
      all Law to extend the Loan, to enter into an Agreement and to fulfill all
      its obligations in accordance with that
  Agreement.

                

        

        

        
          	
                   
      

                	
                  3.2.

                	
                  The
      Lender has taken in accordance with Law, all the decisions required in
      accordance with the Lender’s articles of incorporation and in accordance
      with all Law, in order to enter into this Agreement lawfully and to
      fulfill all its obligations in accordance with this
    Agreement.

                

        

        

        
          	
                   
      

                	
                  3.3.

                	
                  The
      Lender’s entry into this Agreement and the fulfillment of all the Lender’s
      obligations in accordance with this Agreement do not contravene any Law or
      agreement obliging the Lender. All the obligations imposed upon the Lender
      in accordance with this Agreement are legal obligations and have the
      validity, which obliges the Lender in accordance with the conditions
      thereto.

                

        

        

        
          	
                   
      

                	
                  3.4.

                	
                  The
      Lender is aware that the exercise of the Lender’s rights in accordance
      with the collateral pledged in accordance with this Agreement, including
      their realization, shall be subject to all the limitations in Law and the
      licenses in this context and as stipulated in Sections 2.2.5 and 2.12.6 to
      the Agreement above.

                

        

        

        
          	
                   
      

                	
                  4.
      Conditions to the Extension of the Loan Principal, the
      Collateral

                

        

        

        Subject
to the fulfillment of all the undertakings made by the Borrower in accordance
with this Agreement, including the fulfillment of all the conditions stipulated
below and relying upon all the representations stipulated in Section 2 to this
Agreement, the Lender undertakes to extend the Loan Principal to the Borrower in
accordance with that stipulated below:

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  4.1.

                	
                  On
      the date on which this Agreement is signed, the Borrower or New Smile, as
      appropriate, shall create (shall sign) for the Lender, the collateral
      listed below.

                   

                  It
      is agreed that the Borrower shall register the collateral in any register
      required by Law and shall provide the Lender with confirmation of that
      registration in accordance with Law by no later than the date on which the
      Loan is extended, subject to that stated in reference to the mortgages,
      which are the subject of Sections 4.1.2 – 4.2.4
  below.

                

        

         

        
          	
                   
      

                	
                  4.1.1.

                	
                  Fixed mortgage on New
      Smile shares

                   

                  The Borrower shall mortgage to the benefit of the
      Lender, as a first, fixed mortgage to an unlimited sum, all the rights to
      the shares held by the Borrower in New Smile, including additional shares
      in New Smile, which shall be allocated to the Borrower from time to time
      and including all the fruits wherefrom, the revenues and rights linked to
      the shares; including if such are generated and/or bestowed after the
      creation of this mortgage and as stipulated in the bond hereby attached as
      Appendix
      4.1.1. To avoid doubts: For as long as the aforementioned
      collateral has not been realized, dividends received from New Smile by the
      Borrower shall not be mortgaged and the Lender shall be entitled to make
      any use of them whatsoever, but such shall be subject to the provisions to
      Section 4.1.5 below.

                

        

         

        
          	
                   
      

                	
                  4.1.2.

                	
                  Current mortgage on
      all New Smile assets and rights

                   

                  New
      Smile shall mortgage to the benefit of the Lender, through second floating
      mortgage unlimited in sum, all New Smile’s existing and future assets and
      rights and the fruits wherefrom, including rights vis-à-vis customers and
      rights to monies and/or rights to securities deposited in New Smile’s bank
      accounts and through second fixed mortgage unlimited in sum on the unpaid
      equity capital and New Smile reputation, as such is stipulated in the bond
      hereby attached as Appendix
      4.1.2.

                   

                  Agreement
      from BLL for the extension of the second mortgage that is the subject of
      this Section is hereby attached as Appendix
      4.1.2a.

                   

                  The
      Lender is aware that the creation of the second mortgage that is the
      subject of this Section is subject to the receipt of agreement to such
      from the Minister of Communications and as such is stipulated in Section
      2.2.5 above. Therefore, it is agreed that the aforementioned mortgage
      shall be registered and extended to the benefit of the Lender by no later
      than sixty (60) days from the date on which this Agreement is signed. The
      Borrower undertakes to submit a request for approval from the Minister of
      Communications as stated, immediately after the date on which the Loan is
      extended and to make every effort to bring about its registration in the
      records kept by the Registrar of Companies at the earliest possible
      time.

                   

                  It
      is agreed that if by the end of the sixty (60) day period the
      aforementioned mortgage is not registered, then the sum for the Safety
      Cushion stated at the beginning of Section 4.1.3 below shall increase to
      NIS 30,000,000 instead of NIS 20,000,000 and the ratio stated there shall
      increase to 30/220 instead of 20/220. It is clarified that this shall be
      the only relief for non-registration, on condition that the
      non-registration is due to the refusal of the Minister of Communications
      to approve that registration. No other change shall be made to the
      provisions to Section 4.1.3.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  4.1.3.

                	
                  If
      the Safety Cushion sum rises to NIS 30,000,000 as stated above and then
      afterwards, the second current mortgage is registered in the Companies
      Register, the Borrower shall be entitled to withdraw immediately, all the
      balance of monies in the Safety Cushion until after that withdrawal, the
      sum remaining in the Safety Cushion account shall be the sum equal to the
      20/220 ratio of the remaining principal and as such is defined in Section
      4.1.3 below: Safety
      Cushion.

                   

                  The
      sum of NIS 20,000,000 (the Safety Cushion Sum) out
      of the sum total of the Loan, shall be deposited by the Lender with the
      extension of the Loan, in a deposit account, which shall be opened by the
      Borrower as part of the Designated Bank Account, which shall be opened
      solely for that purpose and which is the Safety Cushion Account as such is
      defined in Section 1.4 above (hereinafter: The Safety Cushion and the
      Bank
      Account).

                  
                     

                    At
      all times during the Loan Period, the Safety Cushion Sum shall stand at a
      sum, which shall be no less than the ratio 20/220 of the remaining
      un-discharged balance of the Loan Principal indexed to the CPI
      (hereinafter in this Section: the Balance of the Principal).

                     

                    The
      following provisions shall apply to the Safety Cushion and the Bank
      Account:

                  

                

        

         

        
          	
                   
      

                	
                  4.1.3.1.

                	
                  The
      Borrower shall mortgage to the benefit of the Lender, as a first fixed
      mortgage unlimited by sum, all the rights to the Bank Account and the
      monies it shall contain from time to time and as stipulated in the bond
      hereby attached as Appendix
      4.1.1.

                

        

        

        
          	
                   
      

                	
                  4.1.3.2.

                	
                  On
      the last day of each calendar quarter (the Examination Date) the
      Borrower shall conduct an examination of the un-discharged balance of the
      Loan Principal, compared with the sums and the value of the assets (to the
      extent that investments have been made as stated in sub-section 5 below)
      deposited in the Bank Account as of the date of the examination. On the
      date of that examination, the Borrower shall provide the Lender with a
      report on the results of that examination, signed on behalf of the
      Borrower by the Borrower’s CFO or CEO.

                   

                  If
      the total of sums and assets in the Bank Account as of the date of the
      examination is higher than the ration of 20/220 of the Balance of the
      Principal on the date of the examination, then the Borrower shall
      be  entitled to withdraw the difference between the two, subject
      to prior written notice to the Lender, in a manner ensuring that after the
      withdrawal, the aforementioned ratio shall be no less than 20/220 and to
      make any use of that sum at the Borrower’s discretion. If the sum in the
      Bank Account is lower than the ratio of 20/220 of the Balance of the
      Principal, then the Borrower shall be obliged to deposit the difference
      between them immediately. The reference to the Safety Cushion Sum in
      sub-section 4 below shall refer to the updated Safety Cushion Sum as
      extant immediately after the examination
date.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Without
derogation from that stated above, the Lender shall be entitled to conduct an
examination of the Bank Account as stated above at any time during the Loan
Period and if the total sum is lower than the ratio of 20/220 of the Balance of
the Principal, the Lender shall be entitled to demand that the Borrower deposit
the difference within no more than three (3) days. The Borrower shall empower
the Manager of the Division / Field of Investments or the Division / Field of
Credit at Harel Insurance Company Ltd and shall empower the Manager of the
Division / Field of Investments or the Division / Field of Credit at Menora
Mivtachim Insurance Ltd, to receive from the Bank at least once every month and
more frequently at their demand, a printout of the details of the Bank Account,
including details of the movements executed in the Bank Account.

        

        Any
breach of the Borrower’s obligation to deposit funds as aforementioned shall
constitute cause for a demand for immediate repayment.

         

        
          
            	
                     
      

                  	4.1.3.3.	In any circumstances in which the Borrower does not fulfill the
      Borrower’s obligations to make a particular payment in accordance with the
      provisions to this Agreement and/or if a demand is made for immediate
      repayment of the Loan in accordance with this Agreement, the Lender shall
      be entitled to withdraw any sum from the Safety Cushion and deposit that
      sum in the Lender’s account – for the purposes of discharging the
      Borrower’s remaining balance of debt to the Lender. To expedite that
      purpose, the Borrower shall provide the Lender with an irrevocable order
      for the Bank to pay to the Lender on demand; all the sums extant in and
      which shall accumulate in the Bank Account as such is explained in Appendix
    4.1.3.

          

        

        
          
            

            
              	
                       
      

                    	4.1.3.4. 	If the Lender uses the Safety Cushion during the Loan Period as stated
      in sub-section 4.1.3.3 above, any sum transferred by New Smile to the
      Borrower, shall serve first and foremost to replenish the Safety Cushion
      up to the Safety Cushion Sum. It is clarified that nothing in that stated
      shall derogate from the Lender’s rights to demand immediate payment of the
      Loan.

            

          

           

        

        
        

        
          
            
            

          

          
            
            

            
              

            

          

           

          
            
              
                	
                         
      

                      	4.1.3.5.	
                        The Lender shall be entitled to invest the monies in the Bank Account
      in short term bank deposits or in securities or in certificates of
      indebtedness issued by the State of Israel and/or in securities rated
      using the local rating system as at least A grade by Standard and Poors,
      Maalot ltd. or the parallel grade used by Midrug Ltd. (with the exception
      of debentures and securities from the Ampal American
  Group.

                      

              

            

            
              
                 

                
                  
                    
                      
                        	
                                 
      

                              	4.1.4. 	Mortgage of
      Owners’ Loans Extended or which Shall be Extended to New
  Smile

                      

                    

                  

                   

                

              

            

          

        

        
        

        The
Borrower shall mortgage to the benefit of the Lender through second fixed
mortgage unlimited by sum, all the rights pertaining to owners loans extended to
and/or which shall be extended to the benefit of New Smile as stipulated in the
bond hereby attached as Appendix 4.1.4 and
subject to the letter from BLL agreeing to the second mortgage attached as Appendix 4.1.4a to
this Agreement. To avoid doubt: For as long as the aforementioned collateral has
not been realized, the Borrower shall be entitled to make any use whatsoever of
the sums for the repayment of owners’ loans, but such shall be subject to the
provisions to Section 4.1.5 below.

        

        The
Borrower undertakes to submit the aforementioned bonds for registration with the
Registrar of Companies, no later than one business day after the signing of the
bonds and to provide the Lender with a mortgage registration certificate for the
mortgage, within seven (7) days from the signing as aforementioned.

        

        To remove
doubt, in a circumstance in which a demand for immediate payment of the Loan is
made, the Borrower and New Smile undertake that the repayment dates for the
owners’ loans (principal and interest) extended by and/or which shall be
extended by the Borrower for the benefit of New Smile shall not be before the
date for the repayment of the Loan in accordance with this Agreement and those
loans shall not be repaid before the repayment of the Loan to the Lender under
any circumstances whatsoever.

         

        
          
            
              	
                       
      

                    	4.1.5.	In addition to the collateral mentioned above, the following
      provisions shall apply:

            

          

        

         

        The
Borrower shall open a Designated Bank Account at the Union Bank of Israel Ltd.
(the Designated
Account). Whenever monies shall fall due to the Borrower from New Smile
for dividends or the repayment of owners’ loans (principal and interest) (Monies), those Monies shall be
received in the Designated Account.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        Without
derogation from the commitment made by the Borrower to repay the Loan in
accordance with the original repayment schedule on time and in full, it is
agreed that the Monies shall be used first to make the next payment (principal
and/or interest) according to the repayment schedule (the Original Repayment Monies). To
the extent that any Monies above the sum of the Original Repayment Monies shall
be received from New Smile (the Surplus Monies), the Borrower
shall inform the Lender of such in writing and the Lender shall be entitled, no
later than at the end of fourteen (14) days from receipt of such notice by the
Lender, to inform the Borrower that the Lender is interested in having the sum
equal to up to 40% of the total of Surplus Monies (but under all circumstances
no more than the un-discharged Balance of the Loan Principal balance) serve as
early payment of the Loan, which shall be executed immediately, on condition
that in the circumstances as stated, the Lender shall not be paid early
repayment fees. The early repayment monies as aforementioned, shall be divided
up among the Lender Individuals in accordance with the division stipulated in
the notice from the Lender mentioned above (that decision shall be made
unanimously by the Lender Individuals). (To avoid doubt: It shall not be
obligatory to divide up those Monies equally among the Lender
Individuals.

         

        The
Borrower shall be entitled to make any use whatsoever of the balance of Surplus
Monies (or of all of them, if no notice has been given by the end of the
fourteen (14) day period mentioned above), including their withdrawal from the
Designated Account.

        

        It is
clarified that the sum, which shall be repaid as Early Repayment as such is
mentioned above, shall be paid on account for the Principal of the Loan and that
sum shall reduce equally, all the payments of remaining Loan Principal according
to the Repayments Schedule and therefore, the Loan Period shall not
change.

        

        The
Borrower shall authorize the Lender to receive from the Bank at least once every
month and more frequently at the Lender’s demand, a printout of the details of
the Designated Account, including details of the movements executed in the Bank
Account. The wording for that authorization is attached as Appendix 4.15 to this
Agreement.

        

        The
Borrower undertakes not to open any bank account in addition to the Designated
Account, to which there shall be a transfer of funds by New Smile and not to
grant to any third party whatsoever, any rights whatsoever to the Designated
Bank Account (including, without derogation from the generality of that stated,
mortgage, collateral, lien, etc.) and such until the repayment of all the
Borrower’s debts to the Lender.

         

        
          
            	
                     
      

                  	4.1.6.	As a precondition to the extension of the Loan Principal, on the date
      on which the Loan is extended, the Borrower shall provide the Lender with
      perpetual, irrevocable guarantees from Ampal American, to guarantee the
      repayment of the Loan and signed by Ampal at the end of this
  Agreement.

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            
              	
                       
      

                    	
                      4.2.

                    	
                      Simultaneous
      with the pledging of the collateral listed in Section 4.1 above, together
      with certificates of registration of the mortgages with the Registrar of
      Companies for the purposes of the mortgages, which are the subject of
      Sections 4.1.1, 4.1.3, the guarantees from Ampal American, the empowering
      in reference to the Designated Account and the irrevocable instructions
      stipulated above in Section 4.1.3; the Lender shall extend the Loan
      Principal  to the Borrower through bank transfer to the account
      in the name of 012 Smile Communications Ltd. in the following manner (and
      divided up as stipulated in Appendix 4.2 to this
    Agreement):

                    

            

            

            Account
Number: 75523/11 at Bank Leumi LeIsrael Ltd. branch number 800, (IBAN: IL24 0108
0000 0000 7552 311)

            

            To remove
doubt, the condition to the extension of the Loan as aforementioned is the
completion of the purchase of the Purchased Activities simultaneously with the
extension of the Loan.

            

            
              	
                       
      

                    	
                      4.3.

                    	
                      It
      is agreed that if and to the extent that New Smile shall be entitled to
      sums from Old Smile by dint of Section 11.4 to the Purchase Agreement,
      then the Lender shall be entitled to demand repayment of the Loan by the
      Borrower, to the same level as the reduction of payment for the purchase
      as aforementioned, Thus, and solely for the purposes of example – if by
      dint of the aforementioned Section, New Smile receives sums from Old Smile
      and thereby, the payment for the Purchase in accordance with the Purchase
      Agreement is reduced by 10%, then the Lender shall  be entitled
      to demand early repayment to the sum that is 10% of the Loan (it is
      clarified that in the circumstances described here, the Safety Cushion
      shall be reduced by the same rate).

                    

            

            

            A numeric
example would be as follows: If the payment for the Purchase is reduced by 10%,
to 1,080,000,000, the Lender shall be entitled to demand early repayment to the
sum of NIS 22,000,000 and the Loan shall stand at NIS 198,000,000 and the Safety
Cushion shall be reduced by the ratio 20/220 to NIS 18,000,000
(18/198).

            

            New Smile
shall send notice to the Lender immediately upon becoming aware of its
entitlement to receive sums as aforementioned in this Section and the Lender
shall be entitled to inform New Smile of the implementation of the right to
early repayment no later than seven (7) business days from the receipt of the
aforementioned notice.

             

            
              	
                      5.
      Repayment of the Loan

                    

            

            

            
              	
                       
      

                    	
                      5.1.

                    	
                      The
      Loan shall be repaid throughout the Loan Period as stipulated
      below:

                    

            

            

            
              	
                       
      

                    	
                      5.1.1.

                    	
                      The
      interest, with additional indexing differentials shall be paid in half
      yearly installments, beginning on January 31, 2011 and on the 31st
      of each of the months of July and January in each year, beginning on the
      date on which the Loan was extended and ending with the date on which the
      Loan was repaid.

                       

                      The
      calculation of the interest on the Loan shall take into account 365 days
      in a year (and if there are 366 days in a year, the formula shall be
      amended to include 366 instead of
365).

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              	
                       
      

                    	
                      5.1.2.

                    	
                      The
      Loan Principal, with additional index differentials, shall be paid in
      equal half yearly installments beginning on January 31, 2012 and on the
      31st
      day of each of the months of July and January in each year, beginning on
      the date on which the Loan was extended and ending with the date on which
      the Loan was repaid.

                       

                      Precise
      details of the sums to be paid are to be found in the Repayment Schedule
      attached to this Agreement as Appendix
      5.1.

                    

            

             

            
              	
                       
      

                    	
                      5.2.

                    	
                      In
      addition to that stated above, the Borrower shall bear the payments listed
      in Appendix 5 to this Agreement.

                    

            

            

            
              	
                       
      

                    	
                      5.3.

                    	
                      The
      Borrower undertakes to pay to each of the Lender Individuals, all those
      payments due to each Lender Individual, through bank transfer to the bank
      accounts listed in Appendix 4.2.
      The Lender shall inform the Borrower of any change to the data listed in
      that Appendix, if there shall be any changes, fourteen (14) days before
      the date for the making of any payment in accordance with the Repayment
      Schedule.

                       

                      The
      Lender shall credit the Borrower for any payment whatsoever, only on the
      date on which the Lender shall be actually credited for that payment in
      the bank accounts stipulated above.

                    

            

             

            
              	
                       
      

                    	
                      5.4.

                    	
                      In
      any circumstance in which the date for any payment whatsoever, on account
      for the repayment of a Loan Principal and interest sum or another payment
      due to the Lender in accordance with this Agreement, shall fall on a day
      that is not a business day, the payment of that sum shall be delayed until
      the first business day that follows the payment
  date.

                    

            

            

            
              	
                      6.
      Accompanying Payments

                    

            

            

            In
addition to the Loan Principal, the interest and the index differentials, which
the Borrower must pay to the Lender in accordance with this Agreement, the
Borrower undertakes to pay the Lender or as instructed by the Lender, the
payments listed here below:

            

            
              	
                       
      

                    	
                      6.1.

                    	
                      The
      cost of registering the collateral, to the extent that they shall be borne
      by the Lender.

                    

            

            

            
              	
                       
      

                    	
                      6.2.

                    	
                      Legal
      fees to the Lender’s attorneys, for the drawing up of this Agreement and
      those fees shall be paid by the Borrower directly to the Lender’s
      attorneys within seven (7) days from the date on which this Agreement is
      signed and against the receipt of a tax invoice as required by
      Law.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            
              	
                       
      

                    	
                      6.3.

                    	
                      All
      the costs incurred by the Lender in connection with the realization of
      collateral, to the extent that there shall be realization, including legal
      fees, Court fees, Execution Office fees, the appointment of an official
      receiver and/or manager and/or trustee and/or liquidator and their
      salaries.

                       

                      All
      the collateral, which shall be provided in accordance with this Agreement,
      shall also serve to guarantee the payment of all the aforementioned
      sums.

                    

            

             

            
              	
                      7.
      Order for Making Payments

                    

            

            

            Any sum
paid to the Lender by the Borrower and/or which shall be received by the Lender
in any manner whatsoever shall be credited by the Lender in accordance with the
following order:

            

            
              	
                       
      

                    	
                      7.1.

                    	
                      On
      account for the costs and expenses listed in Section 6 above, if and to
      the extent that they shall be paid by the
  Borrower.

                    

            

            

            
              	
                       
      

                    	
                      7.2.

                    	
                      On
      account for the early repayment
fee.

                    

            

            

            
              	
                       
      

                    	
                      7.3.

                    	
                      On
      account for late payment interest.

                    

            

            

            
              	
                       
      

                    	
                      7.4.

                    	
                      On
      account for index differentials on late payment
  interest.

                    

            

             

            
              
                	
                         
      

                      	
                        7.5.

                      	
                        On
      account for Loan interest

                      

              

               

            

            
              	
                       
      

                    	
                      7.6.

                    	
                      On
      account for index differentials on the interest on the
    Loan.

                    

            

            

            
              	
                       
      

                    	
                      7.7

                    	
                      On
      account for the Loan Principal and index differentials on the Loan
      Principal.

                    

            

            

            
              	
                      8.
      The Commitments Made by the Borrower and New
  Smile

                    

            

            

            Without
derogation from the commitments stipulated in this Agreement, for as long as the
balance of the Loan in accordance with this Agreement has not been paid to the
Lender, in addition, the Borrower and New Smile make their commitment to the
Borrower to fulfill that stated in this Section 8 below:

             

            
              	
                       
      

                    	
                      8.1.

                    	
                      Without
      derogation from the undertaking to comply with the covenants vis-à-vis BLL
      as stipulated in Section 2.13.3 above, Ampal American and New Smile
      undertake to comply with the covenants listed here
  below:

                    

            

            

            
              	
                       
      

                    	
                      8.1.1.

                    	
                      Ampal
      American undertakes that Ampal American’s solo, tangible equity capital
      (pro forma) shall at no time be less than the total of USD 150
      million.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              	
                       
      

                    	
                      8.1.2.

                    	
                      In
      addition, Ampal American undertakes that the total sum of Ampal American’s
      equity capital shall at no time be less than a total of USD 150
      million.

                    

            

            

            
              	
                       
      

                    	
                      8.1.3.

                    	
                      Ampal
      American undertakes that the ratio between net debt and net CAP at Ampal
      American (pro forma) shall not rise above 75%. For the purposes of this
      Section, the aforementioned ratio shall mean the portion received from
      financial commitments after deduction of cash and cash equivalent,
      deposits and negotiable securities (net debt) divided by the
      equity capital with the addition of the net debt (net CAP).

                       

                      Financial Institution –
      shall mean – Each of the following bodies: Banks, including Auxiliary
      Corporations, as such are defined in the Banking Law (Licensing) 5741 –
      1981; corporations to which the Joint Investments Trust Law,
      5754 - 1994
      applies; corporations to which the Control of Financial Services Law
      (Provident Funds) 5765 – 2005 applies; an insuring corporation, as such is
      defined in the Control on Insurance Business Law 5741 – 1981, or any
      corporation similar to those mentioned above, which was incorporated
      outside Israel and is under the supervision of the competent authority in
      the country of incorporation and the holders of debentures.

                       

                      Financial Commitments –
      shall mean – The balance of debts and commitments to Financial
      Institutions as such appear in the financial reports for Ampal American
      (pro forma).

                      
                         

                        Equity Capital – shall
      mean – The equity capital presented in the financial reports on a combined
      basis for Ampal American.

                         

                        Financial Reports for Ampal American (pro
      forma) – shall mean – The financial reports for Ampal American,
      including the combined reports for companies which are either directly or
      indirectly, wholly owned by Ampal American and when their entire
      activities are the holdings in or the investment in corporations
      (including but without derogation from partnerships or projects) or in
      financial assets. True of the date of the signing of this document, the
      companies included in the Financial Reports (pro forma) are as listed in
      Appendix
      8.1 to this Agreement.

                         

                        It
      is hereby clarified that in reference to the Financial Reports drawn up in
      accordance with US GAAP standards, the definition for equity capital (in
      reference to combined reports) does not include the minority rights that
      appear as part of the equity capital.

                         

                        Furthermore,
      it is hereby clarified that in reference to the Financial Reports drawn up
      in accordance with the IFRS standard for the purposes of defining equity
      capital:

                      

                    

            

             

            
              	
                       
      

                    	
                      A.

                    	
                      Such
      shall not include minority rights that appear as part of the equity
      capital (in reference to combined reports) and furthermore
    –

                    

            

             

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

             

            
              	
                       
      

                    	
                      B.

                    	
                      The
      equity capital shall also include options when the realization addition
      for those options is indexed (they shall appear as part of the
      commitments) and furthermore –

                    

            

            

            
              	
                       
      

                    	
                      C.

                    	
                      The
      equity capital shall also include the conversion component for convertible
      bonds, when their realization price is indexed (if they appear separately
      as part of the commitments in the balance) and furthermore
    –

                    

            

            

            
              	
                       
      

                    	
                      D.

                    	
                      They
      shall not include the re-evaluation principal for fixed assets created due
      to the adoption of the re-evaluation model during the period after the
      formulation of the financial
conditions.

                    

            

            

            Solo, Tangible Equity Capital
– shall mean – The equity capital as presented in the annual or quarterly
Financial Reports as appropriate, for Ampal American (pro forma), drawn up in
USD in accordance with standard accounting practices applied consistently,
approved in the name of Ampal American by the CFO or the CEO at Ampal American
with added explanations in accordance with the demand made by the Lender,
including paid up share capital, undistributed surpluses, funds, with additional
balances for the owners’ loans fund sums and/or capital bills, for which Ampal
American and its shareholders have signed subordination documents for the
Lenders and after deduction of non-tangible assets such as: Reputation, patents,
brand names, trade names, copyright, etc.

            

            Furthermore,
it is hereby clarified that in reference to the Financial Reports drawn up in
accordance with the IFRS standards, for the purposes of defining equity
capital:

            

            
              	
                       
      

                    	
                      A.

                    	
                      Such
      shall not include minority rights that appear as part of the equity
      capital (in reference to combined reports) and furthermore
    –

                    

            

            

            
              	
                       
      

                    	
                      B.

                    	
                      The
      equity capital shall also include options when the realization addition
      for those options is indexed (they shall appear as part of the
      commitments) and furthermore –

                    

            

            

            
              	
                       
      

                    	
                      C.

                    	
                      The
      equity capital shall also include the conversion component for convertible
      bonds, when their realization price is indexed (if they appear separately
      as part of the commitments in the balance) and furthermore
    –

                    

            

            

            
              	
                       
      

                    	
                      D.

                    	
                      They
      shall not include the re-evaluation principal for fixed assets created due
      to the adoption of the re-evaluation model during the period after the
      formulation of the financial
conditions.

                    

            

             

            
              
                	
                         
      

                      	
                        8.1.4.

                      	
                        The
      debt to EBIDTA ratio at New Smile shall be no more than 3.7

                         

                      

              

               

            

            
              	
                       
      

                    	
                      8.1.5.

                    	
                      Management
      fees to be paid by New Smile to those in control of New Smile, directly
      and/or indirectly shall not rise above, collectively, the sum of NIS
      15,000,000 per year, indexed to the CPI; if the aforementioned sum is not
      paid in a specific year, it shall be paid out only during the following
      year.

                       

                      If
      Ampal American and/or New Smile do not comply with any of the covenants
      stated in Sections 8.1.1 to 8.1.5 above, such shall be considered a breach
      of the Borrower’s commitments in accordance with this Agreement and shall
      constitute cause to demand immediate repayment of the balance of the Loan
      and as such is stipulated in Section 9 below. To remove doubt it is hereby
      clarified that non-compliance with the financial relationship vis-à-vis
      BLL (which is not mentioned in Sections 8.1.1 to 8.1.5 above) shall not
      constitute cause for the demand of immediate payment of the Loan, unless
      if BLL demands the immediate repayment of the credit extended to New Smile
      by BLL as aforementioned in Section 2.13.3
  above.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              	
                       
      

                    	
                      8.2.

                    	
                      With
      the exception of that stated explicitly in this Agreement (and in the
      floating mortgage bond), not to sell and/or transfer and/or assign and/or
      mortgage the collateral provided to the Lenders in accordance with this
      Agreement, including at an equal or lower
level.

                    

            

            

            
              	
                       
      

                    	
                      8.3.

                    	
                      The
      Borrower does also undertake not to mortgage the Borrower’s shares in the
      EMG Company, without the Lender’s prior permission for
    such:

                    

            

            

            
              	
                       
      

                    	
                      8.3.1.

                    	
                      If
      the Borrower sells or transfers more than 50% of the Borrower’s shares in
      EMG, the Borrower shall inform the Lender of such in writing and within
      thirty (30) days from the date on which the Lender received that notice,
      the Lender shall be entitled to inform the Borrower that the Lender is
      interested in the execution of immediate repayment of the net sum received
      by the Borrower for the aforementioned sale (but no more than the Balance
      of Loan Principal not yet discharged, hereinafter: The Net Return). If the
      Lender demands early repayment as aforementioned, no early repayment fee
      shall be paid.

                    

            

            

            
              	
                       
      

                    	
                      8.3.2.

                    	
                      If
      the Borrower sells up to 50% of the Borrower’s shares in the EMG Company,
      then that stipulated in sub-section 8.3.1 above shall apply only to 10% of
      the Net Return. If the Borrower sells in blocks, after each sale the
      Lender shall be able to demand immediate repayment as stipulated in this
      sub-section.

                    

            

            

            
              	
                       
      

                    	
                      8.3.3.

                    	
                      Notwithstanding
      that stated in sub-section 8.3.2 above, if the Borrower sells the
      Borrower’s shares in blocks that accumulate to constitute more than 50% of
      the Borrower’s shares, then that stipulated in sub-section 8.3.1 shall
      apply to the Net Return.

                    

            

            

            To the
extent that some of the early repayment sums have already been paid – in
accordance with that stipulated in sub-section 8.3.2 above, at the Lender’s
request, additional early repayment monies shall be paid up to the sum of the
Net Return, including that received for the sales at the scale mentioned (to
avoid doubt – without payment of early repayment fees).

            

            
              	
                       
      

                    	
                      8.3.4.

                    	
                      Early
      repayment monies as aforementioned, shall be divided up among the Lender
      individuals in accordance with the division which shall be stipulated in
      the Lender’s notice mentioned above (to avoid doubt – the monies shall not
      necessarily be distributed equally among the Lender
      individuals).

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

               

              
                
                

              

            

            
              	
                       
      

                    	
                      8.3.5.

                    	
                      The
      sale or transfer of EMG shares in lieu of rights to shares in another
      company (share swopping), as differentiated from the sale of shares in
      lieu of cash, shall be subject the Lender’s Board of Directors’ approval
      that the shares in the other company constitute economic benefit befitting
      the value of the EMG shares. The Lender shall give the Borrower prior,
      written notice concerning the aforementioned share swop. If shares are
      exchanged as aforementioned in this sub-section, the provisions to this
      sub-section 8.3 shall apply to the shares in the other
      company.

                    

            

            

            
              	
                       
      

                    	
                      8.3.6.

                    	
                      It
      is clarified that early repayment (when such is lower than the
      un-discharged Balance of the Loan Principal) shall be paid on account for
      the un-discharged Balance of the Loan Principal and it shall reduce
      equally the payments of Loan Principal remaining according to the
      Repayment Schedule and therefore, the Loan Period shall not
      change.

                    

            

            

            
              	
                       
      

                    	
                      8.4.

                    	
                      To
      verify that all the sums paid to the Borrower by New Smile and/or for the
      Borrower shall be transferred into the Designated
  Account.

                    

            

            

            
              	
                       
      

                    	
                      8.5.

                    	
                      To
      inform the Lender in writing without delay, of any incident involving
      application of lien, execution of Court Execution Office instructions, the
      appointment of a receiver or the institution of any similar process
      whatsoever, which might have a significant negative effect on the
      Borrower’s ability to fulfill the conditions to the Agreement or on the
      ability of New Smile to fulfill its commitments and without delay to take
      at the Borrower’s expense, all the steps required for the purposes of
      cancelling the lien, execution of Court Execution Office instructions, the
      appointment of a receiver or institution of any similar process in
      connection with the Borrower as soon as possible and no later than up to
      sixty (60) days from the date on which the lien was applied, the Execution
      Order was implemented, the receiver was appointed, or another process was
      instituted.

                    

            

            

            
              	
                       
      

                    	
                      8.6.

                    	
                      To
      inform the Lender in writing without delay of any suit, mediation,
      regulatory or administrative processes against the Borrower or concerning
      the Borrower (including notice of any threat of suit, mediation or
      processes as aforementioned) or against New Smile or concerning New Smile,
      which in the Borrower’s opinion, based on the Borrower’s assessment of the
      risks associated with the aforementioned process, will have a significant
      negative effect on the Borrower’s ability to fulfill the conditions to the
      Agreement.

                    

            

            

            
              	
                       
      

                    	
                      8.7.

                    	
                      To
      send to the Lender without delay, written notice of every event in which
      there is a significant breach of this Agreement, along with reasonable
      explanation of the details of that event and the steps taken (if taken) to
      rectify the situation.

                    

            

            

            
              	
                       
      

                    	
                      8.8.

                    	
                      Not
      to perform knowingly, any act which might have any significant negative
      effect whatsoever on the Borrower’s ability to fulfill the Borrower’s
      commitments.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              	
                       
      

                    	
                      8.9.

                    	
                      To
      comply with all the rules, instructions and guidelines applicable to the
      Borrower’s activities.

                    

            

            

            
              	
                       
      

                    	
                      8.10.

                    	
                      To
      send the following reports (the confidentiality of which will be
      maintained by the Lender, unless that information is made public knowledge
      not due to the breach of the duty of confidentiality) to the
      Lender:

                    

            

             

            
              
                	
                         
      

                      	
                        8.10.1.

                      	
                        The
      pro forma report for New Smile, which reflects the execution of the
      purchase of the Purchased Activities in accordance with the Purchase
      Agreement, by no later than thirty (30) days from the date for the
      extension of the Loan as such is defined
above.

                      

              

               

              
                
                  
                    	
                             
      

                          	
                            8.10.2.

                          	
                            In
      reference to Ampal American and New
Smile:

                          

                  

                   

                

              

            

            
              	
                       
      

                    	
                      8.10.2.1.

                    	
                      A
      copy of the audited Financial Reports for each of them for each financial
      year.

                    

            

            

            
              	
                       
      

                    	
                      8.10.2.2.

                    	
                      A
      copy of every intermediate Financial Report and/or Quarterly Report for
      each of them.

                    

            

             

            By no
later than fourteen (14) business days from the date determined in Law for the
publication referring to a Company, with shares registered for trading on the
NASDAQ, or referring to a corporation reporting to the Tel Aviv Stock Exchange
Ltd. if Ampal American shares will not be registered on the NASDAQ.

             

            
              
                
                  
                    	
                             
      

                          	
                            8.10.3.

                          	
                            A
      copy of every audited Financial Report for the Borrower by no later than
      fourteen (14) business days form the date determined in Law for its
      submission to the tax authorities and under all circumstances, no later
      than January 14 in the year following the year in which the report must be
      submitted.

                          

                  

                   

                  
                    
                      
                        
                          
                            	
                                     
      

                                  	
                                    8.10.4.

                                  	
                                    The
      Borrower’s confirmation of compliance with the Covenants, which are the
      subject of Section 8.1 above and compliance with the Covenants agreed with
      BLL, up to and no later than the end of the second calendar month after
      the end of each quarter.

                                  

                          

                           

                          
                            
                              
                                
                                  
                                    	
                                             
      

                                          	
                                            8.10.5.

                                          	
                                            Information
      pertaining to the Borrower’s, or Smile’s, or Ampal American’s obligations
      to BLL, in connection with the credit and/or the collateral provided to
      and/or which shall be provided by BLL to New Smile for the purposes of
      purchasing the Purchased Activities, including in reference to covenants,
      waivers, changes to covenants, agreement from BLL for the those changes
      and including any changes to the original conditions to the Loan with BLL
      – the Repayment Schedule, interest rates, changes to the collateral, etc.
      and all information pertaining to any event or misgivings inferring that
      the Borrower shall not meet the Borrower’s obligations to comply with the
      covenants with BLL.

                                          

                                  

                                   

                                  
                                    
                                      
                                      

                                    

                                    
                                      
                                      

                                      
                                        

                                      

                                    

                                    
                                      
                                      

                                    

                                  

                                  
                                    
                                    

                                    
                                      
                                        	
                                                 
      

                                              	
                                                8.10.6.

                                              	
                                                Information
      concerning every circumstance in which the Borrower shall not meet its
      commitments to comply with the covenants made with a third party and due
      to which that third party has asked for or warned that it intends to
      demand immediate repayment of the Borrower’s debt to that third party, on
      condition the size of the debt, to the extent that the matter pertains to
      New Smile, is more than NIS 20 million and to the extent that the matter
      pertains to Ampal American, is more than NIS 50
  million.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                8.10.7.

                                              	
                                                All
      information requested by the Lender concerning the Borrower’s and New
      Smile’s business interests, rights, obligations and when that information
      contains sufficient to constitute relevant information pertaining to the
      Borrower’s ability to meet its obligations in accordance with this
      Agreement.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                8.10.8.

                                              	
                                                Information
      concerning any event, which constitutes cause to demand the immediate
      repayment of the Loan, as stipulated in Section 9 below, with an almost
      certain likelihood.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                8.10.9.

                                              	
                                                The
      Borrower shall provide the Lender with a copy of assessment of the value
      of New Smile drawn up by an independent evaluator, which shall be
      delivered to BLL, to the extent that such shall be delivered, in
      accordance with the provisions to the BLL Agreement and such on the date
      on which it shall be delivered to
BLL.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                8.11.

                                              	
                                                In
      addition to that stated above, for as long as the balance of the loan has
      not been discharged for the Lender in accordance with this Agreement, the
      Borrower undertakes to maintain the following vis-à-vis the
      Lender:

                                              

                                      

                                       

                                      
                                        
                                          	
                                                   
      

                                                	8.11.1.	Ampal American shall not distribute dividends to its shareholders
      during the period up to the date for the first payment of the Loan
      Principal.

                                        

                                         

                                      

                                      
                                        	
                                                 
      

                                              	
                                                8.11.2.

                                              	
                                                A
      transaction between Ampal American and the interested parties in Ampal
      American to a sum greater than NIS 50 million shall require prior approval
      from the Lender. However, that clause shall not apply for as long as Ampal
      American is registered for trading on the NASDAQ, the Tel Aviv Stock
      Exchange (or both).

                                                 

                                                Interested Party – shall
      mean – an interested party in the Company as that term is defined in the
      Securities Law 5728 – 1968, not including a subsidiary company wholly
      owned by the Borrower.

                                                
                                                   

                                                  Transactions with Interested
      Parties, personal matter, transaction, relative, position holder, linked
      company and control – shall have the meanings those terms were
      given in the Companies Law 5759 –
1999.

                                                

                                              

                                      

                                       

                                      
                                        
                                          	
                                                   
      

                                                	
                                                  8.11.3.

                                                	
                                                        
                                                    The
      Ampal American Group, including all the companies within that Group and
      all parties linked to the Group (with the exception of New Smile and its
      owned corporations, to the extent that they are required for the purpose
      of New Smile activities and subject to the covenants to which New Smile
      has made commitments in this Agreement), have not taken and shall not take
      other credit from BLL, guaranteed by the collateral provided for the
      benefit of BLL and as stipulated in this Agreement. It is explicitly
      clarified that solely for the purposes of the relationship between the
      Lender and the Borrower, the provisions to this sub-section 8.11.3 take
      precedence over any contradictory provision, if there be any such, in the
      BLL agreements (Appendices 4.1.2a and 4.1.4a to this
      Agreement).

                                                  

                                                

                                        

                                         

                                      

                                      
                                      

                                      
                                        
                                          
                                          

                                        

                                        
                                          
                                          

                                          
                                            

                                          

                                        

                                        
                                          
                                          

                                        

                                      

                                       

                                      
                                        	
                                                9. Breach and Immediate
      Repayment

                                              

                                      

                                      

                                      The
Borrower hereby agrees that in each of the following circumstances and for as
long as they remain extant, the Lender shall be entitled to demand the immediate
repayment of the balance of un-discharged Loan, including those sums that have
not yet reached their repayment date, the interest on them as such has
accumulated by the date of repayment of the balance of the Loan to the Lender
and all other sums due to the Lender in accordance with this Agreement and the
Lender shall be able to realize the collateral provided to or which shall be
provided to the Lender in accordance with this Agreement, or any part thereof
and/or to appoint a receiver and/or a business manager and/or a liquidator
and/or a trustee for the Borrower and/or the Borrower’s assets, or any part
thereof and/or to conduct any other activity, either the Lender itself or
through those representing the Lender and the Borrower hereby undertakes to do
all that required in order to allow the Lender to realize the collateral,
immediately upon the Lender’s first demand:

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.1.

                                              	
                                                The
      Lender has breached one of the provisions to this Agreement and has not
      rectified that breach within a period of twenty (20) business days from
      the date on which the Borrower received written demand to rectify the
      breach.

                                                 

                                                It
      is hereby clarified that even a breach, which cannot be rectified or
      cannot be rectified within the aforementioned period, shall constitute a
      breach.

                                              

                                      

                                      
                                        

                                        
                                          	
                                                   
      

                                                	
                                                  9.2.

                                                	
                                                  Without
      derogation from the generality of that stated above, if the Safety Cushion
      Sum is less than the ratio determined in sub-section 4.1.3 above and the
      Company has not made up the missing sum in the Safety Cushion Sum within
      three business days.

                                                

                                        

                                         

                                        
                                          
                                            	
                                                     
      

                                                  	
                                                    9.3.

                                                  	
                                                    If
      it becomes apparent that a significant declaration made by the Borrower or
      New Smile in accordance with this Agreement is untrue or incomplete and
      the Borrower does not rectify that which must be rectified within twenty
      (20) business days.

                                                  

                                          

                                           

                                        

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.4.

                                              	
                                                If
      any debt owed by the Borrower, or New Smile or Ampal American is subject
      to a demand for immediate repayment, on condition that the size of the
      debt, to the extent that such shall refer to New Smile is more than NIS 20
      million and to the extent that such shall refer to the Borrower and Ampal
      American, more than NIS 50 million.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.5.

                                              	
                                                If
      he Borrower or New Smile shall be unable to pay their debts on time, or
      begin negotiations with their creditors, with the aim of reaching a debt
      rescheduling arrangement with their creditors or any other similar
      arrangement whatsoever, based on concerns that they might not be able to
      meet their commitments.

                                              

                                      

                                       

                                      
                                        
                                          
                                          

                                        

                                        
                                          
                                          

                                          
                                            

                                          

                                        

                                         

                                        
                                          
                                            	
                                                     
      

                                                  	
                                                          
                                                      9.6.

                                                    

                                                  	
                                                    If
      the Borrower or New Smile or Ampal American have begun taking steps or
      shall begin steps, or if processes instigated against them shall lead to
      the granting of a winding up order, a liquidation order, a process
      freezing order in accordance with the Section 350 to the Companies Law,
      the cessation of payments, protection from creditors, the appointment of a
      liquidator, a receiver, a managing receiver, special manager, or any
      similar position holder, in connection with the Borrower or New Smile or
      their assets, in whole or any significant part thereof; or if steps or
      other similar processes are instigated in connection with the Borrower or
      New Smile or their assets, in whole or any significant part thereof, or
      another, similar order is granted against them, be such processes or
      orders either temporary, for a given period or permanent and the
      aforementioned steps, processes or orders were not cancelled within a
      period of forty five (45) business days from the date on which they began,
      if they refer to processes or from their granting if such refers to Court
      orders.

                                                  

                                          

                                        

                                         

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.7.

                                              	
                                                If
      a significant lien, including a temporary significant lien is imposed upon
      assets belonging to the Borrower, New Smile or Ampal American, or if any
      Execution Order whatsoever is applied to their assets and the lien or
      Execution Order is not removed within forty five (45) business days from
      the date of their imposition.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.8.

                                              	
                                                If
      the Borrower or New Smile or Ampal American shall cease or notify that
      they intend to cease managing their
affairs.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.9.

                                              	
                                                If
      a claim is submitted and/or mediation, regulatory or other processes, or
      investigations in reference to or touching upon the Borrower or New Smile
      or Ampal American begin and according to the assessment of the risks
      associated with that process made by the Borrower or New Smile or Ampal
      American as appropriate, it is reasonable to assume that they will have a
      significant, negative effect on the ability of the Borrower or New Smile
      to fulfill their commitments in accordance with this
      Agreement.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.10.

                                              	
                                                If
      Mr. Yossi Maiman is no longer the controlling party, indirectly, in the
      Borrower and for the purposes of that matter, the term “controlling party”
      shall have the meaning given to it in the Securities
  Law.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.11.

                                              	
                                                If
      there shall be changes to the Borrower’s holdings in New Smile, compared
      with the situation extant on the date of this
  Agreement.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.12.

                                              	
                                                If
      credit extended to New Smile by BLL as stated above – is not be repaid
      within seven (7) days from the date set for its
  repayment.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.13.

                                              	
                                                If
      securities issued by Ampal American are not repaid within seven (7) days
      from the date set for their repayment or if there is almost certain doubt
      that they shall not be repaid on
time.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.14.

                                              	
                                                If
      the significant licenses required by New Smile for its activities are
      cancelled or suspended.

                                              

                                      

                                       

                                      
                                        
                                          
                                          

                                        

                                        
                                          
                                          

                                          
                                            

                                          

                                        

                                        
                                          
                                          

                                        

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.15.

                                              	
                                                If
      there is a sale of or change are made to New Smile’s or the Borrower’s
      principal assets or activities (including to the significant
      licenses).

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.16.

                                              	
                                                If
      the Borrower or New Smile takes a decision concerning structural change or
      a merger, or splitting or concerning an arrangement.

                                                 

                                                For
      the purposes of this matter, “Merger” shall mean a
      merger in accordance with the first Chapter to Part Eight or in accordance
      with the third Chapter to Part Nine in the Companies Law or any other act,
      the result from which shall be the purchase of most of or the majority of
      the Borrower’s or New Smile’s assets by another. “Splitting” shall mean as
      it is defined in Part 5(2) to the Income Tax Ordinance (New Version), or
      as it shall be defined in any lawful provision that comes in its place.
      “Arrangement”
      shall mean as it is defined in Sections 350 and 351 to the Companies Law
      5759 -1999), or as it shall be defined in any lawful provision that comes
      in its place.

                                              

                                      

                                       

                                      
                                        	
                                                 
      

                                              	
                                                9.17.

                                              	
                                                If
      a significant change for the worse occurs to the detriment of the
      Borrower’s or New Smile’s or Ampal American’s financial status or the
      status of their commercial activities and consequential to which, in the
      opinion of the Lender such shall have a detrimental effect on the
      Borrower’s ability to pay on time the full sum due to the Lender in lieu
      of the Loan, including the realization of the collateral and that
      situation has not been rectified within seven (7) days from the date on
      which the Lender informed the Borrower of such in writing. However, if in
      the Lender’s opinion, waiting for the period stipulated above will incur
      risk to the realization of the Lender’s rights, the waiting period shall
      be cancelled.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                9.18.

                                              	
                                                If
      the rating for Ampal American rated securities drops to (BB+) or lower in
      the local rating scale, or if ratings cease for the aforementioned
      securities, on condition that the Lender shall make use of the Lender’s
      rights within thirty (30) days from the date on which notice was given of
      a drop in rating.

                                              

                                      

                                      

                                      
                                        	
                                                10.
      The Manner in Which Collateral Shall be
Realized

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.1.

                                              	
                                                Subject
      to the making of a demand for immediate repayment by the Lender in
      accordance with the provisions to Section 9 above and subject to all Law;
      for as long as the collateral, in whole or in part thereof, shall be
      realizable, the Lender and/or any appointed by a Court (the Appointee) for the
      purposes of realizing the collateral and collecting the return in lieu of
      the collateral shall be entitled as they shall see fit and without any
      derogation from their authority, to instigate any process in accordance
      with the provisions in all Law and to instigate any other activity in
      reference to the collateral, as they shall see fit and all such in order
      to repay the un-discharged balance of the Loan to the Lender. To remove
      doubt: Nothing stated in this Section shall derogate from the Lender’s
      rights to be repaid directly from the Bank Account and the Safety Cushion,
      without a realization process.

                                              

                                      

                                       

                                      
                                        
                                          
                                          

                                        

                                        
                                          
                                          

                                          
                                            

                                          

                                        

                                        
                                          
                                          

                                        

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.2.

                                              	
                                                Subject
      to the provisions in all Law, the Lender and the Appointee appointed as
      aforementioned in sub-section 10.1 above, shall have full authority to
      compromise and to execute any compromise for the purposes of achieving the
      objectives stated above, in whole or in part thereof and they shall have
      the authority to undertake and execute any activities and to sign any
      documents that they shall see fit and all such after given written notice
      to the Borrower and such shall include inter
    alia:

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.2.1.

                                              	
                                                To
      receive the collateral into their possession, for the purposes of its
      realization and the repayment of the un-discharged balance of the Loan in
      accordance with sub-section 10.1
above.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.2.2.

                                              	
                                                To
      manage or participate in the management of the
  collateral.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.2.3.

                                              	
                                                To
      sell or to agree to the sale of the collateral or any part thereof and to
      transfer the collateral in any other manner under the conditions they
      shall see fit to impose.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.2.4.

                                              	
                                                To
      sign in the name of the Borrower, any request or document required for the
      purposes of the sale of collateral and such shall include the signing of
      requests for tax exemptions.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.3.

                                              	
                                                All
      costs incurred by the Lender in connection with the realization of
      collateral in accordance with the provisions to this Agreement shall be
      paid by the Borrower.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.4.

                                              	
                                                In
      addition to all payments to be borne by the Borrower in circumstances in
      which the Lender makes a demand for the immediate repayment of the Loan,
      the Borrower shall pay the Lender early payment fees as defined in Section
      11 below on the sum subject to immediate
  repayment.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.5.

                                              	
                                                After
      application of mortgage realization to the collateral in accordance with
      this Agreement, at any time when so required by the Lender or the
      Appointee appointed to realize the collateral, the Borrower shall execute
      all the reasonable activities required in order to facilitate the
      realization of the collateral.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                10.6.

                                              	
                                                The
      monies received from realization of collateral or collected shall be used
      first and foremost and/or money shall be set aside to pay the costs of the
      fees and costs expended, imposed or incurred due to or consequential to
      the realization activities performed in connection with collection of the
      Balance of the Loan (including salaries and expenses due to the
      Appointee).

                                                 

                                                The
      remaining sum shall be used to pay the sums due in accordance with the
      payment order stipulated in Section 7
above.

                                              

                                      

                                       

                                      
                                        	
                                                11. Early
      Repayment

                                              

                                      

                                      

                                      The
Borrower shall be entitled to repay the Loan through early repayment on any
interest payment date, sums on account for the Loan Principal to a total of NIS
10,000,000 or more, with additional interest and index differentials accumulated
on them by the date of the early repayment, after providing ten (10) days prior,
written notice to the Lender.

                                       

                                      
                                        
                                          
                                          

                                        

                                        
                                          
                                          

                                          
                                            

                                          

                                        

                                        
                                          
                                          

                                        

                                      

                                      

                                      If the
Borrower chooses to implement this entitlement, the Borrower shall pay the
Lender an early repayment fee, at the rate which is the difference between the
capitalization of the future flow on the sum designated for early repayment –
for the return on the Loan as such is defined in the Payments Appendix and that
sum capitalized as return on government securities for a similar duration on
condition that it is positive.

                                      

                                      The
Borrower shall have no entitlement to early repayment at the Borrower’s
initiative, unless two (2) years have passed since the extension of the
Loan.

                                      

                                      For the
purposes of this Section –

                                      

                                      “Return on government securities over
a similar duration” – shall mean – The average yield over the previous
five (5) business days previous to the date for the repayment of the series of
government securities issued by the Government of the State of Israel, indexed
to the CPI at a fixed rate of interest, with the duration closest to the
duration for the balance of the Loan (on the date for early
repayment).

                                      

                                      It is
hereby agreed that the early repayment fee shall also be paid in any instance of
immediate repayment of the loan in accordance with the provisions to Section 9
above.

                                      

                                      
                                        	
                                                12.
      Late Payment Interest

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                12.1.

                                              	
                                                In
      any instance in which the Borrower does not pay within fourteen (14)
      business days from the stipulated date, any sum whatsoever so required
      from the Borrower in accordance with this Agreement, late payment interest
      shall apply to that sum and such beginning on the stipulated date for
      payment of the unpaid sum until the date of its actual payment in full and
      such shall not derogate from any other relief granted to the Lender in
      accordance with the provisions to this Agreement or in all
      Law.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                12.2.

                                              	
                                                The
      Lender shall be entitled to charge the Borrower late payment interest
      without prior notification of such to the Borrower and at all times and
      without prior notification of such to the Borrower the Lender shall be
      entitled to add the late payment interest to the late payment, at any
      interest repayment date according to the Repayment Schedule and to apply
      to the late payment interest, all the conditions to this Agreement
      applicable to late payment.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                12.3.

                                              	
                                                The
      Lender shall determine the manner for the calculation and the recording
      for implementation of the provisions to this Section and the determination
      made by the Lender shall constitute prima facie evidence of
      the verity of the calculation.

                                              

                                      

                                       

                                      
                                        
                                          
                                          

                                        

                                        
                                          
                                          

                                          
                                            

                                          

                                        

                                        
                                          
                                          

                                        

                                      

                                      
                                        	
                                                13.
      Transfer of Rights and Obligations

                                              

                                      

                                       

                                      
                                        	
                                                 
      

                                              	
                                                13.1.

                                              	
                                                The
      Borrower hereby undertakes not to transfer and/or endorse and/or assign
      and/or mortgage the rights and obligations, in whole or in part thereof –
      in accordance with this Agreement – to any third party whatsoever, in any
      manner or fashion, without receipt of prior agreement to such from the
      Lender.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                13.2.

                                              	
                                                The
      Lender shall be entitled to assign all the Lender’s rights and obligations
      in accordance with this Agreement, or part thereof, to the following
      bodies, with receipt of the Borrower’s agreement: [a] Banks in Israel,
      including auxiliary corporations as such are defined in the Banking Law
      (Licensing) 5741 – 1981, to insuring corporations, as such are defined in
      the Control on Insurance Business Law 5741 – 1981; [b] Corporations, to
      which the Joint Investments in Trust Law 5754 – 1994 applies; corporations
      to which the Control on Financial Services (Provident Funds) 5765 –2005
      applies, when such manage funds to the sum of more than NIS 10
      billion.

                                              

                                      

                                      

                                      
                                        	
                                                14.
      Repayment of the Loan and Release of
Collateral

                                              

                                      

                                      

                                      In return
for the final and absolute repayment of the entire sum of Loan (including all
the other sums owed to the Lender by the Borrower at that time), the Lender
undertakes to provide the Borrower with the Lender’s written agreement to the
removal, release and cancellation of all the collateral pledged to the Lender’s
benefit in accordance with the provisions to this Agreement and the Appendices
thereto. It is clarified that only documents signed by the Lender shall
constitute sufficient proof to release the collateral.

                                      

                                      
                                        	
                                                15.
      Miscellaneous

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.1.

                                              	
                                                The
      Borrower shall have no right to set off or lien in reference to the sums
      due to the Lender from the Borrower in accordance with this Agreement
      under any circumstances whatsoever.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.2.

                                              	
                                                This
      Agreement constitutes the full Agreement between the parties in reference
      to the subject of this Agreement and it replaces any other previous
      agreement or arrangement or understanding between the parties referring to
      the subject of this Agreement.

                                              

                                      

                                       

                                      
                                        
                                           

                                        

                                        
                                           

                                          
                                            

                                          

                                        

                                        
                                           

                                        

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.3.

                                              	
                                                Any
      abstention by the Lender or the Borrower from exercising any right
      whatsoever granted to the Lender or the Borrower in accordance with this
      Agreement or in all Law, or any delay or postponement of the exercise of
      any such right as aforementioned, shall not be considered waiver of that
      right and any single or partial exercise of a right by the party entitled
      to that right shall not prevent further or other exercise of that right or
      the exercise of any other right whatsoever in that party’s good stead in
      accordance with this Agreement or in all Law. The remedies and reliefs in
      accordance with this Agreement are in addition to and do not derogate from
      any other remedy or relief granted by all Law. Any extension or mitigation
      granted, or waiver or compromise made by either the Lender or the Borrower
      in any circumstances whatsoever, shall not be interpreted as a precedent
      or waiver in a difference circumstance and shall not derogate from the
      rights accruing to the Lender or the Borrower as appropriate, in
      accordance with this Agreement or in accordance with all
    Law.

                                              

                                      

                                      
                                        
                                          
                                          

                                        

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.4.

                                              	
                                                The
      Lender’s books and accounts shall be considered trustworthy by the
      Borrower with all that implied thereby pertaining to the Loan, including
      the balance of the Loan Principal, the accompanying payments, the
      interest, the index differentials, the costs, recording of payments and
      all other matters pertaining to this Loan and at all times, they shall
      serve as prima
      facie proof of that recorded
therein.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.5.

                                              	
                                                The
      Lender shall be entitled to sue and/or to submit claims against the
      Borrower for party of the Loan and/or part of the sums, which the Borrower
      owes to the Lender, without such derogating from or derogating in the
      future, from the Lender’s right to submit further claims in reference to
      the balance of the sums. Any sum claimed by the Lender shall serve as
      cause for a separate, independent claim in any other part of the Loan or
      for any part of the Loan.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.6.

                                              	
                                                The
      Borrower undertakes to take any steps and conduct any activity; to appear
      before any body and/or authority and to sign any document for the purposes
      of the complete fulfillment of this
Agreement.

                                              

                                      

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.7.

                                              	
                                                If
      a Court or a qualified mediator determine in a final decision obliging the
      parties that a commitment made in the Agreement, in whole or in part
      thereof, has no validity or is not reasonable, then to the extent that it
      shall be possible – the scale of that commitment shall be reduced in
      accordance with the decision handed down by that Court or mediator and
      that commitment shall be enforceable in accordance with the aforementioned
      decision. Furthermore, such a determination as aforementioned, shall not
      derogate from the other parts of the Agreement, which shall remain valid
      and obliging with all that implied thereby, to the extent that such shall
      not be a significant change to the economic significance of the
      transaction, which is the subject of this
  Agreement.

                                              

                                      

                                      
                                        
                                          
                                          

                                        

                                      

                                      
                                        	
                                                 
      

                                              	
                                                15.8.

                                              	
                                                The
      Laws of the State of Israel shall apply to this Agreement and its
      interpretation and the sole legal jurisdiction competent to hear any
      matter in connection with this Agreement or arising from this Agreement is
      hereby granted to the competent Court in Tel Aviv –
  Jaffa.

                                              

                                      

                                       

                                      
                                        
                                          	
                                                   
      

                                                	
                                                  15.9.

                                                	
                                                  Any
      notice in accordance with this Agreement shall be given in writing and
      sent to the parties addresses as stated in the preamble to this Agreement
      and shall be considered notice delivered to the addressee, four (4)
      business days after the date on which that notice was handed in for
      sending by registered mail or the first business day after the sending of
      that notice by fax; for the purposes of that delivery as aforementioned,
      it shall suffice to prove that the notice was handed in for sending by
      registered mail, addressed in accordance with
  Law.

                                                

                                        

                                      

                                       

                                      The
Borrower undertakes to give written notice to the Lender of any changes that
occur, if such shall occur, to the Lender’s address or name or any other detail
that appears in this Agreement. Until such notice has been received, the address
that appears in the Lender’s books shall be considered the Borrower’s address
for all matters and the sending of an item of mail to that address shall be
considered as having reached its destination, even if returned because of a
change of address.

                                       

                                      
                                        
                                           

                                        

                                        
                                           

                                          
                                            

                                          

                                        

                                        
                                           

                                        

                                      

                                       

                                      Now
in witness thereof, the parties have signed below:

                                       

                                      
                                        	
                                                
                                                    By:
      /s/ Irit Eluz

                                                

                                                
                                                           /s/
      Yoram Firon

                                                  
                                                    
      

                                                  Merhav Ampal Energy Ltd. 

                                                   

                                                

                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	
                                                By:
      /s/ Irit Eluz

                                                
                                                  
                                                          /s/
      Yoram Firon

                                                      
      

                                                          
                                                      012
      Smile Telecom Ltd.

                                                  

                                                

                                                 

                                                 

                                                By:
      /s/ Yoni Tal 

                                                       /s/
      Haim Hoisman

                                                _________________________

                                              
	
                                                Harel
      Insurance Company Ltd

                                              	
                                                Menora
      Mivtachim Insurance Ltd.

                                              
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	
                                                By:
      /s/ Rami Armon

                                                       /s/
      Israel Ezra

                                                _________________________

                                              
	
                                                Manof
      Pension Fund Management Ltd.

                                              	
                                                Menora
      Mivtachim Pension Ltd

                                              
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	
                                                By:
      /s/ Yoni Tal 

                                                       /s/
      Rami Armon

                                                _________________________

                                              
	
                                                Savings
      Fund for the Regular Army –

                                                 Pension
      Fund Management Company Ltd.

                                              	
                                                Menora
      Mivtachim Gemel Ltd.

                                                 

                                              
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	 
      
	
                                                Dikla
      Insurance Company Ltd.

                                              	 
      
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	 
      
	
                                                Gilad
      Comprehensive Pension Fund Ltd.

                                              	 
      
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	 
      
	
                                                Harel
      Pension Funds Management Ltd

                                              	 
      
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	 
      
	
                                                Harel
      Gemel Ltd.

                                              	 
      
	
                                                 

                                                By:
      /s/ Itzhak Tawil

                                                       /s/
      Ofer Nargasi

                                                _________________________

                                              	 
      
	
                                                Atidit
      Pension Funds Ltd.

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