o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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CELLCOM ISRAEL LTD.
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(Exact name of Registrant as specified in its charter
and translation of Registrant’s name into English)
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ISRAEL
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(Jurisdiction of incorporation or organization)
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10 Hagavish Street, Netanya 42140, Israel
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(Address of principal executive offices)
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Liat Menahemi Stadler, 972-52-9989595 (phone), 972-98607986 (fax), LIATME@cellcom.co.il, 10 Hagavish Street, Netanya 42140, Israel
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Title of each class
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Name of each exchange on which registered
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Ordinary Shares, par value NIS 0.01 per share
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New York Stock Exchange (“NYSE”)
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Securities registered or to be registered pursuant to Section 12(g) of the Act.
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None
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(Title of Class)
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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
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None |
(Title of Class)
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Large accelerated filer [X]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Page
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PART I | ||
Item 1.
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5
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Item 2.
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5
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Item 3.
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5
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Item 4.
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32
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Item 4A
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94
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Item 5.
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94
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Item 6.
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119
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Item 7.
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139
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Item 8.
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143
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Item 9.
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146
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Item 10.
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149
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Item 11.
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163
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Item 12.
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164
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PART II
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||
Item 13.
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165
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Item 14.
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165
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Item 15.
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165
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Item 16A.
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166
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Item 16B.
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166
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Item 16C.
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167
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Item 16D.
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167
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Item 16E.
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167
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Item 16F.
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168
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Item 16G.
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168
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PART III
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||
Item 17.
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169
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Item 18.
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169
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Item 19.
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169
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Financial Statements
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F-1
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ITEM 3.
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A.
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SELECTED FINANCIAL DATA
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Year Ended December 31,
|
||||||||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
2011(1)
|
2011(1)
|
|||||||||||||||||||
(In NIS millions, except per share data)
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(In US$ millions)
|
|||||||||||||||||||||||
Income Statement Data:
|
||||||||||||||||||||||||
Revenues
|
6,050 | 6,417 | 6,483 | 6,662 | 6,506 | 1,703 | ||||||||||||||||||
Cost of revenues
|
3,315 | 3,396 | 3,333 | 3,322 | 3,408 | 892 | ||||||||||||||||||
Selling and marketing expenses
|
685 | 701 | 716 | 756 | 990 | 259 | ||||||||||||||||||
General and administrative expenses
|
653 | 659 | 660 | 641 | 685 | 179 | ||||||||||||||||||
Other (income) expenses, net
|
3 | (29 | ) | 6 | 5 | 1 | - | |||||||||||||||||
Operating income
|
1,394 | 1,690 | 1,768 | 1,938 | 1,422 | 373 | ||||||||||||||||||
Financing expense, net
|
(147 | ) | (310 | ) | (219 | ) | (230 | ) | (293 | ) | (77 | ) | ||||||||||||
Income tax
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328 | 391 | 367 | 417 | 304 | 80 | ||||||||||||||||||
Net income
|
919 | 989 | 1,182 | 1,291 | 825 | 216 | ||||||||||||||||||
Basic earnings per share
|
9.42 | 10.12 | 12.01 | 13.04 | 8.28 | 2.17 | ||||||||||||||||||
Diluted earnings per share
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9.34 | 9.96 | 11.90 | 12.98 | 8.28 | 2.17 | ||||||||||||||||||
Weighted average ordinary shares used in calculation of basic earnings per share
|
97,500,000 | 97,721,339 | 98,432,757 | 98,979,544 | 99,476,671 | |||||||||||||||||||
Weighted average ordinary shares used in calculation of diluted earnings per share
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98,441,260 | 99,279,924 | 99,306,714 | 99,480,791 | 99,511,433 | |||||||||||||||||||
Other Data:
|
||||||||||||||||||||||||
EBITDA(2)
|
2,187 | 2,482 | 2,529 | 2,667 | 2,167 | 567 | ||||||||||||||||||
Capital expenditures
|
651 | 633 | 663 | 735 | 520 | 136 | ||||||||||||||||||
Dividends declared per share
|
13.90 | 11.23 | 11.91 | 13.85 | 7.88 | 2.06 | ||||||||||||||||||
Net cash provided by operating activities
|
1,820 | 1,745 | 2,080 | 2,380 | 1,332 | 349 | ||||||||||||||||||
Net cash used in investing activities
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(560 | ) | (528 | ) | (774 | ) | (889 | ) | (1,656 | ) | (433 | ) | ||||||||||||
Net cash provided by (used in) financing activities
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(405 | ) | (1,853 | ) | (678 | ) | (1,861 | ) | 715 | 187 | ||||||||||||||
Cellular Subscribers (in thousands)(3)
|
3,073 | 3,187 | 3,292 | 3,394 | 3,349 | |||||||||||||||||||
Cellular Period churn rate(4)
|
16.3 | % | 18.9 | % | 19.6 | % | 20.5 | % | 25.1 | % | ||||||||||||||
Cellular ARPU (in NIS)(5)
|
150 | 149 | 144 | 144 | 106 | 27.7 | ||||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||||||
Cash
|
911 | 275 | 903 | 533 | 920 | 241 | ||||||||||||||||||
Working capital
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716 | 461 | 1,254 | 924 | 679 | 178 | ||||||||||||||||||
Total assets
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6,294 | 5,488 | 6,379 | 5,996 | 8,557 | 2,239 | ||||||||||||||||||
Total equity
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881 | 390 | 374 | 341 | 187 | 49 |
(1)
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The consolidated financial results for the year 2011 include the results of Netvision Ltd., or Netvision, our recently acquired wholly owned subsidiary, for the months September through December 2011. We consummated the acquisition of Netvision on August 31, 2011. For further details regarding the Netvision acquisition, see Item 4. A – “Significant Developments during 2011”. For further details regarding the effect of Netvision’s financial results on our consolidated financial results, see Item 5. A - “Operating and Financial Review and Prospects”.
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(2)
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EBITDA is a non-IFRS measure and is defined as income before financing income (expenses), net; other income (expenses), net; income tax; depreciation and amortization; share based payments. We present EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure (most particularly affecting our interest expense given our significant debt), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) the age of, and depreciation expenses associated with fixed assets. EBITDA should not be considered in isolation or as a substitute for operating income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of our profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this annual report, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.
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The following is a reconciliation of net income to EBITDA:
|
Year Ended December 31,
|
||||||||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
2011
|
2011
|
|||||||||||||||||||
(In NIS millions)
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(In US$ millions)
|
|||||||||||||||||||||||
Net income
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919 | 989 | 1,182 | 1,291 | 825 | 216 | ||||||||||||||||||
Financing expense (income), net
|
147 | 310 | 219 | 230 | 293 | 77 | ||||||||||||||||||
Other expenses (income), net
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3 | (29 | ) | 6 | 5 | 1 | - | |||||||||||||||||
Income taxes
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328 | 391 | 367 | 417 | 304 | 80 | ||||||||||||||||||
Depreciation and amortization
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790 | 821 | 755 | 724 | 738 | 193 | ||||||||||||||||||
Share based payments
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- | - | - | - | 6 | 1 | ||||||||||||||||||
EBITDA
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2,187 | 2,482 | 2,529 | 2,667 | 2,167 | 567 |
(3)
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Cellular subscriber data refers to active subscribers. We use a six-month method of calculating our cellular subscriber base, which means that we deduct subscribers from our subscriber base after six months of no revenue generation or activity on our network by or in relation to both the post-paid and pre-paid subscriber. The six-month method is, to the best of our knowledge, consistent with the methodology used by other cellular providers in Israel. During the fourth quarter of 2011, we have removed approximately 52,000 subscribers from our subscribers base, following the shutdown of our TDMA network as of December 31, 2011, since such subscribers have not requested a transfer to our other networks as of that date, and following a change to our previous policy which allowed subscribers to change from post to prepaid subscription as a result of the reduction of Early Termination Fees in the cellular market in early 2011, as we found this change to be futile since most of these subscribers ceased using our services. These changes affected other key performance indicators. We have not restated prior subscriber data to conform with these changes.
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(4)
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Churn rate is defined as the total number of voluntary and involuntary permanent deactivations of cellular subscribers in a given period expressed as a percentage of the number of cellular subscribers at the beginning of the period. Involuntary permanent deactivations relate to cellular subscribers who have failed to pay their arrears for the period of six consecutive months. Voluntary permanent deactivations relate to cellular subscribers who terminated their use of our cellular services.
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(5)
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Average monthly revenue per cellular subscriber (ARPU) is calculated by dividing revenues from cellular services for the period by the average number of cellular subscribers during the period and by dividing the result by the number of months in the period. Revenues from inbound roaming services are included even though the number of cellular subscribers in the equation does not include the users of those roaming services. Inbound roaming services are included because ARPU is meant to capture all service revenues generated by a cellular network, including roaming services. Revenues from sales of extended warranties are included because they represent recurring revenues generated by cellular subscribers, but revenues from sales of handsets, repair services and other services are not. We and industry analysts treat ARPU as a key performance indicator of a cellular operator because it is the closest meaningful measure of the contribution to service revenues made by an average subscriber.
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We have set out below the calculation of ARPU for each of the periods presented:
|
Year Ended December 31,
|
||||||||||||||||||||||||
2007
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2008
|
2009
|
2010
|
2011
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2011
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|||||||||||||||||||
(In NIS millions, except number of subscribers and months)
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(In US$ millions)
|
|||||||||||||||||||||||
Revenues
|
6,050 | 6,417 | 6,483 | 6,662 | 6,506 | 1,703 | ||||||||||||||||||
less revenues from equipment sales
|
635 | 745 | 751 | 802 | 1,747 | 457 | ||||||||||||||||||
less other revenues*
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93 | 135 | 162 | 124 | 484 | 127 | ||||||||||||||||||
Revenues used in cellular ARPU calculation
|
5,322 | 5,537 | 5,570 | 5,736 | 4,275 | 1,119 |
Average number of cellular subscribers
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2,955,855 | 3,105,022 | 3,215,492 | 3,322,891 | 3,361,803 | 3,361,803 | ||||||||||||||||||
Months during period
|
12 | 12 | 12 | 12 | 12 | 12 | ||||||||||||||||||
Cellular ARPU (in NIS, per month)
|
150 | 149 | 144 | 144 | 106 | 28 |
*
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Other revenues include revenues from repair services and other communication services such as ISP, transmission services and local and international landline services.
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Month
|
High (NIS)
|
Low (NIS)
|
||||||
September 2011
|
3.725 | 3.574 | ||||||
October 2011
|
3.763 | 3.602 | ||||||
November 2011
|
3.800 | 3.650 | ||||||
December 2011
|
3.821 | 3.727 | ||||||
January 2012
|
3.854 | 3.733 | ||||||
February 2012
|
3.803 | 3.700 |
Year
|
Average (NIS)
|
|||
2007
|
4.085 | |||
2008
|
3.568 | |||
2009
|
3.927 | |||
2010
|
3.732 | |||
2011
|
3.582 |
B.
|
CAPITALIZATION AND INDEBTEDNESS
|
C.
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REASONS FOR THE OFFER AND USE OF PROCEEDS
|
D.
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RISK FACTORS
|
·
|
reduce tariffs, including roaming tariffs, or otherwise intervene in the pricing policies for our products and services, including by: completely annulling early termination fees in cellular pricing plans which include a commitment to a predefined period, or Early Termination Fees, intervening in pricing of bundles of services, intervening in our ability to offer airtime rebates or refunds for end user equipment, or the scope thereof, requiring us to offer a “limited credit” service to our post-paid customers, by requiring us to offer “data only” services and intervening in pricing and terms of such services, or by prohibiting subscription fees for certain services. The reduction of interconnect tariffs that came into force in January 1, 2011, and the reduction of Early Termination Fees in cellular pricing plans to a negligible amount as of February 1, 2011, had a material adverse effect on our results of operations and are expected to continue to adversely affect our results of operations in the future. See “Item 4. Information on the Company – B. Business Overview – Government Regulations – Tariff Supervision” and “Item 4. Information on The Company – B. Business Overview – Netvision”. for additional details;
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·
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set unfavorable national roaming tariffs or Mobile Virtual Network Operator, or MVNO, hosting tariffs or tariffs that are lower than the tariffs that we would otherwise be willing to offer. According to the Telecommunication Law, the MOC is required to set the national roaming tariffs until February 1, 2012, however, to date, no such tariffs were set yet. See “Item 4. Information on the Company – B. Business Overview - Government Regulations - Additional UMTS Operators”;
|
·
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increase the number of competitors in the cellular market, including by awarding cellular licenses to additional MVNOs, and licenses for the use of our network by competing technologies, such as Voice over Broadband over Cellular, or VoC; awarding new competitors certain benefits and leniencies not available to existing cellular operators, including through requiring us to allow usage of our network by such competitors and on unfavorable terms to us; limit our ability to compete, including by limiting our ability to develop our network and by preferring new and/or small competitors in the allocation of frequencies, including those designated to the 4G of cellular services. See “Item 4. Information on the Company – B. Business Overview” under “Competition” and under “Government Regulations – Mobile Virtual Network Operator” and “- Additional UMTS Operators” for additional details;
|
·
|
impose new safety or health-related requirements;
|
·
|
impose additional restrictions or requirements with respect to the construction and operation of cell sites or the network, including as a result of MVNO hosting services, national roaming and site sharing;
|
·
|
impose restrictions on the provision of services or products we currently provide or regulate or otherwise intervene with the terms under which we advertise and market them and provide them to our subscribers, including in respect of existing agreements;
|
·
|
impose restrictions on the provision of cellular internet services, including by providing customers their choice of ISP;
|
·
|
limit or otherwise intervene with the services or products that we may sell;
|
·
|
set higher service standards; or
|
·
|
impose a stricter policy with respect to privacy protection, such as with regard to data protection, collection, amelioration or usage of data for marketing activities. An initial proposal of the Information and Technology Authority regarding cellular operators recently received, proposes imposing strict limitations on such collection and usage, including the requirement to receive a positive consent of the customer to do so (other than with regards to basic data); or
|
·
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impose structural or operational separation between our and Netvision’s operations (partial or full) or between the different services within each company - see “Item 4. Information on the Company – B. Business Overview - Government Regulations – Long Distance Services; or set unfavorable regulation regarding the wireline wholesale market - see “Item 4. Information on The Company – B. Business Overview – Competition”.
|
·
|
the launch of a UMTS network by Mirs and Golan Telecom Ltd., or Golan and additional MVNO operators commencing operations could increase competition and thus may have a material adverse effect on our revenues. Mirs and Golan were awarded UMTS licenses in April and December 2011, respectively, and were awarded certain leniencies in the deployment of their networks, including the usage of national roaming (both have signed national roaming agreements - Golan with us and Mirs with Pelephone). Mirs is expected to launch its UMTS network during the first half of 2012 and Golan during the second half of 2012. To date nine entities were granted MVNO licenses (of which five have entered into hosting agreements (including Rami Levy which, commenced operation in the market in December 2011) the others are expected to commence operations in 2012), and the Ministry of Communications may grant additional MVNO licenses. For additional details see “Item 4.
|
·
|
the sale of bundles of services by operators, including cellular services, as it is expected to entail further price erosion, more so if offered by either the Bezeq or Hot groups (the only operators owning full landline infrastructure in Israel and offering internet infrastructure services to ISP operators, as well as to end-users) or the offering of services by the Bezeq and Hot groups at tariffs significantly lower than prevailing market tariffs, such as by cross subsidizing with other services in which they have the capacity to monopolize the market; in 2011 three additional communications groups were formed in the Israeli communications market, in addition to the Bezeq group: Partner-012 Smile, Cellcom–Netvision and Hot-Mirs. This change together with the regulatory changes relaxing the structural separation imposed on each of the Bezeq and Hot groups (Bezeq being the incumbent landline operator and Hot the incumbent multichannel television provider, both monopolies in their incumbent market), will allow each of the groups to offer a bundle of services, in some cases quadruple and even quintuple service bundles, to existing customers in each of their previously separated platforms as well to new customers. Bundles offerings are expected to blur boundaries among services and lead to price erosion with each of the groups having an interest not to erode the prices of its core business, but rather that of its competitors. Although Pelephone and Bezeq do not currently offer a bundle that includes both cellular and wireline services, such a bundle was already approved for the Bezeq group in 2010 under certain conditions, in relation to private customers and is currently being considered by the Ministry of Communications for business customers as well. The offering of a bundle of services, including cellular services by another group, will relax the conditions under which Bezeq may provide a similar bundle. Further, a public committee appointed by the Ministry of Communications recommended in October 2011 to annul structural limitations currently imposed on Bezeq and its subsidiaries when a wireline wholesale market of landline services is available to the other operators and to replace Bezeq’s regulated fixed tariffs with maximum tariffs. If such recommendations are adopted by the Ministry of Communications, they will allow Bezeq and its subsidiaries, including Pelephone, to offer bundles of services (other than multichannel television services) without limitation. Although the Hot group is also under structural separation limitations between its broadcasting landline, ISP and cellular services, the Ministry of Communications is currently considering to annul the structural separation limitations between Mirs and Hot, after already lifting certain limitations in 2011, allowing Hot and Mirs to sell and market each other’s services and transfer information. The Hot group was previously allowed to offer a bundle of multi-channel television, landline and internet infrastructure services and include ISP services in a bundle of services, under certain conditions. Both Bezeq and Hot currently offer bundles of services excluding cellular services. Bundle offerings are expected to accelerate price erosion in each of the services included. In February 2012, Hot began offering ISP services and has done so at tariffs significantly lower than prevailing market prices and Bezeq also significantly lowered its internet infrastructure services
|
·
|
increased usage of competing technologies, applications and services, allowing usage of our network with or without an operator, such as VoC or voice over IP, or VoIP (including applications such as Viber, WhatsApp and free SMS among iPhone holders) or other technologies, such as WiFi, more so following the increased usage of smart phones, tablets and laptops. To date, VoC services are available under two trial licenses granted by the Ministry of Communications and using VoC based software on smart phones. The Ministry of Communications has published in December 2010, a hearing in relation to VoC license, under which cellular operators will be required to provide data only services, including at lower speed rates and price them by speed rate. Under an amendment to the Communication Law enacted in December 2010, any limitation or blocking of internet based services or applications is forbidden, including by differentiating pricing.
|
·
|
the expansion of the “Open Garden” content provision offerings, as it is transforming the cellular operator, previously the provider of content to its subscribers, into one of many content providers competing to provide content to the operator’s own subscribers; The Open Garden international trend is facilitated by technological changes allowing high speed internet surfing and supporting handsets and the entry of international media providers and handsets manufacturers into the cellular content provision market. Further, expansion of arrangements such as that introduced by Apple and Android, in which subscribers can purchase content only through their handset manufacturer’s store, has and is expected to continue to adversely affect our content revenues. See “Item 4. Information on the Company – B. Business Overview” under “Competition”.
|
·
|
Pursuant to an amendment to the Israeli Restrictive Trade Practices Law, 1988, if the Director General decides that the Israeli cellular market is oligopolistic, the Director General will have the authority to give instructions to all or some of the participants in our market, in order, among others, to maintain or increase the competition level among the participants, including the authority to issue orders to remove or to ease entry or transfer barriers, to cease a participant’s activity, or otherwise regulate the activities of the market.
|
·
|
our founding shareholder, Discount Investment Corporation Ltd., or DIC (or its transferee or transferees, if approved in advance by the Ministry of Communications as “founding shareholders”), must own at least 26% of each of our means of control;
|
·
|
Israeli citizens and residents among our founding shareholders (or their approved transferees) must own at least 20% of our outstanding share capital and each of our other means of control (DIC has agreed to comply with this requirement);
|
·
|
a majority of our directors must be Israeli citizens and residents;
|
·
|
at least 20% of our directors must be appointed by Israeli citizens and residents among our founding shareholders; and
|
·
|
we are required to have a committee of our Board of Directors that deals with matters relating to state security, which must be comprised of at least four directors (including an external director) having the requisite security clearance by Israel’s General Security Service.
|
·
|
increasing our vulnerability to adverse economic, industry or business conditions, including increases in the Israeli Consumer Prices Index, or CPI;
|
·
|
limiting our flexibility in planning for, or reacting to, changes in our industry and the economy in general;
|
·
|
requiring us to dedicate a substantial portion of our cash flow from operations to service our debt, thus reducing the funds available for operations and future business development; and
|
·
|
limiting our ability to obtain additional financing to operate, develop and expand our business or to refinance existing debt.
|
ITEM 4.
|
A.
|
HISTORY AND DEVELOPMENT OF THE COMPANY
|
B.
|
BUSINESS OVERVIEW
|
Year Ended December 31,
|
||||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
2011
|
||||||||||||||||
Cellular subscribers (end of period) (in thousands)(1)
|
3,073 | 3,187 | 3,292 | 3,394 | 3,349 | |||||||||||||||
Revenues (in NIS millions)
|
6,050 | 6,417 | 6,483 | 6,662 | 6,506 | |||||||||||||||
(1)
|
Subscriber data refers to active cellular subscribers. We use a six-month method of calculating our cellular subscriber base, which means that we deduct subscribers from our cellular subscriber base after six months of no revenue generation or activity on our network by or in relation to both the post-paid and pre-paid subscriber. The six-month method is, to the best of our knowledge, consistent with the methodology used by other cellular providers in Israel. During the fourth quarter of 2011, we have removed approximately 52,000 subscribers from our subscribers base, following the shutdown of our TDMA network as of December 31, 2011, since such subscribers have not requested a transfer to our other networks as of that date, and following a change to our previous policy which allowed subscribers to change from post to prepaid subscription as a result of the reduction of Early Termination Fees in the cellular market in early 2011, as we found this change to be futile since most of those customers ceased using our services. These changes affected other key performance indicators. We have not restated prior subscriber data to conform with these changes.
|
Population (millions, at end of year)
|
7.8
|
GDP ($ billions) (1)
|
239
|
GDP per capita ($ 000) (1)
|
31
|
Exports of goods & services ($ billions) (1)
|
88
|
CPI change
|
2.2%
|
Long-term local currency sovereign credit rating by S&P
|
A+(Stable)
|
Unemployment rate (average for nine months ending September 2011)
|
5.7%
|
(1)
|
2011 forecast, translated to USD based on the average representative rate of exchange for the year
|
December 31,
|
||||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
2011
|
||||||||||||||||
Total subscribers (millions)
|
9.0 | 9.2 | 9.5 | 9.8 | 10 | |||||||||||||||
Cellular penetration (%)
|
124 | % | 124 | % | 127 | % | 128 | % | 128 | % |
Source:
|
Reported by Cellcom, Partner and Pelephone. Mirs data as reported by Hot on July 25, 2011 in the valuation of Mirs performed by TASC , an Israeli consulting firm.
|
1986
|
Bezeq and Motorola create a joint venture called “Pelephone”, which becomes Israel’s first cellular operator. Pelephone launches N-AMPS services
|
1994
|
Cellcom awarded a license and launches TDMA services
|
1997
|
Cellcom introduces first pre-paid plan to the market
|
1998
|
Partner awarded a license and launches GSM services
|
1998
|
Pelephone launches CDMA services
|
2001
|
Ministry of Communications allocates additional 2G and 3G cellular frequencies for existing cellular operators and for the licensing of a new operator
|
2001
|
MIRS becomes Israel’s fourth cellular operator with iDEN services
|
2002
|
Cellcom launches GSM/GPRS services
|
2003
|
Cellcom launches EDGE services
|
2004
|
Partner launches UMTS services
Pelephone launches EVDO services
|
2006
|
Cellcom launches full scale UMTS/HSDPA services
|
2007
|
Partner launches HSDPA services
|
2008
|
Cellcom launches HSUPA services
|
2009
|
Pelephone launches UMTS/HSPA services
|
2010
|
Ministry of Communications provides MVNO licenses; Cellcom and Pelephone launch HSPA+ services
|
2011
|
Mirs and Golan awarded UMTS operator licenses
Rami Levy , MVNO operator, commences operations
Cellcom stops operating its TDMA network
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Combination of leading operators. The combination of our market leading position in the cellular market, as reflected by our market share, , coupled with Netvision’s leading position in the ISP market and significant market share in the ILD services, and the recent combination of these two leading companies, enables us to leverage synergies and create a rich portfolio of services which further strengthens our competitive abilities.
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Leading brands. Our established brands, Cellcom and Netvision, enjoy strong public recognition in Israel. We consider the enhancement of our image among consumers a top priority and continually invest substantial resources to maintain Cellcom and Netvision as leading brands in the Israeli communications market. Globes, a leading financial magazine in Israel, ranked Cellcom as the leading and strongest brand of Israel’s telecommunications market in 2011 and Israel’s 4th strongest brand in the Israeli market overall, after three prestigious global brands. We believe that the acquisition of Netvision will strengthen the Cellcom brand and the combination of the two leading brands will create an even stronger communications brand. Furthermore, Cellcom is not only considered a leading brand for consumers, it is also considered an attractive workplace. According to BDI, Cellcom is the 5th most desirable work place among graduating students in Israel. According to the same survey, Cellcom is number 6 most desirable workplaces in Israel. In addition to being a leading brand for both consumers and employees, Cellcom also leads the mobile communications market in terms of customer care. According to the two leading consumer organizations (Emun Hatzibur and the Israeli Consumers Council), Cellcom has the lowest rate of customer complaints while possessing the largest customer base in the market. According to an external survey conducted by Geocartography Group (a survey institute and one of the leading applied-research institutes in Israel (in November 2011, Netvision’s brand is also one of the leading brands in the Israeli telecommunications market. According to that survey, Netvision is the most recognized ISP provider, with the highest score both in terms of retention and unaided awareness and also has the highest rate of promoters among its customers.
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Large market share across our core lines of business. We hold a large market share in each of our core lines of business – cellular, ISP and ILD services, providing us with economies of scale in a business characterized by significant fixed costs. In addition, partial customer overlap between our core businesses provides us with ample cross-selling opportunities.
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Transmission infrastructure. We have an advanced fiber-optic transmission infrastructure that consists of approximately 1,600 kilometers of inland fiber-optic cable, which, together with our complementary microwave-based infrastructure, connects the majority of our cell sites and provides for substantially all of our backhaul services. Our transmission infrastructure significantly reduces our operational reliance on Bezeq, the incumbent landline operator in Israel, and saves us substantial infrastructure-leasing cash costs. As our transmission network has
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Strategic relationship with one of Israel’s largest business groups. Our ultimate parent company, IDB, is one of the largest business groups in Israel. We enjoy access through our management services agreement to the senior management of the IDB group, who are some of the most experienced managers in Israel. These managers, including veterans of the Israeli telecommunications market, provide us with financial, managerial and strategic guidance.
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Strong management team. Our management team includes seasoned managers with significant experience and solid track records in previous managerial positions. Our Chairman, Mr. Ami Erel, is a veteran of the Israeli communications market and previously served as the Chief Executive Officer of Bezeq. Our Chief Executive Officer, Mr. Nir Sztern, has extensive experience in wireline and cellular services, having previously been Chief Executive Officer of Netvision and Deputy Chief Executive Officer of Pelephone. Mr. Heen, our Chief Financial Officer, previously held a variety of positions within our finance division, including head of our economic department, responsible for our budget, financial analysis, cost accounting and control over our performance. We believe that under the leadership of Messrs. Erel, Sztern and Heen, we are well positioned to execute our business strategy and maintain our leading position in the rapidly changing Israeli telecommunications market.
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Cash flow generation. Our cellular business is characterized by high cash flow generation though substantially lower following the regulatory changes regarding the compulsory reduction of interconnect tarrifs and Early Termination fees to a negligible amount. This allows us to invest in our business and deploy advanced network technology, enabling us to offer advanced services and applications, as well as distribute dividends to our shareholders. Further, Netvision also contributes to our financial results of operations and to our free cash flow. This contribution is significant in light of the adverse effects of several regulatory changes on our results of operations.
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Formation of a leading Israeli telecommunications group - Following the acquisition of Netvision, we commenced the integration of Netvision’s business with our existing business, in order to create a leading, strong and efficient Israeli telecommunications group. This includes the merger of our and Netvision’s headquarters and our and Netvision’s business customers operations to create a one stop shop for the group’s
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Offering our customers comprehensive mobile and wireline solutions. Following the acquisition of Netvision, we are now able to offer our customers a wide range of mobile and wireline telecommunications services, while maximizing the synergies between the two entities, both in terms of revenue generation and cost efficiencies. This includes identifying the potential synergies between the two businesses, such as integrating the operations of the business customers of both businesses. In addition, we intend to leverage our leading position and large market share in those businesses for cross-sales and the offering of new services which are found to be synergetic to those businesses, in order to increase our overall revenues and market share.
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Maximize customer satisfaction, retention and growth. Our growth strategy is focused on retaining our subscribers, expanding the selection of services and products we offer to our subscribers, and tailoring offers to our customers’ needs in order to enhance customer satisfaction and increase average revenues per user. We strive to be proactive at every service interaction with our customers, to offer service and service terms which are as clear, simple and methodical as possible, and to continually improve and enhance the flexibility of our customer service. In addition to providing quality customer service, we also strive to retain our subscribers and attract new subscribers by offering them comprehensive service packages and advanced handsets and services.
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Growing and developing of our Mobile Data and Value Added Services. We view Mobile Data as a significant growth engine for our business. Accordingly, during 2010 and 2011, we continued to build our Carrier Ethernet network in order to enable the provision of data services at high speeds and capacity. We intend to continue to invest in the improvement and upgrade of our high speed UMTS/HSPA+ network, to enhance its capacity and increase its speed, as well as enhance our readiness towards a 4G technology, in order to permit higher-quality and higher-speed multimedia content transmission. In 2012 we also plan to continue our efforts in expanding data services usage and revenues, focusing on increasing sales of data-enabled devices such as tablets and smartphones while enhancing the focus on data sales and marketing at our points of sales.
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Growing in wireline services. We intend to continue to expand our landline business with both private and business customers. For private customers, we provide ISP, VOB services (via Bezeq’s and Hot’s infrastructure) as well as ILD services. The possible
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Further develop and strengthen the Cellcom brand. External market surveys that we have commissioned indicate that brand recognition is an important factor in subscriber selection of, and loyalty to, a cellular operator and more so in the increasingly intensifying competitive market and given the additional competitors joining the market. We plan to continually enhance our brand through maintaining our high network quality, the provision of innovative products and services, quality customer service and investments in advertising and promotional campaigns. We believe these enhancements are key to maintaining our competitive advantage, differentiating our services from those of our competitors and establishing and maintaining a successful relationship with our subscribers.
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Offer new services that will complete our offering as a telecommunications group and provide us with growth engines that are synergetic to our core businesses. We are constantly looking for new, innovative ways to deliver new services to our customers. We continue to develop new complementary businesses which leverage our varied capacities and are synergetic to our core business. We have identified television services over the internet (known as Over the Top TV, or OTT TV) as a potential source of growth which is both synergetic and complementary to our core business. We are exploring the possibility of developing the OTT TV market as an attractive alternative to the traditional cable and satellite television services currently offered in Israel by Hot and Bezeq.
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Optimization of cost structure. We continue our efforts to control costs and improve our efficiency while improving the quality of our services. One area which we plan to focus on is to utilize the synergies created by the acquisition of Netvision, including the merger of our and Netvision’s headquarters and our and Netvision’s business customers operations and the transfer of Netvision’s employees to our headquarters’ facilities in Netanya, aimed at optimizing the associated costs and improving the service to our business customers by providing them a ‘one stop shop’ service. In addition, having already built our own fiber-optic and microwave infrastructure, we continue to reduce our operating costs, as our network maintenance costs and microwave spectrum fees are lower than the lease costs to rent backhaul capacity from Bezeq.
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Our principal cellular service is basic cellular telephony. In addition we offer many other services with enhancements and additional features to our basic cellular telephony service. These services include voice mail, cellular fax, call waiting, call forwarding, caller identification, conference calling, “Talk 2” (two handsets sharing the same number, thus allowing our subscribers to own both a handset and a car phone), additional number service (enabling our subscribers to add a second phone number to their handset) and collect call service.
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We also offer both an outbound roaming service to our subscribers when traveling outside of Israel and an inbound roaming service to visitors to Israel who can “roam” into our network. Roaming allows cellular subscribers, while using their own cell phone number (and handset, in most cases) and being billed by their provider, to place and receive calls and text messages while in the coverage area of a network to which they do not subscribe. Where available, subscribers can also benefit from other cellular services such as advanced data and content services. As of December 31, 2011, we had commercial roaming relationships with 545 operators in 179 countries based on the standard agreements of the GSM organization (an umbrella organization in which all the cellular operators operating with GSM technology are members). This enables our subscribers to enjoy our services in almost the entire world. Most of our GSM subscribers who use these roaming services abroad can use their own handset and others can borrow or rent, depending upon the period of time, a suitable handset from us. In addition, as of December 31, 2011, we had 3G roaming arrangements with 260 of these operators, enabling our 3G roamers to participate in video calls and use high-speed data, video and audio content services in 106 countries.
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In addition to basic cellular telephony services, we offer many value-added services. Value-added services are important to our business as they enable us to differentiate ourselves from our competitors, strengthen our brand and increase subscriber usage, ARPU and subscriber satisfaction. We offer those services that we believe are likely to be popular with subscribers and benefit our business. Some of the value-added services that we offer are available only to subscribers who have supporting handset models and some are offered only to business subscribers. The principal advanced value-added services that we currently offer are:
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the entry into the market of additional competitors and specifically the entry of additional MVNOs and UMTS operators, more so if hosting services to MVNOs and national roaming services for UMTS operators will be at unfavorable terms for us. Mirs is expected to commence its UMTS operations (using national roaming on Pelephone's network) in the first half of 2012 and Golan is expected to commence operating (using national roaming on our network) in the second half of 2012. An additional three MVNO operators are also expected to commence operations in the first half of 2012;
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the sale of bundles of communications services, including cellular services, as it is expected to entail further price erosion, more so if offered by either the Bezeq or Hot groups; the formation of three additional communications groups in the Israeli communications market in 2011, together with the regulatory changes relaxing the structural separation imposed on each of the Bezeq and Hot groups, will allow each of the groups to offer a bundle of services, in some cases quadruple and even quintuple service bundles to existing customers in each of their previously separated platforms, as well as to new customers. Bundles offerings are expected to blur boundaries among services and lead to price erosion, with each of the groups having an interest not to erode the prices of its core business, but rather of the core services of its competitors. Both Bezeq and Hot currently offer bundles of services, excluding cellular services. Bundle offerings by Hot and Bezeq, including cellular services, are expected to accelerate price erosion in the cellular market. See “Item 3. Key Information – D. Risk Factors – Risks related to our Business – We face intense competition in all aspects of our business” and "Item 4. Information on The Company - Business Overview - The Telecommunications Industry in Israel – Communications Groups – Structural Seperation" for additional details;
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increased usage of competing technologies, applications and services, allowing usage of our network, such as VoC or VoIP and applications such as Viber, WhatsApp and free SMS among iPhone holders, or other services, such WiFi, more so following the increased usage of smart phones; and
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acquiring Netvision to create a competitive communication group; we believe that our acquisition of Netvision in 2011 strengthens our competitive position vis-à-vis other communications groups in the Israeli market, as it allows us to offer our customers a comprehensive mobile and wireline solutions.
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marketing and branding campaigns aimed at enhancing market leadership, perceived value, perception of the fairness and value of our pricing, brand recognition and loyalty among our existing and potential subscriber base;
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investing significant resources in improving customer service and retention, as well as supporting information technology systems;
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introducing innovative value-added services and identifying popular niches among various subscriber groups;
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taking efficiency measures in order to reduce costs and improve our agility;
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investing in improving our network technology to ensure our ability to offer quality services and advanced services, both cellular and wireline services;
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using innovative sales campaigns for attracting new subscribers by offering loyalty rebates;
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offering attractive pricing plans to subscribers, adapted to their needs and preferences and innovative pricing models, including cross sale and up sale of our and Netvision's services; and
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identifying new opportunities to maximize our advantages as an operator, in order to expand our share in the "Open Garden" market place and the recent launch of certain financial services.
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The license may be modified, cancelled, conditioned or restricted by the Ministry of Communications in certain instances, including: if required to ensure the level of services we provide; if a breach of a material term of the license occurs; if DIC (or a transferee or transferees, if approved by the Ministry of Communications), in its capacity as our founding shareholder, holds, directly or indirectly, less than 26% of our means of control; if our founding shareholders who are Israeli citizens and residents hold, directly or indirectly, less than 20% of our means of control (DIC, as founding shareholder, has undertaken to comply with this condition); if at least 20% of our directors are not appointed by Israeli citizens and residents from among our founding shareholders or if less than a majority of our directors are Israeli citizens and residents; if any of our managers or directors is convicted of a crime of moral turpitude and continues to serve; if we commit an act or omission that adversely affects or limits competition in the cellular communications market; or if we and our 10% or greater shareholders fail to maintain combined shareholders’ equity of at least $200 million. For the purpose of the license, “means of control” is defined as voting rights, the right to appoint a director or general manager, the right to participate in distributions, or the right to participate in distributions upon liquidation;
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It is prohibited to acquire (alone or together with relatives or with other parties who collaborate on a regular basis) or transfer our shares, directly or indirectly (including by way of creating a pledge which if foreclosed, will result in the transfer of shares), in one transaction or a series of transactions, if such acquisition or transfer will result in a holding or transfer of 10% or more of any of our means of control, or to transfer any of our means of control if as a result of such transfer, control over our company will be transferred from one party to another, without the prior approval of the Ministry of Communications. For the purpose of the license, “control” is defined as the direct or indirect ability to direct our operations whether this ability arises from our articles of association, from written or oral agreement or from holding any means of control or otherwise, other than from holding the position of director or officer;
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It is prohibited for any of our office holders or anyone holding more than 5% of our means of control, to hold, directly or indirectly, more than 5% of the means of control in Bezeq or another cellular operator in Israel, or, for any of the foregoing to serve as an office holder of one of our competitors, subject to certain exceptions requiring the prior approval of the Ministry of Communications;
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We, our office holders or interested parties may not be parties to any arrangement whatsoever with Bezeq or another cellular operator that is intended or is likely to restrict or harm competition in the field of cellular services, cellular handsets or other cellular services. For the purpose of the
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We are subject to the guidelines of Israel’s General Security Services, which may include requirements that certain office holders and holders of certain other positions be Israeli citizens and residents with security clearance. For example, our Board of Directors is required to appoint a committee to deal with matters concerning state security. Only directors who have the requisite security clearance by Israel’s General Security Services may be members of this committee. In addition, the Minister of Communications is entitled under our license to appoint a state employee with security clearance to act as an observer in all meetings of our Board of Directors and its committees;
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Prior to operating a network, we are required to have agreements with a manufacturer of cellular network equipment for the duration of its intended operating period, which must include, among other things, a know-how agreement and an agreement guaranteeing the supply of spare parts for our network equipment for a period of at least seven years; –
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We are required to interconnect our network to other public telecommunications networks in Israel, on equal terms and without discrimination, in order to enable subscribers of all operators to communicate with one another; we are also required to provide national roaming services to new UMTS operators;
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We may not give preference in providing infrastructure services to a license holder that is an affiliated company over other license holders, whether in payment for services, conditions or availability of services or in any other manner, other than in specific circumstances and subject to the approval of the Ministry of Communications;
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The license sets forth the general types of payments that we may collect from our subscribers, the general mechanisms for setting tariffs, providing cellular services related benefits, limitations on raising tariffs (for non-business subscribers under obligation to purchase our services for a predefined period, during such period), and on the duration of a non-business subscriber's obligation to purchase our services, the reports that we must submit to the Ministry of Communications and the obligation to provide notice to our customers and the Ministry of Communications prior to changing tariffs. The Ministry of Communications is authorized to intervene in setting tariffs in certain instances;
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The license requires us to maintain a minimum standard of customer service, including, among other things, establishing call centers and service centers, maintaining a certain service level of our network, collecting payments pursuant to a certain procedure, protecting the privacy of subscribers; using a specific format for our agreement with our customers; obtaining an explicit request from our subscribers to purchase services, whether by us or by third parties, as a precondition to providing and charging for such services, including specific requirements as to format and a default blockage of the customer's ability to purchase certain services; maintaining a specific form of
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The license or any part thereof may not be transferred, pledged or encumbered without the prior approval of the Ministry of Communications. The license also sets forth restrictions on the sale, lease or pledge of any assets used for implementing the license;
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We are required to obtain insurance coverage for our cellular activities. See “Item 8 – Financial Information - Legal Proceedings” for details of a purported class action filed against us in that regard in March 2010. In addition, the license imposes statutory liability for any loss or damage caused to a third party as a result of establishing, sustaining, maintaining or operating our cellular network. We have further undertaken to indemnify the State of Israel for any monetary obligation imposed on the State of Israel in the event of such loss or damage. For the purpose of guaranteeing our obligations under the license, we have deposited a bank guarantee in the amount of $10 million with the Ministry of Communications, which may be forfeited in the event that we violate the terms of our license.
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the maximum interconnect tariff payable by a landline operator or a cellular operator for the completion of a call on another cellular network was reduced from the previous tariff of NIS 0.251 per minute to NIS 0.0687 per minute from January 1, 2011; to 0.0634 per minute from January 1, 2012; to NIS 0.0591 per minute from January 1, 2013; and to NIS 0.0555 from January 1, 2014;
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the maximum interconnect tariff payable by a cellular operator for sending an SMS message to another cellular network was reduced from the previous tariff of NIS 0.0285 to NIS 0.0016 from January 1, 2011; to NIS 0.0015 from January 1, 2012; to NIS 0.0014 from January 1, 2013; and to NIS 0.0013 from January 1, 2014;
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the tariffs do not include VAT and will be updated annually from January 1, 2011, based on the change in the Israeli CPI published in November of the year preceding the update date from the average annual Israeli CPI for 2009. The tariffs will also be increased by the percentage of royalties payable to the Ministry of Communications by the operator.
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building permits from the local planning and building committee or the local licensing authority (if no exemption is available);
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approvals for construction and operation from the Commissioner of Environmental Radiation of the Ministry of Environmental Protection;
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permits from the Civil Aviation Authority (in most cases);
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permits from the Israel Defense Forces (in certain cases); and
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other specific permits necessary where applicable, such as for cell sites on water towers or agricultural land.
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Provision of international calling services, or ILD services;
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Provision of landline telephony services, including teleconferencing services; and
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Sales of telephony equipment (including switchboards, telephones and communication switches), and operation and management of voice communication systems and data communications systems, including maintenance and support of telecommunication systems.
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The license holder is required to interconnect its network to other public telecommunications networks in Israel, on equal terms and without discrimination, in order to enable subscribers of all operators to communicate with one another;
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The license holder may not take any action or be party to any arrangement which might adversely affect competition in the market;
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The license holder is required to, among other things, maintain a minimum standard of customer service, including, among other things, establishing call centers and service centers, maintaining a certain service level of its network, tariffs setting and updating and protecting the privacy of subscribers;
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The licenses or any part thereof may not be transferred, pledged or encumbered without the prior approval of the Ministry of Communications. The licenses also set forth restrictions on the sale, lease or pledge of any assets used for implementing the licenses;
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Pursuant to theses licenses and the Israeli Communications Regulations (Royalties), 2001, the license holders are required to pay the State of Israel royalties equal to 1% of their eligible revenues;
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The license holders are required to obtain insurance coverage for their activities pursuant to theses licenses. In addition, the licenses impose statutory liability for any loss or damage caused to a third party as a result of establishing, sustaining, maintaining or operating the license holder's network. The license holders have further undertaken to indemnify the State of Israel for any monetary obligation imposed on the State of Israel in the event of such loss or damage. For the purpose of guaranteeing our obligations under theses license, Netvision deposited bank guarantees for this liability under the ILD and landline licenses in the amounts of $9
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The transfer or pledge of means of control in the license holder is prohibited without the prior written consent of the Ministry of Communications, if, as a result of such transfer, a person becomes a 5% holder or more in the license holder.
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Year Ended December 31,
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Change*
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2009
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2010
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2011
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2010 vs. 2009
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2011 vs. 2010
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Subscribers at end of period(1) (in thousands)
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3,292 | 3,394 | 3,349 | 3.1 | % | (1.3 | %) | |||||||||||||
Period churn rate(1)(2)
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19.6 | % | 20.5 | % | 25.1 | % |
0.9pp
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4.6pp
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Average monthly usage per subscriber (MOU) (in minutes)(1)(3)
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331 | 335 | 346 | 1.2 | % | 3.3 | % | |||||||||||||
Average monthly revenue per subscriber (ARPU) (1)(4) (in NIS)
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144 | 144 | 106 | - | (26.3 | %) | ||||||||||||||
Operating income (in NIS millions)
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1,768 | 1,938 | 1,422 | 9.6 | % | (26.6 | %) | |||||||||||||
Net income (in NIS millions)
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1,182 | 1,291 | 825 | 9.2 | % | (36.1 | %) | |||||||||||||
EBITDA(5) (in NIS millions)
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2,529 | 2,667 | 2,167 | 5.5 | % | (18.7 | %) | |||||||||||||
Operating income margin(6)
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27.3 | % | 29.1 | % | 21.9 | % |
1.8pp
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(7.2)pp
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EBITDA margin(7)
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39.0 | % | 40.0 | % | 33.3 | % |
1.0pp
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(6.7)pp
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*
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pp denotes percentage points and this measure of change is calculated by subtracting the 2009 measure from the 2010 measure and the 2010 measure from the 2011 measure, respectively.
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(1)
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Cellular subscriber data refers to active subscribers. We use a six-month method of calculating our cellular subscriber base, which means that we deduct subscribers from our subscriber base after six months of no revenue generation or activity on our network by or in relation to both the post-paid and pre-paid subscriber. The six-month method is, to the best of our knowledge, consistent with the methodology used by other cellular providers in Israel. During the fourth quarter of 2011, we have removed approximately 52,000 subscribers from our subscribers base, following the shutdown of our TDMA network as of December 31, 2011, since such subscribers have not requested a transfer to our other networks as of that date, and following a change to our previous policy which allowed subscribers to change from post to prepaid subscription as a result of the reduction of Early Termination Fees in the cellular market in early 2011, as we found this change to be futile since most of those customers ceased using our services. These changes affected other key performance indicators. We have not restated prior subscriber data to conform with these changes.
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(2)
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Churn rate is defined as the total number of voluntary and involuntary permanent deactivations of cellular subscribers in a given period expressed as a percentage of the number of cellular subscribers at the beginning of such period. Involuntary permanent deactivations
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(3)
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Average monthly minutes of use per cellular subscriber (MOU) is calculated by dividing the total billable minutes (of outgoing and incoming cellular calls from other networks, excluding roaming usage) during the month, by the average number of cellular subscribers during such month, and by dividing the sum of such results for all months in the reported period by the number of months in the period.
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(4)
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Average monthly revenue per cellular subscriber (ARPU) is calculated by dividing revenues from cellular services for the period by the average number of cellular subscribers during the period and by dividing the result by the number of months in the period. Revenues from inbound roaming services are included even though the number of subscribers in the equation does not include the users of those roaming services. Inbound roaming services are included because ARPU is meant to capture all service revenues generated by a cellular network, including roaming services. Revenues from sales of extended warranties are included because they represent recurring revenues generated by subscribers, but revenues from sales of handsets, repair services, and other services are not. We, and industry analysts, treat ARPU as a key performance indicator of a cellular operator because it is the closest meaningful measure of the contribution to service revenues made by an average subscriber.
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We have set out below the calculation of ARPU for each of the periods presented:
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Year Ended December 31,
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2009
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2010
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2011
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(In NIS millions, except number of subscribers and months)
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Revenues
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6,483 | 6,662 | 6,506 | |||||||||
less revenues from equipment sales
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751 | 802 | 1,747 | |||||||||
less other revenues*
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162 | 124 | 484 | |||||||||
Revenues used in ARPU calculation (in NIS millions)
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5,570 | 5,736 | 4,275 | |||||||||
Average number of subscribers
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3,215,492 | 3,322,891 | 3,361,803 | |||||||||
Months during period
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12 | 12 | 12 | |||||||||
ARPU (in NIS, per month)
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144 | 144 | 106 |
*
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Other revenues include revenues from other communication services such as ISP, transmission services and local and international landline services and repair services.
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(5)
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EBITDA is a non-IFRS measure and is defined as income before financing income (expenses), net; other income (expenses), net; income tax; depreciation and amortization; share based payments. We present EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure (most particularly affecting our interest expense given our significant debt), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with fixed assets. EBITDA should not be considered in isolation or as a substitute for operating income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of our profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this annual report, may not be comparable to similarly titled measures reported by other companies due to differences in the way these measures are calculated.
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Year Ended December 31,
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2009
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2010
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2011
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(In NIS millions)
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Net income
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1,182 | 1,291 | 825 | ||||||||||
Financing expenses, net
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219 | 230 | 293 | ||||||||||
Income taxes
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367 | 417 | 304 | ||||||||||
Operating income
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1,768 | 1,938 | 1,422 | ||||||||||
Other expenses (income), net
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6 | 5 | 1 | ||||||||||
Depreciation and amortization
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755 | 724 | 738 | ||||||||||
Share based payments
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- | - | 6 | ||||||||||
EBITDA
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2,529 | 2,667 | 2,167 |
(6)
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Operating income margin is defined as operating income as a percentage of total revenues for each of the applicable periods.
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(7)
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EBITDA margin is defined as EBITDA as a percentage of total revenues for each of the applicable periods.
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Year Ended December 31,
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2009
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2010
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2011
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Revenues
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100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of revenues
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51.4 | % | 49.9 | % | 52.4 | % | ||||||
Gross profit
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48.6 | % | 50.1 | % | 47.6 | % | ||||||
Selling and marketing expenses
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11.0 | % | 11.3 | % | 15.2 | % | ||||||
General and administrative expenses
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10.2 | % | 9.6 | % | 10.5 | % | ||||||
Other (income) expenses, net
|
0.1 | % | 0.1 | % | - | |||||||
Operating income
|
27.3 | % | 29.1 | % | 21.9 | % | ||||||
Financing expenses, net
|
3.4 | % | 3.5 | % | 4.5 | % | ||||||
Income before income tax
|
23.9 | % | 25.6 | % | 17.4 | % | ||||||
Income tax
|
5.7 | % | 6.2 | % | 4.7 | % | ||||||
Net income
|
18.2 | % | 19.4 | % | 12.7 | % |
Year Ended December 31,
|
Change
|
|||||||||||||||||||
2009
|
2010
|
2011
|
2010 vs. 2009
|
2011 vs. 2010
|
||||||||||||||||
(In NIS millions)
|
||||||||||||||||||||
Revenues
|
6,483 | 6,662 | 6,506 | 2.8 | % | (2.3 | %) |
* 2009
|
* 2010
|
2011
|
||||||||||||||||||||||
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
|||||||||||||||||||
(NIS in millions)
|
(NIS in millions)
|
(NIS in millions)
|
||||||||||||||||||||||
Cellular voice services:
|
||||||||||||||||||||||||
Outgoing air time**
|
2,953 | 45.5 | % | 2,760 | 41.4 | % | 2,167 | 33.3 | % | |||||||||||||||
Incoming air time
|
1,178 | 18.2 | % | 1,272 | 19.1 | % | 398 | 6.1 | % | |||||||||||||||
Roaming
|
340 | 5.3 | % | 358 | 5.4 | % | 314 | 4.8 | % | |||||||||||||||
Total cellular voice services
|
4,471 | 69.0 | % | 4,391 | 65.9 | % | 2,879 | 44.2 | % | |||||||||||||||
Cellular content and value added services***
|
882 | 13.6 | % | 1,112 | 16.7 | % | 1,167 | 17.9 | % | |||||||||||||||
Internet services (ISP)
|
- | - | - | - | 216 | 3.3 | % | |||||||||||||||||
International long distance services
|
- | - | - | - | 96 | 1.5 | % | |||||||||||||||||
Other services****
|
379 | 5.8 | % | 357 | 5.4 | % | 401 | 6.2 | % | |||||||||||||||
Total services
|
5,732 | 88.4 | % | 5,860 | 88.0 | % | 4,759 | 73.1 | % | |||||||||||||||
Equipment
|
751 | 11.6 | % | 802 | 12.0 | % | 1,747 | 26.9 | % | |||||||||||||||
Total
|
6,483 | 100.0 | % | 6,662 | 100.0 | % | 6,506 | 100.0 | % |
*
|
Reclassified (mainly reclassification of fixed monthly subscription fees from other services to outgoing air time)
|
**
|
Including air time packages, interconnect fees and fixed monthly subscription fees.
|
***
|
Consists of content services, text messages and data services.
|
****
|
Consists of extended warranty fees, transmission services, landline services and others.
|
2009
|
2010
|
2011
|
||||||||||||||||||||||
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
|||||||||||||||||||
(NIS in millions)
|
(NIS in millions)
|
(NIS in millions)
|
||||||||||||||||||||||
Individual
|
4,775 | 73.7 | % | 4,917 | 73.8 | % | 4,727 | 72.7 | % | |||||||||||||||
Business
|
1,622 | 25.0 | % | 1,649 | 24.8 | % | 1,686 | 25.9 | % | |||||||||||||||
Other*
|
86 | 1.3 | % | 96 | 1.4 | % | 93 | 1.4 | % | |||||||||||||||
Total
|
6,483 | 100.0 | % | 6,662 | 100.0 | % | 6,506 | 100.0 | % |
*
|
Consists of revenues from inbound roaming services and other services.
|
2009
|
2010
|
2011
|
||||||||||||||||||||||
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
Revenues
|
% of Total Revenues
|
|||||||||||||||||||
(NIS in millions)
|
(NIS in millions)
|
(NIS in millions)
|
||||||||||||||||||||||
Pre-paid
|
657 | 10.1 | % | 675 | 10.1 | % | 488 | 7.5 | % | |||||||||||||||
Post-paid
|
5,741 | 88.6 | % | 5,891 | 88.5 | % | 5,925 | 91.1 | % | |||||||||||||||
Other*
|
86 | 1.3 | % | 96 | 1.4 | % | 93 | 1.4 | % | |||||||||||||||
Total
|
6,483 | 100.0 | % | 6,662 | 100.0 | % | 6,506 | 100.0 | % |
|
* Consists of revenues from inbound roaming services and other services.
|
Year Ended December 31,
|
Change
|
|||||||||||||||||||
2009
|
2010
|
2011
|
2010 vs. 2009
|
2011 vs. 2010
|
||||||||||||||||
(In NIS millions)
|
||||||||||||||||||||
Cost of revenues-services
|
2,643 | 2,671 | 2,126 | 1.1 | % | (20.4 | %) | |||||||||||||
Cost of revenues-equipment
|
690 | 651 | 1,282 | (5.7 | %) | 96.9 | % | |||||||||||||
Total cost of revenues
|
3,333 | 3,322 | 3,408 | (0.3 | %) | 2.6 | % | |||||||||||||
Gross profit
|
3,150 | 3,340 | 3,098 | 6.0 | % | (7.2 | %) |
Year Ended December 31,
|
Change
|
|||||||||||||||||||
2009
|
2010
|
2011
|
2010 vs. 2009
|
2011 vs. 2010
|
||||||||||||||||
(In NIS millions)
|
||||||||||||||||||||
Selling and marketing expenses
|
716 | 756 | 990 | 5.6 | % | 31.0 | % | |||||||||||||
General and administrative expenses
|
660 | 641 | 685 | (2.9 | %) | 6.9 | % | |||||||||||||
Total
|
1,376 | 1,397 | 1,675 | 1.5 | % | 19.9 | % |
Year Ended December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
(In NIS millions)
|
||||||||||||
Other expenses, net
|
6 | 5 | 1 |
Year Ended December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
(In NIS millions)
|
||||||||||||
Financing expenses
|
(370 | ) | (336 | ) | (409 | ) | ||||||
Financing income
|
151 | 106 | 116 | |||||||||
Financing expenses, net
|
(219 | ) | (230 | ) | (293 | ) | ||||||
Year Ended December 31,
|
Change
|
|||||||||||||||||||
2009
|
2010
|
2011
|
2010 vs. 2009
|
2011 vs. 2010
|
||||||||||||||||
(In NIS millions)
|
||||||||||||||||||||
Income tax
|
367 | 417 | 304 | 13.6 | % | (27.1 | %) | |||||||||||||
Year Ended December 31,
|
Change
|
|||||||||||||||||||
2009
|
2010
|
2011
|
2010 vs. 2009
|
2011 vs. 2010
|
||||||||||||||||
(In NIS millions)
|
||||||||||||||||||||
Net income
|
1,182 | 1,291 | 825 | 9.2 | % | (36.1 | %) | |||||||||||||
·
|
negative pledge, subject to certain exceptions;
|
·
|
a covenant not to distribute more than 95% of the profits available for distribution according to the Israeli Companies law (“Profits”); provided that if our net leverage (defined as the ratio of net debt to EBITDA during a period of 12 consecutive months, excluding onetime influences) exceeds 3.5:1, we will not distribute more than 80% of our Profits and if our net leverage exceeds 4.0:1, we will not distribute more than 70% of our Profits;
|
·
|
limitation of our ability to voluntarily redeem the debentures prior to their stated maturity date to a minimum amount of NIS 100 million of each series of debentures
|
·
|
a covenant to have the debentures rated by a rating agency (in as much as under our control);
|
·
|
an obligation to pay additional interest of 0.25% for any two-notch or more downgrade in the debentures' rating and up to a maximum addition of 1%, in comparison to the rating given to the debentures prior to their issuance or in case the debentures cease to be rated for a period of over sixty days;
|
·
|
a covenant not to issue additional debentures of the relevant series if the additional issuance by itself, will cause a certain rating downgrade.
|
·
|
cross default, excluding following an immediate repayment initiated in relation to a liability of NIS 150 million or less;
|
·
|
failure of our main business to be cellular communications or loss of our cellular license for a period of over 60 days;
|
·
|
suspension of trading of the debentures on the TASE over a period of 45 days;
|
·
|
failure to comply with the above covenant regarding limitations on dividend distributions;
|
·
|
failure to have the debentures rated over a period of 60 days;
|
·
|
a petition or court order to withhold all legal proceedings against us or petition for creditors arrangement filed;
|
·
|
the sale of a major part of our assets or merger (with certain exclusions);
|
·
|
failure to publish financial reports when due;
|
·
|
a net leverage in excess of 5.0:1, or in excess of 4.5:1 during four consecutive quarters;
|
·
|
failure to comply with our negative pledge covenant; and
|
·
|
any other event causing or expected to cause a material adverse effect (which shall not include any event that shall or is likely to cause our net leverage to increase to a ratio of under 5.0:1) on our business and posing real threat of a substantial damage to the debenture holders’ rights.
|
Total
|
2012
|
2013- 2015 | 2016-2017 |
2018 and Beyond
|
||||||||||||||||
Long-term debt obligations (including interest)(1)
|
7,281 | 1,002 | 3,968 | 2,311 | - | |||||||||||||||
Operating lease obligations
|
1,448 | 301 | 611 | 259 | 277 | |||||||||||||||
Purchase obligations
|
413 | 337 | 63 | 13 | - | |||||||||||||||
Total
|
9,142 | 1,640 | 4,642 | 2,583 | 277 |
|
(1)
|
Interest does not include any increase in interest that would be required based on increases in the Israeli CPI.
|
|
·
|
cash flows attributed to the asset group;
|
|
·
|
future cash flows for the asset group, including estimates of residual values, which incorporate our views of growth rates for the related business and anticipated future economic conditions; and
|
|
·
|
period of time over which the assets will be held and used.
|
1.
|
IAS 24 (2009) Related Party Disclosures (hereinafter - “the Standard”)
|
2.
|
Amendment to IFRS 7 Financial Instruments: Disclosures – Clarification of disclosures (hereinafter – “the Amendment”)
|
Name
|
Age
|
Position
|
Ami Erel (2), (3)
|
64
|
Chairman of the Board
|
Nochi Dankner (3)
|
57
|
Director
|
Shay Livnat (2), (3)
|
53
|
Director
|
Raanan Cohen (2), (4)
|
44
|
Director
|
Rafi Bisker (4)
|
60
|
Director
|
Shlomo Waxe (1), (2), (4)
|
66
|
Independent Director
|
Haim Gavrieli
|
41
|
Director
|
Ari Bronshtein (2)
|
42
|
Director
|
Tal Raz
|
50
|
Director
|
Edith Lusky (2)
|
61
|
Director
|
Assaf Topaz (2)
|
41
|
Director(a)
|
Ephraim Kunda (1), (2)
|
59
|
Independent Director
|
Joseph Barnea (1), (2), (3), (4)
|
76
|
Independent / External Director
|
Ronit Baytel (1)
|
44
|
Independent / External Director
|
Amos Shapira
|
62
|
President and Chief Executive Officer(b)
|
Yaacov Heen
|
42
|
Chief Financial Officer
|
Yoni Sabag
|
39
|
Vice President of Marketing
|
Eliezer (Lipa) Ogman
|
58
|
Chief Technology Officer
|
Isaiah Rozenberg
|
51
|
Vice President of Engineering and network operation
|
Itamar Bartov
|
49
|
Vice President of Executive and Regulatory Affairs
|
Yoav Kirmayer
|
40
|
Vice President of Business Customers (c)
|
Meir Barav
|
54
|
Vice President of Sales and Service (d)
|
Sharon Amit
|
45
|
Vice President of Human Resources(e)
|
Amos Maor
|
48
|
Vice President of Operations and Supply Chain (d)
|
Ran Harpaz
|
38
|
Vice President of Information Technology (f)
|
Liat Menahemi-Stadler
|
45
|
General Legal Counsel and Corporate Secretary
|
Teimurz Romashvily
|
33
|
Vice President of Pre Paid Activity (g)
|
Liat Straus
|
33
|
Netvision Vice President of Sales and Service (h)
|
Gil Ben-Itzhak
|
46
|
Controller
|
(a)
|
Mr. Assaf Topaz was appointed to office as of August 28, 2011.
|
(b)
|
Mr. Amos Shapira resigned from office as of December 31, 2011 and Mr. Nir Sztern was nominated as our CEO as of January 1, 2012.
|
(c)
|
Yoav Kirmayer resigned from office as of February 29, 2012 and was replaced by Keren Shtevy as of March 1, 2012.
|
(d)
|
Mr. Meir Barav resigned from office as of January 31, 2012 and replaced by Mr. Amos Maor as of February 1, 2012.
|
(e)
|
Ms. Sharon Amit was appointed to office as of November 1, 2011.
|
(f)
|
Mr. Ran Harpaz was appointed to office as of December 1, 2011.
|
(g)
|
Mr. Teimurz Romashvily was appointed to office as of October 23, 2011.
|
(h)
|
Ms. Liat Straus serves as Vice President of sales and Service of Netvision.
|
(1)
|
Member of our Audit Committee.
|
(2)
|
Member of our Analysis Committee.
|
(3)
|
Member of our Option Committee.
|
(4)
|
Member of our Security Committee. Mr Topaz joined our Analysis Committee at January 22, 2012.
|
|
·
|
an employment relationship;
|
|
·
|
a business or professional relationship maintained on a regular basis;
|
|
·
|
control; and
|
|
·
|
service as an office holder, excluding service as a director in a private company prior to its initial public offering if such director was appointed in order to serve as an external director following the offering.
|
|
·
|
at least a majority of the shares of non-controlling shareholders voted at the meeting vote in favor of the election of the external director; or
|
|
·
|
the total number of shares of non-controlling shareholders voted against the election of the external director does not exceed 2% of the aggregate voting rights in the company.
|
|
·
|
information on the appropriateness of a given action brought for his or her approval or performed by virtue of his or her position; and
|
|
·
|
all other important information pertaining to these actions.
|
|
·
|
refrain from any conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;
|
|
·
|
refrain from any activity that is competitive with the company;
|
|
·
|
refrain from exploiting any business opportunity of the company to receive a personal gain for himself or herself or others; and
|
|
·
|
disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.
|
|
·
|
other than in the ordinary course of business;
|
|
·
|
that is not on market terms; or
|
|
·
|
that is likely to have a material impact on the company’s profitability, assets or liabilities.
|
|
·
|
at least majority of the shareholders who have no personal interest in approving the transaction and who vote on the matter vote in favor of the transaction; or
|
|
·
|
the shareholders who have no personal interest in the transaction who vote against the transaction do not represent more than 2% of the voting rights in the company.
|
|
·
|
an amendment to the articles of association;
|
|
·
|
an increase in the company’s authorized share capital;
|
|
·
|
a merger; and
|
|
·
|
approval of related party transactions that require shareholders approval.
|
|
·
|
the securities issued amount to 20% or more of the company’s outstanding voting rights before the issuance;
|
|
·
|
some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and
|
|
·
|
the transaction will increase the relative holdings of a shareholder that holds 5% or more of the company’s outstanding share capital or voting rights or that will cause any person to become, as a result of the issuance, a holder of more than 5% of the company’s outstanding share capital or voting rights.
|
Number of Full-Time Equivalent Positions
|
||||||||||||
Unit
|
December 2009 **
|
December 2010 **
|
December 2011 **
|
|||||||||
Management and headquarters
|
34 | 37 | 68 | |||||||||
Human resources
|
54 | 52 | 72 | |||||||||
Marketing
|
80 | 83 | 107 | |||||||||
Customers*
|
3,452 | 3,779 | 5,518 | |||||||||
Finance
|
133 | 134 | 176 | |||||||||
Technologies
|
679 | 596 | 851 | |||||||||
Netvision subsidiaries***
|
- | - | 462 | |||||||||
Total
|
4,432 | 4,681 | 7,254 |
Shares Beneficially Owned
|
||||||||
Name of Beneficial Owner
|
Number
|
Percent
|
||||||
Discount Investment Corporation Ltd.*
|
46,793,635 | 47.04 | % | |||||
Directors and executive officers as a group (29 persons)**
|
47,005,465 | 47.25 | % |
*
|
DIC, a public Israeli company traded on the Tel Aviv Stock Exchange, is a majority-owned subsidiary of IDB Development Corporation Ltd., or IDB Development. Includes 31,192,780 ordinary shares held by DIC directly, 12,188,355 ordinary shares held by a wholly-owned subsidiary of DIC (namely, DIC Communication and Technology Ltd., an Israeli company) and 3,412,500 ordinary shares, representing approximately 3.43% of our issued and outstanding shares, held by two shareholders whose voting rights are vested in DIC. Does not include 59,347 ordinary shares (representing approximately 0.06% of our issued and outstanding shares) held as of December 31, 2011 by indirect subsidiaries of IDB Development for their own account and 584,226 ordinary shares (representing approximately 0.59% of our issued and outstanding shares) held as of that date for members of the public through, among others, provident funds, mutual funds, pension funds, exchange traded funds, insurance policies and unaffiliated third-party client accounts, which are managed by such subsidiaries.
|
|
IDB is controlled as follows:
|
|
·
|
Ganden Holdings Ltd., or Ganden, a private Israeli company controlled by Nochi Dankner (who is also the Chairman of the boards of directors of IDB, IDB Development and DIC and one of our directors) and his sister Shelly Bergman, held as of December 31, 2011, directly and through a wholly-owned subsidiary, approximately 54.78% of the outstanding shares of IDB;
|
|
·
|
Shelly Bergman, through a wholly-owned company, held as of December 31, 2011 approximately 4.17% of the outstanding shares of IDB;
|
|
·
|
Avraham Livnat Ltd., or Livnat, a private Israeli company controlled by Avraham Livnat (one of whose sons, Zvi Livnat, is a director and Executive Vice President of IDB, a director and Deputy Chairman of the board of directors of IDB Development and a director
|
|
·
|
Manor Holdings BA Ltd., or Manor, a private Israeli company controlled by Ruth Manor (whose son in law Assaf Topaz, is one of our directors and her son Dori Manor is a director of IDB, IDB Development and DIC), held as of December 31, 2011, directly and through a majority-owned subsidiary, approximately 13.32% of the outstanding shares of IDB.
|
**
|
Includes the 46,793,635 ordinary shares held, directly or indirectly, by DIC and 59,347 ordinary shares held by indirect subsidiaries of IDB Development, for their own account, which may be deemed to be beneficially owned by Nochi Dankner by virtue of his control of IDB. Does not include an aggregate of 584,226 of our ordinary shares held, as of December 31, 2011, by members of the public through, among others, provident funds, mutual funds, pension funds, exchange traded funds, insurance policies and unaffiliated third-party client accounts, which are managed by indirect subsidiaries of IDB Development. Each of our directors who is affiliated with IDB or DIC disclaims beneficial ownership of such shares. Also includes43,189 ordinary shares issuable upon the exercise of stock options that are exercisable on, or within 60 days following December 31, 2011, and 54,647 ordinary shares held by each of Messrs. Ami Erel and Amos Shapira as of December 31,2011.
|
ITEM 8.
|
ITEM 9.
|
High
|
Low
|
|||||||
NIS
|
NIS
|
|||||||
Annually
|
||||||||
2007
|
84.3 | 60.0 | ||||||
2008
|
82.0 | 55.4 | ||||||
2009
|
98.2 | 56.6 | ||||||
2010
|
109.4 | 81.0 | ||||||
2011
|
105.9 | 59.5 | ||||||
Quarterly
|
||||||||
2010
|
||||||||
First Quarter
|
107.7 | 92.8 | ||||||
Second Quarter
|
103.7 | 81.3 | ||||||
Third Quarter
|
95.6 | 81.0 | ||||||
Fourth Quarter
|
109.4 | 96.1 | ||||||
2011
|
||||||||
First Quarter
|
105.9 | 97.3 | ||||||
Second Quarter
|
104.2 | 86.9 | ||||||
Third Quarter
|
90.5 | 70.0 | ||||||
Fourth Quarter
|
79.4 | 59.5 | ||||||
Monthly
|
||||||||
2011
|
||||||||
September
|
75.4 | 70.0 | ||||||
October
|
79.4 | 69.9 | ||||||
November
|
77.9 | 61.2 | ||||||
December
|
63.4 | 59.5 | ||||||
2012
|
||||||||
January
|
||||||||
February
|
||||||||
High
$
|
Low
$
|
|||||||
Annually
|
||||||||
2007
|
20.8 | 10.2 | ||||||
2008
|
24.2 | 14.4 | ||||||
2009
|
26.0 | 14.1 | ||||||
2010
|
30.1 | 20.8 | ||||||
2011
|
30.1 | 15.7 | ||||||
Quarterly
|
||||||||
2010
|
||||||||
First Quarter
|
28.2 | 25.2 | ||||||
Second Quarter
|
28.0 | 20.9 | ||||||
Third Quarter
|
26.1 | 20.8 | ||||||
Fourth Quarter
|
30.1 | 26.3 | ||||||
2011
|
||||||||
First Quarter
|
29.8 | 26.8 | ||||||
Second Quarter
|
30.1 | 25.4 | ||||||
Third Quarter
|
26.5 | 18.9 | ||||||
Fourth Quarter
|
22.1 | 15.7 | ||||||
Monthly
|
||||||||
2011
|
||||||||
September
|
20.9 | 18.9 | ||||||
October
|
22.1 | 18.6 | ||||||
November
|
21.1 | 16.1 | ||||||
December
|
16.6 | 15.7 | ||||||
2012
|
||||||||
January
|
33.6 | 30.5 | ||||||
February
|
32.3 | 30.4 |
ITEM 10.
|
|
·
|
a breach of his or her duty of care to us or to another person;
|
|
·
|
a breach of his or her duty of loyalty to us, provided that the office holder acted in good faith and had reasonable grounds to assume that his or her act would not prejudice our interests;
|
|
·
|
a financial liability imposed upon him or her in favor of another person concerning an act performed in the capacity as an office holder.
|
|
·
|
reasonable litigation expenses, including attorney fees, incurred by the office holder as a result of an administrative enforcement proceeding instituted against him, including a payment imposed on the office holder in favor of an injured party as set forth in the Israeli Securities Law and expenses that the office holder incurred in connection with a relevant proceeding under the Securities Law, including reasonable legal expenses, which term includes attorney fees.
|
|
·
|
a financial liability imposed on or incurred by an office holder in favor of another person by any judgment, including a settlement or an arbitrator’s award approved by a court concerning an act performed in his or her capacity
|
|
·
|
reasonable litigation expenses, including attorney’s fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding was concluded without the filing of an indictment against him or her and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent; or in connection with an administrative enforcement proceeding or a financial sanction, including a payment imposed on the office holder in favor of an injured party as set forth in the Israeli Securities Law, 1968, as amended (the "Securities Law"), and expenses that the office holder incurred in connection with a relevant proceeding under the Securities Law, including reasonable legal expenses, which term includes attorney fees; and
|
|
·
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or charged to him or her by a court, in proceedings instituted by us or on our behalf or by another person, or in a criminal indictment from which he or she was acquitted, or a criminal indictment in which he or she was convicted for a criminal offense that does not require proof of intent, in each case relating to an act performed in his or her capacity as an office holder.
|
|
·
|
a breach by the office holder of his or her duty of loyalty unless, with respect to insurance coverage or indemnification, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
|
|
·
|
a breach by the office holder of his or her duty of care if the breach was done intentionally or recklessly;
|
|
·
|
any act or omission done with the intent to derive an illegal personal benefit; or
|
|
·
|
any fine or penalty levied against the office holder.
|
|
·
|
a citizen or resident of the United States;
|
|
·
|
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; or
|
|
·
|
an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
|
As of December 31,
|
||||||||||||||||||||||||
2009
|
2010
|
2011
|
||||||||||||||||||||||
Par Value
|
Fair Value
|
Par Value
|
Fair Value
|
Par Value
|
Fair Value
|
|||||||||||||||||||
(In NIS millions)
|
||||||||||||||||||||||||
Forward contracts on exchange rate
(mainly US$– NIS)
|
586 | (10 | ) | 439 | (14 | ) | 497 | 24 | ||||||||||||||||
Forward contracts on Israeli CPI rate
|
1,700 | 51 | 1,325 | 12 | 1,825 | (22 | ) | |||||||||||||||||
Options on the exchange rate
(mainly US$– NIS)
|
868 | 2 | 500 | 2 | 377 | 1 | ||||||||||||||||||
Compounded foreign currency and interest swap
|
240 | (5 | ) | - | - | - | - | |||||||||||||||||
Total
|
3,394 | 38 | 2,264 | - | 2,699 | 3 |
|
·
|
an increase of 0.1% of the Israeli CPI would result in an increase of approximately NIS 4.2 million in our financing expenses;
|
|
·
|
a devaluation of the NIS against the U.S. dollar of 1.0% would increase our financing expenses by approximately NIS 1.9 million.
|
ITEM 15.
|
·
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the company’s assets that could have a material effect on the financial statements.
|
ITEM 16A.
|
ITEM 16B.
|
ITEM 16C.
|
2010
|
2011
|
|||||||
(NIS in thousands)
|
||||||||
Audit Fees
|
1,860 | 2,671 | ||||||
Audit-Related Fees
|
- | 180 | ||||||
Tax Fees
|
106 | 120 | ||||||
Total
|
1,966 | 2,971 |
Exhibit
Number
|
Description
|
||
1.1
|
Updated Articles of Association and Memorandum of Association *
|
||
2.1
|
Form of Ordinary Share Certificate†
|
||
4.1
|
Series A Indenture dated December 21, 2005 and an addendum dated February 27, 2006 between Cellcom and Aurora Fidelity Trust Ltd. †
|
||
4.1.1
|
Series A Debentures Trustee Replacement Agreement dated June 11, 2009. †††
|
||
4.2
|
Series B Indenture dated December 21, 2005 and an addendum dated February 27, 2006 between Cellcom and Hermetic Trust (1975) Ltd. †
|
||
4.3
|
Series C Indenture dated September 20, 2007, between Cellcom and Aurora Fidelity Trust Ltd. ††
|
||
4.3.1
|
Series C Debentures Trustee Replacement Agreement dated June 11, 2009. †††
|
Exhibit
Number
|
Description
|
4.4
|
Series D Indenture dated September 20, 2007, between Cellcom and Hermetic Trust (1975) Ltd. ††
|
||
4.5
|
Series E Indenture dated March 31, 2009, between Cellcom and Hermetic Trust (1975) Ltd. †††
|
||
4.6
|
Shelf Prospectus Indenture dated July 14, 2011, between Cellcom and Hermetic Trust (1975) Ltd. *
|
||
4.6.1
|
Shelf Prospectus Indenture dated March 7, 2012, between Cellcom and Strauss Lazar Trust Company (1992) Ltd.*
|
||
4.6.2.
|
Amendment and Addendum no. 1 to the Indenture from March 7, 2012, dated March 7, 2012, between Cellcom and Strauss Lazar Trust Company (1992) Ltd.*
|
||
4.7
|
Amended 2006 Share Incentive Plan*
|
||
4.8
|
Registration Rights Agreement dated March 15, 2006 among Cellcom, Goldman Sachs International, DIC, DIC Communication and Technology Ltd. and PEC Israel Economic Corporation†
|
||
4.9
|
Amended Non-Exclusive General License for the Provision of Mobile Radio Telephone Services in the Cellular Method dated June 27, 1994*
|
||
4.10
|
Netvision Ltd. Merger Agreement*
|
||
8.1
|
Subsidiaries of the Registrant*
|
||
12.1
|
Certification of Principal Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act *
|
||
12.2
|
Certification of Principal Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act *
|
||
13.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act *
|
||
15
|
Consent of Independent Registered Public Accounting Firm *
|
*
|
Filed herewith.
|
†
|
Incorporated by reference to our registration statement on Form F-1 (registration no. 333-140030) filed with the SEC on January 17, 2007.
|
††
|
Incorporated by reference to our annual report on Form 20-F for the year 2007 filed with the SEC on March 18, 2008.
|
†††
|
Incorporated by reference to our annual report on Form 20-F for the year 2009 filed with the SEC on March 2, 2010.
|
Cellcom Israel Ltd.
|
||
By:
|
/s/ Nir Sztern
|
|
Name:
|
Nir Sztern
|
|
Title:
|
President and Chief Executive Officer |
Contents
|
|
Page
|
|
F2-F3
|
|
Consolidated Financial Statements
|
|
F4
|
|
F5
|
|
F6
|
|
F7
|
|
F8-F9
|
|
F10-F72
|
December 31, 2010 | December 31, 2011 | Convenience translation into US dollar (Note 2D) December 31, 2011 | |||||||||||||
Note
|
NIS millions
|
NIS millions
|
US$ millions
|
||||||||||||
Assets
|
|||||||||||||||
Cash and cash equivalents
|
8 | 533 | 920 | 241 | |||||||||||
Current investments, including derivatives
|
404 | 290 | 76 | ||||||||||||
Trade receivables
|
9 | 1,478 | 1,859 | 487 | |||||||||||
Other receivables
|
9 | 64 | 93 | 24 | |||||||||||
Inventory
|
10 | 104 | 170 | 44 | |||||||||||
Total current assets
|
2,583 | 3,332 | 872 | ||||||||||||
Trade and other receivables
|
9 | 597 | 1,337 | 350 | |||||||||||
Property, plant and equipment, net
|
11 | 2,063 | 2,168 | 567 | |||||||||||
Intangible assets, net
|
12 | 753 | 1,680 | 440 | |||||||||||
Deferred tax assets
|
28 | - | 40 | 10 | |||||||||||
Total non- current assets
|
3,413 | 5,225 | 1,367 | ||||||||||||
Total assets
|
5,996 | 8,557 | 2,239 | ||||||||||||
Short term credit and current maturities of long term loans and debentures | 17 | 348 | 674 | 176 | |||||||||||
Trade payables and accrued expenses
|
13 | 716 | 1,026 | 268 | |||||||||||
Current tax liabilities
|
132 | 69 | 18 | ||||||||||||
Provisions
|
14 | 84 | 148 | 39 | |||||||||||
Other payables, including derivatives
|
15 | 379 | 547 | 143 | |||||||||||
Dividend declared
|
19 | - | 189 | 49 | |||||||||||
Total current liabilities
|
1,659 | 2,653 | 693 | ||||||||||||
Long-term loans from banks
|
17 | - | 19 | 5 | |||||||||||
Debentures
|
17 | 3,913 | 5,452 | 1,427 | |||||||||||
Provisions
|
14 | 17 | 21 | 5 | |||||||||||
Other long-term liabilities
|
16 | - | 41 | 11 | |||||||||||
Liability for employee rights upon retirement, net
|
18 | 1 | 10 | 3 | |||||||||||
Deferred tax liabilities
|
28 | 65 | 174 | 46 | |||||||||||
Total non- current liabilities
|
3,996 | 5,717 | 1,497 | ||||||||||||
Total liabilities
|
5,655 | 8,370 | 2,190 | ||||||||||||
Equity attributable to owners of the Company
|
19 | ||||||||||||||
Share capital
|
1 | 1 | - | ||||||||||||
Cash flow hedge reserve
|
(21 | ) | 7 | 2 | |||||||||||
Retained earnings
|
361 | 175 | 46 | ||||||||||||
Non-controlling interest
|
- | 4 | 1 | ||||||||||||
Total equity
|
341 | 187 | 49 | ||||||||||||
Total liabilities and equity
|
5,996 | 8,557 | 2,239 |
Year ended December 31, 2009 | Year ended December 31, 2010 | Year ended December 31, 2011 | Convenience translation into US dollar (Note 2D) Year ended December 31, 2011 | ||||||||||||||
Note
|
NIS millions
|
NIS millions
|
NIS millions
|
US$ millions
|
|||||||||||||
Revenues
|
22 | 6,483 | 6,662 | 6,506 | 1,703 | ||||||||||||
Cost of revenues
|
23 | (3,333 | ) | (3,322 | ) | (3,408 | ) | (892 | ) | ||||||||
Gross profit
|
3,150 | 3,340 | 3,098 | 811 | |||||||||||||
Selling and marketing expenses
|
24 | (716 | ) | (756 | ) | (990 | ) | (259 | ) | ||||||||
General and administrative expenses
|
25 | (660 | ) | (641 | ) | (685 | ) | (179 | ) | ||||||||
Other expenses, net
|
26 | (6 | ) | (5 | ) | (1 | ) | - | |||||||||
Operating profit
|
1,768 | 1,938 | 1,422 | 373 | |||||||||||||
Financing income
|
151 | 106 | 116 | 30 | |||||||||||||
Financing expenses
|
(370 | ) | (336 | ) | (409 | ) | (107 | ) | |||||||||
Financing expenses, net | 27 | (219 | ) | (230 | ) | (293 | ) | (77 | ) | ||||||||
Profit before taxes on income
|
1,549 | 1,708 | 1,129 | 296 | |||||||||||||
Taxes on income
|
28 | (367 | ) | (417 | ) | (304 | ) | (80 | ) | ||||||||
Profit for the year
|
1,182 | 1,291 | 825 | 216 | |||||||||||||
Attributable to:
|
|||||||||||||||||
Owners of the Company
|
1,182 | 1,291 | 824 | 216 | |||||||||||||
Non-controlling interests
|
- | - | 1 | - | |||||||||||||
Profit for the year
|
1,182 | 1,291 | 825 | 216 | |||||||||||||
Earnings per share
|
|||||||||||||||||
Basic earnings per share (in NIS)
|
19 | 12.01 | 13.04 | 8.28 | 2.17 | ||||||||||||
Diluted earnings per share (in NIS)
|
19 | 11.90 | 12.98 | 8.28 | 2.17 |
Year ended December 31, 2009 | Year ended December 31, 2010 | Year ended December 31, 2011 | Convenience translation into US dollar (Note 2D) Year ended December 31, 2011 | |||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
US$ millions
|
|||||||||||||
Profit for the year
|
1,182 | 1,291 | 825 | 216 | ||||||||||||
Net change in fair value of cash flow hedges transferred to profit or loss
|
(14 | ) | (10 | ) | 20 | 5 | ||||||||||
Changes in fair value of cash flow hedges, net of income tax
|
(2 | ) | 9 | 13 | 3 | |||||||||||
Income tax on other comprehensive income
|
4 | 3 | (5 | ) | (1 | ) | ||||||||||
Other comprehensive income for the year, net of income tax
|
(12 | ) | 2 | 28 | 7 | |||||||||||
Total comprehensive income for the year
|
1,170 | 1,293 | 853 | 223 | ||||||||||||
Total comprehensive income attributable to:
|
||||||||||||||||
Owners of the Company
|
1,170 | 1,293 | 852 | 223 | ||||||||||||
Non-controlling interests
|
- | - | 1 | - | ||||||||||||
Total comprehensive income for the year
|
1,170 | 1,293 | 853 | 223 |
Attributable to owners of the Company
|
Non-controlling interests | Total equity |
Convenience translation into US dollar
(Note 2D)
|
|||||||||||||||||||||||||
Share capital
|
Capital reserve | Retained earnings |
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
Balance as of January 1, 2009
|
1 | (11 | ) | 400 | 390 | - | 390 | 102 | ||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
- | (12 | ) | - | (12 | ) | - | (12 | ) | (3 | ) | |||||||||||||||||
Profit for the year
|
- | - | 1,182 | 1,182 | - | 1,182 | 309 | |||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (1,187 | ) | (1,187 | ) | - | (1,187 | ) | (311 | ) | |||||||||||||||||
Balance as of December 31, 2009
|
1 | (23 | ) | 396 | 374 | - | 374 | 97 | ||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
- | 2 | - | 2 | - | 2 | 1 | |||||||||||||||||||||
Profit for the year
|
- | - | 1,291 | 1,291 | - | 1,291 | 338 | |||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Cash dividend paid
|
- | - | (1,327 | ) | (1,327 | ) | - | (1,327 | ) | (347 | ) | |||||||||||||||||
Balance as of December 31, 2010
|
1 | (21 | ) | 361 | 341 | - | 341 | 89 | ||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
- | 28 | - | 28 | - | 28 | 7 | |||||||||||||||||||||
Profit for the year
|
- | - | 824 | 824 | 1 | 825 | 216 | |||||||||||||||||||||
Share based payments
|
- | - | 6 | 6 | - | 6 | 2 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (827 | ) | (827 | ) | - | (827 | ) | (216 | ) | |||||||||||||||||
Declared dividend
|
- | - | (189 | ) | (189 | ) | (1 | ) | (190 | ) | (50 | ) | ||||||||||||||||
Non-controlling interests in respect of business combination (see note 7)
|
- | - | - | - | 4 | 4 | 1 | |||||||||||||||||||||
Balance as of December 31, 2011
|
1 | 7 | 175 | 183 | 4 | 187 | 49 |
Year ended December 31, 2009 | Year ended December 31, 2010 | Year ended December 31, 2011 | Convenience translation into US dollar (Note 2D) Year ended December 31, 2011 | |||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
US$ millions
|
|||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Profit for the year
|
1,182 | 1,291 | 825 | 216 | ||||||||||||
Adjustments for:
|
||||||||||||||||
Depreciation and amortization
|
755 | 724 | 738 | 193 | ||||||||||||
Share based payment
|
1 | 1 | 6 | 2 | ||||||||||||
Loss on sale of property, plant and equipment
|
6 | 5 | - | - | ||||||||||||
Income tax expense
|
367 | 417 | 304 | 80 | ||||||||||||
Financing expenses, net
|
219 | 230 | 293 | 77 | ||||||||||||
Other expenses
|
- | - | 2 | 1 | ||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Change in inventory
|
(105 | ) | - | (67 | ) | (18 | ) | |||||||||
Change in trade receivables (including long-term amounts)
|
(69 | ) | 172 | (585 | ) | (153 | ) | |||||||||
Change in other receivables (including long-term amounts)
|
2 | (6 | ) | 61 | 16 | |||||||||||
Changes in trade payables, accrued expenses and provisions
|
152 | (42 | ) | 146 | 38 | |||||||||||
Change in other liabilities (including long-term amounts)
|
(4 | ) | (16 | ) | (52 | ) | (14 | ) | ||||||||
Proceeds from (payments for) derivative hedging contracts, net
|
21 | (16 | ) | (14 | ) | (4 | ) | |||||||||
Income tax paid
|
(447 | ) | (380 | ) | (325 | ) | (85 | ) | ||||||||
Net cash from operating activities
|
2,080 | 2,380 | 1,332 | 349 | ||||||||||||
Cash flows from investing activities
|
||||||||||||||||
Acquisition of property, plant, and equipment
|
(404 | ) | (441 | ) | (333 | ) | (87 | ) | ||||||||
Acquisition of intangible assets
|
(173 | ) | (180 | ) | (99 | ) | (26 | ) | ||||||||
Acquisition of activity
|
- | (108 | ) | - | - | |||||||||||
Acquisition of subsidiary, net of cash acquired (see note 7)
|
- | - | (1,458 | ) | (382 | ) | ||||||||||
Change in current investments, net
|
(212 | ) | (154 | ) | 197 | 52 | ||||||||||
Proceeds from (payments for) other derivative contracts, net
|
8 | (17 | ) | 1 | - | |||||||||||
Gain on sale of property, plant and equipment
|
2 | 2 | 3 | 1 | ||||||||||||
Interest received
|
5 | 9 | 33 | 9 | ||||||||||||
Net cash used in investing activities
|
(774 | ) | (889 | ) | (1,656 | ) | (433 | ) |
Year ended December 31, 2009 | Year ended December 31, 2010 | Year ended December 31, 2011 | Convenience translation into US dollar (Note 2D) Year ended December 31, 2011 | |||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
US$ millions
|
|||||||||||||
Cash flows from financing activities
|
||||||||||||||||
Proceeds from derivative contracts, net
|
33 | 34 | 11 | 3 | ||||||||||||
Reciept (repayment) of long term loans from banks
|
8 | (8 | ) | (4 | ) | (1 | ) | |||||||||
Repayment of debentures
|
(332 | ) | (343 | ) | (354 | ) | (93 | ) | ||||||||
Proceeds from issuance of debentures, net of issuance costs
|
989 | - | 2,165 | 566 | ||||||||||||
Dividend paid
|
(1,186 | ) | (1,319 | ) | (858 | ) | (225 | ) | ||||||||
Interest paid
|
(190 | ) | (225 | ) | (245 | ) | (64 | ) | ||||||||
Net cash from (used in) financing activities
|
(678 | ) | (1,861 | ) | 715 | 186 | ||||||||||
Cash balance presented under assets held for sale (see notes 9 and 15)
|
- | - | (4 | ) | (1 | ) | ||||||||||
Changes in cash and cash equivalents
|
628 | (370 | ) | 387 | 101 | |||||||||||
Cash and cash equivalents as at the beginning of the year
|
275 | 903 | 533 | 140 | ||||||||||||
Cash and cash equivalents as at the end of the year
|
903 | 533 | 920 | 241 |
A.
|
Statement of compliance
|
B.
|
Functional and presentation currency
|
C.
|
Basis of measurement
|
D.
|
Convenience translation into U.S. dollars ("dollars" or "$")
|
E.
|
Use of estimates and judgments
|
F.
|
Newly adopted accounting standards during the period
|
1.
|
IAS 24 (2009) Related Party Disclosures (hereinafter – "the Standard"). The new standard includes changes in the definition of a related party and changes with respect to disclosures required by entities related to government. The Standard is effective from January 1, 2011. For the purpose of applying the Standard for the first time, the Group mapped its relationships with related parties. The Standard has no material impact on the Group's consolidated financial statements.
|
2.
|
Amendment to IFRS 7 Financial Instruments: Disclosures - Clarification of disclosures (hereinafter – “the Amendment”) – The Amendment added a declaration that the interaction between the qualitative and quantitative disclosures enables the users of the financial statements to better assess the Group's exposure to risks arising from financial instruments. Furthermore, the clause stating that quantitative disclosures are not required when the risk is immaterial was removed, and certain disclosure requirements regarding credit risk were amended while others were removed. The Amendment is implemented from annual periods beginning on January 1, 2011. The required disclosures were included in the consolidated financial statements. For further details see note 21, regarding financial instruments.
|
A.
|
Basis of consolidation
|
1.
|
Business combinations
|
2.
|
Subsidiaries
|
B.
|
Foreign currency transactions
|
C.
|
Financial instruments
|
1.
|
Non derivative financial instruments
|
2.
|
Derivative financial instruments
|
3.
|
Financial instruments linked to the Israeli CPI that are not measured at fair value
|
4.
|
Share capital
|
D.
|
Property, plant and equipment
|
%
|
|
Communication network
|
5-20
|
Control and testing equipment
|
15-25
|
Vehicles
|
15-33
|
Computers and hardware
|
15-33
|
Furniture and office equipment
|
6-15
|
E.
|
Rights of use of communication lines
|
F.
|
Intangible assets
|
1.
|
Goodwill that arises upon the acquisition of subsidiaries is presented as part of intangible assets. For information on measurement of goodwill at initial recognition, see paragraph A(1) of this note.
In subsequent periods goodwill is measured at cost less accumulated impairment losses.
|
2.
|
Other intangible assets are measured at cost less accumulated amortization and accumulated impairment losses and including direct costs necessary to prepare the asset for its intended use.
|
3.
|
Certain direct and indirect development costs associated with internally developed information system software, and payroll costs for employees devoting time to the software projects, incurred during the application development stage, are capitalized. The costs are amortized using the straight-line method beginning when the asset is substantially ready for use. Costs incurred during the research stage and after the asset is substantially ready for use are expensed as incurred.
|
4.
|
Deferred expenses in respect of commissions and handset subsidies regarding the acquisition of new subscribers are recognized as intangible assets, if the costs can be measured reliably, are incremental to the contract, there is a control over resources and the existence of future economic benefits and directly attributable to obtaining a specific subscriber. If the costs do not meet the aforementioned criteria, they are recognized immediately as expenses.
|
5.
|
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.
|
6.
|
Amortization is calculated using the straight-line method, except for a certain intangible asset recognized during business combination, which is amortized according to the economic benefit expected from this asset each period. If the intangible assets consist of several components with different estimated useful lives, the individual significant components are amortized over their individual useful lives. The annual amortization rates are as follows:
|
Licenses
|
5-6%
|
(mainly 6%)
|
Information systems
|
25%
|
|
Software
|
15-25%
|
|
Customer relationship
|
approximately 6 years
|
G.
|
Non-current assets and disposal groups held for sale or distribution
|
H.
|
Inventory
|
I.
|
Impairment
|
1.
|
Non-derivative financial assets
|
2.
|
Property, plant and equipment and intangible assets
|
J.
|
Employee benefits
|
1.
|
Post employment benefits
|
2.
|
Short term benefits
|
3.
|
Share based payments
|
K.
|
Provisions
|
L.
|
Revenue
|
M.
|
Lease payments
|
N.
|
Financing income and expenses
|
O.
|
Income tax expense
|
P.
|
Earnings per share
|
Q.
|
Advertising expenses
|
R.
|
New standards and interpretations not yet adopted
|
1.
|
IFRS 10 Consolidated Financial Statements (hereinafter – “IFRS 10”). IFRS 10 replaces the requirements of IAS 27 Consolidated and Separate Financial Statements and the requirements of SIC-12 Consolidation – Special Purpose Entities with respect to the consolidation of financial statements, so that the requirements of IAS 27 will continue to be valid only for separate financial statements.
|
2.
|
IFRS 11 Joint Arrangements (hereinafter – “IFRS 11”). IFRS 11 replaces the requirements of IAS 31 Interests in Joint Ventures (hereinafter – IAS 31) and amends part of the requirements in IAS 28 Investments in Associates.
|
3.
|
IFRS 12 Disclosure of Involvement with Other Entities (hereinafter – “IFRS 12”). IFRS 12 contains extensive disclosure requirements for entities that have interests in subsidiaries, joint arrangements (i.e. joint operations or joint ventures), associates and unconsolidated structured entities.
|
4.
|
IFRS 13 Fair Value Measurement (hereinafter – “IFRS 13”). IFRS 13 replaces the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance. It defines fair value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value measurements. IFRS 13 does not introduce new requirements to measure assets or liabilities at fair value.
|
5.
|
Amendment to IAS 1, Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income (hereinafter - “the Amendment”). The Amendment changes the presentation of items of other comprehensive income (hereinafter – “OCI”) in the financial statements, so that items of OCI that may be reclassified to profit or loss in the future, would be presented separately from those that would never be reclassified to profit or loss. Additionally, the Amendment changes the title of the Statement of Comprehensive Income to Statement of Profit or Loss and Other Comprehensive Income. However, entities are still allowed to use other titles. The Amendment is effective for annual periods beginning on or after July 1, 2012. The amendment will be applied retrospectively. Early adoption is permitted providing that disclosure is provided. The Group is examining the effect of adopting the Amendment on its financial statements.
|
6.
|
Amendment to IAS 19, Employee Benefits (hereinafter – “the Amendment”). The Amendment introduces a number of changes to the accounting treatment of employee benefits.
|
•
|
The Amendment requires immediate recognition of past service costs regardless of whether the benefits have vested or not.
|
•
|
The calculation of net financing income or expense will be determined by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability (asset). Accordingly, calculation of actuarial gains or losses will also change.
|
•
|
The Amendment changes the definitions of short-term employee benefits and of other long term employee benefits, so that the distinction between the two will depend on when the entity expects the benefits to be wholly settled, rather than when settlement is due.
|
•
|
The Amendment enhances the disclosure requirements for defined benefit plans, in an effort to provide better information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans.
|
•
|
The definition of termination benefits has been clarified in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets, so that termination benefits are recognized at the earlier of when the entity recognizes costs for a restructuring that includes the payment of termination benefits, and when the entity can no longer withdraw the offer of the termination benefits.
|
7.
|
Amendment to IFRS 7 Financial Instruments: Disclosures, Transfers of Financial Assets(hereinafter - “the Amendment”) - The Amendment introduces new disclosure requirements regarding transfers of financial assets, including disclosures for:
|
●
|
Financial assets that were not derecognized in their entirety, including disclosures of the risks and rewards associated with these assets, the relationship between the transferred assets and the associated liabilities, the restrictions on the Group’s use of the assets and so forth; and
|
●
|
Financial assets that were derecognized in their entirety but the entity has a continuing involvement in them, including the carrying amount and fair value that represents the Group’s involvement in these assets, the Group’s maximum exposure to losses from these assets, an analysis of the undiscounted cash flows as well as the gain or loss from the transfer of the asset and the income or expense arising from the Group’s continuing involvement in the asset.
|
8.
|
Amendment to IFRS 7 Financial Instruments: Disclosures and to IAS 32 Financial Instruments: Presentation - Offsetting of Financial Assets and Financial Liabilities (hereinafter - “the Amendment to IFRS 7” and “the Amendment to IAS 32”, respectively). The Amendment to IAS 32 clarifies that an entity currently has a legally enforceable right to set-off amounts that were recognized if that right is not contingent on a future event; and it is enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all its counterparties. The Amendment to IFRS 7 contains new disclosure requirements for financial assets and liabilities that are offset in the statement of financial position; or are subject to master netting agreements or similar agreements.
|
|
9.
|
IFRS 9 (2010), Financial Instruments (hereinafter – “the Standard”) – This Standard is one of the stages in a comprehensive project to replace IAS 39 Financial Instruments: Recognition and Measurement (hereinafter - IAS 39) and it replaces the requirements included in IAS 39 regarding the classification and measurement of financial assets and financial liabilities.
|
A.
|
Fixed assets
|
B.
|
Intangible assets
|
C.
|
Inventories
|
D.
|
Trade and other receivables
|
E.
|
Current investments and derivatives
|
F.
|
Non-derivative financial liabilities
|
G.
|
Share- based payment transactions
Fair value of employee stock options is measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behavior), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.
|
|
—
|
Cellcom – the segment includes Cellcom Israel Ltd. and its subsidiaries, excluding Netvision Ltd. and its subsidiaries.
|
|
—
|
Netvision – the segment includes Netvision Ltd. and its subsidiaries.
|
Year ended December 31, 2011
|
||||||||||||||||
NIS millions
|
||||||||||||||||
Reconciliation
|
||||||||||||||||
for
|
||||||||||||||||
Cellcom
|
Netvision*
|
consolidation
|
Consolidated
|
|||||||||||||
Revenues
|
6,125 | 381 | - | 6,506 | ||||||||||||
Inter-segment revenues
|
7 | 19 | (26 | ) | - | |||||||||||
Interest income
|
92 | 1 | - | 93 | ||||||||||||
Interest expenses
|
(286 | ) | - | - | (286 | ) | ||||||||||
EBITDA**
|
2,084 | 83 | - | 2,167 | ||||||||||||
Reconciliation of reoportable segment
|
||||||||||||||||
EBITDA to net profit
|
||||||||||||||||
Depreciation and amortization
|
(652 | ) | (40 | ) | (46 | ) | (738 | ) | ||||||||
Taxes on income
|
(313 | ) | (2 | ) | 11 | (304 | ) | |||||||||
Financing income
|
116 | |||||||||||||||
Financing expenses
|
(409 | ) | ||||||||||||||
Other expenses
|
(1 | ) | ||||||||||||||
Share based payments
|
(6 | ) | ||||||||||||||
Net profit
|
821 | 39 | (35 | ) | 825 |
*
|
Netvision segment represents results of operations for the four month period commencing September 1, 2011 (see note 7).
|
**
|
EBITDA as reviewed by the CODM, represents earnings before interest (financing expenses, net), taxes, other income and expenses, depreciation and amortization and share based payments, as a measure of operating profit. EBITDA is not a financial measure under IFRS and cannot be compared to other similarly titled measures in other companies.
|
NIS millions
|
||||
Cash
|
1,570 | |||
Share-based awards - cost of past service
|
8 | |||
Total consideration transferred
|
1,578 |
NIS millions
|
||||
Trade and other receivables
|
599 | |||
Inventory
|
5 | |||
Intangible assets
|
1,099 | |||
Deferred tax liabilities
|
(44 | ) | ||
Property, plant and equipment
|
180 | |||
Trade and other payables
|
(326 | ) | ||
Credit and loans
|
(45 | ) | ||
Provisions
|
(10 | ) | ||
Net assets acquired
|
1,458 | |||
Cash acquired
|
120 | |||
Total consideration transferred
|
1,578 |
December 31,
|
||||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Bank balances
|
32 | 14 | ||||||
Call deposits
|
501 | 906 | ||||||
533 | 920 |
December 31
|
||||||||
Current
|
2010
|
2011
|
||||||
Trade Receivables*
|
NIS millions
|
NIS millions
|
||||||
Open accounts
|
486 | 524 | ||||||
Checks and credit cards receivables
|
221 | 250 | ||||||
Accrued income
|
115 | 148 | ||||||
Current maturity of long-term receivables
|
656 | 937 | ||||||
1,478 | 1,859 | |||||||
Other Receivables
|
||||||||
Prepaid expenses
|
49 | 60 | ||||||
Other
|
15 | 6 | ||||||
Assets held for sale
|
- | 27 | ||||||
64 | 93 | |||||||
1,542 | 1,952 | |||||||
Non-current
|
||||||||
Trade receivables*
|
523 | 980 | ||||||
Rights of use of communication lines
|
- | 259 | ||||||
Deposits and other receivables
|
55 | 56 | ||||||
Other
|
19 | 42 | ||||||
597 | 1,337 | |||||||
2,139 | 3,289 |
A.
|
Composition
|
December 31,
|
||||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Handsets
|
68 | 137 | ||||||
Accessories
|
14 | 14 | ||||||
Spare parts
|
22 | 19 | ||||||
104 | 170 |
|
B.
|
Inventories of handsets, accessories and spare-parts as at December 31, 2011 and December 31, 2010 are presented net of a provision for impairment and inventory write off in the amount of NIS 19 million and NIS 8 million, respectively.
|
Communication
network
|
Control and
testing
equipment
|
Vehicles
|
Computers,
furniture
and office
equipment
|
Leasehold
improvements
|
Total
|
|||||||||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||||||||
Cost
|
||||||||||||||||||||||||
Balance at January 1, 2010
|
5,927 | 342 | 32 | 863 | 216 | 7,380 | ||||||||||||||||||
Additions
|
319 | 20 | 14 | 47 | 20 | 420 | ||||||||||||||||||
Disposals
|
(121 | ) | - | (4 | ) | (14 | ) | - | (139 | ) | ||||||||||||||
Balance at December 31, 2010
|
6,125 | 362 | 42 | 896 | 236 | 7,661 | ||||||||||||||||||
Business combination*
|
577 | - | 19 | 444 | 60 | 1,100 | ||||||||||||||||||
Additions
|
291 | 14 | 7 | 69 | 5 | 386 | ||||||||||||||||||
Disposals
|
(17 | ) | (1 | ) | (4 | ) | (11 | ) | - | (33 | ) | |||||||||||||
Reclassification to assets held for sale
|
(1 | ) | - | - | (4 | ) | - | (5 | ) | |||||||||||||||
Balance at December 31, 2011
|
6,975 | 375 | 64 | 1,394 | 301 | 9,109 | ||||||||||||||||||
Accumulated Depreciation
|
||||||||||||||||||||||||
Balance at January 1, 2010
|
4,202 | 261 | 10 | 661 | 150 | 5,284 | ||||||||||||||||||
Depreciation for the year
|
342 | 21 | 4 | 64 | 15 | 446 | ||||||||||||||||||
Disposals
|
(119 | ) | - | (2 | ) | (11 | ) | - | (132 | ) | ||||||||||||||
Balance at December 31, 2010
|
4,425 | 282 | 12 | 714 | 165 | 5,598 | ||||||||||||||||||
Business combination*
|
493 | - | 6 | 376 | 45 | 920 | ||||||||||||||||||
Depreciation for the year
|
343 | 20 | 7 | 71 | 16 | 457 | ||||||||||||||||||
Disposals
|
(15 | ) | (1 | ) | (3 | ) | (11 | ) | - | (30 | ) | |||||||||||||
Reclassification to assets held for sale
|
(1 | ) | - | - | (3 | ) | - | (4 | ) | |||||||||||||||
Balance at December 31, 2011
|
5,245 | 301 | 22 | 1,147 | 226 | 6,941 | ||||||||||||||||||
Carrying amounts
|
||||||||||||||||||||||||
At January 1, 2010
|
1,725 | 81 | 22 | 202 | 66 | 2,096 | ||||||||||||||||||
At December 31, 2010
|
1,700 | 80 | 30 | 182 | 71 | 2,063 | ||||||||||||||||||
At December 31, 2011
|
1,730 | 74 | 42 | 247 | 75 | 2,168 |
Cost
|
Licenses
|
Information Systems
|
Software
|
Deferred Expenses
|
Goodwill
|
Customer Relationship and Other
|
Total
|
|||||||||||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||||||||||||||
Balance at January 1, 2010
|
550 | 684 | 336 | 350 | - | - | 1,920 | |||||||||||||||||||||
Additions
|
- | 80 | 19 | 114 | 77 | 25 | 315 | |||||||||||||||||||||
Disposals
|
- | - | - | (122 | ) | - | - | (122 | ) | |||||||||||||||||||
Balance at December 31, 2010
|
550 | 764 | 355 | 342 | 77 | 25 | 2,113 | |||||||||||||||||||||
Business combination*
|
6 | 40 | - | - | 753 | 322 | 1,121 | |||||||||||||||||||||
Additions
|
- | 69 | 13 | 6 | - | - | 88 | |||||||||||||||||||||
Disposals
|
- | (18 | ) | - | (296 | ) | - | - | (314 | ) | ||||||||||||||||||
Reclassification to assets held for sale
|
- | (3 | ) | - | - | - | - | (3 | ) | |||||||||||||||||||
Balance at December 31, 2011
|
556 | 852 | 368 | 52 | 830 | 347 | 3,005 | |||||||||||||||||||||
Accumulated Amortization
|
||||||||||||||||||||||||||||
Balance at January 1, 2010
|
197 | 512 | 260 | 240 | - | - | 1,209 | |||||||||||||||||||||
Amortization for the year
|
30 | 69 | 30 | 139 | - | 5 | 273 | |||||||||||||||||||||
Disposals
|
- | - | - | (122 | ) | - | - | (122 | ) | |||||||||||||||||||
Balance at December 31, 2010
|
227 | 581 | 290 | 257 | - | 5 | 1,360 | |||||||||||||||||||||
Business combination*
|
3 | 19 | - | - | - | - | 22 | |||||||||||||||||||||
Amortization for the year
|
28 | 80 | 25 | 79 | - | 48 | 260 | |||||||||||||||||||||
Disposals
|
- | (18 | ) | - | (296 | ) | - | - | (314 | ) | ||||||||||||||||||
Reclassification to assets held for sale
|
- | (3 | ) | - | - | - | - | (3 | ) | |||||||||||||||||||
Balance at December 31, 2011
|
258 | 659 | 315 | 40 | - | 53 | 1,325 | |||||||||||||||||||||
Carrying amounts
|
||||||||||||||||||||||||||||
At January 1, 2010
|
353 | 172 | 76 | 110 | - | - | 711 | |||||||||||||||||||||
At December 31, 2010
|
323 | 183 | 65 | 85 | 77 | 20 | 753 | |||||||||||||||||||||
At December 31, 2011
|
298 | 193 | 53 | 12 | 830 | 294 | 1,680 |
A.
|
Impairment testing for cash-generating unit containing goodwill
|
December 31
|
||||
2011
|
||||
NIS millions
|
||||
Netvision
|
753 |
B.
|
Key assumptions used in calculation of recoverable amount
|
After-tax discount rate | Terminal value growth rate | ||
2011 | |||
Netvision | 13.0% | 1.5% |
(1)
|
After-tax discount rate
|
2011 | |
% | |
After-tax discount rate
|
13.1
|
Terminal value growth rate
|
1.4
|
December 31
|
||||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Trade payables
|
267 | 554 | ||||||
Accrued expenses
|
449 | 472 | ||||||
716 | 1,026 |
Dismantling
and restoring |
Litigations
|
Other legal
obligations |
Other
|
Total
|
||||||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||||||||
Balance as at January 1, 2011
|
17 | 22 | 58 | 4 | 101 | |||||||||||||||
Businesss combination
|
- | 10 | - | - | 10 | |||||||||||||||
Provisions made during the period
|
4 | 39 | 19 | - | 62 | |||||||||||||||
Provisions reversed during the period
|
(1 | ) | (4 | ) | - | - | (5 | ) | ||||||||||||
Unwind of discount
|
1 | - | - | - | 1 | |||||||||||||||
Balance as at December 31, 2011
|
21 | 67 | 77 | 4 | 169 | |||||||||||||||
Non-current
|
21 | - | - | - | 21 | |||||||||||||||
Current
|
- | 67 | 77 | 4 | 148 | |||||||||||||||
21 | 67 | 77 | 4 | 169 |
December 31
|
||||||||
|
2011
|
|||||||
NIS millions | NIS millions | |||||||
Employees and related liabilities
|
110 | 182 | ||||||
Government institutions
|
38 | 17 | ||||||
Interest payable
|
163 | 248 | ||||||
Accrued expenses
|
- | 26 | ||||||
Deferred revenue
|
50 | 44 | ||||||
Derivative financial instruments
|
18 | 11 | ||||||
Liability for assets held for sale
|
- | 19 | ||||||
379 | 547 |
December 31
|
||||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Long-term liabilities to trade payables
|
- | 24 | ||||||
Deferred revenue in respect of rights of use of communication lines
|
- | 6 | ||||||
Derivative financial instruments
|
- | 11 | ||||||
- | 41 |
December 31
|
||||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Non- current liabilities
|
||||||||
Debentures
|
3,913 | 5,452 | ||||||
Loans from banks
|
- | 19 | ||||||
3,913 | 5,471 | |||||||
Current liabilities
|
||||||||
Current maturities of debentures
|
348 | 658 | ||||||
Current maturities of long-term loans from banks
|
- | 16 | ||||||
348 | 674 |
December, 31 2010
|
December, 31 2011
|
||||||||||||||||||||||||
NIS millions
|
NIS millions
|
||||||||||||||||||||||||
Currency
|
Nominal
interest rate
|
Year of
maturity
|
Face value
|
carrying amount
|
Face value
|
carrying amount
|
|||||||||||||||||||
Loans from banks
|
NIS
|
4.80-6.00 | % | 2012-2015 | - | - | 35 | 35 | |||||||||||||||||
Debentures (Series A) - linked to the Israeli CPI
|
NIS
|
5.00 | % | 2012 | 473 | 537 | 237 | 276 | |||||||||||||||||
Debentures (Series B) - linked to the Israeli CPI
|
NIS
|
5.30 | % | 2017 | 925 | 1,052 | 925 | 1,079 | |||||||||||||||||
Debentures (Series C) - linked to the Israeli CPI
|
NIS
|
4.60 | % | 2013 | 181 | 202 | 108 | 124 | |||||||||||||||||
Debentures (Series D) - linked to the Israeli CPI
|
NIS
|
5.19 | % | 2017 | 1,507 | 1,685 | 2,423 | 2,824 | |||||||||||||||||
Debentures (Series E) - unlinked
|
NIS
|
6.25 | % | 2017 | 789 | 785 | 1,799 | 1,807 | |||||||||||||||||
Total interest- bearing liabilities
|
3,875 | 4,261 | 5,527 | 6,145 |
A.
|
Defined contribution plan
|
1.
|
The Group’s liability for severance pay for its Israeli employees is calculated pursuant to Israeli Severance Pay Law. The Group’s liability is mostly covered by monthly deposits with severance pay funds, insurance policies and by an accrual on the consolidated statements of financial position. For most of the Group's employees, the payments to pension funds and to insurance companies exempt the Group from any obligation towards its employees, in accordance with Section 14 of the Severance Pay Law. Accumulated amounts in pension funds and in insurance companies are not under the Group's control or management and accordingly, neither those amounts nor the corresponding accrual for severance pay are presented in the consolidated statement of financial position. The obligation of the Group, under law and labor agreements, to pay severance pay employees who are not covered by the pension or insurance plans as mentioned above, is NIS 10 million and NIS 1 million for the years ended December 31, 2011 and 2010, respectively, as included in the consolidated statement of financial position, under Liability for employee rights upon retirement, net. The calculation for this liability is based on salary components that according to management's estimation create the liability for severance pay.
|
2.
|
The severance pay expenses for the years ended December 31, 2011, 2010 and 2009 were approximately NIS 36 million, NIS 35 million and NIS 32 million, respectively.
|
3.
|
In January 2008, under an expansion order issued by the Israeli Ministry of Industry, Commerce and Labor, all Israeli employers are obligated to contribute to pension plans amounts equal to a certain percentage of the employee's wages, for all employees, after a certain minimum employment period. The Group complies with this order. Other employees are entitled to contribution to a pension plan, which shall increase gradually until 2014 and up to 6% of the employee’s wages, and additional identical contribution for severance pay.
|
B.
|
Defined benefit plan
|
2009
|
2010
|
2011
|
||||||||||
NIS
|
||||||||||||
Issued and paid at January 1
|
983,493 | 988,957 | 994,647 | |||||||||
Exercise of share options
|
5,464 | 5,690 | 167 | |||||||||
Issued and paid at December 31
|
988,957 | 994,647 | 994,814 |
2011
|
||||
NIS millions
|
||||
2.60 NIS per share paid in April 2011
|
303 | |||
3.05 NIS per share paid in July 2011
|
292 | |||
2.93 NIS per share paid in October 2011
|
232 | |||
2.33 NIS per share declared in November 2011
|
189 | |||
1,016 |
2010 | ||||
NIS millions
|
||||
2.60 NIS per share paid in March 2010
|
257 | |||
3.64 NIS per share paid in June 2010
|
360 | |||
3.13 NIS per share paid in October 2010
|
310 | |||
4.03 NIS per share paid in December 2010
|
400 | |||
1,327 |
2009
|
||||
NIS millions
|
||||
2.75 NIS per share paid in March 2009
|
270 | |||
3.36 NIS per share paid in June 2009
|
330 | |||
3.05 NIS per share paid in September 2009
|
300 | |||
2.90 NIS per share paid in December 2009
|
287 | |||
1,187 |
|
A.
|
In September 2006, the Company's Board of Directors approved a share based incentive plan ("the plan") for employees, directors, consultants and sub-contractors of the Company and the Company’s affiliates. The plan has an initial pool of 2,500,000 shares from which options and restricted stock units (RSUs) could be granted.
|
|
B.
|
In October and November 2006, the Company granted options to purchase an aggregate of 2,414,143 ordinary shares at an exercise price of $12.60 per share. Among those grants were options to purchase up to 450,000 ordinary shares granted to the Chairman of the Company’s Board of Directors and an additional 450,000 options to the Company’s Chief Executive Officer. The remainder of the option grants was made to other Company senior employees. Options not exercised within 6 years of the grant date, will expire.
|
C.
|
In March 2007, the Company granted to senior employees options to purchase an aggregate of 30,786 ordinary shares at an exercise price of $12.60 per share according to the terms of the Plan. As a result of a dividend adjustment mechanism, the exercise price for all these options was adjusted to $0 per share as of December 31, 2011 ($0 per share as of December 31, 2010).
|
D.
|
In August 2008, the Company granted to senior employees options to purchase an aggregate of 27,500 ordinary shares at an exercise price of $25 per share according to the terms of the Plan. As a result of a dividend adjustment mechanism, the exercise price for these options was adjusted to $13.89 per share as of December 31, 2011 ($16.77 as of December 31, 2010).
|
|
E.
|
In August 2009, the Company granted to senior employees options to purchase an aggregate of 74,164 ordinary shares at an exercise price of $24.65 per share according to the terms of the plan. As a result of a dividend adjustment mechanism, the exercise price for these options was adjusted to $16.61 per share as of December 31, 2011 ($19.49 as of December 31, 2010).
|
|
F.
|
In November 2010, the Company granted to a senior employee options to purchase an aggregate of 12,000 ordinary shares at an exercise price of $27.92 per share under the terms of the plan. As a result of a dividend adjustment mechanism, the exercise price for these options was adjusted to $23.92 per share as of December 31, 2011 ($26.8 as of December 31, 2010).
|
|
G.
|
In May 2011, the Company's board of directors resolved to enlarge the initial pool of options or RSUs of the Company's 2006 Share Incentive Plan from 2,500,000, by 1,400,000 options or RSUs and the Company granted to senior employees options to purchase an aggregate of 1,060,000 ordinary shares at an exercise price of $31.74 per share according to the terms of the plan. As a result of a dividend adjustment mechanism, the exercise price for these options was adjusted to $29.72 per share as of December 31, 2011.
|
Grant date/employees entitled |
Number of
instruments
In thousands
|
Vesting conditions |
Contractual
life of
options
|
|||
Share options granted in October-November 2006 to managers and senior employees
|
2,414
|
Four equal installments over four years of employment
|
6 years
|
|||
Share options granted in March 2007 to senior employees
|
31
|
Four equal installments over four years of employment
|
6 years
|
|||
Share options granted in August 2008 to senior employees
|
27
|
Four equal installments over four years of employment
|
6 years
|
|||
Share options granted in August 2009 to senior employees
|
74
|
Four equal installments over four years of employment
|
6 years
|
|||
Share options granted in November 2010 to senior employees
|
12
|
Four equal installments over four years of employment
|
6 years
|
|||
Share options granted in May 2011 to senior employees
|
1,060
|
Three equal installments over three years of employment
|
4.5 years
|
Number of
options |
Weighted average
of exercise price |
Number of
options |
Weighted average
of exercise price |
Number of
options |
Weighted average
of exercise price |
|||||||||||||||||||
2009
|
2010
|
2011
|
||||||||||||||||||||||
Balance as at January 1
|
1,274,863 | 6.86 | 704,674 | 6.19 | 116,132 | 17.20 | ||||||||||||||||||
Granted during the year
|
74,164 | 23.86 | 12,000 | 27.36 | 1,060,000 | 30.65 | ||||||||||||||||||
Forfeited during the year
|
(7,759 | ) | 5.59 | (7,395 | ) | 2.74 | (100,125 | ) | 29.90 | |||||||||||||||
Exercised during the year
|
(636,594 | ) | 4.26 | (593,147 | ) | 1.11 | (19,111 | ) | 2.70 | |||||||||||||||
Total options outstanding as at December 31
|
704,674 | 6.19 | 116,132 | 17.20 | 1,056,896 | 29.10 | ||||||||||||||||||
Total of exercisable options as at December 31
|
11,450 | 12.59 | 26,936 | 13.40 | 43,189 | 16.68 |
2009
|
2010
|
2011
|
||||||||||
Fair value of share options and assumptions:
|
||||||||||||
Fair value at grant date
|
$ | 8.82 | $ | 10.83 | $ | 4.84 | ||||||
Fair value assumptions:
|
||||||||||||
Share price at grant date
|
$ | 27.88 | $ | 33.27 | $ | 31.58 | ||||||
Exercise price
|
$ | 24.65 | $ | 27.92 | $ | 31.74 | ||||||
Expected volatility (weighted average life)
|
30.28 | % | 28.85 | % | 24.35 | % | ||||||
Option life (expected weighted average life)
|
4.25 years
|
3.75 years
|
2.3 years
|
|||||||||
Risk free interest rate
|
2.5 | % | 3.42 | % | 0.7 | % |
December 31
|
December 31
|
|||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Trade receivables including long term amounts
|
1,999 | 2,839 | ||||||
Loans and other receivables including long term amounts
|
76 | 96 | ||||||
Investment in debt securities
|
386 | 266 | ||||||
Cash and cash equivalents
|
533 | 920 | ||||||
Forward exchange contracts on foreign currencies
|
5 | 24 | ||||||
Forward exchange contracts on CPI
|
13 | - | ||||||
3,012 | 4,145 |
December 31
|
December 31
|
|||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Receivables from subscribers
|
1,894 | 2,793 | ||||||
Receivables from distributors and other operators
|
105 | 44 | ||||||
Investment in government of Israel debt securities
|
244 | 143 | ||||||
Investment in institutional debt securities
|
142 | 123 | ||||||
Cash and cash equivalents
|
533 | 920 | ||||||
Other
|
94 | 122 | ||||||
3,012 | 4,145 |
Gross
|
Impairment
|
Gross
|
Impairment
|
|||||||||||||
2010
|
2011
|
|||||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||
Not past due
|
2,822 | 4 | 3,977 | 9 | ||||||||||||
Past due less than one year
|
180 | 71 | 202 | 69 | ||||||||||||
Past due more than one year
|
299 | 214 | 277 | 233 | ||||||||||||
3,301 | 289 | 4,456 | 311 |
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Balance at January 1
|
218 | 289 | ||||||
Business combination
|
- | 38 | ||||||
Impairment loss recognized
|
(35 | ) | (97 | ) | ||||
Increase in doubtful debt expenses
|
106 | 81 | ||||||
Balance at December 31
|
289 | 311 |
December 31, 2011
|
Carrying
|
Contractual
|
More than
|
|||||||||||||||||||||||||
amount
|
Cash flows
|
1st year
|
2nd year
|
3rd year
|
4-5 years
|
5 years
|
||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||
Debentures*
|
(6,358 | ) | (7,246 | ) | (986 | ) | (1,403 | ) | (1,302 | ) | (2,429 | ) | (1,126 | ) | ||||||||||||||
Trade and other payables
|
(1,443 | ) | (1,443 | ) | (1,443 | ) | - | - | - | - | ||||||||||||||||||
Forward exchange contracts on CPI
|
(22 | ) | (22 | ) | (11 | ) | (2 | ) | (7 | ) | (2 | ) | - | |||||||||||||||
Credit and loans from banks
|
(35 | ) | (35 | ) | (16 | ) | (9 | ) | (5 | ) | (5 | ) | - | |||||||||||||||
Long term liabilities to trade payables
|
(35 | ) | (35 | ) | (13 | ) | (12 | ) | (8 | ) | (2 | ) | - | |||||||||||||||
(7,893 | ) | (8,781 | ) | (2,469 | ) | (1,426 | ) | (1,322 | ) | (2,438 | ) | (1,126 | ) |
December 31, 2010
|
Carrying
|
Contractual
|
More than
|
|||||||||||||||||||||||||
amount
|
Cash flows
|
1st year
|
2nd year
|
3rd year
|
4-5 years
|
5 years
|
||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||
Debentures
|
(4,424 | ) | (5,235 | ) | (573 | ) | (688 | ) | (901 | ) | (1,610 | ) | (1,463 | ) | ||||||||||||||
Trade and other payables
|
(826 | ) | (826 | ) | (826 | ) | - | - | - | - | ||||||||||||||||||
Forward exchange contracts on foreign currencies
|
(17 | ) | (17 | ) | (17 | ) | - | - | - | - | ||||||||||||||||||
Forward exchange contracts on CPI
|
(1 | ) | (1 | ) | (1 | ) | - | - | - | - | ||||||||||||||||||
(5,268 | ) | (6,079 | ) | (1,417 | ) | (688 | ) | (901 | ) | (1,610 | ) | (1,463 | ) |
Carrying
|
Contractual
|
More than
|
||||||||||||||||||||||||||
amount
|
Cash flows
|
1st year
|
2nd year
|
3rd year
|
4-5 years
|
5 years
|
||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||
Forward exchange contracts:
|
||||||||||||||||||||||||||||
Assets
|
19 | 19 | 19 | - | - | - | - | |||||||||||||||||||||
Liabilities
|
- | - | - | - | - | - | - | |||||||||||||||||||||
19 | 19 | 19 | - | - | - | - | ||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||
Forward exchange contracts:
|
||||||||||||||||||||||||||||
Assets
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Liabilities
|
(13 | ) | (13 | ) | (13 | ) | - | - | - | - | ||||||||||||||||||
(13 | ) | (13 | ) | (13 | ) | - | - | - | - |
Carrying
|
Contractual
|
More than
|
||||||||||||||||||||||||||
amount
|
Cash flows
|
1st year
|
2nd year
|
3rd year
|
4-5 years
|
5 years
|
||||||||||||||||||||||
NIS millions
|
||||||||||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||
Forward exchange contracts:
|
||||||||||||||||||||||||||||
Assets
|
19 | 19 | 19 | - | - | - | - | |||||||||||||||||||||
Liabilities
|
- | - | - | - | - | - | - | |||||||||||||||||||||
19 | 19 | 19 | - | - | - | - | ||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||
Forward exchange contracts:
|
||||||||||||||||||||||||||||
Assets
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Liabilities
|
(13 | ) | (13 | ) | (13 | ) | - | - | - | - | ||||||||||||||||||
(13 | ) | (13 | ) | (13 | ) | - | - | - | - |
December 31, 2010
|
December 31, 2011
|
|||||||||||||||||||||||
In or linked
|
In or linked
|
|||||||||||||||||||||||
to foreign
|
to foreign
|
|||||||||||||||||||||||
currencies
|
linked
|
currencies
|
linked
|
|||||||||||||||||||||
(mainly USD)
|
to CPI
|
unlinked
|
(mainly USD)
|
to CPI
|
unlinked
|
|||||||||||||||||||
NIS millions
|
NIS millions
|
|||||||||||||||||||||||
Current assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
13 | - | 520 | 13 | - | 907 | ||||||||||||||||||
Current investments, including derivatives
|
- | 230 | 174 | 24 | 159 | 107 | ||||||||||||||||||
Trade receivables
|
- | - | 1,478 | 38 | - | 1,821 | ||||||||||||||||||
Other receivables, including derivatives
|
- | 14 | - | - | 2 | 31 | ||||||||||||||||||
Non- current assets
|
||||||||||||||||||||||||
Long-term receivables
|
- | 19 | 564 | - | 20 | 1,023 | ||||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||
Current maturities of debentures and long-term loans
|
- | (348 | ) | - | - | (358 | ) | (316 | ) | |||||||||||||||
Trade payables and accrued expenses
|
(101 | ) | - | (615 | ) | (284 | ) | - | (742 | ) | ||||||||||||||
Other current liabilities, including derivatives
|
- | (114 | ) | (177 | ) | - | (148 | ) | (539 | ) | ||||||||||||||
Non- current liabilities
|
||||||||||||||||||||||||
Long-term loans from banks
|
- | - | - | - | - | (19 | ) | |||||||||||||||||
Debentures
|
- | (3,128 | ) | (785 | ) | - | (3,945 | ) | (1,507 | ) | ||||||||||||||
Non- current other liabilities
|
- | - | - | (21 | ) | (11 | ) | (3 | ) | |||||||||||||||
(88 | ) | (3,327 | ) | 1,159 | (230 | ) | (4,281 | ) | 763 |
December 31, 2011 | ||||
Currency/
linkage
receivable
|
Currency/
linkage
payable
|
Notional
Value
|
Fair value
|
|
NIS millions |
Instruments not used for hedging
|
||||
Forward exchange contracts on foreign currencies
|
USD
|
NIS
|
204
|
5
|
Forward exchange contracts on CPI
|
CPI
|
NIS
|
1,825
|
(22)
|
Foreign currency purchase options
|
USD
|
NIS
|
150
|
1
|
Foreign currency sell options
|
NIS
|
USD
|
227
|
-
|
Instruments used for hedging
|
||||
Forward exchange contracts on foreign currencies
|
USD
|
NIS
|
293
|
19
|
December 31, 2011
|
||||
Currency/
linkage
receivable
|
Currency/
linkage
payable
|
Notional
Value
|
Fair value
|
|
NIS millions | ||||
Instruments not used for hedging
|
||||
Forward exchange contracts on foreign currencies
|
USD
|
NIS
|
169
|
(1)
|
Forward exchange contracts on CPI
|
CPI
|
NIS
|
1,325
|
12
|
Foreign currency purchase options
|
USD
|
NIS
|
444
|
2
|
Foreign currency sell options
|
NIS
|
USD
|
56
|
-
|
Instruments used for hedging
|
||||
Forward exchange contracts on foreign currencies
|
USD
|
NIS
|
270
|
(13)
|
December 31
|
December 31
|
December 31
|
||||||||||
2009
|
2010
|
2011
|
||||||||||
CPI (in points)
|
206.2 | 211.7 | 216.3 | |||||||||
Exchange rate of US$ in NIS
|
3.775 | 3.549 | 3.821 | |||||||||
2009 | 2010 | 2011 | ||||||||||
Change in %
|
||||||||||||
CPI
|
3.9 | % | 2.7 | % | 2.2 | % | ||||||
Exchange rate of US$ to NIS
|
(0.7 | %) | (6.0 | %) | 7.7 | % |
Equity
|
Net income
|
|||||||||||
Change
|
NIS millions
|
NIS millions
|
||||||||||
December 31, 2011
|
||||||||||||
Increase in the CPI of
|
2.0 | % | (37 | ) | (37 | ) | ||||||
Increase in the CPI of
|
1.0 | % | (18 | ) | (18 | ) | ||||||
Decrease in the CPI of
|
(1.0 | %) | 18 | 18 | ||||||||
Decrease in the CPI of
|
(2.0 | %) | 37 | 37 | ||||||||
December 31, 2010
|
||||||||||||
Increase in the CPI of
|
2.0 | % | (30 | ) | (30 | ) | ||||||
Increase in the CPI of
|
1.0 | % | (15 | ) | (15 | ) | ||||||
Decrease in the CPI of
|
(1.0 | %) | 15 | 15 | ||||||||
Decrease in the CPI of
|
(2.0 | %) | 30 | 30 |
Carrying amount
|
||||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Fixed rate instruments
|
||||||||
Financial assets
|
899 | 1,188 | ||||||
Financial liabilities
|
(4,261 | ) | (6,141 | ) | ||||
(3,362 | ) | (4,953 | ) | |||||
Variable rate instruments
|
||||||||
Financial assets
|
28 | 6 | ||||||
Financial liabilities
|
- | (3 | ) | |||||
28 | 3 |
Equity
|
Profit or loss
|
|||||||||||||||||||||||||||||||
1.0% increase
|
1.0% decrease
|
0.5% increase
|
0.5% decrease
|
1.0% increase
|
1.0% decrease
|
0.5% increase
|
0.5% decrease
|
|||||||||||||||||||||||||
NIS millions
|
NIS millions
|
|||||||||||||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||||||
Fixed rate instruments
|
(7 | ) | 7 | (4 | ) | 4 | (7 | ) | 7 | (4 | ) | 4 | ||||||||||||||||||||
Cash flow sensitivity (net)
|
(7 | ) | 7 | (4 | ) | 4 | (7 | ) | 7 | (4 | ) | 4 |
Equity
|
Profit or loss
|
|||||||||||||||||||||||||||||||
1.0% increase
|
1.0% decrease
|
0.5% increase
|
0.5% decrease
|
1.0% increase
|
1.0% decrease
|
0.5% increase
|
0.5% decrease
|
|||||||||||||||||||||||||
NIS millions
|
NIS millions
|
|||||||||||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||||||
Fixed rate instruments
|
(9 | ) | 9 | (4 | ) | 4 | (9 | ) | 9 | (4 | ) | 4 | ||||||||||||||||||||
Cash flow sensitivity (net)
|
(9 | ) | 9 | (4 | ) | 4 | (9 | ) | 9 | (4 | ) | 4 |
Equity
|
Profit or loss
|
|||||||||||||||||||||||||||||||
1.0% increase
|
1.0% decrease
|
0.5% increase
|
0.5% decrease
|
1.0% increase
|
1.0% decrease
|
0.5% increase
|
0.5% decrease
|
|||||||||||||||||||||||||
NIS millions
|
NIS millions
|
|||||||||||||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||||||||||
Variable rate instruments
|
1 | (1 | ) | - | - | 1 | (1 | ) | - | - | ||||||||||||||||||||||
Interest rate swaps
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Cash flow sensitivity (net)
|
1 | (1 | ) | - | - | 1 | (1 | ) | - | - | ||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||||||
Variable rate instruments
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Interest rate swaps
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Cash flow sensitivity (net)
|
- | - | - | - | - | - | - | - |
December 31, 2010
|
December 31, 2011
|
|||||||||||||||||||||||
Interest rates
|
Interest rates
|
|||||||||||||||||||||||
used for
|
used for
|
|||||||||||||||||||||||
Carrying
|
Fair
|
determining
|
Carrying
|
Fair
|
determining
|
|||||||||||||||||||
amount
|
value
|
Fair value
|
amount
|
value
|
Fair value
|
|||||||||||||||||||
NIS millions
|
NIS millions
|
|||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
533 | 533 | 920 | 920 | ||||||||||||||||||||
Current investments, Including derivatives
|
404 | 404 | 290 | 290 | ||||||||||||||||||||
Trade receivables, net
|
1,478 | 1,478 | 1,859 | 1,859 | ||||||||||||||||||||
Other receivables
|
14 | 14 | 33 | 33 | ||||||||||||||||||||
Long-term receivables
|
583 | 583 | 3.5 | % | 1,043 | 1,043 | 5.2 | % | ||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||
Credit and current maturities of long-term loans
|
- | - | (16 | ) | (16 | ) | ||||||||||||||||||
Trade payables and accrued expenses
|
(716 | ) | (716 | ) | (1,026 | ) | (1,026 | ) | ||||||||||||||||
Other current liabilities, including derivatives
|
(128 | ) | (128 | ) | (439 | ) | (439 | ) | ||||||||||||||||
Long-term loans from banks
|
- | - | (19 | ) | (19 | ) | ||||||||||||||||||
Non- current liabilities
|
||||||||||||||||||||||||
Debentures including current maturities and accrued interest
|
(4,424 | ) | (4,585 | ) | (6,358 | ) | *(6,001) | |||||||||||||||||
Other long- term liabilities
|
- | - | (35 | ) | (35 | ) | ||||||||||||||||||
(2,256 | ) | (2,417 | ) | (3,748 | ) | (3,391 | ) |
Level 1:
|
quoted prices (unadjusted) in active markets for identical instruments.
|
Level 2:
|
inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
|
Level 3:
|
inputs that are not based on observable market data (unobservable inputs).
|
December 31, 2011
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
266 | - | - | 266 | ||||||||||||
Derivatives
|
- | 24 | - | 24 | ||||||||||||
Total assets
|
266 | 24 | - | 290 | ||||||||||||
Financial liabilities at fair value through profit or loss
|
||||||||||||||||
Derivatives
|
- | (22 | ) | - | (22 | ) | ||||||||||
Total liabilities
|
- | (22 | ) | - | (22 | ) |
December 31, 2010
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
386 | - | - | 386 | ||||||||||||
Derivatives
|
- | 18 | - | 18 | ||||||||||||
Total assets
|
386 | 18 | - | 404 | ||||||||||||
Financial liabilities at fair value through profit or loss
|
||||||||||||||||
Derivatives
|
- | (18 | ) | - | (18 | ) | ||||||||||
Total liabilities
|
- | (18 | ) | - | (18 | ) |
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Revenues from equipment
|
751 | 802 | 1,747 | |||||||||
Revenues from services:
|
||||||||||||
Cellular voice services
|
4,471 | 4,391 | 2,879 | |||||||||
Cellular content and value added services
|
882 | 1,112 | 1,167 | |||||||||
Internet services
|
- | - | 216 | |||||||||
International long distance services
|
- | - | 96 | |||||||||
Other services
|
379 | 357 | 401 | |||||||||
Total revenues from services
|
5,732 | 5,860 | 4,759 | |||||||||
Total revenues
|
6,483 | 6,662 | 6,506 |
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
According to source of income:
|
||||||||||||
Cost of revenues from handsets
|
690 | 651 | 1,282 | |||||||||
Cost of revenues from services
|
2,643 | 2,671 | 2,126 | |||||||||
3,333 | 3,322 | 3,408 | ||||||||||
According to its components:
|
||||||||||||
Cost of revenues from handsets
|
690 | 651 | 1,282 | |||||||||
Rent and related expenses
|
333 | 330 | 333 | |||||||||
Salaries and related expenses
|
163 | 176 | 240 | |||||||||
Fees to other operators and others
|
1,007 | 1,112 | 630 | |||||||||
Cost of value added services
|
391 | 376 | 270 | |||||||||
Depreciation and amortization
|
489 | 472 | 442 | |||||||||
Royalties and fees (see note 30(1)b)
|
154 | 110 | 133 | |||||||||
Other
|
106 | 95 | 78 | |||||||||
2,643 | 2,671 | 2,126 | ||||||||||
3,333 | 3,322 | 3,408 |
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Salaries and related expenses
|
333 | 376 | 412 | |||||||||
Commissions
|
96 | 90 | 237 | |||||||||
Advertising and public relations
|
99 | 84 | 95 | |||||||||
Depreciation and amortization
|
65 | 75 | 104 | |||||||||
Other
|
123 | 131 | 142 | |||||||||
716 | 756 | 990 |
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Salaries and related expenses
|
145 | 147 | 169 | |||||||||
Depreciation and amortization
|
200 | 177 | 192 | |||||||||
Rent and maintenance
|
75 | 68 | 72 | |||||||||
Data processing and professional services
|
56 | 55 | 76 | |||||||||
Allowance for doubtful accounts
|
94 | 106 | 81 | |||||||||
Other
|
90 | 88 | 95 | |||||||||
660 | 641 | 685 |
Note 26 - Other Expenses, Net
|
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Capital loss from sale of property, plant and equipment
|
6 | 5 | - | |||||||||
Other - net
|
- | - | 1 | |||||||||
Other expenses, net
|
6 | 5 | 1 |
Note 27 - Financing Income and Expenses
|
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Interest income on deposits
|
15 | 27 | 34 | |||||||||
Interest income from installment sale transactions
|
50 | 45 | 65 | |||||||||
Net foreign exchange gain
|
5 | 14 | - | |||||||||
Net change in fair value of financial assets at fair value through profit or loss
|
81 | 20 | 17 | |||||||||
Financing income
|
151 | 106 | 116 | |||||||||
Interest expenses on long term liabilities
|
(229 | ) | (232 | ) | (286 | ) | ||||||
Linkage expenses to CPI on long term liabilities
|
(141 | ) | (78 | ) | (91 | ) | ||||||
Net change in fair value of derivatives
|
- | (26 | ) | (19 | ) | |||||||
Net loss from exchange rate differences
|
- | - | (13 | ) | ||||||||
Financing expenses
|
(370 | ) | (336 | ) | (409 | ) | ||||||
Net financing expenses recognized in profit or loss
|
(219 | ) | (230 | ) | (293 | ) |
A.
|
Details regarding the tax environment of the Group
|
(1)
|
Amendments to the Income Tax Ordinance and the Land Appreciation Tax Law
|
|
(a)
|
On July 14, 2009, the Israeli parliament passed the Economic Efficiency Law (Legislation Amendments for Implementation of the 2009 and 2010 Economic Plan) - 2009, which provided, inter alia, an additional gradual reduction in the company tax rate to 18% as from the 2016 tax year. In accordance with the aforementioned amendments, the company tax rates applicable as from the 2009 tax year are as follows: In the 2009 tax year - 26%, in the 2010 tax year - 25%, in the 2011 tax year - 24%, in the 2012 tax year - 23%, in the 2013 tax year - 22%, in the 2014 tax year - 21%, in the 2015 tax year - 20% and as from the 2016 tax year the company tax rate will be 18%.
|
|
(b)
|
On February 4, 2010 Amendment 174 to the Income Tax Ordinance - Temporary Order for Tax Years 2007, 2008 and 2009 was published in the Official Gazette (hereinafter - "the Temporary Order"). In accordance with the Temporary Order, Israeli Accounting Standard No. 29 regarding the adoption of International Financial Reporting Standards (IFRS) (hereinafter - "Standard 29") shall not apply when determining the taxable income for the 2007-2009 tax years even if it was applied when preparing the financial statements. On January 12, 2012 Amendment 188 to the Income Tax Ordinance was published, which amended the Temporary Order, in a manner that Standard 29 shall not apply also when determining the taxable income for 2010 and 2011.
|
(2)
|
Taxation under inflation
|
B.
|
Composition of income tax expense (income)
|
Year ended December 31, | ||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Current tax expense (income)
|
||||||||||||
Current year
|
423 | 462 | 288 | |||||||||
Adjustments for prior years, net
|
6 | (18 | ) | - | ||||||||
Changes in accounting policy
|
(1 | ) | - | - | ||||||||
Total current tax expenses
|
428 | 444 | 288 | |||||||||
Deferred tax expense (income)
|
||||||||||||
Creation and reversal of temporary differences
|
(20 | ) | (27 | ) | (17 | ) | ||||||
Change in tax rate
|
(41 | ) | - | 33 | ||||||||
Total deferred tax expenses (income)
|
(61 | ) | (27 | ) | 16 | |||||||
Income tax expense
|
367 | 417 | 304 |
C.
|
Income tax recognized directly in equity
|
Year ended December 31, 2011
|
||||||||||||
Before tax
|
Tax expenses
|
Net of tax
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Hedging transactions – equity component
|
37 | (9 | ) | 28 | ||||||||
Year ended December 31, 2010
|
||||||||||||
Before tax
|
Tax expenses
|
Net of tax
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Hedging transactions – equity component
|
3 | (1 | ) | 2 |
Year ended December 31, 2009
|
||||||||||||
Before tax
|
Tax benefit
|
Net of tax
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Hedging transactions – equity component
|
(16 | ) | 4 | (12 | ) |
D.
|
Reconciliation between the theoretical tax on the pre-tax profit and the tax expense:
|
Year ended December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Profit before taxes on income
|
1,549 | 1,708 | 1,129 | |||||||||
Primary tax rate of the Group
|
26 | % | 25 | % | 24 | % | ||||||
Tax calculated according to the Group’s primary tax rate
|
403 | 427 | 271 | |||||||||
Additional tax (tax saving) in respect of:
|
||||||||||||
Non-deductible expenses
|
3 | 2 | 4 | |||||||||
Taxes in respect of previous years
|
6 | (18 | ) | - | ||||||||
Effect of changes in tax rate
|
(41 | ) | - | 33 | ||||||||
Other differences, including inflation differences
|
(4 | ) | 6 | (4 | ) | |||||||
Income tax expense
|
367 | 417 | 304 |
E.
|
Deferred tax assets and liabilities
|
(1)
|
Recognized deferred tax assets and liabilities
|
Allowance for doubtful debts
|
Property, plant and equipment and intangible assets
|
Hedging transactions
|
Carry forward tax deductions and losses
|
Other
|
Total
|
|||||||||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||||||||
Balance of deferred tax asset (liability) as at January 1, 2011
|
64 | (164 | ) | 7 | - | 28 | (65 | ) | ||||||||||||||||
Changes recognized in profit or loss
|
(9 | ) | 17 | - | (5 | ) | 14 | 17 | ||||||||||||||||
Changes recognized in equity
|
- | - | (9 | ) | - | - | (9 | ) | ||||||||||||||||
Effect of change in tax rate
|
10 | (55 | ) | - | 4 | 8 | (33 | ) | ||||||||||||||||
Business combinations (see note 7)
|
13 | (80 | ) | - | 23 | - | (44 | ) | ||||||||||||||||
Deferred tax asset (liability) as at December 31, 2011
|
78 | (282 | ) | (2 | ) | 22 | 50 | (134 | ) | |||||||||||||||
Deferred tax asset
|
78 | 18 | - | 22 | 50 | 168 | ||||||||||||||||||
Offset of balances
|
128 | |||||||||||||||||||||||
Deferred tax asset in statement of financial position as at December 31, 2011
|
40 | |||||||||||||||||||||||
Deferred tax liability
|
- | (300 | ) | (2 | ) | - | - | (302 | ) | |||||||||||||||
Offset of balances
|
(128 | ) | ||||||||||||||||||||||
Deferred tax liability in statement of financial position as at December 31, 2011
|
(174 | ) |
Allowance for doubtful debts
|
Property, plant and equipment and intangible assets
|
Hedging transactions
|
Carry forward tax deductions and losses
|
Other
|
Total
|
|||||||||||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||||||||
Balance of deferred tax asset (liability) as at January 1, 2010
|
57 | (159 | ) | 8 | - | 3 | (91 | ) | ||||||||||||||||
Changes recognized in profit or loss
|
7 | (5 | ) | - | - | 25 | 27 | |||||||||||||||||
Changes recognized in equity
|
- | - | (1 | ) | - | - | (1 | ) | ||||||||||||||||
Balance of deferred tax asset (liability) as at December 31, 2010
|
64 | (164 | ) | 7 | - | 28 | (65 | ) | ||||||||||||||||
Deferred tax asset
|
64 | - | 7 | - | 28 | 99 | ||||||||||||||||||
Offset of balances
|
99 | |||||||||||||||||||||||
Deferred tax asset in statement of financial position as at December 31, 2010
|
- | |||||||||||||||||||||||
Deferred tax liability
|
- | (164 | ) | - | - | - | (164 | ) | ||||||||||||||||
Offset of balances
|
(99 | ) | ||||||||||||||||||||||
Deferred tax liability in statement of financial position as at December 31, 2010
|
(65 | ) |
(2)
|
Unrecognized deferred tax liability
|
F.
|
Tax loss carryforwards and other temporary differences
|
G.
|
Tax assessments
|
December 31
|
||||
2011
|
||||
NIS millions
|
||||
Less than one year
|
301 | |||
Between one and five years
|
752 | |||
More than five years
|
395 | |||
1,448 |
a.
|
Office buildings and warehouses - there are lease agreements for periods of up to 18 years.
|
b.
|
Switching stations - there are lease agreements for switching station locations for periods of up to 21 years and 7 months.
|
c.
|
Cell sites - there are lease agreements for cell sites for periods of up to 16 years.
|
d.
|
Service centers, retail stores and stands - there are lease agreements for service and installation centers and stands for periods of up to 16 years and 8 months.
|
e.
|
Transmission services for cell sites and switches up to 6 years.
|
f.
|
Motor vehicles - lease for a period of 3 years.
|
g.
|
Rights of use of international communication lines - there are lease agreements for a period of up to 13 years.
|
1.
|
The Group has commitments regarding the license it was granted in 1994, most of which are:
|
a.
|
Not to pledge any of the assets used to execute the license without the advance consent of the Ministry of Communications.
|
b.
|
To pay the State of Israel (the State) royalties equal (in 2011) to 1.75% of the Company’s revenues generated from cellular telecommunications services, less payments transferred to other license holders for interconnect fees or roaming services, sale of handsets and losses from bad debts in respect of royalty-bearing services and revenues collected for other license holder. The rate of these royalties has decreased in recent years, from 4.5% in 2002, to 4% in 2003, to 3.5% in 2004 and 2005, to 3% in 2006, to 2.5% in 2007, to 2% in 2008, to 1.5% in 2009 and to 1% in 2010. In January 2011, the applicable regulations
|
c.
|
Netvision's International Long Distance license determines that Netvision will have to pay royalties to the State from Netvision's revenues which derive from international Bezeq services, less payments that are transferred to other communication operators in respect of interconnect, payments to a foreign supplier in respect of outgoing calls, bad debt expenses in respect of royalty-bearing services and revenues which are collected for other license holder. In 2011, the rate of such royalties was 1% of the taxable income, as defined in the Communication Regulations (Bezeq and Transmissions)(Royalties), 2011. This rate is expected to apply in 2012 as well.
|
d.
|
The Company's shareholders' joint equity, combined with the Company's equity, shall not amount to less than $200 million. Regarding this stipulation, a shareholder holding less than 10% of the rights to the Company's equity is not taken into account.
|
2.
|
In September 2005, the Company signed an agreement with Ericsson Israel Ltd. according to which the Company will acquire a UMTS radio access network and ancillary products and services. The Company was obligated to purchase maintenance services for 5 years from the launch of the system (until 2011) and the Company has an option to purchase maintenance services for 20 years from the launch of the systems (until 2026), including all the required services for establishment and maintenance of the system (including receipt of updates and upgrades for the system). The aggregate scope of the agreement is USD 27.5 million payable over five years. In December 2011, the Company entered into an addendum to the agreement for the purchase of upgraded UMTS /HSPA products and related services, under similar terms. The Company obligated in such amendment to purchases of at least USD 12 million in 2012. Under the agreement the parties generally have limited liability for direct damages of up to 40% of the value of the agreement.
|
3.
|
In July 2001, the Company signed an agreement with Nokia Israel Communications Ltd., for the purchase of a GSM/GPRS system (the agreement was assigned to Nokia-Siemens Networks Israel Ltd., or Nokia Siemens, in 2007). The Company was also granted an option to purchase GSM 800, EDGE, UMTS and ancillary systems. In 2002, the Company exercised the option to purchase an EDGE system, and in 2005, the Company purchased a UMTS core system, under similar terms. In May 2011, the Company entered into an addendum to the agreement for the purchase of radio equipment to the UMTS/HSPA network and related products and additional services to the network. Nokia Siemens is obligated to offer the Company maintenance services for 15 years from execution of the said addendum (until 2026). Under the agreement, the parties generally have limited liability for direct damages of up to 10% of the value of the agreement.
|
|
4.
|
Be’eri Printers provides the Company's printing supplies and invoices as well as the distribution, packaging and delivery of invoices and other mail to the postal service distribution centers. The Company entered into an agreement with Be’eri Printers - Limited Partnership and with Be’eri Technologies (1977) Ltd., or together Be’eri, for printing services in August 2003.
Under the terms of the agreement, the Company committed to purchase from Be’eri a minimum monthly quantity of production and distribution services which may be reduced if the Company modifies its printed invoice delivery policy. The agreement is valid until December 2013.
|
|
5.
|
As at December 31, 2011, the Group has commitments to purchase equipment for the communication network, cellular telephone equipment and systems and software maintenance, at an amount estimated at NIS 413 million.
|
|
6.
|
In July 2010, the Company entered into an agreement with Amdocs (Israel) Limited, or Amdocs Israel, for the provision of operation, maintenance, management and development services for its billing system, which were previously performed partly by Amdocs UK and Amdocs Israel and partly by the Company's employees. Amdocs Israel is obligated to provide the Company with such services for a period of eight years (until August 2018), and after 30 months from entering into this agreement the Company has the option to terminate the agreement subject to the provision of prior written notice and payment of certain amounts. Under the agreement, the parties generally have limited liability for direct damages of up to the value of the agreement for each year subject to certain additional exceptions to the limitation.
|
|
7.
|
In October 2010, the Company entered into a long-term agreement for the enlargement of the current techno-logistic center, including its new central laboratory, in Netanya, Israel, and the lease thereof. The leased property covers approximately 11,000 square meters. The lease is for a term of ten years starting August 1, 2011 and is renewable for an additional period of 5 years, at the Company's option. In case the Company does not exercise the option it shall be required to pay approximately NIS 11 million.
|
|
8.
|
In December 2010, the Company entered into an agreement with Ashdod Energy Ltd., expected to construct a private power plant fueled by natural gas in Israel, by the end of 2013. Under the agreement the Company committed to purchase electricity for the earlier of a period of 15 years from commencement of operations of the power plant or until January 2028, subject to the Company's right to terminate the agreement after 8 years from the commencement of operations of the power plant under certain conditions.
|
|
9.
|
In the years 2003 through 2011, Netvision entered into a number of agreements with Mediterranean Nautilus Ltd. and Mediterranean Nautilus (Israel) Ltd., or together Med Nautilus. Pursuant to its agreements with Med Nautilus, Netvision purchased rights of use, or IRU, of certain telecommunications capacities on Med Nautilus' communication cables, as well as maintenance and operation services relating to these cables. The agreements include options pursuant to which Netvision may expand the purchased capacity. The term of the agreement with respect to part of the capacity purchased from MedNautilus is until May 2027. Netvision has the option to terminate agreements with respect to parts of the capacity in 2017 and 2022. The remainder of the obligation to Med Nautilus in respect of rights of use of international communication lines from all existing agreements as of December 31, 2011 is NIS 243 million.
|
10.
|
In August 2010, Netvision entered into an agreement with Bezeq that regulates the provision of the internet connectivity services by Bezeq to Netvision internet network. In November 2011, the agreement was updated and was extended until the end of 2014. Under this agreement, Netvision obligated to purchase minimum bandwidth capacities which Bezeq undertook to provide Netvision, in consideration to a price that reflects a considerable decrease in comparison to the previous price per giga-byte unit.
|
|
1.
|
Consumer claims
|
Claim amount
|
Number of claims
|
Total claims amount (NIS millions) |
Up to NIS 100 million
|
32
|
1,083 |
NIS 100-500 million
|
11
|
2,251 |
NIS 500 million-NIS 1 billion
|
1
|
817 |
Unquantified claims
|
7
|
- |
|
2.
|
Environmental claims
|
Claim amount
|
Number of claims
|
NIS 1 billion and above
|
4
|
|
a.
|
In December 2007, a purported class action lawsuit was filed against the Company (and two other cellular operators) in the District Court of Tel Aviv-Jaffa, by plaintiffs alleging to be residing next to cell sites of the defendants which the plaintiffs allege were built in violation of the law. The plaintiffs allege that the defendants have created environmental hazards by unlawfully building cell sites and therefore demand that the defendants will compensate the public for damages (other than personal damages, such as depreciation of property and/or health related damages which are excluded from the purported class action), dismantle existing unlawfully built cell sites and refrain from unlawfully building new cell sites. If the lawsuit is certified as a class action, the compensation claimed from the defendants is estimated by the plaintiffs to be NIS 1 billion.
|
|
b.
|
In March 2010, a purported class action lawsuit was filed against the Company and another cellular operator, in the District Court of Tel-Aviv-Jaffa by two plaintiffs alleging to be subscribers of the defendants, in connection with allegations that the defendants breached their license by failing to purchase insurance against monetary liability which the defendants may suffer due to bodily damages that allegedly may be caused by cellular radiation.
|
c.
|
In May 2010, a purported class action lawsuit was filed against the Company (and the three other Israeli cellular operators) in the District Court of Central Region, by four plaintiffs alleging to be subscribers of the defendants. The plaintiffs allege that the defendants unlawfully and in violation of their license and agreements with their subscribers fail to construct cell sites in a sufficient quantity, scope and coverage in order to provide cellular services in the requisite quality; fail to test, repair and notify the subscribers that non-ionizing radiation level for repaired handsets may exceed the manufacturer's specifications and the maximum level allowed by law; fail to inform and caution the subscribers of the risks related to the manner of carrying the handset and its distance from the subscriber's body; all of which allegedly increase the level of non-ionizing radiation and health risks to which the subscribers are exposed. In September 2010, at the Company and two other cellular operators' request, the Court instructed the transfer of this purported class action to the Tel-Aviv-Jaffa District Court, to be heard by the Judge hearing the purported class action filed against the Company in December 2007 (by plaintiffs alleging that the Company and the two other Israeli cellular operators have created environmental hazards by unlawfully building cell sites). If the lawsuit is certified as a class action, the total amount claimed from the Company is estimated by the plaintiffs to be approximately NIS 3.68 billion (the total amount claimed from the four defendants is estimated by the plaintiffs to be approximately NIS 12 billion).
|
d.
|
In June 2011, a purported class action lawsuit was filed against the Company and three other cellular operators in the District Court of Tel-Aviv-Jaffa, by an Israeli citizen, in connection with the allegation that the defendants mislead customers who buy accessories for carryingcellular handsets or do not disclose to them relevant data concerning radiation hazards associated with the usage of accessories for carrying cellular handsets, allegedly contrary to the cellular handsets manufacturers' instructions and warnings and the Israeli Ministry of Health' recommendations.
|
|
3.
|
Employees, subcontractors, suppliers, authorities and others claims
|
a.
|
To the Government of Israel (to guarantee performance of the License) - U.S. $10 million.
|
b.
|
To the Government of Israel (to guarantee performance of the Licenses of the Group ) - NIS 31 million.
|
c.
|
To suppliers, government institutions and other - NIS 53 million.
|
1.
|
In September 2010, the Ministry of Communications announced its decision to amend the regulations which determine the interconnect fees paid to cellular operators in Israel, as follows:
|
|
·
|
the maximum interconnect tariff payable by a landline operator or a cellular operator for the completion of a call on another cellular network was reduced from the previous tariff of NIS 0.251 per minute to NIS 0.0687 per minute from January 1, 2011; to 0.0634 per minute from January 1, 2012; to NIS 0.0591 per minute from January 1, 2013; and to NIS 0.0555 from January 1, 2014;
|
|
·
|
the maximum interconnect tariff payable by a cellular operator for sending an SMS message to another cellular network was reduced from the previous tariff of NIS 0.0285 to NIS 0.0016 from January 1, 2011; to NIS 0.0015 from January 1, 2012; to NIS 0.0014 from January 1, 2013; and to NIS 0.0013 from January 1, 2014. The tariffs do not include VAT and will be updated annually from January 1, 2011, based on the change in the Israeli CPI published in November of the year preceding the update date from the average annual Israeli CPI for 2009. The tariffs will also be increased by the percentage of royalties payable to the Ministry of Communications by the operator. As a result of these updates, including the increase of the royalties the Group pays to the Ministry of Communications, the current maximum interconnect tariffs are NIS 0.0728 per minute for the completion of a call on another cellular network and NIS 0.0017 for a completion of an SMS message to another cellular network.
|
2.
|
In July 2009, the Communications Law was amended to include an MVNO license. In January 2010, the regulations necessary for the grant of an MVNO license were promulgated. As of the balance sheet date the Ministry of Communications granted nine MVNO licenses one of which was returned. Under the Communications Law, in the event that a MVNO and the cellular operator, will not have reached an agreement as to the provision of service by way of MVNO within six months from the date the MVNO has approached the cellular operator, and if the Ministry of Communications together with the Ministry of Finance determine that the failure to reach an agreement is due to unreasonable conditions imposed by the cellular operator, the Ministry of Communications may intervene in the terms of the agreement, including by setting the price of the service. The operation of MVNO operators in the cellular market and unfavorable terms and consideration for the service (such as equal or based on the Interconnect tariff), may result in material adverse effect on the Group's results of operations. In 2011 five MVNO's have entered into hosting agreements, one of which (Home Cellular) has entered into an agreement with the Company.
|
3.
|
In March 2010 the Israeli Ministry of Interior Affairs submitted a draft regulation setting substantial limitations on the ability to construct radio access devices based on the exemption from obtaining a building permit, for the approval of the Economy Committee of the Israeli Parliament. The proposed limitations will render the construction of radio access devices based on the exemption practically impossible. In September 2010, the Israeli Supreme Court issued an interim order prohibiting further construction of radio access devices in cellular networks in reliance on the exemption (requested in two petitions filed in July 2008 and June 2009). The interim order, which was issued pursuant to the Israeli Attorney General's request, will be in effect until the enactment of the proposed regulations or other decision by the court. A further decision of the Supreme Court in February 2011, states that the order will not apply to the replacement of existing radio access devices under certain conditions.
|
4.
|
National Zoning Plan 36 includes guidelines for constructing cell sites in order to provide cellular broadcasting and reception communications coverage throughout Israel, while preventing radiation hazards and minimizing damage to the environment and landscape. However, National Zoning Plan 36 is in the process of being revised. Current proposed changes will impose additional restrictions and requirements on the construction and operation of cell sites. In June 2010, the proposed changes were approved by the National Council for Planning and Building and submitted for the approval of the Government of Israel. If the proposed changes are approved by the Israeli Government they will harm the Group's ability to construct new cell sites, make the process of obtaining building permits for the construction and operation of cell sites more cumbersome and costly, could adversely affect the Group's existing network and may delay the future deployment of its network.
|
5.
|
In December 2010, the Communications Law was amended to reduce the early termination fees in pricing plans that include a commitment to a predefined period, in the cellular market. In accordance with the amendment, as of February 1, 2011, early termination fees are calculated based on the subscriber's average monthly bill, resulting in a negligible fee. The reduced Early Termination Fees apply to customers with less than a certain amount of phone lines. The reduction applies to existing as well as new pricing plans. In August 2011, the Communications Law was amended to annul early termination fees in all other communications markets. The reduction and annulment of early termination fees has led to the offering of packages at lower average revenue per minute and resulted in accelerated price erosion, materially increased churn rate and increased subscriber acquisition and retention costs due to materially increased rate of gross recruitment of subscribers.
|
|
6.
|
In December 2010, the Communication Law was amended to allow national roaming for new operators and Mirs Communications Ltd. ("Mirs"), one of the existing four cellular companies. Following the amendment, if a new operator or Mirs and the hosting operator have not reached an agreement as to the terms of the service (including the consideration), for any reason, until the service is to commence (after certain criteria is met) the service will be provided for the then prevailing interconnect tariff (in case of a call and for data services - 65% of the interconnect tariff per 1 mega) and subsequently (but no later than February 1, 2012) shall be determined by the Ministry of Communications with the consent of the Minster of Finance and applied retroactively. In April 2011 and December 2011 Mirs and Golan, respectively, were awarded UMTS operator licenses including authorization for national roaming on the existing cellular networks. In September 2011, Mirs entered a national roaming agreement with Pelephone and in October 2011, the Company entered a national roaming agreement with Golan. Additional UMTS operators and unfavorable terms and consideration for the service may result in material adverse effect on the Company's results of operations.
|
7.
|
In October 2011, the public committee appointed by the Ministry of communications to examine Bezeq's tariffs structure and tariffs for wireline wholesale services and to review the possible annulment of the structural limitations currently imposed on Bezeq and its subsidiaries, published its recommendations. The recommendations include: (1) The creation of an effective
|
8.
|
In January 2012, a bill proposing to set gradually increasing financial sanctions on communication operators, for breach of their licenses, the amount of which shall be calculated as a percentage of the operator's income and based on the gravity of the breach passed the preliminary enacting stage in the Israeli Parliament. Such bill, if adopted, is expected to substantially increase the Ministry of Communications' usage of such sanctions. Substantial sanctions will harm the Group's results of operations.
|
A.
|
Balance sheet
|
December 31
|
December 31
|
|||||||
2010
|
2011
|
|||||||
NIS millions
|
NIS millions
|
|||||||
Current assets
|
1 | 150 | ||||||
Current liabilities
|
5 | 2 | ||||||
Long-term liability - debentures
|
267 | 214 |
B.
|
Transactions with related and interested parties executed in the ordinary course of business at regular commercial terms:
|
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Income:
|
||||||||||||
Revenues
|
32 | 33 | 26 | |||||||||
Expenses:
|
||||||||||||
Cost of revenues
|
77 | 74 | 43 | |||||||||
Other
|
16 | 8 | 18 |
C.
|
Key management personnel compensation (including directors)
|
Year ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
NIS millions
|
NIS millions
|
NIS millions
|
||||||||||
Short-term employee benefits
|
5 | 6 | 11 | |||||||||
Share-based payments
|
- | - | - | |||||||||
5 | 6 | 11 |
D.
|
An agreement with DIC
|
E.
|
An agreement with Netvision 013 Barak
|
1.
|
Definitions
|
a)
|
In these Articles the following terms shall bear the meaning ascribed to them below:
|
b)
|
The captions in these Articles are for convenience only and shall not be deemed a part hereof or affect the construction of any provision hereof.
|
c)
|
Unless the subject or the context otherwise requires, words and expressions not defined herein shall have the respective meanings set forth in the Companies Law in force on the date when these Articles or any amendment thereto, as the case may be, first became effective; words and expressions importing the singular shall include the plural and vice versa; and words and expressions importing the masculine gender shall include the feminine gender.
|
2.
|
Object and Purpose of the Company
|
3.
|
Limitation of Liability
|
4.
|
Authorized Share Capital
|
5.
|
Increase of Authorized Share Capital
|
6.
|
Rights of the Ordinary Shares
|
7.
|
Special Rights; Modifications of Rights
|
8.
|
Consolidation, Subdivision, Cancellation and Reduction of Share Capital
|
9.
|
Issuance of Share Certificates; Replacement of Lost Certificates
|
10.
|
Allotment of Shares; Registered Holders of Shares
|
11.
|
Calls on Shares
|
12.
|
Forfeiture and Surrender
|
13.
|
Lien
|
14.
|
Sale after Forfeiture or Surrender or in Enforcement of Lien
|
15.
|
Redeemable Shares
|
16.
|
Effectiveness and Registration
|
17.
|
Limitation on Transfer of Shares Held by Original Minority Shareholders
|
18.
|
Contravening Holdings; Compliance with the Cellular License and the Other Licenses
|
18A.
|
Security Committee; Security Observer; Qualifications of Directors and Officers
|
19.
|
Record Dates
|
20.
|
Decedents' Shares
|
21.
|
Receivers and Liquidators
|
22.
|
Annual General Meeting
|
23.
|
Extraordinary General Meetings
|
24.
|
Notice of General Meetings
|
25.
|
Quorum
|
26.
|
Chairman of Meetings
|
27.
|
Adoption of Resolutions at General Meetings
|
28.
|
Resolutions in Writing
|
29.
|
Power to Adjourn
|
30.
|
Voting Power
|
31.
|
Voting Rights
|
“I, the undersigned, | , being a | ||
(name of shareholder)
|
|||
shareholder of Cellcom Israel Ltd. hereby appoints
|
of | ||||
(name of proxy)
|
(address of proxy)
|
|||
as my proxy to attend and vote on my behalf at [any General Meeting of the Company] [the General Meeting of the Company to be held on the _____ day of _______ , 2____ ] and at any adjournment thereof.
Neither the holding nor the voting of the shares to which this proxy relates requires the approval of the Minister of Communications pursuant to Company’s telecommunication licenses and are not considered “Contravening Holdings”, as this term is defined in the Company’s Articles of Association.
Signed this ______ day of ___________, 2___ .
|
||||
,” | ||||
(signature of shareholder)
|
33.
|
Effect of Death of Appointer or Revocation of Appointment
|
34.
|
Powers of Board of Directors
|
35.
|
Exercise of Powers of Directors
|
36.
|
Delegation of Powers
|
37.
|
Number of Directors
|
38.
|
Election and Removal of Directors
|
39.
|
Qualification of Directors
|
40.
|
Continuing Directors in the Event of Vacancies
|
41.
|
Vacation of Office
|
42.
|
Remuneration of Directors
|
43.
|
Conflict of Interests
|
44.
|
Alternate Directors
|
45.
|
Meetings
|
46.
|
Quorum
|
47.
|
Chairman of the Board of Directors
|
48.
|
Validity of Acts Despite Defects
|
49.
|
General Manager
|
50.
|
Minutes
|
51.
|
Declaration and Payment of Dividends
|
52.
|
Amount Payable by Way of Dividends
|
53.
|
Interest
|
54.
|
Form of Dividend
|
55.
|
Retention of Dividends
|
56.
|
Unclaimed Dividends
|
57.
|
Mechanics of Payment
|
58.
|
Financial Statements
|
59.
|
Outside Auditor
|
60.
|
Internal Auditor
|
61.
|
Exculpation, Indemnity and Insurance
|
62.
|
Notices
|
63.
|
Rights of Signature
|
64.
|
Winding Up
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Between
|
||
Cellcom Israel Ltd.
|
||
of 10 HaGavish St., Netanya
|
||
Telephone: 052-9989595
|
||
Fax: 098607986
|
||
(The “Company”)
|
of the First Part;
|
|
And:
|
||
Hermetic Trust (1975) Ltd.
|
||
of 113 HaYarkon St., Tel Aviv
|
||
Telephone: 03-5274867
|
||
Fax: 03-5271736
|
||
(The “Trustee”)
|
||
of the Second Part;
|
Whereas
|
The Company’s board of directors decided on July 14, 2011 to publish a shelf prospectus according to which the Company might issue, inter alia, Series F to O and Series 1 to 6 Debentures of the Company, in the manner described in this Indenture and in the Shelf Prospectus; and
|
Whereas
|
An Indenture had been executed between the parties on March 31, 2009 for the Series E to I Debentures and the Series 1 to 2 Debentures which were offered pursuant to a shelf prospectus published by the Company in March 2009 and by virtue of which the Company issued the Series E Debentures; and it is agreed that the said indenture shall remain in effect only in respect of the Series E Debentures of the Company; and
|
Whereas
|
The Trustee declares that it is a company registered in Israel, engaged in trusts and it complies with the qualification requirements set forth in the Securities Law, 5728-1968 (the “Securities Law”) to serve as a trustee for the debentures subject matter of this Indenture and that there is no impediment according to the Securities Law against the engagement thereof with the Company according to this Indenture and that it complies with the requirements and qualification terms set forth in the Securities Law to serve as a trustee for the issuance of the debentures subject matter of this Indenture. The contact person at the Trustee in respect of this Indenture is Merav Offer Oren, Joint CEO, e-mail: hermetic@hermetic.co.il; and
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Whereas
|
Each of the parties to this Indenture declares, that they are not subject to any impediment according to any law or agreement against the engagement thereof in this Indenture; and
|
Whereas
|
The Trustee has agreed to operate as a trustee of the Debenture holders subject matter of this Indenture, according to the trust terms specified in this Indenture below; and
|
Whereas
|
The provisions of this Indenture shall apply, separately to each of the Debenture Series subject matter of this Indenture and this Indenture shall be deemed as if separately signed for each of the said series and independently of each other;
|
1.
|
Interpretation and Definitions
|
1.1.
|
The preamble of this Indenture and the annexes and schedules thereto constitute an integral part hereof.
|
1.2.
|
The division of this Indenture into sections as well as the provision of headings to sections, were done for purposes of convenience and as reference only, and may not be used for interpretation.
|
1.3.
|
Each term or expression in this Indenture, except for those explicitly defined in this Indenture (including those defined in Section 1.6 below) will have the meaning ascribed thereto in the Debenture Certificate (the form of which is attached in the First Schedule of this Indenture), unless another intention is implicated by the contents of matters or context thereof.
|
1.4.
|
Anywhere in the Indenture which says “subject to any law” (or a similar expression), the meaning is subject to any mandatory law.
|
1.5.
|
Anything stated in this Indenture in the plural shall also include the singular by implication and vice a versa, and anything stated in the masculine shall also include the feminine and vice a versa, and anything referring to a person, shall also include a corporation by implication, all when there is no other explicit or implicit provision or if the contents of matters or context thereof does not mandate otherwise.
|
1.6.
|
The terms specified below shall have in this Indenture the meaning stated alongside them, unless another intention is implicated from the contents of matters or the context thereof, or if explicitly otherwise stated below:
|
This or the “Indenture”
|
This Indenture including the schedules and annexes attached hereto, constituting an integral part hereof.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
The “Prospectus” or the “Shelf Prospectus” -
|
A shelf prospectus of the Company which shall be published in respect of, inter alia, debentures, as shall be amended from time to time.
|
||
The “Shelf Offering Report” or the “Offering Report” -
|
The shelf offering reports which shall be released pursuant to the shelf prospectus, according to the provisions of Section 23a of the Securities Law, 5728-1968, in which all of the special details for such offering shall be completed according to the provisions of any law, including the Rules and Regulations of TASE, as shall be in effect at the time.
|
||
The “Debenture Series” or the “Relevant Series”
|
Registered series F to O and Series 1 to 6 Debentures of the Company, the terms of each of which will be according to the debenture certificate of such series and the Shelf Offering Report according to which such series shall be initially offered, which will be issued from time to time by the Company, according to its sole discretion.
It is clarified, that even though in the Shelf Prospectus it was stipulated that the total par value of each of the debenture series would not exceed NIS5,000,000,000, the Company shall be entitled to increase, from time to time and pursuant to the provisions of any law, each of the debenture series, with no limitation, and this Indenture, and the terms hereunder, shall apply to each of the Debenture Series, with no amount limitation.
|
||
The “Debentures” or the “Debenture of the Relevant Series” -
|
Debentures of each of the Debenture Series
|
||
The “Relevant Series' Initial Offering Report” -
|
An offering report according to which Debentures of the Relevant Series shall be initially offered.
|
||
The “Trustee” -
|
Hermetic Trust (1975) Ltd. and/or anyone who shall serve from time to time as a trustee of the Debenture holders pursuant to this Indenture.
|
||
The “Register”
|
The register of the holders of the Debentures of the Relevant Series, as stated in Section 26 of this Indenture.
|
||
“Debenture Certificate”
|
A debenture certificate in respect of the relevant series, the form of which appears in the First Schedule of this Indenture and which shall be issued according to the terms of this Indenture and the Shelf
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Prospectus. | |||
The “Law” or the “Securities Law” -
|
The Securities Law, 5728-1968 and the regulations promulgated thereunder, as shall exist from time to time.
|
||
“TASE”
|
The Tel Aviv Stock Exchange Ltd.
|
||
The “Debenture holders” and/or the “Debenture Owners” and/or the “Holders” -
|
Anyone holding the Debentures.
|
||
“Business Day” or “Bank Business Day” -
|
Any day on which most of the banks in Israel are open for the performance of transactions.
|
||
“Principal”
|
The total unpaid nominal value of the Debentures of the Relevant Series.
|
||
“Special Resolution” -
|
A resolution adopted in a general meeting of the Holders of Debentures of the Relevant Series, in which Holders of at least fifty five percent (55%) of the unpaid balance of the Debenture Principal of the same series in circulation, were present in person or by proxy, or in an adjourned meeting in which the Holders of at least ten percent (10%) of the said balance were present in person or by proxy, and which was adopted (whether in the original meeting or in the adjourned meeting) at a majority of at least seventy five percent (75%) of the overall votes of the participants counted in the vote, not including abstainers.
|
||
“TASE Clearinghouse”
|
The Tel Aviv Stock Exchange Clearing House Ltd.
|
2.
|
Issuance of the Debentures and the Applicability of the Indenture
|
2.1.
|
Up to 10 series of Series F to O Debentures while each of these Debenture Series will be at a total nominal value of up to NIS 5,000,000,000, registered, and available for payment (principal) in one payment or more, equal or unequal, on each of the dates, all as shall be specified in the offering report according to which each of the said series will be first offered, but no more than on one date in each quarter (the “Series F to O Debentures”). The linkage (or no linkage) basis and the type of interest (or no interest) that the Debenture Principal of each of the said series shall bear, will be specified in the offering report according to which such Debentures shall be initially offered. For
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
specification of the linkage bases of the Series F to O Debentures and the types of interest for such Debentures, possible according to the Shelf Prospectus, see Section 2 of the Terms and Conditions Overleaf. The interest rate borne by the Debenture Principal of each of the said series which will be issued, or the margin above or below the Base Interest borne by the Debenture Principal of each of the said series, or the absence of interest (or such margin) borne by the Debenture Principal of each of the said series, as applicable, will be specified in the offering report according to which such debentures will be initially offered, or will be determined in a tender according to which their initial offer will be prepared. The interest, if any, on the Debenture Principal of the series F to O will be paid in one or more installments on each of the dates, all as shall be specified in the offering report according to which such debentures will be initially offered, but not more than once in a quarter. The dates and number of Principal installments, the linkage (or no linkage) base, the interest type or the margin above or below the Base Interest rate as applicable, or the manner of determination thereof and the dates of payment of the interest (or the absence of such interest or margin) of the Series F to O Debentures, as shall be specified in the offering report according to which each of the said series of debentures shall be initially offered, will be determined by the Company at the eve of the initial offering of the Debentures of the Relevant Series. The Company will be entitled to determine in the offering report in which the Series F to O Debentures will be initially offered, that the Company shall be conferred a right to subject the debentures of the said series to early redemption as aforesaid and subject to the terms as specified in Section 7.2 of the Indenture.
|
|
If after the date of the initial issuance of the Debentures of any series of the Series F to O such Debenture Series shall be expanded by the Company, the Holders of Series F to O Debentures which will be issued within the framework of the expansion of such series, will not be entitled to receive payment on account of a Principal and/or interest for the said Debentures, in respect of which the effective date for payment shall occur prior to the date of issuance as aforesaid.
|
2.2.
|
Up to 6 series of convertible debentures (Series 1 to 6) while each of these Debenture Series will be at an overall nominal value of up to NIS 5,000,000,000, registered, and available for payment (Principal) in one payment or more, equal or non-equal, on each of the dates, all as shall be specified in the Offering Report according to which each of the said series be initially offered, but no more than on one date in each quarter (the “Series 1 to 6 Debentures”). The linkage (or no linkage) base and the type of interest (or no interest) that the Debenture Principal of each of the said series shall bear, will be specified in the Offering Report according to which such Debentures shall initially be offered. For specification of the linkage bases of the Series 1 to 6 Debentures and the types of interest for such Debentures, possible according to this Shelf Prospectus, see Sections 2 and 3 of the Terms and Conditions
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Overleaf. The interest rate borne by the Debenture Principal of each of the said series, or the margin above or below the Base Interest which will be borne by the Debenture Principal of each of the said series, or the absence of interest (or absence of such margin) which will be borne by the Debenture Principal of each of the said series, as applicable, will be specified in the Offering Report according to which such debentures will be initially offered, or will be determined in a tender according to which their offer will be first prepared. The Interest, if any, on the Debenture Principal of the said series will be paid in one or more installments on each of the dates, all as shall be specified in the Offering Report according to which such debentures will be first offered, but not more than once in a quarter. The dates and number of Principal installments, the linkage (or no linkage) basis, the interest type or the margin above or below the Base Interest rate, as applicable, or the manner of determination thereof and the dates of payment of the interest (or the absence of such interest or margin) of the Series 1 to 6 Debentures, as shall be specified in the Offering Report according to which each of the said series of debentures shall be first offered, will be determined by the Company prior to the initial offering of the Debentures of the Relevant Series. The Series 1 to 6 Debentures will be convertible into ordinary shares of the Company as shall exist on the date of release of the Initial Offering Report of each of the said series and as shall be specified therein, on each day which trade is performed at TASE (a “Trade Day”), commencing on the date of registration of such Debentures for trade on TASE and until several days prior to the expiration of the term of Debentures of such series, except for several days prior to the effective date for partial redemption and until the date of performance of the partial redemption all in accordance with TASE’s directives as shall be in effect on the Offering Report Date, according to a conversion rate which will be no less than the nominal value of the ordinary shares of the Company on the First Offering Report Date of the Series 1 to 6 Debentures (subject to adjustments as specified in Sections 7.3 and 7.4 of the Terms and Conditions Overleaf), in the manner and under the terms, all as shall be specified in the First Offering Report of the Debentures of each of the said series, according to the determination of such details by the Company at the eve of the initial offering of the Debentures of the Relevant Series. The Company may determine in the Offering Report in which the Series 1 to 6 Debentures shall be initially offered, that the Company will be granted the right to subject the Debentures of the said series to early redemption as aforesaid and subject to the terms as specified in Section 7.2 of the Indenture.
|
|
If after the date of the initial issuance of the Debentures of any series of the Series 1 to 6 such Debenture Series will be expanded by the Company, the Holders of Series 1 to 6 Debentures which will be issued within the framework of the expansion of such series, will not be entitled to receive payment on account of Principal and/or interest for the said Debentures, in respect of which the effective date for payment shall occur prior to the date of issuance as aforesaid.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
2.3.
|
The provisions of this Indenture shall apply, separately, in respect to each of the Debenture series, and all – unless otherwise stated or implicated from the context of matters. The provisions of this Indenture in respect of one of the relevant series are not contingent and do not depend on the provisions of this Indenture in respect of another series.
|
2.4.
|
Insofar as by virtue of the Shelf Prospectus, the Series F to O and/or Series 1 to 6 Debentures shall be offered, the possibility shall be examined, of the Trustee’s tenure as a trustee for the Debentures of the series that shall be offered in such an Offering Report, in whole or in part, in light of the existence or absence of possible conflict of interests between the Series B, D and E Series Debenture holders, which as of the date of execution of this Indenture the Trustee serves as a trustee for debentures of such series, and the Holders of the Debentures of the series that shall be offered as aforesaid, according to the provisions of law (including – the directives of the Securities Authority) commencing on such date.
|
3.
|
Expansion of existing series and issuance and allocation of Debentures and additional securities
|
3.1.
|
The Company shall be entitled, from time to time, without requiring an approval from the Trustee for the Relevant Series and/or the Holders of the Debentures of the Relevant Series who exist at the time, to expand each of the Debenture Series and issue additional Debentures of the same series (whether through a private offering, in the framework of a Prospectus, according to a Shelf Offering Report or otherwise), including to a subsidiary of the Company, at any price and in any manner that the Company shall deem fit, including at a discount or a premium (including with no discount or premium) rate different than those that prevailed (if any) in other issuances which were carried out of the same series, provided that it shall provide a notice to the Trustee for such series in respect thereof. The Trustee shall serve, subject to the provisions of the Indenture, as a trustee for the Debentures of the Relevant Series, as shall be from time to time in circulation, also in the case of expansion of a series and the consent of the Trustee to the service as aforesaid for the expanded series, will not be required. The Debentures of the Relevant Series which will be in circulation and other Debentures of the same series, which will be issued (if any) as stated in this Section above, shall constitute (commencing on the date of issuance thereof) one series for all intents and purposes, and the indenture of the Debentures of such series shall apply also in respect of all of the additional Debentures of such series. The additional Debentures will not confer a right for payment of Principal and/or interest in respect of the Debentures of the Relevant series for which the effective date for payment occurs prior to the date of issuance thereof. In case of the expansion of a series as aforesaid, the tax implications as specified in the Shelf Prospectus and in the relevant Offering Report shall apply.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
3.2.
|
Without derogating from the aforesaid, the Company reserves the right to issue at any time additional series of Debentures and/or other securities, of any type, without requiring the receipt of an approval from the Trustee and/or the Holders existing at the time, whether they purchase a Conversion Right in the Company’s shares or not, and under terms of payment, interest, linkage, collateral and other terms as it shall deem fit, whether they are preferable to the terms of the Debentures of any Relevant Series in circulation, equal thereto or inferior thereof.
|
3.3.
|
Nothing stated in this Section above shall constitute prior consent on behalf of the Trustee or the Debenture holders to such issuance, or derogate from any rights of the Trustee and the Holders of the Debentures pursuant to the Indenture.
|
4.
|
The Company hereby undertakes to pay all of the Principal amounts, the interest (including the interest in arrears, if any) and the linkage differentials pursuant to the terms of the Debentures (insofar as such shall be issued) and to comply with all of the other conditions and undertakings imposed thereon pursuant to the terms of the Debentures and this Indenture.
|
5.
|
Securing the Debentures
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
6.
|
Purchase Debentures by the Company and/or a subsidiary of the Company and/or a corporation controlled by the Company
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.
|
Early Redemption
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7.1.
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Early Redemption initiated by TASE
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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7.2.
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Early Redemption initiated by the Company
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[a]
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The minimal amount of each early redemption will be determined in the First Offering Report of the Debentures of the Relevant Series.
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[b]
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Upon the adoption of a resolution of the Company’s board of directors pertaining to early redemption as aforesaid, the Company shall release an immediate report regarding the performance of early redemption for Holders of Debentures of the Relevant Series with a copy to the Trustee, the effective date for performance of which will be determined in the immediate report and shall occur no less than seventeen (17)
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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days and no more than forty five (45) days prior to the performance of early redemption. Notwithstanding the aforesaid, in the early redemption of Series 1 to 6 Debentures only, the effective date for performance of early redemption shall occur no less than thirty (30) days and no more than forty five (45) days before the early redemption. The date of the early redemption shall not occur in the period between the effective date for payment of interest due to the Debentures of the Relevant Series and the date of actual payment. In the immediate report as aforesaid, the Company shall publish the Principal amount to be paid through early redemption as well as the interest accrued in respect of the said Principal amount until the early redemption date, according to the provisions of subsection [c] below.
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Partial redemption shall not be carried out more than once in each calendar quarter, and insofar as partial redemption be carried out during a quarter in which Principal and/or interest payments are carried out, the partial early redemption will be carried out on the date which the payment is made as aforesaid.
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Early redemption for a part of the Relevant Debenture Series shall not take place if the amount of the last redemption shall be less than NIS3.2 million. On a partial early redemption date, if any, the Company shall announce in an immediate report the: (1) rate of partial redemption in terms of the unpaid balance; (2) rate of the partial redemption in terms of the original series; (3) the rate of the interest in the partial redemption on the redeemed part; (4) the rate of interest to be paid in the partial redemption, calculated in respect of the unpaid balance; (5) update of the partial redemption rates remaining, in terms of the original series; (6) the effective date for entitlement to receive the early redemption of the Debenture Principal which will be twelve (12) days prior to the date scheduled for the early redemption (it shall be clarified that if the effective date for entitlement to receive the partial redemption will occur during a quarter in which current interest payment exists, the effective date for entitlement to receipt of the partial redemption shall occur on the next effective date for receipt of the current interest payment which will be paid during such quarter).
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Partial early redemption shall be carried out pari passu to each of the Debenture holders.
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[c]
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The amount which will be paid to the Holders of Debentures of the Relevant Series in case of early redemption, will be the highest amount among the following: (1) market value of the balance of the Debentures of the Relevant Series in circulation, which will be determined according to the higher between: (a) the price of the Debentures of the Relevant Series on TASE in
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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the end of the Trade Day preceding the date on which the Company’s board resolution for performance of the early redemption shall be adopted; or (b) the average closing price of the Debentures of the Relevant Series in the thirty (30) Trade Days preceding the date of adopting the board resolution regarding the early redemption; (2) the liability value of the Debentures of the Relevant Series available for early redemption in circulation, namely, Principal plus interest and linkage differentials (if any), until the actual early redemption date; (3) the cash flow balance of the Debentures of the Relevant Series available for early redemption (Principal plus interest) while discounted according to the Government Debentures Yield (as defined below) plus interest which will be determined in the Initial Offering Report. Discounting of the Debentures of the Relevant Series subject to early redemption will be calculated commencing from the early redemption date until the date of the last payment determined in respect of the Debentures of the Relevant Series being redeemed early, as shall be determined in the Initial Offering Report.
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For this matter: the “Government Debentures Yield” means the average return (gross) for redemption, during a period of seven Business Days, ending two Business Days prior to the date of announcement of the early redemption, of three series of government debentures of which average lifetime is the closest to the average lifetime of the Debentures of the Relevant Series on the relevant date.
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8.
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Acceleration
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8.1.
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Upon the occurrence of one or more of the events specified below the provisions in Section 8.2 of the Indenture shall apply:
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8.1.1.
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If the Company shall not pay any amount due therefrom in respect of the Debentures of the Relevant Series within forty five (45) days after the payment date had become due.
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8.1.2.
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If a temporary liquidator had been appointed to the Company by a court or a final irrevocable valid resolution for dissolution of the Company shall be adopted (except for dissolution for reasons of merger with another company and/or restructuring of the Company), and such appointment or resolution had not been revoked within ninety (90) Business Days from the date of appointment or resolution, as applicable.
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8.1.3.
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If an attachment shall be imposed, a charge be exercised or execution actions be carried out, all on the Majority of the Company’s Assets, and such attachment not be removed or the exercise be cancelled or the action be canceled within ninety (90) Business Days after the attachment had been imposed or
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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the charge was exercised or the action carried out, and such attachment, charge exercise or action entail or is reasonably liable to entail actual risk for the possibility of payment of any amount due from the Company in respect of the Debentures of the Relevant Series.
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8.1.4.
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If a receiver or a temporary receiver be appointed for the Majority of the Company’s Assets, and the appointment will not be removed within ninety (90) Business Days, and such appointment entails or is reasonably liable to entail actual risk for the possibility of payment of any amount due from the Company regarding the Debentures of the Relevant Series.
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8.1.5.
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If the Company shall cease or announce its intention to cease the payment of debts thereof, in a manner that any such event entails or is reasonably liable to entail risk to the rights of the Holders of Debentures of the Relevant Series.
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8.1.6.
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If the Company shall cease to continue its business and/or to conduct its business as shall be from time to time and/or notify the Trustee of its intention to cease continuation of engaging in the business thereof as shall be from time to time and/or conduct them and/or shall intend to cease continuation of the business thereof as shall be from time to time.
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8.1.7.
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If the Company shall violate or not fulfill any material condition or undertaking included in the Debentures of the Relevant Series or in the Indenture, in a manner which such shall entail or is reasonably liable to entail material prejudice to the rights of the Debenture holders of the same series.
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8.2.
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In cases as specified in this Section, the provisions in Section 8.2 below shall apply:
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[a]
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Upon the occurrence of any of the events in Sections 8.1.1 to 8.1.6 (inclusive) above, the Trustee shall be obligated to convene a meeting of the holders of Debentures of the Relevant Series;
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[b]
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Upon the occurrence of an event as specified in Section 8.1.7 above, the Trustee shall be entitled (but not obligated) to, and each of the Debenture holders who holds ten percent (10%) or more of the Debentures of the Relevant Series, will be entitled to convene a meeting of Debenture holders of the Relevant Series.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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[c]
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The date of convening a meeting of Holders of Debentures of the Relevant Series on whose agenda there shall be a resolution regarding the acceleration of all of the unpaid balance of the Debentures of the Relevant Series, due to the occurrence of any of the events specified in Section 8.1 above, will be upon the passing of thirty (30) days from the date of convening thereof (or a shorter term according to the provisions of subsection [f] below).
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[d]
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In a case which until the date of convening of a meeting as aforesaid, any of the events specified in Section 8.1 above had not been cancelled or removed, and a resolution in the meeting of Debenture holders as aforesaid regarding the acceleration was adopted as a Special Resolution, the Trustee will be obligated, within reasonable time, to accelerate all of the unpaid balance of the Debentures of the Relevant Series.
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[e]
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A copy of the meeting convening notice as aforesaid will be sent by the person convening the meeting to the Company immediately upon the publication of the notice of the convening thereof and shall constitute an advance written notification to the Company of the intention thereof to operate as aforesaid, and the Company shall release an immediate report regarding the convening of a meeting as aforesaid.
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[f]
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The Trustee may, according to its discretion, reduce the period of thirty [30] days stated in subsection [c] above, in a case which the Trustee shall be of the opinion that any delay in the convening of a meeting may risk the rights of the holders of Debentures of the same series.
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[g]
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The Trustee will be responsible to report to the Holders of Debentures of the Relevant Series of the occurrence of any of the events specified in Section 8.1 above, whether by virtue of general publications made by the Company or according to the Company’s notice which will be sent thereto according to the provisions of Section 24 of the Indenture.
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[h]
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It is hereby clarified that the Trustee’s duties according to this Section 8.2 are subject to the actual knowledge thereof of the occurrence of the facts, cases, circumstances and events specified therein. Such may not prejudice the duties of the Trustee according to any law, provided that such may not prejudice the rights of the Trustee.
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9.
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Actions and Proceedings by the Trustee
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9.1.
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In addition to any provision in this Indenture and as an independent right and authority, the Trustee shall be entitled, according to the discretion thereof, to initiate any proceedings, including legal proceedings, as the Trustee shall deem fit, and subject to the provisions
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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of any law, for the enforcement of the Company’s undertakings pursuant to the Indenture and for the exercise of the rights of the holders of Debentures of the Relevant Series according to the Indenture. Notwithstanding the provisions of this Section, a right for acceleration shall arise only pursuant to the provisions of Section 8 above and not by virtue of this Section.
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9.2.
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The Trustee may, prior to initiating proceedings as aforesaid, convene a meeting of Holders of the Debentures of the Relevant Series in order for such Holders to decide in a Special Resolution what proceedings to instigate for exercise of the rights thereof pursuant to the Indenture, provided that the convening of the meeting shall be done on the first possible date and delaying of proceedings shall not risk the rights of the said Holders. Also, the Trustee will be entitled to reconvene meetings of Holders as aforesaid, for the purpose of receiving instructions in all matters pertaining to conduct of such proceedings according to the aforesaid above.
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9.3.
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Subject to the provisions of the Indenture, the Trustee may, but is not obligated to, convene at any time, a general meeting of Holders of Debentures of the Relevant Series in order to deliberate and/or receive the instructions thereof on any matter pertaining to the Indenture provided that the convening of the meeting shall be done on the first possible date and the delaying of proceedings shall not risk the rights of the said Holders. The Trustee shall be obligated to convene a meeting on the first possible date pursuant to a request of the Holders of at least ten percent (10%) of the Principal of the Debentures of the same series in circulation.
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9.4.
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The Trustee may, according to the sole discretion thereof, withhold the performance of any action thereby according to the Indenture, for referring to a meeting of Holders of Debentures of the Relevant Series and/or the court until he receives instructions from the meeting of the Holders of Debentures of the Relevant Series and/or instructions from the court how to act, provided that the convening of the meeting or reference to the court shall be done on the first possible date.
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9.5.
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For avoidance of doubt it is hereby clarified that none of the provisions specified above may prejudice and/or derogate from the right of the Trustee, hereby conferred upon the Trustee, to refer, according to the sole discretion thereof, to legal instances, even before the Debentures
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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of the Relevant Series shall be accelerated, and thereafter, for the purpose of provision of any order in respect of the trusteeship matters.
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10.
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Trust for the Proceeds
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11.
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Authority to withhold distribution of funds
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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12.
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Notice of Distribution
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12.1.
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The Trustee shall notify the Holders of the date and place in which any payment of the payments stated in Sections 10 and 11 above shall be made, by an advance notice of 14 days which will be delivered in the manner prescribed in Section 24 of the Indenture.
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12.2.
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After the date specified in the notice, the Holders will be entitled to interest according to the rate set forth in the Debenture of the same series, only for the balance of the Principal amount (if any) after deduction of the amount paid, or proposed to be paid to them, as aforesaid.
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13.
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Non-Payment for a Reason Beyond the Company’s Control
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13.1.
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Any sum payable to a holder of Debentures of the Relevant Series which was not paid on the due date for the payment thereof for a reason beyond the Company’s control, even though the Company was ready to pay the same (the “Impediment”), shall cease from bearing interest and linkage differentials from the aforesaid date and the said holder shall be entitled only to the sums to which he was entitled on the due date of that payment on account of the principal and/or linkage differentials and/or interest (as the case may be).
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13.2.
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If such sum as aforesaid was not paid within fourteen (14) days from the due date for the payment thereof, then on the fifteenth (15) day after the due date for the payment (and if this day is not a Business Day, then on the first Business Day thereafter) the Company shall remit this sum to the Trustee, who shall hold the sum in trust for the Debenture holder and the remittance of the sum to the Trustee as aforesaid shall be deemed as payment of that sum to this holder, subject to the provisions of Section 13.3 below. If the aforesaid sum is the last payment – the deposit of this sum in trust in the hands of the Trustee shall be deemed as the redemption of the aforesaid Debentures, subject to the provisions of Section 13.3 below. The Trustee shall deposit in the bank any sum held thereby in trust for holders in the investments permitted under the Indenture. After receiving from the holder a notice on the removal of the Impediment, the Trustee shall remit to the holder the funds accrued for the deposit and resulting from
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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the liquidation of the investment of the same, net of all of the expenses and management fees of the escrow account and net of any tax under law. The payment shall be made against the presentation of such proof as shall be acceptable to the Trustee concerning the holder’s right to receive the same.
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13.3.
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Upon the expiration of one year after the final date for the payment of the Debentures of the Relevant Series, the Trustee shall remit the sums accrued in its hands to the Company, net of its expenses, and the Company shall hold the same in trust and invest the same as provided in Section 13.2 above for the holder until the expiration of three (3) years after the date of the final payment of the Debentures of that series, and it shall make no use of the same during this period. With respect to the sums that shall be remitted to the Company by the Trustee as aforesaid, they shall be subject to the provisions of this section 13.3, mutatis mutandis. After remitting the sums to the Company the Trustee shall owe to the Debenture holders of this series no payment for the sums held thereby as aforesaid.
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13.4.
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The Company shall confirm for the Trustee in writing the remittance of the aforesaid sums to it and the receipt of the same in trust for the Debenture holders of that series as aforesaid, and it shall undertake to indemnify the Trustee for any damage of any kind that shall be caused thereto for the remittance of the funds as aforesaid, provided that it acted reasonably and not in bad faith and/or malice and/or negligence. Funds as aforesaid which shall not be demanded from the Company by the Debenture holder of the Relevant Series upon the expiration of three (3) years after the final payment date of the Debentures of that series shall become the Company’s property and it shall be entitled to use the remaining funds for any purpose whatsoever.
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14.
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Receipt from the Debenture holders
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14.1.
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A receipt from the holder or evidence from the transferring bank of the execution of the transfer or the execution of the transfer via the TASE Clearinghouse for the principal and/or interest sums paid thereto by the Trustee and/or the Company for the Debentures of the Relevant Series shall release the Trustee and/or the Company (as the case may be) entirely with respect to the payment of the sums stated therein.
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14.2.
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A receipt from the Trustee concerning the deposit of the principal and interest sums therewith in favor of the Debenture holder shall be deemed as a receipt from the Debenture holder of the Relevant Series.
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14.3.
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The funds distributed as provided in Section 12 above shall be deemed as made on account of the payment.
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15.
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Application of the Securities Law
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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In any matter not mentioned herein as well as in any case of discrepancy between the (mandatory) provisions of the Securities Law and this Indenture, the parties shall act in accordance with the provisions of the Securities Law.
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16.
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Investment of Funds
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All of the funds which the Trustee may invest hereunder shall be invested by him in one of the five large banks in Israel, on its name or to its order, in investments in which the laws of the State of Israel permit to invest trust funds, as it shall see fit, subject to the terms of the Indenture and to the provisions of any law, provided that any investment in securities shall be in securities rated no lower than AA. If the Trustee invested funds as aforesaid, the Trustee shall only owe to the entitled parties for these funds the consideration received from the liquidation of the investments, net of its fee and expenses, the commissions and expenses related to the investments as aforesaid and the management of the trust’s accounts, the commissions and the deduction of the mandatory payments applicable to the escrow account, and the Trustee shall act with respect to the balance of the funds in accordance with the provisions of the Indenture, as the case may be.
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17.
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The Company’s Undertakings vis-à-vis the Trustee
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The Company assumes, vis-à-vis the Trustee, the following undertakings, for as long as the Debentures of the Relevant Series have not yet been fully paid-up:
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17.1.
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To continue managing the Company’s businesses in an orderly and proper manner.
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17.2.
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To keep and maintain its assets (as being from time to time) in good and functioning condition.
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17.3.
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To provide and order its accountants to provide to the Trustee and accountants, attorneys or other consultants on its behalf any information that shall be reasonably required for protecting the holders with respect to all of the data related to its businesses or assets (subject to the provisions of any law and to the execution thereby of an undertaking of confidentiality in favor of the Company).
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17.4.
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To keep regular account books in accordance with the acceptable accounting principles and to safeguard the books, including the documents serving as evidence thereof, at its offices, as required under law.
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17.5.
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To allow the Trustee to attend the general meetings of the Company’s shareholders (without a right to participate or to vote).
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17.6.
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To deliver to the Trustee the reports and notices as specified in Section 29 of the Indenture.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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17.7.
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To provide to the Trustee, at its request, an affidavit and/or statements and/or details and/or information, as required by the Trustee, at its sole discretion, for implementing and exercising the authorities, powers and authorizations of the Trustee and/or its representatives under the Indenture, provided that they are reasonable.
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17.8.
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To file immediately, without delay, in the Trustee’s name, any report in such language as shall be delivered thereto in writing by the Trustee, with respect to the Debentures and/or the trust with respect thereto according to this Indenture.
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The Trustee hereby undertakes to keep confidential any information that it shall receive from the Company as aforesaid, except for the purpose of the transfer of information to a meeting of holders convened for the purpose of reporting and/or making a decision concerning their rights under the Debentures of the Relevant Series, provided that such transfer of information as aforesaid shall be subject to the provisions of any law and that such transfer shall not damage a legitimate interest of the Company.
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18.
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Additional Undertakings
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After and insofar as Debentures of the Relevant Series shall be accelerated, as defined in Section 8 above, the Company shall perform from time to time and at any time that it shall be required to do so by the Trustee all of the reasonable actions in order to allow the exercise of all of the authorities vested in the Trustee and the Company shall take in particular the following actions:
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18.1.
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It shall transfer and remit to the Trustee the consideration for the Debentures due, according to the terms thereof.
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18.2.
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It shall deliver statements and execute all of the documents and take or ensure the taking of all of the actions necessary or required under the law for validating the exercise of the Trustee’s authorities, powers and authorizations.
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18.3.
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It shall give all of the notices, orders and instructions that the Trustee shall deem useful and reasonably demand for implementing the provisions hereof.
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19.
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Other Agreements
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Subject to the provisions of the law, neither the fulfillment of the Trustee’s duties hereunder, nor its mere status as a trustee, shall prevent the Trustee from engaging with the Company in various contracts or from performing transactions therewith in its ordinary course of business.
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20.
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Trustee’s Fee
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The Company shall pay to the Trustee a fee for its services as a trustee for the Debentures under the Indenture, as follows:
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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20.1.
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For the trust services for any series of Debentures that shall be issued according to the Shelf Prospectus the Company shall pay to the Trustee:
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20.1.1.
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For the first year of trust, from the actual issue, the Trustee shall be paid an annual fee of NIS 15,000, and for each additional year in which the Trustee shall act as a trustee for the Debentures of that series, the sum of NIS 12,500 (and all linked to the Consumer Price Index known on the issue date of the Relevant Series) (the “Annual Fee”).
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The Annual Fee for any series of Debentures shall be paid to the Trustee at the beginning of each trust year, for each trust year.
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20.1.2.
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For participating in the Debenture holders meeting, the Trustee shall be paid an additional fee of NIS 500 per meeting (linked to the Consumer Price Index as aforesaid) in addition to travel expenses.
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20.2.
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If the Trustee’s office expired with respect to a certain series of Debentures as provided in the Indenture and/or if it ended in accordance with the terms of the Debentures, the Trustee shall not be entitled for the payment of a fee for the period from the aforesaid date and any overpayment made to the Trustee for such period shall be repaid thereby to the Company.
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20.3.
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If the Trustee is required to perform special works in connection with and for the purpose of exercising its duties hereunder, such as the performance of an action resulting from a breach of the Indenture by the Company and/or due to the need to take actions due to the non-performance by the Company of its undertakings to the Debenture holders and/or for accelerating the Debentures, and including the participation in various meetings (such as meetings with the Securities Authority), the Company shall pay the Trustee a fee according to the hours actually invested thereby in the sum of NIS 500.
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20.4.
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To all of the aforesaid sums that shall be paid to the Trustee legal VAT and reimbursement of expenses shall be added.
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20.5.
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If the Company issues debentures secured by liens, the Trustee shall be entitled to an additional fee as shall be determined by the parties.
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21.
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Special Authorities
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21.1.
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The Trustee shall be entitled to deposit all of the instruments and documents that attest to, represent and/or determine its right with respect to any asset found at that time in its hands in a safe and/or any other place of its choice, with any banker and/or banking company and/or attorney.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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21.2.
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In the framework of performing the matters of the trust hereunder and subject to the provisions of any law and the Indenture, the Trustee may commission the opinion and/or advice of any lawyer, accountant, assessor, appraiser, surveyor, broker or other expert, and to act in accordance with the conclusions thereof, whether such opinion and/or advice was prepared at the request of the Trustee and/or of the Company. The Trustee shall be liable for no loss or damage caused as a result of any act and/or omission committed thereby in reliance on such advice or opinion as aforesaid, unless it was determined in a final judgment that the Trustee acted with malice or negligence, in respect of which the Trustee is not exempted by law (as applicable from time to time) and/or with malice.
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21.3.
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Any advice and/or opinion as aforesaid may be provided, sent or received by a letter, telegram, fax and/or any other electronic media for the transfer of information in writing.
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21.4.
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Subject to the provisions hereof, the Trustee may, but is not obligated to, convene at any time a general meeting of Debenture holders of any Relevant Series, in order to discuss and/or receive its instructions in any matter concerning this Indenture and it may reconvene the same.
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21.5.
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The Trustee shall not be required to notify any party of the execution hereof and it may not intervene in any form whatsoever in the management of the Company’s businesses or matters, except according with the authorities granted thereto herein.
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21.6.
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The Trustee shall exercise in the framework of the trust the powers, authorizations and authorities granted thereto hereunder at its absolute discretion and subject to the other provisions hereof it shall not be liable for any loss or damage caused due to an error in the exercise of the aforesaid discretion, unless it was determined in a final judgment that the Trustee acted with malice or negligence, in respect of which the Trustee is not exempted by law with negligence, in respect of which the Trustee is not exempted by law as applicable from time to time.
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22.
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Trustee’s Authority to Employ Representatives
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The Trustee may, in the framework of managing the businesses of the trust, appoint representatives to act in its place, whether an attorney or another person, in order to take or participate in taking special actions that are required in connection with the trust, and without derogating from the generality of the aforesaid, instituting legal proceedings, provided that the Trustee gave a notice to the Company of the appointment of a representative as aforesaid. The Trustee may also pay on the Company’s account the reasonable fee of any such representative for proceedings for the purpose of or after the acceleration of the Debentures, and the Company shall repay the Trustee, immediately at its first demand, such expenses, provided that the Trustee gave the Company an advance notice of the appointment of such representatives. The
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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appointment of a representative as aforesaid may not release the Trustee of any liability that would have applied thereto if not for the said appointment and/or derogate from the Trustee’s liability for its actions and the actions of its representatives. The Company may object the appointment of a certain representative as aforesaid on any reasonable ground, including in case that the representative is a competitor or found in conflict of interests, whether directly or indirectly, with the Company’s businesses.
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23.
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Indemnification of the Trustee
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23.1.
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The Trustee shall be entitled to receive indemnification from the Debenture holders of the Relevant Series and/or the Company, as the case may be, for reasonable expenses that it incurred and/or shall incur in connection with actions concerning this Series, which it took or has to take by virtue of its duties under the terms hereof and/or under law and/or under any instruction of a competent authority and/or under any law and/or at the demand of the Debenture holders and/or at the Company’s demand, as specified in this section below.
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23.2.
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Notwithstanding the aforesaid:
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[a]
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The Trustee shall not be entitled to demand indemnification as aforesaid in advance in an urgent matter (without derogating from the Trustee’s right for retroactive indemnification in the same matter, if and insofar as it shall have such a right).
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[b]
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The Trustee shall be entitled to indemnification for liability in torts in case it shall be charged with such liability under a final judgment or concluded settlement vis-à-vis a third party, who is not one of the Debentureholders of that Series, provided that it did not act in negligence and/or bad faith and/or malice.
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23.3.
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The aforesaid right of indemnification is subject to the following conditions:
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[a]
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The expenses for the liability in torts are reasonable.
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[b]
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The Trustee acted in good faith and this action was taken in the framework of the performance of its duties, according to the provisions of the law and hereunder.
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23.4.
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Without derogating from the rights of compensation and indemnification granted to the Trustee under the law and/or the commitments of the Company and the Debenture holders hereunder, the Trustee, its representative or any other person appointed by the Trustee hereunder shall be entitled to receive out of the funds received by the Trustee from the proceedings instituted thereby and/or otherwise hereunder indemnification with respect to the undertakings assumed by them, with respect to expenses incurred by them in the course of performing the trust or in connection with such actions, which at the Trustee’s opinion were required for the performance of the same and/or with respect to the exercise of authorities and authorizations granted by
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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virtue of the Indenture as well as with respect to all kinds of legal proceedings, opinions and consultation with attorneys and other experts, negotiations, talks, expenses, claims and demands with respect to any matter and/or issue which were done and/or not done in any matter, and all with respect to the Relevant Series, and the Trustee may withhold the funds held thereby and pay therefrom the sums required for the payment of the indemnification as aforesaid. All of the aforesaid sums shall have preference over the rights of the Debenture holders of that Series, subject to the provisions of any law, provided that the Trustee acted in good faith and in accordance with the duties applicable thereto under any law and hereunder.
|
23.5.
|
Whenever the Trustee shall be required under the terms of the Indenture and/or under the law and/or an instruction by a competent authority and/or any law and/or at the demand of the Debenture holders of the Relevant Series and/or at the Company’s demand, to take any action with respect to that Series, including, without limitation, instituting proceedings or filing actions at the request of the Debenture holders of that Series, as provided in the Indenture, the Trustee may refrain from taking any such action until it receives to its satisfaction a letter of indemnification from all or any of the Debenture holders of that Series with respect to expenses and/or damages that may be caused thereto and/or to the Company due to taking such action as aforesaid, and if the action is taken due to the Company’s demand – from the Company, for any liability to damages and/or expenses that may be caused to the Trustee and the Company or any of them due to taking such action. It is clarified that the aforesaid does not exempt the Trustee from taking an urgent action which is required in order to prevent a material breach of the rights of the Debenture holders of that Series.
|
23.6.
|
Notwithstanding the aforesaid in this Section 23, whenever the Trustee deems right, for protecting and/or exercising the rights of the Debenture holders of the Relevant Series and/or shall be required, according to the terms of the Indenture and/or under law and/or an instruction of a competent authority and/or any law and/or at the demand of the Company and/or the Debenture holders of that Series, to institute legal proceedings, the Company shall deposit in the Trustee’s hands a sum that shall be determined reasonably by the Trustee as the expected sum of the Trustee’s expenses in connection with these proceedings. In case that the Company does not deposit the aforesaid sum on the date that it was requested to do so by the Trustee, and in the Trustee’s opinion there is a doubt as to the Company’s ability to cover the expenses involved in instituting proceedings by the Trustee, the Trustee shall immediately convene a meeting of the Debenture holders of that Series in order to confirm their liability for covering the expenses involved in the proceedings which the Trustee intends to institute. In case that the Debentureholders of that Series refuse to bear the expenses involved in instituting the proceedings by the Trustee, the Trustee shall be under no obligation to institute proceeding as
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
aforesaid. It shall be hereby clarified that the Debenture holders’ consent as aforesaid shall not release the Company from its undertakings to bear and cover all of the expenses involved in instituting proceedings as aforesaid. In addition, all of the funds that shall be received from the exercise proceedings shall be also used for reimbursement and covering of expenses which the Debenture holders undertook to bear as aforesaid. It is clarified that the aforesaid does not exempt the Trustee from taking an urgent action required for preventing a material breach of the Debenture holders’ rights.
|
|
The indemnification undertakings under this Section 23.6 shall be referred to as the “Indemnification Undertaking”.
|
23.7.
|
The ‘Indemnification Undertaking’:
|
|
[a]
|
Shall apply to the Company in any case of (1) actions that were taken and/or required to be taken according to the terms hereof or for protecting the rights of the Debenture holders (including at a Holder’s demand which is required for such protection); and (2) actions that were taken and/or required to be taken at the Company’s demand.
|
|
[b]
|
Shall apply to the Holders who held the Debentures of the Relevant Series on the effective date in any case of (1) actions that were taken and/or required to be taken at the Debenture holders’ demand (except for such actions that were taken at Debenture holders’ demand for protecting the Debenture holders’ rights); and (2) the non-payment by the Company of the sum of the ‘Indemnification Undertaking’ that apply thereto under subsection [a] above (subject to the provisions of Section 23.8 below).
|
|
For this matter, the effective date for determining the liability of a Holder for the ‘Indemnification Undertaking’ is as follows: in any case in which the ‘Indemnification Undertaking’ is required due to an urgent decision or action required in order to prevent an adverse material breach of the Debenture holders’ rights, without a prior decision of the Debenture holders meeting – the effective date for the liability shall be the close of the Trading Day on the day on which the action is taken or the decision is made (according to the earlier) and if that day is not a Trading Day, the preceding Trading Day. In any case in which the ‘Indemnification Undertaking’ is required according to the decision of the Debentureholders meeting – the effective date for the liability shall be the date stated in the proof of ownership (as specified in Section 7 of the Second Schedule hereto) and it shall also apply to a Holder who did not attend or participated in the meeting.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
23.8.
|
The payment by the Holders in the Company’s place of any sum imposed on the Company pursuant to this Section 23 shall not release the Company from its obligation to bear the said payment.
|
24.
|
Notices
|
|
Any notice on behalf of the Company and/or Trustee to the Debenture holders shall be given by an immediate report and in the following cases only the Company shall also publish an announcement in two (2) newspapers of broad circulation, which are published in Israel in Hebrew: (a) an arrangement or settlement pursuant to Section 350 of the Companies Law; (b) a merger. In case that the Company ceases from reporting according to Chapter F of the Securities Law, any notice on behalf of the Company and/or the Trustee to the Debenture holders shall be given by sending a notice by registered mail to each one of the Debenture holders, according to his last address as registered in the Register (and in the case of several co-holders, the co-holder who is registered first in the Register). Any notice that was sent as aforesaid shall be deemed as if it was delivered to the Debenture holders three (3) Business Days after postal dispatch thereof.
|
|
Any notice or demand on behalf of the Trustee to the Company or on behalf of the Company to the Trustee may be given by a letter that shall be sent by registered mail or by courier according to the address specified in the Indenture or according to a different address of which the parties shall give a written notice or – also by transmitting it by fax or by e-mail. Any notice or demand that shall be sent by registered mail shall be deemed to have been received by the other party three (3) Business Days after postal dispatch thereof. Any notice or demand that shall be sent by courier shall be deemed to have been received by the other party upon its delivery by the courier to the addressee or upon the tender thereof to the addressee, as the case may be. Any notice or demand that shall be sent by fax (in addition to telephone confirmation of the receipt thereof) shall be deemed to have been received by the other party one Business Day after the transmission thereof and in case of a transmission by e-mail – on the date of receipt of an e-mail confirmation of the reading thereof or on the date of the telephone confirmation of its receipt (if any), according to the earlier.
|
|
Copies of notices that shall be given by the Company to the Debenture holders shall be sent by the Company also to the Trustee, and copies of notices that shall be given by the Trustee to the Debenture holders shall be sent by the Trustee also to the Company.
|
25.
|
Waivers, Settlements and/or Modifications in the Indenture
|
|
[a]
|
Subject to the provisions of any law, the Company and the Trustee may, whether before or after the Principal of the Debentures of the Relevant Series is due, modify the Indenture and/or the terms of the Debentures of that Series, if one of the following applies:
|
|
[1]
|
Except for a modification of the dates of the payments according to the terms of the Debentures of that Series, of its interest rates, the causes for acceleration and reports that the
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
|
Company is required to submit to the Trustee, if the Trustee was convinced that the modification does not materially damages the Debenture holders of that Series.
|
|
[2]
|
A meeting of the Debenture holders of that Series approved the modification in a Special Resolution.
|
|
[b]
|
In addition to the provisions of Subsection [a] and subject to the provisions of any law:
|
|
[1]
|
Except with respect to the dates of the payments according to the terms of the Debentures of that Series, its interest rate, in linkage of the Debentures, insofar as the terms of the Debentures of the Relevant Series provide for a method of linkage, the causes for acceleration and reports that the Company is required to submit to the Trustee, the Trustee for that Series may, from time to time and at any time, if in its opinion it does not violate the rights of the Holders of that Series, waive any breach or non-performance of any of the terms of the Indenture by the Company.
|
|
[2]
|
The Trustee shall be authorized, with a prior approval that shall be granted by a Special Resolution of the meeting of the Debenture holders of that Series, settle with the Company with respect to any of their rights or actions, and to waive any of their rights or actions vis-à-vis the Company pursuant to the Indenture and the Debentures of the Relevant Series. If the Trustee settled with the Company after it received a prior approval of the Debenture holders as aforesaid, the Trustee shall be exempt from any liability for this action.
|
|
[c]
|
The Company and/or Trustee shall deliver to all of the Debenture holders of the Relevant Series a written notice of any modification and/or waiver as aforesaid in Subsections [a][1] or [b][1] above with respect to this Series, shortly after the execution thereof.
|
|
[d]
|
In any case of exercise of the Trustee’s right under this section above with respect to any Relevant Series, the Trustee may demand from the Debenture holders of that Series to deliver to it or to the Company the Certificates of the Debentures of that Series for registering a note concerning any waiver, settlement, modification or amendment as aforesaid, and at the Trustee’s demand the Company shall register such a note in the Debenture Certificates delivered thereto.
|
|
[e]
|
In addition to the aforesaid, the terms of the Debentures may be modified in the framework of an arrangement or settlement that was approved by the court pursuant to Section 350 of the Companies Law.
|
|
[f]
|
The exchange of the Debentures of any Relevant Series for debentures of another traded company in the framework of a process of merger, split, re-organization of the Company or an exchange tender offer may be performed subject to the adoption of a Special Resolution by the Debenture holders of the Relevant Series or, at the Company’s choice, in another way permitted under law on the relevant date.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
26.
|
The Debenture holders Register
|
|
The Company shall keep at its registered office a separate Debenture holders Register for each Relevant Series (the “Register for the Relevant Series”), in which shall be registered all of the registered Holders, as being from time to time, of the Debentures of that Series as well as their addresses, details of the bank accounts to which the payments on account of the Principal and interest shall be transferred and the par value of the Debentures of this Series which are registered in their names, as being from time to time. In the Register for the Relevant Series other Holders shall be also registered, insofar as such Holders shall exist due to a split or a transfer of ownership of the Debenture of that Series, if actions are taken in accordance with Sections 8 or 9 of the Terms and Conditions Overleaf.
|
|
The Company may close the Register for the Relevant Series from time to time for period or periods of time that shall not exceed thirty (30) cumulative days in each year.
|
|
The Debenture holder of the Relevant Series may inspect the Register for that Series at any reasonable time, as long as he holds Debentures of that Series. In addition, the Trustee may inspect the Register for that Series at any reasonable time.
|
|
The Company shall not be required to enter any notice in the Debenture holders Register concerning explicit, implicit or presumed trust, or a pledge or lien of any kind or any right in equity, action or setoff or any other right with respect to the Debentures. The Company shall only acknowledge the ownership of the person in whose name the Debentures were registered. The legal heirs, administrators or executors of the registered Holder and any person who shall be entitled to the Debentures due to the bankruptcy of any registered Holder (and if it is a corporation – due to its dissolution) may be registered as the Holders thereof after providing proofs which in the Company’s opinion shall suffice to prove their right to be registered as Holders thereof.
|
27.
|
Appointment of a New Trustee and Expiry of the Trustee’s Office
|
27.1.
|
The Trustee’s office shall terminate in the cases specified in Section 35N of the Securities Law and according to the terms thereof.
|
27.2.
|
In case of termination of the Trustee’s office or in case that the Trustee is replaced as a result of the Securities Authority’s demand that the Trustee not act as the trustee of several series of Debentures of the Company, the Company shall take action to appoint a new Trustee which shall be a trust company of one of the six large banks in Israel or any other Trustee that shall be approved at the Debenture holders meeting by a simple majority.
|
27.3.
|
The Trustee shall hand-over to the new Trustee all of the documents and sums accrued therewith in connection with the trust contemplated in the Indenture for the Relevant Series, and it shall execute any document required for this purpose. Any new Trustee shall have the same powers, obligations and authorities and it shall be able to act for
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
all purposes and intents as if it had been initially appointed as a Trustee.
|
28.
|
Holders Meetings
|
|
The meetings of the Holders of any Relevant Series shall be conducted as provided in the Second Schedule hereto.
|
29.
|
Reporting to the Trustee
|
|
The Company shall deliver to the Trustee, as long as the Debentures subject to the trust are in circulation and have not yet been paid-up in full:
|
29.1.
|
Audited annual financial statements of the Company and reviewed quarterly financial statements of the Company, immediately upon the publication thereof.
|
29.2.
|
Within four (4) Business Days after making any payment to the Debenture holders of the Relevant Series the Company shall deliver to the Trustee a lawfully signed letter, confirming the performance of that payment to the Debenture holders and the balance of the par value of the Debentures of this Series which are still in circulation as of the confirmation date.
|
29.3.
|
Within ten (10) days from the end of each calendar year and as long as this Indenture is in force with respect to this Series, the Company shall deliver to the Trustee a written and lawfully signed certification, whereby, to the best of its knowledge, the Company did not breach this Indenture, including a breach of the terms of the Debentures of the Relevant Series, unless it was stated therein otherwise.
|
29.4.
|
No later than thirty (30) days after the issue date of a series of Debentures in the framework of a Shelf Offer Report pursuant to the Shelf Prospectus, the Company shall submit to the Trustee a payment schedule for the Debentures (Principal and interest) of the issued series, summarized in an Excel file.
|
29.5.
|
The Company shall notify the Trustee immediately and in writing of any reasonable concern of the Company that all or any of the events specified in Section 8.1 above is likely to occur and of the occurrence of all or any of the events specified in the aforesaid section.
|
30.
|
Applicable Law and Jurisdiction
|
|
The law that governs the Indenture with its annexes and the Debentures is the Israeli law. The courts in the city of Tel Aviv Jaffa shall have a unique and exclusive jurisdiction in any conflict regarding the Indenture and the Debentures.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
31.
|
Rating
|
|
The Company may determine in the First Offer Report of the Relevant Series' Initial Offering Report that insofar as the Debentures that shall be offered pursuant to the Offer Report as aforesaid shall be rated the Company shall act (insofar as the matter shall be within its control) to arrange that as long as Debentures of the Relevant Series are listed for trade, the Debentures of the Relevant Series shall be under rating follow-up by a rating agency.
|
|
In such case, the Company does not undertake not to replace the rating company throughout the Debentures’ life time. In case of replacing the rating company, the Company shall publish an immediate report concerning the replacement as aforesaid.
|
32.
|
Distribution of Dividend and/or Repurchase of Shares by the Company
|
|
It is clarified that no limitations on the Company with respect to the distribution of dividend and/or any other distribution and/or repurchase of Company’s securities were set forth in the Indenture and/or the terms of the Series F to O and Series 1 to 6 Debentures.
|
33.
|
Authorization for MAGNA
|
|
By signing this Indenture the Trustee authorizes any of the Company’s authorized signatories to report in its name in the MAGNA system of its engagement herein and its execution hereof.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Cellcom Israel Ltd.
|
Hermetic Trust (1975) Ltd.
|
|
Signed by: Yaacov Heen
CFO
|
Signed by: Dan Avnun
|
|
Attorney’s Certification
|
|
I, the undersigned, Adv. Tamar Enav, hereby certify that this Indenture was signed lawfully by the authorized signatories of Cellcom Israel Ltd., Mr. Yaacov Heen.
|
Tamar Enav, Adv.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
This certificate attests that Cellcom Israel Ltd. (the “Company”) shall pay to the (Series ____) Debenture holders principal and interest payments on such dates, pursuant to such payment terms and in accordance with such other conditions as set forth in the Terms and Conditions Overleaf in the Indenture of July 14, 2011 (the “Indenture”), between the Company, of the first part, and Hermetic Trust (1975) Ltd., of the second part, and in the Shelf Offer Report published by the Company on __________________, pursuant to which the Debentures contemplated herein were issued, all of which constitute an integral part hereof.
|
2.
|
This Debenture is issued as part of a series of debentures in identical terms to the terms hereof. The Debentures of the same series in circulation shall rank pari-passu with each other, without any preference or priority of the one over the other.
|
Signed by the Company on:
|
|||
Cellcom Israel Ltd.
|
|||
Signed by: |
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
General
|
"Company"-
|
Cellcom Israel Ltd.
|
||
"Indenture"-
|
The Indenture which was signed between the Company and the Trustee, on July 14, 2011, including the schedules and annexes which are attached thereto which constitute an integral part thereof.
|
||
"Prospectus" or "Shelf Prospectus"-
|
A shelf prospectus of the Company which will be published due to, inter alia, the Debentures, as amended from time to time.
|
||
"Shelf Offering Report" or "Offering Report"-
|
Shelf offering reports which will be published pursuant to the Shelf Prospectus, in accordance with the provisions of Section 23A of the Securities Law, 5728-1968, in which all of the details which are unique to such offering will be filled out in accordance with the provisions of any law, including TASE rules and directives, as being from time to time.
|
||
"Debenture Series" or "Relevant Series"-
|
Series F to O and Series 1 to 6 of registered debentures of the Company, the terms of each shall be in accordance with the Debenture Certificate of such series and the Shelf Offering Report pursuant to which such series will be initially
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
issued, which will be issued from time to time by the Company according to the sole discretion thereof.
It is clarified that although the Shelf Prospectus determines that the total par value of each of the Debenture Series shall not exceed NIS 5,000,000,000, the Company shall be entitled to increase, from time to time and in accordance with the provisions of any law, each one of the Debenture Series, without limitation, and the Indenture and the conditions thereunder shall apply to each one of the Debenture Series, in an unlimited amount.
|
|||
"Debentures" or Debenture of the Relevant Series"-
|
Debentures from each one of the Debenture Series.
|
||
"Relevant Series' Initial Offering Report"-
|
An Offering Report pursuant to which Debentures of the Relevant Series will be initially offered.
|
||
"Trustee"-
|
Hermetic Trust (1975) Ltd. and/or anyone acting from time to time as the Debenture holders' trustee pursuant to the Indenture.
|
||
"Register"-
|
The Debenture holders' register as provided in Section 26 of the Indenture.
|
||
"Debenture Certificate"-
|
The debenture certificate in respect of the Relevant Series, the language of which appears in the First Schedule to the Indenture and which will be issued in accordance with the terms
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
of the Indenture and Shelf Prospectus. | |||
"Law" or "Securities Law"-
|
The Securities Law, 5728-1968, and the regulations thereunder, as being from time to time.
|
||
"TASE"-
|
The Tel Aviv Stock Exchange Ltd.
|
||
"Consumer Price Index" or "Index"-
|
The price index which is known by the name "consumer price index" which includes vegetables and fruit and is published by the Central Bureau of Statistics and Economic Research in Israel, and including such index also if published by a different official institute or body, and including any other official index which will replace the same, whether or not it will be based on the same data on which the existing index is based. If a different index which will be published by a body or an institute as aforesaid will replace the same, and such body or institute shall not have determined the ratio between it and the replaced index, such ratio shall be determined by the Central Bureau of Statistics, and in the event that such ratio will not be determined as aforesaid, then it shall be determined by the Trustee for the Relevant Series, in consultation with economic experts which will be chosen thereby.
|
||
"Known Index" on any date-
|
The last known Index which was published before such date.
|
||
"Base Index" with regard to any Relevant Series-
|
The Known Index on a specific date, which will be detailed in the Relevant
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Series' Initial Offering Report. | |||
"Payment Index"-
|
The Known Index on the date which is scheduled for any payment on account of a Principal and/or interest, subject to the provisions below.
The Relevant Series' Initial Offering Report, which includes Index linked Debentures, shall specify whether protection will apply to the Principal and/or interest of such Debentures (in other words, if the Known Index on the date which is scheduled for the relevant installment will be lower than the Base Index, the payment index will be the Base Index) or no such protection will apply (in other words, the payment index shall be the Known Index on the date which is scheduled for the relevant installment, also if such Index will be lower than the Base Index).
The manner of determination of the payment index, as aforesaid, shall be detailed in the Relevant Series' Initial Offering Report.
If the Company shall not have determined in the Offering Report as aforesaid whether or not such protection will apply, no protection shall apply.
|
||
"Debenture holders" and/or "Debenture Owners" and/or "Holders"
|
Anyone holding the Debentures.
|
||
"Business Day" or "Bank Business Day"-
|
Any day on which most of the banks in Israel are open for the performance of transactions.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
"Overseas Business Day"-
|
Any day on which Base Interest which refers to Foreign Currency is quoted which is published on Reuters information service, or any other source of information which will be specified in the Relevant Series' Initial Offering Report.
|
||
"Principal"-
|
The total par value which has not yet been paid of the Debentures of the Relevant Series.
|
||
"Special Resolution"-
|
A resolution which was adopted by a general meeting of the Debenture holders of the Relevant Series, which was attended by, in person or through their attorneys, Holders of at least fifty five percent (55%) of the balance of the par value of the Debentures in circulation of such series, or by an adjourned meeting, which was attended by, in person or through their attorneys, Holders of at least ten percent (10%) of the aforesaid balance, and which was adopted (either by the original meeting or the adjourned meeting) by a majority of at least seventy five percent (75%) of all of the votes of those participating in the vote, other than the abstainers.
|
||
"Transfer Agent"-
|
The transfer agent of Israel Discount Bank Ltd.
|
||
"Foreign Currency"-
|
No more than one foreign currency due to each Relevant Series, as will be specified in the Relevant Series' Initial Offering Report.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
"Foreign Currency Rate"-
|
The representative rate of the Foreign Currency which is published by the Bank of Israel or any official exchange rate of the Foreign Currency to the Israeli currency which will replace the representative rate as aforesaid, and which will apply at such time with regard to the government debentures which are linked to such foreign currency rate.
|
||
"Known Rate" on any date-
|
The last Foreign Currency Rate which was determined by the Bank of Israel before such date. However, in a period during which the Bank of Israel does not regularly determine a representative rate, the Known Rate on any date shall be the rate which was last determined before such date by the Minister of Finance together with the Governor of the Bank of Israel for government debentures which are linked to the Foreign Currency Rate.
|
||
"Base Rate" with regard to any Relevant Series-
|
The Known Rate on a specific date, which will be specified in the Relevant Series' Initial Offering Report.
|
||
"Payment Rate"-
|
The Known Rate on the actual payment date, subject to the provisions below.
The Relevant Series' Initial Offering Report, which includes Foreign Currency linked Debentures, shall specify whether protection will apply to the Principal and/or interest of such Debentures (in other words, if the Known Rate on the date which is
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
scheduled for the relevant installment will be lower than the Base Rate, the Payment Rate shall be the Base Rate) or no such protection will apply (in other words, the Payment Rate shall be the Known Rate on the date which is scheduled for the relevant installment, also if such rate will be lower than the Base Rate).
The manner of determination of the Payment Rate, as aforesaid, shall be detailed in the Relevant Series' Initial Offering Report.
If the Company shall not have determined in the Offering Report as aforesaid whether or not such protection shall apply, no protection shall apply.
|
|||
"LIBOR Interest"-
|
The London Interbank Offered Rate – The interest rate which is offered on the interbank market in London on deposits in USD for the period which will be specified in the Relevant Series' Initial Offering Report (for one week, one month, six months, etc.) as quoted on the Sampling Date in respect of such interest modification period which will be stated as aforesaid in the Relevant Series' Initial Offering Report,2 at 11:00 o'clock, London time, or close
|
2
|
For example, if a Relevant Series' Initial Offering Report determines that the interest rate shall be for a one month period, then the quote on the Sampling Date shall be of the LIBOR interest per month.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
thereafter, on the Libor01 page which is published by the Reuters information service (or, if such page will be replaced by a different page, then as quoted on the Sampling Date, at the aforesaid time or close thereafter, on the different page, as aforesaid), or on a different information source which will be specified in the Relevant Series' Initial Offering Report. | |||
"CHF LIBOR Interest"-
|
The CHF London Interbank Offered Rate – The interest rate which is offered on the interbank market in London on deposits in Swiss Francs for the period which will be specified in the Relevant Series' Initial Offering Report (for one week, one month, six months, etc.) as quoted on the Sampling Date in respect of such interest modification period which will be stated as aforesaid in the Relevant Series' Initial Offering Report,3 at 11:00 o'clock, London time, or close thereafter, on the Libor01 page which is published by the Reuters information service (or, if such page will be replaced by a different page, then as quoted on the Sampling Date at the aforesaid time or close thereafter, on the different page, as aforesaid), or on another information source which will be specified in the Relevant Series' Initial Offering Report.
|
||
"EURIBOR Interest"-
|
The Euro Interbank Offered Rate - The interest rate which is offered on the interbank market on deposits in Euros for the period which will be specified in the Relevant Series' Initial Offering Report (for one week, one month, six months, etc.) as quoted on the Sampling Date in
|
3
|
For example, if a Relevant Series' Initial Offering Report determines that the interest rate shall be for a one month period, then the quote on the Sampling Date shall be of the CHF LIBOR interest per month.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
respect of such interest modification period which will be stated as aforesaid in the Relevant Series' Initial Offering Report,4 at 11:00 o'clock CET, or close thereafter, on the Euribor01 page which is published by the Reuters information service (or, if such page will be replaced by a different page, then as quoted on the Sampling Date at the aforesaid time or close thereafter, on the different page, as aforesaid), or on another information source which will be specified in the Relevant Series' Initial Offering Report. | |||
"TELBOR Interest"-
|
The Tel Aviv Interbank Offered Rate – The interest rate for interbank loans in NIS, which is calculated according to interest offers which are issued by several banks in Israel, for the period which will be specified in the Relevant Series' Initial Offering Report, as will appear on the Sampling Date in respect of such interest modification period which will be stated as aforesaid in the Relevant Series' Initial Offering Report,5 (if on Mondays through Thursdays – at 13:00 o'clock or close thereto, and if on Fridays – at 12:00 o'clock or close thereto) on the system of the information distributor, Reuters, or on another information source which will be specified in the Relevant Series' Initial Offering Report.
|
4
|
For example, if a Relevant Series' Initial Offering Report determines that the interest rate shall be for a one month period, then the quote on the Sampling Date shall be of the EURIBOR interest per month.
|
5
|
For example, if a Relevant Series' Initial Offering Report determines that the interest rate shall be for a one month period, then the quote on the Sampling Date shall be of the TELBOR interest per month.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
"Bank of Israel Interest"-
|
Bank of Israel's declared interest which is announced by the Governor of the Bank of Israel from time to time. In the event that Bank of Israel's interest shall no longer be calculated and published by the Bank of Israel, the interest shall be replaced by interest the manner and method of calculation of which is significantly similar to Bank of Israel's interest, as approved by an objective economic expert who will be appointed by the Company, and whose identity will be approved in advance by the Trustee.
|
||
|
""Government Debenture-with Variable Interest" Interest"
|
The interest rate which will be borne by "Government Debentures-with Variable Interest" type Debentures, which either were and/or will be issued pursuant to the State Loan Regulations ("Government Debentures – Variable Interest" Type Debentures), 5766-2006 (of the series which will be specified in the Relevant Series' Initial Offering Report) as will be published by the Government Debt Management Unit of the General Accountant at the Ministry of Finance or any other government body which will come in its stead, or the variable interest rate which will be borne by government debentures which are not linked to a linkage basis of any kind, which either were and/or will be issued pursuant to the State Loan Law, 5739-1979, and the regulations thereunder, and/or any law which will replace the same and/or add thereto, which are listed for trade on TASE.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
"Prime" or "Prime Interest" on any date-
|
The average prime interest on such date as published by Bank Hapoalim Ltd., Bank Leumi L'Israel Ltd., and Israel Discount Bank Ltd.
|
||
""Gilon Chadash Government Debenture "Interest"-
|
The interest rate which will be borne by "Gilon Chadash" type Debentures which either were and/or will be issued pursuant to the State Loan Regulations ("Gilon Chadash" Type Series), 5759-1999 (of the series which will be specified in the Relevant Series' Initial Offering Report) as will be published by the Government Debt Management Unit of the General Accountant at the Ministry of Finance or any other government body which will come in its stead, or the variable interest rate which will be borne by government debentures which are not linked to a linkage basis of any kind, which either were and/or will be issued pursuant to the State Loan Law, 5739-1979, and the regulations thereunder, and/or any law which will replace the same and/or add thereto, which are listed for trade on TASE.
|
||
"Zero Coupon Debenture "-
|
Debentures which are issued in series by the State of Israel for the purpose of a zero coupon debenture which the State of Israel borrows in accordance with the provisions of the Zero Coupon Debenture Law, 5744-1984 and/or any law which will replace the same and/or add thereto, which are listed for trade on TASE and sold in a tender by the Bank of Israel, and do not bear interest and/or linkage differentials.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
"One Year Zero Coupon Debenture"-
|
A Zero Coupon Debenture series which is in circulation, the payment date of which was scheduled for the period which is closest to a period of twelve (12) months from the Sampling Date, provided that the payment date thereof is at least ten (10) months from the Sampling Date. In the event that on the Sampling Date there is no such Zero Coupon Debenture, the One Year Zero Coupon Debenture shall be a series of other NIS government debentures which do not bear linkage differentials, which are listed for trade on TASE, and whose payment date was scheduled for the period which is closest to twelve (12) months from the Sampling Date.
|
||
"Zero Coupon Debenture Yield"-
|
An average of One Year Zero Coupon Debenture yields (according to the yield per year of such Zero Coupon Debenture, as being at the time of the ending of the daily trade on TASE) in the several Trading Days before the Sampling Date, as will be determined in the Relevant Series' Initial Offering Report. In the event that during such Trading Days before the Sampling Date as aforesaid, trade will commence on TASE in a new Zero Coupon Debenture series, the payment date of which was scheduled for the period which is closest to a period of twelve (12) months from the Sampling Date, then for the purpose of calculation of the One Year Zero Coupon Debenture Yield, on each Trading Day (from among such Trading Days before the Sampling Date as aforesaid, on which
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
2.
|
the One Year Zero Coupon Yield is measured) will be taken the One Year Zero Coupon Yield which fulfills, on such date, the definition of the One Year Zero Coupon Debenture as aforesaid. | ||
"Sampling Date" with regard to any Interest Period of a Base Interest-
|
As will be determined in the Relevant Series' Initial Offering Report in respect of the Base Interest which will be borne by the Debentures which will be offered in an Offering Report as aforesaid, provided that the Sampling Date in respect of any Interest Period shall be at least seven (7) Trading Days before the effective date in respect of such Interest Period.
|
||
"Trading Day"-
|
A day on which trade is performed on the Tel Aviv Stock Exchange.
|
||
"TASE Clearinghouse"-
|
The clearing house of the Tel Aviv Stock Exchange Ltd.
|
|
The Principal of the Debentures and the Principal linkage bases
|
2.1.
|
Linkage to the Index
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
2.2.
|
Linkage to Foreign Currency
|
2.3.
|
Non-linked Debentures
|
2.4.
|
Subject to the provisions of the TASE rules and the directives by virtue thereof, the linkage method shall not be modified during the period of the Debentures.
|
3.
|
The interest due to the Debentures
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
(a)
|
Interest on Index linked Principal
|
(b)
|
Interest on non-linked Principal
|
(1)
|
Fixed interest in NIS – Interest at a fixed rate which will be set forth in the Relevant Series' Initial Offering Report and/or in a tender pursuant to such Offering Report.
|
(2)
|
Interest at a variable rate, while the margin above or below the Base Interest (as defined below) shall be specified in the Relevant Series' Initial Offering Report or determined by a tender pursuant thereto, and while the Base Interest is the Bank of Israel Interest or Prime Interest or Telbor Interest or "Government Debenture-with Variable Interest" Interest or "Gilon Chadash Government Debenture" Interest or Zero Coupon Debenture Yield (in this Subsection (2) – the "Base Interest") which will be determined in the Offering Report as aforesaid – the interest rate due to each Interest Period of Debentures of such series shall be determined in accordance with the Base Interest rate, as quoted on the Sampling Date, plus or minus a margin (as the case may be) as will be specified in the Offering Report. The Company shall submit an immediate report within four (4) days from the Sampling Date (but in any event, no less than four (4) Trading Days before the effective date in respect of the relevant Interest Period), with regard to the interest rate which will be borne by the Debentures in the relevant Interest Period.
|
6
|
The interest rate, including the rate of the margin above or below (as the case may be) Base Interest (in the event of a variable interest rate), which will be borne by the Series 1 to 6 Debentures, shall be specified in the Offering Report pursuant to which the Debentures of such series will be initially offered and shall not be determined by a tender.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
(c)
|
Interest on Foreign Currency linked Principal
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
(1)
|
Foreign Currency linked fixed interest– Interest which is linked to Foreign Currency while the interest is at a fixed rate which will be determined in the Relevant Series' Initial Offering Report and/or in a tender pursuant to the aforesaid Offering Report.
|
(2)
|
Interest at a variable rate, while the margin above or below the Base Interest (as defined below) shall be specified in the Relevant Series' Initial Offering Report or determined by a tender pursuant thereto, and while the Base Interest is the LIBOR Interest or CHF LIBOR Interest or EURIBOR Interest (in this Subsection (2) – the "Base Interest") which shall be determined in the Offering Report as aforesaid – the interest rate due to each Interest Period of Debentures of such series shall be determined in accordance with the Base Interest rate for the period which will be stated in the Relevant Series' Initial Offering Report, as will be quoted on the Sampling Date, plus or minus a margin (as the case may be) as will be specified in the Offering Report. The Company shall submit an immediate report within four (4) days from the Sampling Date (but in any event no less than four (4) Trading Days before the effective date in respect of the relevant Interest Period), with regard to the interest rate which will be borne by the Debentures in the relevant Interest Period.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
(d)
|
The interest rate due to the first Interest Period of the Debentures of the Relevant Series, and the annual interest rate based on which it was determined, shall be specified in the Relevant Series' Initial Offering Report and/or in a report which the Company will release pertaining to the results of the tender in connection with the interest rate and/or in the immediate report in which the Company will announce the results of the calculation of the interest rate on the Sampling Date, as the case may be, and as will be specified in the aforesaid Offering Report.
|
(e)
|
It is clarified that in respect of the Debentures bearing a variable interest, as provided in Sections 3(b)(2) and 3(c)(2), it is anticipated that the interest rate which will be paid due to the entire Interest Period shall be a different interest rate, as specified above.
|
(f)
|
The interest rate which will be determined due to the Debentures of the Relevant Series shall be an annual rate. Insofar as the terms of the Debentures will determine that the interest due thereto shall be paid on more than one date in a year, the interest payment which will be made on each interest payment date shall be calculated according to the annual interest rate, divided into the number of the installments in a year which is determined pursuant to the terms of the Debentures of the Relevant Series and all as will be specified in the Relevant Series' Initial Offering Report.
|
(g)
|
The interest due to each Relevant Series of Debentures shall be paid in one or more installments, on each one of the dates, all as will be specified in the Offering Report pursuant to which such series will be initially offered, for the interest period which shall have expired on the last day before the payment date (the "Interest Period"). The first Interest Period of the Debentures of the Relevant Series shall commence on the first Trading Day after the date of closing of the
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
subscription list, which will be specified in the aforesaid Offering Report, and expire on the last day before the first interest payment date. Each additional Interest Period of the Debentures of the Relevant Series shall commence on the first day after expiration of the previous Interest Period and expire on the last day before the next payment date after the commencement thereof. The interest for the first Interest Period shall be calculated according to the number of days in such period, based on 365 days in a year.
|
(h)
|
The last installment of interest on the Principal of the Debentures of the Relevant Series shall be paid together with the last payment on account of the Principal of the Debentures of such series, against the delivery of the Debenture Certificates of such series to the Company.
|
4.
|
Payments of the Principal and interest of the Debentures
|
(a)
|
The payments on account of the interest and/or Principal of the Debentures of the Relevant Series which will be offered pursuant to this Shelf Prospectus shall be made to the persons whose names will be registered on the Register for such series on the dates as will be specified in the initial offering report of such series in accordance with the provisions of the TASE rules and the directives by virtue thereof, as being at such time (the "Effective Date in the Relevant Series"), other than the final installment of the Principal and interest which will be performed against the delivery of the Debenture Certificates of such series to the Company on the payment date, at the Company's registered office or at any other location of which the Company will inform at least five (5) Business Days before the last payment date.
|
(b)
|
In any event that the date of payment of the installment on account of the Principal and/or interest will fall on a day which is not a Business Day, the payment date shall be postponed to the next Business Day thereafter, for no added payment, and the "effective date" for the purpose of determination of the entitlement to redemption or interest shall not change due thereto.
|
(c)
|
The payment of the Principal and interest shall be performed subject to the linkage terms as specified in Sections 2 and 3 of the Terms and Conditions Overleaf.
|
(d)
|
Any and all installments on account of a Principal and/or interest which will be paid in arrears of more than seven (7) Business Days from the date which is scheduled for the payment thereof pursuant to the terms of the Debentures as aforesaid for reasons within the Company's control, shall bear arrears interest (as defined below) commencing from
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
the date which is scheduled for the payment thereof until the actual date of payment thereof. In this regard, arrears interest shall mean annual interest in the amount of the Debenture interest as provided in Section 3 of the Terms and Conditions Overleaf, plus 2%. In the event of arrears as aforesaid, the Company shall notify of the interest rate, including the arrears interest as aforesaid, in an immediate report, two (2) Trading Days before the actual payment date.
|
(e)
|
The payment to registered entitled persons shall be performed in checks or in a wire transfer to the credit of the bank account of the persons whose names will be registered on the Register for the Relevant Series and which will be stated in the details which will be timely delivered to the Company, according to the provisions of Subsection (f) below. If the Company will be unable to pay any amount to those who are entitled thereto, for a reason beyond its control, the provisions of Section 13 of the Indenture shall apply.
|
(f)
|
A registered Holder of the Debentures of the Relevant Series shall inform the Company of the details of the bank account to be credited with the payments pursuant to the Debentures of such series as aforesaid or of a change in the details of such account, or his address, as the case may be, in a written notice which he will dispatch via registered mail to the Company. The Company shall be obligated to act according to the notice of a registered Holder pertaining to such change after the lapse of fifteen (15) Business Days from the date on which his notice shall have reached the Company.
|
(g)
|
If a registered Holder of the Debentures who is entitled to payment as aforesaid shall not have timely delivered details pertaining to his bank account to the Company, each payment on account of the Principal and interest shall be performed in a check which shall be dispatched via registered mail to his last address which is registered on the Register for the Relevant Series. The dispatch of a check to a registered entitled person via registered mail as aforesaid shall be deemed, for all intents and purposes, as a payment of the amount which is stated therein on the date of dispatch thereof via mail, provided that it shall have been cleared at the time of its lawful presentation for collection.
|
(h)
|
Any and all mandatory payments shall be deducted from each payment due to the Debentures of the Relevant Series, as required in accordance with the provisions of the law on the relevant date.
|
5.
|
Refrainment from payment for a reason which is beyond the Company's control
|
6.
|
Debenture holders' Register
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.
|
Conversion Right of Debentures (Series 1 to 6) (the "Convertible Debentures")
|
7.1.
|
Terms of Conversion
|
(a)
|
On each Trading Day, beginning on the date of the initial registration of each of the Convertible Debentures' Series for trade in the TASE and until several days prior to the end of the term of the Debentures of the same series, according to the directives of the TASE, as such shall be on the date of the initial offering report of the same series and as specified in the aforesaid offering report (the "Conversion Term", and every Trading Day as stated: the "Conversion Day", and the last day of the Conversion Term: the "End of the Conversion Term"), excluding several days prior to the effective date for partial redemption according to the TASE rules and directives, as shall be on the date of the aforesaid offering report and until the partial redemption's date of execution, the balance of the Principal of the Convertible Debentures of the same series, which are in circulation at that time, will be convertible into ordinary registered shares of the Company, as shall exist on the publication date of the initial offering report of each of the aforesaid series (the: "Conversion Shares"), per a conversion rate which shall be no less than the nominal value of the Company's ordinary shares on the date of the aforesaid offering report (the: "Conversion Rate"), subject to adjustments as specified hereunder and in the manner and on the terms as specified in the aforesaid offering report.
|
(b)
|
Any Holder of Convertible Debentures of any series, who will wish to convert the balance of the nominal value of the Principal of the Convertible Debentures of the same series held thereby into Conversion Shares (the "Converter"), will directly submit to the Company, at its registered office (in the event such Debentures are registered in the name of the Converter in the Register for such series) or via a member of the TASE (in the event such Debentures are held by the Converter through same TASE member), on the Conversion Days and in any event until the End of the Conversion Term with respect to such series, a written application thereof, on a form as determined by the Company, attaching the Convertible Debenture Certificates to which the application refers (the "Conversion Notice").
|
(c)
|
A conversion of the balance of the nominal value of the Principal of several Convertible Debentures of the same series,
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
which are registered in the name of the same Holder, may be requested in one Conversion Notice, and in such an event, all of the Convertible Debenture Certificates to which such Conversion Notice refers, should be attached thereto.
|
(d)
|
In the event of a conversion of Convertible Debentures into shares in accordance with this section, concerning only part of the Convertible Debentures' nominal value registered in one certificate, the Convertible Debenture Certificate should first be split into several Debenture Certificates as required therefor and as stated in Section 9 of the Terms and Conditions Overleaf, in such manner that the total of all nominal value sums of the Debentures listed therein will be equal to the nominal value sum of the Debenture Certificate which shall be split as stated.
|
(e)
|
The Conversion Notice forms are available at the Company's registered office as well as any other place which the Company shall give notice of.
|
(f)
|
The Converter will sign any document required by law and per the Company's instructions for the purpose of the allotment of the Conversion Shares. The day on which the Company directly receives a Conversion Notice from the Converter (for Convertible Debentures directly held by a registered Holder), or the TASE Clearinghouse receives a notice of conversion of the Convertible Debentures from a member of the TASE (for Convertible Debentures held via the Transfer Agent), which fulfills all the conditions specified in this Prospectus, as the case may be, will be deemed the conversion date (the "Conversion Date").
|
(g)
|
In case the Converter will have not fulfilled all of the conditions for the conversion of the Convertible Debentures in full, the Conversion Notice will be deemed null and the Convertible Debenture Certificates attached to such Conversion Notice will be returned to the applicant.
|
(h)
|
A Conversion Notice submitted to the Company is irrevocable and unchangeable.
|
(i)
|
The Converter will not be entitled to an allotment of part of a Conversion Share, however, all fractions of Conversion Shares formed in the conversion process, if any, will be sold on the TASE, by a trustee to be appointed for this purpose by the Company, within thirty (30) days of the accumulation of such fractions to whole shares in a reasonable quantity for sale on the TASE, considering the costs involved therein, and the net consideration of their sale shall be distributed among the entitled persons respectively, within fifteen (15) days of the
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
date of the sale. A check for an amount lower than 50 NIS shall not be sent to a registered entitled person as stated, and such sum may be received at the Company offices on normal business days and hours, following prior coordination. An entitled person as stated who shall have not arrived at the Company's offices to receive such sum as stated within twelve (12) months of the sale date, shall forfeit his right to such sum.
|
(j)
|
The Conversion Shares will grant their owners the full rights of participation in any dividend and another distribution in full, for which the date determining the right to receive such is on the Conversion Date or thereafter, and shall be of equal rights, in all respects, as the Company's ordinary shares which will exist at that time.
|
(k)
|
The Convertible Debentures which will have been converted, will be removed from circulation on their Conversion Date and be completely null, retroactively to the Conversion Date, as of the date when Conversion Shares were allotted therefor, and shall grant no right whatsoever after the last date for payment of interest, the effective date for which occurs before the Conversion Date.
|
(l)
|
The Convertible Debentures of any series, which will have not been converted by the End of the Conversion Term with respect to same series, will no longer grant their Holder any right to convert such into Conversion Shares, and the conversion right therefor shall be null and void after such date.
|
7.2.
|
Conversion Schedules
|
7.3.
|
Instructions for the Protection of Holders of Convertible Debentures in the Conversion Term
|
(a)
|
Distribution of Stock Dividend
|
1.
|
After the date determining the entitlement to participate in the said distribution, the number of Conversion Shares, to which the Holder of the Convertible Debentures of the same series will be entitled upon conversion thereof, will be increased by adding the number of shares the Holder would have been
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
entitled to as stock dividend, had he converted the Convertible Shares immediately before the said effective date. The Company will give notice of the new conversion ratio in an immediate report, prior to the opening of trade on the Ex-dividend date.
|
2.
|
The Holder of Convertible Debentures will not be entitled to an allotment of a portion of a stock dividend as per the aforesaid, however, all fractions of stock dividends formed in the process of the allotment and accumulated to whole shares in a reasonable quantity for sale on the TASE, will be sold on the TASE, by a trustee appointed for this purpose by the Company, within thirty (30) days of the aforesaid allotment date, and the net consideration (after deduction of sale expenses and compulsory payments and levies) will be distributed among the entitled persons within fifteen (15) days of the sale date. A check for an amount lower than 50 NIS shall not be sent to a registered entitled person, and such sum may be received at the Company offices on normal business days and hours, following prior coordination. An entitled person as stated who shall have not arrived at the Company's offices to receive such sum as stated within twelve (12) months of the sale date, shall forfeit his right to such sum.
|
3.
|
Subject to the provisions of the TASE rules and directives, the adjustment method is unchangeable.
|
(b)
|
Rights Issue
|
(c)
|
Adjustment due to Dividend Distribution
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.4.
|
Additional Instructions for the Protection of Holders of Convertible Debentures in the Conversion Term
|
1.
|
The Company will reserve a sufficient amount of ordinary shares in its registered share capital, to ensure the allotment of all shares which may stem out of the conversion of all of the Convertible Debentures of the same series, which are in circulation from time to time, and, if necessary, will cause the Company to increase its registered share capital accordingly.
|
2.
|
If the Company will have united the ordinary shares in its issued share capital into shares of greater nominal value or shall have subdivided them into shares of lower nominal value – the number of Conversion Shares issued as a result of the conversion of the Convertible Debentures of the same series will be increased or decreased, as the case may be, after an action as stated. In such event, the provisions of this section 7 will apply, mutatis mutandis.
|
3.
|
The Company will make a copy of the Company's periodic reports and interim financial statements available for the perusal of the Holders of Convertible Debentures of the same series, in its registered office during normal business hours.
|
4.
|
Within ten (10) days of each adjustment in the Conversion Rate or in the number of Conversion Shares with respect to the same Convertible Debentures' series, the Company will publish an announcement in two (2) widely circulated newspapers, published in Israel in the Hebrew language, as to the right of the Convertible Debentures' Holders of the same series to convert them into shares, listing the Conversion Term, the
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Conversion Rate and the number of Conversion Shares to which a Holder of Convertible Debentures will be entitled as a result of a conversion at that time, all with respect to the same series.
|
5.
|
In addition to the aforesaid announcement, no later than three (3) weeks and no earlier than four (4) weeks prior to the End of the Conversion Term, the Company will publish an announcement in two (2) widely circulated newspapers, published in Israel in the Hebrew language, and will send a written notice to the Holders registered in the Register for said series, with a copy to the TASE and the Trustee of the same series, of the last date for conversion of the Convertible Debentures of the same series. Such announcement shall specify the Conversion Rate, the number of Conversion Shares and the amount of stock dividend to which a Holder of the Convertible Debentures is entitled at the time of the conversion during such period, all with respect to the said series.
|
6.
|
The Company shall not distribute and shall not offer a cash dividend or stock dividend or any offer of rights to any securities, to ordinary shareholders, unless the date determining the right of their receipt is at least ten (10) Trading Days after the publication of the Company's announcement as to the distribution or offer of rights, as the case may be.
|
7.
|
The Company will abstain from any action, including the distribution of stock dividend, which may cause a decrease in the price of a Conversion Share below its nominal value.
|
8.
|
According to the provisions of the TASE rules and the directives thereunder, as per their wording as of the date of the Prospectus, the conditions of the Convertible Debentures are unchangeable with respect to the Conversion Rate, the Conversion Days and the linkage method, but the Company may change the Conversion Term and/or the Conversion Rate, provided that such is done within an arrangement or settlement approved by a court of law, pursuant to Clause 350 of the Companies Law. Additionally, the Company may change the Conversion Rate within a Splitting Process of the Company or a Merger Process of the Company, provided that the change will only include the adjustments which are necessary as a result of the process as stated.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.5.
|
Voluntary Liquidation
|
1.
|
In the event where a resolution of the Company's voluntary liquidation is adopted, the Company shall notify thereof in an immediate report and shall give written notice thereof to all Holders of the Convertible Debentures, which are in circulation at that time, who are registered in the Register of the Relevant Series of Convertible Debentures, and will also publish an announcement in two (2) widely circulated newspapers, published in Israel in the Hebrew language. Any Holder of the Convertible Debentures will be entitled, as per his wish, to be deemed as if the conversion right therefor has been exercised thereby on the eve of the resolution, if he informs the Company
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
in writing of his said wish within three (3) months of the date of the Company's said announcement.
|
2.
|
In such case, the Holder of the Convertible Debentures is entitled to participate in the distribution of the surplus property of the Company in the liquidation (after the settlement of all its debts) among its shareholders, in the amount he would have received in the Company's liquidation, had he been a shareholder of the Company on the eve of the liquidation resolution as a result of the conversion of Convertible Debentures held thereby, with respect to which he has given notice to the Company as stated, after deduction of the amounts of interest paid due to such Convertible Debentures on the date of the resolution or thereafter (excluding interest, the due date of which occurred prior to the date of the resolution, even if it had been paid on the date of the resolution or thereafter); and the Owner of the Convertible Debentures will not be entitled to any payment therefor, the due date for which occurred after the date of the resolution.
|
8.
|
Transfer of Debentures
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
9.
|
Debenture Certificates and Split thereof
|
10.
|
Early Redemption
|
11.
|
Waivers, Compromises and/or Changes in the Indenture
|
12.
|
Debenture holders Meetings
|
13.
|
Replacement of Debenture Certificates
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
14.
|
Applicable Law and Jurisdiction
|
15.
|
Notices
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
The Trustee or the Company may call the Debenture holders of the Relevant Series to a meeting of Debenture holders of the same series. In case the Company calls such meeting, it should immediately send written notice of the place, date and time of the meeting as well as of the matters to be discussed therein, to the Trustee. In case the Trustee calls such meeting, it should send written notice of the place, date and time of the meeting as well as of the matters to be discussed therein, to the Company.
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2.
|
The Company must call a meeting of the Debenture holders of the Relevant Series pursuant to a written request by the Trustee or by the Holders of at least ten percent (10%) of the nominal value of the unpaid balance of the Principal of the Debentures of the same series, which are in circulation. The Trustee must call such meeting pursuant to a written request by the Holders of at least ten percent (10%) of the nominal value of the unpaid balance of the Principal of the Debentures of the same series, which are in circulation. In the event where Debenture holders request to call the meeting, the Company and/or the Trustee, as the case may be, may demand indemnification from the applicants for the reasonable expenses involved therein.
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3.
|
The Debenture holders of the Relevant Series, the Trustee and the Company, as the case may be, will be given an advance written notice of at least fourteen (14) days, which shall specify the place, date and time of the beginning of the meeting, and which shall also list, in general, the topics to be discussed in the meeting. In the event where the objective of the meeting is to discuss a proposal to adopt a Special Resolution, an advance written notice will be given as stated of at least twenty one (21) days and the notice will specify the date and time of the beginning of the meeting as well as the main points of the proposed resolution. The Trustee may bring forward the advance notice date if it will have seen that a postponement in convening the meeting constitutes prejudice or may cause prejudice to the rights of the Debenture holders of the same series or a legitimate interest of the Company. A notice of a meeting or an adjourned meeting, as the case may be, will be reported by the Company in an immediate report as well.
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4.
|
Any resolution which was lawfully adopted in a meeting called as stated (or in an adjourned meeting, as the case may be) will not be disqualified due to a notice thereof erroneously not being given to all of the Debenture holders of the Relevant Series or to a notice as stated not being received by all of the Holders of Debentures of the same series, which are in circulation, provided that a notice of the meeting (or adjourned meeting) will be reported in an immediate report.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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5.
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Any meeting of Debenture holders of the Relevant Series will take place at the registered office of the Company, or another address of which the caller of the meeting shall notify.
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6.
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In any event where a different mechanism for calling debenture holders meetings shall have been determined by law, including the TASE rules and the directives thereunder, the aforesaid mechanism shall be automatically adjusted to the mechanism determined by law, to the extent such is required by the provisions of the same law.
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7.
|
The Debenture holder of the Relevant Series shall present the Company at its registered office (or the entity calling the meeting, at the address determined by said entity), no later than forty eight (48) hours before the time of the Debentureholders meeting of the same series or its adjourned meeting, as the case may be (or until another time, as determined by the caller of the meeting in the invitation to the meeting), with a confirmation from the TASE member, by which the Debentures of the same series are held, as to the quantity of Debentures of the same series which are held by the Holder as stated as of the date specified in the same confirmation. A Debenture holder of the same series may vote in the meeting of Debenture holders of the same series for the quantity of Debentures included in the TASE member's confirmation as stated, insofar as the Holder continues to hold the quantity of Debentures with respect to which the TASE member's confirmation was given at the time of the vote. In case the holdings of the Debenture holder of the same series will have changed between the time specified in the said confirmation and the time of the meeting of Debenture holders of the same series, the Holder – if he shall participate in such meeting – will have to present the Company with a confirmation of proof of ownership from a TASE member, representing the Holder's holdings of Debentures of the same series as of the time of the meeting, before the beginning of the meeting.
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8.
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The chairperson of the meeting shall be a person appointed by the Trustee. In case the Trustee will have not appointed a chairperson as stated or such is absent from the meeting, the Debenture holders of the Relevant Series who are present at the meeting will select a chairperson from amongst themselves.
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9.
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A Debenture holders meeting will open after it will have been proven that the legal quorum required is present at the beginning of the discussion. In a Debenture holders meeting, resolutions which were included in the meeting's agenda, and with respect to which the legal quorum required for adoption thereof is present, will be put to the vote.
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10.
|
In meetings of Debenture holders of the Relevant Series, but except with respect to a Special Resolution, Debenture holders of the same series, present in person or by proxy in the meeting and holding or representing together at
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
least ten percent (10%) of the unpaid balance of the nominal value of the Debentures of the same series, which are in circulation, will constitute legal quorum.
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11.
|
If, within half an hour of the time set for the beginning of the meeting, a legal quorum as stated will have not been present, the meeting shall be adjourned to the same day in the following week (and in the event such day is not a Business Day – the Business Day immediately consecutive thereto), at the same place and at the same time (with no need for further notice), or to a different day and/or a place and/or a time, as shall be determined by the Trustee or the Company (all according to the caller), provided that they inform the Debenture holders of the Relevant Series in the manner provided by Section 24 of the Indenture.
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12.
|
In a meeting adjourned as stated, the presence of any Debenture holder of the Relevant Series (in person or by proxy thereof), independent of the nominal value of the Debentures of the same series held thereby, will constitute legal quorum.
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13.
|
With respect to a Special Resolution, Debenture holders of the Relevant Series, present in person or by proxies thereof in the meeting and holding or representing together at least fifty five percent (55%) of the unpaid balance of the nominal value of the Debentures of the same series, which are in circulation, will constitute legal quorum. If, within half an hour of the time set for the beginning of the meeting, a legal quorum as stated will have not be present, the meeting shall be adjourned and the provisions of Subsection (d) above shall apply, mutatis mutandis. In a meeting adjourned as stated, Debenture holders of the same series, present in person or by proxy in the meeting and holding or representing together at least ten percent (10%) of the unpaid balance of the nominal value of the Debentures of the same series which are in circulation, will constitute legal quorum.
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14.
|
When conducting the Debenture holders meeting, the Trustee shall examine the existence of Conflicting Interests of the Debenture holders, according to the circumstances, and shall determine, in accordance with the provisions of any law, case law, the provisions of the Securities Law and the regulations and directives issued thereunder, which of the participants has a Conflicting Interest.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
15.
|
Debentures of the Relevant Series which are owned by a subsidiary of the Company or by a corporation controlled by the Company, will not grant the subsidiary or the corporation controlled by the Company voting rights in meetings of Debenture holders of the same series and will not be counted for the purpose of legal quorum.
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16.
|
With the consent of the Holders of most of the Principal of the Debentures of the Relevant Series who are present (in person or by proxies thereof) in a meeting, in which a legal quorum is present, the chairperson may, and at the demand of the majority of those present must, adjourn the continuation of the meeting from time to time and from place to place, as per the meeting's decision. In such case, a notice of the continued meeting will be given in the same manner as a notice of the first meeting. No matters shall be discussed in a continued meeting, except for matters which may have been discussed in the meeting in which the continuance was decided.
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17.
|
In any meeting of Debenture holders of the Relevant Series, any Debenture holder of the same series, who is present therein in person or by proxy thereof, is entitled to one vote for every 1 NIS nominal value of the Principal of the Debentures of the same series, by virtue of which he is entitled to vote. The Trustee, who shall participate in a meeting, will participate without a voting right.
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18.
|
In the event of joint Holders of Debentures of the Relevant Series, only the vote of the Holder listed first from among them in the Register for same series, seeking to vote either in person or by proxy thereof, will be counted.
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19.
|
Any proposed resolution which will have been put to the vote in a Debenture holders meeting of the Relevant Series, will be decided by a count of votes.
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20.
|
The majority required for the adoption of an ordinary resolution in a Debenture holders meeting is a simple majority of all the votes of the participants in the vote, excluding the abstainers. The majority required for the adoption of a Special Resolution in a Debenture holders meeting is a majority
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
of no less than seventy five percent (75%) of all the votes of the participants in the vote, excluding the abstainers.7
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21.
|
The announcement of the chairperson with respect to the adoption or rejection of a resolution and an entry to this effect in the book of minutes, will serve as prima facie evidence of such fact.
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22.
|
A Debenture holder may participate and vote in general meetings of Debenture holders by proxies. A proxy appointment form shall be made in writing and signed by the principal or by an attorney thereof duly authorized in writing to do so. If the principal is a corporation, the appointment will be made in writing, signed by the corporate stamp together with the signature of a corporate official or an attorney of the corporation who is authorized to do so. The proxy appointment form will be drawn-up in any standard form. A proxy does not have to be a Debenture holder himself.
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23.
|
A proxy appointment form and the power of attorney pursuant to which the appointment form was signed, or a certified copy of such power of attorney, will be deposited with the Company's registered office (or with the entity calling the meeting at the address determined by such entity) no later than forty eight (48) hours before the time of the meeting with respect to which the appointment form was given, unless otherwise determined by the caller of the meeting in the notice calling the meeting. The appointment form will be valid for any adjourned meeting of a meeting listed in the appointment form, provided that the appointment form does not stipulate otherwise.
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24.
|
A vote, which was made in accordance with the conditions of the document appointing a proxy, will be valid even if prior thereto the principal will have passed away or declared legally incompetent or the appointment form will have been revoked or the Debenture with respect to which the vote was granted will have been transferred, unless a written notice of the passing, the incompetence decision, the revocation or the transfer, respectively, will have been received at the Company's registered office (or by the entity calling the meeting at the time set by such entity), before the meeting.
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25.
|
A Debenture holder of the Relevant Series or his proxy may cast some of his votes in favor of a certain proposed resolution, and some against, and abstain in respect of others, all as he deems fit.
|
26.
|
The Trustee will arrange to take minutes of all discussions and resolutions in every general meeting of Debenture holders of the Relevant Series, and to keep such in the book of minutes of the meetings of Debenture holders of the same series.
|
27.
|
Debenture holders of the Relevant Series may vote in a meeting of Debenture holders of the same series by written proxies, the wording of which will be
|
7
|
Nothing in the aforesaid shall derogate from the provisions of Section 35N(d) of the Securities Law, in the context of the majority required in a Holders meeting for removing the Trustee from office.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
delivered to such Holders by the Trustee and/or the Company (as the case may be) at the time of the calling of the meeting of Debenture holders of the same series and/or will be announced after the meeting and prior to the closing thereof by an immediate report (all according to the decision of the caller of the meeting). In order to vote by written proxy as stated, such should be delivered filled-in, duly signed and with all the required documents attached thereto, to the Company at its registered office (or to the entity calling the meeting at the address determined by such entity), no later than forty eight (48) hours before the time of the meeting of Debenture holders of the same series or before such other time to be set in the invitation to the meeting or before such other time after the holding of the meeting and before its closing to be set by the caller of the meeting as announced in an immediate report.
|
28.
|
A person or persons appointed by the Trustee, may be present but are not entitled to vote in meetings of Debenture holders of the Relevant Series. In Debenture holders meetings called by the Trustee, the Company's secretary and any other person or persons authorized therefor by the Trustee, may be present, with no voting right.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Between
|
||
Cellcom Israel Ltd.
|
||
of 10 HaGavish St., Netanya
|
||
Telephone: 052-9989595
|
||
Fax: 098607986
|
||
(The “Company”)
|
||
of the First Part;
|
||
And:
|
||
Strauss Lazar Trust Company (1992) Ltd.
|
||
of 17 Yitzchak Sade St., Tel Aviv
|
||
Telephone: 03-6237777
|
||
Fax: 03-5613824
|
||
(The “Trustee”)
|
||
of the Second Part;
|
Whereas
|
On July 14, 2011, The Company and Hermetic Trust (1975) Ltd. (“Hermetic”) engaged in an indenture (the “First Indenture”) with respect to a shelf prospects published by the Company on July 18, 2011, (the “Shelf Prospectus”), according to which the Company may issue, inter alia, Series F and/or Series G Debentures of the Company, and/or Debentures of other series (if and insofar as it is determined in their first offering report that the provisions hereof apply thereto) (the “Debentures”); and
|
Whereas
|
The Company intends to publish under the Shelf Prospectus a shelf offering report or shelf offering reports, under which the Company shall initially offer the Debentures (the “Offering Report” or the “Shelf Offering Report”; and
|
Whereas
|
Hermetic cannot act as a trustee for the Debentures that the Company intends to issue under the Shelf Prospectus due to a concern of a potential conflict of interests, and the Company applied to the Trustee in order that it step into Hermetic’s shoes as a trustee with respect to the Debentures (as defined above), and the Trustee agreed to act as a trustee for the Debentures and step into Hermetic’s shoes, on the condition that the terms of the Shelf Prospectus and hereof shall bind the Company and the Trustee and the Trustee shall be deemed to have acted initially as a trustee for the First Indenture with respect to the Debentures, subject to the provisions hereof with the amendments hereto, as applicable from time to time; and
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Whereas
|
The Trustee declares that it is a company registered in Israel, engaged in trusts and it complies with the qualification requirements set forth in the Securities Law, 5728-1968 to serve as a trustee for the Debentures; and
|
Whereas
|
The Trustee declares, after an independent examination performed thereby, that there is no impediment with respect thereof according to any law or agreement that applies to the Trustee against the engagement thereof with the Company in this Indenture, of which the provisions of the First Indenture are an integral part; and
|
Whereas
|
The parties wish to fill out the details of the Debentures with the concrete details, as they shall be stated in the Shelf Offering Report to be published by the Company and as specified below and set forth supplements and modifications that shall apply in the First Indenture, with respect to the Debentures only, as specified herein below and as shall be specified in Amendment and Supplement no. 1 to the First Indenture, such that this Indenture and the Schedule thereto shall supersede the Indenture and the modification and supplement thereto as executed between the parties on January 19, 2012;
|
1.
|
General
|
|
1.1.
|
The provisions of the First Indenture, which is attached hereto as Annex A, constitute an integral part hereof and shall apply in the relations between the parties and with respect to the Debentures, while for the purpose of this Indenture, the Trustee shall be Strauss Lazar Trust Company (1992) Ltd.
|
|
1.2.
|
Unless explicitly stated otherwise in this Indenture, all of the provisions of the First Indenture shall remain in force, subject to the modification of the Trustee’s identity and fees, as follows:
|
|
1.3.
|
In case of discrepancy between the provisions hereof and the provisions of the First Indenture, the provisions hereof shall prevail.
|
2.
|
Notwithstanding the aforesaid, the Debentures shall include the provisions of Amendment and Supplement no. 1 hereto.
|
3.
|
Except for the provisions of Amendment and Supplement no. 1 hereto as aforesaid in Section 2 above, the Trustee’s details as aforesaid and the modifications and supplement as aforesaid, no modification is made in the remaining terms of the Indenture and the First Indenture and its provisions shall continue to apply between the parties with respect to the Debentures.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
4.
|
It shall be clarified that the provisions of this Indenture, including the Amendment hereof, shall only apply with respect to the Series F Debentures, the Series G Debentures and debentures of other series (if and insofar as it is determined in the first offering report of the debentures of the other series as aforesaid that the provisions hereof shall apply thereto) and it does not apply the terms specified herein to other series of debentures which the Company may offer under the Shelf Prospectus and in whose offering report it was not determined that the provisions hereof apply in respect thereof.
|
5.
|
By signing this Agreement the Trustee authorizes any of the Company’s authorized signatories to report in its name in the MAGNA system of its engagement herein and its execution hereof.
|
Cellcom Israel Ltd.
|
Strauss Lazar Trust Company (1992) Ltd
|
||
Signed by: Yaacob Heen
CFO
|
Signed by: Uri Lazar |
Liat Menahemi Stadler, Adv.
|
|
Exhibit 4.6.2
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Between
|
||
Cellcom Israel Ltd.
|
||
of 10 HaGavish St., Netanya
|
||
Telephone: 052-9989595
|
||
Fax: 098607986
|
||
(The “Company”)
|
||
of the First Part;
|
||
And:
|
||
Strauss Lazar Trust Company (1992) Ltd.
|
||
of 17 Yitzchak Sade St., Tel Aviv
|
||
Telephone: 03-6237777
|
||
Fax: 03-5613824
|
||
(The “Trustee”)
|
||
of the Second Part;
|
Whereas
|
An Indenture was entered into between the parties with respect to Series F Debentures, Series G Debentures and debentures of other series (if and insofar as it is determined in their first offering report that the provisions hereof shall apply thereto), which adopted all of the provisions of the indenture that was entered into between the Company and Hermetic Trust (1975) Ltd. on July 14, 2011 (the “Indenture” and the “First Indenture”, respectively); and
|
Whereas
|
The Company published a shelf prospectus dated July 18, 2011, under which it may issue in the future, inter alia, any of the Series F to O Series Debentures and of Series 1 to 6 Debentures, in the manner described in the prospectus as aforesaid and in the Indenture (the “Prospectus” or the “Shelf Prospectus”); and
|
Whereas
|
The parties wish to amend existing provisions and add further provisions to the provisions of the Indenture in the manner specified herein and to fill out the details of the Series F Debentures and the Series G Debentures as well as the details of the debentures of other series (if and insofar as it is determined in the first offering report of the debentures of the other series as aforesaid that the provisions hereof shall apply thereto) with the concrete terms, following the first offering of the Debentures, which shall be offered pursuant to the Shelf Prospectus by virtue of the Shelf Offering Report and as shall be specified in the Shelf Offering Report (the “Debentures” and the “Offering Report” or the “Shelf Offering Report”, as the case may be); and
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Whereas
|
The parties wish to determine that the Series F Debentures and the Series G Debentures as well as the debentures of other series (if and insofar as it is determined in the first offering report of the debentures of the other series as aforesaid that the provisions hereof shall apply thereto) which shall be issued by the Company, if and insofar issued, shall be listed for trade in the Tel Aviv Stock Exchange Ltd. (“TASE”); and
|
Whereas
|
The parties wish that this Amendment and Supplement shall constitute an integral part of the Indenture with respect to the Debentures;
|
1.
|
Interpretation and Definitions
|
|
1.1.
|
The preamble hereto constitutes an integral part hereof.
|
|
1.2.
|
The division hereof into sections as well as the provision of headings to sections, were done for purposes of convenience and as reference only, and may not be used for interpretation.
|
|
1.3.
|
The terms herein which were defined in the Indenture shall have the meaning ascribed thereto in the Indenture, unless explicitly stated otherwise.
|
2.
|
Term of the Indenture
|
|
2.1.
|
With respect to the Series F Debentures, the Series G Debentures and with respect to the debentures of other series (if and insofar as it is determined in the first offering report of the debentures of the other series as aforesaid that the provisions hereof shall apply thereto), the Indenture, with its annexes, shall continue to apply to the parties, and the provisions of the Indenture shall continue to bind the parties verbatim, unless and only insofar explicitly modified herein.
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|
2.2.
|
If it is not determined in the Offering Report of the debentures of the other series as aforesaid that the provisions hereof shall apply thereto, the provisions of the Indenture shall apply and this Amendment and Supplement shall have no effect with respect thereto. For the avoidance of doubt, the provisions hereof shall not apply to debentures of other series issued by the Company prior to the date hereof.
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3.
|
Amendment of Section 3 of the Indenture: Expansion of existing series and issuance and allocation of Debentures and additional securities
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
4.
|
Adding Section 5.1 of the Indenture – Additional Undertakings
|
|
(a)
|
Negative Pledge Covenant
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
(1)
|
The creation of a fixed pledge on assets that shall be purchased by the Company in the future (the “Aforesaid Assets”), if the obligations, for the securing of which these pledges were given, were created for the purchase of the Aforesaid Assets and/or for securing loans or credit that were received thereby for the payment of loans or credit received for the purchase of the Aforesaid Assets, provided that no pledges shall be created thereby on further assets beyond the Aforesaid Assets.
|
|
(2)
|
The creation of a fixed pledge on those parts of the Company’s assets that shall be expanded, for securing loans or credit received for the expansion of those parts.
|
|
(3)
|
A pledge on assets or rights that were (or shall be) purchased while being pledge prior to the purchase thereof.
|
|
(4)
|
Setoff rights, liens, collateral granted in the framework of transactions in financial assets (derivatives and so forth), which are granted to banks or financial institutions in the regular course of business therewith, as well as transfers to hedge exposure which are regulated in the Financial Assets Agreements Law, 5766-2006.
|
|
(5)
|
A symbolic pledge (such as the pledge of a deposit in a symbolic sum for securing debentures).
|
|
(6)
|
A pledge or lien created by law.
|
|
(7)
|
A pledge on assets which were sold by the Company, the full proceeds for which having been paid prior to the date of creating the pledge, but the registration of the change of ownership thereof in the purchaser’s name has not yet been completed.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
(1)
|
A pledge document, pursuant to which the pledge was registered in the Trustee’s favor, bearing an original signature of the Company and an original “received” stamp of the Registrar of Companies’ office, and dated no later than twenty one (21) days after the execution date of the pledge document;
|
|
(2)
|
Notice of Mortgage and Pledge Details (Form 10), bearing an original “received” stamp of the Registrar of Companies’ office and dated no later than twenty one (21) days after the creation of the notice;
|
|
(3)
|
An original pledge registration certificate from the Registrar of Companies;
|
|
(4)
|
A pledge printout from the Registrar of Companies, pursuant to which the aforesaid pledge was registered;
|
|
(5)
|
An affidavit of a senior officer of the Company whereby the pledge does not contradict or is not contrary to the Company’s obligations towards third parties, in a language that shall be acceptable to the Trustee at its reasonable discretion;
|
|
(6)
|
A legal opinion of an attorney on the Company’s behalf, inter alia, with respect to the nature of the rights of the pledging entity in the pledged asset, the manner of registering the pledge, its term, creditor ranking, legality and exercisability and enforceability against the pledging entity under the law applicable in Israel, in a language that shall be acceptable to the Trustee at its reasonable discretion;
|
|
5.2
|
Limitations on the Performance of Distribution (as defined in the Companies Law)
|
|
Notwithstanding the provisions of Section 32 of the Indenture, the Company undertakes that as long as the Series F Debentures, the Series G Debentures, insofar as issued (as well as debentures of other series,
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
if and insofar as it is determined in their first offering report that the provisions hereof shall apply thereto), were not paid-up in full, the Company shall not be authorized to perform a distribution (as this term is defined in the Companies Law), including a distribution of dividend, to its shareholders in a sum exceeding 95% of the total sum of the Company’s profits as defined in Section 302 of the Companies Law of the Company (the “Maximum Distribution Rate”) on the date of the board of directors’ resolution on such distribution. Notwithstanding the aforesaid, if the Debt to EBITDA Ratio (as this term is defined in Section 8.1.16 of the Indenture) exceeds 3.5, the Maximum Distribution Rate shall stand at 85% of the total sum of the Company’s profits as defined in Section 302 of the Companies Law and if the Debt to EBITDA Ratio (as this term is defined in Section 8.1.16 of the Indenture) exceeds 4, the Maximum Distribution Rate shall stand at 70% of the total sum of the Company’s profits as defined in Section 302 of the Companies Law.
It is clarified that as of the date of execution hereof, except for the aforesaid undertaking, no limitation applies to the Company with respect to the performance of a distribution (as defined in Section 302 of the Companies Law) except as follows: (1) limitations that apply to the Company pursuant to the Companies Law with respect to the performance of a distribution; (2) limitations that arise from the Company’s license to provide cellular communication services as specified in the Company’s annual statement for 2010, which was filed on form F-20 (filed with the Securities Authority on March 15, 2011 (Ref. no. 2011-02-080886)) under Item 8 – Dividend Policy. It shall be clarified that the aforesaid limitations apply to the Company in connection with the performance of a distribution as of the date of execution hereof. In this context, it shall be noted that the scope of the limitations that apply to the Company as aforesaid, including the aforesaid limitations, may be adjusted and/or modified from time to time and the Company does not undertake to update the Debenture Holders and/or the Trustee specifically of such adjustment and/or modification. It shall be further clarified that the aforesaid description of the limitations does not create in any way an obligation of the Company vis-à-vis the Debenture Holders.
|
5.
|
Amendment of Section 6 of the Indenture - Purchase of Debentures by the Company and/or a subsidiary of the Company and/or a corporation controlled by the Company
|
6.
|
Amendment of Section 7 of the Indenture - Early Redemption
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.
|
Amendment of Section 8 of the Indenture - Acceleration
|
|
7.1.
|
In Section 8.1.1 of the Indenture, the words “forty five (45)” shall be replaced by “twenty one (21)”.
|
|
7.2.
|
In Sections 8.1.2 to 8.1.4 of the Indenture, the words “ninety (90) Business Days” shall be replaced by “forty five (45) or thirty (30) Business Days, according to the later”.
|
|
7.3.
|
In addition to the provisions of Section 7.2 above, the following changes shall be made in Section 8.1.2 of the Indenture: (1) the words “temporary liquidator” shall be followed by the words “or a permanent liquidator”; (2) the words “by a court” shall be followed by the words “or a temporary or permanent dissolution order had been issued”; (3) the words in brackets, “except for dissolution for reasons of merger”, shall be followed by the words “as defined below”; (4) at the end of the paragraph the following definition shall be added: “In this matter – “merger” shall mean a merger that was performed after obtaining a prior approval of the Debenture Holders of the Relevant Series, unless the Company or the surviving company, as the case may be, declared vis-à-vis the Debenture Holders of the Relevant Series, including via the Trustee, at least ten (10) Business Days prior to the merger date that there is no reasonable concern that following the aforesaid merger the Company or the surviving company, as the case may be, shall be unable to perform its undertakings vis-à-vis the Debenture Holders of the Relevant Series, or in case of a merger between companies from the Cellcom Group, as this term is defined in Section 8.1.9 of the Indenture, including the Company, in which case the declaration as
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
7.4.
|
In addition to the provisions of Section 7.2 above, Sections 8.1.3 and 8.1.4 of the Indenture shall be modified as follows: the latter part starting with the words “and such” and ending with the words “the Debentures of the Relevant Series” shall be deleted.
|
|
7.5.
|
Section 8.1.7 of the Indenture shall be followed by Sections 8.1.8 to 8.1.20 of the Indenture as follows:
|
|
“8.1.8
|
If a third party who is a lender of the Company (except for a supplier of the Company) accelerated debts of the Company thereto and the acceleration demand was not removed or stayed within 35 days after the acceleration date and/or the Company did not pay such debts within 35 days of their acceleration. The aforesaid in this subsection shall not apply if the total cumulative sum of the debts with respect to which the right for acceleration was created and exercised does not exceed NIS 150 million.
|
|
For this matter, it shall be clarified that non-recourse loans shall not be deemed for this matter as Company’s debts as aforesaid in this section.
|
|
8.1.9
|
If Cellcom Group ceased from operating in the cellular communication area and/or ceased from holding a license for grating cellular communication services for a period exceeding 60 (sixty) days. For this matter – “Cellcom Group” shall mean the Company and companies held thereby.
|
|
8.1.10
|
If trade in Debentures of the Relevant Series on TASE was suspended by TASE pursuant to the provisions of the Fourth Part of the TASE rules, except for suspension on grounds of the emergence of unclarity as provided in the Fourth Part of TASE rules, and forty five (45) days have passed since the date of suspension, during which the grounds for the suspension of trade were not cured or removed.
|
|
8.1.11
|
If the Company performs a distribution (as defined in the Companies Law) and such distribution exceeds the Maximum Distribution Rate.
|
|
8.1.12
|
With respect to the Series F Debentures and the Series G Debentures, as the case may be, if, for a period of 60 consecutive days, the Series F Debentures or the Series G Debentures, as the case may be, are not be rated by any rating agency. This section shall apply to Debentures of other series, insofar as their first offering report shall include a provision to this effect, subject to the provisions of Section 5A4 of the Terms and Conditions Overleaf.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
For this matter only: a “rating agency” shall mean any Israeli rating agency or any of the international rating agencies S&P or Moody’s, provided that there is at least one active rating agency in Israel at that time.
|
|
8.1.13
|
A motion was filed for a stay-of-proceedings order for the Company or such order was granted or the Company filed a motion to make a composition with its creditors pursuant to Section 350 of the Companies Law, provided that such composition undermines or is likely to undermine the Company’s solvency with respect to the Debentures, except for a case in which the motion or composition as aforesaid were filed for the purpose of merger (as this term is defined in Section 8.1.2 of the Indenture) and/or a change in the Company’s structure.
|
|
8.1.14
|
If a Sale to Another of most of the Company’s assets as defined below was performed and the Trustee’s prior written consent to such sale shall not have been received, which consent shall be given after obtaining the consent of the Debenture Holders; except for a sale whose proceeds served or are expected to serve the Company (according to its notice) for the purchase of another asset or assets with characteristics matching the Company’s business segments, as being on the date of such sale.
|
|
For this matter, a “Sale to Another” shall mean a sale to any third party (including controlling shareholders of the Company and/or to corporation controlled by them), but except for corporations from the Cellcom Group (as this term is defined in Section 8.1.9 above), provided that in case of a sale to corporations from the Cellcom Group (as this term is defined in Section 8.1.9 above), the Company declared vis-à-vis the Debenture Holders of the Relevant Series, including via the Trustee, at least ten (10) Business Days prior to the date of the sale, that there is no reasonable concern that due to such sale the Company shall be unable to perform its undertakings vis-à-vis the Debenture Holders of the Relevant Series.
|
|
8.1.15
|
In case that the Company does not publish financial statements by the expiration of 60 days after the date set for this purpose pursuant to the provisions of the law applicable thereto (and if the Company obtained an extension from a competent authority – within 60 days after the end of such extension period).
|
|
8.1.16
|
If the net debt to EBITDA ratio, net of non-recurring effects (the “Debt to EBITDA Ratio”) exceeds 5.
|
|
For this matter: “net debt” shall mean credit from banking and other corporations as well as loans from banking and other corporations as well as obligations due to Debentures, net of
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
cash and cash equivalents and current investments in negotiable securities; and “EBITDA” shall mean with respect to the 12-month period preceding the date of the Company’s last financial statements – earnings before depreciation and amortization, other net expenses/income, net financing expenses/income and taxes. Within three (3) Business Days from the date of publication of the Company’s financial statements, the Company shall submit to the Trustee a certification signed by a senior financial officer of the Company, in which shall be stated the ratio of net debt to EBITDA, based on the financial statements as aforesaid. The Trustee shall rely on the Company’s certification and shall not be required to perform an additional examination in this matter.
|
|
8.1.17
|
If the Company does not comply with a Debt to EBITDA Ratio (as this term is defined in Section 8.1.16 of the Indenture) that does not exceed 4.5, for the period of four consecutive quarters.
|
|
8.1.18
|
With respect to Debentures of the Relevant Series, if a merger was performed without obtaining a prior approval of the Debenture Holders of the Relevant Series, unless the Company or the surviving company, as the case may be, declared vis-à-vis the Debenture Holders of the Relevant Series, including via the Trustee, at least ten (10) Business Days prior to the merger date that there is no reasonable concern that following the aforesaid merger the Company or the surviving company, as the case may be, shall be unable to perform its undertakings vis-à-vis the Debenture Holders of the Relevant Series.
|
|
8.1.19
|
If the Company breached its undertakings not to create pledges as set forth in Section 5.1(a) of the Indenture and did not cancel the pledges having been registered incidentally to such breach within 45 days after receiving a warning thereof from the Trustee.
|
|
8.1.20
|
Upon the occurrence of any other event which causes or is expected to cause a material deterioration in the Company’s businesses, so as to create a substantial concern of material harm to the Debenture Holders’ rights.
|
|
For this matter: an event which resulted or is expected to result in the Ratio of the Debt to EBITDA increasing to a rate which is lower than 5 shall not be deemed as a material deterioration”.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
8.
|
Amendment of Section 16 of the Indenture - Investment of Funds
|
9.
|
Amendment of Section 17 of the Indenture - The Company’s Undertakings vis-à-vis the Trustee
|
|
“17.8
|
To provide to the Trustee reports as specified in Section 5.1 of the Indenture”.
|
10.
|
Amendment of Section 19 of the Indenture - Other Agreements
|
11.
|
Amendment of Section 25 of the Indenture - Waivers, Settlements and/or Modifications in the Indenture
|
12.
|
Amendment of Section 28 of the Indenture - Holders Meetings
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
13.
|
Amendment of Section 29 of the Indenture - Reporting to the Trustee
|
|
“29.6
|
To deliver immediately to the Trustee a notice in case that the Company learns of a breach of a material provision of the provisions of the Indenture, including a material breach of such a provision.
|
|
29.7
|
To deliver to the Trustee a notice of new pledges on the Company’s property, with respect to pledges that the Company shall register at the Registrar of Companies and/or the Registrar of Pledges.”
|
14.
|
Amendment of Section 31 of the Indenture - Rating
|
|
The Company does not undertake not to replace the rating agency throughout the Debentures’ life time. In case of replacing the rating agency, the Company shall publish an immediate report concerning the replacement as aforesaid.”
|
|
Shall be replaced by the following paragraphs:
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
15.
|
Addition of Section 4A of the Terms and Conditions Overleaf – Adjusting the Interest Rate as a Result of a Rating Change
|
|
4A1.
|
Insofar as the rating of the Debentures of the Relevant Series by a rating agency which shall be indicated in the first offering report or any other rating agency that shall replace it (in this section, the “Rating Agency”) shall be updated during any interest period, such that the rating that shall be determined for the Debentures of the Relevant Series shall be lower by two levels or more (the “Reduced Rating”) than the basic rating that shall be specified in the shelf offering report (or an equivalent rating that shall replace it as shall be determined by another Rating Agency, insofar as it shall replace the Rating Agency
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
4A2.
|
The interest rate that the Debentures of the Relevant Series shall bear shall be updated also in the case of further downgrading of the rating beyond the Reduced Rating (jointly: the “Further Reduced Rating”), such that: (a) in case that the determined rating shall be one level lower than the Reduced Rating – the rate of the annual interest that the unpaid balance of the principal of the Debentures of the Relevant Series shall bear shall increase by another 0.25%, such that it shall be equal to the Basic Interest plus 0.50%; (b) in case that the determined rating shall be two levels lower than the Reduced Rating, the rate of the annual interest that the unpaid balance of the principal of the Debentures of the Relevant Series shall bear shall increase by another 0.25%, such that it shall be equal to the Basic Interest plus 0.75%; (c) in case that the determined rating shall be three or more levels lower than the Reduced Rating, the rate of the annual interest that the unpaid balance of the principal of the Debentures of the Relevant Series shall bear shall increase by another 0.25%, such that it shall be equal to the Basic Interest plus 1%.
|
|
It is clarified that in no case shall the Basic Interest be increased by more than 1% as a result of a downgrade of the rating compared to the Basic Rating.
|
|
4A3.
|
No later than one Business Day after receiving the notice of the Rating Agency concerning the downgrade of the Debentures of the Relevant Series to the Reduced Rating as defined in Section 1A4 above or the
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Further Reduced Rating, the Company shall publish an immediate report in which it shall specify: (a) the fact of the downgrade of the rating, the Reduced Rating (or the Further Reduced Rating) and the effective date of that rating of the Debentures of the Relevant Series (the “Rating Downgrade Date”); (b) the rate of the updated annual interest that the balance of the principal of the Debentures of the Relevant Series shall bear, for the period commencing on the next interest date (i.e. commencing immediately after the period during which the relevant change in the rating occurred); (c) the interest rate for the period which the balance of the principal of the Debentures of the Relevant Series shall bear with respect to the next periods, insofar as the terms of the Debentures of the Relevant Series shall determine that the interest for them be paid on more than one date each year.
It is clarified that in any case of change in interest as a result of change in rating as aforesaid in this section, no change shall occur in the dates of payment (principal of interest) or on the Effective Date in the Relevant Series (as defined above).
|
|
4A4.
|
In case of an update of the rating of the Debentures of the Relevant Series by the Rating Agency, in a manner that shall affect the rate of interest that the Debentures of the Relevant Series shall bear as aforesaid in this Section 4A, the Company shall notify the Trustee thereof within one Business Day from the date of publication of the immediate report as aforesaid.
|
|
4A5.
|
Insofar as the Debentures of the Relevant Series shall stop being rated for a reason dependent solely upon the Company, prior to their final payment, for a consecutive period exceeding sixty (60) days, provided that the interest rate was not increased as provided in Sections 4A1 and/or 4A2 above, it shall be determined in the first offering report of the Relevant Series of the Debentures of the Relevant Series whether the termination of the rating shall be deemed as a downgrade of the rating of the Debentures of the Relevant Series to the Reduced Rating as provided in Section 4A1 above or to another lower rating, as provided in Section 4A2 above. In this context, it shall be clarified that if it is so determined in the offering report as aforesaid, the provisions of Section 8.1.12 of the Indenture shall not apply. For this matter, and without derogating from the generality of the aforesaid, the default on payments to the Rating Agency, which the Company undertook vis-à-vis the Rating Agency to make, and the non-delivery of reasonable reports and information, which there is no legal impediment to deliver and are required by the Rating Agency in the framework of the engagement between the Company and the Rating Agency, shall be considered as reasons dependent solely upon the Company. For the avoidance of doubt, it is hereby clarified that, if the Debentures stop being rated prior to their final payment due to a reason which is not dependent upon the Company, it shall not affect the interest rate as provided in Sections 4A1 and/or 4A2 above and in any case the provisions of this Section 4A shall not apply.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
It is clarified that the replacement of the Rating Agency (if and insofar as the Company decides to replace it, as provided in Section 31 of the Indenture) shall not affect the interest rate as provided in Section 4A1 and/or 4A2 above and in any case the provisions of this Section 4A shall not apply, provided that the rating given by the new Rating Agency is an equivalent rating to the rating of the current Rating Agency on the replacement date.
|
|
4A6.
|
It shall be clarified that if, after the downgrade of the rating in a manner affecting the rate of interest that the Debentures of the Relevant Series bear as aforesaid, the Rating Agency upgrades the rating of the Debentures of the Relevant Series to a higher rating that the Reduced Rating (and respectively to a higher rating than the Further Reduced Rating) (the “High Rating”), the rate of the annual interest paid by the Company to the Debenture Holders of the Relevant Series shall decrease by an annual rate of 0.25% for each level as specified in Section 4A2 above until the rating above the Reduced Rating, in which case the rate of the annual interest, which the unpaid balance of the principal of the Debentures of the Relevant Series shall bear, shall be the Basic Interest rate with no additions, for the period commencing on the beginning of the next interest period (i.e. which commences immediately after the period during which the relevant change in the rating occurred) until the full payment of the unpaid balance of the principal of the Debentures of the Relevant Series or until the change in the rating of the aforesaid Debentures pursuant to the provisions of this Section 4A. In such case, the Company shall act in accordance with the provisions of Sections 4A2 to 4A4 above, mutatis mutandis.
|
|
4A7.
|
For the avoidance of doubt, it is clarified that a change in the rating horizon of the Debentures of the Relevant Series shall not entail a change in the interest that the Debentures shall bear as aforesaid in this section.
|
|
In addition, notwithstanding the provisions of this Section 4A, the downgrade of the rating of the Debentures of the Relevant Series, which is done as part of updating the rating of all of the companies in Israel which engage in one or more of the Company’s business segments, as a result of changing the Rating Agency’s methodology only, shall not entail a change in the rate of interest that the Debentures of the Relevant Series shall bear.
|
|
4A8.
|
The Company undertook, in Section 31 of the Indenture, to arrange that, insofar as the matter shall be within its control, the Debentures of the Relevant Series shall be under rating follow-up by at least one Rating Agency, as long as Debentures of that series are in circulation (and without derogating from the generality of the aforesaid, in this framework, inter alia, the Company undertakes to make all of the payment and to submit all of the reports required for the Rating Agency, according to the provisions of the agreement therewith).
|
16.
|
General Terms
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
17.
|
Applicable Law and Jurisdiction
|
|
The law that governs the Indenture with its annexes and the Debentures is the Israeli law. The courts in the city of Tel Aviv Jaffa shall have a unique and exclusive jurisdiction in any conflict regarding the Indenture and the Debentures.
|
18.
|
Authorization for MAGNA Reporting
|
|
By signing these Amendment and Supplement, the Trustee authorizes the Company’s authorized electronic signatories, as being, to report in its name in MAGNA of its engagement herein and its execution hereof, insofar as it is required by law.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Cellcom Israel Ltd.
|
Strauss Lazar Trust Company (1992) Ltd
|
||
Signed by: Yaacob Heen
CFO
|
Signed by: Uri Lazar |
Liat Menahemi Stadler, Adv.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
General License for
|
1
|
||
CHAPTER A: GENERAL |
2
|
||
PART A: DEFINITIONS AND INTERPRETATION:
|
2
|
||
1.
|
Definitions
|
2
|
|
2.
|
Clause headings
|
13
|
|
3.
|
Blue pencil principle
|
13
|
|
PART B – LEGAL PROVISIONS AND ADMINISTRATIVE PROVISIONS
|
14
|
||
4.
|
Upholding laws and provisions
|
14
|
|
5.
|
Permit obligation pursuant to any other law
|
14
|
|
6.
|
Contradiction in the License provisions
|
14
|
|
PART A – SCOPE AND PERIOD OF THE LICENSE
|
15
|
||
7.
|
Scope of the License
|
15
|
|
8.
|
Absence of exclusivityA16
|
15
|
|
9.
|
The License period
|
16
|
|
10.
|
Extension of the License Period
|
16
|
|
11.
|
Renewal of the License
|
18
|
|
12.
|
Termination of the License Period
|
19
|
|
PART B – CHANGE IN CONDITIONS AND CANCELLATION OF THE LICENSE
|
20
|
||
13.
|
Change in the License conditions
|
20
|
|
14.
|
Cancellation of the License
|
20
|
|
15.
|
Other remedies
|
23
|
|
CHAPTER C: OWNERSHIP, ASSETS AND MEANS OF CONTROL
|
25
|
||
PART A – RESTRICTIONS ON TRANSFER OF THE LICENSE AND ITS ASSETS
|
25
|
||
16.
|
Prohibition on transfer of the license
|
25
|
|
17.
|
Ownership of the Cellular System
|
25
|
|
18.
|
Restrictions on transfer of the License assets
|
25
|
|
19.
|
Engagement with another
|
26
|
|
Part B: Means of Control – Changes and Limitations
|
27
|
||
20.
|
Particulars of Licensee
|
27
|
|
21.
|
Transfer of Means of Control
|
27
|
|
22.
|
Encumbrance of Means of Control
|
29
|
|
22A.
|
Israeli Nationality and Holdings of Founding Shareholders or Their Substitutes
|
30
|
|
Part C: Cross-Ownership and Conflict of Interest
|
32
|
||
23.
|
Prohibition on Cross-Ownership
|
32
|
|
24.
|
Prohibition on a Conflict of Interest
|
32
|
|
Chapter D: Setup and Operation of Cellular system
|
34
|
||
Part A: Setting Up the System
|
34
|
||
25.
|
Definition
|
34
|
|
26.
|
Setup according to Plans and Specifications
|
34
|
|
27.
|
Execution Stages and Timetable
|
34
|
|
29.
|
Utilization and Construction of Infrastructures
|
36
|
|
30.
|
Obligation of Interconnection
|
37
|
|
30A.
|
Rules Concerning the Implementation of Interconnection
|
37
|
|
30B.
|
Payment for Traffic Completion and Interconnection
|
39
|
|
30C.
|
Prohibition on Delaying Interconnection
|
39
|
|
30D.
|
Providing the Possibility of Utilization
|
39
|
|
30E.
|
Infrastructure Services for an Interested Company
|
39
|
|
30F.
|
Numbering Program
|
40
|
|
31.
|
Reports on the Setup Works
|
41
|
|
32.
|
Handover of Information and Documents
|
41
|
33.
|
Supervision of Setup Works
|
41
|
|
34.
|
Correction of Deficiencies and Defects
|
41
|
|
35.
|
Safety Precautions and Prevention of Hazards
|
42
|
|
36.
|
Void.
|
42
|
|
37.
|
Intersections with Electricity and Telecommunications Lines
|
42
|
|
38.
|
Discovery of Antiquities and Site Preservation
|
42
|
|
39.
|
Land-Related Powers
|
42
|
|
Part B: Equipment Checks and Installation Certifications
|
44
|
||
40.
|
Compliance Check
|
44
|
|
41.
|
Responsibility for Compliance
|
44
|
|
42.
|
Performance Testing Program and Its Approval
|
44
|
|
43.
|
Notice of Setup Completion
|
44
|
|
44.
|
Terms of Fitness and Operation
|
44
|
|
Part C: Use of Frequencies
|
46
|
||
45.
|
Allocation of Frequencies
|
46
|
|
46.
|
Restriction on Use of Frequencies
|
46
|
|
47.
|
Prevention of Interferences
|
46
|
|
48.
|
Cellphone Activity in Emergencies
|
47
|
|
Part D: Inspections and MaintenanceA43)
|
49
|
||
49.
|
Definitions
|
49
|
|
50.
|
Performance of Inspections
|
49
|
|
51.
|
Inspections, Malfunctions and Maintenance Log
|
49
|
|
52.
|
Repair of Deficiencies and Defects
|
50
|
|
Chapter E: Providing Cellular Services to Subscribers |
51
|
||
Part A: Entering into an Agreement with Subscribers
|
51
|
||
55.A43)
|
The Contract
|
51
|
|
56.A43)
|
Modification of Contract
|
56
|
|
59.
|
Obligation of Connecting Applicants and Prohibition on Stipulation
|
57
|
|
Part B: Service Level for Subscribers
|
58
|
||
60.
|
Obligation of Maintaining the Service
|
58
|
|
62.
|
Obligation of Maintenance
|
60
|
|
63.
|
Repair of Malfunctions
|
61
|
|
64.
|
End-user equipment – Selling and Renting
|
61
|
|
65.
|
Public Emergency Services
|
63
|
|
65A.
|
Blocking Service to a Nuisance Subscriber
|
64
|
|
66.
|
Protecting Subscriber Privacy
|
66
|
|
66A.
|
Special Services for the Security Forces
|
66
|
|
66B.
|
Security Provisions
|
67
|
|
67.
|
Bills to Subscribers
|
67
|
|
67A. Information Service for Clarifying Telephone Numbers
|
69
|
||
67B.43Void.
|
72
|
||
67C.Service Dossier
|
72
|
||
67D.Erotic Service
|
73
|
||
Part C: Termination, Delay or Restriction of Service
|
75
|
||
68.
|
Definitions
|
75
|
|
69.
|
Prohibition on the Termination or Disconnection of Service
|
75
|
|
70.
|
Disconnection of Service at Subscriber's Request
|
75
|
|
71.
|
Termination of Service at the Subscriber's Request
|
75
|
|
72.
|
Termination or Disconnection of Service Due to Breach of Agreement
|
79
|
|
73.
|
Disconnection of Service Due to Maintenance Operations
|
83
|
|
CHAPTER F – PAYMENT FOR SERVICES |
84
|
||
Part A – General
|
84
|
73A.
|
Definitions
|
84
|
|
74.
|
Payment Categories
|
84
|
|
Part B – Setting and Publication of Rates
|
86
|
||
75.
|
Setting the Rates and Their Amount
|
86
|
|
75A.
|
Completion of a Call in Another Public Telecommunications Network
|
89
|
|
75B.
|
Completion of an SMS on Another Public Telecommunications Network
|
89
|
|
75C.
|
Temporary Order
|
89
|
|
76.
|
Publication of Rates
|
90
|
|
77.
|
VoidA43)
|
90
|
|
77A.
|
Fraud Prevention
|
90
|
|
Part C – Changes in the Rates
|
92
|
||
78.A43)
|
Change in the Rates
|
92
|
|
79.
|
Start of an Increase or Reduction in a Rate
|
92
|
|
80.
|
Arrears in Payment
|
92
|
|
Part D – Miscellaneous
|
94
|
||
81.
|
Onetime Debit for Connection Fee
|
94
|
|
82.
|
Collection of Subscription Fee in Installments
|
94
|
|
83.
|
Harm to Competition or to Consumers
|
94
|
|
CHAPTER G: PAYMENTS FROM THE LICENSEE, LIABILITY, INSURANCE AND GUARANTEE |
96
|
||
Part A – Royalties and Payments
|
96
|
||
84.
|
Royalties
|
96
|
|
85.
|
Arrears in the Payment of Royalties
|
96
|
|
86.
|
Payment Method
|
96
|
|
87.
|
Other Mandatory Payments
|
96
|
|
Part B – Liability and Insurance
|
98
|
||
88.
|
Definition of Scope of Insurance
|
98
|
|
89.
|
Licensee’s Liability
|
98
|
|
90.
|
Immunity from Liability
|
98
|
|
91.
|
Making an Insurance Contract
|
98
|
|
92.
|
Conditions in the Insurance Contract
|
100
|
|
93.
|
Remedy for Breach of Conditions with Respect to Insurance
|
100
|
|
Part C – Guarantee to Secure Fulfillment of the Terms of the License
|
101
|
||
94.
|
The Guarantee and Its Purpose
|
101
|
|
95.
|
Exercise of the Guarantee
|
101
|
|
96.
|
Manner of Exercise of the Guarantee
|
102
|
|
97.
|
Term of Validity of the Guarantee
|
102
|
|
98.
|
Preservation of Remedies
|
104
|
|
CHAPTER EIGHT – SUPERVISION AND REPORTING |
105
|
||
Part A: Supervision of Licensee’s Activities
|
105
|
||
99.
|
Supervisory Power
|
105
|
|
100.
|
Preservation of Confidentiality
|
105
|
|
101.
|
Entry to Premises and Inspection of Documents
|
105
|
|
102.
|
Cooperation
|
105
|
|
Part B: Reporting and Correction of Defects
|
106
|
||
103.A43)
|
Duty of Submission of Reports
|
106
|
|
104.A43)
|
Types of Reports
|
106
|
|
105.A43)
|
Notice Concerning a Defect
|
108
|
|
106.A43)
|
Void.
|
108
|
|
CHAPTER I – MISCELLANEOUS |
109
|
||
107.
|
The License as an Exhaustive Document
|
109
|
|
108.
|
Keeping the License Document and Returning the License
|
109
|
|
109.
|
Postponement of Deadline
|
109
|
110.
|
Reserving of Liability
|
110
|
|
111.
|
Notices
|
110
|
|
First Schedule
|
1
|
||
Second Schedule – List of Appendices
|
2
|
||
Appendix D – Uniform Engagement Agreement – Not Attached
|
1
|
||
Appendix J –Accessibility to International Telecommunications Services
|
1
|
||
Appendix K – Discontinuation of Service to Cellular End-User Equipment of the IS-54 type
|
1
|
||
Appendix O – Erotic Services
|
1
|
1.
|
Definitions
|
1.1
|
In this License, the words and expressions below will have the meaning listed next to them, unless another meaning is evident from the written language or its context.
|
" Type Approval"
|
-
|
Approval given by the Minister pursuant to the Law and the Ordinance to a cellular end-equipment model.
|
|
"Means of Control"
|
-
|
In a corporation – any one of the following:
(1) the right to vote at a general meeting of a company or in an entity corresponding thereto in another corporation;
(2) the right to appoint a director or CEO;
(3) the right to participate in the profits of the corporation;
(4) the right to a share in the balance of the assets of the corporation after payment of its debts on liquidation.
|
|
"Telecommunications"
|
-
|
Broadcast, transfer or reception of marks, signals, written material, visual forms, sound or information, via wire, wireless, optical system or other electromagnetic systems;
|
|
"Franchisee"A16
|
-
|
As defined in Section 6(12)(1) of the Law;
|
|
"Interested Party"
|
-
|
Anyone holding, directly or indirectly, 5% of a certain type of the Means of Control;
|
|
"Licensee"
|
-
|
Anyone to whom the Minster granted, pursuant to the Law, a general or special license; A16
|
|
"General Licensee" A16
|
-
|
Anyone who has received a general license for implementing the Telecommunications operations and providing Telecommunications services;
|
|
"Roaming Licensee" A60
|
-
|
The person who one Tender 12/2010 – Combined License for the Provision of Mobile Radio Telephone Services by the Cellular Method (Cellular) in Israel – Extension of Existing License and Grant of a New License.
|
|
"Broadcasting Licensee" A16
|
-
|
As defined in the Law;
|
|
"Accessibility Fees"
|
-
|
Payment for the use of another Telecommunications system, including for connection, transmission and collection;
|
|
"Technical Requirements and Service Quality"
|
-
|
Standards of availability and service quality, standards for Telecommunications facilities and instructions for installation, operation and maintenance, all according to the engineering plan as the Director will order from time to time relating to the services of the Licensee
|
|
“Contract”A43
|
-
|
Contract between the Licensee and a Subscriber, for the provision of all or any of the services of the Licensee;
|
|
the "Proposal"
|
-
|
The Licensee’s Proposal in the Tender;
|
|
the "Bezeq Corp."
|
-
|
Bezeq Israel Telecommunication Corp. Ltd.;
|
the “Law"
|
-
|
The Communications Law (Telecommunications and Broadcasts), 5742 – 1982; A16
|
"Holding" A16
|
-
|
For the purpose of Means of Control – directly or indirectly, whether alone or in concert with others, including through another, including a trustee or agent, or through a right granted under an agreement, including an option for a Holding that does not derive from convertible securities, or in any other way;
|
||
"Transfer" A16
|
-
|
For the purpose of the Means of Control, whether directly or indirectly, whether for consideration or without consideration, whether in perpetuity or for a period, all at once or in parts;
|
||
"In Concert With Others" A16
|
-
|
Permanent collaboration and, with regard to an individual, permanent collaborators will be deemed – the individual, his Relative, and a corporation that one of them controls and, with regard to a corporation – the corporation, anyone controlling it and anyone who is controlled by one of them;
|
||
"Security Forces"
|
-
|
The Israel Defence Forces, the Israel Police, the General Security Service and the Mossad Institute for Intelligence and Special Operations;
|
||
"Index"
|
-
|
The Consumer Price Index published by the Central Bureau of Statistics from time to time, or any other index that may replace it;
|
||
“Cellular Radio Center"
|
-
|
A wireless facility functioning on the operating frequencies and used for creating a radio connection between cellular end-equipment units in the possession of the subscribers in its coverage area and the cellular switchboard;
|
||
"Interface"
|
-
|
The physical meeting between various functional Telecommunications units, including by optical or wireless means;A16
|
||
"Telecommunications Facility"
|
-
|
A facility or device intended mainly for telecommunication purposes, including end-equipment;A16
|
||
"Tender No. 1/01" A16
|
-
|
A tender published by the Ministry on 4 Nissan 5761 (March 28, 2001), including the clarifications given by the Ministry in the course of the Tender, as a result of which this License was amended;
|
||
the "Tender"
|
-
|
Tender No. 10/93 published by the Ministry on November 11, 1993, including clarifications given by the Ministry in the course of the Tender, as a result of which this License is granted;
|
||
the "Director"
|
-
|
The Director General of the Ministry of Communications or anyone authorized by him for the purposes of this License, in whole or in part;
|
||
"Subscriber" A43
|
-
|
Anyone who enters into an agreement with the Licensee for the purpose of receiving cellular services as an end user;
|
||
"Dormant subscriber"T48)
|
A subscriber in respect of which all of the conditions set out below are fulfilled:
|
|||
(a) He did not receive or use cellular services
|
during a minimum of one year, starting from January 1, 2008;
(b) He does not pay the Licensee any fixed payment;
(c) He is not bound with the Licensee by any plan that includes a commitment period.
|
||||
"Business subscriber"T47)
|
|
-A subscriber who is any of the following:
(a)A corporation, as defined in the Interpretation Law, 5741-1981;
(b)Government offices and auxiliary government bodies;
(c)A licensed dealer excluding an exempt dealer;
(d)An entity established by or pursuant to a law.
|
||
“Private Subscriber” T52
|
Non-Business Subscriber
|
|||
"International Telecommunications System"
|
-
|
A system of Telecommunications facilities, connected or designated for connection to the Public Telecommunications Network through an International NEP, which is used or designated for use in the transfer of Telecommunications messages between an international switch situated in Israel and a Telecommunications Facility located abroad, including a satellite ground station and other Telecommunications facilities (hereinafter – the System Components) and including transmission facilities among the System Components; A16
|
"Mobile Radio Telephone System" (Cellular System)
|
-
|
A system of wireless facilities built by the cellular method and other installations, through which mobile radio telephone services are provided to the public, including a cellular coordinator, cellular radio centers and wireless or cable transmission arteries between cellular radio centers, a cellular radio center and a cellular coordinator, between Cellular coordinators, or between a cellular switchboard and a Public Telecommunications Network.
|
|
"NDO (National Domestic Operator)" A16
|
-
|
A General Licensee for the provision of landline domestic Telecommunications services
|
|
"Cellular Operator"
|
-
|
A General Licensee for the provision of mobile radio telephone services A16
|
|
"Another Cellular Operator"
|
-
|
A Cellular Operator that is not the Licensee.
|
|
"Switchboard"
|
-
|
A Telecommunications Facility in which are situated and operated switching and transmission means, enabling contact between various end-equipment units that are connected or linked thereto, and the transfer of Telecommunications messages between them, including control and monitoring facilities and other facilities that enable the provision of various services to Subscribers of the Licensee or to subscribers of another Licensee;
|
|
"The Ministry"
|
-
|
The Ministry of Communications
|
|
"Transit Switch"A16
|
-
|
A Telecommunications Facility in which are situated and operated the means of switching, routing and transmission enabling contact between various switchboards that are connected or linked thereto and the transfer of Telecommunications messages between them, including control and monitoring facilities;
|
|
"Domestic Roaming" A60
|
-
|
Expansion of the services of another cellular licensee (hereinafter – "cellular licensee") to the coverage areas of the Licensee by means of the Licensee's cellular system, as set forth in section 67E.
|
|
"Officer"A16
|
-
|
Anyone acting as a director, CEO, chief business officer, deputy CEO, someone who fills such a position in a company even if the title is different, as well as any other manager who is directly subordinate to the CEO of the company;
|
|
"Appendices" A16
|
-
|
The first addendum and the Appendices set forth in the second addendum to the License A16
|
|
"NEP (Network End-Point)"
|
-
|
An Interface to which is connected on one side a Public Telecommunications Network and on the other side, end-user equipment, a private network, a mobile telephone network or other public network, as applicable;
|
|
"International NEP"
|
-
|
A connections device to which are linked a Public Telecommunications Network on one side and an International Telecommunications System on the other;
|
|
"Telecommunications operation"
|
-
|
The operation, installation, construction or maintenance of a Telecommunications Facility, all for the purpose of Telecommunications;
|
|
the "Ordinance"
|
-
|
The Wireless Telegraph Ordinance [New Version]. 5732 – 1972;
|
|
"End-User Equipment"
|
-
|
Telecommunications equipment, which is connected or is designated for connection to a public Telecommunications network through an NEP or through a private network, including a telephone, modem, facsimile or private switchboard;
|
"Cellular End-User Equipment"
|
-
|
Portable or movable Telecommunications equipment, connected or designated for connection to a Cellular System by means of a cellular radio center.
|
|
"Interconnection" A16
|
-
|
Connection between a Public Telecommunications Network of one Licensee to a Public Telecommunications Network of another Licensee, physically or logically, that facilitates the transfer of Telecommunications messages between Subscribers of the Licensees or the provision of services by one Licensee to the subscribers of the other Licensee;
|
|
"Relative"
|
-
|
Spouse, parent, son, daughter, brother, sister or their spouses;
|
|
the "License"
|
-
|
This License, with all its Appendices and any other document or condition stipulated in the License that will constitute an integral part of the License or its conditions;
|
|
the “Network" A16
|
-
|
The Cellular System of the Licensee;
|
|
the “Minister"
|
-
|
The Minister of Communications, including anyone to whom he has delegated his authority with regard to this License, in whole or in part;
|
|
"Public Telecommunications Network"
|
-
|
A system of Telecommunications facilities, used or designated for the provision of Telecommunications services to the general public throughout Israel or at least in the area of service, including Coordinators or Transit Switches, transmission equipment and an access Network, including a Cellular System and an international Telecommunications system, except for a private network, End-Equipment and Cellular End-Equipment;
|
|
"Public Telecommunications Landline Network"
|
-
|
A domestic Public Telecommunications Network, except for a Cellular System and an international Telecommunications network;
|
|
"Access Network" A16
|
-
|
Components of a Public Telecommunications Network, which are used for connection between Coordinators and an NEP by means of a landline infrastructure, wireless infrastructure or a combination of the two;
|
|
"Bezeq Network"
|
-
|
The Public Telecommunications Network used by Bezeq for provision of its services under the general license granted to it and the other Telecommunications services provided under the Law, whether by Bezeq or by any other person;
|
|
"Use" A16
|
-
|
Access to a Telecommunications Facility of the Licensee, including to the public Telecommunications network or its Access Network, in whole or in part, and the possibility of using them for the purpose of conducting Telecommunications operations and providing Telecommunications services by means thereof, including the installation of a Telecommunications Facility of another Licensee in a Telecommunications Facility or courtyards of the Licensee
|
|
"Telecommunications Service"
|
-
|
The performance of Telecommunications operations for others;
|
|
"Basic Telephone Service"
|
-
|
Two-way switched or routed transfer, including via modem, of speech or of speech-like Telecommunications messages, for example, facsimile signals;
|
|
"Telephony Service" A16
|
-
|
Basic telephone service and services related to this service;
|
"International Telephone Service (ITMS)"
|
-
|
A telephone service by means of the international system of a Licensee for the provision of international services;
|
|
"Roaming Service" A16
|
-
|
A cellular service provided abroad and in the areas of civilian control of the Palestinian Council via the Cellular System of a foreign Cellular operator (hereinafter – Foreign Operator), whereby the Subscriber pays the Licensee for the service; and, similarly, a cellular service provided in Israel via the Cellular System of the Licensee, whereby the Licensee provides service to a Foreign Operator for the subscribers of that operator; in this regard, the "Palestinian Council" – as defined in the Law for Implementation of the Interim Agreement Regarding the West Bank and Gaza Strip (Jurisdictional Powers and Other Provisions) (Legislative Amendments), 5756 – 1998 [sic];
|
|
"Related Service"
|
-
|
A service set forth in the first addendum to the License, provided on the basis of the Basic Telephone Service and which, by its nature, can only be provided by the supplier of the basic service;
|
|
"Value Added Service" A16
|
-
|
A service provided on the basis of the Basic Telephone Service, which, by its nature, can be provided by another, including another Licensee that is not the supplier of the basic service; with regard to the services of the Licensee, a service as stated, which is set forth in the first addendum to the License;
|
|
"infrastructure Service"
|
-
|
An Interconnection, or possibility of Use given to another Licensee, to a Franchisee or to a broadcast Licensee;A16
|
|
"Domestic Telecommunications Landline Service" A16
|
-
|
Infrastructure, transmissions, communication of data and landline telephony;
|
|
"Licensee Services"
|
-
|
Cellular services, Telecommunications Services and other services which the Licensee is entitled to provide pursuant to this License, to its Subscribers, to other Licensees, to broadcast licensees, to Franchisees and to the Security Forces;A16
|
|
"Cellular Services"
|
-
|
Telecommunications services provided by means of the Cellular System;
|
|
"Control"
|
-
|
The ability to direct a corporation's activity, directly or indirectly, including ability deriving from the articles of incorporation, by virtue of an agreement, either written or oral, by virtue of a Holding in the Means of Control in another corporation - or from any other source, except for ability deriving solely from fulfilling the position of director or other position in the corporation;
|
|
"the Minister"
|
-
|
The Minister of Communications, including anyone to whom he has delegated his authority with regard to this License, in whole or in part;
|
|
"Engineering Plan"
|
-
|
An engineering plan submitted by the Licensee in the Tender, including any change introduced therein with the approval of the Director and attached to the license as Appendix B;
|
|
"Numbering Plan" A16
|
-
|
As defined in Section 5A(B) of the Law;
|
1.2
|
Other words and expressions in the License, insofar as they are not defined in Clause 1.1, will have the meaning they have in the Law, in the Ordinance, in the regulations enacted thereunder, in the Interpretation Law, 5741 – 1981, or as set forth in the relevant places in the License, unless another meaning is implied by the written language or its context.
|
2.
|
Clause headings
|
3.
|
Blue pencil principle
|
4.
|
Upholding laws and provisions
|
4.1
|
In everything pertaining to the setup, existence, operation, and maintenance of the Cellular System and the provision of Cellular Services thereby, the Licensee will act in accordance with the provisions of any law and, without derogating from the aforesaid generality, will ensure compliance with the following:
|
|
(1)
|
the provisions of the Telecommunication Law and the regulations promulgated thereunder;
|
|
(2)
|
the provisions of the Wireless Telegraph Ordinance and the regulations promulgated thereunder;
|
|
(3)
|
administrative provisions;
|
|
(4)
|
international Telecommunications and radio treaties to which Israel is a party;
|
|
(5)
|
any other law or treaty that will apply to Telecommunications and radio, even if they go into effect after the License is granted.
|
4.2
|
The Licensee will act pursuant to laws and provisions as stated in Clause 4.1 as these will be in force from time to time during the license period, including the remedies for the breach thereof, and they will be deemed an integral part of the License conditions.
|
5.
|
Permit obligation pursuant to any other law
|
5.1
|
The granting of this License will not exempt the Licensee from the obligation to obtain, with regard to execution of the License, any license, permit, approval, or consent pursuant to any other law.
|
6.
|
Contradiction in the License provisions
|
7.
|
Scope of the License
|
7.1
|
Pursuant to this License and subject to all the provisions and conditions hereof, the Licensee is entitled to set up, implement, maintain and operate a Cellular System and, through it, to provide cellular Services to the Israeli public; without derogating from the aforementioned generality, the Licensee is entitled to do the following:
|
|
(1)
|
to set up, implement, maintain and operate cellular radio centers and to connect them to cellular switchboards, and to connect between cellular switchboards, by means of cable and wireless transmission channels;
|
|
(2)
|
To connect the cellular System to the Public Telecommunications Network of Bezeq;
|
|
(3)
|
To connect the cellular System to the international Telecommunications system;
|
|
(4)
|
To connect its cellular System to another cellular System;
|
|
(5)
|
To contract with Subscribers for the purpose of providing cellular Services;
|
|
(6)
|
To provide Subscribers with cellular End-User Equipment;
|
|
(7)
|
To connect Subscribers to the cellular System and provide cellular Services and other services pursuant to this License;
|
|
(8)
|
To provide Subscribers with the following services:
|
|
(A)
|
Basic mobile wireless telephone service;
|
|
(B)
|
Related services as set forth in the first addendum;
|
|
(C)
|
Roaming service; A16
|
|
(D)
|
Any other cellular service permitted pursuant to this License.A16
|
7.2
|
The Licensee will not be entitled to provide any cellular service or other Telecommunications Service that is not explicitly permitted within the context of this License.
|
8.
|
Absence of exclusivity A16
|
8.1
|
The Licensee will not have any exclusivity in the provision of its services.
|
8.2
|
The Minister is entitled, at any time, to grant a license to additional operators for the provision of cellular Services..
|
8.3
|
Should the Minister publish a tender for the provision of cellular services, the Licensee will be entitled to submit its bid in the tender, however, the Minister will be entitled to determine as part of the conditions of such a tender that if the Licensee wins the tender, the receipt of a license will be contingent on the fact that the Licensee transfer its cellular System to another as instructed by the Minister and under conditions determined thereby, and it will cease to provide cellular Services by means thereof.
|
9.
|
The License period
|
9.1
|
This License is valid for a period of 10 years, commencing on the date of the granting of the License (hereinafter – the License Period).
|
9.2
|
The License Period may be extended by additional six years in accordance with that stated in Clause 10 (hereinafter – the Additional Period).
|
9.3
|
This License may be renewed for one or more Additional Periods of six years, in accordance with that stated in Clause 11.
|
9.4
|
During the License Period and the Additional Period or on renewal of the License, the License will be subject to the authority of the Minister pursuant to Clauses 13 to 15 with regard to change, restriction, suspension or cancellation of the License.
|
9.5A15
|
Notwithstanding the aforesaid A16, in the context of expansion of the License, as a result of the Licensee winning Tender No. 1/01, this License will be valid for a period of twenty (20) years, commencing on 19 Shevat 5762 (February 1, 2002).
|
10.
|
Extension of the License Period
|
10.1
|
The Minister is entitled, at the request of the Licensee, to extend the License Period for additional six years, if, after he has examined the following:
|
|
(A)
|
The Licensee has complied with the provisions of the Law, the Ordinance, the regulations thereunder and the provisions of the License;
|
|
(B)
|
The Licensee has continually acted to improve the scope, availability and quality of the cellular Services and to update the technology of the cellular System and its activities did not include an act or omission that would impair or restrict competition in the cellular sector;
|
|
(C)
|
The Licensee is capable of continuing to provide cellular Services at a high level and that it is able to make the investments required for the technological updating of the cellular System and for improving the scope, availability and quality of the cellular Services.
|
10.2
|
The Licensee must submit its request for an extension of the License Period during the forty-five days prior to the period of eighteen months preceding the end of the License Period.
|
10.3
|
The Licensee must attach the following to its request:
|
|
(A)
|
A report summarizing the annual statements that the Licensee has submitted pursuant to this License between the date of commencement of the License and the date of submission of its request;
|
|
(B)
|
Comparison of the data in the report for each year with the data for the preceding year and explanations of unusual changes in the data;
|
|
(C)
|
Review of the means, actions and investments taken or made by the Licensee to improve the quality, scope and availability of the Cellular Services and to develop and update the Cellular System technology.
|
10.4
|
The summary report pursuant to Clause 10.3 must contain up-to-date and precise details and be prepared in the form of an affidavit.
|
10.5
|
For the purpose of examining the Licensee’s request to extend the License Period, the Minister is entitled to require the Licensee to furnish, during the period and in the manner that he will determine, any information or document and, without derogating from the generality of that stated, the Minister is entitled -
|
|
(A)
|
To require the Licensee to attach any document to the summary report for the purpose of verifying the details therein, to complete the report or to furnish any additional detail that is not included therein;
|
|
(B)
|
To summon the Licensee to appear before him to respond to questions or to present documents that are in its possession or under its control, relating to the data in the report;
|
|
(C)
|
To require the Licensee to submit to him an Engineering Plan outlining its plans for the technological update of the Cellular System during the Additional Period;
|
10.6
|
The Licensee must fulfil every requirement or summons as stated in Clause 10.5; if the Licensee is required to appear before the Minister, the chairman of the board of directors of the company holding the License or the CEO of the company or anyone authorized to do so in writing, will appear;
|
10.7
|
If the Licensee fails at least twice to respond to the request or summons as stated in Clause 10.5, the Minister is entitled to reject its request to extend the validity of the License.
|
10.8
|
The Minister will inform the Licensee of his decision regarding the request for extending the validity of the License no later than a year before the end of the License Period.
|
10.9
|
The Additional Period will be subject to the terms of this License, including any change therein.
|
10.10
|
The provisions of Clause 100 regarding confidentiality will apply, mutatis mutandis, to data furnished by the Licensee to the Minister or anyone acting on his behalf, pursuant to the provisions of Clause 10.
|
11.1
|
At the end of the License Period or the Additional Period, the Minister is entitled, at the request of the Licensee, to renew the License for one or more Additional Periods of six years, as will be determined.
|
11.2
|
The Licensee will submit its request for the renewal of the License during the forty-five days prior to the eighteen months preceding of the end of the License Period or the Additional Period.
|
11.3
|
The Minister will inform the Licensee in writing, within 30 days of the date of receiving its request for renewal of the License, whether he intends to take the measures and institute the proceedings required to renew the License, or a tender will be conducted for the services under this License.
|
12.
|
Termination of the License Period
|
12.1
|
If the License Period pursuant to Clause 9.5A16 or the Additional Period pursuant to Clause 10.1 or the License Period after its renewal pursuant to Clause 11.1 ends and the License is not extended or not renewed, the Minister is entitled to instruct the Licensee to continue to operate the Cellular System for a period to be determined (hereinafter - the Period for Terminating the Service) until a license is duly granted to another for the provision of services pursuant to this License (hereinafter – Alternate Licensee), and the procedures for transferring the system thereunder are completed, or until a license is duly granted to another for alternate services. In any case, the Period for Terminating the Service will not exceed two years from the date on which the License expires.
|
12.2
|
During the Period for Terminating the Service and no later than ten months from the date on which a license is granted to an Alternate Licensee, the Licensee and the Alternate Licensee will negotiate for the purpose of purchasing the Cellular system at its economic value and assigning the rights and obligations of Subscribers to the Alternate Licensee; if said Licensees do not reach an agreement within said ten months, the price will be determined by an arbitrator, whose decision will be final, to be appointed by the Chairman of the Institute of Certified Public Accountants.
|
13.
|
Change in the License conditions
|
13.1
|
The Minister is entitled to change, add to or subtract from the License conditions if he is convinced that one of the following exists:
|
|
(A)
|
A change has occurred in the extent of the License applicant’s suitability to perform the actions and services that are the subject of the License;
|
|
(B)
|
Subject to that stated in Clause 8, a change is required in the License to ensure competition in the telecommunications area;
|
|
(C)
|
A change is required in the License to ensure the level of services provided thereunder;
|
|
(D)
|
Changes that have occurred in telecommunications technology require a change in the license;
|
13.2
|
The Minister is entitled to change, increase or reduce the rates for services, if he is convinced that a change has occurred in one or more of the components of the costs, which represent a basis for calculating the rates.
|
13.3
|
The Minister will act pursuant to his authority as stated in Clauses 13.1 and 13.2 after the Licensee has been given a reasonable opportunity to voice its claims.
|
14.
|
Cancellation of the License
|
14.1
|
The Minister is entitled to cancel the License before the end of its period, if one or more of the causes set forth in Section 6 to the Law exist, or in one of the following cases:
|
|
(A)
|
The Licensee did not disclose to the tenders committee information that must be disclosed or it furnished inaccurate information;
|
|
(B)A2
|
If the Licensee refuses to furnish the Minister or anyone acting on his behalf with information in its possession that must be disclosed and which it was obligated to disclose by virtue of the provisions of this license or pursuant to law, or the Licensee furnished the Minister or someone acting on his behalf with false information;
|
|
(C)
|
The Licensee did not comply with the provision of the Law, the Ordinance or the regulations thereunder;
|
|
(D)
|
The Licensee committed a material breach of the License conditions and, without derogating from the generality of that stated, including the following:
|
|
(1)
|
The Licensee is demanding for its services payments that are higher than the maximum rates prescribed in this License or pursuant thereto, or pursuant to any law;
|
|
(2)
|
The Licensee is not complying with the coverage or quality requirements prescribed in this license;
|
|
(3)
|
The Licensee did not comply with the provisions of this license with regard to the operation of digital technology in the cellular System;
|
|
(E)
|
The Licensee did not commence provision of the services pursuant to that set forth in the License or unlawfully discontinued, restricted or delayed one of the services;
|
|
(1)
|
The Licensee has ceased to be a company registered in Israel;
|
|
(2)
|
Residents and citizens of Israel no longer hold, directly or indirectly, at least 20% of all of the Means of Control in the Franchisee; in this clause – "Citizen of Israel" – as defined in the Citizenship Law, 5712 – 1952; "Resident" – as defined in the Population Registry Law, 5735 – 1965;
|
|
(3)
|
A majority of the directors in the Licensee company are not citizens and residents of Israel;
|
|
(4)
|
The manager or a director of the Licensee company was convicted of an infamous crime and continues to serve in his position;
|
|
(5)
|
The joint equity, including surpluses, of all of the shareholders in the Licensee company, together with the equity of the Licensee, has declined to under US $200 million; in this matter, a shareholder holding less than 10% of the right to the company's earnings will not be taken into account.
|
|
(6)
|
Before 5 years have elapsed from the date of granting the License, the share of the cellular operator has fallen to less than 25% of the voting rights in the general meeting or of the right to appoint a director or CEO in the Licensee company;
|
|
(7)
|
Subject to that stated in paragraph (8), the Licensee, or an officer in the Licensee company or anyone who holds more than 5% of the Means of Control in the Licensee company, holds, directly or indirectly, more than one per cent (5%) of the Means of Control in BezeqA2, Another cellular Operator, or one of them acts as an Officer in a competing corporation.
|
|
(8)
|
If one of the following occurs in an Interested Party in the Licensee company, which is a mutual fund, insurance company, investment company or pension fund;
|
|
-
|
it holds, directly or indirectly, more than 5% of any Means of Control in a competing corporation, without receiving a permit therefor from the Minister;
|
|
-
|
it holds, directly or indirectly, more than 5% of any Means of Control in a competing company pursuant to a permit from the Minister and, additionally, it is a controlling shareholder and exercises actual Control in a competing corporation or it has a representative or appointee on its behalf among the Officers in the competing corporation, unless it is required to do so under law;
|
|
-
|
it holds, directly or indirectly, more than 10% of any Means of Control in a competing corporation, even though it has received permission to hold up to 10% of said Means of Control;
|
|
(G)
|
Void A2
|
|
(H)
|
If an act or omission in the Licensee’s operations impaired or restricted competition in the cellular sector;
|
|
(I)
|
A receiver or temporary liquidator was appointed to the Licensee company and an order was given for its liquidation or it decided on voluntary liquidation;
|
|
(J)
|
Void A2)
|
(K)
|
The Licensee requested cancellation of the License;
|
14.1.1A2
|
For the purposes of sub-clause 14.1(E A2), the restriction of service for technological reasons, effected after the Director was provided with prior written notification of the reasons and approved by the Director, will not be considered deemed an improper unlawful cessation, restriction or delay of service.
|
14.2
|
If the Minister is convinced that, in the circumstances, the cause of invalidity does not necessitate cancellation of the License, the Minister will grant the Licensee a fair opportunity to rectify the act or omission constituting a cause for cancellation.
|
14.3
|
The Minister will notify the Licensee in advance of his intention to cancel the license, will state in the notice the cause in question, and will allow the Licensee to voice its claims relating to the cause for cancellation, either in writing or orally, according to the circumstances, within the period set forth in the notice.
|
14.4
|
The Minister is entitled to summon the Licensee to appear before him and may demand that it respond to questions, present documents or furnish him with whatever information and documents are required for the purposes of clarifying the cause for cancellation.
|
14.5
|
If the Licensee is required or summoned as stated, it must respond to the requirement or summons on the date set forth therein.
|
14.6
|
If the Licensee fails to respond, at least twice, to the Minister's demand or summons within the period stipulated by the Minister in his demand or summons, the Minister is entitled to cancel the License in a notice that will be sent to the Licensee (hereinafter - Cancellation Notice).
|
14.7
|
In the Cancellation Notice, the Minister will determine the date on which the cancellation of the License will take effect and he is entitled to instruct the Licensee to continue the provision of services pursuant to this License until a license is granted to another or until the appointment of a trustee or until a receiver is duly appointed for the purpose of managing and operating the cellular System – as applicable.
|
14.8
|
The Licensee will continue to provide services until the end of the period stipulated by the Minister in his notice and will comply with the provisions of this License and any instruction given by the Minister in this matter.
|
15.
|
Other remedies
|
16.
|
Prohibition on transfer of the license
|
17.
|
Ownership of the Cellular System
|
17.1
|
The Licensee will be the owner of the Cellular System.
|
17.2
|
Notwithstanding that stated in Clause 17.1, the Director is entitled to permit the Licensee to utilize the cable or wireless transmission arteries of another for the purpose of connecting cellular radio centers, connecting a cellular radio center to a Cellular Coordinator of the Licensee or of another Licensee, connecting Cellular Coordinators of the Licensee, connecting a Cellular Coordinator of the licensee to a Cellular Coordinator of Another Cellular Operator A16, or connecting a Cellular Coordinator to a Public Telecommunications Network or to an International Telecommunications Network.
|
18.
|
Restrictions on transfer of the License assets
|
18.1
|
The Licensee may not sell, lease or pledge any of the assets used in performance of the License (hereinafter – the License Assets) with the Minister's prior consent and in accordance with the conditions determined by him.
|
18.2
|
Without derogating from the generality of that stated in Clauses 16 and 18.1, the Minister will give his consent for the granting of rights in the License Assets to a third party, if he is convinced to his satisfaction that the Licensee has promised that, in any event, the exercise of the rights by a third party will not cause any impairment in the provision of the services pursuant to this License, as long as the Licensee is obligated to provide these services pursuant to the provisions of this License.
|
18.3 A2
|
Notwithstanding that stated in Clause 18.1, the Licensee is entitled to encumber one of the License Assets in favour of a bank duly operating in Israel, for the purpose of receiving bank credit, provided that it has furnished notice of the encumbrance that it intends to create, whereby the encumbrance agreement includes a clause ensuring that that, in any event, the exercise of the rights by the banking corporation will not cause any impairment in the provision of the services pursuant to this license. For the purposes of this clause – "Banking Corporation" is as defined in the Banking Law (Licensing), 5741 – 1981, except for a "Foreign Corporation," as defined in the same law.
|
18.4 A2
|
The provisions of Clause 18.1 will not apply to the sale of equipment items during an upgrade, including the sale of equipment, as stated, on a "trade-in" basis.
|
19.
|
Engagement with another
|
19.1
|
If the Licensee wishes to provide one of the services pursuant to this license, in whole or in part, through another on its behalf, it must apply to the Director for his approval therefor; the Licensee must attach the ContractA43) to its application. The provisions of this clause will not apply for the purposes of the engagement between the Licensee and a marketer of Cellular End-Equipment or anyone acting on behalf of the Licensee for the purpose of marketing its services. A2
|
19.2
|
The Director is entitled to approve or reject the application, or to condition his approval on terms that must be fulfilled, including amendment of the agreement; the Director will consider, inter alia, to what extent the terms of the engagement with the other guarantee compliance with the conditions of this License and the obligations of the Licensee hereunder. The Director will not approve an engagement with another that contradicts the obligations of the Licensee pursuant to this License.
|
19.3
|
Nothing in the engagement with another will derogate from the obligations and of the Licensee and its responsibility for performing any of the services pursuant to this License, in whole or in part, pursuant to the provisions of this License, nor will it serve to derogate from the powers of the Minister, the Director or anyone acting on their behalf.
|
20.
|
Particulars of Licensee
|
20.1A43)
|
Details regarding the Licensee's legal entity, incorporation, holders of the controlling interest, holders of a material influence, interested parties and officers, are attached as Addendum A to the license. The Licensee must submit to the Director, every year at the beginning of January, an updated Addendum A.
|
20.2
|
The Licensee will report to the Director in writing regarding any change in the information contained in Addendum A, including any transfer and acquisition of control or of 5% of the means of control in the Licensee company or change in the appointment of a director or general manager, within 14 days of the date of change.
|
21.
|
Transfer of Means of Control
|
21.1
|
There will be no transfer, directly or indirectly, of ten percent or more of any means of control in the Licensee, whether all at once or in parts, unless this received the Minister's prior consent.
|
21.2
|
There will be no kind of transfer of any means of control in the Licensee, or a part of said means of control, so that as a result of the transfer, control in the Licensee is transferred from one person to another, unless this was given the Minister's prior consent.
|
21.3
|
There will be no acquisition of control, directly or indirectly, in the Licensee, and there will be no acquisition, directly or indirectly, by a person himself or together with his relative or with another person, who operate with him regularly of 10% or more of any means of control in the Licensee, whether all at once or in parts, without the prior consent of the Minister.
|
21.4
|
Subject to the foregoing in this section, there will be no transfer, directly or indirectly, of means of control, so that the share of a cellular system operator in the Licensee drops below 25% of the voting rights in the general meeting and of the right to appoint a director or general manager, except after 5 years have elapsed since the date of the granting of the license. If 5 years have elapsed since the date of the granting of the license, the cellular system operator's share can go below 25% to the point of selling all the means of control in its possession to another, all subject to the Minister's approval for the very reduction of the cellular system operator's share in the means of control in the Licensee and also regarding the purchaser.
|
21.5
|
Notwithstanding that stated in sections 21.1 and 21.3, if traded means of control in the Licensee, not entailing the transfer of control in the Licensee, have been transferred or acquired at a rate requiring approval under sections 21.1 or 21.3, without the Minister’s approval having been requested, the Licensee shall report this to the Minister, in writing, and shall submit to the Minister an application for approval of the transfer or the acquisition, all within 21 days from when the Licensee learned of this fact, provided the Minister gave his prior written approval to the holding per se of the issue or the sale of the securities to the public. In this regard, “traded means of control” – means of control, including deposit certificates, Global or American Depository Shares (GDRs or ADRs), or similar certificates, in respect of securities listed on the stock exchange in Israel and/or
|
|
abroad, in a non-hostile country, or means of control offered to the public pursuant to a prospectus and held by the public, in Israel and/or abroad, in a non-hostile country.
|
21.6
|
Entry into an underwriting agreement in connection with an issue or sale of securities to the public, and listing on a stock exchange in Israel or abroad, in a non-hostile country, or the deposit of securities, including deposit certificates, Global or American Depository Shares (GDRs or ADRs), or similar certificates, in respect of securities, or the registration thereof with a nominee company and/or agent, shall not in themselves be deemed as the transfer of means of control in the Licensee.
|
21.7
|
(A)
|
Irregular holdings shall be registered in the members register (shareholders register) at the Licensee, noting the fact of their irregularity, immediately when the Licensee learns of this fact, and a notice concerning the registration shall be delivered by the Licensee to the owner of the irregular holdings and to the Minister. In this regard, “irregular holdings” – the holding of traded means of control without the Minister’s agreement as required under section 21 or in contravention of the provisions of section 23, and the entire holdings of a holder of traded means of control who acted contrary to the provisions of section 24; the aforesaid for as long as the Minister’s agreement is required and was not given under section 21 of the license or circumstances exist involving the contravention of the provisions of sections 23 or 24 of the license.
|
|
(B)
|
Irregular holdings registered as stated in section 21.7(A), shall not confer any rights on the holder, and shall be “dormant shares” as defined in section 308 of the Companies Law, 1999, except for purposes of receiving a dividend or other distribution to the shareholders (including the right to participate in an issue of rights which are calculated on the basis of holdings in means of control in the Licensee, except that holdings added as stated shall also be deemed as irregular holdings), therefore no act or contention of exercise of a right by virtue of irregular holdings shall be valid, except for purposes of receiving a dividend or other distribution as stated.
|
|
(C)
|
Irregular holdings shall not confer voting rights in the general meeting. A shareholder participating in a vote in the shareholders meeting shall notify the Licensee prior to the vote, or where the vote is by means of a voting instrument – on the voting instrument, whether or not its holdings in the Licensee or its vote require approval under sections 21 or 23 of the License. If the shareholders did not give a notice as stated, it shall not vote and its vote shall not be counted.
|
|
(D)
|
A director may not be appointed to the Licensee, elected or dismissed by virtue of irregular holdings. If a director was appointed, elected or dismissed as stated, such appointment, election or dismissal, as the case may be, shall not be valid.
|
|
(E)
|
The provisions of sections 21.7 and 21.9 shall be included in the articles of the Licensee, mutatis mutandis.
|
21.8
|
For as long as the Licensee’s articles prescribe as stated in section 21.7 and the Licensee acts in accordance with that stated in sections 21.5 and 21.7, for as long as the holdings of founding shareholders or their substitutes are not reduced to less than 50% of each of the means of control in the Licensee, and for as long as the Licensee’s articles prescribe that a majority of the voting power in the shareholders general meeting may appoint all the
|
|
directors in the Licensee, excluding outside directors in accordance with any relevant statutory requirement or stock exchange directive, irregular holdings shall not in themselves be cause for the cancellation of the license.
|
|
For purposes of this section, “founding shareholders or their substitutes” – Discount Investment Corporation Ltd., DEC Communications and Technology Ltd. and PEC Israel Economic Corporation, or any other body to which any of those enumerated above transferred, with the Minister’s approval, means of control, provided the Minister confirmed in writing that the transferee body shall be deemed in this regard as the substitute of the founding shareholder beginning from the date to be determined by the Minister, and including anyone who is an “Israeli entity” as defined in clause 22.2A, who acquired a means of control from the Licensee and received the Minister’s approval for being deemed a founding shareholder of its substitute starting from the date that was determined by the Minister. The grant of approval under this section shall not exempt the Licensee from the duty of receiving the Minister’s approval for every transfer of means of control in the Licensee that requires approval under any other section of the license.
|
21.9
|
The provisions of sections 21.5 and 21.8 shall not apply to founding shareholders or their substitutes.
|
22.
|
Encumbrance of Means of Control
|
|
A shareholder of the Licensee company or a shareholder of an interested party therein may not encumber his shares in such manner so that exercise of the encumbrance results in a change in ownership of 10% or more of any means of control in the Licensee, unless the encumbrance agreement contains a limitation by which the encumbrance may not be exercised without the prior consent of the Minister.
|
22A.
|
Israeli Nationality and Holdings of Founding Shareholders or Their Substitutes
|
22A.1
|
The total holdings of “founding shareholders or their substitutes” as defined in section 21.8 (including anyone being an “Israeli entity” as defined in section 22.2A below, who acquired means of control from the Licensee and received the Minister’s approval for being deemed a founding shareholder or a substitute thereof as from the date determined by the Minister), who are mutually bound by an agreement for the fulfillment of the provisions of section 22A of the license (in this section, all of the above will be deemed: “founding shareholders or their substitutes”), cumulatively, may not be less than 26% of each of the means of control in the Licensee.
|
22A.2
|
The cumulative holdings of “Israeli entities,” one or more, included among founding shareholders or their substitutes, out of the total holdings of founding shareholders or their substitutes as stated in section 22A.1 above, may not be at any time less than 20% of the total issued capital and of the means of control in the Licensee. For this purpose, the Licensee’s issued share capital will be calculated less the number of “dormant shares” held by the Licensee.
|
|
In this section –
|
|
“Israeli entity” – With respect to an individual – anyone who is a citizen and resident of Israel; with respect to a corporation – the corporation was incorporated in Israel, and an individual who is a citizen and resident of Israel controls it, directly or indirectly, provided indirect control is solely through a corporation incorporated in Israel, one or more. However, for purposes of indirect holding, the Prime Minister and the Minister of Communications may approve holding through a corporation that was not incorporated in Israel, provided such corporation does not hold shares in the Licensee directly, where they are satisfied that this will not be detrimental to the purposes of this section. In this regard, “Israeli citizen” – as defined in the Citizenship Law 1952; “resident” – as defined in the Population Registry Law 1965; “dormant share” – as defined in section 308 of the Companies Law 1999.
|
22A.3
|
At least twenty percent (20%) of the Licensee’s directors will be appointed by Israeli entities as stated in clause 22A.2. Notwithstanding the above, in this regard, if the Licensee’s board of directors numbers up to 14 members – at least two directors will be appointed by Israeli entities as stated in clause 22A.2 above, if the Licensee’s board of directors numbers from 15 to 24 directors – at least three directors will be appointed by Israeli entities as stated in clause 22A.2 above, and so forth.
|
22A.4
|
The Licensee’s board of directors will appoint from among its members having a security classification and security clearance as will be determined by the General Security Service (hereinafter – “classified directors”), a committee called the “Committee for Security Matters.”
|
|
At least four directors will serve on the Committee for Security Matters, among them at least one outside director. Matters pertaining to security will be considered, subject to that stated in clause 22A.5 below, solely in the framework of the Committee for Security Matters.
|
|
A resolution that was adopted or an action that was performed by the Committee for Security Matters, will be deemed the same as a resolution adopted or action performed by the Company’s board of directors, and it will be considered by the board of directly only if this is required under section 22A.5 below and subject to that stated in section 22A.5 below. In this clause, “security matters” – as defined in the Telecommunications Order (Designation of an Essential Service Provided by Bezeq Israeli Telecommunications Company Ltd.) 1997.
|
22A.5
|
Security matters which the Licensee’s board of directors or Audit Committee are required to consider according to the cogent provisions in the Companies Law 1999 or according to cogent provisions of any other law applying to the Licensee, will be considered, insofar as necessary, by the board of directors or by the Audit Committee, with the participation of classified directors only. Non-classified directors may not participate in such meetings of the board of directors or the Audit Committee and may not receive information or inspect documents pertaining to the security matters considered in the meeting. The quorum in every such meeting will consist of classified directors only.
|
|
The Licensee will specify in its articles that an officer who by virtue of his position and by virtue of the provisions of the law or the articles should have received information or participated in meetings on security matters, and is prevented from doing so by reason of the provision of clause 22A.5, will be exempt from liability for breach of the duty of care towards the Licensee, if the duty of care was breached due to non-participation in a meeting or non-receipt of information.
|
22A.6
|
The general meeting may not assume, delegate, transfer or exercise powers that are vested in another organ of the Company, in security matters.
|
22A.7
|
(A)
|
The Minister will appoint an observer at meetings of the Company’s board of directors and committees, having a security classification and security clearance as will be determined by the General Security Service.
|
|
(B)
|
The observer will be a government employee qualifying as a director under Chapter C of the Government Companies Law 1975.
|
|
(C)
|
In addition, and without derogating from any duty imposed on him by law, the observer will owe the Licensee a duty of confidentiality, except as required for the fulfillment of his function as an observer. The observer may not serve as an observer or in any other position on behalf of any other entity engaging in the provision of communication services and competing directly with the Licensee, and he will avoid any conflict of interest between his function as an observer and the Licensee, except a conflict of interest stemming from his being a government employee filling the function of an observer at the Licensee. The observer will commit towards the Licensee not to serve as an observer or officer and not to hold any position or be employed, directly or indirectly, at any entity competing directly with the Licensee or being in a conflict of interest with it, except for a conflict of interest stemming, as stated, from his being a government employee filling the function of an observer at the Licensee, throughout his tenure as observer at the Licensee and during eighteen (18) after the end of such tenure.
|
|
In any case of differences of opinion as to the observer being in a conflict of interest, the Attorney General or someone on his behalf will decide in the matter.
|
|
(D)
|
An invitation to meetings of the board of directors and its committees, including the Committee for Security Matters, will be delivered to the observer as well, who may participate as an observer at any meeting as stated.
|
|
(E)
|
The observer’s right to receive information from the Licensee will be the same as a director’s right. If the Licensee is of the opinion that certain information in the nature of sensitive business information is not required by the observer for the fulfillment of his function, the Licensee may withhold delivery of such information to the observer, notifying him in this regard. If the observer is of the opinion that he should receive that information, the matter will be referred to the decision of the head of the General Security Services.
|
|
(F)
|
If the observer saw that the Licensee adopted or is about to adopt a resolution on security matters contrary to any provision of the license, contract to section 13 of the Law or contrary to section 11 of the General Security Services Law 2002, it will notify the Licensee without any delay, in writing, such notice to be delivered to the chairman of the board of directors and to the chairman of the Committee for Security Matters, and to set a proper time in the circumstances of the case for remedying the breach or modifying the resolution, should this be possible.
|
23.
|
Prohibition on Cross-Ownership
|
23.1
|
The Licensee, an officer therein or whoever holds more than 5% of any means of control in the Licensee, will not hold, directly or indirectly, more than one percent (5%) of the means of control in Bezeq, A16) another cellular system operator. Regarding this matter, "holding" – includes the holding as an agent.
|
23.2
|
Notwithstanding that stated in Section 23.1, an interested party in the Licensee that is a mutual fund, insurance company, investment company or a pension fund, may hold up to 5% of the means of control in Bezeq, another cellular system operator A16), provided all the following are fulfilled:
|
(A)
|
It is not a controlling shareholder and does not exert, directly or indirectly, any control in Bezeq or A16) another cellular system operator;
|
(B)
|
It has no representative or person in charge on its behalf among Bezeq's or the other cellular system operator's officers, unless required to do so by law.
|
23.3
|
Pursuant to a written request, the Minister may allow an interested party in the Licensee, as stated in Section 23.2, to hold up to 10% of the means of control in Bezeq, A16) another cellular system operator, when the terms stated in Section 23.2(A) and (B) are fulfilled, if he saw, to his satisfaction, that such a holding will not harm competition.
|
24.
|
Prohibition on a Conflict of Interest
|
|
The Licensee, an officer therein or an interested party in the Licensee company will not be a party to any agreement, arrangement or understanding with Bezeq, A16) another
|
|
cellular system operator, meant or liable to reduce competition or harm it in all pertaining to cellular system services, cellphone network end-equipment and other services provided via the cellular system.
|
|
In this part –
|
|
"Milestones" – Stages in the setup of the cellular system, according to the timetable detailed in the engineering plan – Addendum B to the license.
|
26.1
|
In all pertaining to the setup and operation of the cellular system (in this section – network), including the technical quality of its various components, as well as the network's structure and manner of setup, the Licensee will comply with the terms and provisions in the engineering plan.
|
26.2
|
The Licensee will follow all the specifications of the Ministry of Communications and the network-related standards prescribed by standardization organizations in Israel and around the world, as well as other international organizations, in the telecommunications and wireless field as well as in any other field pertaining to the setup and operation of the network.
|
26.3
|
The Licensee may discontinue the operation of a cellular system that has become technologically obsolete, after received the Director's approval in that regard and subject to conditions to be set in the LicenseA63.
|
27.1
|
The setup rate of the cellular system, the setup milestones, the commencement date for providing the service in the various regions in Israel, will be in accordance with the timetable set in the engineering plan – Addendum B to the license.
|
27.2
|
The Licensee may not deviate from the timetable unless authorized to do so by the Director, provided the Licensee applies in writing to the Director to receive his permission immediately after realizing that difficulties have arisen that prevent it from meeting the original timetable.
|
27.2.1
|
A delay in signing agreements with a third party or obtaining approval from the planning and construction authorities will be deemed a reasonable reason for obtaining the Director's permission for deviating from the timetable, only if the Director realizes to his satisfaction that the Licensee has done its reasonable utmost in the circumstances of the matter, to come to an agreement with a third party or to receive approval from the planning and construction authorities.
|
27.3
|
The Director may approve the Licensee's request to deviate from the timetable, in whole or in part, and to stipulate conditions for its approval. The Director may also approve deviation regarding a specific milestone, provided the Licensee undertakes to catch up with the planned setup rate in the succeeding milestones.
|
28.
|
Modification of Plans during Setup
|
28.1
|
The Licensee may not deviate from the engineering plan unless it has been authorized to do so by the Director under the provisions of this section. However, the placement of a Cellular Radio Center in a different site from that set in the engineering plan will not be deemed a deviation, if done within the search region. As regards this section, a "search region" denotes a territory defined in the engineering plan in which a Cellular Radio center is planned to be set up, at a specific site within the territory, and regarding which it has been stated in the engineering plan that it might be necessary to place the center in another site found in the territory.
|
28.2
|
If in the course of setting up the cellular system, the Licensee realizes that it has become necessary to deviate or depart from the engineering plan, the Licensee must apply in writing to the Director to obtain his approval for the plan. In its application, the Licensee must describe the essence and nature of the requested modification and the reasons therefor. The Licensee must attach the amended plan it proposes, to the application.
|
28.3
|
The Director may reject or approve the request, in whole or in part, and may also stipulate conditions for its approval, insofar as these are needed for the rigorous assurance of the network's quality and performance level. The Director will make a decision in the matter of the request and notify the Licensee of his decision, all within a reasonable amount of time.
|
29.
|
Utilization and Construction of Infrastructures
|
29.1
|
For the purpose of setting up and operating the cellular network, the Licensee may, subject to any law, set up, maintain and operate cable or wireless transmission arteries, provided such transmission arteries will be used solely for the following:
|
(A)
|
Connection between the Cellular Radio Centers forming part of the Licensee's cellular system;
|
(B)
|
Connection between the Licensee's Cellular Radio Centers and its cellular exchanges;
|
(C)
|
Connection between all the cellular exchanges;
|
(D)
|
Connection between the Licensee's cellular exchanges and a public telecommunications system, or another cellular operator's cellular networkA16), or other systems operating lawfully.
|
29.2
|
For the purpose of the connection described in Section 29.1, the Licensee may use also the cable or wireless transmission arteries of Bezeq or of another licensee or concessionaire lawfully authorized to provide aforesaid infrastructure services.
|
29.3
|
To remove any doubt, it is hereby clarified that use of the transmission arteries to be set up by the Licensee is solely for operating the cellular system as stated in Section 29.1, unless the Minister permitted the Licensee in the license to make other use thereof, in accordance with the terms he laid down.
|
30.A16)
|
Obligation of Interconnection
|
30.1
|
The Licensee will act to effect interconnection of the network with every other public telecommunications network, operating in the territory subject to the law, jurisdiction and governance of the State of Israel (including settlements, military sites and military installations in Judah, Samaria and Gaza Strip), including with every public landline telecommunications network, international telecommunications network and cellular network of another cellular operator.
|
30.2
|
The interconnection between the network and another licensee's public telecommunications network will be effected in such manner as to enable the following:
|
|
(A)
|
Relay of telecommunication messages between end-equipment connected to the network and end-equipment connected to the other public telecommunications network;
|
(B)
|
Proper, regular provision of services by the Licensee to the other licensee's subscribers, and the provision of services by the other licensee to the Licensee's subscribers.
|
30.3
|
Interconnection may be effected either directly or indirectly, via a public telecommunications network of another general license holder, provided it enables that stated in Section 30.2.
|
30.4
|
As regards the interconnection between the network and public landline telecommunications network, the Licensee will act to set up interface points between the two networks, for each type of service (infrastructure, data transmission and communication, telephony), with at least three transition switches, unless the Director has decided otherwise at the written request of the Licensee. Setup of the interface points will be done under an agreement between the Licensee and the domestic operator licensee. Such an agreement will include, inter alia, the technical, operational and business details of the connection, the number of connections and their location.
|
30.5
|
As regards the interconnection between the network and an international telecommunications network, the Licensee will act in compliance with the provisions of Addendum J to the license.
|
30A.A16)
|
Rules Concerning the Implementation of Interconnection
|
|
The Licensee will act to implement interconnection in accordance with all the following:
|
(A)
|
The Licensee will verify that the network's technical and operational standards comply wit the requirements for linkup with the public telecommunications network of the domestic operators, the other cellphone operators, and the international operators (hereinafter – other operator), that the network's activities will mesh properly with the activities of the other operator's public telecommunications network, and that the interconnection will not adversely affect the proper functioning of these networks and the normal service to their subscribers;
|
(B)
|
The Licensee will provide the interconnection service under equal conditions for every other operator and avoid any discrimination in actuating the interconnection, including with regard to the following:
|
(1)
|
Supply of infrastructure facilities and network linkup services;
|
(2)
|
Availability of linkup facilities;
|
(3)
|
Linkup method, quality and survival;
|
(4)
|
Alterations and adaptations in the switching in the facilities, in the protocols and at the network interface points;
|
(5)
|
Payments for interconnection;
|
(6)
|
Debiting and collection arrangements, and the transfer of information regarding subscribers;
|
(7)
|
Commercial terms for effecting interconnection;
|
(8)
|
Submission of information regarding the network and alteration therein relating to interconnection;
|
(C)
|
The Licensee will place at the disposal of the other operator any essential information the other operator needs for providing its services via the Licensee's facilities. Said information will be given subject to any law concerning the protection of privacy or commercial confidentiality. In the event the parties fail to reach an agreement regarding the nature and scope of the essential information, the Minister will decide in the matter;
|
(D)
|
The Licensee will give the other operator information regarding alterations planned in its network, which may affect the interconnection with the other operator's public telecommunications' network, or the interconnection between the public telecommunications networks of the other operators. The Licensee will provide the aforesaid information in such manner as to enable the other operator to prepare reasonably for the implementation of said alterations;
|
(E)
|
As regards Subsections (C) and (D), the Licensee may stipulate the provision of information to the other operator on signing a reasonable privacy protection agreement, intended to safeguard the Licensee's rights under any law, including trade secrets, intellectual property rights and the like, pertaining to information regarding modification of the network meant to be given to the other operator;
|
(F)
|
The terms in respect of interconnection between the network and the other operator's public telecommunications network will be formalized in an agreement between the Licensee and the other operator. If the parties fail to reach an agreement, the Minister will decide in the matter.
|
(G)
|
(1)
|
The Licensee will allow its subscribers to receive all the services offered to them by another operator, The Licensee may also allow another operator's subscribers to receive services from the Licensee, provided that said receipt of services is possible under any law.
|
|
(2)
|
The Director may order the Licensee to allow the other operator's subscribers to receive services provided by the Licensee, provided that such receipt of services is possible technically and under any law.
|
|
(3)
|
Notwithstanding that stated in Subsection (1), the Director may, at the written request of the Licensee, exempt the Licensee from the obligation of allowing its subscribers the possibility of receiving services from another operator, for technical, economic reasons or for other justified reasons.
|
(H)
|
The Licensee will forward to the Director a signed copy of every agreement between it and the other operator concerning interconnection;
|
(I)
|
The Licensee will forward to the Director on demand, any information given to the other operator under Subsections (C) and (D), as well as a copy of every confidentiality agreement under Subsection (E);
|
(J)
|
The Licensee will act in compliance with additional provisions the Minister will prescribe.
|
30B.A16)
|
Payment for Traffic Completion and Interconnection
|
|
In the event the Minister did not determine payment for interconnection or payment deriving from interconnection, the Licensee may demand in respect thereof reasonable and non-discriminatory payment.
|
30C.A16)
|
Prohibition on Delaying Interconnection
|
|
The Minister will give the Licensee a reasonable opportunity to voice his position in all pertaining to the Minister's intention to order it regarding the manner of effecting interconnection and its scope, regarding the actions, services and arrangements incidental to effecting interconnection, and regarding payments in respect of interconnection. Once the Minister has instructed the Licensee on said matters, the Licensee will not delay in any way interconnection with the network, and will fulfill its obligations in accordance with the Minister's provisions, properly and in good faith, on the date set therefor and with full cooperation.
|
30D.A16)
|
Providing the Possibility of Utilization
|
30.1D
|
The Minister may order the Licensee to provide the possibility of utilizing its telecommunications facility, by virtue of his authority under Section 5 of the Law.
|
30.2D
|
The Licensee will enable another licensee, by the Minister's order, to provide value added services via the Licensee's network. The Licensee will ensure reasonable and equal terms for any other licensee, in all pertaining to the provision of value added services by the latter to the Licensee's subscribers.
|
30.3D
|
As regards providing the possibility of utilization, the provisions of Sections 30A to 30C will apply, mutatis mutandis.
|
30E.A16)
|
Infrastructure Services for an Interested Company
|
30.1E
|
The Licensee will not give preference, in providing infrastructure services, to a licensee that is an interested company over another licensee, whether in payment for the service, in service conditions, in service availability or in any other way.
|
30.2E
|
(A)
|
Pursuant to a written request from the Licensee, the Director may permit the Licensee limitations on the provisions of Section 30.1E, in all pertaining to another licensee or a broadcasting licensee that is an interested company, provided the following conditions are fulfilled:
|
|
(1)
|
The other licensee or the concessionaire is not a material operator:
|
|
(2)
|
The Director is of the opinion that giving such permission does not materially harm competition in the field of telecommunications.
|
(B)
|
As regards the limitations stated in Subsection (A), these may allow the Licensee to offer an interested company the use of its telecommunications facilities under preferred conditions, and these may be limited in time or by another condition.
|
(C)
|
When considering a permit under this section, the Director will take into account the existence of a valid agreement, which was signed prior to Amendment No. 16 to this license, between the Licensee and the interested company, concerning, inter alia, the restriction of the permit in time or by other conditions.
|
30.3E
|
In this section – "interested company," "subsidiary," and "material operator" – as these terms are defined in the Telecommunications Regulations (Procedures and Conditions for Obtaining a General License for Providing Domestic Landline Telecommunications Services), 2000.
|
30F.A16)
|
Numbering Program
|
30.1F
|
The Licensee will act in accordance with the numbering program, and in compliance with the Director's provisions regarding the activation and implementation of the numbering program.
|
30.2F
|
The Director ordered the activation of number portability, so that every subscriber of another cellular system licensee will be able to switch over to and be a subscriber of the Licensee or receive services from the Licensee without any change in his telephone number, and vice versa – the Licensee will incorporate into its public telecommunications network devices enabling the application of this property, on the date and using the method laid down in the Director's provision.
|
31.
|
Reports on the Setup Works
|
31.1
|
The Licensee will submit to the Director, throughout the cellular system setup period, quarterly reports describing the setup works carried out during the period of each report, according to the milestones and timetables in the engineering plan. As regards this section, "the setup period" denotes 15 months from the date the license was granted or until the date of the completion of the network's setup in full deployment, according to the engineering plan, whichever the earlier.
|
31.2
|
The reports will include a comparison of the plans' execution versus the plan for each report's period, as well as explanations for any deviation or alteration that occurred in the execution compared with the plan.
|
31.3
|
Each report will be submitted in triplicate in a format to be instructed by the Director, and will bear a date and be signed by the Licensee or whoever it empowered especially for this purpose.
|
31.4
|
The Director may demand that the Licensee prepare special reports, and also that it draw up anew or supplement a report submitted to him.
|
|
The Licensee will furnish to the Director, on demand, any information or document regarding the execution of cellular system setup works, at the time, in the format, and in the manner instructed by the Director.
|
33.
|
Supervision of Setup Works
|
33.1
|
The Director may supervise, by himself or through a designee, the Licensee's actions connected with the execution of the setup works. To this end, the Director may enter at any reasonable time, the Licensee's work sites, cellular system facilities and offices, for the purpose of making measurements, performing inspections and perusing any plan or document pertaining to the execution of the setup works.
|
33.2
|
The Licensee will cooperate with the Director in all pertaining to the supervision of the setup works, and without derogating from the generality of the foregoing, will enable him to enter the work site and its facilities, enable the perusal of any document, plan and specification, and provide him with any information he requests.
|
34.
|
Correction of Deficiencies and Defects
|
34.1
|
The Director may notify the Licensee in writing about deficiencies, defects and deviations he found in the cellular system setup operations, based on reports submitted by the Licensee, documents and information it furnished him, or based on measurements and inspections he made.
|
34.2
|
In the event the Licensee receives a notice as stated in Section 34.1, it will notify the Director, within fourteen days of the date of receiving the notice, regarding its response to that stated therein and the measures it took or plans to take, in order to correct the deficiencies, defects or deviations.
|
35.1
|
The Licensee will execute the setup works, taking adequate safety precautions to prevent personal accidents and property damage, will prevent the causation of nuisances and hazards to the public in the work areas, and if required to do excavations at the spot, will do everything to prevent damages to underground systems, including telecommunications networks, and to this end will make sure to obtain every permit required by any law, including an excavation works permit under Section 53B of the Law.
|
35.2
|
Upon completion of the setup works, the Licensee will make sure to clean up the work sites and restore them to their previous condition.
|
|
In a place where there are electricity lines or electricity facilities prior to the installation of the cellular system, the Licensee is subject to the obligations imposed under the Telecommunications and Electricity Regulations (Convergence and Intersection between Telecommunications Lines and Electricity Lines), 1986.
|
38.1
|
Antiquities, as defined in the Antiquities Law, 1978, which are discovered at a setup work site, are state assets, and the Licensee will take the appropriate precautions to prevent damage thereto.
|
38.2
|
The Licensee will notify the director of the antiquities authority regarding the discovery of an antiquity within 15 days of the date of the antiquity's discovery and will follow the instructions of the authority's director in all pertaining to the manner of handling the antiquity.
|
38.3
|
In the course of the setup works, the Licensee will avoid, inasmuch as possible, damaging sites of historical or national value, tourist sites and landscape.
|
38.4
|
The Licensee will avoid, insofar as possible, damaging buildings and trees found in the places where setup works are being carried out.
|
39.1
|
The Minister may, at the Licensee's request, grant it all or some of the powers prescribed in Chapter F of the Law, subject to that stated in Section 39.2.
|
39.2
|
The Licensee will specify in its request the sites at which it requires the aforesaid powers, the scope of the required powers and the reasons therefor, including the steps it took to find alternative sites, without having to use the power under Chapter F of the Law.
|
39.3
|
In the event the Minister is convinced of the need to grant the Licensee powers under Chapter F of the Law, the Minister will publish his decision in the Reshumot (Official Announcements and Advertisements Gazette).
|
|
The Director may determine which items of equipment should not be installed in the Cellular System before undergoing a compliance check. "Compliance" as regards this section – as emerges from that stated in Section 41. If the Director has decided as aforesaid, the items will not be installed before undergoing a compliance check.
|
|
It is the responsibility of the Licensee to see to it that the equipment installed in the Cellular System is, at least, technically compliant with the properties detailed in the manufacturer's specifications relating to the specific item of equipment, and attached to the engineering plan.
|
42.
|
Performance Testing Program and Its Approval
|
42.1
|
The Licensee will furnish the Director, no later than 30 days before giving notice of the completion of installation under Section 43, with an up-to-date, detailed testing program for carrying out the performance check, relating to that part of the Cellular System it wishes to operate (hereinafter – detailed testing program).
|
42.2
|
The Licensee will present the detailed testing program to the Director. The Director may demand within 15 days of the aforesaid presentation that the Licensee make changes in the detailed testing program or complete it, if he deems it necessary for the full and accurate execution of the performance check, and the Licensee will carry out the checks according to the Director's request.
|
|
Once the Licensee has completed setting up a Switchboard or Cellular Radio Center in some region, so that it is possible to start providing cellular services through it, the Licensee will notify the Director in writing thereof, in the format it was instructed by the Director, along with the results of the detailed check indicating successful installation and operation.
|
44.1
|
Prior to operating the network, the Licensee must meet the requirements and conditions detailed below:
|
(A)
|
Entering into an Agreement with an Equipment Manufacturer
|
|
(1)
|
Know-how agreement;
|
|
(2)
|
An agreement guaranteeing the supply of parts for the network's equipment for a period of at least 7 years;
|
|
(3)
|
An agreement guaranteeing the supply of technical literature and full documentation of the network's equipment, including updates.
|
(B)
|
Lab and Testing Equipment
|
(C)
|
Parts
|
|
(D)
|
Maintenance System
|
|
The Licensee must maintain, on its own or through another, an efficient maintenance system, consisting of maintenance personnel, service vans and communication means, ensuring the proper, ongoing operation of the network and enabling the handling of any malfunction within the response time required under this license, and also enabling, in any case of a serious problem with the Cellular System causing radio interferences, large-scale disconnection of subscribers or posing a safety risk, repair of the malfunction within 4 hours.
|
(E)
|
Communication Means
|
44.2
|
The Licensee must present to the Director, seven days before setting the network in operation for the first time, certifications and documents regarding compliance with the requirements and conditions specified in Section 44.1. In the event the Director fails to respond within five days of the date of delivery of said documents, the Licensee may operate the Cellular System and connect subscribers thereto. If the Director orders the Licensee, based on the documents' findings, to alter or fix the network, the Licensee must make the required alteration or correction and present a certification of execution to the Director, and if the Director fails to respond within 3 days, the Licensee may operate the system.
|
45.
|
Allocation of FrequenciesA16)
|
45.1
|
The Licensee may operate the Cellular Radio centers of the Cellular System, using the frequency bands allocated for its exclusive use, as detailed below:
|
(A)A35)
|
835 to 845 MHz and corresponding range 880 to 890 MHz;
|
(A1)A35)
|
1710 to 1712 MHz and corresponding range 1805 to 1807 MHz;
|
|
That stated in this subsection in no way derogates from the Director's authority to allocate an alternative frequency band with identical bandwidth for the Licensee's use, instead of the frequency band specified in this subsection.
|
(B)
|
Starting from February 1, 2002 to January 1, 2004 the following bands will be allocated:
|
|
(C)
|
Starting from January 1, 2004 the following bands will be allocated:
|
|
1720 to 1730 MHz and corresponding range 1815 to 1825 MHz;
|
|
1960 to 1970 MHz and corresponding range 2150 to 2160 MHz;
|
|
as well as the frequency range 1905 to 1910 MHz.
|
(C1)
|
A2A26) Starting from April 4, 2004 the following frequency bands will be allocated:
|
|
1715 to 1720 MHz and corresponding range 1810 to 1815 MHz.
|
|
(D)
|
Notwithstanding the foregoing, in the event the Licensee asks to postpone the usage commencement date for the frequencies specified in subsections (B) and (C), or a part thereof, to a later date, the Director may suspend the allocation of frequencies to a date he decides on.
|
45.2
|
The Licensee may select a narrower frequency band than that stated above in the framework of the frequency bands specified in Section 45.1.
|
45.3
|
In the event of detection of electromagnetic interferences from other radiants that can harm the proper functioning of the Cellular System, the Director must, at the Licensee's request, take any reasonable action to find an appropriate solution or stop the aforesaid interferences.
|
|
The Licensee will make use of the frequencies allocated to it as stated in Section 45 only for providing the services under this license.
|
47.1
|
The Licensee will set up the Cellular System and operate it in such manner so that no part of its parts will emit radiation prohibited under the provisions of the Pharmacists'
|
|
Regulations (Radioactive Elements and Their Products), 1980, and do everything required, if required, to obtain a permit in accordance with the aforesaid regulations.
|
47.2
|
The Licensee will coordinate the use of the frequencies with the Director, who will base his directives, inter alia, on the program derived from the preparation for a national emergency crisis.
|
47.3
|
The Licensee will submit to the Director, or anyone appointed for this purpose on its behalf, a detailed, up-to-date plan for the operation of Cellular Radio Centersand for the expected use of the frequencies at least 60 days before the operation, and will report to the Director regarding the actual execution, within 7 days of the operation date.
|
47.4
|
The Licensee will set up and operate the Cellular System in such a manner as to prevent interferences with other Bezeq and wireless systems operating lawfully. Prior to the activation of any Cellular System, the Licensee will perform tests and measurements for the purpose of preventing electromagnetic interferences. If found that electromagnetic interferences can be expected or interferences have been detected during operation, the Licensee will act to find a solution that will prevent these interferences and also prevent their recurrence, and in the absence of a solution it will turn in writing to the Director or to anyone appointed for this purpose on its behalf, in order to find a reasonable solution in this regard. The Director may demand that each of the parties make changes in the operation of the equipment or in the use of the frequencies or that they stop broadcasting over certain frequencies, throughout the country or in a certain region.
|
47.5
|
The granting of this license, including the approval of the engineering plan, in no way provides protection against harmonies from other radiants operating lawfully, or other radiants operating outside state territory; however, the Director must make every reasonable effort to find an appropriate solution providing the necessary protection.
|
48.
|
Cellphone Activity in Emergencies
|
48.1
|
In times of national emergency or for national security reasons, the one empowered to do so by any law may take the steps needed for state security, with a notice to the Licensee A2A2), including control of the network. In such circumstances, the Licensee will operate according to the instructions and notices of those authorized to do so by any law, including the government, the Minister, the Director and head of the unit for the management of a broadcasting spectrum and satellites in an emergency (hereinafter – head of the emergency unit).
|
48.2
|
The Licensee will give the head of the emergency unit the names of its representatives authorized to receive instructions and notices anytime, 24 hours a day, in all pertaining to national emergency and security matters. The representative will have a first and second deputy, who will substitute for him during his absence.
|
48.3
|
The Licensee will set up and operate the network in a manner that will allow reducing the network's activity, when necessary, during times of emergency:
|
(A)
|
In terms of the frequency profile;
|
(B)
|
In terms of the geographical profile;
|
(C)
|
Through the disconnection of part of its subscribers, according to predetermined lists, or according to directives deriving from the situation;
|
|
(D)
|
In terms of a profile combining profiles A, B and C.
|
48.4
|
The Licensee will organize itself in such manner, so that it will be able to carry out the reductions detailed in Section 48.3 rapidly and efficiently, by remote control or by presence at the sites themselves.
|
48.5
|
The head of the emergency unit may establish a detailed procedure formalizing and regulating the Cellular System activity during an emergency, which he will present to the Licensee, and the latter will strictly fulfill the provisions of this procedure.
|
49.
|
Definitions
|
|
"Periodical inspection" – An inspection of the network or any part thereof performed according to the license's provisions, at fixed time intervals and at least once every half year;
|
|
"Special inspection" – An inspection of the network or any part thereof performed due to a maintenance action or repair, following electromagnetic interferences, a malfunction, clarification of a complaint, a technological modification, an alteration in the engineering plan or the like;
|
|
"Regular inspection" – An inspection of the network or any part thereof, done on a regular, ongoing basis.
|
50.
|
Performance of Inspections
|
50.1
|
The Licensee will carry out periodical inspections on the Cellular System and will submit the results of the inspection, at the Director’s request, within 30 days of the day of the request.
|
50.2
|
The Licensee will set up and operate a control system for continual monitoring of the performance and functionality of the network, and will perform, on an ongoing basis, regular inspections of the network or any part thereof, as necessary.
|
50.3
|
The Licensee will perform a regular inspection for quality of the service as detailed in Addendum E, including compliance with relevant ITU-T standards, and will submit the results of the inspection, at the Director’s request, within 30 days of the day of the request.
|
50.4
|
The Director may instruct the Licensee to perform a special inspection; The Licensee will perform such inspection in the format and at the time specified by the Director and will submit its results to him.
|
50.5
|
The Director or anyone so authorized by him will be allowed to carry out inspections himself, where he deems this to be necessary; The Licensee will permit the Director or anyone so authorized by him access to the installations and the equipment, subject to prior coordination, and will place at his disposal testing equipment used by it or professional manpower employed by it.
|
51.
|
Inspections, Malfunctions and Maintenance Log
|
51.1
|
The Licensee will manage an inspections, malfunctions and maintenance log (hereinafter – maintenance log), in which details of the malfunctions in and inspections of the network are recorded.
|
51.2
|
The Licensee will keep the maintenance log and enable the Director or a representative authorized by him to peruse it at any time, to examine it or copy it in any manner, and will submit it for inspection by the Director at his request.
|
52.
|
Repair of Deficiencies and Defects
|
52.1
|
The Director may, after giving the Licensee sufficient opportunity in the circumstances of the case to present its case to him, notify the Licensee in writing of deficiencies and defects he found that are affecting the level of the service to Subscribers, the level of survivability and backup of the network or the safety level or interfering with other lawfully operating systems, based on a follow-up of the network’s performance, including by means of Subscribers’ complaints or inspections carried out by him or on the basis of inspection reports, documents and information provided to him by the Licensee.
|
52.2
|
The Director may instruct the Licensee regarding the times by which it must correct the deficiencies and defects.
|
52.3
|
In the event the Licensee received such a notice, it will notify the Director, within the time set for this purpose in the Director's notice, of the correction of the deficiencies and defects, at the level of detail requested by the Director.
|
53.
|
Void.
|
54.
|
Void.
|
55.A43)
|
The Contract
|
55.1
|
The Licensee will prepare a wording for the contract that it intends to offer its subscribers, and will submit it for the Director’s perusal at his request.
|
55.2
|
The terms of the contract shall not contradict, explicitly or implicitly, the provisions of any law or the provisions of the license: The aforesaid shall not prevent the stipulation of various provisions in the contract that benefit the subscriber compared to the provisions of the law or the license.
|
55.3
|
The contract will be in writing and laid out in a clear manner conducive to reading and comprehension and specifying prominently any term or limitation on the subscriber’s right to cancel the contract or on the Licensee's liability toward the subscriber; Any stipulation in the contract shall be stated explicitly and not by way of reference.
|
|
For purposes of this section, “writing” – including an electronic document that can be saved and retrieved by the subscriber.
|
55.4
|
The contract will include, inter alia, in a clear manner, the following:
|
(a)A58
|
A first, separate, printed page, setting out the following details, in a clear and precise manner, without any handwritten additions or alterations (hereinafter – the Plan Summary Page):
|
|
In this section, "new Subscriber" means a Subscriber who entered into an agreement with the Licensee after September 13, 2011 (14 Ellul, 5771).A59
|
(7)
|
The Licensee will publish the form on its website, within seven (7) work days from September 13, 2011 (14 Ellul, 5771)A59.
|
(8)
|
Respecting subsection (a1)(1) to (6) – "Subscriber" - excluding a Pre-Paid Subscriber. Notwithstanding the above, the Licensee shall block services at the request of a Pre-Paid Subscriber, to the extent that it comes from a telephone number to which the request refers, or such Subscriber presented before it the end-equipment serving the telephone number forming the subject matter of the request, or in any other manner to the Licensee's satisfaction A59.
|
|
(a2)
|
Terms of the service to the subscriber, including quality measures for customer and subscriber service as detailed in section 2 in Addendum E;
|
|
(b)
|
Terms for disconnecting from the Licensee’s services or discontinuation of all service A58 terms;
|
|
(c)
|
Licensee’s rates for the services for which the subscriber registered, as of the day of the agreement, including the date and terms for termination of the rates program;
|
|
(d)
|
Limitation on the rate of arrears interest, linkage differences and collection expenses, as stated in section 80.3;
|
|
(e)
|
Condition for changing the rate for the service for which the subscriber registered, as stated in section 78.1;
|
|
(f)
|
The details set out in sections 61 and 61A regarding the public ombudsman and umpire.
|
|
(g)
|
Condition specifying that in case of a contradiction between the provisions relating to the rates and to the basket of services detailed in the contract, and the provisions of the license in this regard, the provisions of the license shall prevail;
|
|
(h)
|
Notice concerning the Director’s authority to instruct the Licensee to modify the contract, and a clarification that the subscriber’s engagement with the Licensee under the contract constitutes agreement to such modification.
|
55.5 A58
|
Where a contract is executed in the presence of the Licensee's representative and the subscriber, the Licensee will act as follows:
|
55.6
|
If the Licensee publishes on its website a tariff plan, including for purchases of cellular end-equipment, such publication will also contain the contract terms pertaining to that tariff plan, including the details appearing on the Plan Summary Page.
|
55A. A58
|
Remote Sales Transaction
|
55A.1
|
In a remote sales transaction, as this term is defined in section 14C of the Consumer Protection Law, 5741-1981 (hereinafter – remote sales transaction), the Licensee will act as follows:
|
|
The Contract Terms Document will be sent to the subscriber by regular post, or via email or fax if the subscriber gave his consent thereto. A copy of the Contract Terms Document must be kept available by the Licensee for presenting to the Director within five (5) work days from the day of executing the contract. If the Licensee sent the Contract Terms Document via email or fax, the sending confirmation must also be available for presenting to the Director within five (5) work days from when the document was sent as stated.
|
|
The notice will be sent to the subscriber by regular post, or via email or fax if the subscriber gave his consent thereto. If the Licensee sent the notice via email or fax, the sending confirmation must also be available for presenting to the Director within five (5) work days from when the notice was sent as stated.
|
56.A43)
|
Modification of Contract
|
56.1
|
The Director may instruct the Licensee to modify the contract, after giving the Licensee sufficient opportunity to present its case.
|
56.2
|
If the contract was amended pursuant to the Director’s instructions or pursuant to a decision of the Standard Contracts Court, in the event that the contract was submitted for its approval, the engagement between the Licensee and the subscriber will be in accordance with the amended contract, as from the date of the amendment.
|
56.3
|
The provisions of section 55 shall apply, mutatis mutandis, to an amendment of the wording of the contract by the Licensee.
|
56A.T47)
|
Period of Commitment under a Contract
|
56A.1
|
Where the Licensee entered with a subscriber who is not a business subscriber into a contract that includes a commitment, the period of the commitment may not exceed eighteen (18) months.
|
|
In this regard, "commitment," – the subscriber's commitment to comply with conditions relating to the scope of consumption of services, the amount of the payment or the payment terms, during a defined period, where noncompliance with such conditions during such period entails a payment, including the return of a benefit or an exit fee.
|
56A.2
|
Where the Licensee proposed to a subscriber who is not a business subscriber to enter into a contract that includes a commitment, the Licensee will present to such subscriber a proposal to enter into a contract that does not include a commitment, as a reasonable alternative to contracts that include a commitment. In this regard, a contract containing a "prepaid" plan will not be deemed a reasonable alternative to a plan that includes a commitment. The Licensee will publish on its website the contract that does not include a commitment, including the Plan Summary Page of such contract A58.
|
56A.3
|
If the Director finds that the Licensee has violated Section 56A.2, he may direct the Licensee to modify conditions in a contract that does not include a commitment, without thereby derogating from any other power established in the License or in any law. In this regard, the Director will consider, inter alia, the number of subscribers of the Licensee who are signed on contracts that do not include a commitment.
|
57. A43)
|
Void.
|
58. A43)
|
Void.
|
59.
|
Obligation of Connecting Applicants and Prohibition on Stipulation
|
59.1
|
If the Licensee has met the terms for operating a Cellular System as stated in Section 44.2, the Licensee will connect any applicant to the cellular network no later than the date set in the contract with the subscriber, unless the Director has authorized the Licensee not to connect the applicant, under circumstances he deems justified. A2)
|
59.2
|
The Licensee may not stipulate the connection of an applicant on unreasonable, discriminatory or unfair terms, and without derogating from the generality of the foregoing:
|
|
The Licensee may not require a subscriber to purchase end-user equipment from it or from its designee;
|
|
The Licensee may not require the subscriber to receive maintenance services from it for the end-user equipment in the subscriber's possession;
|
|
The Licensee may not stipulate or condition cellular services, service conditions or a rate on the purchase of cellular end-user equipment from it or from any other.
|
60.A16)
|
Obligation of Maintaining the Service
|
60.1
|
The Licensee will put at the disposal of its subscribers all the services detailed in the First Schedule, in accordance with the terms detailed in the schedule, and will maintain all its services all year round, around the clock, both in times of calm and in times of an emergency, subject to Section 48, in accordance with the technical requirements and service quality requirements, in a proper and regular fashion, and of a quality no lower than that indicated by the service quality indexes specified in the first schedule to the license and in Addendum E to the Second Schedule to the license. In the event of a contradiction between the First Schedule and Addendum E to the license's Second Schedule, the provisions of Addendum E to the Second Schedule will prevail.
|
60.2
|
Without derogating from that stated in Section 75.3, the Licensee will provide cellular services and a service package, as this term is defined in Section 73A, to every applicant, under equal and non-discriminatory terms and at a non-discriminatory rate.
|
60.3
|
If the Director has found that the service package is liable to harm competition or the consumers, he will notify the Licensee thereof, indicating the date by which the Licensee must stop offering its subscribers the service package.
|
60.4
|
If the Licensee provides any cellular service to any person or organization, for payment, the service must be available to any subscriber throughout the network coverage area, complying with the minimal requirements as regards service quality, without discrimination, within 24 months of the date of commencing provision of the service for payment.
|
60.5
|
The Director may, at the written request of the Licensee, allow the Licensee limitations on the provision of Section 60.4, after being convinced that there is a real difficulty in providing the service to anyone that requests it, and that the specific features of the service possess a unique and exceptional flavor justifying this.
|
(a)
|
A58 The Licensee may not provide, with or without consideration, any of its services not explicitly requested by the subscriber, except for a service given free of charge to all the subscribers, and it may not allow the provision of a service of a service provider not explicitly requested by the subscriber.
|
|
For purposes of this section, “service provider” – anyone providing a service through the network, for which payment is made by means of the telephone bill.
|
|
(b)
|
A58 An explicit request may be made in one of the following ways:
|
|
(1)
|
By a document signed by the subscriber and sent to the Licensee;
|
|
(2)
|
By an email message sent by the subscriber to the Licensee;
|
|
(3)
|
In a phone call between the subscriber and the Licensee's representative;
|
|
(4)
|
By an SMS message sent from the subscriber to the Licensee;
|
|
(c)
|
The Licensee will keep documentation on the subscriber's explicit request throughout the subscriber's commitment period, and where the subscriber is not in a commitment period, during the last eighteen (18) months at least, and also during a year after the date of sending the final bill to the subscriber, as stated in section 2.3(c)(2) in Appendix E.A61 The documentation must be kept available by the Licensee for presenting to the Director within five (5) work days from the day of the subscriber's explicit request.
|
|
In this regard – "documentation":
|
|
For purposes of subsection (b)(1) – a copy of the document;
|
|
For purposes of subsection (b)(2) – a printout of the email message;
|
|
For purposes of subsection (b)(3) – a recording of the phone call;
|
|
For purposes of subjection (b)(4) – a copy of the subscriber's telephone bill in which the details of the SMS sent by the subscriber appear in the "itemized list of calls."
|
|
For purposes of subsection (b)(5) – for purposes of subsection (b)(5) – a log printout from the Licensee's short message service center (SMSCa), detailing the fact of the sending of the two SMS messages from the Licensee to the subscriber during the service ordering process. If the service was ordered on the Licensee's website or on its cellular portal by means of a user code and password as stated in section 1.3 in Appendix F to the License – a log printout from the SMSC testifying to the execution of the service ordering process, and a log printout of the log-in of the user code and password by the subscriberA61.
|
|
A memorandum entered by the Licensee's representative in the Licensee's information systems does not constitute documentation.
|
60.7A63
|
Without derogating from that stated in section 26.3, the Licensee may not discontinue the provision of cellular services through a system that has become technologically obsolete, until after that stated in Appendix K-1 is fulfilled.
|
60.7 A58
|
The Licensee may not collect payment from a subscriber for a service, unless it has documentation on the subscriber's explicit request to receive the service.
|
60.8 A58
|
A subscriber who was debited for a service and notifies the Licensee that he did not request to receive the service, will be refunded the full amount collected from him as payment for the service, where the Licensee has no documentation on the subscriber's explicit request to receive the service. The subscriber's contestations and the refund will be handled in accordance with the provisions on "excess charges" in section 83A of the License.
|
61.1
|
The Licensee will appoint a person to handle complaints of the public (“the Ombudsman”), having the following responsibilities:
|
|
(a)
|
Clarifying subscribers’ complaints in connection with the Licensee’s services, including the complaint of someone applying to receive a service.
|
|
(b)
|
Clarifying subscribers’ complaints in connection with bills that were submitted by the Licensee, and deciding in regard thereto.
|
|
The Public Ombudsman will respond in writing to complaints as stated that were submitted in writing.
|
|
The Licensee will keep a copy of the complaint and of the written response that was sent to the subscriber. Said copies must be kept available by the Licensee for presenting to the Director within five (5) work days from the day of sending the response A58.
|
61.2
|
The Public Ombudsman will act according to a policy to be set by the Licensee’s management.
|
61.3
|
The Licensee will render the Public Ombudsman all the assistance required by him for filling his function.
|
61.4
|
The Licensee will notify every subscriber regarding the possibility of submitting a complaint to the Public Ombudsman, the powers of the Public Ombudsman and the ways of applying to him. The contents of this sub-section shall be included in the contract, in the bill sent to the subscriber and on the Licensee’s website.
|
61A.1
|
The contract will stipulate that any disagreements arising between the Licensee and a subscriber in connection with the interpretation or performance of the contract, shall be submitted for clarification to the Licensee’s Public Ombudsman.
|
61A.2
|
The contract will specify that an application to the Public Ombudsman under section 61A.1 shall not:
|
|
(a)
|
Prevent the subscriber a priori from bringing his case before a competent court;
|
|
(b)
|
Derogate from the Licensee’s authority to act in accordance with the provisions of section 72 regarding the discontinuation of all service A58 or disconnection of a service owing to a breach of the contract.
|
62.1
|
The Licensee is responsible for the maintenance of the Cellular System.
|
62.2
|
If a subscriber purchased cellular end-user equipment from the Licensee or from its designee, and the purchase agreement included maintenance services, the LicenseeA43) will be responsible for the maintenance of said purchased end-user equipment, however the LicenseeA43) will not be responsible for the maintenance of said purchased end-user equipment beyond the maintenance period undertaken by the manufacturer, unless agreed otherwise between it and the subscriber.A2)
|
|
If, in order to receive cellular services, the subscriber used cellular end-user equipment not purchased from the Licensee or from its designee, the Licensee is not obligated to look out for the maintenance of this end-user equipment, but may enter into an agreement with the subscriber for providing maintenance services also for said equipment.
|
63.A56
|
Call Center
|
63.1
|
The Licensee will operate a manned call center for receiving calls of its subscribers. The Licensee will also operate additional means that allow its subscribers to turn to it for information and inquiries, all as set forth in Appendix E to the License.
|
63.2
|
The call center will be manned by skilled and professional personnel, having the appropriate competence for handling calls, and if a complaint has been received regarding a malfunction that led to termination of all cellular services to a subscriber, said personnel will act immediately to localize the malfunction and start taking steps to immediately correct it.
|
63.3
|
The Licensee will specify in the maintenance log the details of the malfunction, as stated in section 63.2, and the steps taken to correct it, all as stated in section 51
|
64.
|
End-user equipment – Selling and Renting
|
|
The Licensee may sell or rent out to its subscribers cellular end-user equipment for the purpose of linkup to the Cellular System, provided it complies with the following:
|
|
The Licensee has notified the subscriber that he may purchase cellular end-user equipment from any licensed marketer and that he does not have to buy the equipment from the Licensee in order to receive cellular services;
|
|
The Licensee will not stipulate the provision of maintenance services for cellular end-user equipment on the very receipt of cellular services from the Licensee, and will notify the subscriber that he may receive maintenance service for end-user equipment, from any person, including the end-user equipment purchased or rented from the Licensee.
|
64A. T53
|
Grant of Benefit to Subscriber
|
64A.1 T53
|
The licensee shall not create any link between any benefit whatsoever for mobile radio-telephone services it granted to a subscriber, including any credit, discount, special tariff program, basket of services etc. (hereinafter referred to in this section as “Benefit”) and the fact that the mobile radio-telephone terminal equipment in the subscriber’s possession was purchased, hired or received from the licensee or any other marketer on its behalf. As part of this, the licensee shall offer an identical Benefit to that offered by it at the time the subscriber receives, purchases or hires from it a specific model of mobile radio-telephone terminal equipment for each subscriber using mobile radio-telephone terminal equipment with similar characteristics to the aforesaid model and which shall be granted to the subscriber in the course of a period of not less than the period in which a monetary credit was granted to the subscriber purchasing terminal equipment from the licensee, pursuant to the following rules:
|
|
(a)
|
To the extent that the model of the terminal equipment in the subscriber’s possession is identical to the model marketed by the licensee at the time the subscriber approaches the licensee, the licensee shall offer the subscriber an identical Benefit to that granted by it to any person purchasing from it the aforesaid model, in reliance on the confirmation of purchase presented to it by the subscriber;
|
|
(b)
|
To the extent that the model of the terminal equipment in the subscriber’s possession is not marketed by the licensee at the time the subscriber approaches the licensee, the licensee shall grant the subscriber a Benefit according to the terminal equipment classification determined in advance by the licensee and in reliance on the confirmation of purchase presented to it by the subscriber;
|
|
(c)
|
At the time of calculating the period in which the Benefit will be granted under subsections (a) or (b), the licensee may take into account the date on
|
|
|
which the terminal equipment was purchased by the subscriber, as appears in the confirmation of purchase.
|
64A.2 T53
|
The licensee shall present updated information on its website about the terminal equipment classification made by it.”
|
65.1A21)
|
The Licensee will enable, anytime and at no charge, for all its subscribers, free and rapid access to public emergency services such as: Magen David Adom, the Israel Police and the Fire Station.
|
65.2A42)
|
Starting from April 5, 2007 (“the inception day”) the Licensee will enable the call centers of the public emergency systems2 to identify the telephone number of a subscriber calling them3, anytime and at no charge, including a subscriber with a confidential telephone number, a subscriber who blocked his number before the call and a subscriber calling from a private exchange.
|
|
The Licensee may do the aforesaid through a licensee that routes the call to the public emergency system.
|
|
Not later than two days before the inception dayA44) the Licensee will notify all its subscribers, clearly, in writing, that starting from the inception day it will be possible for the call centers of the public emergency systems to identify the subscriber’s telephone number, and it will notify in writing any subscriber requesting a “confidential number” – that the number is not confidential with respect to calls to the call centers of the public emergency systems.
|
65.1A
|
Notwithstanding that stated in Section 65.1, the Licensee will block a nuisance subscriber's access to the public emergency service. If blockage of public emergency service alone is not technically possible, then the Licensee will block the nuisance subscriber's access to all the cellular services. As regards this section, a "nuisance subscriber" denotes a subscriber who has contacted a certain emergency center, for no justifiable reason, more than 10 times during one whole day, using the end-user equipment in his possession.
|
65.2A
|
A notice regarding a nuisance subscriber will be submitted in writing to the Licensee by a senior employee in the public emergency service (hereinafter – the employee) and will be
|
|
corroborated by an affidavit signed by the employee (hereinafter – the complaint). The complaint will include, inter alia, the name of the nuisance subscriber, his telephone number, insofar as these are known to the complainant, as well as a specification of the contact times of the nuisance subscriber, and the content of the call showing that the contact was made without any justifiable reason. If the complaint does not include the telephone number of the nuisance subscriber, the Licensee will act in a reasonable fashion, to identify the nuisance subscriber based on the data provided in the complaint.
|
65.3A
|
The Licensee will block the nuisance subscriber's access to the emergency service as stated in Section 65.1A, after giving the nuisance subscriber advance warning. The notice will be given 3 workdays before the date of service blockage, in one of the following ways:
|
A.
|
A phone call from a service center of the Licensee to the cellphone end-equipment of the subscriber;
|
B.
|
An SMS message sent to the cellphone end-equipment of the subscriber;
|
C.
|
Delivery of a registered letter to the subscriber, except for one who is a prepaid subscriber and his address is unknown.
|
65.4A
|
Blockage of service to a nuisance subscriber who is a prepaid subscriber whose address is unknown will be done no later than one full day from the time of receiving a complaint or identification as stated in Section 65.2A.
|
65.5A
|
Notwithstanding that stated in Section 65.1A, the Licensee will not block the public emergency service to a subscriber, if the circumstances of contacting, as these emerge from the explanation given by the subscriber to the Licensee, show that the contacting was justified and that he should not be deemed a nuisance subscriber. The Licensee will forward to the Director, within 10 workdays from the date of receiving the complaint or the identification as stated in Section 65.2A, the arguments for not blocking the nuisance subscriber.
|
65.6A
|
In the event it blocked the nuisance subscriber's access to emergency calls, the Licensee may collect from the subscriber all his debts, and may also collect payment from him for removing the block.
|
65.7A
|
The Licensee may remove the block once the nuisance subscriber has given it a written undertaking not to repeat his nuisance calls in the future.
|
65.8A
|
The Licensee will keep records of how the nuisance subscriber was identified, how the notice was given to the nuisance subscriber, or, alternatively, in a case where a notice was not given the nuisance subscriber, the reasoning for not giving the notice. Likewise, a record will be kept concerning the removal of the block.
|
65.9A
|
The Licensee will specify, in the framework of the nuisance subscribers report as stated in Section 104(B)A43), the number of nuisance subscribers whose access to the public emergency service or to all the cellular services was blocked under this section, and the subscribers for whom said block was removed, as well as the number of subscribers that were not blocked under this section and the reasons for this.
|
66.1
|
Without derogating from the provisions of the Law, The Wiretapping Law, 1979, The Privacy Protection Law, 1981, or any other law concerning the safeguarding of an individual's privacy, the Licensee may not wiretap the telephone or any other communication of the subscriber without the written permission of the subscriber, except for the purpose of controlling the quality and standard of the service or for preventing frauds.
|
66.2
|
Subject to that stated in Section 66A, the Licensee, its workers, agents and designees may not disclose lists or documents containing the name and address of a subscriber or any other information pertaining to him, including account details, phone call traffic, call durations and destinations, to any person whatsoever except to the subscriber or to anyone empowered by the subscriber for this purpose.
|
66.3
|
Notwithstanding that stated in Section 66.2, the Licensee may do the following:
|
(A)
|
To give the subscriber's details to another licensee for the purpose of collecting monies owed him by the subscriber in respect of services it provided him through the network, provided that the information relayed is necessary fro collecting monies and preparing bills, and the other licensee has undertaken to safeguard the subscribers' privacy;
|
(B)
|
To transfer a subscribers' details to another, insofar as the particulars are in its possession, by lawful authority.
|
(A)
|
The Licensee will provide special services to the security forces as detailed in the classified security addendum attached to the license as Addendum I and in the classified security addendum attached to the license as Addendum LA12).
|
|
(A1)A12) The Licensee will enable the security forces, regarding which the Director informed in writing, to realize, subject to any law, their powers with respect to any telecommunications activity in the framework of the license, and will be responsible for the maintenance, proper functioning, and technological adaptation of the equipment and infrastructure required for realizing said execution capability, all in coordination with the security forces, as detailed in Addenda I and L. The security forces will bear the payment under the provisions of Section 13 of the Law.
|
(B)
|
The Licensee will see to it that Addenda I and L are guarded A12) in accordance with the provisions of the procedure for safeguarding records to be laid down by the Licensee in conjunction with the security officer of the "General Security Service."
|
(C)
|
The Licensee will be exempt from the duty of indemnification toward the State, by virtue of the provisions of Section 91.2 of the general license and/or by virtue of any law, in respect of the very execution of the special services for the security forces.
|
(A)
|
The Licensee will appoint a security supervisor in accordance with the provisions of the Security Arrangement in Public Bodies Law, 1998, and rigorously follow the security provisions detailed in the Addendum M to the license.
|
(B)
|
The Licensee will establish appropriate provisions in the incorporation documents and in its regulations, and will act in such manner so that only a person who meets the conditions set out below will be appointed and serve in a position or function enumerated in Addendum M to the license:
|
|
(1)
|
An Israeli citizen, as this term is defined in the Citizenship Law, 1952, and a resident of Israel;
|
|
(2)
|
Was given security clearance by the General Security Service, by which there is no prevention to his serving as stated.
|
(C)
|
The Licensee will act to safeguard the secrecy of the security forces' operations, and act according to the security directives of those same security forces, including in the matter of the appropriate security classification for officers and holders of important functions working for the Licensee, and compartmentalization of knowledge pertaining to activities involving the security forces.
|
(D)
|
The Licensee will take the measures necessary to protect the network, its components and the databases used for providing services, and for operating and controlling the network in the face of activities carried out by unauthorized entities, according to the provisions detailed in Addendum M to the license.
|
67.1A16)
|
A bill that the Licensee submits to the subscriber should be clear, succinct, readable and understandable. The bill should contain an accurate breakdown of the components of the payment required according to the types of payments and the rules specified in Chapter F.
|
67.2
|
Void A58.
|
67.3
|
The Licensee may collect payments for his services from the subscriber through another, including through Bezeq.
|
67.4A34)
|
(A)
|
Without derogating from the rest of the license provisions pertaining to the manner of preparing the bill for the subscriber and to the manner of debiting, the Licensee will act in compliance with Israel Standard 5262, concerning debiting credibility and due disclosure in telephone bills (hereinafter – "the Standard").
|
|
(B)
|
Subsection (A) constitutes a "service condition," as concerns Section 37B(a)(1) of the Law.
|
|
(C)
|
Notwithstanding that stated in subsection (A) -
|
|
(1)
|
Regarding the provision in Section 2.2.2 of the Standard, the rounding off method will apply as follows:
|
|
(a)
|
An amount in the bill will be rounded off to the nearest amount ending in two digits after the decimal point of the shekel, with an amount ending in five tenths of an agora (three digits after the decimal point) to be rounded up.
|
|
(b)
|
An amount to be paid for a single call will be rounded off to the nearest amount ending in three digits after the decimal point of the shekel, with an amount ending in five hundredths of an agora (four digits after the decimal point) to be rounded up.
|
|
(2)
|
The Licensee may present any amount included in the bill with a breakdown exceeding that required by the provision in Section 2.2.2 of the Standard, provided the rounding off method stated in Subsection (C)(1) above will apply thereto.
|
|
(3)
|
The price of a phone call (voice) that includes a changing rate, will be presented in the bill submitted to the subscriber as an average price per minute, computed by dividing the payment amount for that same call by the its total number of minutes.
|
|
In this paragraph, "changing rate" denotes a rate that varies in the course of the call according to various criteria, such as a rate that diminishes with increasing consumption, or a rate that varies due to a transition from a "peak period" to a "slack period" in the course of the call or vice versa.
|
|
(4)
|
In addition to that stated in the provision of the last part of Section 2.2.4 of the Standard regarding service packages, the bill will contain a breakdown of the services included in the package, along with the overall rate paid for the package as a whole.
|
|
In this paragraph, "service package" denotes several services marketed to the subscriber as a single package, in return for an overall rate (and without a breakdown of the payment for each component separately).
|
|
(D)
|
(1)
|
Chapter B in the Standard concerning due disclosure in telephone bills will come into effect no later than Friday, October 14, 2005.
|
|
(2)
|
Chapter C in the Standard regarding debiting credibility will come into effect no later than Sunday, January 14, 2006.
|
67.5 T52
|
A bill submitted to a private subscriber shall also be drawn up according to the provisions of Appendix E 1 (hereinafter referred to in this section as the “Private Subscriber Billing Format”).
|
67A.5 A58
|
A bill submitted to a business subscriber will include the same details as in subsections 9b(1) to 9b(4) in Appendix E1 to the License.
|
|
In this section, 'business subscriber' – excluding the subscribers specified in subsections (b) and (d) of the definition of 'business subscriber' in section 1 of the License.
|
|
A business subscriber may request that the licensee furnish him with a telephone bill in Private Subscriber Billing Format (hereinafter referred to in this section as a “Request”). Where a subscriber has requested as aforesaid, the licensee shall begin to send him the bill according to the aforesaid format by no later than the expiration of two billing periods after the date of the Request. The licensee shall publish once every six months a notice in the telephone bill submitted to the business subscriber according to which the business subscriber may demand that the licensee draw up the telephone bill submitted to him according to the Private Subscriber Billing Format. A business subscriber may also request from the Licensee a written explanation regarding the method of calculating a 'onetime debit.' The Licensee will submit to the business subscriber such written explanation regarding a 'onetime debit' within thirty (30) days from when the subscriber submitted a request in the matter to the customer service center or to the public ombudsman A58.
|
|
The bill shall be sent to the address registered at the licensee or any other address delivered by the subscriber to the licensee or by any other means, if the subscriber has granted his express prior consent thereto; the licensee may demand any payment whatsoever for the issue and mailing of the bill to the subscriber. The licensee may demand reasonable payment for “Call Details” sent to the subscriber at his demand.”
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67.8 A58
|
If the payment specified in the telephone bill is made by standing order or credit card, the payment will not be executed before the expiry of eight (8)A59 days from the day on which the telephone bill was sent to the subscriber.
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67.1A
|
Without derogating from the provisions of Section 66, the Licensee will provide, by itself or through another on its behalf, an information service for clarifying the telephone number of anyone who is a subscriber of a NDO or of a Cellular System operator, excluding an ID-restricted subscriber (hereinafter – "information service"), as follows:
|
(A)
|
For the general public and at no charge, via a website through which the service will be provided;
|
(B)
|
For its subscribers, at a reasonable price, via a phone center, the access to which will be effected by means of a network access code set by the Director;
|
(C)
|
The information service will be given through each of the aforesaid means based on the same information characteristics to be provided by the subscriber applying to receive the service.
|
67.2A
|
Without derogating from that stated in Section 67.1A, the Licensee will provide to the general public and at no charge, by itself or through another, an information service for clarifying the telephone number of any subscriber, excluding an ID-restricted subscriber, via a phone center, the access to which will be effected by means of a national access code set by the Director.
|
67.3A
|
In addition to that stated in Sections 67.1A and 67.2A, the Licensee may offer, at a reasonable price, by itself or through another on its behalf, an information service, by any other means, including by means of a national access code or by means of an SMS.
|
67.4A
|
In order to execute that stated in Subsections 67.1A and 67.3A:
|
|
(A)
|
The Licensee may send a query on its behalf to any database of a NDO or cellular system operator (hereinafter – "another licensee"), or to receive information from the database of another licensee by any other method and with the consent of the other licensee, all subject to the duty of safeguarding the subscriber's privacy;
|
|
(B)
|
In order for an information service to be provided by another licensee under its general license, the Licensee will enable any other licensee access to the Licensee's database;
|
|
(C)
|
The Licensee will update the database on a regular basis, so that each name, address or telephone number of a subscriber that was added, altered or removed, will be updated in the database within one workday following execution of the update in the Licensee's system being used to provide telephony services.
|
|
As regards this section –
"Database" denotes a collection of data including the name, address and telephone number of any subscriber that is not ID-restricted, including a subscriber that is a business. |
67.5A
|
(A)
|
The Licensee will request the consent of each new subscriber for including his details in the database. If the subscriber gives his consent, the Licensee will include his details in the database.
|
|
(B)
|
The Licensee will grant the first request of any subscriber who wishes to remain ID-restricted, free of charge.
|
|
In this subsection, a "new subscriber" denotes a subscriber who has signed a contract with the Licensee after the commencement date as stated in Section 67.7A.
|
67.6A
|
(A)
|
The terms for providing an information service for clarifying telephone numbers, given under Section 67A, will be established by the Licensee, provided they are fair and non-discriminatory, including as regards the order of the data presented to the user of the service. The service will be given twenty four (24) hours a day, all year round, except for Yom Kippur. In this subsection, "order of the data presented" –
|
|
(B)
|
The response in respect of the information service for clarifying telephone numbers as stated in Section 67.2A will be given within a reasonable time. If the Director sees that the waiting times for the service are not reasonable, he may establish response time indexes.
|
|
(C)
|
An information service for clarifying telephone numbers as stated in Section 67.1A(B) and an information service using a phone center, the access to which is effected by means of a national access code as stated in Section 67.3A, will comply with the service indexes specified below:
|
|
(1)
|
At any time, in the event of a heavy service call load6, the number of inquirers receiving service should not be less than 90%;
|
|
(2)
|
The average waiting period of a caller until the start of receiving service7 should not exceed 30 seconds;
|
|
(3)
|
The maximum waiting period for a caller until the start of receiving the service should not exceed 60 seconds.
|
67.7A
|
Section 67A will go into effect on February 8, 2007, except for Subsection 67.1A(a), which will go into effect on March 15, 2007 (“the commencement date”), and except for Section 67.2AA45), which will go into effect at the time of signing this amendment.
|
67.8A
|
The Licensee, by itself or through another, including together with another licensee, will advertise all the information services for clarifying telephone numbers given free of charge by the Licensee, as well as the national access codes allocated to the cellular service licensees for providing the service ("free information services"). The advertising should include at least the following:
|
|
(A)
|
The Licensee's website;
|
|
(B)
|
At least once every half year, the Licensee will attach, in the framework of the bill submitted to the subscriber, a separate information sheetA43) regarding the free information services, which will not include any other information, starting from the first bill submitted to the subscriber following the commencement date.
|
|
(C)
|
At least four (4) times during the first year following the commencement date, the Licensee will run large, prominent ads in at least the 3 largest Hebrew language newspapers, and in the largest newspaper in Arabic, in English and in Russian, as well as in the largest economic newspaper. These ads will include no other information. The first ad in all the aforesaid newspapers, except for the economic newspaper, will be on the first Friday after the commencement date or on the following one, and in the economic newspaper it will run on the first Tuesday after the commencement date or on the following one, regarding the free information services.
|
67C.1
|
If the Licensee wishes to operate a service included in the list of services in the First Schedule and marked “future”, it must notify the Director of this in writing not later than thirty (30) days before the date on which it plans to begin providing the service.
|
67C.2
|
If the Licensee wishes to operate a service not included in the list of services in the First Schedule which it intends to provide to any recipient of its services, it must notify the Director of this in writing not later than thirty (30) days before the intended date for commencement of provision of the new service.
|
67C.3
|
The Director will notify the Licensee within thirty (30) days of the date of receipt of the Licensee’s notice as stated in sections 67C.1 and 67C.2, whether it is allowed to commence provision of the service or whether it must submit a service dossier for the Director’s approval, as a condition for commencement of the service.
|
67C.4
|
The Licensee will submit a service dossier for the Director’s approval, at his request; If the Licensee fails to submit a service dossier as instructed by the Director, or if the Director does not approve the service dossier, the Licensee shall not commence provision of the service.
|
67C.5
|
The Director will give a decision regarding the service dossier that was submitted to him within sixty (60) days from when the Licensee has submitted to the Director all the documents and information requested by him for the purpose of approving the service dossier. In special cases, the Director may extend the times set in this section, by a written, explanatory notice to be given to the Licensee.
|
67C.6
|
The Director may require the Licensee to submit for his approval a service dossier for an existing service regarding which no service dossier was previously required, and he may require the Licensee to submit for his approval a new service dossier for a service regarding which a service dossier was approved in the past.
|
67C.7
|
The service dossier will be submitted to the Director in the format and at the time specified by the Director and will include, inter alia, the following: the name of the service; a detailed description of the service and the manner in which it is provided; the service rate, and an engineering description, all as set out in the First Schedule; The Director may give instructions on additional matters which are to be included in the service dossier.
|
67C.8
|
If the service dossier is approved, the Licensee will provide the service according to the terms of the approved dossier, and the approved service dossier will be deemed an integral part of the license.
|
67C.9
|
The Licensee will advertise an approved service dossier, with details and in the manner specified by the Director, and the Director may advertise it himself, provided he does not
|
|
do so until after the Licensee has begun providing the service. The advertising will not include information comprising a trade secret, which was identified as such by the Licensee and attached to the service dossier as a separate addendum marked as a trade secret.
|
67C.10
|
Any new service which the Licensee begins to provide pursuant to this section will be deemed a part of the First Schedule; The Director will update the First Schedule from time to time.
|
67C.11
|
The provisions of this section will apply, mutatis mutandis, to a trial using the Licensee’s network.
|
|
An erotic service provided through the network, will be provided in accordance with the provisions of Addendum O in the Second Schedule.
|
|
As regards this section –
|
|
"Erotic service" – as defined in Section 1 of Addendum O in the Second Schedule.
|
67E.T60) Domestic Roaming
|
67E.1
|
The Licensee provide by means of its network to a roaming licensee a domestic roaming service for the subscribers of the roaming to the network of the host operator, as set forth below.
|
67E.2
|
Licensee's preparations
|
|
(a)
|
The provisions of Appendix C, in the Second Schedule.
|
|
(b)
|
The provisions of the Law and the License concerning provision of the possibility of utilization of its network, and specifically sections 30 to 30C of the License, mutatis mutandis.
|
67E.3
|
Operating arrangement
|
|
(a)
|
If a roaming licensee notifies the Licensee, after notifying the Minister of its failure to reach agreement with any existing licensees on the conditions for the provision of roaming services as stated in section 5B(b)(1) of the Law, that it has chosen the Licensee for the receipt of domestic roaming services (in this subsection "notice"), the Licensee and the roaming operator shall forward to the Director the engineering and operating details agreed between them with respect to the implementation of domestic roaming ("operating arrangement"), within three months from the date of sending of the notice. In
|
|
(b)
|
Matters in disagreement as stated in paragraph (a) above, should there be any, shall be decided by the Director. The Director's instructions in this regard shall form an integral part of the operating arrangement.
|
67E.4
|
Starting date for implementation of domestic roaming
|
|
A host licensee shall begin providing domestic roaming services in accordance with the operating arrangement no later than three months after the date on which the roaming licensee presented to the host licensee the Minister's approval as stated in section 5B(b)(2) of the Law.
|
|
In this part –
|
|
'Disconnection of service' – Temporary discontinuation of cellular system service to a subscriber;
|
|
'Termination of all service' – Full termination of all the Licensee's services to the subscriber A58;
|
|
'Termination of a service' – Full termination of one of the Licensee's services to the subscriber A58.
|
|
The Licensee may not terminate or disconnect cellular system services and other services, which the Licensee must provide under this license, unless that stated in this part is fulfilled, or that stated in Section 48.
|
70.1
|
A subscriber may ask the Licensee for a temporary disconnection of service for a period no less than thirty days and no longer than ninety days (hereinafter – disconnection period). The subscriber's request will be made in writing, and may be done through the cellular system end-user equipment in his possession, provided that the Licensee has verified the request's credibility by a return call to the subscriber's cellular system end-user equipment or by any other reliable way.
|
70.2
|
The Licensee will effect the disconnection of service no later than the workday following the day of the request's submittal.
|
70.3
|
The Licensee will resume the cellular system services to the cellular system end-user equipment in the subscriber's possession at the end of the disconnection period. If the subscriber requests, in a written notice, to resume the cellular system services to the cellular system end-user equipment in his possession before the end of the disconnection period, the Licensee will resume the services no later than the workday following the day on which the subscriber's notice was submitted.
|
71.
|
Discontinuation of Service at a Subscriber's Request
|
71.1
|
A subscriber may request the Licensee to discontinue service or discontinue all service A58 to the cellular end-user equipment in his possession. For this purpose,
|
71.2
|
The Licensee will discontinue a service or discontinue all service not later than the work day after the date specified by the subscriber in his notice. If the subscriber did not specify a date, the service or all service will be discontinued not later than the work day after the date of delivery of the notice to the Licensee A58.
|
71.3T48)
|
The Licensee will publish on its website, and in the bill sent by it to the subscriber, the fax number and the email address through which the subscriber may request the Licensee to discontinue a service.
|
|
(A)
|
The subscriber did not pay for the third time during the same year the bill in respect of the payments he was charged for cellular system services on the date set therefor in the payment notice. In this section, "year" denotes the period from January 1 to December 31;
|
|
(B)
|
There is reasonable suspicion of a fraudulent act being committed through the subscriber's end-user equipment or using the features of the end-user equipment;
|
|
(C)
|
the Licensee found that the subscriber used the cellular system services in an unusual amount for that type of subscriber, and after the Licensee's service center contacted the subscriber in a phone call placed to the end-user equipment in his possession, and the subscriber did not give a reasonable explanation for said anomaly. As regards this paragraph, consumption will not be deemed unusual when less than threefold the average consumption for the same type of subscribers.
|
71.4 A58
|
The Licensee will send the subscriber a written notice concerning the discontinuation of a service or the discontinuation of all service, within one work day after the discontinuation was effected. The notice will contain, inter alia, the date of effecting of the discontinuation, and in a notice of discontinuation of all service also the last date for sending the final bill, as stated in subsection 2.3(c)(2) in Appendix E to the License (hereinafter – the final bill). Such notice will be sent by regular post, or via email or fax if the subscriber gave his consent thereto. Where the subscriber submitted a request to discontinue a service or to discontinue all service at a service station of the Licensee, the Licensee's representative will give him the aforesaid written notice at the time of the submission of the request.
|
|
A copy of said notice must be kept available by the Licensee for presenting to the Director within five (5) work days from when it was sent. If the Licensee sent the notice via email or fax, the sending confirmation must also be available for presenting to the Director within five (5) work days from when the notice was sent.
|
71.5 A58
|
Following the collection of the amount for payment as specified in the final bill, the Licensee will not be entitled to collect any payment via the payment means provided to it by the subscriber, without the subscriber's express prior written consent, except for the collection of payment for end-equipment that was purchased by the subscriber from the Licensee on installments, as stated in section 2.3(c)(2) in Appendix E to the License. A copy of the subscriber's said consent must be kept available by the Licensee for presenting to the Director within five (5) work days from when it was delivered to the Licensee.
|
71A.T48)
|
Blocking of Cellular End-User Equipment
|
71A.1
|
The Licensee will register the identification number of a subscriber's cellular end-user equipment, excluding cellular end-user equipment operating by the IDEN technology (hereinafter in this section "cellular end-user equipment"):
|
|
(a)
|
On the date of delivery of the cellular end-user equipment to the subscriber, on the date of contracting with the subscriber or on the date of renewal of the contract, including on the date of replacement, upgrading or repair of the cellular end-user equipment.
|
|
(b)
|
In the case of cellular end-user equipment that was not provided to the subscriber by the Licensee, the Licensee will make reasonable efforts to bring to the subscriber's attention the possibility available to him of registering with the Licensee the identification number of such aforesaid cellular end-user equipment.
|
|
(c)
|
At the subscriber's request from the Licensee; the subscriber's request may be via the telephone, after the Licensee has verified the reliability of the request.
|
71A.2
|
If a subscriber notifies the Licensee that his end-user equipment has been stolen or lost, the Licensee will block the end-user equipment of a subscriber who was registered as stated in Section 71A.1, free of charge, not later than thirty (30) days after it has verified the reliability of the subscriber's request. For purposes of this section, "blocking" – elimination of the possibility that the cellular end-user equipment will receive cellular services.
|
71A.3
|
The Licensee will provide details of end-user equipment that was blocked by it to any other cellular licensee, not later than the workday after implementing that stated in Section 71A.2.
|
71A.4
|
(a)T50)
|
The Licensee may not provide cellular services to end-user equipment that was blocked by it or by another cellular licensee.
|
|
(b)T50)
|
Notwithstanding that stated in Section 71A.2 and Subsection (a), if it is found that blocking the identification number will cause the discontinuation of service to other end-user equipment having the same identification number, the Licensee may abstain from implementing the block as stated.
|
71A.5
|
The Licensee will remove the block on end-user equipment that was blocked by it, after receiving a request T50) from the subscriber. Removal of the block will be done not later than one workday after the Licensee has verified the reliability of the request, unless the subscriber has specified a later date in his request T50).
|
71A.6
|
The Licensee will publish to all its subscribers its obligations with respect to the possibility of blocking cellular end-user equipment, the procedure for registration of the identification number of cellular end-user equipment with the Licensee and the ways of communicating with it for the purpose of implementing the block. The publication will be made in at least the following ways:
|
|
(a)
|
In the contract;
|
|
(b)
|
On the Licensee's website;
|
|
(c)
|
In a separate information sheet to be enclosed with the bill submitted to the subscriber, by January 30, 2009T50).
|
71A.7T50)
|
The Licensee will detail, in a half yearly report, the number of identification numbers that were blocked and the number of identification numbers in respect of which such block was removed, as well as the number of identification numbers that were not blocked pursuant to this section and the reasons therefor.
|
72.1
|
The LicenseeA16) may terminate or disconnect the service to a subscriber if one of the following is fulfilled:
|
|
(A)
|
The subscriber did not pay a payment he owes in respect of service he received, on the date set for its defrayal in his contract with the Licensee;
|
|
(B)
|
The subscriber breached a condition in the contract between him and the Licensee, which was established as a material condition;
|
|
(C)
|
The subscriber used unlawfully or allowed another to use as aforesaid the end-user equipment in his possession.
|
72.2
|
Service to a subscriber will not be terminated or disconnected in the cases detailed in Section 72.1(A) and (B), except after the Licensee gives the subscriber a notice in writing at least 10 days prior to the expected termination or disconnection date. The notice will state that the subscriber is being given an opportunity, within the time set in the notice, to rectify the act or default, in respect of which the service will be terminated or disconnected.
|
72.3T2)
|
Notwithstanding that stated in Section 72.2, the Licensee may disconnect service to a subscriber without prior notice, if one of the following is fulfilled:
|
|
(a)
|
The subscriber did not pay, for the third time during the same year, the bill in respect of the payments he was charged for cellular services, on the date set therefor in the payment notice. In this paragraph, "year" – the period from January 1 to December 31;
|
|
(b)
|
There is a reasonable suspicion of a fraudulent act being committed through the subscriber's end-user equipment or using the features of the end-user equipment;
|
|
(c)
|
The Licensee found that the subscriber used the cellular services in an unusual amount for that type of subscriber, and after the Licensee's service center contacted the subscriber in a phone call placed to the end-user equipment
|
72A.4T2)
|
The Licensee may disconnect service to a subscriber if it has found that the end-user equipment in the subscriber's possession, through which the subscriber receives cellular services, causes interference with the provision of cellular services to other subscribers or interference with the cellular system activity, provided that the Licensee gave the subscriber notice in writing at least 21 days prior to the expected disconnection date. The notice will specify the reason for the expected disconnection and state that the subscriber is being given an
|
72A.T48)
|
Discontinuation of Service to a Dormant Subscriber
|
72A.1
|
If the Licensee wishes to discontinue service to a dormant subscriber, it must give the dormant subscriber prior notice of such intention, in the manner set out below (hereinafter in this section "the notice"). The time of discontinuation of the service may not be less than thirty (30) days after the date of sending of the notice.
|
72A.2
|
The Licensee will specify in the notice the telephone number in respect of which it intends to discontinue the service.
|
72A.3
|
The sending of a notice to a dormant subscriber will be done:
|
|
(a)
|
With respect to a subscriber whose name and address are known to the Licensee, in each of the following ways:
|
|
(1)
|
By a letter via regular post;
|
|
(2)
|
By two SMS messages to be sent to the dormant subscriber at a difference of at least two weeks between the messages.
|
|
(b)
|
With respect to a subscriber whose name and address are not known to the Licensee – by four SMS messages to be sent at a difference of at least one week between the messages.
|
|
(c)
|
Notwithstanding that stated in Subsections (a)(2) and (b), if the subscriber's end-user equipment does not support the receipt of SMS messages, the Licensee will send the subscriber voice messages instead of SMS messages, insofar as the subscriber's end-user equipment supports the receipt of voice messages.
|
72A.4
|
The Licensee may not discontinue service to a dormant subscriber to whom a notice was sent, where the dormant subscriber has notified the Licensee that he does not wish the service to be discontinued. The subscriber may deliver such a message via the telephone or in writing, including by fax or by email.
|
|
Notwithstanding the aforesaid, the Licensee may discontinue service to a dormant subscriber who has notified it that he does not wish the service to be discontinued, after the subscriber was sent at least two notices, as stated in Section 72A.3 and 72A.5, and where in the second notice the Licensee has notified the subscriber that if within one year from the date of the second notice the subscriber does not make use of the cellular service, the subscription to the service will be discontinued, without delivery of further notice to the subscriber.
|
72A.5
|
The Licensee may not send the subscriber further notice concerning its wish to discontinue the service after one year has passed from the date on which the subscriber was sent the previous notice in that regard.
|
72A.6
|
The Licensee will keep the telephone number of a dormant subscriber to whom service was discontinued, during at least three months from the date of discontinuation of the service, before the number is returned to the pool of telephone numbers of the Licensee itself or to another cellular licensee who originally allocated the number to the dormant subscriber. If during this period a written request is received from the subscriber to renew the service, the Licensee will renew the service upon the same terms as those that applied prior to the discontinuation of the service, free of charge.
|
72A.7
|
Where service was discontinued to a dormant prepaid subscriber who has a balance of the payment remaining to his credit, the Licensee will refund the appropriate balance within 30 days after receiving a written request from the subscriber who has proven that he is the owner of the line to which the service was discontinued, provided such request is received by the Licensee not later than six months after the date of discontinuation of the service.
|
73.1
|
The Licensee may temporarily disconnect or restrict services that it is obligated to provide (hereinafter – disconnection due to maintenance), if the need to carry out vital cellular system maintenance or setup operations necessitates this, provided the following are fulfilled:
|
|
(A)
|
The duration of the disconnection due to maintenance does not exceed twelve (12) consecutive hours;
|
|
(B)
|
The number of disconnections due to maintenance does not exceed two (2) during a single year;
|
|
(C)
|
Void.A2)
|
73.2
|
The Director may ask the Licensee for a detailed explanation regarding the circumstances necessitating disconnection due to maintenance, and may ask the Licensee to postpone said disconnection if he came to the realization, after considering the Licensee's contentions, that a vital public interest necessitates such a postponement.
|
73.3
|
If due to the need to carry out vital maintenance or setup operations in the cellular system requires disconnection of service exceeding 12 hours, the Licensee will ask in advance for the Director's approval. The request will specify the maintenance operations required and the actions taken by the Licensee to speed up these operations and reduce, inasmuch as possible, the duration of the service disconnection.
|
73.4
|
Void. A2)
|
73.5
|
If disconnection or restriction of service is required urgently for the purpose of carrying out immediate, vital operations, the Licensee will notify the Director forthwith, including by phone, cable or fax, regarding the urgent disconnection or restriction. The Licensee will notify its subscribers about the aforesaid urgent disconnection or restriction, as early as possible, including via the public address system operating through the cellular system, insofar as this is possible, as well as through the public media.
|
73.6
|
Notwithstanding that stated in Sections 73.1 and 73.4, the Licensee does not have to notify the Director or the subscribers about disconnection due to maintenance, when the following are fulfilled:
|
|
(A)
|
The duration of the disconnection due to maintenance does not exceed half an hour;
|
|
(B)
|
Disconnection due to maintenance is being done between 24:00 Saturday night and 05:00 Sunday morning the following day.
|
“Licensee”
|
-
|
Anyone to whom the Minister has granted, in accordance with the Law, a general or special license;
|
|
“Airtime”
|
-
|
Duration of the time in which a subscriber receives cellular services, whether the connection is initiated by the subscriber or by someone else;
|
|
“Airtime unit”A31A31)
|
-
|
Time unit of 12 seconds at the most, but starting from Thursday, 1 January 2009, a time unit of 1 second.
|
|
“Package of services”
|
-
|
Several services sold to a subscriber as a package, for which a rate has been set as specified in section 75.2.
|
|
“Public telecommunications network”
|
-
|
Including an international telecommunications system.
|
|
|
|||
“Payment for completion of a call”
|
-
|
Payment made by the initiator of a call which began on end-user equipment connected to one public telecommunications network and ended on another public telecommunications network, or on end-user equipment connected to such a public telecommunications network, for completing the call on the other public telecommunications network.
|
74.1 A57
|
The Licensee may collect from its subscribers payments for Cellular services, as follows:
|
|
(a)
|
A onetime installation fee for connecting mobile or portable end-user equipment held by the subscriber to the Cellular system, including issuance of a smart (SIM) card to the subscriber, or a onetime registration fee (hereinafter – connection fee);
|
|
(b)
|
A fixed monthly A57 payment;
|
|
(c)
|
Payment for airtime as specified in section 75A;
|
|
(d)
|
Payment for completion of a call as specified in section 75A;
|
|
(e)
|
Payment for basic telephone services, related services and value added services, detailed in the First Schedule to the License;
|
74.2A57
|
The Licensee may not collect from a subscriber:
|
(c) A58
|
Any payment prior to the actual supply of the service, excluding a 'prepaid service.'
|
75.1
|
The Licensee shall fix a rate for every service and package of services provided by it to its subscribers, and it may determine the manner of linkage of the rate to the index. The Licensee shall notify the Director of the amount of each rate, before the rate comes into effect.
|
75.2
|
The Licensee may designate packages of services according to types of services included in the package or time periods or by any other method. The Licensee may set a separate rate for each of the services included in the package or set a general rate for the package.
|
75.3
|
The Licensee shall offer each package of services at equal terms and at a uniform rate according to categories of subscribers; For purposes of this section, “category of subscribers” – A16)a group of subscribers whose attributes provide reasonable justification for distinguishing it from another group.
|
75.4
|
The Licensee shall allow any subscriber, without discrimination, to switch from one package of services to another that is being offered by it at the time. The Licensee shall include such a provision in the contract with its subscribers. In the framework of this provision it may set times when it is permissible to make such a switch and it may set conditions, including payment terms, for implementing the switch.
|
75.5T49)
|
If the Licensee contracts with the subscriber in regard to a certain service or package of services, and the contract includes a commitment as defined in Section 56A.1 ("commitment period"), the following provisions will apply, with the exception of a business subscriber:
|
|
(a)
|
The terms of the contract, excluding the contract rates, will be final, known and fixed in advance for the entire commitment period.
|
|
(b)
|
The rate for each service will be fixed on the date of the contract and will be uniform and specified in shekels for the entire commitment period.
|
|
For purposes of this section, "uniform" – any rate before VAT which the subscriber is required to pay, as determined on the date of the contract, may not be increased during the commitment period.
|
|
Notwithstanding the aforesaid, the Licensee may provide its subscriber services at lower rates than those fixed in advance in the contract, during a limited time period, to all the subscribers or to a certain type of subscriber.
|
|
(c)
|
The Licensee will include provisions as stated above in the contract with the subscriber.
|
75.6
|
The Licensee may not condition a contract with a subscriber or a subscriber’s switch from one package of service to another on the purchase of value added services or end-user equipment from the Licensee.
|
75.7
|
A package of services in which a payment in installments is set for end-user equipment or for one of the services, shall include also a payment arrangement in the event that the subscriber wishes to be released from that package or to switch from that package to another package of services, according to the outstanding balance of the payments due from the subscriber or according to the remainder of the commitment period.
|
75.8
|
(a)
|
The Licensee may not collect from a subscriber payment for a call when the call was not initiated by the subscriber (hereinafter – uninitiated call).
|
|
(b)
|
Notwithstanding that stated in subsection (a), the Licensee may collect from a subscriber payment for an uninitiated call in the following cases:
|
|
(1)
|
Call transferred to the subscriber by means of a roaming service;
|
|
(2)
|
Collect call to which the subscriber has given his agreement;
|
|
(3)
|
A call created by dialing a special prefix for a toll-free service that was allocated to the subscriber under an agreement with himA55;
|
|
(4)
|
VoidA51
|
|
(c)
|
The licensee may collect from a subscriber initiating a call by dialing the following services or access codes, payment not exceeding the tariff collected by the licensee from a subscriber for a call whose destination is on a domestic operator network: A51
|
|
(2) Short number service for businesses2;
|
|
(d)
|
For a call to an international destination, the Licensee may receive only the payment imposed on the international operator, as determined in the Interconnection Regulations." A54
|
75.9A18) Inception
|
|
Void A55
|
75.10
|
The payment for airtime will be determined in the manner set out below:
|
|
(a)
|
The payment for airtime will be determined according to an airtime unitA31); For the purpose of calculating the payment, a part of an airtime unit shall be deemed the same as a whole airtime unit.
|
|
(b)
|
The payment for each airtime unit, at least during the first minute of contact, will be fixed.A57
|
|
(c)
|
The duration of the call for payment purposes is from the moment the connection is established between the subscriber who initiated the connection (hereinafter – the calling subscriber) and the subscriber receiving the call, until the moment when the call is terminated, which is the moment when an instruction to terminate the connection is received from the calling subscriber or from the subscriber receiving the call; The duration of the connection setup time, until the moment the connection is established, and the duration of the disconnection time, from the moment the instruction to terminate the connection is received until it is actually implemented, is not included in the count of the duration of the call.
|
|
In this regard, subscriber receiving the call – including a voice mailbox.
|
|
“Voice mailbox” – an installation or device forming part of the cellular system, designed to enable the calling subscriber to leave a voice message for the called subscriberA40).
|
|
(d)
|
A40) Regarding a call that is transferred to a voice mailbox, the Licensee shall play to the calling subscriber an introductory voice message, lasting at least 2 seconds (in this subsection – “message”), and will enable the calling subscriber, at his option, to disconnect the call without any debit, in the course of the message, or within a reasonable time being not less than one second after the end of the message (“reasonable time”). In such case, the moment of establishing the connection with the subscriber receiving the call, within the meaning of subsection (c) above, will be deemed to occur at the end of the reasonable time.
|
|
The wording of the message will be: “The call is being transferred to a voice mailbox,” and it will be articulated clearly and at a reasonable speed. In this subsection, “call transferred to a voice mailbox” – excluding a call originating in an international telecommunications system.
|
75A.
|
A25)Completion of a Call in Another Public Telecommunications Network
|
|
The payment for completion of a call to be collected by the Licensee shall not exceed the interconnection rate specified in the Telecommunications Regulations (Payments for Interconnection), 2000.
|
|
The Licensee may collect from a subscriber for the transfer of an SMS which is being transferred from end-user equipment that is connected to the network to end-user equipment that is connected to a cellular system of another cellular licensee, a payment not exceeding the payment which the Licensee collects from the subscriber for the transfer of an SMS which is transferred from end-user equipment that is connected to the network to end-user equipment that is connected to the network, plus a payment not exceeding the rate for the transfer of an SMS specified in the Communications Regulations (Telecommunications and Transmissions) (Payments for Interconnection), 2000.
|
|
For purposes of this section –
|
|
“SMS” – telecommunications messages comprised of writing, including signs or symbols, transferred from end-user equipment that is connected to the network, to end-user equipment that is connected to the network or to a cellular system of another cellular licensee.
|
|
Notwithstanding that stated in section 75B, for the period beginning May 9, 2004 and ending February 9, 2005A29), the following provisions shall apply:
|
|
(a)
|
The Licensee may collect from a subscriber for the transfer of an SMS which is destined for end-user equipment that is connected to a cellular system of another cellular licensee (hereinafter – “inter-network SMS”) a payment not exceeding the payment which the Licensee collects from the subscriber for the transfer of an SMS which is transferred from end-user equipment that is connected to the network to end-user equipment that is connected to the network, plus a payment not exceeding the rate for the transfer of an SMS specified in the Communications Regulations (Telecommunications and Transmissions) (Payments for Interconnection), 2000, less a rate of 0.7%8;
|
|
(b)
|
The Licensee may collect from a subscriber payment for an inter-network SMS as stated in subsection (a), even if its transfer to the called subscriber was not completed.
|
75D.1
|
The Licensee will send an SMS message to a subscriber who has utilized 75% and 95% of a surfing package. The SMS message will be sent to the subscriber's telephone number and to the additional telephone number indicated by the subscriber when executing the contract, as soon as possible after the time of such utilization, and will contain at least the following: percentage of utilization of the package, time of calculation of the utilization (date and hour), and the telephone number to which the SMS message relates. In this regard, "surfing package" means the number of units of a cell phone Internet surfing service in Israel (hereinafter – surfing service) that are supplied to the subscriber at a fixed rate regardless of the actual scope of use.
|
|
This section will apply only when the rate of a surfing service unit, after full utilization of all the surfing service units included in the surfing package, is more than 1.25 times the rate of a surfing service unit in the framework of the surfing package.
|
76.1
|
The Licensee shall provide to anyone so requesting, at the service offices and at the call centers, free of charge, full and detailed information concerning the up-to-date rates for all its services, including the payment for completion of a call; The Director may instruct the Licensee concerning the manner and format of publication of the rates.
|
76.2
|
The Licensee shall indicate in every account sent to a subscriber the package of services according to which the subscriber is being debited.
|
76.3
|
The Director may request to receive from the Licensee at any time details of the rates charged by it.
|
77A.1
|
The Licensee shall take suitable and reasonable steps to prevent fraud and shall maintain a control and follow-up system for verifying, to the extent possible, that the calls for which the subscriber is being debited were actually made from end-user equipment connected to the Licensee’s cellular system in the subscriber’s name.
|
77A.2
|
The Licensee shall disconnect the service to the subscriber’s end-user equipment after receiving at the service offices the subscriber’s notification that the end-user equipment was lost or stolen, or that there is a possibility that someone else is making calls through the end-user equipment without having received permission to do so; The subscriber may give such a notification by telephone or in writing, including by fax or email; Upon receipt of a telephone notification or immediately after receipt of a written notification, the Licensee shall verify its reliability and disconnect the service.
|
77A.3
|
The Licensee shall cooperate with other licensees in locating and preventing fraud.
|
|
Subject to that stated in section 75, the Licensee may change the rate that was set by it for any service or basket of services (in this section – “service”), provided:
|
|
(a)
|
It sent the Director prior written notice at least fourteen (14) days before the effective date of the rate, stating the new rate and the rate before the change. Notwithstanding the foregoing, regarding a reduction in a rate, the Licensee may send the notice to the Director up to a month after the reduction A58;
|
|
(b)
|
It sent every subscriber who joined the service prior written notice at least fourteen (14) days before the effective date, noting the new rate and the rate before the change. Notwithstanding the foregoing, regarding a reduction in a rate, the Licensee may send the notice to the subscriber up to a month after the reduction.
|
|
Said notice will be sent to the subscriber by regular post or via the telephone bill sent to the subscriber A58.
|
For purposes of this section, “change” – any change in a rate resulting in an increase or reduction in the payment before VAT which a subscriber is required to pay for the Licensee’s services.
|
|
In case of an increase or reduction in any rate for cellular services according to the provisions of the license, such increase or reduction shall not apply to payments made for such a service prior to the starting date of the increase or the reduction; An increase or reduction shall apply only to cellular services provided to a subscriber after the date of the increase or reduction; This section shall not apply to a rate adjustment ordered by the Minister under section 83(A).
|
80.1
|
The Licensee may debit a subscriber arrears interest, linkage differences and collection costs on payments for cellular services which were not paid by a subscriber on their stipulated payment date, in a payment notice sent to the subscriber, according to the contract between themA33) (hereinafter – the payment date).
|
80.2
|
VoidA43)
|
80.3
|
The amount of the arrears interest shall not exceed the rate specified in the definition of “linkage differences and interest” in section 1 of the Adjudication of Interest and Linkage Law, 1961, plus linkage differences for the period between the stipulated payment date and the actual payment date of the specified amount.
|
80.4
|
A33)The Licensee may debit a subscriber collection costs on a payment for a service which it provided to the subscriber, which was not paid on the payment date (hereinafter – the amount of the debt), provided at least fourteen (14) days have elapsed from the payment date, excluding a case of nonpayment due to the bank’s or the credit-card
|
|
If the Licensee decides to collect a connection fee as defined in section 74(A), it may debit a subscriber a connection fee only for the connection of the subscriber for the first time to the cellular network and the provision of the cellular services, or for a connection after the termination of all A58 service under section 71 or the termination or disconnection of a service under section 72.
|
|
The Licensee may collect the connection fee as stated in section 81 for connection to the cellular system in a number of installments, at the times agreed upon with the subscriber and in the amount specified in the contract.
|
|
(a)
|
If the Minister finds that any of the Licensee’s rates or any payment required to be made to or through the Licensee is contrary to the provisions of the License, the Minister shall notify the Licensee in that regard, indicating the correction that needs to be made and that if the Licensee fails to do so, the Minister will act pursuant to his power under sections 5 and 15 of the Law; The Licensee shall send the Minister a written notification setting out the corrected rate and shall act to refund the excess amount, if any, which a subscriber was debited according to the rate prior to its correction.
|
|
(b)
|
If the Minister finds that any of the Licensee’s rates or any payment required to be made to or through the Licensee is unreasonable or is liable to harm competition or the consumers, the Minister shall notify the Licensee in that regard, indicating the correction that needs to be made and that if the Licensee fails to do so, the Minister will act pursuant to his power under sections 5 and 15 of the Law; The Licensee shall send the Minister a written notification setting out the corrected rate
|
|
(a)
|
The Licensee will document in its information systems any written or verbal contestation by a subscriber concerning an excess charge that appears in the telephone bill.
|
|
(b)
|
The Licensee will give a subscriber a written, explanatory response to his contestation, setting out the manner of calculation of the refund or the reasons for rejecting the contestation, as the case may be, within twenty one (21) days from the day of receipt of the contestation. In this regard, "day of receipt of the contestation" – With respect to a notice sent in writing – the day on which the notice was received by the Licensee;
|
|
With respect to a notice delivered orally – the day on which the notice was delivered to the Licensee.
|
|
A copy of such response must be kept available by the Licensee for presenting to the Director within five (5) work days from when it was sent. If the Licensee sent the response via email or fax, the sending confirmation must also be available for presenting to the Director within five (5) work days from when the notice was sent.
|
|
Notwithstanding the above, where a Subscriber has submitted a verbal objection and the Licensee found that the Subscriber has been overcharged by an amount not exceeding NIS 100, the Licensee has authority not to respond in writing to the objection, to the extent that the Subscriber granted his express consent theretoA59.
|
|
(c)
|
If the Licensee finds that the subscriber was overcharged, it will refund the excess charge in a single payment, without setting any conditions for the refund, with the addition of "linkage differences and interest" as this term is defined in section 1 of the Adjudication of Interest and Linkage Law, 5721-1961, for the period from the date of collection of the excess charge to the date of actual making of the refund, as set forth below:
|
84.1
|
The Licensee shall pay royalties as prescribed in the Telecommunications Regulations (Royalties), 2001, or in any other regulations replacing them (hereinafter – “the Royalties Regulations”).
|
84.2
|
To every payment of royalties under this section the Licensee shall attach two copies of an unaudited quarterly income report, signed by the Licensee and certified by an accountant; The report shall contain a detailed calculation of the liable income according to the Royalties Regulations, and any other particular on which the Licensee based the amount of the royalties.
|
84.3
|
Upon the submission of an annual income report audited and signed by the Licensee’s accountant (hereinafter: “the audited report”), the Licensee shall submit a report, prepared by quarters, setting out the adjustment between the income on which it paid royalties, and the income appearing in the audited report (hereinafter – “the adjustment report”).
|
84.4
|
If it becomes apparent that the amount of the royalties to be paid by the Licensee, according to the adjustment report, is greater than the amount paid by it for the quarter to which the audited report relates, the Licensee shall pay royalties differences, in addition to interest and linkage differences, as prescribed in the Royalties Regulations.
|
84.5
|
If it becomes apparent that the amount of the royalties paid by the Licensee is greater than the amount it was required to pay for the quarter to which the audited report relates, the Licensee shall be credited with the amount of the excess payment; The excess payments to which the Licensee is entitled shall be offset, pursuant to a written approval of the Director, from the next payment of royalties, and linkage differences and interest shall be calculated according to the last index published before the date of the offset; In this regard – interest and linkage differences, as prescribed in the Royalties Regulations.
|
|
The Licensee shall pay linkage differences, arrears interest and collection costs, as set forth in the Royalties Regulations, on royalties that were not paid at the time stipulated therefor in the regulations.
|
|
Royalties as well as linkage differences, arrears interest and collection costs in respect thereof shall be paid to the Ministry of Communication’s accountant by a bank transfer to the ministry’s account.
|
|
The royalties under this Part shall be in addition to any other fee, tax or mandatory payment which the Licensee is required to pay under any law.
|
|
In this Part, “use of the license” – setup, installation, maintenance, upkeep or operation of the cellular system, whether by the Licensee itself or through anyone acting on its behalf, including its employees, contractors, agents or representatives.
|
89.1
|
The Licensee shall be liable at law for death, damage or loss to the body or property of any person, directly or indirectly resulting from or consequent on the use of the license.
|
89.2
|
When using the license, the Licensee shall take all reasonable precautions to prevent damage or loss to the body or property of any person, and where such damage or loss was caused due to the use of the license, the Licensee shall repair the damage at its expense and compensate the aggrieved party, all subject to any law, excluding a case in respect of which the Minister granted the Licensee immunity as specified in section 90.
|
|
To avoid doubt, this section shall not impose on the Licensee liability beyond the liability in torts established in the regular law of torts.
|
90.1
|
The Minister may, at the Licensee’s request, grant it all or any of the immunities enumerated in Chapter I of the Law, subject to that stated in section 90.3.
|
90.2
|
The Licensee shall set out in its request the immunities which it is requesting and the reasons therefor.
|
90.3
|
If the Minister is persuaded of the necessity of granting the Licensee the immunities under Chapter I of the Law, he shall publish his decision in a notice in Reshumot.
|
91.1
|
The Licensee shall make, at its expense, an insurance contract with a licensed insurer according to the terms contained in section 92; The insurance contract shall be presented to the Director at the time of the grant of the license.
|
91.2
|
The Licensee shall indemnify the State in respect of any financial liability as stated in section 89.1, for which it may be held liable towards a third party due to the use of the license; Any indemnity under this section shall be insured by the Licensee for liability insurance.
|
91.3
|
The Licensee shall insure itself, including its employees and contractors, against any financial liability as stated in section 89.1, for which it may be held liable at law owing to damage caused to the body or property of a person from the use of the license, and against any loss or damage caused to all or a part of the cellular system from the use of the license, including against third party risks.
|
91.4
|
The Licensee shall submit to the Director an opinion of a lawyer specializing in insurance, confirming that the insurance policy covers everything required in sections
|
92.1
|
The insurance contract shall specify the period of insurance and shall stipulate that at the end of the period of insurance the insurance shall be extended automatically.
|
92.2
|
The Licensee shall present to the Director, once a year, the insurer’s confirmation that the insurance contract is valid, there are no arrears in the Licensee’s payments of the premiums and there are no pending notices concerning the cancellation, suspension, limitation, amendment or termination of the insurance contract.
|
92.3
|
The insurance contract shall stipulate that in the event the insurer wishes to cancel the insurance contract, owing to nonpayment of the premium, it must give the Director prior notice in that regard not less than 90 days before the contract is actually due to be cancelled (hereinafter in this section – cancellation notice).
|
92.4
|
If a cancellation notice has been sent as stated in section 92.3, the Licensee shall act immediately to eliminate the cause of the cancellation, or shall act immediately to obtain an alternative insurance contract as stated in section 92.6, and it shall notify the Director of the actions it took for this purpose; Where the cause of cancellation was nonpayment of the premium by the Licensee, the Director may pay the premium in the Licensee’s stead, and he may exercise the bank guarantee or any part thereof to cover amounts which he expended on payment of the premium or collect them in any other manner.
|
92.5
|
If the Licensee wishes to cancel the insurance contract, it must notify the Director in that regard at least 45 days before the contract is actually due to be cancelled.
|
92.6
|
If the Licensee has agreed to the cancellation of the insurance contract by the insurer or itself wishes to cancel the insurance contract, it shall make an insurance contract with another licensed insurer, in such manner that the new insurance contract will come into effect simultaneously with the lapse of the previous contract; The new insurance contract shall be submitted for approval to the Director, together with an opinion as stated in section 91.4, 45 days before its effective date, and it shall be subject to the provisions of the sections in this Part.
|
|
If the Licensee did not make an insurance contract, or if it becomes apparent that the insurance contract which it made was cancelled or expired, the Director may effect insurance and pay the premium in the Licensee’s stead, and it may exercise the bank guarantee to cover amounts expended by it on the insurance or collect them in any other manner; All the foregoing without derogating from the authority to cancel, restrict or suspend the license owing to the Licensee’s failure to effect insurance according to the terms of this license.
|
94.1
|
A30)The Licensee shall present to the Director an unconditional bank guarantee in favor of the State of Israel, in shekels, equivalent to ten (10) million US dollars, as security for fulfillment of the terms of the License; The guarantee is attached to this license as Addendum H to the Second Schedule.
|
94.2
|
The guarantee shall serve as security for fulfillment of the terms of the license and for compensation and indemnification of the State for any damage, payment, loss, detriment or expense caused or liable to be caused to the State – whether directly or indirectly – due to nonfulfillment of all or any of the terms of the license, fully and on time, or due to the cancellation, restriction or suspension of the license.
|
95.1
|
Without derogating from the general purport of section 94.2, the Director may exercise the guarantee, in whole or in part, if damage is caused due to nonfulfillment of the terms of the license, including in each of the cases set out below:
|
|
(a)
|
The State incurred a loss of income from royalties owing to a lack of revenues from subscribers’ payments, including by reason of:
|
|
(1)
|
Failure to operate the cellular services at a time stipulated therefore in the timetable determined by the Director, or as approved by the Director;
|
|
(2)
|
Discontinuation, suspension or restriction of services;
|
|
(3)
|
Restriction or suspension of the license;
|
|
(b)
|
No insurance contract was made according to sections 91-92, the premium was not paid, or the insurance contract was cancelled or expired;
|
|
(c)
|
The Licensee is debiting its subscribers for payments contrary to that stated in section 75;
|
|
(d)
|
The Licensee is not complying with the coverage and service quality requirements as stated in Appendix B, or the Licensee consistently stops, suspends or limits the service contrary to the provisions of the license;
|
|
(e)
|
The Licensee does not convert the cellular system to a digital technology by the date specified in Appendix B.
|
|
(f)
|
The Licensee consistently or willfully violates any of the provisions, terms or requirements of the license;
|
|
(g)
|
A claim or demand was submitted against the State for payment of compensation and damages due to a violation of a condition in the license or faulty implementation of the license or due to the cancellation of the license, and where the State incurred expenses due to such claim or demand; The exercise of the
|
|
(h)
|
Royalties according to section 74 were not paid fully and on time;
|
|
(i)
|
The State incurred costs or damage due to the cancellation of the license;
|
|
(j)
|
The Licensee did not complete the guarantee fees as specified in sections 96.2 and 79.2.
|
|
(k)
|
A16)The Licensee did not present the license fee on the required date, as stipulated in section 40.1 of the conditions of Tender No. 1/01.
|
|
(l)
|
A16)A monetary sanction was imposed on the Licensee in accordance with the law, and the required amount was not paid on time, provided no amount above the amount of the sanction is collected.
|
95.2
|
The Director may exercise the guarantee as stated in this Part also by reason of an expected violation of the terms of the license or frustration of the terms of the license that justify, at his discretion, early exercise of the guarantee.
|
96.1
|
The Director may exercise the guarantee, in whole or in part, up to the amount specified therein, provided it warned the Licensee that if it does not correct the act or omission the subject of the warning within the period specified in the warning – the guarantee will be exercised, in whole or in part.
|
96.2
|
If the entire amount of the guarantee or a part thereof was exercised, the Licensee shall provide a new guarantee or complete the balance up to the original amount of the guarantee immediately upon the Director’s demand; Failure to complete the amount of the guarantee as stated shall constitute a material breach of the terms of the license, and the Director may – without derogating from his authority to cancel, restrict or suspend the license – exercise any remaining balance of the guarantee.
|
96.3
|
The Licensee may appeal a decision of the Director to exercise the guarantee, in whole or in part, before the Minister within 15 days of being notified of the Director’s decision.
|
97.1
|
The guarantee shall be valid throughout the term of validity of the license and for A16)two years after the end of the term of the license, or until the Licensee satisfies all its obligations under the license to the Director’s satisfaction – according to the later of these two dates.
|
97.2
|
If the Director determines that the Licensee did not satisfy all its obligations under the license, within 60 days before the expiry of the term of the guarantee, he may require the Licensee to extend the term of the guarantee or to present a new guarantee, within the period specified by the Director; The new guarantee shall be valid up to the date specified by the Director or until the Licensee satisfies, to the Director’s satisfaction, all its obligations under the licenses – according to the later of these two dates; If the
|
97.3
|
Where the Director confirmed receipt of a guarantee the validity of which may be extended from time to time upon his demand, the Licensee shall extend the validity of the guarantee before the expected end of its term, for a year, unless the Director exempted it from this obligation; If the Director did not grant an exemption from the obligation to extend the validity of the guarantee, and the validity of the guarantee was not extended at the specified time, the Director may exercise the guarantee in its entirety without advance warning.
|
98.1
|
Exercise of the guarantee, in whole or in part, does not derogate from the authority to cancel, restrict or suspend the license.
|
98.2
|
The amount of the guarantee shall not serve to limit the scope of the Licensee’s liability towards the State for payment of the full damages caused to it, where the Licensee is obligated to make such payment under the license or by law.
|
98.3
|
The exercise of the guarantee, in whole or in part, shall not derogate from the Director’s right to demand from the Licensee in any other manner payment for damages which it is obligated to cover under this license or to exercise other reliefs that are available to him by law.
|
|
The Director or anyone authorized by him for this purpose may supervise the Licensee’s activities with respect to the implementation of the license and compliance with the provisions of the Law, the Ordinance and the Regulations pursuant thereto.
|
|
The Director and anyone engaging on his behalf in supervising the Licensee shall not disclose any information or document coming into their possession by virtue of their function, to a person who is not authorized to receive such information or document, unless it was already published in public or disclosure is necessary for the performance of their function under this license or by law.
|
|
For the purpose of exercising the supervision as stated in this Part, the Director may:
|
|
(a)
|
Enter at any reasonable time any facility or office used by the Licensee to provide its services under this license.
|
|
(b)
|
Carry out measurements and tests on the cellular system, and he may inspect any record, document, plan, account book, ledger or data base, whether regular or computerized, of the Licensee or of anyone employed by the Licensee in subjects over which the Director has supervisory power as stated; The Director may inspect them and copy them in any manner he deems fit.
|
|
The Licensee shall cooperate with the Director or with anyone authorized by him with respect to the exercise of supervision over its activities as stated, and without derogating from the general purport of the aforesaid, it shall allow them to carry out that stated in sections 100 and 101 and shall furnish to them, upon their demand, any information in its possession or control that is required by them for the exercise of the supervision.
|
103.1
|
The Licensee shall submit to the Director the reports specified in this license, in the format and at the times stipulated in this part.
|
103.2
|
Every report shall reflect the correct facts relating to the subject thereof, updated for the period of the report.
|
103.3
|
A report shall be submitted in two (2) copies, printed and prepared in an easily readable form, bearing the date of its preparation and signed by the Licensee or whoever it authorized for this purpose; The report shall be submitted in a format as directed by the Director, including with respect to its contents, structure and manner of submission.
|
103.4
|
The Director may require the Licensee to prepare anew or to complete a report which it submitted, if he found it lacking in necessary details or details which, in the Director’s opinion, should have been included by the Licensee in the report.
|
|
The Licensee shall submit to the Director, at his request and at least once a year, at the end of the calendar year and not later than ninety (90) days thereafter, annual reports describing its activity in the period from January to December of the past year:
|
|
(a)
|
Financial statement audited and signed by an accountant;
|
|
(b)
|
Subscribers report, including the following data:
|
|
(1)
|
Number of subscribers broken down according to business and private subscribers and according to post-paid and pre-paid;
|
|
(2)
|
Amount of income broken down according to subsection (1), with each type of income from interconnection appearing separately, and broken down as well according to airtime and added-value services.
|
|
(c)
|
Report on the use of frequencies according to Chapter D Part C;
|
|
(d)
|
Addendum A – “Particulars of Licensee” updated as of the beginning of January, as detailed in section 20.1.
|
104.2
|
The Licensee shall submit to the Director once a quarter, not later than a month after the end of the quarter, the following reports:
|
|
(a)
|
Unaudited quarterly financial statement signed by an accountant;
|
|
(b)
|
Unaudited quarterly income report signed by an accountant, giving details of income on which royalties are payable;
|
|
(c)
|
Traffic report – in a format as directed by the Director.
|
104.3
|
The Licensee shall submit a report on any special occurrence, as set out in regulation 8 of the Control Regulations.
|
104.4
|
The Licensee shall submit to the Director the following report, at his request:
|
|
(a)
|
Report concerning development works of the network;
|
|
(b)
|
Malfunctions report – containing a brief description and discussion of the malfunctions that occurred in the network, the number of malfunctions and the cumulative duration of malfunctions of each type, an analysis of the malfunctions and the steps taken to repair them;
|
|
(c)
|
Service quality report – Analysis of the Licensee’s compliance with the requirements of sections 49 to 51 and Addendum E – Level of Services for Subscribers, during the period of the report;
|
|
(d)
|
Complaints report – detailing the written service complaints that were submitted by subscribers, including the subject of the complaints, the dates on which they were received, the written response given, the manner in which they were dealt with and details of the activity of the Public Ombudsman;
|
|
(e)
|
List of the Licensee’s rates;
|
|
(f)
|
Updated engineering program;
|
|
(g)
|
Encumbrances report – The Licensee must report to the Director immediately any case of imposition of an attachment or encumbrance on any of the Licensee’s assets or any case of an encumbrance on means of control in the Licensee, any realization of such encumbrances or voidance of any right of the Licensee in an asset; The Licensee must also submit to the Director, at his request, a report detailing all such encumbrances.
|
|
(h)
|
Report on number of subscribers, income and minutes broken down according to private and business subscribers, and within each category – broken down according to subscribers for programs priced according to an “inclusive standard rate” and subscribers for programs priced separately for payment in respect of “airtime” and interconnection, in a format as directed by the Director;
|
|
(i)
|
Nuisance subscribers report as detailed in section 65A.9;
|
|
(j)
|
Any other data required for performance of control on the Licensee’s activities, and any information required by the Ministry for regulating the telecommunications sector.
|
104.5
|
The Director may add or remove periodical, annual or quarterly reports, and he may request the Licensee to submit special reports as directed by him.
|
105.1
|
Where the Director finds defects or deficiencies in the Licensee’s activities, he shall notify the Licensee thereof in writing.
|
105.2
|
If the Licensee received a notification as stated, it shall submit to the Director, within thirty (30) days from receipt of the notification, its written response detailing the measures taken by it to correct the defects indicated therein.
|
107.1
|
The Licensee’s rights, obligations and powers with respect to the setup, maintenance and operation of the cellular system and the provision of services by means thereof, originate in and derive exclusively from and according to this license.
|
107.2
|
Void.A2)
|
108.1
|
The Licensee shall keep the license documents in its office and shall allow the public to inspect their true and up-to-date copies; In case the terms of the license are modified, the Licensee shall attach the modification wording to said license documents.
|
108.2
|
A16)If the license and its documents are made available for public inspection, the public shall not be allowed to inspect the following documents, which are included in the Second Schedule to the License:
|
|
(a)
|
Appendix A – Details of the Licensee;
|
|
(b)
|
Appendix B – Engineering program;
|
|
(c)
|
VoidA43);
|
|
(d)
|
Appendix G – Insurance contract;
|
|
(e)
|
Appendix H – Bank guarantee;
|
|
(f)
|
Appendix I – Special services for the security forces;
|
|
(g)
|
Appendix L – Special services for the security forces – security addendum (confidential);
|
|
(h)
|
Appendix M – Security directives;
|
|
(i)
|
Appendix N – Letters of undertaking.
|
108.3
|
The license documents are the property of the State and are entrusted to the Licensee for the term of validity of the license; Upon the cancellation or expiry of the license, the Licensee shall return the license with all its documents to the Director.
|
108.4
|
A16)The Licensee shall allow the public to inspect the license documents via the Internet; The Licensee may do this also by way of referral to the website of the Ministry of Communications, as long as the Ministry publishes the license on its website.
|
108.5
|
A16)The Ministry may publish the license, excluding the appendices indicated in section 108.2, at the time and in the manner deemed fit by it.
|
109.1
|
A duty imposed on the Licensee in this license, for which a performance deadline has been set, must be performed by the Licensee within the deadline.
|
109.2
|
A2)The Director, at the Licensee’s request, may postpone a deadline set as stated, if it deems it impossible to perform the duty within such deadline for reasons of force majeure.
|
|
Any approval or supervisory authority granted under this license to the Minister or to the Director, including the exercise of such authority, shall not impose on them any liability which is imposed by this license on the Licensee, and shall not derogate or detract from or void or diminish the Licensee’s liability as stated.
|
111.1
|
A notice concerning this license or its implementation shall be in writing and shall be delivered by hand or dispatched by registered post with confirmation of delivery; A notice sent by registered post as stated shall be presumed to have reached its destination by the end of 48 hours from the time of its delivery for dispatch.
|
111.2
|
Any notice of the Licensee to the Minister shall be delivered or sent through the Director.
|
111.3
|
The Licensee’s address for receipt of notices under this section is: 10 Hagavish St., Poleg Industrial Area, Netanya 42140; The Licensee shall notify the Director immediately of any changes in this address.
|
112.1
|
The Licensee will present and/or play to the Director, at his request, any recording and/or document relevant to the subscriber, throughout the subscriber's last commitment period, and if the subscriber is not within a commitment period – during at least the last eighteen (18) months, and for a year after the date on which the final invoice is sent to the subscriber, as stated in section 2.3(c)(2) in Appendix E.
|
1.
|
General
|
|
1.1.
|
This Schedule includes the list of services the Licensee will provide, under the conditions set out in Section B of Chapter E – “Level of Services for Subscribers”.
|
|
1.2.
|
The services will be provided in each of the technologies operated by the Licensee, unless otherwise noted in the License or in the Schedule to the License.
|
|
1.3.
|
Wherever the term: “Support in Various Languages” is used, this denotes support in at least these four languages: Hebrew, Arabic, English and Russian.
|
|
1.4.
|
A43) The Licensee must include in the service dossier at least the following details:
|
|
a.
|
Name of the service: Name of the service, including its trade name and a general description of the service.
|
|
b.
|
Detailed description of the service: Among other things –
|
|
c.
|
Engineering description:
|
|
d.
|
Miscellaneous:
|
2.
|
List of Services
|
|
2.1.
|
Basic Telephone Services
|
No.
|
Name of Service
|
Description of Service
|
Date provided
|
Measures for quality of service
|
Remarks
|
1.
|
Cellular Calls
|
Telephone calls to and from Licensee’s subscribers to any telephone or other appropriate end user equipment in another public telecommunications network in Israel or throughout the world
|
Existing service
|
98% availability
|
|
2.
|
Emergency Calls
|
Free dialing to emergency services determined by the Director (for example: police, ambulance, fire dept., etc). Caller will be referred to the emergency hotline according to the services provider’s definition with reference to the subscriber’s location.
|
Existing service
|
98% availability
|
According to the Director’s rules
|
2.2.
|
Related Services
|
No.
|
Name of Service
|
Description of Service
|
Date provided
|
Measures for quality of service
|
Remarks
|
1.
|
Call Waiting
|
Subscriber may receive incoming calls while on another call. Subscriber may cancel service at will.
|
Existing service
|
99.9% availability
|
|
2.
|
Selective Call Waiting
|
Only calls from a list of numbers defined by the subscriber will activate call waiting alert
|
Future service
|
99.9% availability
|
|
3.
|
Call Forwarding
|
Diversion of incoming calls to a phone number at the subscriber’s choice:
Always
|
Existing service
|
99.9% availability
|
When busy
|
|||||
When call is not answered
|
|||||
When subscriber unavailable
|
|||||
4.
|
Selective Call Forwarding
|
Diversion of incoming calls according to a list of numbers predefined by the subscriber, to another destination at the subscriber’s choice:
· Always
· When call is not answered
· When busy
|
Future Service
|
99.9% availability
|
|
5.
|
Call Transfer
|
Subscriber may transfer call to another telephone number
|
Future Service
|
99.9% availability
|
|
6.
|
Hunting Group
|
Determining a leading number for a subscriber’s group of numbers: dialing the leading number will refer the call to a free number in the group.
|
Future Service
|
99.9% availability
|
|
7.
|
Caller ID
|
Caller’s number will appear on the screen
|
Existing Service
|
99.9% availability
|
Depends on caller's end device
|
8.
|
Calling ID Restriction
|
Allows blocking subscriber’s number from appearing on call receiver’s screen. Block may be permanent or one-time.
|
Existing Service
|
99.9% availability
|
|
9.
|
Caller Name Announcement
|
Option of identification of caller by voice signature
|
Existing Service
|
99.9% availability
|
|
10.
|
Conference Call
|
Establishing a call for a number of subscribers simultaneously
|
Existing Service
|
98% availability
|
|
11.
|
Closed User Group
|
A group of phone numbers than may establish a call only among themselves
|
Existing Service
|
98% availability
|
GSM network only
|
12.
|
Voice Mail
|
Storing messages of callers to the subscriber in a personal box and allowing extraction of such
|
Existing Service
|
99% availability
|
13.
|
Advanced Voice Mail
|
Voice mail system as described in paragraph 12 above, with added “smart” element, including visual or audio indication of messages waiting, transfer of messages to other platforms and receiving messages from such platforms.
|
Existing Service
|
98% availability
|
|
14.
|
Voice Mail Notification
|
When message received in voice mail box, the mail box will dial or send message to destinations defined by subscriber
|
Future Service
|
99.9% availability
|
|
15.
|
Voice Activated Service
|
Allows operation of telephone and basic services, related services and value added services by voice
|
Partialy existing, Future Service expansion.
|
70% chance of correct identification in regions where signal strength is better than 85dbm
|
|
16.
|
Call Tracking
|
Allows subscriber to send the applicant an indication, while talking, for purposes of later identification of source of call.
|
Future Service
|
99.9% availability
|
Subject to law
|
17.
|
Virtual Private Network (VPN)
|
Allows short dialing according to a private numbering program
|
Existing Service
|
99.9% availability
|
For subscribers according to relevant types. Currently provided to business sector.
|
18.
|
Centrex
|
Allows maintaining a private network while using network resources
|
Future Service
|
||
19.
|
Facsimile Services
|
Allows receiving, storing and extracting facsimile messages via phone
|
Existing Service
|
99.9% availability
|
|
20.
|
Roaming
|
Allows receiving, extracting and blocking messages abroad
|
Existing Service
|
99.9% availability
|
Subject to availability of foreign operator. In GSM network
|
in 3 months of launching of the network. | |||||
21.
|
GPRS Roaming
|
Allows using certain communications data services while using roaming services
|
Future Service
|
99.9% availability
|
Subject to operator availability
|
22. A55
|
Toll-Free Call
|
The initiator of the call is not charged. The subscriber to whom the call is made is charged according to relevant debiting arrangements.
|
March 2010
|
According to the service file (1800).
|
|
23.
|
Void A51
|
||||
24.
|
Call Screening
|
Defining a list of phone numbers subscriber will receive calls from. Call from other numbers will be referred to another destination.
|
Existing Service
|
99.9% availability
|
|
25.
|
Talk Two
|
One number for two end user equipment units.
|
Existing Service
|
99% availability
|
|
26.
|
One number for two SIM cards
|
cellular services for two or more telephones in one number
|
Future Service
|
99% availability
|
|
27.
|
Two numbers for one SIM card
|
Defining two telephone numbers for the same SIM card
|
Future Service
|
99% availability
|
|
28.
|
Change of number announcement
|
A caller to a subscriber will receive an announcement of the subscriber’s new number, and will be given the option of directing the call to the new number.
|
Existing Service
|
99.9% availability
|
GSM network only
|
29.
|
Wake-up Service
|
Allows subscriber to request the system call him at an hour defined.
|
Future Service
|
Precision of service approx. 5 minutes.
|
99.9% availability | |||||
30.
|
Camp on busy line
|
Call automatically put through to busy number when number frees up.
|
Future Service
|
99.9% availability
|
|
31.
|
Personal Number Service
|
Allows subscriber to define calls to a certain number be forwarded to various destinations according to parameters set by subscriber.
|
Future Service
|
99.9% availability
|
|
32.
|
Collect Call
|
Cost of call to be paid by subscriber receiver, after confirmation.
|
Existing Service
|
99.9% availability
|
Between licensed subscribers only
|
33.
|
Message Distribution
|
Distribution of messages to a list of addressees, using various platforms
|
Future Service
|
99.9% availability
|
|
34.
|
Hot Billing
|
Provides updated information to subscriber regarding his bill with the applicant via various platforms
|
Future Service
|
99% availability
|
|
35.
|
Over the Air Services (OTA)
|
Update of data and applications on SIM card via SMS by the applicant. Running applications from SIM card will be performed by subscriber, using end device.
|
Future Service
|
99% availability
|
|
36.
|
Account Code Billing
|
Splitting charge for one phone number into separate accounts. Subscriber’s instructions regarding the account to be billed will be performed by punching a code at the beginning or during a call.
|
Future Service
|
99% availability
|
|
37.
|
Star Services
|
Allows establishing a connection by dialing a short access code according to applicant’s internal numbering program.
|
Existing Service
|
99.9% availability
|
|
38.
|
Short Messages Service (SMS)
|
Allow receiving and sending written messages
|
Existing Service
|
99% availability
|
Depends on end user equipment
|
via phone | |||||
39.
|
Circuit Switch Data (CSD)/High speed circuit switch data (HSCSD)
|
Access to data service using a dial-up modem on phone or independent dial modem
|
Existing Service
|
98% availability
|
Depends on end user equipment
|
40.
|
Data communications in Packet Switch
|
Subscriber connection via phone or independent modem to TCP/UDP/IP communications for broadcastung using packet switch
|
Existing Service
|
98% availability on best effort basis
|
Depends on end user equipment
|
41.
|
Discontinuation of Service
|
Discontinuation of service upon subscriber's request
|
Existing Service
|
Will be performed no later than the next business day after subscriber's request
|
|
42.
|
POC (Push to Talk Over Cellular)
|
Call made by pressing a button on cellular end user equipment
Call may be private (between subscriber and subscriber) or group on data communications network
|
Service Exists (just started)
|
According to service file
|
According to temp. provision
|
Temporary Provision
|
The Licensee will allow operation of Push to Talk Over Cellular services (hereinafter: the Service) to any subscriber who is a legal entity (individual or corporation), provided the number of users (number of cellular end user equipment units permitted use of this service, hereinafter – end user equipments) in the possession of such subscriber does not exceed 20 during the first year starting on the date service begins. Notwithstanding the aforesaid, should there be any considerable changes in the cellular sector influencing provision of such service, the Ministry will consider a shorter period.
|
Application
|
This service will not begin before Sunday, the 29th day of Tamuz, 5764 (July 18, 2004)
|
* availability of service is the percentage of time the service is available, not
|
|
2.3.
|
Value Added Services
|
No.
|
Name of Service
|
Description of Service
|
Date provided
|
Measures for quality of service
|
Remarks
|
1.
|
Speaking Clock
|
Notice of time
|
Future Service
|
99.9% availability
|
|
2.
|
Directory Assistance
|
Allows receiving information on phone numbers and automatic establishment of calling number so given.
|
Future service
|
99.9% availability
|
|
3.
|
Connectivity to Information and Entertainment Services
|
Allows subscriber to connect to information, entertainment, applications and content services, whether interactive or noniteractive, whether by download, by upload, or by various means of access.
|
Existing service
|
99.9% availability
|
Depends on end user equipment. Subject to Director’s rules
|
4.
|
Access to Internet Provider Services
|
Allows subscriber access to internet provider.
|
Future Service
|
||
5.
|
Location Based Information & Tracking
|
Receiving and sending information depending on location of phone, subject to law.
|
Future Service
|
||
6.
|
M-Commerce
|
Connection via end user equipment for performing transactions
|
Existing Service
|
|
Depends on end user equipment. Subject to Director’s rules
|
7.
|
Unified Messaging
|
Allows subscriber to receive and send voice messages, speaking messages, faxes, SMS, E-mail messages, application messages and multimedia files, to and from unified cell, allowing the convertion of the data
|
Future Service
|
99.9% availability
|
Depends on end device
|
received from one format to another, as well as access to data from various means of access. | |||||
8.
|
Telemetry Command and Control
|
Use of phone or cellular modem for receiving indication and sending orders concerning various device operation (for example: alarm systems, inventory systems, traffic lights, controllers, etc.)
|
Existing Service
|
99.9% availability
|
|
9.
|
Sponsored Call
|
Connection during which subscriber will be exposed to commercial information and advertisements
|
Future Service
|
Subject to law
|
|
10.
|
Video Conference
|
Allows visual and audio communication between a number of users.
|
Future Service
|
|
Depends on end device
|
11.
|
Instant Messaging
|
Message transfer service between “community” participants, organizations, groups of friends, groups of people with same interests. Subscriber notifies he is on network and ready to receive messages. Service notifies subscriber members of group who are in geographic proximity.
|
Future Service
|
||
12.
|
Surf & Talk
|
Allows subscriber to receive an indication of call waiting and reply while connected to internet
|
Existing Service
|
99% availability
|
Depends on end user equipment. GSM network only
|
13.
|
Personal Information Management
|
Access and synchronization via end user equipment to personal data base.
|
Existing Service
|
Depends on end user equipment.
|
|
·
|
availability of service is the percentage of time the service is available, not including availability of basic services.
|
Appendix A
|
Particulars of Licensee – not available to public;
|
Appendix BA16
|
Engineering Plan - not available to public;
|
Appendix CA60
|
Domestic Roaming;
|
Appendix DA43
|
void;
|
Appendix EA16
|
Level of Subscriber Services;
|
Appendix FA8
|
Ordering Of A Service On The Website Of The Licensee Or A Service Provider;
|
Appendix G
|
Insurance Contract - not available to public;
|
Appendix HA16
|
Bank Guarantee - not available to public;
|
Appendix It3t5
|
Special Services for security forces - not available to public;
|
Appendix JA6
|
Access to International Communications Services;
|
Appendix KA7
|
Discontinuation of Services for cellular end user equipments of IS-54 type;
|
Appendix LA12
|
Special Services for security forces - not available to public;
|
Appendix MA12
|
Security Instructions - not available to public;
|
Appendix NA16
|
Letters of Undertaking - not available to public;
|
Appendix OA24
|
Erotic Services
|
1. In this Appendix
|
"Handover4"
|
Continuity of a call during its transfer by means of cellular end equipment from the coverage area of a cellular radio center of one licensee to the coverage area of a cellular radio center of another licensee, in a continuous manner, without being disconnected or disrupted.
|
"Call"
|
Including SMS messages, data communication, cellular Internet surfing, use of applications and the like.
|
"Roaming Licensee's Subscriber"
|
Including a subscriber of a cellular licensee on another network, where such licensee utilizes a roaming licensee's network.
|
"Lockdown"
|
A state in which the end equipment of a roaming licensee's subscriber, who roamed to a host network, continues to receive service on the Licensee's network after the termination of the call, even if the roaming licensee has coverage in that area.
|
"Specifications"
|
The current 3GPP5 recommendations regarding domestic roaming as in effect from time to time.
|
2. The Licensee shall provide by means of its network to a roaming licensee a domestic roaming service, as stated in section 67E, in accordance with the conditions set out below.
|
3. The Licensee shall provide a domestic roaming service, as stated, by one of the following two methods:
(a) Call transfer – The Licensee shall enable the transfer of a call which is being conducted by means of a subscriber's end equipment from a roaming licensee's network to the Licensee's network, when the roaming operator's network has no coverage in that area. After the transfer, the call shall be conducted on
|
the Licensee's network up to its termination.
(b) Call setup – The Licensee shall enable the setup of a call on its network, by means of the end equipment of a roaming subscriber's licensee, if the roaming operator's network has no coverage in that area, or due to locking down of the end equipment of the roaming subscriber on the Licensee's network. Following its setup, the call shall be conducted on the Licensee's network up to its termination.
|
4. The Licensee shall determine the duration of the lockdown time in accordance with the requirement of the roaming licensee.
|
5. The Licensee shall guarantee reasonable and equal conditions for every roaming licensee, as regards the provisions of cellular services by it, including the following:
(1) Prohibition on discrimination – The scope, nature and quality of the services received by a roaming licensee's subscribers may not be inferior to those provided to the Licensee's subscribers. Insofar as the Licensee creates a distinction between categories of its subscribers, regarding the scope, quality or nature of its services, it shall allow the roaming licensee to maintain the same distinction for its subscribers.
(2) Transfer – The Licensee shall allow a roaming licensee's subscribers a one-way transfer, i.e. – from the roaming licensee's coverage area to the Licensee's coverage area, in a continuous manner, without disconnection or interruption of the call.
(3) Advanced network – The Licensee shall provide domestic roaming services to a roaming licensee by means of its most advanced network6 and within the lowest frequency utilized by it7; only if it does not have such coverage shall it provide the roaming licensee with domestic roaming services by means of a higher frequency range or by means of an earlier generation network8, all according to the same priority as its own subscribers.
|
(4) Range of services – The Licensee shall enable a roaming licensee to provide the entire range of services the roaming licensee wishes to provide to its subscribers, subject to the host licensee's technical possibilities and provided this does not burden it unreasonably.
|
6. The Licensee shall cooperate with the roaming licensee, including by -
(1) Blocking sites – The Licensee, at the roaming licensee's request from time to time, shall block the use by the roaming licensee's subscribers in specific coverage areas of sites of the Licensee in which the roaming licensee has coverage.
(2) Dynamic update – The Licensee shall update the roaming licensee on a regular basis regarding the data required for domestic roaming support, according to the roaming licensee's needs and in line with the expansion of its network, and regarding changes in the Licensee's network, including traffic data by sites, records of calls9, billing data of the roaming licensee's subscribers, malfunctions, changes in systems, etc., and the Licensee shall also update its systems, as necessary, according to the network data of the roaming licensee.
(3) Location data – The Licensee shall provide to a roaming licensee, on a regular basis, real-time location data of the roaming licensee's subscribers who are within the Licensee's coverage area. Such location data shall not be less than those received for the Licensee's subscribers.
(4) Visibility - The Licensee shall operate, to the extent possible, in such a manner that a roaming licensee's subscribers do not notice that they are receiving service through the Licensee.
(5) Switching – The Licensee shall transfer all the outgoing and incoming calls through the roaming licensee's network, to enable the roaming licensee to provide to its subscribers all the services it wishes to provide to them, including signaling of failed calls.
(6) Intelligent network – The Licensee shall support, to the extent possible, intelligent network services provided by a roaming licensee.
|
(7) Calls to emergency centers – The call of a roaming licensee's subscriber to an emergency center set up on the Licensee's network shall be routed directly to the emergency center by the Licensee, unless the roaming licensee is able to route it to the appropriate emergency center according to the subscriber's geographical location.
(8) Compliance with statutory provisions – The Licensee shall cooperate with the roaming licensee for the purpose of complying with any statutory provision issued to any of them, where such cooperation is required by the existence per se of domestic roaming.
(9) Handling malfunctions – The Licensee shall repair malfunctions in its systems which impair or could impair the domestic roaming service level agreed upon between the Licensee and the roaming licensee10 or determined by the Ministry.
(10) Prevention of information transfer – The Licensee shall keep fully confidential any information relating to a roaming licensee, and shall prevent the transfer of any information relating to the roaming licensee from its employees and representatives who handle the operation of the domestic roaming to any other personnel of the Licensee, and particularly the Licensee's marketing and sales personnel.
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7. The Licensee shall operate, with respect to domestic roaming, in accordance with the Specifications. Where any matter is not regulating in the Specifications, the licensees concerned shall act according to the best engineering practice11.
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1.
|
System Performance
|
1.1.
|
The system and its services will fulfill performances, qualities and measures defined in the Engineering Plan – Appendix B.
|
1.2.
|
The system performance and services will not fall, in any event, from the following minimum requirements:
|
|
1.2.1.
|
Digital Technology: the system and the services under the extension of the license will be operated using digital technologies, according to relevant international standards.
|
|
1.2.2.
|
Service Coverage:
|
|
1.2.3.
|
Quality of Service:
|
|
(A)
|
In this section:
|
|
(1)
|
“Blocked Calls”: calls that cannot be established or messages that cannot be sent immediately upon entering the order to connect because of non-availability of cellular system resources or resources for connection between the cellular system and other systems;
|
|
(2)
|
“Dropped Calls” – calls stopped not by the initiative of the subscriber caller/connector or that of the receiving subscriber;
|
|
(B)
|
Quality of service in cellular system will not be less than the following:
|
|
(1)
|
the amount of blocked calls during hours of maximum use will not exceed two percent (2%);
|
|
(2)
|
The amount of dropped calls during hours of maximum use will not exceed two percent (2%);
|
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(C)
|
The system will uphold the requirements set out in sub-sections (A) and (B) ninety-nine percent (99%) of the time during maximum use hours;
|
|
(D)
|
Subject to the provisions of section 60.5 of the license, the system will reach the level of requirements set out above by no later than twenty four (24) months from the date of start of provision of such services for pay; from that time, said quality of service will be upheld in all the system’s coverage areas;
|
|
(E)
|
The number of blocked and dropped calls will be measured as follows:
|
|
(1)
|
measure will relate to the time span of one hour;
|
|
(2)
|
the maximum use hour to which the measure will refer will be the busiest hour of the system, on the day the measure is taken;
|
|
(3)
|
The measure will be taken at the maximum use hours on each of five (5) consecutive work days as stated;
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(4)
|
The final number indicating the likelihood of blocked and dropped calls will refer to the average of the five (5) measured over the five (5) said consecutive work days, and for each type of service provided by the system;
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|
(F)
|
Measurement and calculation will be performed for each cell separately, for each switch separately, and for the entire system; notwithstanding the aforesaid, at the written request of the Licensee, the Director may allow exceptions to the provisions of section 1.2.3, after having been satisfied that there is a true difficulty in performing the measure and calculations as stated, provided an alternative measuring and calculation system is proposed.
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2.
|
Customer and Subscriber Services Quality Measures
|
2.1.
|
Services for provision of information to customers and subscribers: will be given by referral to call centers, at service centers, at the internet site, by e- mail, by telephone and by facsimile.
|
2.2.
|
Standards for accessibility and provision of information:
|
|
(A)
|
A56A call center will be manned twenty four (24) hours a day, for receiving calls regarding theft or loss of cellular end-equipment, a network malfunction leading to termination of all cellular services to the subscriber and the "roaming service", all days of the week except on Yom Kippur.
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|
(B)
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A56The call center will be manned at least thirteen (13) hours a day Sundays through Fridays, and five (5) hours a day on Fridays and eves of holidays for receiving calls pertaining to a problem in receiving cellular services, which is
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(C)
|
The reply at the call center will be within a reasonable time. Should the Director observe that the waiting time at the call center is not reasonable, he may set measures for response time.
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|
(D)
|
A caller to a call center during unmanned hours will be referred to a message box to leave a message, and will receive a reply on the following day.
|
|
(E)
|
The Licensee will operate additional channel allowing subscribers to contact it for provision of information and for queries, such as:
|
|
-
|
Computerized voice system IVR;
|
|
-
|
queries via post;
|
|
-
|
queries via fax;
|
|
-
|
queries via e mail.
|
|
(F)
|
The Licensee will publish its service office address and telephone number of the call center in the following ways, among others:
|
|
-
|
In the engagement agreement with the subscriber;
|
|
-
|
In the bills sent to the subscriber;
|
|
-
|
In any document sent on behalf of the Licensee to the subscriber in a matter relating to customer services;
|
|
-
|
In telephone directories and in telephone information centers.
|
|
(G)
|
A58 The Licensee may not use a telephone number with a cell phone area code for a fax service for the purpose of receiving complaints from the public.
|
|
(H)
|
A58Access to all call centers for reporting malfunctions, loss or theft (hereinafter – problem reporting center") will be via a toll-free service (1-800 service). The Licensee will enable access to the problem reporting center from any national domestic network.
|
|
|
(I)
|
A58 Subject to that stated in subsection (h), access to all call centers for matters pertaining to the Licensee's services will be by means of each of the following:
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|
(2)
|
A split-charge call service (1-700 service) or a toll-free service (1-800 service).
|
2.3.
|
Bills to Subscribers
|
|
(A)
|
Bills to subscribers will set out the relevant details for such bill, out of the following:
|
|
(1)
|
monthly charge (fixed charge)
|
|
(2)
|
duration of calls or air time (minutes, seconds)
|
|
(3)
|
volume of data use (MB,kB) – if the service provided is charge by volume of data transmitted.
|
|
(4)
|
Other charges (such as for receipt of data, SMS transmission, mobile electronic commerce).
|
|
(5)
|
Combination of the above charge methods.
|
|
(B)
|
Structure of the Bill
|
(1)
|
Following payment; the bill will serve as a receipt, including:the amount for payment not including VAT, rate of VAT and total for payment including VAT. In this section, the identifying particulars of the Licensee will be specified, and the identifying particulars of the subscriber.
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|
(3)
|
The Licensee may include information regarding deals and personal notices to the subscriber.
|
|
(C)
|
Production and delivery of bills
|
|
(1)
|
The Licensee will produce monthly bills for its subscribers or at any other time with subscriber’s consent.
|
|
(2)
|
A subscriber who wishes to disconnect from the Licensee shall receive a final bill on the nearest possible date, and no later than two months after the disconnection date. A61Where the subscriber and the Licensee agreed on payment in installments for end-equipment purchased by the subscriber from the Licensee, and the subscriber's contract with the Licensee is cancelled before the subscriber has paid all the installments on the end-equipment which he purchased from the Licensee, the Licensee will send the subscriber a final invoice for the Licensee's services, and thereafter the Licensee will be entitled to send the subscriber invoices only in respect of the debit for the end-equipment. A58
|
|
(3)
|
Void T52
|
2.4.
|
A43)Measures for Handling Public’s Applications
|
|
(A)
|
Level of handling a written complaint – The response times for complaints will be up to 14 workdays; the response for 5% of complaints will be within a month.
|
|
(B)
|
Measures for quality of service of the service centers –
|
|
-
|
90% of applications will be handled directly by the service representatives, up to completion.
|
|
-
|
Not more than 10% of applications, some due to escalation of complaints, will be referred to more senior levels.
|
|
(C)
|
Applications clarified by the senior level – In any case where the Public Ombudsman’s reply to a complaint does not satisfy the applicant, the application will be passed on to the managerial level, which will examine the it again and reply directly to the applicant. In any event, the applicant will receive a response within 30 days from the day of his application.
|
1.
|
The telephone bill (hereinafter referred to in this Appendix as the “Bill”) to be presented by the licensee to a subscriber shall be clear, legible and comprehensible; the Bill shall include accurate details about the components of the charge demanded, as set forth in this Appendix.
|
2.
|
The Bill shall include the following parts:
|
|
A.
|
“Billing Summary”;
|
|
B.
|
“Billing Details” including:
|
|
1)
|
Details of fixed charges, variable charges, one-time charges, credits and reimbursements, within the meaning in section 8 E of this Appendix;
|
|
2)
|
Information on usage patterns;
|
|
C.
|
“Call Details”.
|
|
3.
|
The Bill shall be constructed using a bottom-up method, with its bottom level being Part C - “Call Details”, above it Part B - “Billing Details” and at the top level Part A - “Billing Summary”.
|
|
4.
|
The Company name and logo shall be displayed on each page of the Bill, including on the “Call Details”.
|
|
5.
|
The licensee shall issue a “Billing Summary”, “Billing Details” and “Call Details” for each telephone number separately. The licensee may issue to a subscriber holding several telephone lines one “Billing Summary” to refer to all the telephone numbers in the possession of the subscriber, provided that the “Billing Summary” sets forth each of the telephone numbers to which the Bill relates (see examples 1 and 2). “Call Details” and “Billing Details” shall be issued by the licensee for each telephone number separately. Notwithstanding the above, a subscriber in possession of several telephone numbers may demand from the licensee to receive a
|
|
6.
|
Amounts in the Bill shall be rounded off and shall be set forth according to the provisions of section 2.2.2 of Israeli Standard 5262 - “Honesty in Billing and Fair Disclosure in Telephone Bills” (hereinafter referred to in this Appendix as the “Standard”) and the provisions of the General License on this matter. It should be clarified that in respect of the manner of calculating the billing amount, in contrast to the manner of presenting the “Call Details”, and the “Billing Details”, as determined in the provisions, the licensee must calculate this pursuant to the tariff provided in the Regulations, with no rounding off.
|
|
7.
|
The Ministry of Communications’ website in the section on “General Licenses” has examples of telephone bills drawn up pursuant to the detailed provisions of this Appendix (hereinafter referred to in this Appendix as the “Examples”). The Examples are based on telecommunications agreements and tariff plans marketed in 2008 by the general licensees. The examples are for the sake of illustrating the mode of implementation of the provisions only. In the case of any inconsistency between the provisions and the Examples, the binding version is that in the provisions.
|
|
Part A - “Billing Summary”
|
|
8.
|
The following details shall be presented in the “Billing Summary”:
|
|
A.
|
Subscriber Details -
|
|
1)
|
First name;
|
|
2)
|
Surname;
|
|
3)
|
Address;
|
|
4)
|
Customer number;
|
|
5)
|
Telephone number and/or PRI line number by means of which the services on account of which the Bill is presented to the subscriber were provided;
|
|
B.
|
Licensee Details -
|
|
1)
|
Company name;
|
|
2)
|
Company management address;
|
|
3)
|
Customer service telephone and facsimile numbers;
|
|
4)
|
Company website address.
|
|
C.
|
Dates -
|
|
1)
|
Billing date;
|
|
2)
|
Billing period;
|
|
3)
|
Last date for payment of Bill - in respect of a Bill not paid by standing order or by credit card.
|
|
D.
|
Notices to Subscriber
|
|
1)
|
Notice on the option of filing a complaint to the licensee’s public complaints commissioner, about his powers and the ways of contacting him. To the extent that the licensee is not obligated under the provisions of its license to notify every subscriber about the option of filing a complaint with the licensee’s public complaints commissioner on the telephone bill, the licensee shall present a notice on the option of filing a complaint with the licensee’s telephone call center and about the ways of contacting it.
|
|
2)
|
The licensee’s address, telephone number, facsimile number and email address by means of which the subscriber may request the licensee to stop the service or deliver the licensee a notice of cancellation, within the meaning in section 13D of the Consumer Protection Law, 5741-1981. To the extent that the licensee is not obligated under the provisions of its license to provide for the sending of a request to stop the service by email, it is not obligated to present such email address.
|
|
3)
|
Information on offers and personal notices to the subscriber, at the decision of the licensee.
|
|
E.
|
Billing charge exclusive of VAT, as set forth below:
|
|
1)
|
Fixed charges - charges applying to the subscriber not dependent on the scope of usage;
|
|
2)
|
Variable charges - charges applying to the subscriber dependent on the scope of usage;
|
|
3)
|
One-time charges, such as charges for “Exit Fee”, linkage and interest differentials charge for a monetary debt, charge for collection expenses, etc. (hereinafter referred to in this Appendix as “One-Time Charges”);
|
|
4)
|
Credits, such as credit for return of old terminal equipment, credit for a subsidy on terminal equipment, etc. (hereinafter referred to in this Appendix as “Credits”);
|
|
5)
|
Financial reimbursements for surplus charges (hereinafter referred to in this Appendix as “Reimbursements”).
|
|
F.
|
Total payment amount will be presented as set forth below:
|
|
1)
|
Total payment amount exclusive of VAT; the amount shall be calculated according to the charges summary presented in the “Subtotals Summary” and the “Billing Summary”;
|
|
2)
|
VAT amount;
|
|
3)
|
Total payment amount, plus VAT.
|
|
F.
|
All charges appearing in the “Billing Summary” shall be presented as a decimal number in New Israeli Shekels to a degree of accuracy of two digits after the decimal point.
|
|
Part B - “Billing Details”
|
|
9.
|
Part 1 of the “Billing Details” will include information on fixed charges, variable charges, One-Time Charges, Credits and Reimbursements, as set forth below:
|
|
A.
|
“Billing Details” will include general information on the tariffs plan according to the terms of which the subscriber is charged, including details of its main tariffs, inclusive of VAT. Details of the main tariffs will be presented exclusive of VAT for business subscribers.
|
|
B.
|
If the subscriber’s agreement includes a commitment period the licensee must note on every bill in the “Billing Details” the following details:
|
|
1)
|
The duration of the commitment period and its date of expiration; the provisions of this subsection shall not apply in respect of a transaction where there is no obligation to give a collection notice as stated in section 13A(d)(2)(b) of the Consumer Protection Law, 5741-1981.
|
|
2)
|
The payment the subscriber will be asked to pay if he requests to terminate his agreement with the licensee prior to the expiration of the commitment period to the company or the tariff plan (“Exit Fee”) in the course of the billing period following the present billing period (hereinafter referred to in this Appendix as the “Subsequent Billing Period”). In the event that the amount of the Exit Fee changes throughout the Subsequent Billing Period, the time point of reference for determining the amount of the Exit Fee shall be the middle of the Subsequent Billing Period (see Example 1).
|
|
3)
|
To the extent that payment of the Exit Fee also includes payment for subsidizing terminal equipment, the aforesaid payment shall be presented separately. In the event that such payment amount is variable throughout the Subsequent Billing Period, the time point of reference will be the middle of the Subsequent Billing Period (see Example 1).
|
|
4)
|
The licensee will present to the subscriber written details in respect of the mode of calculation of the Exit Fee within 14 days of the date the subscriber submitted a request to the licensee’s customer service center or the public complaints commissioner.
|
|
C.
|
“Billing Details shall be presented by means of a table composed of columns and rows, as set forth in the Examples.
|
|
D.
|
Each service provided to the subscriber in the course of the Billing Period shall be presented in the “Billing Details” in a separate row, with the following details:
|
|
1)
|
Name of service; the name of the service shall identify as clearly and as accurately as possible, the service provided to the subscriber; respecting a service provided to the subscriber not by means of the licensee, the licensee shall present the details of the service provider, including its name and a telephone number by means of which it can be contacted;
|
|
2)
|
Quantity; quantity measured in time will be presented in the form of mm:ss (minutes: seconds). Quantity measured by data volume will be presented as a decimal number in MB to a degree of accuracy of at least 3 digits after the decimal point. The quantity of internet pages viewed or text messages will be presented as a natural number.
|
|
3)
|
Tariff; the tariff will be presented as a decimal number in New Israeli Shekels, to a degree of accuracy of at least 3 digits after the decimal point. The tariff is composed of several payment components, such as one tariff for the licensee’s services and a second tariff for reciprocal link or for international phone service, will also be presented as one inclusive tariff (see Examples 1 and 2). Calls in respect of which the tariff varies in the course of performance, such as a transition from off-peak to peak rates and from peak to off-peak rates, a change in tariff in the course of a conversation, including a conversation started within the scope of a “pay as you go” plan and exceeding the minutes in the course of performance, will be presented collectively within the “Calls at Variable Tariff in the Course of a Call” service; the tariff will be presented under the column “Average Tariff” and will be calculated by dividing the charge amount in the “Subtotal Row”, within the meaning in section 11I of the Appendix by the quantity (see Example 5 - Version A). To the extent that a call in the “Calls at Variable Tariff in the Course of a Call” is presented as set forth in the concluding part of section 11L below, the “Average Tariff” will not be required to be presented and the tariff will be presented according to each segment separately (see Example 5 - Version B).
|
|
4)
|
The charge amount; the charge amount will be calculated by multiplying the quantity by the tariff and it will be identical to the charge amount appearing in the “Call Details” in the “Subtotal Row”; the charge in the “Subtotal Row” in the “Call Details” of each segment of a “Call at a Variable Tariff in the Course of a Call” will be included in the “Account Details” within the scope of the appropriate category of service (see Example 5 - Version B).
|
|
5)
|
In the event that there is also a fixed charge for each individual call, the number of calls made and the fixed tariff per call shall also be presented in the same row and the charge amount shall be calculated by multiplying the number of calls by the fixed charge tariff per call plus the quantity multiplied by the tariff (see Example 4).
|
|
E.
|
The “Fixed Charges”, “One-Time charges”, “Credits”, “Reimbursements” and "Linkage differences and interest" as specified in sections 60.8 and 83A A58, shall each be presented in the “Billing Details” in a separate group (see Examples 3 and 5).
|
|
F.
|
The licensee shall notify the subscriber in the Bill of his option to request written details in respect of the mode of calculation of A58 the “One-Time Charge”; the licensee will furnish the subscriber with such written details within 30 days of the date of submission of a request by the subscriber on the matter to the licensee’s customer service center or the customer complaints commissioner (see Examples 3 and 5).
|
|
G.
|
Charges may also be noted in the “Billing Details” for sale of terminal equipment and charges for services which are not telecommunication services.
|
|
H.
|
The “Billing Details” shall include subtotals of charge amounts exclusive of VAT, for fixed charges, variable charges, One-Time Charges, Credits and Reimbursements (“Subtotal Row”).
|
|
I.
|
The final charge amount will be presented exclusive of VAT, and alongside such amount will be presented the charge amount inclusive of VAT.
|
|
J.
|
The licensee must note in the “Billing Details” a comment whereby to the extent that there is a difference between the charge amount and the subtotal of charge amounts set forth in the Subtotal Rows of the “Billing Details”, they originate in the fact that the charge amount was calculated according to tariffs to a higher degree of accuracy than that determined in the provisions of the license and the Standard.
|
|
K.
|
All charge amounts appearing in the “Billing Details” will be presented as a decimal number in New Israeli Shekels to a degree of accuracy of two digits after the decimal point, unless expressly determined otherwise.
|
|
10.
|
In Part 2 of the “Billing Details” the licensee shall present in graph form or in any other manner in respect of each telephone number to which the telephone bill relates information about usage patterns, as set forth below:
|
|
A.
|
The rate of utilization of each package of services included in the tariffs plan to which he is a subscriber, including packages of services granted to a subscriber within the scope of the fixed charge;
|
|
B.
|
Details of charges according to categories of services;
|
|
C.
|
Distribution of call minutes and text messages according to categories of licensees on whose network the call was completed (internal network, external network according to category of licensee - mobile radio-telephone, internal domestic fixed line telephony).
|
|
Part C - “Call Details”
|
|
11.
|
The details set forth below shall be presented in the “Call Details”:
|
|
A.
|
“Call Details” shall include information about all the services provided to the subscriber in the period to which the Bill relates.
|
|
B.
|
Each “category of service” shall be set forth in a separate group under the heading of the service name, with each item in the “category of service” being presented in a separate row, pursuant to the provisions of subsection 11E. Respecting PTT services, no details are required for each call separately.
|
|
C.
|
Presentation of data in relation to each “category of service” appearing in the “Call Details” will be carried out in ascending chronological order.
|
|
D.
|
“Call Details” will be presented in table format pursuant to the details in the Examples.
|
|
E.
|
In respect of each item appearing in the “Call Details”, at least the following data shall be noted:
|
|
1)
|
Date of performance of call or text message or internet surfing;
|
|
2)
|
Time (hh:mm:ss);
|
|
3)
|
Call destination (if any);
|
|
4)
|
Quantity;
|
|
5)
|
Tariff exclusive of VAT, to a decimal number in New Israeli Shekels to a degree of accuracy of at least 3 digits after the decimal point.
|
|
6)
|
Charge amount exclusive of VAT, to a decimal number in New Israeli Shekels to a degree of accuracy of at least 3 digits after the decimal point.
|
|
F.
|
The tariff presented shall be the tariff according to which the subscriber is charged, viz., for example, after a discount, if any, the cheaper tariff offered to the subscriber within the scope of any offer, etc.
|
|
G.
|
The quantity, tariff and charge amount will be presented in adjacent columns if possible, so that the quantity multiplied by the tariff will give the charge amount. If there is also a fixed charge per call the quantity of calls made and the fixed charge per call shall be presented and the charge amount will be calculated by the quantity of calls multiplied by the fixed charge tariff per call plus the quantity multiplied by the tariff (see Example 4).
|
|
H.
|
Quantity measured by time will be presented in the form of mm:ss (minutes: seconds); quantity measured by data volume will be presented as a digital number in MB to a degree of accuracy of at least 3 digits after the decimal point; the quantity of internet pages viewed or text messages will be presented as a natural number.
|
|
I.
|
Any “Category of Service” appearing in the “Call Details” will include a summary row in which will be set forth the total quantity for which the subscriber is charged and the total charge amount in respect of such “Category of Service” exclusive of VAT (hereinafter referred to in this Appendix as the “Subtotal Row”).
|
|
J.
|
Any charge amount appearing in the “Subtotal Row” will be presented in the “Billing Details” as a decimal number to a degree of accuracy of two digits after the decimal point, with the quantity presented alongside.
|
|
K.
|
The presentation of each Subtotal Row shall be made in a prominent manner.
|
|
L.
|
A call whose tariff is variable in the course of performance thereof, such as a transition from off-peak to peak rate or from peak to off-peak rate, a change in tariff in the course of the conversation, including a conversation starting within the scope of a “pay as you go” program and exceeding the minutes in the course of performance thereof, will be presented within the
|
|
M.
|
The licensee may provide a subscriber making an express request, with Call Details in chronological order in which the calls were provided with no separation between categories of services, provided that it notifies the subscriber within the scope of the “Call Details” that he may receive “Call Details” also pursuant to the format determined in section 11(b).
|
|
A59APPENDIX E2 – ACCESS TO SERVICES FORM
|
Form for Access to Services by Means of a Cellular Device Charged in Telephone Statement
Name of Licensee
Means of Sending the Form:
Address
Email address
Facsimile number
Date: _________________
I, whose particulars are recorded below, request access to the services set forth below for the telephone number noted in this form, as follows:
Subscriber particulars
Subscriber name/company name: ___________ I.D/co. no. ________________ Address: _______________ telephone number: _______________
Mark X according to your selection and sign. For your attention, failing to mark and sign means blocking the option of receiving the service.
|
No.
|
Category of service
|
Blocked
|
Open
|
Subscriber signature
|
||
1.
|
Cellular internet surfing service, including on Licensee's cellular portal, by means of a device
|
¨
|
¨
|
|||
2.
|
Content and/or information service one-time
|
A.
|
Receipt or downloading content via the internet, viewing and/or listening to such content on a one-time basis (such as downloading or viewing a video film, listening to a song, downloading a ringtone, downloading a video film, downloading a game, all on a one-time basis)
|
¨
|
¨
|
|
B.
|
Sending an SMS by special payment for voting within the scope of a program broadcast on television on a one-time
|
¨
|
¨
|
basis (such as voting in a reality program on a one-time basis) | ||||||
C.
|
Giving a donation by means of sending an SMS on a one-time basis (such as a donation to an association on a one-time basis)
|
|||||
D.
|
Receipt of content and/or information on a one-time basis (such as information on transportation lines, professionals, financial information, all on a one-time basis)
|
¨
|
¨
|
|||
3.
|
Content and/or information service
continuing – Subscriber
|
A.
|
Receipt or downloading of content via the internet, viewing and/or listening to such content not on a one-time basis (such as a subscriber for downloading or viewing a video film, subscriber to a music service, subscriber for downloading ringtones, subscriber for downloading video films and subscriber for downloading games)
|
¨
|
¨
|
|
B.
|
Receipt of content and/or information not on a one-time basis (such as a subscriber for receipt of news updates, subscriber for receipt of sports results, subscriber for receipt of trivia questions and subscriber for receipt of diet recipes)
|
¨
|
¨
|
Upon agreement in the presence of the Licensee's representative – I declare that this form was marked and signed by me
Name of Licensee's representative: ____________ signature of Licensee's representative: ___________
Subscriber's signature: ____________________________________
|
|
1.1
|
Ordering a Service from the Licensee
The ordering of a service on the Licensee's website or on its cellular portal (both hereinafter – the "Site") shall be done according to one of the alternatives detailed in sections 1.2 or 1.3.
|
|
1.2
|
Random Code
|
|
(a)
|
The subscriber shall enter on the Site, in the place designated for that purpose, his subscriber number9.
|
|
(b)
|
If the subscriber is blocked for the service, the Licensee shall send the subscriber an SMS notifying him that he is blocked for the type of service that was ordered, and that he can apply to the Licensee to remove the block for that type of service.
|
|
(c)
|
If the subscriber is not blocked for the service, the Licensee shall send the subscriber an SMS including the following:
|
|
(1)
|
The name of the service including its classification as "one-time" or as "continuing."
|
|
(2)
|
The price of the service. The price shall be displayed in a detailed manner, including details concerning a "one-time" payment, a "fixed" payment for a specific period, including specification of the period, and the unit price according to which the payment for the service is measured.
|
|
(3)
|
A random code of five (5) digits (hereinafter – the "Sent Code").
|
|
(d)
|
The subscriber shall enter on the Site, in the place designated for that purpose, the Sent Code.
|
|
(e)
|
The Licensee shall compare the Sent Code and the code entered by the subscriber as stated in subsection (d) (hereinafter – the "Entered Code").
|
|
(f)
|
If the Entered Code is identical to the Sent Code, the Licensee shall send the subscriber an SMS notifying him that his registration for the service was approved, and in the case of a continuing service – information
|
|
(g)
|
If the Entered Code is not identical to the Sent Code, the Licensee shall send the subscriber an SMS notifying him that his registration for the service failed due to such non-identity.
|
|
1.3
|
User Code and Password
|
|
(a)
|
The Licensee shall display on the Site, next to the place designated for ordering the service, prominently and in a clear and legible manner, the following details:
|
|
(1)
|
The name of the service including its classification as "one-time" or as "continuing." In the case of a continuing service – information concerning the manner in which it is possible to cancel the registration for the service.
|
|
(2)
|
The price of the service. The price shall be displayed in a detailed manner, including details concerning a "one-time" payment, a "fixed" payment for a specific period, including specification of the period, and the unit price according to which the payment for the service is measured.
|
|
(b)
|
The subscriber shall enter on the Site the user code and the password set or approved for him by the Licensee (hereinafter – the "Identity Code").
|
|
(c)
|
If the subscriber is blocked for the service, the Licensee shall display to the subscriber a message addressed exclusively to him on the Site, notifying him that he is blocked for the type of service that was ordered, and that he can apply to the Licensee to remove the block for that type of service.
|
|
(d)
|
The Licensee shall compare the Identity Code and the user code and password set by it for the subscriber and saved in its system (hereinafter – the "Saved Code").
|
|
(e)
|
If the Identity Code is identical to the Saved Code, the Licensee shall provide the service to the Licensee.
|
|
(g)
|
If the Identity Code is not identical to the Saved Code, the Licensee shall send the subscriber a message addressed exclusively to him through the Site, notifying him that his registration for the service failed due to such non-identity.
|
|
2.
|
Ordering a Service from a Service Provider
|
|
2.1
|
The ordering of a service on the website of a service provider shall be done in the following manner:
|
|
(a)
|
The subscriber shall enter on the website of the service provider (hereinafter – the "Service Provider's Site"), in the place designated for that purpose, his subscriber number1.
|
|
(b)
|
The service provider shall send the Licensee a message including the subscriber number, the type of service requested and the details of the service as set out in paragraph (d) below.
|
|
(c)
|
If the subscriber is blocked for the service, the Licensee shall send the subscriber an SMS notifying him that he is blocked for the type of service that was requested, and that he can apply to the Licensee to remove the block for that type of service. In addition, the Licensee shall notify the service provider that the subscriber is blocked for the service.
|
|
(d)
|
If the subscriber is not blocked for the service, the Licensee shall send the subscriber an SMS including the following:
|
|
(1)
|
The name of the service including its classification as "one-time" or as "continuing."
|
|
(2)
|
The price of the service. The price shall be displayed in a detailed manner, including details concerning a "one-time" payment, a "fixed" payment for a specific period, including specification of the period, and the unit price according to which the payment for the service is measured.
|
|
(3)
|
A random code of five (5) digits (hereinafter – the "Code").
|
|
(e)
|
The subscriber shall enter on the Service Provider's Site, in the place designated for that purpose, the Code.
|
|
(f)
|
The service provider shall send the Licensee the code that was entered by the subscriber as stated in paragraph (e) (hereinafter – the "Entered Code").
|
|
(g)
|
The Licensee shall compare the Code and the Entered Code.
|
|
(h)
|
If the Entered Code is identical to the Code, the Licensee shall send the subscriber an SMS notifying him that his registration for the service was approved, and in the case of a continuing service – information concerning the manner in which it is possible to cancel the registration for the service. In addition, the Licensee shall notify the service provider that the registration
|
|
(i)
|
If the Entered Code is not identical to the Code, the Licensee shall send the subscriber an SMS notifying him that his registration for the service failed due to such non-identity. In addition, the Licensee shall notify the service provider that the registration for the service failed.
|
1.
|
Definitions
|
1.1
|
In this document, the following words and terms will have the definitions noted at their sides, unless otherwise deriving from the language or context:
|
Bezeq International -
|
The Bezeq International Company Ltd. ;
|
|
Barak -
|
Barak I.T.C. (1995) Company for International Telecommunications Services;
|
|
Chance caller -
|
A Licensee subscriber, calling abroad using an international operator, using a three digit dialing code, as set out in section 2;
|
|
Subscriber number (or telephone number) -
|
A group of numbers in a certain order, including area code, the dialing of which should create a telecommunication’s connection between the reading subscriber’s end user equipment and the reader subscriber’s end user equipment; a reader subscriber number may be a subscriber number of a number to a call answering center of a subscriber or a number to a call answering center of a licensee2
|
|
International operator -
|
Anyone providing international telecommunications services to the public in Israel under a general license from the Director;
|
|
Chosen operator -
|
An international operator chosen by appointment, under the provisions of section 43
|
|
Access code -
|
A group of numbers in a certain order, the dialing of which allows access to a certain telecommunications service of a certain operator; dialing additional codes, as needed, and the subscriber number, should create a telecommunication connection to the subscriber’s end user equipment4 ; if the access code is a manned call center, the service is given via the operator.
|
Short dialing code -
|
“00” ” and “188” access code, designated to receive international telecommunications services, by direct dialing, or via an operator, as explained in section 2;
|
|
Golden Lines -
|
The Golden Lines International Communications Services Company;
|
|
Subscriber ascription
|
The technically defining action an internal operator performs in his switch so that his subscriber’s calls, performed through a shortened dialing code, are channeled into the chosen operator’s switch;
|
|
Outgoing ITMS calls -
|
Transferring a verbal message or facsimile message via an international telecommunications service, initiated by a Licensee subscriber;
|
|
Ingoing ITMS calls -
|
Transferring a verbal message or facsimile message via an international telecommunications service, initiated by an international caller;
|
|
International Telecommunications Services -
|
Telecommunications services given to the public in Israel, under license from the Director, via an international operator’s international telecommunication services;
|
|
ITMS service
|
International telecommunications message service, that is, two-directional simultaneous transfer of talk and simultaneous transfer of facsimile messages, in an international telecommunications system.
|
1.2
|
Words and expressions in this document not defined above shall have the meaning as defined in the Law, regulations enacted by virtue thereof, in the Interpretation Law, 5741 – 1981, or as set out in the appropriate places in the Licensee’s general license and in the International Operators’ licenses, unless otherwise deriving from the language or context.
|
2.
|
Allocation of Access Code
|
|
2.1
|
A Licensee will channel subscriber dialing, to the international operators’ switches, for access to international telecommunications’ services, using the following codes:
|
|
(A)
|
double-digit access code – the ‘00’ access code, which will serve as short access code for international telecommunications services provided by a
|
|
(B)
|
triple-digit access code – an access code of ‘01X’ type, which will serve as an access code for international telecommunications services provided to a chance user; the Licensee will channel any subscriber dialing the prefix ‘01X’ code to the international operator according to the X digit; the X digit is the international operator’s code, according to the following:
|
|
1.
|
‘2’ – code for Golden Lines’ services;
|
|
2.
|
‘3’ – code for Barak services;
|
|
3.
|
‘4’ – code for Bezeq International services;
|
|
(C)
|
‘188’ access code – that will serve as a number for operator services ; any subscriber dialing ‘188’ will be channeled by the Licensee to the chosen operator’s operator services;
|
|
(D)
|
four-digit access code – numbers of the ‘18XY’ type, that will serve as an access code for various international telecommunications services of any and all international operators; any subscriber dialing ‘18XY’ will be channeled by the Licensee to the international operator according to the X digit; the X digit is the code of the international operator under section 2.1(B); the Y digit is any number from 1 to 9 and the 0 digit; the use of the Y digit will be determined by the Director, under advisement with the international operators, in order to ensure uniformity and fair competition; each international operator will be allocated ten (10) such four digit numbers/ these numbers will be accessible for both the chosen operator’s subscribers and for chance callers.
|
|
2.2
|
If the Licensee allows its subscriber the use of another short dial code (such as +), instead of the “00” dial code (hereinafter: a special code), all the provisions and rules applicable to the short “00” dial code will apply to the special code as well.
|
|
2.3
|
Dial by pre-paid program for unidentified subscribers who are not blocked for outgoing ITMS calls will be possible only using three-digit access codes of the 01X type, and four-digit access codes of the 18XY type; upon dialing a short access code or a special access code, a voice announcement will be heard referring the customer to dial via said access codes available to him.
|
|
2A.1
|
The Licensee will allow subscribers to act as follows, with regard to outgoing ITMS calls:
|
|
(D)
|
as an ascribed subscriber.
|
|
(E)
|
As blocked
|
|
(F)
|
As a chance caller only.
|
3.
|
Blocking Outgoing International Calls and Removal of the Blocking
|
3.1
|
The Licensee will block outgoing ITMS calls, and may also block collect incoming ITMS calls for any subscriber requesting to block access to international services or subscribers for whom the international service for outgoing ITMS calls has been stopped or cut off, in accordance with the conditions of the License; the licensee may not block incoming ITMS calls except collect calls.
|
3.2
|
If a block for outgoing ITMS calls has been implemented at a subscriber’s request, the Licensee will remove the block as follows: A23
|
|
(A)
|
If the subscriber has asked to join, he will indicate his choice international operator who shall serve as his “chosen operator”, by his signature on the appropriate form; notice given by means of facsimile will be deemed notice in writing given to by the subscriber in this matter.
|
|
(B)
|
If the subscriber has asked to be a chance caller, he will notify the Licensee of such; if the notice is verbal, the Licensee will verify the requesting party’s identity.
|
3.3
|
The Licensee will perform the block for ITMS or removal thereof, performed in accordance with the subscriber’s request, according to the following:
|
|
(A)
|
70% - Within one working day of receipt of notice; requests received after 1500 hours will be deemed having been received on the following work day;
|
|
(B)
|
20% - within two working days of receipt of notice;
|
|
(C)
|
the rest – within 5 working days.
|
3.4
|
The Licensee will ensure that a subscriber who has blocked his outgoing ITMS calls cannot make outgoing calls using ‘00’ dialing code, ‘01X’ dialing code, ‘188’ or ‘18XY’ dialing codes, or using any other code that may come in place thereof A23 .
|
3.5
|
The Licensee may collect reasonable payment for performance of a block for outgoing ITMS calls or for removal of the block.
|
3.6
|
Notwithstanding that stated in section 3., the Licensee will allow all its subscribers to block outgoing ITMS calls before initiation of services for such subscriber, free of charge.
|
3.7
|
The Licensee will verify that all subscribers whose access to outgoing ITMS calls has been blocked receive appropriate voice message when dialing access codes or telephone numbers for international services.
|
3.8
|
If a subscriber who has chosen a chosen operator asks to block outgoing ITMS calls, the Licensee shall notify such to the chosen operator, within seven (7) working days of the date of performance of the block.
|
4.
|
Choosing a Chosen Operator
|
4.1
|
A Licensee’s subscriber may notify the international operator in writing, on a signed form approved by the Director, regarding his choice of a chosen operator through whom such wishes to receive international telecommunications services using ‘00’ or ‘188’ access codes; the form will including the particulars of the subscriber – first name, last name or name of corporation, ID number of ID number of the corporation, address and telephone numbers the subscriber asks to define the international operator as the chosen operator for, and the date and time when instruction regarding the appointment was given. The form will explain that any phone number may have one chosen operator only, and such will fulfill the requirements prescribed in this matter in the international operator’s license7 (hereinafter: the ascription form).
|
4.2
|
Subscribers may change the chosen operator at any time by written notice on the ascription form; for initial ascription made at the subscriber’s request, the subscriber will not be asked to pay anything, however the subscriber may be charged a reasonable fee for any change in the ascription.
|
4.3
|
The chosen operator will send the Licensee notice regarding the subscriber’s having chosen him as the chosen operator (hereinafter: ascription notice); ascription notice will include the subscriber’s particulars - first name and last name, address and telephone numbers the subscriber asked to define the international operator as the chosen operator for, and the date and time of the ascription form on which the subscriber signed; the chosen operator will give ascription notice to the Licensee in accordance with the ascription forms signed by him; ascription notice will be given via magnetic media files, or in any other manner agreed upon between the Licensee and the international operators. If two or more ascription notices are given to the Licensee, relating to the same telephone number, the sc will act in accordance with the ascription notice with the later date and hour.
|
4.4
|
If a person has asked to become a new Licensee subscriber, he must make note, in the request to the international operator of his choice to engage with as a chosen operator; the Licensee will allow any new subscriber to choose a chosen operator for himself or to block the outgoing ITMS calls, or will allow the subscriber to receive ITMS services as a chance caller only; ascription services to a chosen operator or
|
4.5
|
In order to choose a chosen operator, and without derogating from the aforesaid, the Licensee will act as follows:
|
|
(A)
|
the Licensee will allow all subscribers having a subscriber line number to choose one chosen operator will be for certain subscriber lines, and another for other subscriber lines;
|
|
(B)
|
VoidA2A23 .
|
|
(C)
|
the Licensee will perform ascription of a subscriber within one working day of receipt of ascription notice form the chosen operator A2A23.
|
|
(D)
|
The Licensee will report to the international operator regarding completion of said subscriber ascription as stated in sub-clause (C) above, including change of ascription at the time and under such plan as agreed upon between the Licensee and the international operator; the report will include particulars of the subscriber – first name, last name or name of corporation, address and telephone numbers the subscriber asked to ascribe to the international operator.
|
|
(E)
|
A20 The Licensee will send a daily modification file of subscriber ascription to all international operators (hereinafter: the modification file), containing the particulars of the subscribers who ascribed to the international operator or who unsubscribed on that day. The modification file will be handed over at the time and under such procedure as shall be agreed upon between the Licensee and the international operator. The file will include the particulars of the subscriber, including at least the first name, last name or name of corporation, ID number of ID number of the corporation, address and telephone numbers the subscriber asks to define the international operator as the chosen operator for. effect
|
|
(F)
|
The Licensee may request that the Director allow in certain cases, all the prescription of rules and limitations on the matter of subscriber ascription, the Licensee will set out the technical or operational reasons on which such request is based; if the Director consents to the Licensee’s said request, at his professional discretion, the Director will prescribe the time frame for the applicability of said rules and limitation;
|
|
(G)
|
The Licensee will submit a written quarterly report to the Director, by the 15th of the month following the end of the quarter; the information in the report will be correct as of the last day of the calendar quarter preceding the date of the report, and will include the following:
|
|
(1)
|
The number of subscribers blocked form international telecommunications services;
|
|
(2)
|
The number of subscriber engaged for international services using short dialing codes or using special codes, for each of the international operators;
|
|
(3)
|
A23 The number of subscribers engaged for international services as chance dialers only.
|
|
(H)
|
If there should be any disputes between the international operator or between the Licensee and the international operator on the matter of a subscribers choosing a chosen operator, the matter will resolved by the Director, or resolved by an independent arbitrator appointed by the Director, at his exclusive discretion.
|
4.6
|
The Licensee will channel any subscriber dialing using the ‘00’ prefix or any other special prefix for access to international telecommunications services, or channeling a call to a Licensee’s subscriber located abroad using an international operator (follow-me subscriber service) to the chosen operator.
|
5.
|
Void A23
|
6.
|
Block for short dialing code
|
6.1
|
Subject to the provisions of this appendix, the Licensee will perform a block for short dialing code for any subscriber so requestingA23 .
|
6.2
|
The Licensee will perform the block for short dialing code as follows: the Licensee will channel the subscriber’s calls using the double-digit ‘00’ prefix and the ‘188’ prefix to an announcer playing a recorded announcement stating the following in Hebrew, English, Arabic and Russian: “This service is blocked, for further details please dial ___ (a telephone number of the announcer under the provisions of section 6.7)A23 .
|
6.3
|
Void A23
|
6.4
|
Void A23
|
6.5
|
Void A23
|
6.6
|
Void A23
|
6.7
|
The Licensee will operate the voice announcement 24 hours a day, including Saturdays and holidays, using such method and wording allowing a subscriber to receive an explanation regarding the ascription and overseas dialing, in Hebrew, English, Arabic and Russian; the explanation will include the following matters:
|
|
(A)
|
Performance of ascription – the ascription process and where to call in order to request the ascription form;
|
|
(B)
|
How one may make an international call when the subscription is blocked for short dialing codes;
|
|
(C)
|
The option of blocking overseas dialing and the option of removing such block;
|
|
(D)
|
Where one may call in order to find out about additional matters – telephone numbers of international operators.
|
7.
|
Interconnection
|
7.1
|
The Licensee will connect its system to all international telecommunications system, directly or indirectly, according to the terms of its license, in a manner allowing provision of international telecommunications services to all subscribers through the international telecommunications services of all international operators, including outgoing and incoming ITMS calls, direct dialing, dialing through an operator (‘188’ service, as stated in section 2.2(A)), “Direct Israel” services, collect service (from abroad to Israel, from Israel abroad), international 1-800 service (incoming and outgoing), calling card services, from any destination abroad and to any destination abroad.
|
7.2
|
The technical, operational and commercial arrangements between the Licensee and any international operator will allow the provision of the following to all subscribers:
|
|
(A)
|
Quality service, including service quality control and means for investigating and dealing with subscriber’s complaints regarding quality of service;
|
|
(B)
|
Accurate and precise billing of subscriber, including control over the billing and means for investigating and dealing with subscriber’s complaints regarding incorrect billing and tools and means of identification and prevention of fraud and deception;
|
|
(C)
|
Consumer response to subscriber’s queries and questions, including tools and means of providing an itemized bill for subscribers, and for investigating subscriber’s queries in all matters related to receipt of international services.
|
7.3
|
In order to implement the provisions of this appendix, the Licensee will act, inter alia, as follows:
|
|
(A)
|
Allow any subscriber who has not blocked outgoing international ITMS calls to make international calls at any time via his chosen international operator or as a chance caller, using dialing methods set out in section 2;
|
|
(B)
|
Allow all subscribers to change their chosen operators; this service will be given in return for a reasonable charge,
|
|
(C)
|
Take reasonable measures to prevent subscriber ascription to a chosen operator without his knowledge or against the subscriber’s wishes (“slamming”); these measures will include identification of the subscriber and verification of the subscriber’s right to receive service;
|
|
(D)
|
Give all subscribers, free of charge, service allowing them to identify the name of their chosen operators;
|
|
(E)
|
The Licensee will offer non-discriminatory conditions to all international operators, including in all matters regarding the commercial conditions, billing and collections arrangements, availability of connection installations and quality of service; without derogating from the generality of the aforesaid, the Licensee will provide service for all international operators under equal conditions including in the matter of interconnection, provision of infrastructure installations and connection services to the network, performance of changes in switching, in installations, protocols and network interface;
|
|
(F)
|
The conditions for interconnection between the Licensee’s system and the international operator’s international telecommunications system will be reasonable and non-discriminatory; if the parties have not reached any agreement, the Minister will determine matters between them;
|
|
(G)
|
A copy of any agreement between the Licensee and international operator in the matter of interconnection will be delivered to the Director;
|
|
(H)
|
Any international operator requesting the particulars of a subscriber refusing to make payments to the Licensee designated for the international operator for services used via the international operator’s international telecommunications system will be given over, whether such subscriber was an ascription subscriber or a chance caller; these particulars will include the first name, last name or name of corporation, ID number of ID number of the corporation, address and telephone number.
|
|
(I)
|
A22 Allow international operators to collect payment directly for services from subscribers ascribed to such international operator, and who have chosen to receive billing and collections services directly; the Licensee will have any vital information required by the international operator at his disposal allowing the international operator to provide billing and collection services for such aforesaid ascribed subscribers;
|
|
(J)
|
A22 Provide services under equal and non-discriminatory conditions and for such charge not discriminating against an ascribed subscriber who has chosen to receive billing and collection services from the international operator.
|
7.4
|
The international operators will bear the costs of implementation of the interconnection including the process of survey and blocking short dialing codes, and, if so required, for a subscriber’s initial ascription to a chosen operator; the rate of payments, as stated, will be determined under negotiation between the Licensee and the international operator; the Licensee’s shared expenses that cannot be ascribed to a particular international operator will be divided equally between all international operators; if the parties have not come to an arrangement, the Minister will prescribe instructions in these matters, after giving the parties a fair opportunity to argue their claims before him.
|
“Old technology phone” –
|
A cellular phone operating on IS-54 format;
|
“New technology phone” -
|
A cellular phone operating on IS-136 format;
|
“Upgradeable telephone” -
|
An old technology phone that may be upgraded to a new technology phone;
|
“Date of cessation of service” -
|
The date on which the Licensee ceases to provide cellular services to an old technology phone owner.
|
“Eligible customer” -
|
The Licensee’s subscriber or customer who has lawfully purchased an old technology telephone and has not exchanged or upgraded it to a new technology phone;
|
“Telephone Number” -
|
The number of the cellular telephone given to a subscriber or customer who lawfully purchased an old technology phone and connected to the Licensee’s network;
|
“Upgrade” -
|
Exchanging the software version of the telephone upgrades the telephone, wherein it becomes a new technology phone.
|
Discontinuation of service
|
2.
|
Notwithstanding the aforesaid in section C of chapter E of the General License, the Licensee may discontinue provision of cellular services to eligible customers, provided all the following provisions apply:
|
Publication
|
3.
|
(A) The Licensee will publish an appropriate notice under these provisions in three of the largest newspapers in Israel, one of which is published in Arabic, on the closest Friday to the date 30 days before the date of cessation of service.
(B) The Licensee will publish an appropriate notice under these provisions in three of the largest newspapers in Israel, one of
|
which is published in Arabic, on the closest Friday to the date 30 days earlier than the end of six months from the date of cessation of service.
|
||
Exchange of telephone
|
4.
|
The Licensee will exchange an old technology telephone including all accessories thereto, including a hands-off device, for a new technology telephone, including all accessories thereto, for any eligible customer, on the basis of accessory for accessory, including the installation thereof, provided the new technology telephone is of no lesser features than the new technology telephone’s features, free of any direct or indirect charge to the customer.
|
Upgrade
|
5.
|
The Licensee will upgrade an eligible customer’s upgradeable telephone, free of any direct or indirect charge to the customer.
|
Telephone number
|
6.
|
The Licensee will keep the telephone number allocated to any eligible customer before the date of cessation of service for a period of six months from the date of cessation of service; after this period the Licensee may exchange the telephone number of an eligible customer who did not exchange the old technology telephone to a new technology telephone or did not upgrade an upgradeable phone during that period.
|
Notice of Application
|
7.
|
The Licensee shall inform the Director in advance and in writing of the day of Discontinuation of Service and of the days of Publication as detailed in sub-sections 3(A) and (B) above and shall furnish the Director with copies of the notices as published.
|
Period
|
8.
|
The Licensee will fulfill the provisions of sections 4 and 5 above starting on the date of publication prescribed in sub-section 3(A) above for a period of 7 years from the date of cessation of service.
|
Conditions of service
|
9.
|
The provisions of sections 4, 5 and 6 will be deemed a condition of service, as defined in section 37B.(A)(1) of the Telecommunications Law.
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1.
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Definitions
In this appendix –
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"Day of Service Discontinuation"
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December 31, 2011 or an earlier date, if no initiated calls are made in the system operating by the IS-136 (TDMA) technology (hereinafter – the "old system") by entitled subscribers during at least 14 consecutive days.
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"Entitled Subscriber"
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A subscriber, excluding a dormant subscriber to which the service was discontinued, who prior to the day of service discontinuation held obsolete equipment and has still not replaced or upgraded it to new equipment.
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"Phone Number"
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The phone number given to an entitled subscriber holding obsolete equipment.
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"New Equipment"
|
Cellular end equipment, including a battery and charger, reconditioned or new according to the Licensee's choice, operating at a minimum on a system using the GSM technology, of Nokia 6070 model or another model with features not inferior to those of the said model.
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"Obsolete Equipment"
|
Cellular end equipment operating on the obsolete system and its accessories, including end equipment which is out of order or missing.
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2.
|
The Licensee shall discontinue the provision of cellular service to a subscriber holding obsolete equipment, starting from the service discontinuation day.
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3.
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Publication of Service Discontinuation
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3.1
|
The Licensee shall publish, in at least three major dailies in Israel one of which is published in Arabic, on the closest Friday to the date 30 days before the service discontinuation, an appropriate notice notifying the public of the discontinuation of activity of the system using the IS-136 (TDMA) technology and the services provided to its subscribers through that system, in accordance with the provisions of this appendix (hereinafter – the "first notice"). In addition, it shall send a written notice similar to the first notice to each entitled subscriber whose address is registered with the Licensee. The Licensee shall submit the contents of the first notice to the Director for approval prior to its publication.
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3.2
|
The Licensee shall publish, in three major newspapers in Israel, one of which is published in Arabic, on the closest Friday to the date 30 days earlier than the end of six months from the date of service discontinuation, an additional notice, in accordance with the provisions of this appendix (hereinafter: the "second notice"). Notwithstanding the foregoing, the Licensee is entitled not to publish a second notice as stated, if no entitled subscriber exists on that date.
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3.3
|
The Licensee shall send an entitled subscriber a voice message and an SMS concerning the discontinuation of the service, by one week before the day of service discontinuation.
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3.4
|
The Licensee shall publish a notice similar to the first notice also on its website, starting from the date of publication of the first notice until 30 days after the publication of the second notice.
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4.
|
End Equipment Replacement Process
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4.1
|
The Licensee shall do the following, without any direct or indirect consideration:
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a.
|
It shall replace for each entitled subscriber the obsolete equipment with new equipment.
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b.
|
For an entitled subscriber with a speaker, it shall replace the speaker with a reconditioned or new speaker compatible with the new equipment. In this regard, replacement – including installation of the speaker.
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c.
|
It shall grant a warranty for the new equipment and for the speaker, as the case may be, for a period of no less than two years from the day of publication of the first notice.
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|
(All that stated in section 4.1 above – "upgrade".)
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4.2
|
The upgrade process shall be carried out at any of the Licensee's service and sales center, during two years from the day of publication of the first notice.
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4.3
|
An entitled subscriber who is a "prepaid" subscriber with an unutilized payment balance, and who is not interested in upgrading the obsolete equipment held by him, shall receive from the Licensee the balance of the payment. Such a subscriber shall be entitled to a refund of the unutilized balance, after showing the obsolete equipment, from the day of service discontinuation until the end of the validity of such balance.
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5.
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Phone Number
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5.1
|
The Licensee shall keep the phone number of an entitled subscriber that was allocated to him before the day of service discontinuation, during one year from the day of service discontinuation, before it is returned to the pool of phone numbers of the Licensee, unless the entitled subscriber notifies the Licensee of his wish to keep the number that was allocated to him for an additional year.
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6.
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Notice of Inception
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6.1
|
Without derogating from that stated in section 3.1, the Licensee shall give the Director prior written notice regarding the day of service discontinuation and the publications days as stated, and shall furnish to the Director photocopies of all the notices, as stated in section 3.
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Licensee -
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One who has been given a general license by the Minister for provision of NDO or cellular services;
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Telephone bill -
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A bill given to the subscriber by the Licensee for services provided;
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Writing -
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Including via facsimile or electronic mail;
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Service number -
|
A number of digits allocated to an erotic services provider by the Licensee, given by dialing a telephone number, subject to the provisions of the numbering program and administrative provisions in this matter, the dialing of which, following a dialed prefix, allows the subscriber access to the service;
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Services provider -
|
One who provides erotic services via the network, and payment for the service is made through the telephone bill; in the matter of erotic services provided through dialing a telephone number, access to the services is achieved through a service number;
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Erotic promo
|
Broadcast or presentation of an audio or visual message with sexual content, including a recorded message, given via a telecommunications facility, directly or indirectly, and such message is intended to provide information on a service following or to encourage the use thereof, provided the broadcast of the message or presentation are made without additional charge beyond the charge for a telephone call collected via the telephone bill;
In this matter, “indirectly” – including by way of creating a connection from the subscriber’s end user equipment as a condition of providing the erotic promo.
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Area code
|
A national area code in such model as prescribed by the Ministry for erotic services;
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The network -
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The Licensee’s public telecommunications network.
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Erotic services -
|
Audio broadcast or presentation of an audio or visual message with sexual content, including recorded messages, given via a telecommunications facility, directly or indirectly, including services for dating, chats, or sending messages between chance callers, designated or serving, even in part, for sexual purposes,
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which are any of the following:
(1) A service provided through the dialing of a telephone number given by a service provider;
(2) An access service to a closed data base of contents including multimedia files, held by the Licensee or by another provider of the service with the Licensee’s consent (hereinafter: the “cellular portal”).
In this matter, “indirectly” – including by way of creating a connection from the subscriber’s end user equipment as a condition of providing the service or for charging for it;
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Payment regulations -
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The Communications Law (Telecommunications and Broadcasts) (Payment for Telecommunications’ Services), 5765 – 2005;
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Special payment -
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A price fixed as stated in section 6, which the subscriber is required to pay for erotic services in addition to the regular payment;
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Payment Per time -
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A special payment, the rate of which is determined by the amount of time the subscriber used the erotic service;
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Regular payment -
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One of the following:
(A) For a call within the network – a payment that does not exceed the fixed charge according to the rate agreement between the subscriber and the Licensee regarding a call to another subscriber in the same network;
(B) For a call from one cellular network to another cellular network or to a NDONDO network – payment as set out in sub-section (A) plus a payment that does not exceed NIS 0.50 per minute (including VAT);
(C) For a call from the Bezeq company network to a cellular network – a charge that does not exceed that prescribed by the letter D in table A in the First Schedule of the Payment Regulations, plus NIS 0.50 per minute (including VAT);
(D) For a call from a NDONDO network, except the Bezeq company network, to a cellular network – a charge that does not exceed the fixed charge according to the rate agreement between NDO subscribers and NDO, with respect to another subscriber number within the same network, plus NIS 0.50 per minute.
(E) For erotic services given via the cellular portal – a charge that does not exceed the fixed charge according to the rate agreement between the subscriber and the Licensee with regard to access service to the cellular portal.
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2.1
|
Subject to the provisions of section 4, access to erotic services given through dial-up will be made available to subscribers via an area code and service number.
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3.
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Allocation of Service Number
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3.1.
|
In the matter of erotic services provided by dial-up, the Licensee may allocate a service number to a service provider; in such case, the Licensee will allow the service provider to provide services to both the Licensee’s subscribers as well as subscriber to other licensees.
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4.
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Blocking Access
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4.1.
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A. A38 A Licensee will block access to erotic services from all end-user equipments connected to the network; without derogating from the aforesaid, for the purpose of blocking access to erotic services given though the cellular portal, the Licensee may make use of a means of blocking, including content filtering programs, provided they efficiently block access to said service.
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B. A38 Should the Ministry of Communications notify the Licensee that an erotic promo is being given through the Licensee’s telephone line or network, without access through a service number, the Licensee will cut off said line, or block the line from receiving incoming calls;
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4.2
|
A subscriber 18 years of age or more may request the Licensee remove a block imposed as described in section 4.1AA38 from his end user equipment.
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4.3
|
A request for such removal of a block will be made in writing, or verbally, provided the Licensee has prescribed a procedure allowing accurate identification of the requesting subscriber.
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4.4
|
If a subscriber has so requested a block removed, the Licensee will remove the block within a reasonable time, in a manner allowing the subscriber access to erotic services via the end user equipment in his possession.
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4.5
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If a block has been removed for erotic services as stated, and the subscriber requests that his end user equipment again be blocked for such services, the Licensee shall perform the block at the soonest possible opportunity, and by no later than 2 work days from the date of receipt of the subscriber’s request.
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4.6
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The first removal of a block against erotic services, made at the subscriber’s request as stated in sections 4.2 and 4.3 will be made free of charge; the Licensee may charge the subscriber a reasonable fee for any additional blocking access to erotic services or for additional removal of such block, made at the subscriber’s request.
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5.
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Early Registration
|
|
5.1 Notwithstanding that stated in section 4 above, the Licensee may establish a duty of early subscriber registration for receipt of a password, a submission of which will be a precondition for receipt of erotic services. The provisions of this section do not derogate from the provisions of sections 4.2 and 4.3 above.
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6.
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Special Payment
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6.1
|
If special payment is prescribed for erotic services, the rate shall be fixed by the Licensee or in agreement between the Licensee and the services provider.
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7.
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Charging the Subscriber
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7.1.
|
If special payment is prescribed for erotic services, the Licensee’s phone bill will show the payment for the service separately from charges for the Licensee’s other services, unless the subscriber has requested otherwise.
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7.2.
|
The Licensee shall provide the subscriber, upon demand and within ten (10) working days, details of the special payment for erotic services as follows:
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|
(A)
|
The service number the service allocated;
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(B)
|
The date and time service was provided;
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(C)
|
Billing time units – when charging per time – the number of time units charged or the total amount of the special payment; in the case of a charge according to traffic volume (such as MB, KB), the number of volume units transferred;
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(D)
|
The sum charged for the service.
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8.
|
Mandatory Tender
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8.1
|
If a special payment has been fixed for erotic services provided through the network, the Licensee, either himself or via the services provider, will play a recorded message at the beginning of the call, containing the following details:
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A.
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The essence of the service;
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B.
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Rate of special payment for the service, according to payment per time or per traffic volume, as the case may be;
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|
C.
|
The option to discontinue the service, without charge, before the signal is heard, as stated in section 8.4.
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8.2
|
The recorded message will be played in the language in which the erotic service is provided, in comprehensible language, at a reasonable pace and without recording defects.
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8.3
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At the start of erotic services provided in a language not Hebrew, a message will be played announcing the language in which the service is provided, and after, the recorded message will be played, as stated in sections 8.1 and 8.2, in the language in which the service is provided.
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8.4
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Upon completion of the recorded message, as stated in section 8.1, the caller will have a 5 second interval, at the end of which a signal indicating the start of the erotic services; if the caller disconnected the call before the signal was heard, he will not be charged the special payment. Alternatively, the caller will be asked to press a certain key on his end user equipment in order to confirm that he desires to accept the service, and will be charged the special payment only from the moment he so acts.
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8.5
|
If a special payment is fixed for erotic services provided by access to the cellular portal, the Licensee will notify subscribers regarding the price of the service in an obvious and clear manner, providing the subscriber the option to disconnect from the service without being charged the special payment.
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9.
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Licensee –Services Provider Relations
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9.1
|
The Licensee may allow a services provider to perform telecommunications operations via its installations in order to provide erotic services; the services provider will be exempt from the duty of obtaining a license for telecommunications services, under the provisions of section 3(5) of the Law.
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9.2
|
The Licensee will include the provisions of this appendix, mutatis mutandis, in the agreement between the Licensee and the services provider, in such manner that the services provider will be obligated to fulfill said provisions.
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9.3
|
The Licensee will provide the Director with any agreement between such and a services provider, upon demand.
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10.
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Interconnection
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10.1
|
The conditions for interconnection between the network and the Licensee’s public telecommunications network, in all matters relating to provision of billing and collection services by one Licensee to another licensee, for purposes of provision of erotic services given via the network to another licensee’s subscriber, will be formalized in an agreement between the Licensee and the other licensee; if the parties cannot reach an agreement, the Minister will decide on the matter.
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10.2
|
The Licensee will, upon demand, provide the Director with a signed copy of all agreement it has with other licensees in the matter of said interconnection.
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11.
|
General
|
11.1
|
The Licensee will be responsible to handle all erotic services customer complaints, in all matters relating to subscriber access to the service, and problems of billing and collection in connection with the service, and will establish a mechanism for dealing with customer queries for such purpose; the services provider will be responsible to deal with subscriber complaints in regard to service content. If the Licensee himself provides the erotic services, the Licensee will be responsible to handle erotic services customer complaints regarding the service content as well.
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11.2
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The Licensee may not disconnect, stop or harm the basic telephone services of a subscriber who has used erotic services and refuses to pay for such, however, the Licensee may disconnect such subscriber from continued use of the erotic services.
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11.3
|
The Licensee may not provide a subscriber’s particulars to another services provider or to others, without the subscriber’s written consent , and only after verification of the authenticity of such consent.
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11.4
|
A Licensee shall, within three (3) working days, provide any subscriber so requesting the following particulars regarding the services provider, without charge:
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|
A.
|
The name and address of the provider;
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|
B.
|
The telephone number at which such provider may be reached.
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11.5
|
The provisions of this appendix will apply, mutatis mutandis, to provision of erotic services provided as a network service to the Licensee’s subscribers only.
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11.6
|
The Licensee may himself provide erotic services, and the provisions of this appendix will apply thereto, mutatis mutandis.
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TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Between:
|
Cellcom Israel Ltd.
|
A n d:
|
Netvision Ltd.
|
A n d:
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Cellcom Merger 2011 Ltd.
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Whereas
|
Cellcom is a public company whose securities are traded on the New York Stock Exchange (NYSE) and on the Stock Exchange (as defined below); and
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Whereas
|
the Target Company is a private company wholly owned by Cellcom, formed for the purpose of this Merger Agreement, and no business and/or other activity took place, is taking place or shall take place in it from its formation date until the Closing Date (as defined below), except as required in connection with this Agreement; and
|
Whereas
|
Netvision is a public company whose securities are traded on the Stock Exchange (as defined below); and
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Whereas
|
Netvision wishes to acquire the entire activity, liabilities and assets of the TargetCompany, in accordance with the provisions of Chapter 1 of Part 8 of the Companies Law (as defined below), in such manner that the Target Company be liquidated and Netvision (the acquiring company) shall become a private company wholly owned by Cellcom and its shares be delisted from the Stock Exchange (as defined below), and the Eligible Netvision Shareholders (as defined below) shall be entitled to a cash payment for their shares, all in accordance with the provisions of this Agreement; and
|
Whereas
|
the boards of directors of Cellcom, of Netvision and of the Target Company, after receiving the approval of the audit committee, insofar as required, have approved the execution of the Merger Transaction (as defined below);
|
|
Now therefore, it is hereby agreed between the parties as follows:
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
Preamble and Interpretation
|
1.1
|
The preamble to this Agreement forms an integral part hereof.
|
1.2
|
The division of the Agreement into clauses and assignment of headings to said clauses has been done solely for reasons of convenience, and shall not be used for purposes of interpreting the Agreement.
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2.
|
Definitions and Appendices
|
2.1
|
In this Agreement, the terms below shall have the meaning appearing alongside them:
|
"Eligible Shareholders"
|
- |
The holders of Netvision shares on the Closing Date not being Netvision itself or the Subsidiaries.
|
|
"Interested Party"
|
- |
As the term is defined in the Companies Law (as hereinafter defined).
|
|
"Stock Exchange"
|
- |
The Tel Aviv Stock Exchange Ltd.
|
|
"Netvision's Periodical Reports"
|
- |
Netvision's Annual Report (as defined below and Netvision's First Quarter 2011 Report (as defined below).
|
|
"Nominee Company"
|
- |
The Nominee Company of Bank Hapoalim Ltd.
|
|
"Valuation"
|
- |
The valuation from June 13, 2011 performed by the Appraiser (asdefined below), on the basis of which the Merger Consideration (as defined below) was determined.
|
|
"Subsidiaries"
|
- |
Any company, partnership, and any other corporation in which Netvision holds at least 50% of the voting rights or the issued capital, and jointly with Netvision – the "Netvision Group."
|
|
"Merging Companies"
|
- |
Netvision (the acquiring company) and the Target Company.
|
|
"Merged Company"
|
- |
Netvision after the merger of the Target Company into it.
|
|
"Deadline"
|
- |
December 31, 2011, or a later date to be determined by written agreement between Cellcom and Netvision.
|
|
"Transaction" or
"Merger Transaction"
|
- |
As defined in clause 3 below.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
"Companies Law"
|
- |
The Companies Law, 5759-1999, and the regulations issued pursuant thereto.
|
|
"Securities Law"
|
- |
The Securities Law, 5728-1968, and the regulations issued pursuant thereto.
|
|
"Closing Date"
|
- |
The date of closing of the Transaction under this Agreement as stated in clause 14 below, which shall occur on a business day to be determined by the parties, but no later than 10 business days after the date on which all the conditions precedent have been fulfilled, provided at least 30 days have elapsed from the date of the passing of a resolution by the general meeting of each of the Merging Companies and at least 50 days have elapsed from the date of submission of the merger offers to the Registrar of Companies.
|
|
"Execution Date"
|
- |
The date of execution of this Agreement.
|
|
"Appraiser"
|
- |
Kesselman Finance PriceWaterhouseCoopers Ltd.
|
|
"Per-Share
Consideration"
|
- |
As defined in clause 3 below.
|
|
"Interim Period"
|
- |
The period from the Execution Date until the Closing Date.
|
|
"Transaction with a
Controlling Shareholder Regulations"
|
- |
The Securities Regulations (Transaction between a Registered Company and a Controlling Shareholder Therein), 5761-2001.
|
|
"Merger Regulations"
|
- |
The Companies Regulations (Merger), 5760-2000.
|
2.2
|
The following appendices shall be annexed to this Agreement, and they may be annexed by way of reference1:
|
Appendix 3.3
|
- |
Handling of options allotted by Netvision;
|
|
Appendix 6.3
|
- |
List of various securities of the Netvision Group as of June 12, 2011;
|
|
Appendix 6.4
|
- |
Copy of Netvision's Annual Report (as defined below) and of Netvision's First Quarter 2011 Report (as defined below);
|
|
Appendix 6.10
|
- |
Material Assets (as defined below);
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Appendix 6.11.2
|
- |
Important agreements.
|
|
Appendix 6.11.3
|
- |
Notices of cancellation or breach of important agreements;
|
|
Appendix 6.12.1
|
- |
Intellectual property;
|
|
Appendix 6.13.2
|
- |
Licenses;
|
|
Appendix 6.13.5
|
- |
Applications for subsidies and grants;
|
|
Appendix 6.14
|
- |
Significant legal proceedings;
|
|
Appendix 6.15.3
|
- |
Employee deductions and contributions;
|
|
Appendix 6.15.4
|
- |
Employees' claims;
|
|
Appendix 6.15.7
|
- |
Employees' and consultants' rights to payments and bonuses deriving from the Transaction;
|
|
Appendix 6.16.1
|
- |
Insurance policies and claims;
|
|
Appendix 12.1.5
|
- |
Third parties' confirmations and consents;
|
|
Appendix 13.3
|
- |
Wording of indemnification letters.
|
3.
|
General – the Transaction
|
3.1
|
Subject to the provisions of this Agreement and to the fulfillment of the conditions precedent, as set forth in clause 12.1 below, on the Closing Date the Target Company shall merge with and into Netvision, in such manner that the entire activity, assets and liabilities of the Target Company shall be transferred into Netvision (the acquiring company), with the result that the Target Company shall be liquidated and removed from the records of the Registrar of Companies, in accordance with section 323 of the Companies Law, and the Eligible Netvision Shareholders shall receive consideration for their shares in Netvision, which shall be paid in cash by Cellcom, as set forth in this Agreement (hereinafter: the "Transaction" or the "Merger Transaction").
|
3.2
|
On the Closing Date, each NIS 1 par-value ordinary share of Netvision held by the Eligible Shareholders (including those allotted as a result of the exercise of options in the period between the Execution Date and the Closing Date) shall be automatically transferred to Cellcom in a manner to be coordinated in advance with the Stock Exchange Clearing House, insofar as necessary, and shall entitle its holder to receive, in consideration thereof, the quotient of (a) the sum of NIS 1,538,378 thousand plus effective annual interest at a rate of 5% calculated pro rata from April 1, 2011 until the Closing Date (hereinafter: the "Merger Consideration"), divided by (b) the number of issued Netvision shares held by the Eligible Shareholders on the Closing Date (the quotient of (a) divided by (b) – hereinafter: the "Per-Share Consideration"), in cash. It is hereby clarified that Cellcom shall from the Merger
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Consideration withholding tax according to a mechanism to be coordinated in advance with the Stock Exchange and as set forth in clause 4.4 below.
|
3.3
|
In addition, on the Closing Date the options which were allotted by Netvision shall be handled in accordance with the principles, the conditions and the times set forth in Appendix 3.3.
|
3.4
|
It is hereby clarified that following the closing of the Transaction, Netvision shall become a private company wholly held by Cellcom, and its shares shall be delisted from the Stock Exchange.
|
4.
|
Payment of the Merger Consideration
|
4.1
|
The Merger Consideration shall be paid by Cellcom to the Eligible Netvision Shareholders who are registered (either in the company's books or through the Nominee Company) as holders of Netvision shares on the Closing Date.
|
4.2
|
The Merger Consideration due to each of the Eligible Shareholders shall be paid to such Eligible Shareholder, as stated, after the Closing Date.
|
4.3
|
Cellcom is responsible for ensuring that registered shareholders receive the consideration from Cellcom and/or its designee by a direct bank transfer or by a check sent by registered mail with confirmation of delivery to their address as it appears in Netvision's shareholders register, according to Cellcom's choice and subject to the instructions of the Stock Exchange, and that shareholders who hold their shares through a Stock Exchange member receive the consideration directly into the bank account through which they hold shares of Netvision, all subject to and in accordance with the rules and regulations of the Stock Exchange and as shall be coordinated in advance with it. Netvision shall submit to Cellcom a complete list of all its registered shareholders (excluding the Nominee Company), including their updated address, as far as known, at least 14 days before the estimated Closing Date, and it shall also submit such an updated list on the Closing Date.
|
4.4
|
Cellcom shall deduct from the Merger Consideration payable to the Eligible Shareholders withholding tax in accordance with the Income Tax Regulations (Deduction from Consideration, Payment or Capital Gain on the Sale of a Security, the Sale of a Unit in a Mutual fund or a Futures Transaction), 5763-2002 (hereinafter: the "Deduction Regulations") and any other relevant statute, all in accordance with a mechanism to be coordinated in advance with the Stock Exchange. The deduction of withholding tax from the Merger Consideration with respect to Eligible Shareholders who are not registered shareholders shall be done by the Stock Exchange member through whom such Eligible Shareholders hold shares in Netvision. The deduction of withholding tax with respect to shareholders who are registered in Netvision's shareholders register (excluding the Nominee Company) shall be done by Cellcom on its responsibility. If a confirmation of exemption from withholding tax or a confirmation concerning a reduced rate of withholding tax is not submitted to Netvision or to the relevant Stock Exchange member or to the Target
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Company or to Cellcom, as the case may be, within 10 business days after the Closing Date, Cellcom shall deduct from the Merger Consideration withholding tax at the maximum rate applying under the Deduction Regulations.
|
4.5
|
Cellcom shall submit all the required vouchers in connection with the deduction of withholding tax by it, so that the Eligible Shareholders who are registered in Netvision's shareholders register are able to take a credit for the tax withheld, in accordance with any statute.
|
4.6
|
Within three (3) business days after the Closing Date, Cellcom shall send, on the basis of information to be provided to it by Netvision, to Netvision's registered shareholders (excluding the Nominee Company), by registered mail or by personal delivery, detailed instructions as to the documents which Cellcom requires them to complete and sign, and their accepted wording, in connection with the transfer to Cellcom of the shares which are registered in the name of the registered shareholders (including affidavits and indemnification undertakings in the event that share certificates held by them were lost / destroyed / damaged), in exchange for receiving the Per-Share Consideration for each registered share held by them in Netvision. Netvision shall submit to Cellcom a list of registered shareholders as of the Closing Date and shall assist Cellcom, as necessary, in the share and consideration transfer processes which are to be carried out by Cellcom.
|
4.7
|
If any part of the Merger Consideration remains unclaimed after 12 months from the Closing Date, Cellcom shall be entitled to use such part in any way it sees fit, and any registered shareholder who did not comply with the provisions of article 4.6 above by that time, shall be entitled thereafter to receive from Cellcom his proportionate share of the Merger Consideration solely as an unsecured creditor, without the addition of any interest or linkage differences.
|
5.
|
Representations and Declarations of the Target Company
|
5.1
|
The Target Company was established and duly incorporated under the laws of the State of Israel on May 24, 2011, it is duly registered with the Registrar of Companies, and there is no pending proceeding for its dissolution or removal from the records of the Registrar of Companies.
|
5.2
|
The registered capital of the Target Company stands at 40,000 ordinary shares of NIS 1 par value each. The issued capital of the Target Company stands at one ordinary share of NIS 1 par value, and no change shall occur therein until the Closing Date.
|
5.3
|
From the date of its incorporation until the date of its entry into this Agreement, the Target Company had no business activity, it did not hold any assets or liabilities and it was not a party to any agreements (apart from this Agreement), and therefore it did not prepare financial statements, and it shall not have any business activity or assume any new liabilities until the Closing Date.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
5.4
|
There is no undertaking on the part of the Target Company or any of its managers or officers requiring the Target Company to allot shares or convertible securities and/or other rights and/or securities of any nature and kind and/or undertaking to grant rights to shares and/or other securities of any nature and kind to any person, and no such undertaking shall be assumed by the Target Company and any of its managers or officers until the Closing Date.
|
5.5
|
The Target Company does not act as guarantor for any party and has not undertaken to indemnify any third parties in connection with the undertakings of any interested parties thereof, and it shall not act as guarantor or undertake to indemnify as stated until the Closing Date, and the interested parties thereof do not act as guarantors for any party and have not undertaken to indemnify any third parties in connection with its activity and shall not be guarantors or undertake to indemnify as stated until the Closing Date.
|
5.6
|
Subject to receipt of the approvals and fulfillment the conditions specified in clause 12.1 below, there is no prohibition, restriction or other preclusion, whether by statute or by virtue of any agreement or undertaking, on its entering into this Agreement and on the performance of all its undertakings hereunder in their entirety, and the transaction under this Agreement does not conflict with its incorporation documents.
|
5.7
|
Subject to fulfillment of the conditions set out in clause 12.1 below, the persons signing this Agreement on the Target Company's behalf are duly authorized to bind it by their signature, and all resolutions were passed by the Target Company as required by law for its entering into this Agreement.
|
5.8
|
The board of directors of the Target Company confirmed, inter alia based on data provided to it by Netvision and Netvision's representations in this Agreement, that, considering the financial position of the Merging Companies and considering that the Target Company has no business activity or obligations, there is no reasonable likelihood that following the merger the Merged Company will be unable to meet the Target Company's obligations to its creditors.
|
6.
|
Declarations and Undertakings of Netvision
|
6.1
|
Netvision was established and duly incorporated under the laws of the State of Israel, it is duly registered with the Registrar of Companies, and there is no pending proceeding for its dissolution or removal from the records of the Registrar of Companies. The Subsidiaries were established and duly incorporated under the laws of their country of incorporation, and there is no pending proceeding for their dissolution or removal. True copies of the memorandum of association and articles of Netvision and of any similar incorporation document of all the Subsidiaries were submitted to Cellcom.
|
6.2
|
As of the date of execution of this Agreement, the registered capital of Netvision stands at 40,000,000 ordinary shares of NIS 1.00 par value each. As of June 12, 2011, the issued capital of Netvision stands at 31,605,667 ordinary shares of NIS
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
1.00 par value each. As of the date of execution of this Agreement, Netvision, and to the best of Netvision's knowledge the Subsidiaries, do not hold any shares of Netvision.
|
6.3
|
Except as set out in Appendix 6.3 to this Agreement: (1) There are no securities convertible into share capital of Netvision (including options), and there is no undertaking of Netvision in effect towards any person requiring it to allot any of its shares or convertible securities and/or other rights and/or securities of any nature and kind and/or undertaking to grant rights to shares and/or other securities of any nature and kind to any person; (2) There are no securities convertible into share capital of the Subsidiaries (including options), and there is no undertaking in effect of any of the Subsidiaries towards any person requiring such Subsidiary to allot any of its shares or convertible securities and/or other rights and/or securities of any nature and kind, excluding a preemptive option or right under the founding agreements of the following Subsidiaries: Internet Rimon Israel 2009 Ltd., Safeway Data Protection Solutions Ltd., Telroaming Advanced Communication Solution Ltd. and Nana 10 Ltd.
|
6.4
|
Appendix 6.4 to this Agreement includes by reference true copies of: (a) Netvision's Periodical Statement for the year 2010, as published on the distribution site of the Israel Securities Authority Ltd. (Magna) (hereinafter: "Netvision's Annual Report"), which comprises, inter alia, the consolidated financial statements of Netvision as of December 31, 2010, audited by Netvision's auditors, and (2) Netvision's quarterly statement for the first quarter of 2011, as published on the distribution site of the Israel Securities Authority (Magna) (hereinafter: "Netvision's First Quarter 2011 Report," and jointly with Netvision's Annual Statement: "Netvision's Periodical Reports").
|
6.4.1
|
The financial statements included in Netvision's Periodical Reports were prepared in conformity with IFRS rules, on a consistent basis with previous years and periods (except for the changes detailed in the notes to those financial statements of Netvision), in accordance with all the rules and regulations applying to companies whose shares are traded on the Stock Exchange.
|
6.4.2
|
Netvision's Periodical Reports reflect the business, financial position, capital, assets, liabilities and financial results of Netvision and its Subsidiaries as of the dates of Netvision's Periodical Reports, in the format required by the Securities Law, and they do not contain any "misstatement" as the term is defined in the Securities Law.
|
6.4.3
|
Without derogating from the foregoing, to the best of its knowledge, Netvision complies with all the provisions of the Securities Law, including the submission of all the reports required thereunder (including under any directives of the Israel Securities Authority), and to the best of Netvision's knowledge, such reports do not contain any "misstatement" as the term is defined in the Securities Law.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
6.5
|
From the date of publication of Netvision's First Quarter 2011 Report (May 15, 2011) to the Execution Date, there was no significant event in the Netvision Group in respect of which Netvision did not issue an immediate report. Without derogating from the generality of the above, except as set forth in Netvision's immediate report, from May 15, 2011 until the Execution Date, Netvision does not know of any event that could significantly affect the assets, the position or the operating or business results of the Netvision Group.
|
6.6
|
Subject to receipt of the approvals and fulfillment the conditions specified in clause 12.1 below, there is no prohibition, restriction or other preclusion, whether by statute or by virtue of any material agreement or undertaking, on its entering into this Agreement and on the performance of all its undertakings hereunder in their entirety, and the transaction under this Agreement does not conflict with its incorporation documents. To the best of Netvision's knowledge, subject to receipt of the approvals as stated in clause 15.1.5 below, its entry into this Agreement and the performance of that stated herein are incapable of causing significant damage to the Netvision Group or an immediate call on credit facilities in a significant amount that were provided to the Netvision Group by financial institutions (subject to receipt of the agreement of the Netvision Group's lending banks), or the cancellation of important agreements (as defined in clause 6.11.4 below) to which the Netvision Group is a party, or significantly impair the terms of such credit facilities or important agreements. It is hereby declared that any impairment of the financial terms of bank credit facilities provided to the Netvision Group shall be deemed significant impairment.
|
6.7
|
Netvision has made available for Cellcom's inspection a complete, correct and updated copy of the minute books of meetings of the board of directors and board committees of Netvision and of meetings of the shareholders of Netvision, beginning from January 1, 2009, as well as a complete, correct and updated copy of the minute books of meetings of the board of directors and board committees and of meetings of the shareholders of 013 Netvision Ltd. and of meetings of the relevant organs of Veidan Conferencing Solutions Limited Partnership, beginning from January 1, 2009, and all these minutes are a true reflection of all the resolutions passed at Netvision, 013 Netvision Ltd. and Veidan Conferencing Solutions Limited Partnership beginning from that date.
|
6.8
|
Subject to fulfillment of the conditions set out in clause 12.1 below, the persons signing this Agreement on Netvision's behalf are duly authorized to bind it by their signature, and all resolutions were passed by Netvision as required by law for its entering into this Agreement.
|
6.9
|
The board of directors of Netvision confirmed that, considering the financial position of the Merging Companies and based on the representations of the Target Company in this Agreement, there is no reasonable likelihood that following the merger the Merged Company will be unable to meet its obligations to its creditors.
|
6.10
|
Except as set out in Appendix 6.10, the Netvision Group holds title to or has a right of lease and use of its important equipment and fixed assets, as hereinafter defined (hereinafter: the "Netvision Group's Important Assets"), which are in its possession or use. Except as set out in Appendix 6.10, all the Netvision Group's
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Important Assets are free from any debt, attachment, charge, pledge, mortgage or lien, preemptive right and right of first refusal. Except as set out in Appendix 6.10, to the best of Netvision's knowledge, the Netvision Group's Important Assets are in good and serviceable condition as required for carrying out the Netvision Group's business activity as it is presently carried out, and Netvision does not foresee any necessity for investments in assets on the part of the Netvision Group in the course of 2011 in amounts in excess of NIS 10 million beyond the amounts set out in the business plan for 2011, a true copy of which was provided to Cellcom.
|
6.11
|
Agreements
|
6.11.1
|
True and accurate copies of all the important agreements (as hereinafter defined) of the Netvision Group were provided to Cellcom prior to the Execution Date.
|
6.11.2
|
Except as set out in Appendix 6.11.2, all the Netvision Group's important agreements are in force. The Netvision Group is in compliance with all the material provisions contained in the important agreements, and, to the best of Netvision's knowledge, the other parties to those agreements are in compliance with all the material provisions thereof, and the Netvision Group and/or its designees were not served by the parties to those agreements or their designees any notice of an intention to cancel any of those important agreements or any warning or notice concerning a breach or a future breach of the provisions thereof, and Netvision is not aware of the existence of a cause or a real likelihood of the existence of a cause for the service of such notice, all except as set out in Appendix 6.11.2.
|
6.11.3
|
Except as set out in Appendix 6.11.3, the Netvision Group and/or its designees have not served any of the other parties to those important agreements any notice of cancellation of the agreement or any warning or notice concerning a breach or a future breach of the provisions thereof, and it is not aware of the existence of a cause or a real likelihood of the existence of a cause for the service of such notice. The Netvision Group does not have any significant customer or any material agreement with a customer.
|
6.11.4
|
In this Agreement, "important agreements" denotes any agreement that is required for the continued proper management of the Netvision Group's business, in such manner that the cancellation or modification thereof would or could impair by 1.5% or more one or more of the following parameters: regarding customer agreements – the amount of annual revenues, and regarding supplier agreements – the amount of annual expenses of the Netvision Group. It is hereby clarified that, in this regard, operator interconnection agreements shall not be deemed important agreements.
|
6.12
|
Know-How and Intellectual Property
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
6.12.1
|
The Netvision Group does not possess significant know-how or intellectual property in connection with its activity, except as set out in Appendix 6.12.1 (hereinafter: the "Intellectual Property").
|
6.12.2
|
To the best of Netvision's knowledge, without having specifically examined the matter, the Netvision Group holds any necessary licenses for using the intellectual property of others, insofar as required by it for the proper management of its existing activity.
|
6.12.3
|
All the registered intellectual property rights of the Netvision Group and all its applications to register intellectual property rights are set out in Appendix 6.12.1. The Netvision Group has taken generally accepted precautions to protect its Intellectual Property, including its registered intellectual property rights.
|
6.12.4
|
To the best of Netvision's knowledge, without having specifically examined the matter, the Netvision Group's use of the Intellectual Property does not infringe any right, license or third-party right in a manner that could materially harm the Netvision Group.
|
6.12.5
|
The Netvision Group is not obligated or liable to pay any royalties, commissions or other payment to any owner or licensee or claimant of any patent, trademark, service mark, trade name, copyright or asset or other intangible right, with respect to the use thereof or otherwise in connection with the management of the business of the Netvision Group, other than payments in the normal course of business in amounts which are not significant in the aggregate.
|
6.13
|
Permits and Licenses; Compliance with Statutory Provisions; Financing and Grants
|
6.13.1
|
True and complete copies of all the material licenses, permits and approvals required by the Netvision Group for the management of its business in accordance with the provisions of any law and/or the instructions of any government and/or regulatory authority (hereinafter: the "Licenses") were provided to Cellcom as part of the due diligence. All the Licenses are full valid, and true and exact copies thereof were provided to Cellcom as part of the due diligence.
|
6.13.2
|
To the best of Netvision's knowledge, the Netvision Group complies with all the material provisions and requirements existing by virtue of the Licenses, and specifically with any provision or requirement which are a condition for the existence and full validity of the License. Except as provided in Appendix 6.13.2, Netvision is not aware of any breach or expected breach of the provisions of any of the Licenses that could result in the cancellation of such License or in an adverse change in its terms that could materially harm the Netvision Group or cause the Netvision Group significant financial exposure.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
6.13.3
|
Except as provided in Appendix 6.13.2 and in public information on regulatory processes and changes in the communications sector, Netvision is not aware of any examination or of an intention by any relevant authority to change the terms of any of the Licenses in a manner that could significantly harm the Netvision Group. To the best of Netvision's knowledge, subject to the approval of the Ministry of Communications, the execution or performance of the Agreement will not result in the cancellation, restriction, revocation or suspension of any of the Licenses as in effect on the Execution Date.
|
6.13.4
|
To the best of Netvision's knowledge, the Netvision Group is not in breach of any statutory provision/s that could cause the Netvision Group material harm, and other than legal proceedings and other proceedings that were brought against the Netvision Group as set out in Appendix 6.14 hereto, Netvision has not received any notice of breach of any statutory provision on its part that could cause the Netvision Group material financial exposure and/or materially impair its operating conditions as in effect on the Execution Date.
|
6.13.5
|
The Netvision Group has not received any grant, incentive or subsidy approval from any source, that is in effect on the Execution Date or that shall be in effect after the Closing Date, including from any government, regulatory, national, local or other authority and from any quasi-government authority (in this clause, jointly: "authority"), and that impose any material liability or limitation on the activity of the Netvision Group, and except as stated in Appendix 6.13.5, it has not applied to any such authority for receiving such grants or incentives.
|
6.14
|
Legal Proceedings
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
6.15
|
Employment Matters
|
6.15.1
|
A complete and accurate list of officers and of all the employees directly subordinate to the vice presidents in the Netvision Group (hereinafter: "Material Employees"), including their name, position, employment starting date, direct employer, gross monthly salary and employer cost, as of the Execution Date of this Agreement, was submitted to Cellcom prior to the Execution Date, on June 12, 2011. There is no custom or practice in the Netvision Group according to which a bonus in a significant amount is given, individually or cumulatively, to the employees of the Netvision Group. None of the Material Employees have been given an undertaking by a competent person at Netvision concerning a material change in any of said terms of employment.
|
6.15.2
|
The Netvision Group has paid, and until the Closing Date shall pay, in full to the various authorities any tax and/or levy and/or fee and/or other significant mandatory payment required of it in connection with the employees of the Netvision Group and/or any such tax, levy, fee and mandatory payment the nonpayment of which could materially affect the Netvision Group even if it is not material in its own right.
|
6.15.3
|
Except as set out in Appendix 6.15.3, to the best of Netvision's knowledge, the Netvision Group has actually paid its employees or deducted and/or transferred and/or deposited and/or set aside on their behalf the full amounts it was required to pay and/or deduct and/or transfer and/or deposit and/or set aside in accordance with any statute or agreement, in respect of and/or in connection with the period of their employment by the Netvision Group and/or upon the termination of their employment, including salary and social benefits, pension and/or senior employees insurance, redemption of vacation days, sick pay, severance pay, income tax and National Insurance contributions, all with the exception of negligible amounts which failure to deduct and/or transfer and/or deposit and/or set aside such amounts as stated, would not materially affect the Netvision Group or its results.
|
6.15.4
|
To the best of Netvision's knowledge, the Netvision Group complies substantially and in a manner incapable of causing the Netvision Group significant exposure, with all the labor laws and statutes applying and relevant to the employees of the Netvision Group. Except as set out in Appendix 6.15.4, Netvision is not aware of any claim and/or demand and/or complaint of any of the employees of the Netvision Group in connection with the fulfillment of such laws and statutes.
|
6.15.5
|
No member of the Netvision Group is subject to a contractual or legal impediment precluding the employment termination of a material employee or adviser of the Netvision Group by prior notice of up to 90 days (inclusive).
|
6.15.6
|
Except as set out in Appendix 6.15.4, Netvision (including its Subsidiaries in Israel) is not a member of any employers organization and its employees
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
are not represented by any trade union, and to the best of Netvision's knowledge, no collective agreements of any kind apply to it, apart from extension orders which apply to all workers in the economy.
|
6.15.7
|
Except as set out in Appendix 6.15.7, to the best of Netvision's knowledge, none of the employees of the Netvision Group and none of its advisers are entitled to any payment or other benefit (including the acceleration of options) due to the execution of this Agreement or the closing of the Transaction the subject of this Agreement, with the exception of such rights (if any exist) of various service providers in connection with and against the provision of services to the Transaction in the normal course of business.
|
6.16
|
Insurance Policies
|
6.16.1
|
Appendix 6.16.1 lists all the insurance policies issued in favor of the Netvision Group, including the insurer's name, the parties insured under the policy, the scope of cover, the annual premium and the expiration date. As of the Execution Date, all of said insurance policies are in force and the premiums payable thereon until that date were paid. To the best of Netvision's knowledge, the Netvision Group is in compliance with any condition or limitation reasonably required in said policies for establishing entitlement to the insurance coverage on the occurrence of an insured event. Except as set out in Appendix 6.16.1, no claims were submitted pursuant to or in connection with said policies during the last three years. To the best of Netvision's knowledge, there is no impediment to the renewal of said policies at the time set therefor. The Netvision Group is not obligated by law to maintain insurance coverage beyond that stated in Appendix 6.16.1.
|
6.17
|
Taxes
|
6.17.1
|
The Netvision Group does not have any significant tax debt (including withholding tax) for any liability owed by it, including, without derogating from the generality of the above, taxes, National Insurance contributions and other mandatory payments connected with its employees and/or service providers and/or shareholders and/or activity at the rate determined in the relevant statute.
|
6.17.2
|
The Netvision Group has submitted to the relevant tax authorities and/or to any other authority (hereinafter in this clause 6.17: "authorities"), in accordance with the law and at the time stipulated therefor, all the reports which it is obligated to submit. The tax reports submitted by the Netvision Group were prepared in accordance with the provisions of the law. The books of the Netvision Group reflect all the debts to the relevant authorities and all the provisions for mandatory payments, as stated, applying by law and not yet paid by it. Netvision has not been informed of any examination, investigation or proceeding which is being conducted with respect to and/or against the Netvision Group by any of the said authorities, apart from current examinations of assessments which have still not been declared final.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
6.17.3
|
Netvision has not been informed of any complaint by the tax authorities in connection with a significant liability of the Netvision Group. There is no valid demand or claim on the part of the authorities, and no discussions are taking place with the authorities, in respect of any report which the Netvision submitted and/or should have submitted to the authorities. Netvision is not aware of any examination and/or investigation that is being conducted as of the Execution Date by the tax authorities against or with respect to the Netvision Group.
|
6.17.4
|
Netvision has tax assessments considered final up to and including the 2009 tax year. The subsidiary 013 Netvision Ltd. has tax assessments considered final up to and including the 2005 tax year. Netwise Applications Ltd. has tax assessments considered final up to and including the 2006 tax year. As of the Execution Date, to the best of Netvision's knowledge, the rest of the Subsidiaries do not have final tax assessments.
|
7.
|
Representations and Declarations of Cellcom
|
7.1
|
It is the owner and holder of the entire issued and allotted capital of the Target Company from the time of its establishment, and the representations and declarations of the Target Company in clause 5 above are true and complete and shall be true and complete on the Closing Date.
|
7.2
|
Cellcom was established and duly incorporated under the laws of the State of Israel, it is duly registered with the Registrar of Companies, and there is no pending proceeding for its dissolution or removal from the records of the Registrar of Companies.
|
7.3
|
Subject to receipt of the approvals and fulfillment the conditions specified in clause 12.1 below, there is no prohibition, restriction or other preclusion, whether by statute or by virtue of any agreement or undertaking, on its entering into this Agreement and on the performance of all its undertakings hereunder in their entirety, and the Transaction under this Agreement does not conflict with its incorporation documents.
|
7.4
|
Subject to fulfillment of the conditions set out in clause 12.1 below, the persons signing this Agreement on Cellcom's behalf are duly authorized to bind it by their signature, and all resolutions were passed by Cellcom as required by law for its entering into this Agreement.
|
7.5
|
Cellcom has and/or shall have by the Closing Date the financial means for payment of the Merger Consideration under this Agreement.
|
7.6
|
Cellcom is a leading Israeli communications company and it is familiar with the communications market and the competition and changes therein. Nothing stated in this clause shall derogate from the validity of Netvision's representations as set out in clause 6 above.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.7
|
Cellcom has read Netvision's Periodical Reports and the immediate reports issued by it, as it saw fit, and performed a due diligence, including a legal, accounting and business examination of the Netvision Group's business and activity. Cellcom was given an opportunity to request and receive clarifications from Netvision's managers regarding the activity, business, assets and liabilities of Netvision and the Subsidiaries. Nothing stated in this clause shall derogate from the validity of Netvision's representations as set out in clause 6 above.
|
8.
|
Validity of Representations and Declarations
|
8.1
|
Each of the parties is relying, when entering into this Agreement, on the above representations of the parties, and except as stated in this Agreement and its appendices, it has not received any additional representation from another party.
|
8.2
|
If a party to the Agreement (hereinafter: "aggrieved party") discovers, prior to the Closing Date, that another party to the Agreement (hereinafter: "party in breach") gave a materially incorrect representation, such that it alone or cumulatively with other representations given and found to be incorrect materially change/s the considerations of the aggrieved party for entering into the Agreement or materially change/s the valuation done for Netvision (hereinafter: "material inconsistency in representations"), the aggrieved party shall notify the party in breach in writing of the breach.
|
8.3
|
If the party in breach fails to remedy the material inconsistency in representations within 15 days from the date of the aggrieved party's written notice (as stated in clause 8.2 above), insofar as the material inconsistency in representations is remediable (otherwise the aggrieved party shall be entitled to cancel the Agreement immediately by a written notice to the party in breach), the aggrieved party shall be entitled to cancel the Agreement by a written notice to the party in breach, provided that such notice is delivered to the party in breach prior to the Closing Date (hereinafter: "cancellation relief").
|
8.4
|
To avoid doubt, it is hereby clarified that the cancellation relief shall be available to the aggrieved party only if it notified the party in breach in writing, prior to the Closing Date, of the existence of a material inconsistency in the representations of the party in breach (all or any of them), and not in any other case of representations which are incorrect, incomplete or inaccurate.
|
8.5
|
Without derogating from the foregoing, the parties agree that the cancellation relief to which the aggrieved party shall be entitled under this Agreement in respect of a material inconsistency in representations is a sole and exclusive relief, and other than such cancellation relief (up to the Closing Date) and the right not to close the Transaction during the period of 15 days referred to in clause 8.3 above, the aggrieved party and/or its officers and/or shareholders and/or their designees shall not be entitled to any monetary or other relief against the party in breach, its officers, managers, employees, shareholders, advisers and service providers or their designees. Other than the aforesaid cancellation relief, the parties to this Agreement hereby waive irrevocably any complaint and/or demand and/or claim under this Agreement and under any law in respect of an inconsistency in representations,
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
against another party to this Agreement, its officers, managers, employees, shareholders, advisers and service providers or their designees.
|
8.6
|
The parties agree that immediately after the closing of the Transaction under this Agreement, the validity of the representations set out in clauses 5, 6 and 7 above shall lapse, and none of the parties shall have any claim or complaint or demand against the other parties and/or its officers in respect of incorrectness or incompleteness of all or any of the representations. If a part to the Agreement discovers any inconsistency in the representations of another party to the Agreement after the Closing Date, it and/or its officers and/or designees shall not be vested by reason thereof with any complaint and/or claim and/or demand under this Agreement and under any law against the party in breach, its officers, managers, employees, shareholders, advisers and service providers or their designees.
|
9.
|
Implementation of the Merger Transaction
|
9.1
|
Netvision shall act to publish a report on a transaction with a controlling shareholder in accordance with the Transaction with a Controlling Shareholder Regulations and to convene an extraordinary general meeting of its shareholders for the approval of the Merger Transaction in accordance with the Companies Law and the Companies Regulations (Notice of General Meeting and Class Meeting in a Public Company), 5760-2000.
|
9.2
|
Cellcom shall act to convene a general meeting of its shareholders for the approval of the Merger Transaction in accordance with the Companies Law and in accordance with the provisions of any law applying to it.
|
9.3
|
Within 3 days from the date of convening of the general meetings for the approval of the Merger, the Merging Companies shall submit to the Registrar of Companies an agreed merger offer in accordance with the Merger Regulations.
|
9.4
|
Upon the entry of the Merger into effect and the fulfillment of the conditions set out in clause 12.1 below, the Target Company shall merge with and into Netvision, in such manner that the entire activity, assets and liabilities of the Target Company shall be transferred into Netvision, with the result that the Target Company shall be liquidated and removed from the records of the Registrar of Companies, in accordance with section 323 of the Companies Law, and Netvision shall become a private company wholly owned by Cellcom. Following the completion of the merger, Cellcom shall hold the entire issued and paid-up share capital of the Merged Company.
|
9.5
|
The parties shall act for the fulfillment of all the statutory provisions in connection with the merger, including the submission of notices to the Registrar of Companies concerning the resolution of the general meetings of the Merging Companies and the sending of notices to creditors, all in accordance with the provisions of the Companies Law and the Merger Regulations.
|
9.6
|
The merger shall be completed on the Closing Date, as stated in clause 14 below.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
10.
|
Undertakings in the Interim Period
|
10.1
|
In the Interim Period the parties shall act as follows:
|
10.1.1
|
The parties to this Agreement undertake to perform all actions and to sign all documents as reasonably required for the timely implementation of the provisions of this Agreement, and to make best efforts to receive any approval required for closing the Transaction pursuant to and in accordance with the provisions of this Agreement and all its parts. Without derogating from the generality of the foregoing, none of the parties shall perform any act contrary to the undertakings given by all and/or any of them in this Agreement. Nothing stated in this clause shall derogate from Cellcom's right to object to conditions for closing the Transaction that may be stipulated by a third party whose approval is required for closing the Transaction, as stated in clause 12.3 below.
|
10.1.2
|
Netvision may not perform any action that is outside the normal course of business of the Netvision Group or that could materially affect the assets, business or financial position of the Netvision Group, except with the prior agreement of Cellcom, which may not be withhold other than on reasonable grounds. It is hereby clarified that the provisions of this clause above shall not apply to actions included in Netvision's work plan for 2011 as approved by Netvision's board of directors in the framework of the budget for 2011 and submitted to Cellcom for its inspection as part of the due diligence. Notwithstanding the foregoing, actions on a scope not exceeding NIS 500,000 shall not be considered actions of the Netvision Group outside the normal course of business.
|
10.1.3
|
Without derogating from the generality of the foregoing, during the Interim Period Netvision shall not perform any of the actions setout below, except with Cellcom's prior written agreement, which shall not be withhold other than on reasonable grounds:
|
10.1.3.1
|
Any capital-related action of any nature and kind, including an allotment of shares or convertible securities, distribution of bonus shares, consolidation and division of shares, etc., apart from an issue of shares of Netvision arising from the exercise of options granted prior to the Execution Date. It is hereby clarified that the foregoing shall not apply to a transfer of shares by a shareholder of Netvision in the course of regular trading on the Stock Exchange.
|
10.1.3.2
|
Any alteration to Netvision's memorandum or articles.
|
10.1.3.3
|
Any distribution, including a dividend distribution in cash or in kind, as defined in the Companies Law.
|
10.1.4
|
In the event that Netvision distributes to its shareholders a dividend in cash or in kind during the Interim Period, after receiving Cellcom's agreement as
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
stated, the Merger Consideration shall be reduced by an amount equivalent to the amount of the dividend paid by Netvision for each share multiplied by the number of issued shares of Netvision on the record date for the distribution of the dividend.
|
10.2
|
Without derogating from that stated in clause 10.1 above, Cellcom and Netvision shall act to the best of their ability to schedule their shareholders meetings for approval of the Merger Transaction on the same date.
|
11.
|
Material Adverse Change after the Execution of the Agreement
|
11.1
|
In the event that Cellcom or Netvision discover during the Interim Period, prior to the receipt of all the approvals for closing the Merger Transaction except for the issuance of a merger certificate by the Registrar of Companies as stated in clause 12.1.7 below, that any material adverse change (as the term is defined hereinafter) has occurred in the Netvision Group, including in its assets, business or business position, such party shall, immediately following the discovery, furnish to the other party full details to the best of its knowledge of the change that occurred (hereinafter: "notice of adverse change").
|
11.2
|
If notice of an adverse change (as the term is defined above) is given, Cellcom may demand that the parties apply jointly to the Appraiser, who shall give an opinion as to whether or an event, change or effect has occurred that could constitute a material adverse change, and if such event, change or effect has occurred, he shall reappraise the value of Netvision.
|
11.3
|
The Appraiser shall submit his findings to Cellcom and Netvision in writing within 14 business days, and his response shall be final and conclusive.
|
11.4
|
If the Appraiser determines that Netvision's value has decreased by NIS 60 million or more relative to the Valuation, Cellcom shall be entitled, within 14 days from the date of receipt of the Appraiser's findings, to notify Netvision of its withdrawal from
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
the Transaction (and likewise, for the removal of doubt, it shall not be obligated to close the Transaction during said period of 14 days), and in such case the Agreement shall terminate with immediate effect and all the representations and undertakings therein shall lapse, and none of the parties and/or their officers and/or designees shall have any complaint and/or demand and/or cause of action against the other party, its officers, managers, employees, advisers and service providers or their designees. If Cellcom does not give written notice of cancellation within 14 days, as stated, this shall be deemed as waiver of the right of withdrawal from the Agreement due to such material adverse change, and this Agreement and all its provisions shall continue in effect, and Cellcom and/or its officers and/or designees shall not have any complaint and/or demand and/or cause of action against any party to this Agreement, its officers, managers, employees, advisers and service providers or their designees, in respect of that material adverse change.
|
11.5
|
To avoid doubt, it is hereby clarified that in the event the Appraiser determines that a material adverse change has occurred during the Interim Period, prior to the receipt of all the approvals for closing the Merger Transaction except for the issuance of a merger certificate by the Registrar of Companies as stated in clause 12.1.7 below, that could affect the Valuation and its results, but not to the extent of a decrease of NIS 60 million or more in Netvision's value relative to the Valuation, the provisions of clause 11.4 above shall not apply to such event, change or effect, and this Agreement and its provisions shall continue in full effect and none of the parties and/or their officers and/or designees shall have any complaint and/or demand and/or cause of action against the other party, its officers, managers, employees, advisers and service providers or their designees, in respect of that event, change or effect.
|
11.6
|
Without derogating from that stated in clauses 11.2 to 11.5 above, where an event, change or effect as stated in clause 11.1 above occurs that can be precisely quantified, Cellcom and Netvision may agree mutually not to apply to the Appraiser to determine the effect on Netvision's value and determine between themselves the change in Netvision's value relative to the Valuation, and the provisions of clause 11.4 above shall apply, mutatis mutandis, in respect of Cellcom's right to cancel the Agreement.
|
12.
|
Conditions Precedent to Closing the Transaction
|
12.1
|
The conditions set out below are conditions precedent to the closing of the Transaction and the merger pursuant thereto, applying to all the parties to this Agreement, and they must be fulfilled by the Deadline. If all the conditions precedent are not fulfilled by the Deadline, and the Deadline is not extended by the parties expressly in writing, this Agreement shall lapse and none of the parties shall have any complaint, claim or demand by reason thereof against the other party, other than complaints in respect of any breach of the undertakings included in this Agreement:
|
12.1.1
|
Approval of the Merger Transaction by the general meeting of Netvision, by the majority prescribed in section 320(f) and in section 275(a) of the Companies Law.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
12.1.2
|
Approval of the Merger Transaction by the general meeting of Cellcom, by the majority prescribed in section 320(f) and in section 275(a) of the Companies Law.
|
12.1.3
|
Receipt of approval from the Ministry of Communications and from the Civil Administration in Judea and Samaria.
|
12.1.4
|
Receipt of approval from the Antitrust Commissioner, insofar as required.
|
12.1.5
|
Receipt of the approval and/or agreement of any third party whose approval and/or agreement is required under any law or under any important agreement (as the term "important agreements" is defined in clause 6.11.4 above) for the completion of the Merger, as set out in Appendix 12.1.5.
|
12.1.6
|
The purchase by Netvision of runoff insurance to cover the liability of officers and directors, as stated in clause 13.1 below.
|
12.1.7
|
At least 30 days have elapsed from the date on which the general meeting of each of the Merging Companies passed a resolution, and at least 50 days from the date on which the merger notices were submitted to the Registrar of Companies, and the Registrar has issued a merger certificate in accordance with the provisions of section 323 of the Companies Law.
|
12.1.8
|
There is no statute, order or instruction of a competent authority in effect that prevents the completion of the merger.
|
12.2
|
The parties to this Agreement may agree mutually to waive the fulfillment of any condition or any approval stipulated in the provisions of this Agreement for the completion of the Merger, insofar as it is not required by law.
|
12.3
|
If the approval of any of the entities specified above is stipulated on any conditions that could materially harm any of the parties or burden it after the Closing Date, the parties shall act for the removal or limitation thereof, and if they are unable to do so, then Cellcom shall be entitled to object to those conditions, and in such case the approval shall be deemed not to have been given; all with the exception of the conditions prescribed in regulation 12A(a) of the Communications Regulations (Telecommunications and Broadcasts), (Procedures and Conditions for Receiving a General License for the Provision of International Telecommunication Services), 5764-2004, to which the parties agree insofar as the conditions for their existence shall apply on the Closing Date.
|
12.4
|
Subject to any statute, each of the parties shall report to the other party on an ongoing basis on progress in dealing with the conditions precedent for which it is responsible and on any difficulty arising in connection with those conditions and their achievement.
|
13.
|
Insurance and Indemnification Undertaking
|
13.1
|
No later than on the Closing Date, Netvision shall purchase runoff insurance to cover the liability of officers and directors on such a scope and such policy terms as are in
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
effect up to the Closing Date, for an additional period of seven years from that date. The insurance shall apply to insured events, as the term is defined in the policies, occurring up to the date of completion of the acquisition, and to circumstances which are known to Netvision on that date. The insurance shall include an express clause prohibiting the insurer to cancel the insurance (non-cancellation clause). Prior to purchasing such insurance, Netvision shall forward to Cellcom for comments the quotation for the runoff insurance policy and the policy terms.
|
13.2
|
Cellcom undertakes starting from the Closing Date that Netvision shall comply with all the provisions of the insurance policy referred to in clause 13.1, including as regards any required notices to the insurance company.
|
13.3
|
Cellcom undertakes starting from the Closing Date that Netvision shall honor the indemnification letters issued by Netvision, prior to the Execution Date, to officers and directors of Netvision and the Subsidiaries, according to their terms. Appendix 13.3 sets out all the wordings of such indemnification letters issued by Netvision to officers and directors, past and present, of the Netvision Group. Netvision hereby declares that it did not issue an indemnification letter to any person other than officers and directors of the Netvision Group.
|
14.
|
Closing of the Transaction
|
14.1
|
The Merger Transaction shall be closed on the Closing Date, subject to fulfillment of the conditions set out in clause 12 above. On the Closing Date the parties shall perform the following actions, which shall be deemed to have been performed simultaneously for the purpose of completing the Merger Transaction:
|
14.1.1
|
Netvision shall furnish to the parties a copy of the resolutions of its audit committee and board of directors approving the Merger Transaction, and the minutes of the general meeting of its shareholders approving the Merger Transaction by the required majority, as stated in clause 12.1.1 above.
|
14.1.2
|
The Target Company shall furnish to the parties a copy of the resolutions of its board of directors and general meeting approving the Merger Transaction.
|
14.1.3
|
Cellcom shall furnish to the parties a copy of the resolutions of its audit committee and board of directors approving the Merger Transaction, and the minutes of the general meeting of its shareholders approving the Merger Transaction by the required majority, as stated in clause 121.2 above.
|
14.1.4
|
The Merging Companies and Cellcom shall furnish to each other written confirmations, signed by their authorized signatories and attached as an integral part of this Agreement, concerning the complete fulfillment of the conditions precedent which are dependent on each of them, as follows:
|
14.1.4.1
|
Netvision shall furnish a confirmation as above regarding the conditions precedent set out in the following clauses: 12.1.1,
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
14.1.4.1
|
12.1.3, 12.1.5, 12.1.6, 12.1.7 and 12.1.8 with respect to the approvals required of it.
|
14.1.4.2
|
Cellcom shall furnish a confirmation as above regarding the following conditions precedent: 12.1.2, 12.1.3, 12.1.7 and 12.1.8 with respect to the approvals required by it.
|
14.1.4.3
|
Cellcom and Netvision jointly shall be responsible for furnishing the confirmations referred to in clause 12.1.4 above.
|
14.1.5
|
The Merging Companies and Cellcom shall furnish to each other a written confirmation of the absence of any material inconsistency in their representations as given on the Execution Date and as of the Execution Date, and Netvision shall furnish to Cellcom a written confirmation that no material adverse change (as defined in clause 11.1 above) has occurred with respect to the Netvision Group from the Execution Date until the Closing Date. In case notice is given of an adverse material change as stated in clause 11.1 above, such material adverse change shall be excluded from Netvision's confirmation.
|
14.1.6
|
Cellcom shall deposit the Merger Consideration on behalf of the Eligible Shareholders.
|
14.1.7
|
A merger certificate in accordance with section 323 of the Companies Law shall be issued to the Merging Companies.
|
14.2
|
The parties undertake to cooperate with the Stock Exchange and the Stock Exchange Clearing House insofar as necessary for the closing of the Transaction.
|
14.3
|
With the entry of the Transaction into effect following the completion of the actions specified in clause 12.1 above and in clauses 14.1.1 to 14.1.7 above, all the assets and liabilities of the Target Company shall vest and be transferred to Netvision, and the Target Company shall be liquidated without winding up in accordance with the provisions of the Companies Law.
|
15.
|
Expenses
|
16.
|
Cancellation of the Agreement
|
16.1
|
Up to the Closing Date the parties may, by joint agreement, cancel the Merger Agreement at any time and for any reason.
|
16.2
|
Without derogating from the foregoing, the parties agree that the Merger Agreement shall be cancelled upon the occurrence of one or more of the following events:
|
16.2.1
|
The Closing Date does not occur by the Deadline.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
16.2.2
|
At the shareholders meeting of Netvision (including an adjourned meeting, where relevant) it is resolved by the majority of shareholders prescribed by law not to approve the merger.
|
16.2.3
|
At the shareholders meeting of Cellcom (including an adjourned meeting, where relevant) it is resolved by the majority of shareholders prescribed by law not to approve the merger.
|
16.2.4
|
A final and unappealable order is issued that prevents the merger.
|
16.2.5
|
A law is enacted or regulations are made or a government authority acts in such a manner that the closing of the Transaction is rendered illegal.
|
16.3
|
In addition to that stated in clause 16.2 above, in the event that any of the parties to the Agreement acts in material breach of its undertakings in the Merger Agreement and fails to cure such breach within 15 days from the date of the other party's written notice concerning the breach, at any time prior to the Closing Date, the aggrieved party shall be entitled to cancel the Agreement by written notice to the party in breach, without derogating from any other relief available to it in law. To avoid doubt, it is hereby clarified that in case of a material inconsistency in representations, the provisions of clauses 8.2 to 8.5 alone shall apply, and the provisions of this clause 16.3 shall not apply.
|
16.4
|
In case of the cancellation of the Agreement as stated in clauses 16.2.1 to 16.2.5 above, the Agreement shall be deemed void ab initio, and the parties, their shareholders or any third party shall not have any cause of action arising from the Agreement or its cancellation, including a cause or right of action against an officer, director or shareholder of any of the parties to the Agreement.
|
17.
|
Notices and Reports
|
17.1
|
The parties undertake to coordinate in advance any report and announcement to the press and to the various authorities concerning the execution and closing of this Agreement (without derogating from the reporting duties applying to any of the parties by law).
|
18.
|
Miscellaneous
|
18.1
|
Any delay or abstention by any of the parties in exercising or enforcing any of its rights under this Agreement shall not be deemed as its waiver of or preclusion from exercising its rights in the future, and it shall be entitled to exercise its rights wholly or partly, whenever it sees fit. No waiver, allowance, extension, representation, alteration, addition or subtraction from or pursuant to this Agreement shall be valid unless they are made in writing and signed jointly by the parties.
|
18.2
|
Any alteration, amendment and/or addition to the Agreement shall not be valid and shall be deemed not to have been made, unless made in writing and signed by the parties jointly.
|
TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
18.3
|
This Agreement and its appendices reflect the full agreement between the parties in the matters provided for herein. Any representation, consent or draft or prior undertaking, whether direct or in favor of a third between, between the parties in connection with the matters provided for in this Agreement, and any negotiations, summary, understanding or agreement between the parties prior to the execution of the Agreement and connected with the matters provided for herein, shall not be valid, apart from the confidentiality agreement that was signed between Cellcom and Netvision.
|
18.4
|
If it is held that any provision of the Agreement is unenforceable and/or void for any reason, this shall not affect the rest of the provisions of the Agreement, and the parties shall act in good faith to implement the Agreement in spirit and language, including the replacement of such unenforceable and/or void provision with an alternative provision, the result and operation of which is substantially the same and the financial consequences of which are the same in terms of the parties hereto.
|
18.5
|
This Agreement may be executed in several counterparts, including by fax, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
|
18.6
|
This agreement shall be governed by the laws of the State of Israel. The competent court of law in the city of Tel Aviv-Yafo is vested with sole and exclusive jurisdiction to consider the Agreement and any matter connected therewith and/or pertaining thereto and/or arising therefrom.
|
18.7
|
The parties' addresses and contact details for purposes of the Agreement are as set out in the preamble to this Agreement or any other address in Israel or other contact details of any of the parties concerning which such party gave written notice to the other party hereto.
|
18.8
|
Any notice of any of the parties in connection with this Agreement shall be sent to the addressee by personal delivery or by registered mail to its address or by fax or by electronic mail, as stated above, and it shall be deemed delivered to the addressee on the day of its delivery by personal delivery, or at the end of 3 days after it was sent by registered mail, as stated above, or on the first business day after the receipt of confirmation of its transmission by fax or by electronic mail, all as the case may be.
|
( - )
|
( - )
|
( - )
|
||
Cellcom Israel Ltd.
|
Netvision Ltd.
|
Cellcom Merger 2011 Ltd.
|
As of December 31, 2011
|
Country
|
Percentage of voting
share capital held
|
Principal activity
|
Netvision Ltd.
|
Israel
|
100%
|
Holdings Company
|
013 Netvision Ltd.
|
Israel
|
100% (indirectly - through Netvision Ltd.)
|
Communications
|
1.
|
I have reviewed this annual report on Form 20-F of Cellcom Israel Ltd;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in
|
|
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
/s/ Nir Sztern
|
||
Nir Sztern
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 20-F of Cellcom Israel Ltd;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
|
|
|
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
/s/ Yaacov Heen
|
||
Yaacov Heen
Chief Financial Officer
|
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cellcom Israel Ltd..
|
/s/ Nir Sztern
|
|
Name: Nir Sztern
|
|
Chief Executive Officer
|
/s/ Yaacov Heen
|
|
Name: Yaacov Heen
|
|
Chief Financial Officer
|