1

L/566005/2190/7916835/1

ISRAEL ELECTRIC CORPORATION LTD.

INVITATION FOR PRE-QUALIFICATION

TO PARTICIPATE IN A TENDER FOR THE SUBMISSION OF BIDS

TO PURCHASE THE

RAMAT HOVAV TRANSFERRED FACILITIES

July 15, 2019

2

L/566005/2190/7916835/1

CONTENTS

1. INVITATION FOR PRE-QUALIFICATION ............................................................................. 3

2. RULES AND PROCEDURES ....................................................................................................... 5

3. GENERAL PROVISIONS RELATING TO PARTICIPANTS ............................................... 15

4. PROFESSIONAL PRE-QUALIFICATION REQUIREMENTS ............................................ 20

5. FINANCIAL PRE-QUALIFICATION REQUIREMENTS .................................................... 24

6. RANKING OF THE PARTICIPANTS (OPTIONAL) ............................................................. 30

7. METHOD OF SUBMISSION...................................................................................................... 32

8. EVALUATION OF THE PRE-QUALIFICATION SUBMISSIONS ..................................... 35

3

L/566005/2190/7916835/1

1. INVITATION FOR PRE-QUALIFICATION

1.1 Introduction

On June 3, 2018, the Government of Israel approved a broad reform of the activity and

structure of the Israel Electric Corporation Ltd., as part of Government Resolution No.

3859 (hereinafter: the “Government Resolution”, the “Reform” and “IEC”

respectively). For the purpose of implementation of the Reform, the Ministers of Finance

and Energy, among others, were charged with the implementation of amendments to

legislation in the Electricity Sector Law, and those amendments were approved by the

Knesset in July 2018 (Electricity Sector Law (Amendment No. 16 and Temporary

Provision), 2018). As part of the Reform, it was agreed and resolved, inter alia, that IEC

will sell the Ramat Hovav Transferred Facilities as a whole, in a single transaction.

Accordingly, the Tender Committee hereby invites any Entity (other than Israeli

Government Corporations) or consortia of Entities (joint ventures) that is interested in

participating in the Pre-Qualification Process, all as set forth in this Invitation and

pursuant and subject to the terms thereof.

The Tender Committee reserves the right to contact additional Entities at its own

initiative, in any manner it sees fit, to notify them of its intention to sell the Ramat Hovav

Transferred Facilities, and to invite them at any time to participate in the Pre-

Qualification Process pursuant to this Invitation.

1.2 The Selection Process

The Tender Committee intends to select one Entity to purchase the Ramat Hovav

Transferred Facilities, via a two-stage Sale Process, as follows:

a) A Pre-Qualification Stage; and

b) A Tender Stage.

1.3 The Pre-Qualification Stage

The purpose of this Pre-Qualification Process is to identify Eligible Participants who will

be invited to participate in the Tender Process.

In this Pre-Qualification Stage, the Participants will be requested to submit Pre-

Qualification Submissions in accordance with the provisions of this Invitation, in order to

demonstrate their compliance with all the Pre-Qualification Requirements and all other

applicable provisions of this Invitation.

The Tender Committee will examine and evaluate the Pre-Qualification Submissions

submitted by the Participants in accordance with the provisions of this Invitation, and at

the end of the Evaluation Process, it will announce the Eligible Participants.

4

L/566005/2190/7916835/1

1.4 The Tender Stage

Following the completion of the Pre-Qualification Process, the Tender Committee

intends to invite all Eligible Participants to participate and submit Bids in the Tender

Process.

After the completion of the Tender Process, the Tender Committee will announce the

Successful Bidder, with which IEC will enter into an agreement for the sale of the Ramat

Hovav Transferred Facilities, all in accordance with the provisions of this Invitation and

the Tender Documents to be published by IEC.

Due to the unique characteristics of the Sale Process, and due to the uncertainty involved

in the Sale Process and changes that may take place during the various stages of the Sale

Process, IEC reserves the right, at any point, to make changes in the Sale Process,

including substantive changes in the wording of the Sale Contract, including all

appendices thereto and the ancillary documents (including a Power Purchase Agreement,

metering agreement and a substation operation and maintenance agreement), whether at

its initiative or pursuant to requests from an Eligible Participant and/or changes in

regulation, and no Participant and/or Eligible Participant and/or Bidder and/or person or

Entity on their behalf will have any complaint, claim or demand in connection therewith.

In addition, IEC reserves its right to conduct negotiations with some or all of the Bidders,

and to conduct an additional competitive procedure ("Best & Final") among Bidders the

Bids of which will be ranked by IEC within the Tender Process as optimal, all at IEC's

discretion and pursuant to the provisions of Applicable Law.

1.5 Anticipated Schedule

1.5.1 Without derogating from the Tender Committee’s right to postpone and/or to

modify any of the following dates at any time (including in proximity to the dates

set forth below), at the Tender Committee’s sole discretion, the planned schedule

for the Pre-Qualification Stage is as follows:

Date of publication of this Invitation July 15, 2019

Final date for the submission of Requests for

Clarification with respect to this Invitation

August 12, 2019

Pre-Qualification Submission Date October 1, 2019

1.6 The Properties Being Sold

1.6.1 A general description of the Ramat Hovav Transferred Facilities is attached as

Appendix 1 to this Invitation. The Site Diagram is attached as Appendix 2 to this

Invitation.

1.6.2 Without derogating from the description of the Transferred Facilities, as set forth

in Appendix 1 to this Invitation, it is hereby clarified that the Transferred

Facilities include all items constructed on the Site, including buildings, fixtures,

movable property and equipment, including the fuel tanks and the fuel system,

5

L/566005/2190/7916835/1

water piping, spare parts and inventory, provided that all these are directly used

for the operation of the power plant, and all subject to the terms of the Sale

Contract. In addition, the sale of the Transferred Facilities will include the

assignment of certain agreements in connection with the Site to the Purchaser, all

as will be set forth in the Sale Contract.

1.6.3 The Ramat Hovav Transferred Facilities are being sold exclusively as a “going

concern”, for the purpose of the continued operation and maintenance of the Site

and for the purpose of the generation of electricity and the sale thereof to the

system operator, in accordance with new generation licenses to be issued to the

Purchaser by the Electricity Authority under the Electricity Sector Law, and

relevant regulations enacted thereunder, and provided that the Purchaser obtains

all of the Required Approvals, according to the provisions of Section ‎2.19

(Receipt of Approvals From the Competent Authorities) below.

1.6.4 The Ramat Hovav Transferred Facilities will be sold in the condition they are in,

including from the legal, regulatory, accounting, economic, tax-related, physical,

environmental, technical and engineering standpoints as will be set out in the Sale

Contract (hereinafter: “As Is”), without any representations or warranties of IEC

regarding the condition of the Ramat Hovav Transferred Facilities other than as

will be expressly set forth in the Sale Contract.

1.6.5 On the date of completion of the Sale Process, upon the Handover of the Ramat

Hovav Transferred Facilities to the Purchaser, certain employees of IEC (both

permanent and temporary) who are intended for secondment will be seconded to

the Purchaser (the "Seconded Employees") for a period of five (5) years. The

identities of the Seconded Employees will be provided to the Purchaser before the

Handover, and the terms of such secondment will be determined by IEC, all as

will be set forth in the Sale Contract.

1.6.6 The operation and maintenance of all of the Ramat Hovav Transferred Facilities,

following the completion of the Sale Process and Handover will be the exclusive

responsibility of the Purchaser.

2. RULES AND PROCEDURES

2.1 Definitions

All capitalized terms used in this Invitation shall have the meaning ascribed thereto

herein or in Annex 1.

2.2 Governing Law and Jurisdiction

2.2.1 The Pre-Qualification Process, the Pre-Qualification Documents and the

interpretation and implementation thereof shall be governed and construed in

accordance with the provisions of Israeli Law, including the Mandatory Tenders

Law 1992 and the Mandatory Tender Regulations 1993 ("Regulations").

6

L/566005/2190/7916835/1

2.2.2 The competent courts of Tel Aviv-Jaffa shall have the sole and exclusive

jurisdiction over all matters and all disputes arising in connection with the Pre-

Qualification Process.

2.3 Regulatory Framework

The regulatory framework which will apply in connection with the Pre-Qualification

Stage (and, as applicable, to the Tender Stage and to the operation of the Transferred

Facilities by the Purchaser) will be in accordance with, inter alia (in each case as

amended, consolidated, extended, updated, replaced or re-enacted from time to time):

a) The Electricity Sector Rules (Transactions with an Essential Service Provider), 2000,

the Electricity Authority resolution dated May 13, 2019 (Decision No. 5 (1358) from

meeting 558) including the explanatory notes and the Q&A document, as published

in Electricity Authority's website, with respect to publication of general transactions

and standards for new producers in the transmission network; and

b) The document of principles for advice on sector-wide competition in the sale of the

generation sites published by the Competition Authority on September 27, 2018, and

the document of principles for advice on sector-wide competition in the sale of the

generation sites published by the Concentration Committee pursuant to the

Promotion of Competition and Reduction of Concentration Law 2013 (“the

Concentration Committee”) on October 4, 2018; and

c) The procedures of the Israel Lands Authority (“the ILA”) with respect to the

conferral of rights in real estate upon a Foreign Entity, including Professional

Procedure No. 05.02M; and

d) Standards published by the Electricity Authority, as may be amended and/or updated

from time to time.

2.4 Waiver

2.4.1 By submitting a Pre-Qualification Submission, each Participant (and any

Participating Entity and any person or Entity acting on their respective behalves)

will be deemed to have waived any claims in connection with the terms of this

Invitation and any right to seek interim (including injunctive) relief of any nature

with respect to or concerning the Pre-Qualification Process or any actions

thereunder, or to seek any other remedy the effect of which, whether directly or

indirectly, would be a delay in the Pre-Qualification Process or any actions

thereunder.

2.4.2 The foregoing does not derogate from the obligation of any Participant, and any

Participating Entity, and anyone on their behalf, to address the Tender

Committee, in writing, with a specific and detailed claim or complaint.

2.5 Conformity with All Applicable Laws

Participants and their Pre-Qualification Submissions shall abide by all Applicable Law.

Participants shall be subject to any changes in Applicable Law (including any

7

L/566005/2190/7916835/1

governmental decisions), should such changes occur during the Pre-Qualification

Process.

2.6 Preparation for Submission

2.6.1 By submitting a Pre-Qualification Submission each Participant (and each

Participating Entity) confirms that it has received the complete Pre-Qualification

Documents, that it has read, considered and understood the Pre-Qualification

Documents, and that it accepts the terms and conditions thereof and all

obligations and undertakings specified or implied therein.

2.6.2 The descriptions that are included in the Pre-Qualification Documents, including

with respect to the Ramat Hovav Transferred Facilities, are intended exclusively

for the purpose of providing a general background, and do not constitute

representations, warranties or undertakings of IEC or anyone on its behalf.

Furthermore, such descriptions are not exhaustive and do not constitute a

substitute for the performance of an examination by Participants of all relevant

information concerning the Ramat Hovav Transferred Facilities.

2.6.3 The information included in the Pre-Qualification Documents, including with

respect to the Ramat Hovav Transferred Facilities, is to the best of IEC’s

knowledge only, and neither IEC nor anyone on its behalf (including the

Advisors) is liable in any way whatsoever for the correctness, accuracy and/or

completeness of such information and/or for any other information that will be

provided to a Participant and/or to anyone on its behalf during the Pre-

Qualification Process.

2.6.4 Each Participant shall be deemed to be aware of and familiar with all Applicable

Law with respect to the Pre-Qualification Process, the Tender Process and the

Sale Process. All Pre-Qualification Submissions shall be prepared and submitted

in accordance with Applicable Law, and the Participants (and each Participating

Entity) are assumed to have obtained professional advice with respect to the

relevant disciplines, including legal, financial and constructional, for participating

in the Pre-Qualification Process.

2.7 The Invitation

2.7.1 The Pre-Qualification Documents comprise this Invitation for Pre-Qualification,

its annexes, the Pre-Qualification Forms and any other document issued by the

Tender Committee during the Pre-Qualification Process, including any

Addendum to this Invitation (hereinafter: the “Pre-Qualification Documents”).

2.7.2 In any case of lack of clarity and/or ambiguity and/or contradiction and/or

incompatibility between the provisions of any Pre-Qualification Documents, the

interpretation that is most beneficial to IEC (as determined by IEC in its sole

discretion) shall apply. Each Participant that wishes to receive clarification

regarding any such lack of clarity and/or ambiguity and/or contradiction and/or

incompatibility shall notify IEC of such matter in accordance with the procedure

8

L/566005/2190/7916835/1

set out in Section ‎2.14 (Requests for Clarification of the Pre-Qualification

Documents) below.

2.8 Severability

The invalidity or unenforceability of any provision of the Pre-Qualification Documents

shall not affect the validity or enforceability of any other provisions, which will continue

in effect. Without derogating from the foregoing, if it is determined that any provision of

the Pre-Qualification Documents is invalid or unenforceable, then such provision will be

replaced by a valid and enforceable provision, the content, purpose and outcome of

which are as close as possible to those of the original provision.

2.9 Cost of Participation

2.9.1 Any and all costs and expenses incurred by Participants or Members thereof with

respect to and/or in connection with their participation in the Pre-Qualification

Stage (including, without limitation, preparation and submission of the Pre-

Qualification Submissions, costs related to examination by external consultants

on behalf of the Participants, and including changes and Requests for

Clarifications), will be borne by Participants.

2.9.2 None of the Participants, the Members, anyone acting on their behalf or anyone

for whom any Participant or Member thereof may be contractually or legally

responsible or accountable, will have any right to any compensation or restitution

from IEC, the Tender Committee or anyone acting on their behalf for any costs or

expenses so incurred by them, or for any loss or damage whatsoever suffered by

any Participant or Member thereof, their employees, officers, agents, or any other

persons for whom any Participant or Member thereof may be contractually or

legally responsible or accountable, in connection with their participation in the

Pre-Qualification Process, including in the event of termination of the Pre-

Qualification Process and/or the Sale Process for any reason whatsoever; the

disqualification of a Pre-Qualification Submission for any reason whatsoever,

including due to a Participant’s failure to receive any Required Approval or

otherwise due to the objection of any governmental authority; the non-selection of

a Participant as an Eligible Participant; or a change in the terms of the Pre-

Qualification Stage.

2.9.3 Each Participant hereby waives, in its own name and in the name of its Members

and anyone acting on its or their behalf and in the name of any other persons for

whom it (or any of its Members) may be contractually or legally responsible or

accountable, any rights, claims or demands for compensation from IEC or the

Tender Committee or anyone acting on their behalf with respect to the foregoing

or as a result thereof.

2.10 Intellectual Property

The Pre-Qualification Documents are the property of the Tender Committee, and are

provided to the Participants for the sole purpose of their participation in the Pre-

9

L/566005/2190/7916835/1

Qualification Process. Participants will not be entitled to copy and/or to use the Pre-

Qualification Documents for any other purpose whatsoever.

2.11 Language of the Pre-Qualification Documents

The binding language for the Pre-Qualification Documents is English, except for any

specific parts thereof which may be in Hebrew (as set out therein). However, the Tender

Committee reserves the right to issue a Hebrew version of any part thereof.

2.12 Access to Documents and Participation Fee

2.12.1 Any Entity wishing to participate in the Pre-Qualification Process may view the

Pre-Qualification Documents at the offices of IEC and on IEC's website.

2.12.2 The participation in the Pre-Qualification Process and the submission of Requests

for Clarification is subject to the payment of a participation fee in the amount of

NIS 15,000 (in words: fifteen thousand New Israeli Shekels), including VAT (the

“Participation Fee”), to be paid to IEC via bank transfer to one of the following

bank accounts, as applicable:

(a) For Participants paying from Israel – to IEC's bank account which is

maintained at the Postal Bank ("Bank Ha-Doar"), Account No. 5-31454-3

under the name of “Israel Electric Corporation Ltd.” (Bank No. 09, branch

No. 001); or

(b) for Participants paying from abroad, to IEC's bank account at Mizrahi Tefahot

Bank Ltd, IL57 020 444 0000 000 318200.

2.12.3 The amount of the Participation Fee also includes payment for the Tender

Documents, when distributed.

2.12.4 The Participation Fee will not be refunded to Participants, other than where the

Pre-Qualification Stage is cancelled and such cancellation does not result from or

relate to actions or circumstances related to the process itself (such as the Pre-

Qualification Submissions, the acts or the omissions of the Participants, in whole

or in part).

2.12.5 An Entity which does not pay a Participation Fee may submit a Pre-Qualification

Submission, provided that the right to do so was transferred to it by an Entity

which did so pay. The payment of a Participation Fee through another is

permitted, provided that only one Pre-Qualification Submission may be submitted

in respect of any one payment. Where a Participant is a Group, only one

Participation Fee will be required.

2.13 Authorised Representative

2.13.1 Each Participant shall appoint a representative on its behalf, who will be

authorized by the Participant to approach the Tender Committee on behalf of the

10

L/566005/2190/7916835/1

Participant, and to receive notices and/or guidance for the Participant and all of its

Members, as applicable (hereinafter: the “Authorized Representative”).

2.13.2 Participants shall submit to the Tender Committee a notice of the appointment of

an Authorized Representative on Pre-Qualification Form F, as well as a copy of

the receipt for the payment of the Participation Fee, to the e-mail address

provided in Section ‎2.14.1.

2.13.3 A Participant may replace its Authorised Representative at any time during the

Pre-Qualification Stage, by providing an advance written notice to the Tender

Committee, signed by all Members thereof, if applicable.

2.13.4 Neither IEC, the Tender Committee nor anyone acting on their behalf shall be

responsible for any damage or loss of any kind whatsoever suffered by a

Participant or anyone on its behalf, arising from an error or omission with respect

to any information provided by a Participant under this Section.

2.14 Requests for Clarification of the Pre-Qualification Documents

2.14.1 Participants may address requests for clarification(s) to the Tender Committee, in

writing, with respect to the Pre-Qualification Documents, by way of a written

request from the Participant’s Authorised Representative to the following e-mail

address: Hovav-Project@iec.co.il, by no later than the deadline set out in

Section ‎1.5 (Anticipated Schedule) ("Requests for Clarification"). Such

Requests must include the following details: the details of the Participant

submitting the Request (and of its Authorized Representative), their e-mail

address, the name of the document to which the Request refers and the page

number and the section number thereof. Requests for Clarification must be

submitted as Word (open-for-editing) and scanned PDF files, in the following

format:

Serial Number Name of

Document, Page

Number

Section Clarification/

Question

1.

2.14.2 Any Requests for Clarification submitted by Participants after the deadline set out

in Section ‎1.5 (Anticipated Schedule) may be accepted or rejected, at the sole

discretion of the Tender Committee.

2.14.3 The Tender Committee may ask a Participant to clarify any item contained in a

Request for Clarification, including by way of meeting with some or all of the

Participants, in a joint meeting or in separate meetings.

2.14.4 Any responses of the Tender Committee to Requests for Clarification will be

provided in writing by the Tender Committee by e-mail to all of the Participants

(to the e-mail addresses of the Authorised Representatives) as a PDF file, without

11

L/566005/2190/7916835/1

disclosing the identity of the Participant asking the question. The Tender

Committee shall not be bound by, and Participants shall not rely on, any oral

interpretation or clarification of the Pre-Qualification Documents.

2.14.5 Answers will be provided only to substantive questions which the Tender

Committee considers, in its sole discretion, would have an effect on Pre-

Qualification Submissions.

2.14.6 Receipt of Requests for Clarification submitted by Pre-Qualification Submissions

in accordance with the provisions of Section ‎2.14.1 will not derogate from the

rights and discretions of the Tender Committee in any way. Without derogating

from the above, the Tender Committee shall be entitled, to exercise its rights

under Section ‎2.15 (Addenda) whenever it is of the opinion that the Pre-

Qualification Documents or any parts thereof require amendment.

2.14.7 Any amendment of the Pre-Qualification Documents made in writing by the

Tender Committee, if any, and answers in writing to Requests for Clarifications

as set out above, shall be published by the Tender Committee, as an Addendum to

this Invitation, in accordance with the provisions of Section ‎2.15 (Addenda).

Upon the publication of such an Addendum, the said amendments or answers will

constitute an integral part of the Pre-Qualification Documents.

2.15 Addenda

2.15.1 Notwithstanding any of the provisions of this Invitation, and without derogating

from the discretion of the Tender Committee under the provisions of Section ‎2.18

(Reservation of Rights), the Tender Committee reserves the right, at any time up

to the Pre-Qualification Submission Date, to revise, modify, amend, clarify, add,

eliminate or otherwise change the provisions of the Pre-Qualification Documents

or any part thereof, including any instruction, requirement, specification,

evaluation criteria or date contained therein. Such revisions, if any, shall be

announced by written Addenda to the Pre-Qualification Documents which shall

constitute an integral part of the Pre-Qualification Documents ("Addenda" and

any one thereof an "Addendum").

2.15.2 No clarification or amendment to the Pre-Qualification Documents shall be

binding unless issued by the Tender Committee in writing in the form of an

Addendum.

2.15.3 Each Addendum will be given a separate number by the Tender Committee and

will be sent in writing to the Participants by the Tender Committee, by email to

the Authorized Representatives. Notwithstanding the above, each Participant shall

be responsible for monitoring the publication of Addenda on IEC’s website on a

regular basis and for confirming that any such Addenda have been received by its

Authorized Representative.

2.15.4 Each Participant will be required to confirm to the Tender Committee the receipt

of each Addendum, by no later than two (2) business days following receipt

12

L/566005/2190/7916835/1

thereof, by having its Authorised Representative sign an “Acknowledgment”

form, which will be attached by the Tender Committee to every Addendum. In

addition, Participants will be required to acknowledge receipt of all Addenda in

their Pre-Qualification Submissions, specifically detailing the number and date of

receipt of each Addendum as part of Pre-Qualification Form A, as well as by

submitting the signed acknowledgments to their Pre-Qualification Submissions.

2.15.5 Without derogating from the generality of the provisions of Section ‎1.5

(Anticipated Schedule), the Pre-Qualification Submission Date may be postponed

by such number of days as shall be necessary in the opinion of the Tender

Committee and/or any person authorized by it, to enable Participants to revise

their Pre-Qualification Submissions and/or any part thereof, as a result of any

Addenda issued. The announcement of such new date, if any, will be included in

an Addendum, and an update notice will also be published on IEC’s website.

2.16 No Conflict of Interest

2.16.1 Each Participant represents that it does not have any conflict of interest or

suspicion of conflict of interest, of any type and kind whatsoever, in connection

with the purchase of the Transferred Facilities and undertakes that throughout the

Pre-Qualification Process, it will not have any such conflict of interest. If any

such conflict of interest arises, the applicable Participant undertakes to notify the

Tender Committee to that effect immediately.

2.16.2 Each Participant undertakes to bring to the attention of the Tender Committee any

information that may be relevant to the Tender Committee’s determination as to

whether a Participant has or is suspected of having a conflict of interest as stated

above.

2.16.3 The decision as to whether a Participant has a conflict of interest, or is suspected

of having a conflict of interest, is subject to the Tender Committee’s sole and

exclusive discretion.

2.16.4 The Tender Committee reserves the right not to select a Participant and/or to

cancel its announcement as an Eligible Participant, if such Participant has or is

suspected of having, directly or indirectly, a conflict of interest.

2.16.5 The provisions of this Section ‎2.16 will apply to any Member, and each Member

will be required to comply with the provisions of this Section ‎2.16.

2.17 Advisors to the Tender Committee in the Pre-Qualification Stage

2.17.1 The list of Advisors to the Tender Committee in connection with this Invitation

and the Pre-Qualification Stage is set out in Appendix 5 to this Invitation

(“Advisors”).

2.17.2 Participants and/or any Participating Entity shall be prohibited from employing,

engaging, or obtaining services in connection with the Pre-Qualification Process

from any person or Entity that has provided or will provide the Tender Committee

13

L/566005/2190/7916835/1

and/or IEC with services in connection with this Invitation and/or the Pre-

Qualification Process, in whole or in part, including the Advisors, other than with

advance written approval from the Tender Committee.

2.17.3 The Tender Committee will be entitled, at its sole and exclusive discretion, to

disqualify Participants (or any Participating Entity) which do not comply with the

provisions of this Section ‎2.17.

2.18 Reservation of Rights

Without derogating from the provisions Section ‎8.8 (Additional Prerogatives of the

Tender Committee), the Tender Committee reserves the right to annul the Sale Process,

or any part thereof, including the Pre-Qualification Stage; to reject any Pre-Qualification

Submission; not to accept the Pre-Qualification Submission awarded with the highest

Final Score; not to accept any of the Pre-Qualification Submissions; and to conduct the

Pre-Qualification Stage in any manner the Tender Committee deems fit; all subject to the

provisions of the Regulations.

2.19 Receipt of Approvals From the Competent Authorities

2.19.1 Participants are required to obtain, at their sole expense, all the approvals,

consents and licences required under any Applicable Law from any Competent

Authority for the purpose of entering into the Sale Contract and the operation of

the Transferred Facilities (including with respect to the assignment to the

Purchaser of agreements between IEC and third parties in connection with the

Transferred Facilities, and to obtain the required consents, if any, from those third

parties) (the “Required Approvals”).

2.19.2 Without derogating from the foregoing, the Participants will be required, inter

alia, to:

(a) Comply with all of the qualification conditions for obtaining electricity

generation licences for the Ramat Hovav Transferred Facilities pursuant to the

provisions of the Electricity Sector Law and the regulations enacted

thereunder.

It is hereby clarified, that in order to comply with the requirement, the Bidders

will be required, within the Tender Stage, to include an undertaking from the

Members thereof to inject a shareholder equity with a minimum value into the

Bidder, all in accordance with the provisions of the Tender Documents;

(b) Obtain an approval, if necessary, from the ILA (including compliance with

the provisions of the Israel Lands Law and the procedures of the ILA, and

including with respect to the conferral of rights in real estate upon a Foreign

Entity); and

(c) Obtain an approval, if necessary, from the Competition Authority, including,

to the extent required, consultation with the Concentration Committee.

14

L/566005/2190/7916835/1

2.19.3 In addition, the Bidders will be required to obtain, at their own responsibility and

expense, pre-rulings from the following governmental authorities:

(a) The Competition Authority (including, to the extent required, after having

fulfilled the duty of consultation with respect to economy-wide and sector-

wide centralization, with the Concentration Committee and with the

Competition Commissioner, as relevant) ("Competition Authority's Pre-

Ruling") and

(b) The ILA (including compliance with the provisions of the Israel Lands Law

and the procedures of the ILA, and including with respect to the conferral of

rights in real estate upon a Foreign Entity) ("ILA's Pre-Ruling").

(Together: the "Pre-Rulings").

2.19.4 The Bidders are required to obtain the Pre-Rulings until the following deadlines

and neither the Bidders, nor any other Entity on their behalves will have any

complaint, demand or claim against IEC in respect of the receipt or non-receipt

thereof:

(a) The Competition Authority's Pre-Ruling shall be obtained and submitted by

the Bidder to the Tender Committee no later than the Bids Submission Date.

A Bidder which has not, by the Bids Submission Date, obtained the

Competition Authority's Pre-Ruling, will not be entitled to submit a Bid, and

if a Bid is submitted by it, it will be disqualified outright, and such Bidder will

not be entitled to continue to participate in the Tender Stage;

(b) The ILA's Pre-Ruling shall be obtained and submitted by the Bidder to the

Tender Committee no later than the Bids Submission Date.

In case where the Bidder has not, by the Bids Submission Date, obtained the

ILA's Pre-Ruling, it will be required, if it has been announced as the

Successful Bidder, to obtain the Required Approval from the ILA by the date

which is fourteen (14) days following the announcement of the Successful

Bidder by the Tender Committee, and as a pre-condition for the signature of

the Sale Contract by IEC. Without derogating from any other prerogative of

the Tender Committee pursuant to this Invitation and the Tender Documents,

it is hereby clarified that the Tender Committee and/or IEC will be entitled, at

their sole discretion, to postpone the final date for the presentation of the

Required Approval from the ILA by the Successful Bidder.

2.19.5 Without derogating from the foregoing and from the Bidder's responsibility to

approach the relevant Competent Authority for the receipt of the Required

Approvals as set out above, it is hereby clarified that IEC will be entitled to

forward the Pre-Qualification Submissions to the following authorities for

examination: (a) the Competition Authority (the Antitrust Commissioner and the

Concentration Committee); (b) the Electricity Authority; and (c) the ILA

15

L/566005/2190/7916835/1

(including the Ministry of Defense and the Ministry of Foreign Affairs, which

advise the ILA with respect to the grant of rights to a Foreign Entity). If the IEC

receives any response and/or input from the Competent Authorities with regard to

any Bidder, the IEC will be entitled to inform the Bidder with such a response,

and the Bidders will be required to act according to the instructions of the IEC/

the Competent Authority in this regard.

2.19.6 Without derogating from the foregoing, by submitting the Pre-Qualification

Submission, each Participant confirms that it is aware that the grant of

rights in the Site real estate to a Foreign Entity is subject, inter alia, to

obtaining the approval of the Chairman of the ILA, pursuant to a

recommendation by a subcommittee of the Israel Lands Council and after

consultation with the Minister of Defense and the Foreign Minister, and is

further subject to the provisions of Professional Procedure No. 05.02M.

2.19.7 Without derogating from the foregoing and from any other prerogative of the

Tender Committee, the Tender Committee and/or IEC reserve the right, at any

point and at their sole discretion, to make changes in the procedure and/or the

requirements for obtaining the Required Approvals and/or the Pre-Rulings,

including cancellation and/or waiver of the requirement, and no Participant and/or

Eligible Participant and/or Bidder and/or person or Entity on their behalf will

have any complaint, claim or demand in connection therewith.

3. GENERAL PROVISIONS RELATING TO PARTICIPANTS

3.1 The Participant

3.1.1 A Participant shall mean: (i) a single Entity; or (ii) up to four Entities, other than

an Entity as specified in Section ‎3.3.3 below, that have joined together into a

single group (hereinafter: “Group” and "Participant" respectively).

3.1.2 Any Pre-Qualification Submission that is submitted in the name of or by a Group,

and any other document that will be signed or submitted in the name of a Group

as part of the Pre-Qualification Process, will be binding upon each and all of the

Members of such Group, jointly and severally.

3.2 Formation of a Single-Purpose Vehicle

3.2.1 Following completion of the Pre-Qualification Process, in order to participate in

the Tender Process and to submit a Bid, each Eligible Participant that is a Group,

and each foreign Eligible Participant, will be required to form a new entity,

incorporated under the laws of Israel, one of the purposes of which shall be the

participation in the Tender Process (the "Special-Purpose Vehicle" or "SPV").

3.2.2 For the avoidance of doubt, an Eligible Participant that consists of one Israeli

Entity shall not be required to establish an SPV, but it will be entitled to do so if it

holds 100% of the SPV.

16

L/566005/2190/7916835/1

3.2.3 Without derogating from the provisions of Section ‎3.10 (Changes in the

Participant and/or in the Eligible Participant), the shares and other interests in

the SPV may be held only by Members who participated, through the Participant,

in the Pre-Qualification Submission, and were approved by the Tender

Committee pursuant to the Pre-Qualification Process.

3.2.4 Nothing shall preclude a Participant from incorporating an SPV as stated, for the

purpose of submitting the Pre-Qualification Submission.

3.3 Members of the Participant

3.3.1 Members of a Participant shall mean each of the Entities committed to hold

shares or other interests in the Participant (the "Member").

3.3.2 Each of the Members must be a corporation, which is lawfully incorporated in its

country of incorporation. For the avoidance of doubt, private individuals cannot

participate in the Pre-Qualification Process and/or in the Sale Process.

3.3.3 A Member cannot be a SPV or an entity which was incorporated after the date

which is three (3) months prior to the Pre-Qualification Submission Date.

3.3.4 A Member may participate in only one Pre-Qualification Submission.

3.3.5 In cases where the Participant is a single Entity, that Entity will also be

considered a “Member” for the purposes of this Invitation, and the provisions that

apply to a “Member” will also apply to it, mutatis mutandis.

3.3.6 The provisions of this Invitation that apply or refer to Members will also apply, to

the extent relevant and mutatis mutandis, to the Controlling Shareholders, the

directors and the Position Holders of a Member.

3.4 Major Subcontractor

3.4.1 “Major Subcontractor” shall mean an Entity with which the Participant engages

in an agreement, in which such Entity undertakes to provide the Participant with

all of the required operation and maintenance services of the Transferred

Facilities, following the Handover (if the Participant is declared to be the

Purchaser).

3.4.2 A Major Subcontractor need not be a Member.

3.5 Compliance With the Provisions of the Transactions With Public Entities Law

Each Participant and each Member which is a corporation that is a “resident of Israel,” as

this term is defined in the Income Tax Ordinance [New Version] is required to comply

with the following requirements pursuant to the Transactions with Public Entities Law:

3.5.1 To hold a valid certificate, issued by a tax assessing officer or an accountant, with

respect to keeping account books as required by Law pursuant to the provisions of

17

L/566005/2190/7916835/1

the Income Tax Ordinance [New Version] and the Value Added Tax Law, 1975

(“the VAT Law”).

3.5.2 To hold a valid certificate, issued by an assessing officer or an accountant, with

respect to reporting to the assessing officer on its income and to the Director of

VAT on transactions that are subject to tax under the VAT Law.

3.5.3 To comply with the requirements of Section 2B of the Transactions with Public

Entities Law, with respect to the payment of minimum wage and employment of

foreign workers.

3.5.4 To comply with the requirements of Section 2B1 of the Transactions with Public

Entities Law, with respect to the Equal Opportunities for Persons with Disabilities

Law, 1998.

3.6 Absence of Connection to Countries With Which Israel Has No Diplomatic

Relations

3.6.1 A Participant, each Participating Entity and each Controlling Shareholder,

director, and Position Holder of the Participant and/or of any Participating Entity

may not be a citizen or a resident of a Country With Which Israel Has No

Diplomatic Relations, or a corporation that is incorporated in such a country.

3.6.2 In this regard, in the case of a Participant or a Participating Entity that is a Private

Investment Fund, the compliance of the general partner/the managing Entity of

the fund and each of its Principals with the condition set forth above will be

examined (without examining the limited partners/the investors in the fund).

3.7 Absence of a Criminal Record

The Participant, the Participating Entity and each of the Controlling Shareholders, the

directors and the Position Holders of the Participant and of each Participating Entity shall

not have been convicted in a criminal case (and, to the best of its knowledge, no

proceedings for the conviction of any thereof shall be under way) of an Offense.

3.8 Undertaking to Maintain Confidentiality

3.8.1 Each Participant and each Participating Entity are required to sign an Undertaking

to Maintain Confidentiality, in accordance with Pre-Qualification Form G of

this Invitation, and to submit it as part of the Pre-Qualification Submission.

3.8.2 Without derogating from the provisions of the Undertaking to Maintain

Confidentiality, by submitting the Pre-Qualification Submission, each Participant

undertakes to maintain absolute confidentiality with respect to all of the

information, data and documents pertaining to IEC and/or to the Transferred

Facilities which were provided to it as part of the Pre-Qualification Process and

the Tender Process.

18

L/566005/2190/7916835/1

3.9 Participation in One Pre-Qualification Submission

3.9.1 Each Participant may submit only one Pre-Qualification Submission.

3.9.2 Each Participating Entity may participate in only one Pre-Qualification

Submission.

3.9.3 For the purposes of this Section ‎3.9, the terms "Participant" and “Participating

Entity" shall be deemed to include every Related Entity of each of the foregoing.

3.10 Changes in a Participant and/or in an Eligible Participant

3.10.1 The Tender Committee will be entitled, until the deadline that will be determined

by it within the Tender Documents, to allow changes with respect to a Participant

or an Eligible Participant, as applicable, and with respect to each Participating

Entity, including the replacement, addition, change in or deletion of any such

Entity, or a change in the joint Anticipated Holdings for each such Entity,

pursuant to a request in writing submitted to the Tender Committee by the

Participant and/or the Eligible Participant, as applicable ("Request Regarding

Changes in Group Composition").

3.10.2 For the avoidance of doubt, the Tender Committee will be entitled to accept or to

reject such a Request, at its absolute and exclusive discretion, which will be

exercised, inter alia, in light of the stage of the Sale Process at the time.

3.10.3 Without derogating from the generality of the foregoing, the Tender Committee

will reject a Request Regarding Changes in Group Composition, if, as a result of

the change requested:

3.10.3.1 The Participant/ the Eligible Participant, as applicable, does not

comply with any of the Pre-Qualification Requirements, including

with the requirement set out in Section ‎3.3.3 above;

Or –

3.10.3.2 Subject to provisions of Sections ‎6 (Ranking of the Participants

(Optional)), the new Final Score that the Participant/ the Eligible

Participant receives as a result of such a change is lower in such a

way that the new Final Score is not sufficient for its declaration as

an Eligible Participant.

3.10.4 A Participant/an Eligible Participant will not be entitled to make any change in

the composition of its Members and/or in the identity of a Guarantor (if relevant)

and/or in the Anticipated Holdings unless it has received the approval of the

Tender Committee, in advance and in writing.

3.10.5 The Tender Committee will be entitled to disqualify a Participant's Pre-

Qualification Submission and/or its declaration as an Eligible Participant and/or

its Bid (as applicable) if such Participant, notwithstanding the foregoing, has

19

L/566005/2190/7916835/1

made the aforesaid changes without having obtained the approval of the Tender

Committee as required.

3.10.6 In any case where the Tender Committee approves a Request Regarding Changes

in Group Composition, after one or more of the Required Approvals have been

obtained, the Participant/Eligible Participant will be required, at its own expense,

to contact the relevant Competent Authority and to obtain from it, within a period

of time that the Tender Committee will determine, and, in any event, no later than

the Bids Submission Date or no later than 14 days after the announcement of the

Successful Bidder (as this date may be postponed by the Tender Committee

and/or IEC, according to the provisions of Section 2.19.4(b) above) as applicable,

a new approval with respect to the new composition of the Participant/Eligible

Participant, as applicable.

3.10.7 Without derogating from the provisions of this Section ‎3.10, the Tender

Committee will be entitled, at any time during the Sale Process, at its absolute and

exclusive discretion, including at the request of any Competent Authority, and

without this conferring upon any Participant/Bidder a right to delay the Sale

Process, to allow a Participant/Bidder to join the Sale Process or to add one or

more new or existing Participants/Bidders to another Participant/Bidder, and upon

the granting of approval as stated, the Participant/Bidder that has been added will

be deemed to have been a party to the application as it was filed, for all intents

and purposes. An approval as stated may be made contingent upon conditions.

3.11 Participation of Israeli Government Company

An Israeli Government Company shall not be permitted to participate in the Sale Process,

whether as a Participant or as a Participating Entity.

3.12 Demonstration of compliance with the requirements

3.12.1 Each Member will specify its share in the applicable Participant, including its

anticipated holdings in the SPV (hereinafter: the “Anticipated Holdings”), in the

Pre-Qualification Submission Letter (Pre-Qualification Form A).

3.12.2 Each Participant will attach to Pre-Qualification Form A, a group chart,

demonstrating the composition of its Pre-Qualification Submission, including

each Participating Entity and its role, and the connection between the Entities, if

any.

3.12.3 In order to demonstrate compliance with the provisions of Section ‎3.1 (The

Participant), each Participant shall submit Pre-Qualification Form B, duly

completed and signed. In addition, each Participant that is a corporation will

append a certified copy of an updated certification attesting to its existence as a

corporation.

3.12.4 In order to demonstrate compliance with the provisions of Section ‎3.3 (The

Member), each Member shall submit Pre-Qualification Form C, duly completed

20

L/566005/2190/7916835/1

and signed. In addition, each Member will append a certified copy of an updated

certification attesting to its existence as a corporation.

3.12.5 Each Related Entity shall submit Pre-Qualification Form D, duly completed and

signed. The Related Entity shall detail, within this Form, its relation to the

Participant/ Member, and append a structure chart demonstrating this relation. In

addition, each Related Entity will append a certified copy of an updated

certification attesting to its existence as a corporation.

3.12.6 In order to demonstrate compliance with the provisions of Section ‎3.4 (Major

Subcontractor), the Major Subcontractor shall submit Pre-Qualification Form E,

duly completed and signed. In addition, the Major Subcontractor will append to

this Form a copy of the agreement signed by the Participant and the Major

Subcontractor and a certified copy of an updated certification attesting to its

existence as a corporation.

3.12.7 In order to demonstrate compliance with the provisions of Section ‎3.5

(Compliance with the Requirements of the Transactions with Public Entities

Law), each Participant that is a single Entity, and each Member of a Participant

that is a Group, shall submit Pre-Qualification Form H, duly completed and

signed, and the relevant certifications, listed on Pre-Qualification Form H.

4. PROFESSIONAL PRE-QUALIFICATION REQUIREMENTS

Each Participant will be required to demonstrate compliance with the Professional Pre-

Qualification Requirement set out in Section ‎4.1 (Operation and Maintenance Experience) and

also with at least one of the Professional Pre-Qualification Requirements set out in

Sections ‎4.2, ‎4.3 and ‎4.4 below, as follows:

4.1 Operation and Maintenance Experience

4.1.1 Each Participant is required to demonstrate that the last 7 (seven) years, an

Experience Provider on its behalf has proven operation and maintenance

experience with respect to the operation and maintenance of Power Plant(s) for

the generation of electricity, provided that they are not Renewable Energy Power

Plant(s) (“Power Plant(s)”), with a cumulative installed power that appears in the

generation license(s) (insofar as such license(s) is required) of at least 200 (two

hundred) megawatts (MW), throughout a continuous period of a least five years,

between October 1, 2012 and the Pre-Qualification Submission Date (Hereinafter:

"Operation and Maintenance Experience").

4.1.2 Form of Submission: In order to demonstrate compliance with this Section ‎4.1

(Operation and Maintenance Experience), the Experience Provider shall submit

Pre-Qualification Form I1, duly completed and signed.

21

L/566005/2190/7916835/1

4.2 Entrepreneurship Experience

4.2.1 The Participant is required to demonstrate that in the last 10 (ten) years, an

Experience Provider on its behalf has proven entrepreneurship experience in at

least one of the following:

4.2.1.1 Entrepreneurship of Power Plant(s), with a cumulative installed power

that appears in the generation license(s) (insofar as such license(s) is

required) of at least 200 (two hundred) megawatts (MW); or

4.2.1.2 Entrepreneurship of one or more Infrastructure Projects, with a

construction cost for a single Infrastructure Project of at least NIS

1,000,000,000 (one billion New Israeli Shekels) (not including VAT),

or a cumulative construction cost for, at the most, up to 4 (four)

Infrastructure Projects, of at least NIS 2,000,000,000 (two billion

New Israeli Shekels) (not including VAT).

(Hereinafter: "Entrepreneurship Experience")

4.2.2 For the purpose of this Section, the Experience Provider shall demonstrate

Entrepreneurship Experience as stated above, during the period between October

1, 2009 and the Pre-Qualification Submission Date.

4.2.3 Form of Submission: In order to demonstrate compliance with this Section ‎4.2

(Entrepreneurship Experience), the Experience Provider shall submit Pre-

Qualification Form I2, duly completed and signed.

4.3 Ownership Experience

4.3.1 The Participant is required to demonstrate that in the last 7 (seven) years, an

Experience Provider on its behalf has proven ownership experience in at least one

of the following:

4.3.1.1 Ownership of Power Plant(s), with a cumulative installed power that

appears in the generation license(s) (insofar as such license(s) is

required) of at least 200 (two hundred) megawatts (MW), for at least

two continuous years; or

4.3.1.2 Ownership of one Infrastructure Project, including ownership of a

concessionaire under a concession agreement, the construction cost of

which is at least NIS 1,000,000,000 (one billion New Israeli Shekels)

(not including VAT), or with a cumulative construction cost for, at the

most, up to 4 (four) Infrastructure Projects, of at least NIS

2,000,000,000 (two billion New Israeli Shekels) (not including VAT),

for at least two continuous years.

(Hereinafter: "Ownership Experience")

22

L/566005/2190/7916835/1

4.3.2 For the purpose of this Section, the Experience Provider shall demonstrate

Ownership Experience as stated above, during the period between October 1,

2012 and the Pre-Qualification Submission Date.

4.3.3 For the purpose of this Section starting date of ownership will be considered as

the earliest of the following:

4.3.3.1 The date on which the property was recorded in the books of the

Entity with Ownership Experience; or

4.3.3.2 The date of receipt of a permanent generation license for the private

generation of electricity under the Electricity Sector Law; or

4.3.3.3 The date of creation of a reference document with respect to the start

of commercial operation of the project.

("Starting Date of Ownership")

4.3.4 Form of Submission: In order to demonstrate compliance with this Section ‎4.3

(Ownership Experience), the Experience Provider shall submit Pre-Qualification

Form I3, duly completed and signed.

The Experience Provider shall append to this Form, the relevant document for the

demonstration of Starting Date of Ownership, as follows:

4.3.4.1 An accountant’s certificate; or

4.3.4.2 A permanent generation license for the private generation of

electricity under the Electricity Sector Law; or

4.3.4.3 A reference document with respect to the start of commercial

operation of the project.

4.4 Experience in Financial Close

4.4.1 The Participant is required to demonstrate that in the last 7 (seven) years, an

Experience Provider on its behalf has proven experience in financial close of an

Infrastructure Project, the construction cost of which is at least NIS 1,000,000,000

(one billion New Israeli Shekels) (not including VAT), or with a cumulative

construction cost for, at the most, up to 4 (four) Infrastructure Projects, of at least

NIS 2,000,000,000 (two billions New Israeli Shekels) (not including VAT), in

Israel and/or the United States of America and/or OECD Countries (Hereinafter:

"Experience in Financial Close").

4.4.2 Form of Submission: In order to demonstrate compliance with this Section ‎4.4

(Experience in Financial Close), the Experience Provider shall submit Pre-

Qualification Form I4, duly completed and signed.

23

L/566005/2190/7916835/1

4.5 General Instructions With Respect to Demonstration of Compliance With the

Professional Pre-Qualification Requirements

4.5.1 A Participant may demonstrate compliance with the Professional Pre-

Qualification Requirements by itself or through a Related Entity thereto.

4.5.2 Notwithstanding the foregoing, in cases where the Participant is a Group, it is also

possible to demonstrate compliance with the Professional Pre-Qualification

Requirements through up to two Members (at the most), whether themselves or

through one Related Entity each, where each such Member demonstrating

compliance will itself hold at least 25% (twenty-five percent) of the Anticipated

Holdings in the Participant.

4.5.3 Without derogating from the foregoing, the Participant’s compliance with the

Professional Pre-Qualification Requirement set forth in Section ‎4.1 (Operation

and Maintenance Experience) above, and this requirement only, can also be

proved through a Major Subcontractor, with which the Participant shall engage in

an agreement, where the Major Subcontractor possesses the relevant experience.

4.5.4 In addition to the aforesaid, for the purpose of demonstrating compliance with the

Professional Pre-Qualification Requirements, an Experience Provider may present

and rely on a referenced project which was executed by another Entity, as

follows:

4.5.4.1 In order to demonstrate compliance with Section ‎4.1 (Operation and

Maintenance Experience), the Experience Provider may present a

project that was held as a joint venture or as a jointly held company,

provided that the Experience Provider held, at least, 50% (fifty percent)

of the share capital of the joint venture or the held company (as is

relevant). In such a case, the Experience Provider will accordingly be

credited with the entire amount of the experience attributed to the joint

venture or the held corporation (as is relevant).

4.5.4.2 In order to demonstrate compliance with Section ‎4.1 (Entrepreneurship

Experience) and with Section ‎4.3 (Ownership Experience) and with

Section ‎4.4 (Experience in Financial Close), the Experience Provider

may present a project that was held as a joint venture or as a jointly

held company, provided that the Experience Provider held, at least,

25% (twenty five percent) of the share capital of the joint venture or the

held company (as is relevant). In such a case, the Experience Provider

will accordingly be credited with the entire amount of the experience

attributed to the joint venture or the held corporation (as is relevant).

4.5.5 In cases where the construction cost of Power Plant(s) and/or Infrastructure

Project(s) being relied upon in connection with the above requirements is stated in

foreign currency under the relevant agreements regarding such Power Plant(s)

and/or Infrastructure Project(s), the amount of such construction cost in foreign

24

L/566005/2190/7916835/1

currency will be converted into New Israeli Shekels according to one of the

following rates of exchange:

4.5.5.1 In the entrepreneurship of Power Plant(s) and/or Infrastructure

Project(s) (Section ‎4.2 above) – the rate of exchange that was

published by the Bank of Israel as of the date of financial close of the

project (and in the case of self-financing – the date of winning a

tender/ procedure/ signing an engagement contract/ obtaining a

license/ concession for the implementation of the project, whichever

is earlier).

In cases where no rate of exchange as stated was published on the

date of financial close, the construction cost will be converted into

New Israeli Shekels according to the last rate of exchange that was

published by the Bank of Israel before the date of financial close of

such project.

4.5.5.2 In the ownership or financial close of Power Plant(s) and/or

Infrastructure Project(s) (Sections ‎4.3 and ‎4.4 above) – the rate of

exchange that was published by the Bank of Israel as of the signing

date of the finance documents/ the sale agreement for the project (and

in cases where no rate of exchange as stated was published on that

date, according to the last rate of exchange that was published by the

Bank of Israel before the signing date of the finance documents/ the

sale agreement).

5. FINANCIAL PRE-QUALIFICATION REQUIREMENTS

Each Participant is required to demonstrate its and its Members' compliance (by themselves or

through a Guarantor as described in Section ‎5.7 below), with all the applicable Financial Pre-

Qualification Requirements:

5.1 Equity

Each Member that is not a Financial Entity is required to demonstrate Equity of not less

than NIS 9,000,000 (nine million New Israeli Shekels) for each 1% (one percent) of

Anticipated Holdings in the Participant, based on its most recent annual Financial

Statements (provided these are not earlier than for year 2018).

If the Participant is a single Entity, the calculation of the minimum Equity with respect to

it will be performed according to Anticipated Holdings of 100% (one hundred percent).

5.2 Turnover

Each Participant is required to demonstrate that the Participant's Weighted Turnover (or

attributed to the Participant, if the Participant is a Group, as set forth in Section ‎5.2.1

below) is not lower than the Minimal Turnover Required (as such term is defined in

Section ‎5.2.3 below).

25

L/566005/2190/7916835/1

5.2.1 Participant's Weighted Turnover

The Participant's Weighted Turnover shall be calculated in the following manner:

Participant’s Weighted Turnover = ∑ 𝑖=𝑛𝑖=1 𝑊𝑇𝑂𝑖 ∗ 𝐻𝑆𝑖

Where:

WTOi = Member(i)'s Average Turnover (as such term is defined in

Section ‎5.2.2.2)

HSi = the Anticipated Holdings of Member (i) in the Participant.

n= the number of Members in the Participant.

("Participant's Weighted Turnover")

5.2.2 Member's Average Turnover

The weighted turnover of each Member will be calculated as follows:

5.2.2.1 For any Member, the Anticipated Holdings of which are lower than

10% (ten percent), the Member's Average Turnover shall be deemed

as 0 (zero).

5.2.2.2 For any Member, the Anticipated Holdings of which exceed 10% (ten

percent), the Member's Average Turnover shall be calculated as

follows:

ATO = (3*TOt + 2*TOt-1 + 1*TOt-2)/6

Where:

ATO = Member's Average Turnover

TOt = income turnover in year t

t = year 2018

("Member's Average Turnover")

5.2.3 Minimal Turnover Required

The minimal turnover required of the Participant is:

5.2.3.1 Where all Members of the Participant are not Financial Entities – not

less than NIS 800,000,000 (eight hundred million New Israeli

Shekels).

5.2.3.2 Where one or more of the Members of the Participant is a Financial

Entity – the minimal turnover required of a Participant shall be as

follows:

X = A * 800,000,000

26

L/566005/2190/7916835/1

Where: A = the total Anticipated Holdings of the Members that are

not Financial Entities.

("Minimal Turnover Required")

5.3 Operating Cash Flow

Each Member which is not a Financial Entity, and whose Anticipated Holdings exceed

10%, will be required to demonstrate its compliance with either Section ‎5.3.1 or

Section ‎5.3.2 below:

5.3.1 The Average Operating Cash Flow of a Member that is not a Financial Entity in

the last three fiscal years is not negative (either positive or equal to zero).

For the purposes of this section, the Member’s Average Operating Cash Flow will

be calculated as follows:

WCF = (3*CFt + 2*CFt-1 + 1*CFt-2)/6

Where:

WCF = Average Operating Cash Flow of a Member

CFt = The Member's annual operating cash flow from the relevant year, based on

the Member's respective Financial Statement for that year.

t = year 2018

("Average Operating Cash Flow of a Member")

5.3.2 In the event that the Average Operating Cash Flow of a Member that is not a

Financial Entity, is negative, the Member will be required to demonstrate that the

ratio between the absolute value of (a) and (b) below is less than 20% and more

than 0%:

(a) The Average Operating Cash Flow of the Member;

(b) its Equity as at the end of the Last Fiscal Year.

0% < ABS[(3*CFt + 2*CFt-1 + 1*CFt-2)-6] / Et < 20%

Where:

CFt = the Member's operating cash flow of the relevant year, based on its

Financial Statements for that year

Et = Equity at the end of the year t

t = year 2018

ABS = absolute value

27

L/566005/2190/7916835/1

5.4 No “Going Concern Notice”

The most recent audited Financial Statements of each Member (even if relying on a

Guarantor) and each Guarantor shall not contain a “Going Concern Notice”.

5.5 Financial Entity (other than a Private Investment Fund)

Any Member which is a Financial Entity, other than a Private Investment Fund, will be

required to demonstrate its compliance with either Section ‎5.5.1 or ‎5.5.2 below:

5.5.1 Its equity (excluding minimal equity required by Law, to the extent relevant) was

not less than NIS 10,000,000 (ten million New Israeli Shekels) for each 1% (one

percent) of its Anticipated Holdings in the Participant, based on the Member's

Financial Statements for the Last Fiscal Year;

Or,

5.5.2 For each 1% (one percent) of its Anticipated Holdings in the Participant, it has

managed assets with a net worth of not less than NIS 100,000,000 (one hundred

million New Israeli Shekels), as at the end of the Last Fiscal Year.

5.6 Private Investment Fund

Any Member which is a Private Investment Fund will be required to demonstrate its

cumulative compliance with both Sections ‎5.6.1 and ‎5.6.2 below:

5.6.1 For each 1% (one percent) of its Anticipated Holdings, the amount of Unutilized

Commitments under its management is at least NIS 9,000,000 (nine million New

Israeli Shekels), as of 14 days prior to the Pre-Qualification Submission Date;

And,

5.6.2 For each 1% (one percent) of its Anticipated Holdings, the Fund has Assets Under

Management of not less than NIS 10,000,000 (ten million New Israeli Shekels),

as at the end of the Last Fiscal Year.

5.7 Reliance on a Guarantor

5.7.1 Each Member may demonstrate compliance with the Financial Pre-Qualification

Requirements by relying on one Entity Controlling such Member (hereinafter:

“Guarantor”), provided that the Guarantor itself complies with all the Financial

Pre-Qualification Requirements, and provided that both the Member and its

Guarantor comply with the requirement under Section ‎5.4 (No "Going Concern

Notice") (in their entirety and cumulatively). A Member relying on a Guarantor

shall submit within the Pre-Qualification Submission, Pre-Qualification Form

L, duly signed and completed by the Guarantor.

5.7.2 In the event that the Guarantor is also a Member or a parent company of another

Member of the Participant, then, for the purpose of determining compliance with

all Financial Pre-Qualification Requirements, the Anticipated Holdings of such

28

L/566005/2190/7916835/1

Guarantor in the Participant will be deemed to include also all Anticipated

Holdings of the Member seeking to rely on such Guarantor.

5.7.3 The provisions of this Section ‎5.7 will also apply, mutatis mutandis, to a Member

that seeks to rely on a Guarantor, where the referenced Guarantor is also a

Member. In such a case, the Anticipated Holdings of the referenced Guarantor

will be deemed also to include the Anticipated Holdings of the Member seeking

to rely on such Guarantor, which will be calculated proportionately (pro rata) to

the relevant Guarantor’s Holdings in that Member.

5.8 Demonstration of Compliance With the Financial Pre-Qualification Requirements

5.8.1 In order to demonstrate compliance with the Financial Pre-Qualification

Requirements, each Member and each Guarantor (as applicable) shall submit Pre-

Qualification Form J1, duly completed and signed.

5.8.2 With respect to a Member (and a Guarantor, as applicable) that is a Financial

Entity (other than a Private Investment Fund), in order to demonstrate compliance

with the requirements of Section ‎5.5 above, such Member shall submit Pre-

Qualification Form J2, duly completed and signed.

5.8.3 With respect to a Member (and a Guarantor, as applicable) that is a Private

Investment Fund, in order to demonstrate compliance with the requirements of

Section ‎5.6 above, such Member shall submit Pre-Qualification Form J3, duly

completed and signed.

5.8.4 In order to demonstrate its compliance with the Financial Pre-Qualification

Requirements, the Member (and a Guarantor, as applicable) shall submit a

certification from its auditor, certifying the Member's (or the Guarantor's, as

applicable) compliance with all of the Financial Pre-Qualification Requirements,

in the form of Pre-Qualification Form K, in accordance with the consolidated (if

relevant) audited Financial Statements of the Member and/ or the Guarantor.

5.8.5 The Financial Statements based upon which the Member (or the Guarantor, as

applicable) demonstrates its compliance with the Pre-Qualification Requirements

shall be duly prepared and presented in accordance with one of the following sets

of accounting rules:

5.8.5.1 The rules of generally accepted accounting principles in Israel as

published by the Israel Accounting Standards Board, including the

guidelines for disclosure of the cash flow statement as published in

Opinion No. 51 – Statement of Cash Flows;

5.8.5.2 The rules of generally accepted accounting principles in the United

States (US GAAP) as published by the Financial Accounting

Standards Board (FASB) in the United States, including the

guidelines for disclosure of the cash flow statement as published in

ASC 230 Statement of Cash Flows;

29

L/566005/2190/7916835/1

5.8.5.3 The International Financial Reporting Standards (IFRS) as published

by the International Accounting Standards Board (IASB), including

the guidelines for disclosure of the cash flow statement as published

in IAS 7 – Statement of Cash Flows;

5.8.5.4 The rules of generally accepted accounting principles in one of the

OECD countries.

5.8.6 An Entity whose Financial Statements are based on the rules of generally

accepted accounting principles in its country of origin, which are not listed above,

but are equivalent to the abovementioned sets of accounting rules, will be

required to submit a specific written request to the Tender Committee to approve

reliance and submission of a certification by an auditor in accordance with such

Financial Statements, at least thirty (30) days prior to the Pre-Qualification

Submission Date. The Tender Committee will examine and decide on such a

request at its exclusive discretion. It is hereby clarified that the Tender Committee

will be entitled, but not obligated, at its sole discretion, to approve such reliance

without a submitted request, in case it would be approved within the certification

by an auditor, that the Financial Statements are based on the rules of generally

accepted accounting practice in its country of origin and are equivalent to the

abovementioned sets of accounting rules.

5.8.7 It is hereby clarified that the Member and/or the Guarantor need not to submit

their Financial Statements within the Pre-Qualification Submission.

5.8.8 In cases where a Member relies on a Guarantor, the Guarantor shall submit the

Letter of Guarantee (Pre-Qualification Form L).

5.9 Conversion of Currencies

All financial data that is included in the Pre-Qualification Forms will be submitted in

New Israeli Shekels (NIS). In any case where the data in the Financial Statements is not

presented in New Israeli Shekels, the relevant Entity will convert the financial data in

accordance with the following:

5.9.1 The turnover and the operating cash flow will be converted into New Israeli

Shekels according to the average rate of exchange for that year, as it appears in

the following table:

Currency Rate of exchange (NIS) for conversion of financial

data for the year:

Year 2016 2017 2018

1 US dollar (US$) 3.874 3.656 3.608

1 euro (€) 4.145 4.098 4.222

100 Japanese Yen (JPY) 3.264 3.183 3.246

1 Chinese Yuan

renminbi (CNY) 1.736 1.845 1.857

30

L/566005/2190/7916835/1

5.9.2 The Equity will be converted into New Israeli Shekels according to the rate of

exchange as at December 31, 2018, as it appears in the following table:

Currency Rate of exchange (NIS) for conversion

1 US dollar (US$) 3.748

1 euro (€) 4.292

100 Japanese Yen (JPY) 3.411

1 Chinese Yuan

renminbi (CNY)

1.835

5.9.3 An Entity, the financial data of which are presented in currencies other than US

dollars (US$) or euros (€)or Japanese Yen (JPY) or Chinese Yuan (CNY), will

be required to submit a specific written request to the Tender Committee for the

conversion of such other currency to US$, at least thirty (30) days prior to the

Pre-Qualification Submission Date. The Tender Committee will examine and

decide on such a request at its exclusive discretion. It is hereby clarified that the

Tender Committee will be entitled, but not obligated, at its sole discretion, to

approve such reliance without a submitted request.

5.9.4 An Entity whose fiscal year, according to the Law of its domicile, ends on a date

other than December 31, will be required to submit a specific written request to

the Tender Committee in advance and to obtain its instructions with respect to the

fiscal years relevant to the examination, and for the purpose of obtaining the

conversion rates in accordance with other rates of exchange, at least 30 (thirty)

days prior to the Pre-Qualification Submission Date. The request must specify all

of the relevant information, including the tables of exchange rates upon which

that Entity wishes to rely. The Tender Committee will examine and decide on

such a request at its exclusive discretion. It is hereby clarified that the Tender

Committee will be entitled, but not obligated, at its sole discretion, to approve

such reliance without a submitted request.

6. RANKING OF THE PARTICIPANTS (OPTIONAL)

6.1 In case where more than 7 (seven) Pre-Qualification Submissions will be found to

comply with the Pre-Qualification Requirements as set forth in this Invitation, the Tender

Committee will be entitled, but not obligated, to examine the quality of the Participants

and to rank them in accordance with the criteria set forth in this Section ‎6 (the "Ranking

Process").

6.2 The criteria for the Ranking Process will be in accordance with the following formula:

TS = 0.6 * FR + 0.4 * PE

Where:

31

L/566005/2190/7916835/1

Description Weight

FR Financial robustness 60%

PE Professional experience 40%

TS Participant’s Final Score 100%

6.3 Criteria for Scoring – Financial Robustness

The financial robustness of the Participants will be scored by the Tender Committee

according to the table set out in Appendix 3.

The maximum score that can be cumulatively attained with respect to the above

parameters is 100 points, even in the cases where the Participant’s cumulative score in all

of the sections is more than 100 points.

6.4 Criteria for Scoring – Professional Experience

The professional experience of the Participants will be scored by the Tender Committee

according to the table set out in Appendix 3.

6.5 Ranking Process – General Provisions

6.5.1 Each Participant’s final score will be calculated by multiplying the cumulative

score in the professional experience section by 40%, and by multiplying the

cumulative score in the financial robustness section by 60% and adding the results

together (the "Final Score"). The ranking of the Participants will be determined

in accordance with the Final Score each Participant receives.

6.5.2 In addition to the criteria set forth above, the Tender Committee will also be

entitled to consider criteria of:

6.5.2.1 Absence of conflict of interest between the business and the affairs of

the Participant and the Member (if the Participant is a Group) and the

affairs of the State of Israel and of IEC; and

6.5.2.2 Any other consideration that results from the requirements of the

Competent Authorities and/or that is relevant to the Sale Process, at

the exclusive discretion of IEC, including with respect to each

Participant’s chances of obtaining the Required Approvals.

6.6 If the Tender Committee has exercised its powers as set forth in this Section ‎6, then,

from among the Participants that were found to comply with the Pre-Qualification

Requirements as stated, the 5 (five) Participants that received the highest Final

Score will be selected, and they will be the ones to be declared as Eligible

Participants and entitled to participate in the Tender Stage.

6.7 Notwithstanding the foregoing, the Tender Committee will be entitled, at its

exclusive discretion, to add to the five Participants as stated above up to 2 (two)

additional Participants, which receive the highest Final Score after the Scores of the

5 (five) Participants as stated above (that is, to determine that up to 2 (two)

32

L/566005/2190/7916835/1

additional Participants from among the Participants that were ranked sixth and

seventh, which will also be entitled to participate in the Tender Stage).

7. METHOD OF SUBMISSION

7.1 Compliance With the Requirements of the Invitation

Participants shall prepare their Pre-Qualification Submissions in strict conformity with

the requirements of this Invitation. Participants shall answer all applicable parts of the

Pre-Qualification Submission in an accurate and detailed manner, disclosing all the

information requested, as well as any additional information or data required to clarify,

substantiate and, in general, support the Pre-Qualification Submission.

7.2 No Unauthorized Modification

7.2.1 Participants shall not modify or supplement the instructions of this Invitation

(including the Pre-Qualification Forms). Unauthorized conditions, amendments,

limitations, modifications, supplements, reservations, disclaimers or provisions

attached to a Pre-Qualification Submission may result in the disqualification of

the Pre-Qualification Submission and the Participant.

7.2.2 Without derogating from the generality of the foregoing, the Tender Committee

will be entitled, at its discretion:

7.2.2.1 To make the review of the Pre-Qualification Submission contingent

upon the cancellation of any amendment, change, omission,

reservations, stipulation or addendum and/or (as is relevant) the

completion and rectification of any deficiency, lack of clarity or

ambiguity as stated, within a period of time to be determined by the

Tender Committee; and/or

7.2.2.2 To examine the Pre-Qualification Submission while ignoring any

amendment, change, omission, reservations, stipulation or addendum

as stated.

7.3 Language of the Pre-Qualification Submission

All Pre-Qualification Submissions, including Pre-Qualification Forms, statements

contained therein and responses to Requests for Clarifications shall be in English.

Supporting documents and printed literature submitted by the Participants will be in

Hebrew or English only, and if they were originally drawn up in a different language –

they will be submitted in translation into Hebrew or English, certified by a notary.

7.4 Signing of the Pre-Qualification Submission

7.4.1 Each page of the Pre-Qualification Submission, including all Pre-Qualification

Forms and appendices, shall be duly signed by the relevant Entity detailed in such

Pre-Qualification Form, and authorized by an attorney. In case where the

33

L/566005/2190/7916835/1

Participant is a Group – all the Members thereof shall sign in the designated place

for the Participant.

7.4.2 Every page of the Pre-Qualification Submission shall be signed by the Participant

in the margins of each page with initials and stamp. In cases where the Participant

is a Group – the Pre-Qualification Submission will be signed by each one of the

Members thereof.

7.5 Table of Contents

All pages of the Pre-Qualification Submission will be numbered, and the Pre-

Qualification Submission will include a detailed table of contents.

7.6 Number of Pre-Qualification Submission Copies

7.6.1 Pre-Qualification Submissions must be submitted in 4 (four) printed copies – an

original copy, marked as such; 2 (two) identical copy; and one copy that includes

marking of the sensitive information, as described in Section ‎7.7 below

(Identification of Sensitive Information).

7.6.2 In addition, the Pre-Qualification Submission shall be submitted on 2 (two)

mobile storage devices (USB flash drives) – one for each envelope – that will

include: (1) files in a PDF format, both original (without signatures) and scanned

(including signatures), of all of the Pre-Qualification Submission; and (2) files of

the forms attached to this Invitation in Word format (editable), including all of the

details filled in by the Participant (in accordance with the files that will be

delivered to the Participants by IEC).

7.6.3 In any case of discrepancy between the printed copy and the copy delivered on

mobile storage device, the printed copy will prevail. In any case of discrepancy

between the printed copies, the original copy will prevail.

7.7 Identification of Sensitive Information

7.7.1 Without derogating from the generality of the provisions of Regulation 21(h) of

the Regulations (and the discretion granted thereunder to the Tender Committee),

Participants will detail, within the Pre-Qualification Letter (Pre-Qualification

Form A), in a clear, complete and legible manner, all information contained in

their Pre-Qualification Submission which they consider to be of a commercially

sensitive or secret nature.

7.7.2 It is hereby clarified that, in any event, the decision with respect to the exposure

or commercial sensitivity or secrecy of parts of a Pre-Qualification Submission is

within the authority of the Tender Committee, which is also entitled to disclose

parts that the Participant has designated as commercially sensitive or secret. If the

Tender Committee decides to do so, the Participant will be given proper time to

evaluate its steps.

34

L/566005/2190/7916835/1

7.8 Sealing and Marking of the Pre-Qualification Submissions

7.8.1 Participants shall submit each of the copies of their Pre-Qualification Submission

in two separate envelopes, as set forth below:

7.8.1.1 Envelope No. 1 – an envelope that contains all the General

Information – and will be marked as: “Envelope 1 – The Pre-

Qualification Submission (Without Financial Data).”

A mobile storage device containing all General Information will

be attached to Envelope No. 1.

7.8.1.2 Envelope No. 2 – a sealed envelope that contains the Financial Forms

– and will be marked as: “Envelope 1 – Financial Data.”

A mobile storage device containing only the Financial Forms will

be attached to Envelope No. 2.

7.8.2 All of the envelopes containing the four copies of the Pre-Qualification

Submission will be inserted into an additional envelope or into a box, which will

also be sealed, and the following will be written on it: “Pre-Qualification

Submission – Invitation for Pre-Qualification to Participate in a Tender for

the Submission of Bids to Purchase the Ramat Hovav Transferred

Facilities”. No other details shall be indicated on the outer envelope or box.

7.9 Contents of Submission

For Participant's convenience and without derogating from the generality of the

provisions of this Section ‎7, Annex 2 includes a detailed list of the contents of the Pre-

Qualification Submissions and the documentation to be included therein.

7.10 Pre-Qualification Submission Date

7.10.1 Pre-Qualification Submissions must be submitted at the address provided in

Section ‎7.10.2, on the date designated for such submission in Section ‎1.5

(Anticipated Schedule), no later than 15:00 Israel time (hereinafter: the “Pre-

Qualification Submission Date”).

7.10.2 Pre-Qualification Submissions must be delivered, no later than the Pre-

Qualification Submission Date, by way of delivery by hand, to Tender Box no.

12, in room no. 9 in the lobby, at the following address: IEC, 1 Netiv Ha-Or

Street, Haifa.

7.10.3 Pre-Qualification Submissions are not to be sent by mail, by facsimile or by

email.

7.10.4 The Tender Committee will be entitled immediately to disqualify Pre-

Qualification Submissions that are submitted after the Pre-Qualification

Submission Date.

35

L/566005/2190/7916835/1

7.10.5 The Tender Committee, and/or any person authorized by it, is entitled, at its

exclusive discretion, to postpone or to advance the Pre-Qualification Submission

Date, pursuant to Section ‎1.5 (Anticipated Schedule) above, and neither the

Participants nor any other Entity on their behalves will have any complaint or

claim against the Tender Committee in this regard.

7.11 Validity of Pre-Qualification Submissions

Unless extended by the Tender Committee, the Pre-Qualification Submissions shall be

valid until 12 (twelve) months after the Pre-Qualification Submission Date.

8. EVALUATION OF THE PRE-QUALIFICATION SUBMISSIONS

8.1 Examination of the Pre-Qualification Submissions by the Tender Committee

8.1.1 The Tender Committee, with the assistance of any of its Advisors, shall review

and evaluate the Pre-Qualification Submissions in order to determine whether

each of the Participants meets the Pre-Qualification Requirements, including all

Professional and Financial Pre-Qualification Requirements and all other

applicable provisions and requirements of this Invitation (the "Evaluation

Process").

8.1.2 It is hereby clarified that, in order that the Tender Committee and/or the IEC

and/or any of its managers and/or its employees should not be exposed to

information on private electricity producers and suppliers, the Financial Forms

will be examined on behalf of the Tender Committee by consultants external to

IEC, and not by IEC employees.

8.1.3 During the examination of the Participants’ compliance with the Pre-Qualification

Requirements, the Tender Committee will not score or rank the Participants;

rather, it will merely give them a grade of “Pass” or “Fail.”

8.1.4 Notwithstanding the above, the Tender Committee will be entitled to rank and

score the Participants in accordance with the conditions set forth in Section ‎6

(Ranking of the Participants (Optional)).

8.1.5 Any Final Score resulting from the exercise by the Tender Committee of its

powers pursuant to Section ‎6 (Ranking of the Participants (Optional)) will not be

carried over to the Tender Stage and, in any event, will not affect and will not

have implications on the Tender Stage.

8.2 General Provisions Regarding the Evaluation Process

With respect to the manner of examining compliance with the Pre-Qualification

Requirements:

8.2.1 The Tender Committee will distinguish between a substantive requirement, the

deadline for the fulfillment of which is up to the Pre-Qualification Submission

Date (or up to an earlier or later date, if so stated in the requirement and pursuant

36

L/566005/2190/7916835/1

to the terms thereof), and the manner of proof of compliance with such

requirement.

8.2.2 Without derogating from the generality of the foregoing, the Tender Committee

will be entitled also to allow proof of compliance with any Pre-Qualification

Requirement in a different way from that which was defined in the Invitation or in

the Pre-Qualification Submission, at its discretion. In addition, proof of

compliance with any Pre-Qualification Requirement can be implemented, inter

alia, in the following ways:

8.2.2.1 Presenting data or documents, including after the Pre-Qualification

Submission Date, including information and documents that were

generated or prepared after that date.

8.2.2.2 Presenting different data from that which was originally presented to

the Tender Committee, such as Power Plants or Infrastructure Projects

other than those that were originally presented in the Pre-

Qualification Submission.

8.2.2.3 All of the data that has been placed before the Tender Committee,

including data that was presented to it with respect to other Pre-

Qualification Requirement.

8.2.2.4 All of the data that has been placed before the Tender Committee,

including data that is in its possession or that came into its hands other

than within the Pre-Qualification Process or the Pre-Qualification

Submission.

8.2.2.5 Presenting data that refers to any of the Participating Entity, even if

the Participant did not initially seek to rely on such data.

8.2.3 In cases where the manner of proof of compliance with a Pre-Qualification

Requirement was not specified, Participants will be entitled to provide such proof

as they see fit. The Tender Committee will consider whether compliance with

such Pre-Qualification Requirement was proved to its satisfaction, without

derogating from its right to demand additional details and reference documents

for the purpose of examining compliance (or otherwise) with the Pre-

Qualification Requirement.

8.2.4 The Tender Committee will be entitled to exchange a Pre-Qualification

Requirement for another equivalent Pre-Qualification Requirement that fulfills

the purpose of the original Pre-Qualification Requirement, or to waive and to

forgive minor Deviations or immaterial Deviations from the Pre-Qualification

Requirements, if they have no substantive effect on the Participant’s ability to

purchase the Ramat Hovav Transferred Facilities; all without derogating from the

powers of the Tender Committee as set forth in the Pre-Qualification Documents.

37

L/566005/2190/7916835/1

8.3 Requests For Clarifications

8.3.1 The Tender Committee may request the Participant to clarify any detail or item

contained in its Pre-Qualification Submission and to provide any additional

information and documents necessary, at the opinion of the Tender Committee,

for the evaluation of its Pre-Qualification Submission.

8.3.2 Participants will comply with the requests of the Tender Committee and will

submit all clarifications and additional information requested within the time

period stipulated in the request.

8.3.3 A Participant's response to such a request will be considered as an integral part of

its Pre-Qualification Submission and will bind the Participant for all intents and

purposes. The response to the request for clarifications will be considered to

prevail over any contradictory parts of the original Pre-Qualification Submission,

all subject to any Applicable Law.

8.3.4 The Tender Committee may exercise its right under this Section ‎8.3 as many

times as it sees fit during the Evaluation Process.

8.4 Announcement of Eligible Participants

8.4.1 Upon the completion of the Evaluation Process, the Tender Committee will

announce those Participants which the Tender Committee deems to have

successfully complied with the requirements of this Invitation (“Eligible

Participants”).

8.4.2 Without derogating from the generality of the provisions of Section ‎2.18

(Reservation of Rights), following the publication of the Tender Documents, the

Eligible Participants will be invited to submit Bids in accordance with the

provisions of the Tender Process.

8.4.3 Participants who will be deemed by the Tender Committee to have failed to meet

any one of the Pre-Qualification Requirements will not be announced as Eligible

Participants.

8.4.4 The Tender Committee will be entitled to determine conditional compliance with

the conditions of the Pre-Qualification Procedure, and to specify the conditions

for compliance therewith and the deadline for fulfilling them.

8.5 Issuance of the Tender Documents

IEC intends to issue the Tender Documents to Participants which will be declared as

Eligible Participants.

The Pre-Qualification Submissions will be considered as an integral part of an Eligible

Participant’s Bid, if such a Bid is submitted.

38

L/566005/2190/7916835/1

8.6 Updates Statement

8.6.1 Without derogating from the remaining provisions of this Invitation, each of the

Participants in the Pre-Qualification Process will provide the Tender Committee

with a notice in writing of any change that occurs in information that it submitted

to the Tender Committee. Such notice shall be provided without delay and no

later than seven (7) days after first having been apprised thereof, and, in any

event, no later than the Bids Submission Date.

8.6.2 The Tender Committee will be entitled, on the basis of the change in the

information as stated, or on the basis of any new information concerning the

Participant that reaches the Tender Committee in any way whatsoever, or if the

Tender Committee believes, at its absolute and exclusive discretion, that an act or

an omission by a Participant in the Sale Process may be detrimental to the Sale

and/or to its outcome, to notify such Participant of the termination of its

participation in the Sale Process, and such a Participant and/or anyone on its

behalf will have no complaint nor right of claim against the Tender Committee

and/or anyone on its behalf in this regard.

8.7 Disclosure of Documents

8.7.1 Subject to the provisions of the Mandatory Tenders Regulations, 1993, any

Participant will be entitled, within 30 (thirty) days of the date of publication of the

results of the Pre-Qualification Stage, to review the minutes of the Tender

Committee, its correspondence with the Participants, the professional expert

opinions that were prepared at its request, the opinions of the legal advisors to the

Tender Committee, and the other Pre-Qualification Submissions submitted by

other Eligible Participants, and to receive copies of those documents, with the

following exceptions:

8.7.1.1 The parts of the decision or of the Pre-Qualification Submission that

were filed by a Participant, review of which, in the opinion of Tender

Committee, might expose a trade secret or a professional secret, or

might be harmful to the security of the State, its foreign relations, its

economy or public security;

8.7.1.2 Any legal opinion that was prepared as part of a legal advice to the

Tender Committee, including an examination of various possible

alternatives to an action or to a decision by the Tender Committee, or

an evaluation of opportunities and risks that result from making such

decisions in future legal proceedings.

8.7.2 In light of the right of review that is conferred upon the Participants in the Sale

Process by any Applicable Law, a Participant that objects to granting a right of

review of its Pre-Qualification Submission, in whole or in part, to other

Participants, due to a trade secret or professional secret that it claims is included

in the Pre-Qualification Submission, is required to act according to the provisions

39

L/566005/2190/7916835/1

of Section ‎7.7 (Identification of Sensitive Information). A Participant will be

precluded and estopped from arguing that it is entitled to review those parts of the

Pre-Qualification Submissions of another Participant that are parallel to the parts

that were marked as confidential in its Pre-Qualification Submission.

8.7.3 The marking of parts of a Pre-Qualification Submission by the Participant as

privileged will not derogate from the Tender Committee’s right, at its exclusive

discretion, to transfer the Pre-Qualification Submissions, in their entirety,

including parts of a Pre-Qualification Submission that were marked as privileged,

to any Competent Authority.

8.7.4 The Tender Committee will not be obligated to contact a Participant in order to

clarify whether parts of its Pre-Qualification Submission are privileged and/or the

justifications for privilege, if this was not stated in its Pre-Qualification

Submission.

8.8 Additional Prerogatives of the Tender Committee

Without derogating from the generality of the foregoing and the powers of the Tender

Committee under any Law and/or pursuant to that which has been set forth in the Pre-

Qualification Documents, the Tender Committee will be entitled to act as follows:

8.8.1 To contact a Participant or a Member that did not produce, along with its Pre-

Qualification Submission, a document, permit, approval, license or any other

document that constitutes a prerequisite pursuant to this Invitation, inter alia, for

the purpose of providing clarifications and/or supplements, with a request to

receive clarifications with respect to its Pre-Qualification Submission or with a

request to receive additional data and documents for the purpose of examining its

Pre-Qualification Submission, all as it sees fit.

8.8.2 To contact any third party (including recommending entities and/or other third

parties that a Participant has mentioned in its Pre-Qualification Submission), as it

sees fit, for the purpose of clarifying and verifying details in connection with

information provided by such Participant.

8.8.3 To use its existing information with respect to a Participant and with respect to its

Members, whether that information was created before or after the submission of

its Pre-Qualification Submission, for the purpose of examining such Participant’s

Pre-Qualification Submission.

8.8.4 To cancel the Sale Process and/or to initiate any other procedure for the receipt of

Bids, the purpose of which is to engage in an agreement that constitutes the object

of the Sale Process, inter alia, in light of the absence of an approval or another

permit that is required under any Applicable Law for the performance of the Sale

Process, or in light of considerations of efficiency or other public interests.

8.8.5 To reject or to disqualify a Pre-Qualification Submission, including in cases

where it transpires that the applicable Participant does not actually have the

40

L/566005/2190/7916835/1

financial robustness and/or the financial capacity to purchase the Ramat Hovav

Transferred Facilities, including under circumstances in which liquidation

proceedings, bankruptcy proceedings or a stay of proceedings was/were initiated

against the Participant; a receivership order was issued with respect to it; a

temporary or permanent receiver was appointed for it; any insolvency proceeding,

of any type and kind whatsoever, was initiated against it, and the like.

8.8.6 To reject or to disqualify a Pre-Qualification Submission, including in cases

where criminal proceedings or investigations are being conducted against the

applicable Participant, or against a Principal or an officer of the Participant, in

connection with an offense that significantly pertains to the Sale Process, and/or

in any case where a Participant, or a Principal or an officer of the Participant, has

been convicted in the past of an offense as stated.

8.8.7 To reject or to disqualify a Pre-Qualification Submission, including in cases

involving the occurrence of an exceptional event, which, in the opinion of the

Tender Committee, is capable of having a significantly negative impact on the

applicable Participant’s ability to participate in the Sale Process and to fulfill its

undertakings therein, and to reject its Pre-Qualification Submission in any case

where the Participant has submitted mendacious, deceptive or erroneous

information to the Tender Committee, or in any case involving the discovery of

an event or information that, had it been discovered at an earlier time, would have

affected the approval of the Participant.

8.8.8 To reject or to disqualify a Pre-Qualification Submission for any other reason,

including in cases of any other impediment under any Applicable Law.

8.9 No Assignment

A Participant is not entitled to assign to another any right or duty that results from the

Pre-Qualification Documents and/or from the Sale Process, unless IEC has given its

explicit consent thereto, in advance and in writing, subject to the exclusive discretion of

IEC. If IEC’s consent has been given as stated, this will not release the Participant from

any undertaking, liability and/or duty that is binding upon it pursuant to the Pre-

Qualification Documents and/or as a result of the Sale Process or under any Applicable

Law.

41

L/566005/2190/7916835/1

Certification by the Participant

We hereby certify that we have read the Invitation for Pre-Qualification, including the appendices

thereto. We consent to its provisions and I will act in accordance therewith.

The signatories of the Invitation for Pre-Qualification on behalf of the Participant certify, by their

signature, that they are competent to act on behalf of the Participant.

Date ___________ Participant’s signature __________________

Participant’s name ____________________

Identity/Company No. ______________

By ___________ Position ___________

By ___________ Position ___________

Certification

I the undersigned, Adv. ___________, License No. ___________, of [address] _________________,

do hereby certify that the above signatures are those of Messrs. ___________ and ___________, who

identified themselves by means of Identity No. ___________ / who are known to me personally, and

their signatures are binding upon the Entity on behalf of which they signed, for all intents and

purposes.

__________________________

Attorney’s signature and stamp