Letter of Undertaking between Ampal Israel Ltd. and Bank Hapoalim Ltd. regarding $27 Million Loan

Whereas

Bank Hapoalim Ltd. (hereinafter – The Bank) has made and/or will make a loan in the amount of USD $27 million (hereinafter – The Credit) available to the undersigned;

And whereas

We the undersigned have undertaken vis-à-vis the bank to sign on this letter of undertaking;

1.

The introduction to this letter constitutes an integral part hereof:

2.

Without detracting from the events that are detailed in any other bond for the creation of charges on which we have signed and/or that has been signed in favor of the Bank and/or any other document whatsoever on which we have signed in favor of the Bank in addition to them, then the Bank will be entitled, if one or more of the events that are detailed below occur, to make the aforementioned amounts repayable immediately, in whole or in part, (the amounts that will be made repayable immediately, as aforesaid, will be called hereinafter – The Amounts of the immediate repayment). Without detracting from our other undertakings to the Bank, we undertake to pay the Bank the Amounts of the immediate repayment:

2.1.

If the holders of the bonds that have been issued and/or that will be issued to the public by Ampal American Israel Corporation (hereinafter –Ampal American) will demand early repayment(s) and/or will present claims and/or demands for payment against Ampal American and if these are approved by the court and/or a body that is authorized for that purpose under the power of the bonds, or if the Tel-Aviv Stock Exchange decides that there is to be an early redemption in respect of the said bonds.

2.2.

If Mr. Yossef Maiman ceases to be the effective controlling interest in Ampal American. For this matter, “effective control” is the holding, directly or indirectly, of the issued and paid up capital of Ampal American, which affords the largest percentage holding as a single holder out of the generality of the shareholders in Ampal American.

3.

What is stated in this letter comes in addition to what is stated in any other document of credit and/or any other bond that has been made and/or which will be made by us in the relationship between us and the Bank, in connection with the credit and/or otherwise, however, in the event of a discrepancy between them what is stated in this letter shall prevail.

/s/ Irit Eluz ; /s/ Yoram Firon

Ampal Israel Ltd.

Signed by:

Irit Eluz

Position:

Director

Signed by:

Yoram Firon

Position:

Director