1

AGREEMENT No. _______

entered into this _____ day of ____________, 2016 in Tel Aviv, Israel

(hereinafter the “Effective Date”)

Between,

Israel Railways Authority, Ltd.

Company No. 52-004361-3

P.O. Box 18085

Tel Aviv 61180, Israel

(hereinafter “ISR”)

of the first part

and

(hereinafter “Supplier”)

of the second part

ISR and Supplier each referred to hereinafter as a "Party" and collectively as the

"Parties."

WHEREAS ISR wishes to purchase Fork Lift Trucks and Reach Stacker of various types

(the "Vehicles") as further specified in this Agreement along with its

Appendixes; and

WHEREAS ISR has published Tender No. 41513 requesting proposals for the

manufacturing and supply of the Vehicles (the “Tender”); and

WHEREAS the proposal submitted by Supplier in the Tender was selected as the

winning proposal; and

WHEREAS Supplier represents and warrants that it has the know-how, ability, expertise,

facilities, financial and all other resources, experience, Intellectual Property

Rights, and all rights and permits necessary to undertake the obligations set

forth in the Tender and as described in this Agreement herein; and

WHEREAS the Parties desire to set forth a contractual framework to determine the

Parties’ relationship and obligations with regards to the manufacture and

supply of the Vehicles as aforesaid.

2

NOW THEREFORE, IT IS DECLARED, COVENANTED AND AGREED BETWEEN

THE PARTIES AS FOLLOWS:

1. Preamble, Appendices and Headings

1.1 The preamble to this Agreement constitutes an inseparable part hereof.

1.2 The following appendices, which are attached to this Agreement, constitute

inseparable parts hereof:

a) Appendix A1 + A2 – Technical Specification;

b) Appendix B - Consideration

c) Appendix C- Spare parts & Price List

d) Appendix D - Form of Performance and Warranty Guarantee

e) Appendix E - Form of Payment Guarantee

f) Appendix F - Supplier's Bank Account Form

g) Appendix G - Acceptance Certificate

h) Appendix H - ISR Safety Regulations

1.3 The headings in this Agreement are for reference purposes only, and are not a

material part hereof and shall not be used for purposes of interpretation.

2. Order of Precedence and Interpretation

In the case of any discrepancy between this Agreement and the technical specification,

this Agreement shall prevail.

3. Definitions

The following definitions shall apply to this Agreement:

3.1 "Acceptance" or "Acceptance Certificate" – shall mean ISR's issuance

of a signed Acceptance Certificate in the form attached hereto as Annex G

3.2 "Agreement" – shall mean this agreement including all appendices

attached hereto.

3.3 "Agreement Period" – shall have the meaning ascribed to it in Section ‎‎5.

3.4 “Business Day” – means any day of the week other than Saturday or

Sunday, and excluding official holidays and bank holidays in Israel.

3.5 “DAP” – shall mean Delivered at Place as that term is defined in

"INCOTERMS 2010" - ICC Rules for the Use of Domestic and International

Trade Terms (ICC Pub. No. 715).

3

3.6 “Vehicles” – shall mean Reach stacker and/or Fork-lift vehicles all in

accordance with the technical specifications detailed in Appendix A1 and

Appendix A2‎‎5.

3.7 "Effective Date" – shall have the meaning ascribed to it in the Preamble to

this Agreement.

3.8 "Order" – An order issued by ISR to the Supplier for a Device.

3.9 "Sites" – as defined in section 8.1 herein.

3.10 "Technical Specifications" – the technical specifications for the

Vehicles, are as detailed in Appendix A1 and Appendix A2‎‎5..

3.11 "Warranty" or "Warranty Period" – shall have the meaning ascribed

to it in Section ‎‎512.

4. Declarations, Representations and Warranties of the Supplier

4.1 Supplier specifically declares, represents and warrants that it has the know-how,

ability, expertise, facilities, resources, financial resources, licenses, permits and

all that is required and necessary to undertake the obligations set forth in this

Agreement, including, inter alia, the provision of the Vehicles in accordance

with the terms set forth herein.

4.2 Requisite Power - Supplier has all requisite power and authority to own, lease

and operate its properties and assets and carry on its business as now being

conducted and as proposed to be conducted.

4.3 Authority Relative to this Agreement - Supplier has all necessary corporate

power and authority to execute and deliver this Agreement, to perform its

obligations under this Agreement and to consummate the transactions

contemplated hereby. The execution and delivery of this Agreement and the

consummation of the transactions contemplated hereby have been duly and

validly authorized by all necessary action of Supplier, and no other corporate

proceedings on the part of Supplier are necessary to authorize this Agreement, or

to consummate the transactions contemplated hereby. This Agreement has been

duly and validly executed and delivered by Supplier and constitutes a valid, legal

and binding agreement of Supplier, enforceable against Supplier in accordance

with its terms.

4.4 No Conflict - No actual or potential conflict of interest or unfair competitive

advantage as to ISR exists with respect to Supplier's acting hereunder, and

Supplier shall not engage in any contractual relationship that may cause such

conflict of interest or unfair competitive advantage to exist.

4

4.5 No Litigation or Impediment. There are no (i) litigation that is currently in

effect or threatened, against Supplier, which would challenge the authority of

Supplier to enter into this Agreement or to carry out its obligations under this

Agreement, or (ii) impediment, whether legal or stemming from a prior or

simultaneous commitment made by Supplier, or any other impediment of

whatever nature, which might prevent Supplier from entering into this

Agreement or hinder the performance of any or all of its obligations hereunder.

4.6 Supplier's Examination and Evaluation:

4.6.1 Supplier has examined this Agreement (including for the removal of

doubt all Attachments thereto) and all other documents comprising the

Agreement, and is satisfied with regard to the data, specifications, terms

and conditions under which the Services will be provided by Supplier;

4.6.2 Inspected, examined and satisfied itself as to any Location (including

ISR's Facilities) where Supplier will carry out its obligations under this

Agreement, the general conditions of the Locations, the surroundings of

any such Location, the arrangements for the provision of utilities, pipes

and cables in, on or over the ground, and the form and nature of any

such Location;

4.6.3 Satisfied itself as to the means of communication with, and access to and

through, any and all Locations and the surroundings of any such

Location, the accommodation it may require, the possibility of

interference by any third party who will also have access to or use of any

Location and the surrounds of any such Location, the precautions and

the times and methods of working necessary to prevent any nuisance or

interference, whether public or private, being caused to any third party;

4.6.4 Obtained for itself all necessary information as to risk, contingencies and

all other circumstances which may influence or affect the consideration

for the Services and/or for the Supplier's obligations under this

Agreement (including its obligation to provide the Services as required

by the provisions of this Agreement) and satisfied itself as to the

interpretation of all such information for the purposes of this Agreement

(for which information ISR shall have no responsibility whatsoever);

4.7 Supplier accepts that it bears the risk in relation to any information provided (or

not provided) by ISR or on its behalf to Supplier (notwithstanding that Supplier

was unable to verify the accuracy of such information). Supplier confirms that

any attachments to this Agreement and any documents provided to it by ISR are

provided strictly on an "AS IS" basis.

5

4.8 No Additional Payments - Supplier shall make no claim for additional payment

from ISR (A) on the grounds of any misunderstanding or misapprehension in

respect of any matter which a reasonable and expert Supplier knew or should

have known, (B) on the grounds of any allegation or fact that incorrect

information was given to Supplier by any person, firm or any legal entity which

Supplier knew or should have known to be incorrect as a reasonable and expert

Supplier, whether the person, firm or legal entity was employed by ISR or not,

(C) on the grounds of the failure on its part to obtain correct information with

regard to the Services.

4.9 Compliance with Applicable Law - Supplier is aware and has knowledge of all

legal requirements prevailing in the State of Israel that are to be followed for the

execution of the Services, including, but not limited to the requirement

according to the Israeli Heavy Engineering Machinery Law and regulations.

Without derogating from any provision herein, Supplier shall abide by any

Applicable Law, as shall be in effect from time to time, and shall perform and

execute the Services in strict compliance therewith (including but without

limitation in compliance with regulations and orders relating to the employment

of its employees).

5. Term of Agreement

5.1 The term of this Agreement shall be for three (3) years from the Effective Date

(the “Agreement Period”).

5.2 ISR shall have the option, to be exercised at its sole discretion, to extend the

Agreement Period by additional periods (or part) of up to three (3) years in

total, and in such case, the terms and the conditions of the Agreement shall

remain unchanged (the "Option Period(s)").

6. Purchase Requirement

6.1 Subject to the Supplier's fulfillment of all of its obligations pursuant to this

Agreement, and subject to the conditions of this SectionISR hereby undertakes

to make a purchase a single Reach stacker fork-lift and/or three (3) Pitch Fork-

lifts (the "Amount").

6.2 In addition to the aforementioned, it is herby clarified, that the Supplier shall

provide with a two (2) day on-site Training relevant to each fork-lift type at no

additional cost to ISR (the "Training").

6.3 Notwithstanding the above, ISR's obligation to purchase shall cease and have

no further effect in the event that Supplier commits a fundamental breach of

this Agreement and/or fails to comply with the terms hereof.

6

6.4 Additionally, during the Agreement Period, ISR, in its sole discretion, shall

have the option (but shall not be obligated) to purchase from the Supplier

additional Reach stacker fork-lifts and additional Pitch Fork-lifts ("Optional

Vehicles"). The relevant terms and conditions detailed in this Tender,

including its Appendices, shall apply, mutatis mutandis, to the purchase of the

Optional Vehicles.

7. Supplier’s Obligations

7.1 Without derogating from any of the Supplier’s obligations in accordance with

this Agreements, the Supplier hereby undertakes to supply, during the

Agreement Term, all Vehicles necessary for the full operation and maintenance

with the Technical Specifications, common railway practices and any

applicable standards, so as to enable ISR to correct any malfunction of the

Units as promptly as possible so as to minimize the effect thereof on ISR’s

train traffic, in accordance with the terms and conditions detailed herein.

7.2 The Supplier shall supply the Vehicles in accordance with the standards set

forth by ISR in the Technical Specifications and/or this Agreement, and if no

standard is expressly mentioned, the Supplier shall comply with the standards

which shall ensure the highest quality of workmanship, material and equipment

required by the applicable law and/or as instructed by ISR in accordance with

ISR's sole discretion. All Vehicles shall be new, of high standard and quality,

free of, and not reported by third parties to suffer from, defects in design,

material or workmanship, and shall perform in accordance with all of the

requirements of this Agreement. All calculations, designs, integration and

drawings related to the Vehicles shall assure the reliability, efficiency,

competency as well as the functionality of the Vehicles (once installed) to

ISR's fullest satisfaction.

7.3 Subject to the provisions herein, ISR, in its sole discretion, shall decide which

Vehicles it wishes to acquire from Supplier, if any, and in which quantities.

7.4 This Agreement is non-exclusive and ISR, in its sole discretion, may acquire

similar or identical Vehicles from any third party at any time, in addition to or

in place of, the Vehicles it acquires from Supplier. Without derogating from the

Supplier's obligations hereunder, ISR shall be entitled at any time to purchase

Vehicles either directly from Supplier or from any third party, including

without limitation, Sub-Suppliers (as defined in the Main Agreements) and/or

suppliers of same and Supplier shall not be entitled to any payment for same.

7.5 Nothing in this Agreement shall derogate from any of the rights, options or

remedies of ISR under any law.

8. Terms of Delivery and Delivery Time of Vehicles

8.1 The terms of supply and delivery of the Vehicles shall be “DAP” "Delivery at

Place" (as that term is defined in Inco-terms 2010, International Rules for the

7

Interpretation of Trade, ICC Publication No. 715) at ISR's Workshops (the

“Site”) as follows:

8.1.1 Reach stacker fork-lifts – to Ramat-Hovav

8.1.2 Pitch fork-lifts – to Tzefa, Rosh-Ha'ayin and Bnei-Brak (one each)

8.2 The time of delivery for the supply of each of the Vehicles shall not exceed six

(6) months DAP at Site from the issuance of a Purchase Order (“Delivery

Time”).

8.3 The Supplier shall be fully responsible, at its sole cost, to ensure safe, lawful

and expedient delivery of all Vehicles from their respective places of origin to

the Sites. It is hereby clarified between the Parties that the Supplier shall not

recover any sums expended for the payment of any unloading fees and/or costs

at the destination and/or Sites.

8.4 Notwithstanding the above, the Vehicles shall be considered delivered only

once Supplier has un-stuffed and placed them at the Site, and they are ready for

use by ISR.

8.5 It is hereby clarified that containers may not arrive at the Site and the Supplier

may not perform any un-stuffing and/or unpacking of containers at the Site or

on ISR's premises. The Supplier shall be solely responsible for the transfer of

the Vehicles to the Site after un-stuffing of containers.

8.6 Without derogating from Supplier's obligations and responsibilities as detailed

herein, upon shipment of Vehicles, Supplier shall provide ISR with the

tracking number of such shipment to enable ISR to monitor the shipment.

8.7 Each delivery shall be marked with a note specifying the part number for each

item of Vehicles.

8.8 All Vehicles shall be appropriately packed in a container or other means

suitable for export and shall be capable of withstanding rough handling and

ocean shipment. The Supplier, in its sole discretion, may decide to deliver the

Vehicles via airfreight at its own expense.

8.9 The following original documents regarding each delivery shall be supplied to

ISR by Supplier within (5) five calendar days from the shipment date thereof.

A copy of all such documents shall also be sent to ISR via facsimile. These

documents must be solely in ISR’s name and shall state ISR's exact name.

a) Commercial Invoices The invoices shall make reference to this

Agreement, the Vehicles ordered including part numbers, serial

numbers, quantities, delivery note number, shipping dates, Supplier’s

company registration number and ISR’s Order number;

8

b) Certificates of Origin and non-manipulation certificates, if necessary

(EURO -1);

c) Bill(s) of Lading;

d) Packing Lists;

e) All other information and documents necessary to release the Vehicles

from the designated port in an expeditious manner and to enable ISR to

make payment in foreign currency pursuant to the regulations of the

Bank of Israel;

8.10 Upon delivery, ISR shall provide the Supplier with written confirmation of

receipt and acceptance of the Vehicles, it being clarified that such written

acceptance (including after the conduct of any inspections in accordance with

Section ‎9) does not constitute a waiver on the part of ISR or an

acknowledgement by ISR of the quality of such Vehicles, and does not

derogate from any of the Supplier's obligations as detailed herein, including

without limitation, with respect to warranty.

9. Inspection and Acceptance of the Vehicles

9.1 ISR, in its sole discretion, shall have the right (but not the obligation) to have

any or all of the Vehicles supplied to it pursuant to this Agreement inspected in

order to ensure that such Vehicles are satisfactory and in compliance with the

Technical Specifications.

9.2 ISR, in its sole discretion, may elect to have such inspections carried out by

ISR’s engineering inspectors or by any third party, provided however that the

costs related to such inspections will be borne by ISR.

9.3 If an inspection reveals that any item of Vehicles does not comply with the

Technical Specifications or if any of the materials or components is discovered

to be defective or inferior in quality, ISR may reject the said Vehicles.

9.4 If ISR finds the inspected Vehicles to be satisfactory and in compliance with

the relevant Technical Specifications, ISR shall accept such Vehicles and

notify Supplier of the same.

9.5 If ISR, in its sole discretion, has elected to inspect any order of Vehicles or part

thereof, such Vehicles shall only be considered delivered once ISR has

accepted them.

10. .Liquidated Damages

10.1 Without prejudice to any other relief or remedy available to ISR under this

Agreement or under law, in the event that the delivery of the Vehicles or any

part thereof is delayed beyond the specified Delivery Time and/or in the event

9

of any other delay in fulfilling any undertaking of the Supplier pursuant to this

Agreement, the Supplier shall pay ISR Liquidated Damages in the sum equal to

one-half percent (0.5%) of the value of the Vehicles Price for each calendar

week of delay, or any part thereof. The Liquidated Damages shall not exceed a

total of seven and half percent (7.5%) of the value of the consideration

specified in this Agreement.

10.2 The Liquidated Damages in this Agreement have been determined after due

consideration of the damages the parties anticipate that ISR will suffer under

the specific circumstances to which each specific type of liquidated damage

apply, and therefore they shall not be regarded as a penalty. Payment of the

Liquidated Damages shall not be conditioned on ISR having to present

evidence of any loss.

11. Spare Parts

11.1 Without derogating from its warranty obligations as detailed herein and in the

Agreement, the Supplier shall undertakes that all Vehicles ordered by ISR will

be delivered with spare parts sufficient for two (2) years of operation, at no

additional cost. In addition, the Supplier undertakes that during the Agreement

Period and thereafter until ten (10) years from the end of the Warranty Period

for the last Device ordered pursuant to the Agreement (as set forth herein), it

will supply ISR with all spare parts and tools necessary to maintain and repair

the Vehicles (the “Spare Parts”). Following such fifteen (15) years period, if a

spare part is no longer available on the market the Supplier will offer ISR an

adequate substitute at a comparable price.

11.2 The Supplier includes a list of all necessary and recommended Spare Parts and

their prices, in the form attached hereto as Appendix C (the “Spare Parts List

and Prices”). The Spare Parts List and Prices shall be in English or Hebrew and

shall quote the delivery time, description, original manufacturer's name, part

number of original manufacturer and the prices DAP (ISR’s Sites) for each

Spare Part, which shall remain fixed for a period of two (2) years from the

Final Submission Date.

11.3 As from the 2nd anniversary of the Final Submission Date, the Spare Parts List

and Prices shall be adjusted once a year as linked to the European Consumer

Price Index (HICP E27 - Overall index, Monthly Index, (2005=100) as

published at Eurostat website:

http://epp.eurostat.ec.europa.eu/portal/page/portal/hicp/data/database ("HICP").

11.4 The basic index for the HICP shall be the last known index on the Final

Submission Date.

12. Warranty

11

12.1 The Supplier shall provide a Warranty and perform Warranty Services with

regard to the Vehicles as such terms are defined in the Agreement, and in

accordance with the provisions set forth therein.

12.2 Each Device shall be fully warranted by the Supplier for a period of one (1)

year commencing on the day that an Acceptance Certificate (as defined in the

Agreement) was issued in respect of each Device (the "Warranty Period").

ISR shall the option to be exercised at its sole discretion, to extend the

Warranty Period by additional periods (or part) of up to three (3) consecutive

years in total, and in such case (the "Optional Warranty Period")., the terms

and the conditions of the Agreement (the Warranty included terms) shall

remain unchanged and shall apply mutatis mutandis to the Optional Warranty

Period.

12.3 For any fault or defect attributed to the Vehicles within the Warranty Period,

the Supplier shall, at its own expense and without delay, immediately repair or

replace the damaged Vehicles to the satisfaction of ISR, and all costs related to

such repair or replacement, including, but not limited to, costs related to

transportation, dismounting and mounting, etc. shall be borne by Supplier.

12.4 Warranty shall include, among others, any and all equipment, parts, hardware,

software (including software updates and upgrades), and maintenance tools

required for the maintenance and operation of the Vehicles. Warranty shall also

include updates to the documentation, if required.

12.5 Without derogating from the aforesaid, the Supplier is obliged to remedy the

fault and/or defect and/or damage to the Vehicles within three (3) days from

the day the damage report was communicated to it, repair and replace with a

new Device (the “Time of Repair”).

12.6 The Supplier shall do its best efforts whatsoever, in order to shorten the

delivery time of the replaced Vehicles.

12.7 The Supplier shall keep complete records of all repairs and replacements made

to each Vehicles, its parts, components and systems, and shall provide them to

ISR upon request.

13. Consideration

13.1 The consideration payable for the manufacture and supply of the Vehicles

including all ancillary services, warranty and equipment as required for the

delivery, testing or as otherwise required for fulfillment of the Supplier's

obligations under this Agreement in accordance with the terms and conditions

thereof, to be paid by ISR to Supplier, shall be as set forth in Appendix B (the

“Vehicles Price”).

11

13.2 The Vehicles Price are the final inclusive prices for the manufacture, supply,

delivery of the Vehicles pursuant to this Agreement and include any and all

expenses or costs related to its shipment and delivery to Israel, including, but

not limited to, export duties, licenses, registration of the Vehicles in the

Ministry of Transportation, tools, labor and accommodation, as well as any and

all applicable taxes. Other than the Vehicles Prices listed in Appendix B,

Supplier shall not be entitled to any other compensation whatsoever in

connection with the sale and delivery of any Vehicles pursuant to this

Agreement.

13.3 Without derogating from any of the above, it is hereby clarified that Supplier

shall bear and pay (by way of reimbursement to ISR where applicable) all

taxes, fees, customs, duties, levies, charges (including bank charges and

commissions), and all other expenses relating to, or in connection with the

manufacture, exportation, supply, delivery of the Vehicles, including but not

limited to all types of importation and custom duties and services, such as

transportation costs, customs agents’ fees, purchase tax (in Hebrew "Mas

Kniya" or " קניה מס " ), Israeli customs duties, port handling fees (in Hebrew

"Dmei Nitul" or " ניטול דמי " ), port infrastructure fees (in Hebrew "Dmei

Tashtit" or " תשתית דמי " ), cleaning of the containers, unstuffing and unloading

of the containers, etc. Any porterage and local forwarding agent fees and Israeli

customs duties, if applicable, shall be considered as part of the Vehicles Prices

and shall be borne solely by Supplier.

13.4 Notwithstanding any other provision herein, Israeli Value Added Tax, if

applicable to the provision of any Vehicles, shall be borne by ISR.

13.5 In the event that ISR shall be required to pay any of the payments related to

import and release from customs, ISR shall charge the Supplier accordingly

(excluding Israeli Value Added Tax).

13.6 The Vehicles Prices include any sum which the Israeli Tax Authorities require

to be withheld at source. The amounts required by the applicable law to be

withheld at source by the Israeli Tax Authorities shall be deducted from the

Vehicles Prices, and shall be paid directly to the Israeli Tax Authorities.

13.7 The Supplier hereby commits that the Vehicles Prices shall not be adjusted for

at least two years from the Effective Date, or, in the case of a New Device, for

at least two years from the time such New Device is added to the Vehicles List.

After such time, the Vehicles Prices shall be updated annually, on the same

date as the Effective Date, based on linkage to the HICP Index. The Supplier

shall provide ISR with an updated Vehicles List that include the updated prices

each year and the updated prices shall apply to Orders issued 30 days following

the receipt of such updates.

14. Terms of Payment

12

Payment by ISR to Supplier shall be on a per-unit basis and shall be made within sixty

(60) calendar days from the date of issuance of an itemized invoice and receipt by ISR

of all of the necessary relevant supporting documentation from Supplier, as long as the

documents required have been received by ISR at least thirty (30) calendar days before

the payment day. Supplier may only issue such invoices when the relevant Vehicles

have been duly delivered to and received by ISR in accordance with the terms herein.

14.1 Payment by ISR to Supplier for the each unit shall be as follows:

14.1.1 A down payment of thirty (30%) percent of the consideration payable

shall be paid to Supplier within sixty (60) calendar days following the

Supplier's receipt of a Purchase Order by ISR (the “Down Payment”),

provided that Supplier has provided ISR at least forty-five (45)

calendar days prior with all of the following:

- An invoice in the amount of the Down Payment; and

- A payment guarantee in the form set forth in Annex D in the

amount of the Down Payment (the “Down Payment

Guarantee”). The Down Payment Guarantee shall remain in

force until thirty (30) calendar days following the issuance

of a Acceptance Certificate by ISR; and

- A Performance and Warranty Guarantee.

14.1.2 The remaining balance of Seventy percent (70%) of the remainder of

the consideration payable shall be paid, relatively, per delivery and

successful Acceptance tests of each device, within sixty (60) days

following the issuance of Acceptance Certificate for the vehicle

providing that Supplier has provided ISR at least forty-five (45)

calendar days prior to the payment with all the following:

- An invoice in the amount of the remaining balance, as

applicable;

14.2 Payments under this Agreement shall be made to the Supplier by means of a

bank transfer to the Supplier’s bank account as specified in the Supplier's Bank

Account Form attached hereto as Annex E.

15. Authorized Representatives

The Authorized Representatives of the Parties shall be as follows:

15.1 "ISR Vehicles Representative Mr./Ms. _______________________":

Israel Railways

Rolling Stocks Division

Purchasing and Logistics Dept. Manager

13

Israel Railways Ltd.

1 Hacharoshet

P.O. Box 10062

Haifa Bay 26111 Israel

telephone no.: +972-4-856-4601

facsimile no.: +972-4-856-4636

e-mail: baruchl@rail.co.il

15.2 "Supplier Vehicles Representative":

_________________________

telephone no.:______________

facsimile no.:_______________

e-mail:___________________

[to be completed by Supplier]

Either Party may change its authorized representative upon written notice to

the other Party.

16. Quality Management System

During the Agreement Term, Supplier must remain certified in accordance with ISO

9001 and/or equivalent standards and shall provide ISR with evidence thereof. In any

event, Supplier shall immediately notify ISR if the said certification is suspended

and/or canceled and/or not continued as soon as practicable and in any event within no

more than seven days from such event.

17. Insurance

17.1 Without derogating from any of the Supplier's responsibilities and liabilities

under this Agreement and/or the Main Agreements and/or under any applicable

law, the Supplier shall maintain, at its own expense, at all times for as long as

any liability under this Agreement may exist, insurance policy from reputable

insurers, which shall include at least the following:

17.1.1 A worldwide Product Liability Insurance, in the joint names of ISR

and Supplier subject to a "Cross Liability" clause, covering any

liability of the Supplier and/or whoever act on its behalf, for any loss

or damage derived from the execution of this Agreement.

17.2 The Supplier's insurance required under this section is primary and precedent

to any of ISR and/or the Israeli Government’s insurances, and the Supplier's

insurer shall waive their right to contribution from any of ISR and/or the Israeli

14

Government’s insurers with respect to any damage covered by the Supplier's

insurance policy.

17.3 The Supplier shall refrain from canceling the insurance policy and/or from

decreasing its scope. The Supplier further undertakes to notify ISR of any

situation of cancellation and/or expiration of the insurance policy specified in

this section, sixty (60) days before the date of occurrence of such situation.

17.4 The Supplier represents and warrants that it shall not have any claims, demands

and/or actions against ISR and/or anyone on its behalf and/or the Israeli

Government, concerning damage to its property or other property used in

connection with this Agreement. The foregoing shall not apply for the benefit

of anyone who caused damage with malicious intent.

17.5 The Supplier waives and shall have no claims or demands of any kind against

ISR and/or anyone on its behalf, with respect to the content and/or extent

and/or coverage of the insurance policy required to be purchased by it under

this section, and the Supplier hereby confirms that it shall be prevented from

raising any such claim or demand. For the avoidance of doubt, it is agreed that

the insurance policy required to be purchased under this section, including the

limits specified herein, are stated as a minimal demand from the Supplier. The

Supplier is encouraged to further scrutinize its exposure to liability and to add

and/or increase the types and scope of insurance coverage.

17.6 The Supplier undertakes to indemnify ISR for any amount incurred by ISR as a

result of a violation by the Supplier (and/or any person or entity acting on its

behalf) of any of the conditions of its insurance policy.

17.7 It is hereby clarified and agreed that all the insurance policy required in

accordance with this Agreement shall be procured at the Supplier's expense and

that under no circumstances shall the duty to procure such incur expenses

and/or any duty for payment on ISR. It is also clarified and agreed that the

liability for the payment of the insurance deductible applies to the Supplier

only and under no circumstances to the ISR.

17.8 It is clarified and agreed that insurance payments shall not derogate from the

Supplier's liability under the Agreement and/or under any law, and should the

insurance payments not be sufficient in order to cover the extent of the loss

and/or the damage actually caused, the Supplier shall be responsible for

completing such.

17.9 As a condition precedent to the first payment under this Agreement, Supplier

shall furnish a certificate from its insurers stating:

17.10 "The insurance required by Agreement No _____ between ISR and Supplier is

in full force and effect".

15

17.11 Without derogating from the duty to provide the insurance certificates as

detailed above, The Supplier undertakes to provide ISR with a copy of all of its

insurance policy, within fourteen (14) days of ISR's first request.

18. Termination

18.1 ISR, in its sole discretion, may terminate this Agreement upon provision of a

two (2) months written notice to Supplier in advance.

18.2 ISR, in its sole discretion, may immediately terminate this Agreement if

Supplier commits a fundamental breach hereof and fails to remedy such breach

within thirty days of receipt of written notice of such breach.

18.3 This Agreement may be immediately terminated by ISR by written notice upon

the occurrence of any of the following events to or in connection with Supplier:

18.3.1 Voluntary or involuntary bankruptcy (liquidation or reorganization),

or receivership or commencement of a similar insolvency proceeding;

18.3.2 Cessation of business operations;

18.3.3 Election to dissolve or wind-up business;

18.3.4 Sale of all or substantially all of its assets as would cause Supplier to

be unable to fulfill its obligations under this Agreement;

18.3.5 Supplier no longer has ISO 9001 and/or equivalent certification.

19. Rights and Obligations Upon Termination, Cancellation or Expiration

19.1 Upon the termination, cancellation or expiration of this Agreement for any

reason:

19.1.1 ISR shall not be liable to Supplier for any claim, suit, demand or cause

of action that has arisen or may arise, for any indemnification,

compensation or any other payment for any reason, including by way

of example only, consequential or incidental damages of any kind,

alleged lost profits or commissions, lost income, damage to reputation,

expenditures, investments, costs of arranging alternative lines of

business, unjust enrichment, commitments, built-up goodwill or on

account of any reason or cause whatsoever, arising out of or in

relation to the termination, cancellation or expiration of this

Agreement.

19.1.2 ISR shall be entitled to direct, consequential and/or incidental

damages in the event of a fundamental breach of this Agreement by

Supplier.

16

19.1.3 Should ISR, in its sole discretion, so demand, Supplier shall complete

any outstanding Orders for the provision of any Vehicles.

20. Performance & Warranty Guarantee

20.1 To secure the punctual, complete and entire performance of all of Supplier's

obligations under this Agreement, within 7 days of the Effective Date, the

Supplier shall furnish ISR with an irrevocable autonomous performance and

warranty guarantee, approved in advance by ISR, in the form attached hereto as

Appendix D (the “Performance and Warranty Guarantee”).

20.2 The Performance and Warranty Guarantee shall be for an amount equal to

twenty thousand (20,000) Euros and shall be valid until sixty (60) days

following the end of the Vehicles Warranty Period for any Vehicles ordered

during the Agreement Term and, if applicable, the Option Period.

20.3 The Performance and Warranty Guarantee shall be an unconditional and

irrevocable bank guarantee, issued by a first-class bank approved in advance by

ISR at its sole and absolute discretion, to be paid upon first written demand

without the need to prove or substantiate the demand. The Performance and

Warranty Guarantee shall be denominated in Euros only, unless agreed

otherwise in advance by ISR.

20.4 The timely submission of the Performance and Warranty Guarantee by

Supplier to ISR under this Agreement is a precondition for the payment by ISR

of any consideration due to the Supplier under this Agreement.

20.5 The Supplier undertakes to ensure that the Performance and Warranty

Guarantee remains valid through the time stipulated herein. If sixty (60) days

prior to the expiration of the Performance and Warranty Guarantee the Supplier

has not completed all of its obligations to be performed during the time period

secured by the Performance and Warranty Guarantee, or if such period has

been extended, the Supplier shall provide, at its own expense, a substitute

guarantee meeting the requirements of this Agreement, or extend the term of

the Performance and Warranty Guarantee and notify ISR of such extension,

failing which ISR shall be entitled, without derogating from any other remedy

that may be available to it under the circumstances, to collect the Performance

and Warranty Guarantee.

20.6 For the sake of clarity Collection on the Performance and Warranty Guarantee

or any part thereof by ISR shall not derogate from the right of ISR to terminate

this Agreement, nor from its right to any remedy that may be available to it

under any law or pursuant to this Agreement, nor shall it relieve the Supplier of

any of its liabilities and undertakings under this Agreement.

21. Language

17

All correspondence, orders, documentation, drawings, specifications, instructions,

manuals, etc. related to the Vehicles and/or Services provided pursuant to the

Agreement shall be in the English or Hebrew language, including and without

limitation, oral and written communication between ISR and Supplier, the issuing of

Orders and replies thereto.

22. Amendments

This Agreement may not be modified, amended or canceled, in whole or in part,

except in an instrument in writing signed by both Parties hereto.

23. Set-Off

Without derogating from any right of set-off conferred upon ISR elsewhere in this

Agreement or under any law, ISR shall have the right to set-off against any amounts

that may be owed to Supplier pursuant to this Agreement or to the Main Agreements

and/or to any other agreement between ISR and Supplier, any amount, debt or

payment owed by Supplier to ISR pursuant to this and/or to any other agreement

between ISR and Supplier (including without limitation in the form of indemnification

or compensation for damages, regardless of whether liquidated or not).

24. Severability

If any provision of this Agreement is held or made invalid or unenforceable for any

reason, such invalidity or unenforceability shall not affect the remainder of this

Agreement, and the invalid or unenforceable provisions shall be replaced by a

mutually acceptable provision, which, being valid, legal and enforceable, comes

closest to the original intentions of the Parties hereto and has like economic effect.

25. Entire Agreement

This Agreement reflects the entire agreement between the Parties regarding its subject

matter and cancels or supersedes any representation, undertaking, promise,

understanding, discussion or agreement made between the parties before the Effective

Date, except mentioned otherwise above.

26. Notices

26.1 Except as otherwise stipulated herein, the addresses of the Parties for purposes

of this Agreement and for the delivery of any notices required or otherwise

dispatched hereunder shall be:

Israel Railways

telephone no.: +

facsimile no.: +

e-mail:

___________________

18

___________________

___________________

___________________

Facsimile no.: ___________________

e-mail:______________

[shall be completed by Supplier]

26.2 All notices shall be in writing and shall be sent by either of the Parties to the

other Party by registered mail, facsimile or personal delivery to the addresses

set forth in section ‎31.1 above, and shall be deemed to have been delivered to

the addressee; if by mail, seven (7) calendar days after the date on which the

notice was posted; if by facsimile, 24 hours after dispatch by facsimile; and in

the case of personal delivery, at the time of delivery.

IN WITNESS WHEREOF, the authorized signatories of the Parties have signed this

Agreement:

ISRAEL RAILWAYS LTD.:

______________________________

By:__________________________

Title: ________________________

Printed Name: ________________

By:_______________________

Title:_____________________

Printed Name: _______________ _

19

Appendix A1

Technical Specification

21

Appendix A2

Technical Specification

21

Appendix B

Consideration

(According to Appendix B to the Tender documents)

22

Appendix C

Spare Parts list & prices

Spare Part

Original

manufacturer’s

name and part

number

Price in Euro

(DAP) at Site Delivery Time

Estimated

annual

usage

23

Appendix D

Form of Performance and Warranty Guarantee

Israel Railways

Haifa East Station

1 Hativat Golani Street

P.O. Box 1481

Haifa, Israel

Re: Guarantee No. _____________ (“Performance and Warranty Guarantee”)

Whereas ___________________________________, (the “Supplier”) and Israel Railways

Ltd. (“ISR”) entered into an Agreement No. ____________ on ________________ (the

“Agreement”) for the supply of Spare Parts;

Now, we _____________________________ (“Guarantor”) hereby irrevocably guarantee

the immediate payment, on first demand, to ISR of the sum of __________ Euros [shall be

completed by Supplier] in the event that the Supplier has not fully complied with all of its

obligations under the Agreement, including its warranty obligations.

This Guarantee shall be valid and remain in force for a period of sixty (60) days following

the end of the Spare Parts Warranty Period for any Spare Parts ordered during the Agreement

Term and, if applicable, the Option Period, as those terms are defined in the Agreement, or

as otherwise extended in writing by ISR, Supplier and Guarantor, and may be drawn down

by ISR on one or more occasions up to the aggregate amount referred to above. This

Guarantee shall not be revocable by Guarantor or Supplier by notice or otherwise.

For collecting any amount under this Guarantee, ISR shall not have to refer first to Supplier,

nor shall it have to produce any judgment or any other judicial document, nor shall it have to

prove any breach, failure or non-compliance on the part of Supplier or on the part of any

person acting for Supplier or on its behalf or in its name, and a written demand or facsimile

notice to Guarantor from an authorized representative of ISR in the following form shall

suffice:

Pursuant to Guarantee No. ____________ issued by you on _____________________

[date] on behalf of ________________, you are hereby instructed to immediately pay

Israel Railways Ltd. the sum of ___________ into account no. ____________________

in Bank ________ (branch _____ in ______, Israel).

Said written notice shall be sufficient for all purposes of this Guarantee, and specifically

shall be sufficient to collect any sum(s) under this Guarantee from the Guarantor

immediately upon the demand of ISR.

______________

Guarantor

24

Appendix E

Payment Guarantee

Israel Railways

Israel Railways - Finance Department

Haifa East Station

P.O. Box 1481

Haifa, Israel

Re: Guarantee No. _____________ (“Payment Guarantee”)

Whereas _______________________ (the “Supplier”) and Israel Railways Ltd. (“ISR”)

entered into Agreement No. ____________ on ________________ (the “Agreement”) for

the manufacture and supply of the System(s) (as defined therein):

Now, we _____________________________ (the “Guarantor”) hereby irrevocably

guarantee the immediate payment, on first demand, to ISR of the sum of _______________

Euro (_________________ Euro) [the amount of the Payment, hence ____ % of the

Purchase Order Price of System(s)] in order to ensure that ISR can recover the said amount

should Supplier not fulfill its obligations and/or breach the Agreement.

This Guarantee shall be valid and remain in force through ______________, 20__ or as

otherwise extended in writing between ISR, Supplier and Guarantor. This Guarantee shall

not be revocable by Supplier or Guarantor, by notice or otherwise.

ISR may collect amounts under this Guarantee on more than one occasion within the time

period and up until the aggregate amount set forth above.

For collecting any amount under this Guarantee, ISR shall not have to refer first to Supplier,

nor shall it have to produce any judgment or any other judicial document, nor shall it have to

prove any breach, failure or non-compliance on the part of Supplier or on the part of any

person acting for Supplier or on its behalf or in its name, and a written demand or facsimile

notice to Guarantor from Deputy General Manager, Economics & Finance or by a person

designated in writing by him, in the following form shall suffice:

Pursuant to the Guarantee issued by you on _____________________[date] on behalf of

_______________[Supplier], you are hereby instructed to immediately pay ISR the sum

of _______________________ to Account Number ______________ at

____________________________ (Name of Bank).

The said written notice shall be sufficient for all purposes of this Guarantee, and specifically

shall be sufficient to collect any sum(s) under this Guarantee from the Guarantor

immediately upon the demand of ISR.

The Guarantor hereby waives any notice of default on the part of Supplier and hereby waives

any demand by ISR for payment by Supplier to ISR.

_______________________

Guarantor

25

APPENDIX F

Supplier's Bank Account Form

PART A – Supplier's Bank Details

[to be completed by the Supplier's authorized signatories]:

On behalf of the Supplier, we the undersigned,

________________________________________ [authorized signatories on behalf of the

Supplier], hereby request that all payments to be paid to the Supplier by Israel Railways Ltd.

under this Agreement shall be made by means of bank transfer to the Supplier's bank account

according to the following details:

Bank Account No.: ___________________________________________________

Swift Code: _________________________________________________________

IBAN Code: ___________________________

Branch Number: ____________________________________________________

Bank Name: ________________________________________________________

Bank Address: ______________________________________________________

Signature: _____________________

Name: ________________________

Title: _________________________

Date: _________________________

Signature: _____________________

Name: ________________________

Title: _________________________

Date: _________________________

-----------------------------------------------------------------------------------------------

PART B - Certificate of Authorization

[to be completed by an ADVOCATE / C.P.A.]:

26

I, ___________________ [Advocate/C.P.A.] of _________________________, hereby certify

that ______________________ and ___________________ are fully empowered by

____________ [Supplier] to sign the Bank Account Form, and hereby certify that their

signatures upon the Supplier's Bank Account Form are fully binding upon the Supplier in

accordance with the Supplier's articles of association.

Signature and stamp: _____________________________

PART B - Certificate of Authorization

[alternative authorization: to be completed by the SUPPLIER'S BANK]:

We, the undersigned _________________ [Bank] hereby declare that as of ______________

[date of Supplier's signature on Part A above] the ________________ [Supplier] is the

registered owner of the above mentioned account and certify that Part A above has been signed

by the Supplier's authorized signatories. We undertake to promptly inform Israel Railways Ltd.

regarding any change in the ownership of the account or the authorized signatories.

Signature: ____________________

Name: _______________________

Title: ________________________

Stamp: ______________________

---------------------------------------------------------------------------------------

27

Appendix E

Acceptance Certificate

To:

[Name of Supplier]

[Street]

[City]

[Country of origin]

From:

Israel Railways Ltd.

Tel Aviv Central Train Station (Arlozorov)

P.O.B. 18085

Tel Aviv 61180

Israel

We hereby certify that the Vehicles as defined in Agreement No. _____________ (the

"Agreement"), which were ordered by Israel Railways Ltd. ("ISR") pursuant to the

Agreement, have been accepted by ISR after the successful performance of all the tests and

trials required under the Agreement.

The Supplier confirms that the Vehicles are in full compliance with all of the terms and

requirements of this Agreement, in particular, the Technical Specifications, are without any

discoverable damage, fault or defect, and are and shall be fully operational and compliant

with the Agreement.

It is hereby confirmed between the Parties that the granting of this certificate shall not (i)

derogate from the Supplier's liability under the Agreement; (ii) create any liability on the

part of ISR; or (iii) constitute a waiver of any of ISR's rights under the Agreement.

THIS CERTIFICATE IS ISSUED WITHOUT PREJUDICE TO THE RIGHTS

AND POWERS OF ISR UNDER THE AFORESAID CONTRACT.

Signed:____________________ Israel Railways Ltd.

_____________ _________________

Name Date

Confirmed:

Signed:_________________________ for [Name Of The Supplier]

______________ _________________

Name Date

28

Appendix G

Safety Procedure

ISR's Safety Procedures Safety training for contractors prior to commencement of their work on Israel

Railways' premises

General safety topics and responsibilities of the contractor:

The contractor is to instruct his workers about hazards involved in working near a railway track

(and will have them sign the Safety Declaration). Under no circumstances shall he employ workers

who have not received safety instruction.

It is the contractor's responsibility to ensure that all items of deviceused by his workers are in good

repair.

The contractor is responsible for ensuring that his workers are equipped with and use all items of

personal protective gear as required by any law for doing their work.

Rules of behavior and personal hazards when working on or near railway tracks:

The contractor is required to warn his workers to take precautionary measures when they are

working on or crossing railways tracks.

It is forbidden to walk between rails. When walking along the tracks you must keep to the side, or

walk between them.

Beware of moving trains or locomotives and shunting operations on the track.

Cross the track only when it is clear, with good visibility in both directions.

It is forbidden to run cross the track in front of an item of moving rolling-stock.

It is forbidden to cross the track underneath a stationary railway wagon or any item of rolling-

stock.

Personal protective gear:

Full working clothes

Tall safety boots

A lamination garment

Worker's training:

29

Before the commencement of any job, there must be a meeting between people who have

ordered the work, the local security officer and the operating contractor and its men, in which

special safety instructions for the execution of the work should be handed over (including the

safety annex).

Elevated work:

The contractor is responsible for ensuring that workers employed at a height are held by safety-

harness, and that they are wearing safety helmets when working beneath elevated loads.

For elevated work the contractor is responsible for fencing off and clearly marking the hazardous

areas under and around scaffolding, using clear warning signs that will prevent people entering

those areas.

On railway premises the contractor may use only such ladders as conform to standards.

Use electrical appliances and equipment:

Any failure of the power supply shall be reported immediately by the company to the inspector.

Neither the company nor any of its workers shall open or repair electrical systems of the railway.

Safety regulations for repairing electrical equipment:

The contractor shall use no electrical devicewhatsoever belonging to the railway.

It is the contractor responsibility to ensure that all electrical deviceand mobile electrical tools used

by him conform to standard and are protected by double insulation.

The contractor shall carry out no improvisations on electrical equipment.

Safety Declaration for Contractors/Workers

I, the undersigned, who is employed / who employ workers on the premises of Israel Railways on

the job…………………………………………………………………………... hereby declare that

I have been informed of the instructions for safety and work hygiene required by Israel Railways,

and the possible hazards in working on railway premises are clear to me.

I, representative of the contractor / company …………………………………… carrying out the

work, declare herewith that I have informed all my workers of the instructions for safety and work

hygiene required by Israel Railways.

Name of the contractor ………………………………………..

Passport Number ……………………………………………..

Worker's signature Passport Number

31