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NTA – Metropolitan Mass Transit System, Ltd. NETA-#396285-v16-Procedure_017_2012_-_Invitation_for_Pre_-_Qaulification_NATM.docx Page 1 of 34 INVITATION FOR PRE-QUALIFICATION IN RELATION TO THE PARTICIPATION IN A TENDER FOR DESIGN AND CONSTRUCTION OF NATM TUNNELS FOR THE TEL AVIV LRT RED LINE PROJECT September 2012

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INVITATION FOR PRE-QUALIFICATION

IN RELATION TO THE PARTICIPATION IN A TENDER

FOR DESIGN AND CONSTRUCTION OF NATM TUNNELS FOR THE TEL AVIV LRT RED LINE PROJECT

September 2012

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THE INVITATION CONSISTS OF THE FOLLOWING DOCUMENTS

Part A - Invitation Procedures and Requirements

Part B – Pre-Qualification Forms

Part c – Project Description

INVITATION FOR PRE-QUALIFICATION

TABLE OF CONTENTS

1. INVITATION FOR PRE-QUALIFICATION .............................................................. 5

1.1. DEFINITIONS ................................................................................................................ 5 1.2. GENERAL DESCRIPTION OF THE PROJECT .................................................................... 8 1.3. THE PRE-QUALIFICATION PROCESS ............................................................................. 8 1.4. THE TENDER PROCESS ................................................................................................ 9 1.5. INVITATION FOR PRE QUALIFICATION ....................................................................... 10 1.6. ANTICIPATED SCHEDULE ........................................................................................... 10 1.7. CONFERENCE ............................................................................................................. 10 1.8. INFORMATION SUPPLIED TO THE PARTICIPANTS ........................................................ 11

2. GENERAL PROVISIONS RELATING TO PARTICIPANTS ................................ 11

2.1. THE PARTICIPANT ..................................................................................................... 11 2.2. THE PARTICIPANT AND MEMBERS OF THE PARTICIPANT ........................................... 12 2.3. TUNNELING CONTRACTOR ........................................................................................ 12 2.4. TUNNELING EXPERTS ................................................................................................ 12 2.5. TUNNELING DESIGNER .............................................................................................. 12 2.6. CIVIL ENGINEERING CONTRACTOR ........................................................................... 12 2.7. GENERAL REQUIREMENTS FOR A PARTICIPATING LEGAL ENTITY .............................. 13 2.8. PARTICIPATION IN ONE PRE-QUALIFICATION SUBMISSION ....................................... 14

3. PRE-QUALIFICATION SUBMISSIONS ................................................................... 14

3.1. PRE-QUALIFICATION SUBMISSION LETTER................................................................ 14 3.2. DESCRIPTION OF THE PARTICIPANT, MEMBERS AND THE EXPERIENCE PROVIDER ..... 14 3.3. IDENTIFICATION OF SENSITIVE INFORMATION ........................................................... 14

4. PRE-QUALIFICATION REQUIREMENTS .............................................................. 14

4.1. TECHNICAL PRE-QUALIFICATION REQUIREMENTS .................................................... 14 4.2. FINANCIAL PRE-QUALIFICATION REQUIREMENTS ..................................................... 18

5. METHOD OF SUBMISSION ....................................................................................... 22

5.1. COMPLIANCE WITH THE REQUIREMENTS OF THE INVITATION .................................... 22 5.2. NO UNAUTHORIZED MODIFICATION .......................................................................... 23 5.3. LANGUAGE OF THE PRE-QUALIFICATION SUBMISSION .............................................. 23 5.4. SIGNING OF THE PRE-QUALIFICATION SUBMISSION ................................................... 23 5.5. AUTHORIZATION OF SIGNATURES BY AN ATTORNEY ................................................ 23 5.6. IDENTIFICATION OF SENSITIVE INFORMATION ........................................................... 24 5.7. NUMBER OF PRE-QUALIFICATION SUBMISSION COPIES ............................................. 24 5.8. SEALING AND MARKING OF PRE-QUALIFICATION SUBMISSIONS ............................... 24 5.9. PRE-QUALIFICATION SUBMISSION DATE ................................................................... 24 5.10. OPENING OF PRE-QUALIFICATION SUBMISSIONS ....................................................... 25

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6. EXAMINATION OF THE PRE-QUALIFICATION SUBMISSIONS .................... 25

6.1. EXAMINATION OF THE PRE-QUALIFICATION SUBMISSIONS BY THE TENDER

COMMITTEE .......................................................................................................................... 25 6.2. REQUESTS FOR CLARIFICATIONS ............................................................................... 25 6.3. ANNOUNCEMENT OF ELIGIBLE PARTICIPANTS ........................................................... 26 6.4. REJECTION OF THE PRE-QUALIFICATION SUBMISSIONS ............................................. 26 6.5. DISQUALIFICATION OF THE PRE-QUALIFICATION SUBMISSIONS ................................ 26 6.6. ISSUANCE OF THE TENDER DOCUMENTS; UPDATE STATEMENT ................................ 28 6.7. FORMATION OF A SINGLE PURPOSE COMPANY .......................................................... 28 6.8. RESERVATION OF RIGHTS .......................................................................................... 29

7. TENDERING RULES ................................................................................................... 30

7.1. GOVERNING LAW AND JURISDICTION ........................................................................ 30 7.2. CONFORMITY WITH ALL APPLICABLE LAWS ............................................................. 30 7.3. MANDATORY INDUSTRIAL COOPERATION ................................................................. 30 7.4. THE INVITATION ........................................................................................................ 31 7.5. ORDER OF PRECEDENCE ............................................................................................ 31 7.6. SEVERABILITY ........................................................................................................... 31 7.7. ACCESS TO DOCUMENTS ........................................................................................... 32 7.8. COST OF PARTICIPATION IN THE PRE-QUALIFICATION PROCESS ............................... 32 7.9. LANGUAGE OF THIS INVITATION ................................................................................ 32 7.10. CLARIFICATION OF THIS INVITATION ......................................................................... 32 7.11. ADDENDA .................................................................................................................. 33 7.12. ADVISORS TO THE TENDER COMMITTEE .................................................................... 33 7.13. INTELLECTUAL PROPERTY RIGHTS ............................................................................ 34

APPENDIX ............................................................................................................................. 35

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LIST OF APPENDICES:

Appendix "A" - The Works

Appendix "B" - List of Advisors

LIST OF FORMS:

Pre-Qualification Form "A" - THE PRE-QUALIFICATION SUBMISSION LETTER

Pre-Qualification Form "B" THE PARTICIPANT

Pre-Qualification Form "C " - THE MEMBERS OF THE PARTICIPANT

Pre-Qualification Form "D" - THE PARTICIPANT AND ITS EXPERIENCE PROVIDERS

Pre-Qualification Form "E" - THE EXPERIENCE PROVIDERS OF THE PARTICIPANT

Pre-Qualification Form "F" - TUNNELING CONTRACTOR PROJECTS REFERENCE LIST

Pre-Qualification Form "G" - TUNNELING EXPERT PROJECTS REFERENCE LIST

Pre-Qualification Form "H" - TUNNELING DESIGNER PROJECTS REFERENCE LIST

Pre-Qualification Form "I" - CIVIL ENGINEERING CONTRACTOR PROJECTS REFERENCE LIST

Pre-Qualification Form "J" - FINANCIAL ROBUSTNESS

Pre-Qualification Form “K” - LETTER OF GUARANTEE

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1. INVITATION FOR PRE-QUALIFICATION

1.1. Definitions

All terms used in this Invitation shall have the meaning ascribed thereto herein: Definitions

"Addenda", "Addendum"

Shall have the meaning ascribed thereto in Clause 7.11 (Addenda) of this Invitation.

"Agreement" Shall mean the agreement which will be signed between NTA and the Successful Bidder for the execution of the Works.

"Anticipated Holdings" Shall mean the anticipated holdings of the Members of the Participant's shares, as specified in Pre-Qualification Form "B".

"Bidder" Eligible Participant who will be invited to participate in the tender process.

"Completed" (i) A tunneling project or a NATM Tunnel shall be deemed to be completed only upon the completion of the initial lining works with respect to the tunnel(s);

(ii) An earthworks project shall be deemed to be completed only upon the completion of the primary support works;

(iii) A project which is not a tunneling project or an earthworks project shall be deemed to be Completed only upon delivery thereof to the client.

(iv) A detailed design work shall be deemed to be completed only upon the acceptance of such detailed design by the client.

"Construction" Shall mean the excavation and the initial lining works, final lining works, post tunneling works and all the measures required for a complete and safe operation of the tunnel according to any and all applicable laws.

"Control" Shall have the meaning ascribed thereto in Clause 1 of the Securities Law 5728-1968.

"Cover" Shall mean the distance from the level ground to the top of the external crown of a tunnel.

"Eligible Participant" Those Participants which the Tender Committee deemed to have successfully complied with the requirements of this Invitation, including with all Pre-Qualification Requirements and which were not disqualified thereby in

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accordance with the provisions of Clauses 6.4 (Rejection of the Pre-Qualification Submissions) and 6.5 (Disqualification of the Pre-Qualification Submissions) hereof, as shall be announced by the Tender Committee upon the completion of its examination of the Pre-Qualification Submissions.

"Experience Providers" Shall mean the Tunneling Contractor, the Tunneling Experts, the Tunneling Designer and the Civil Engineering Contractor.

"Financial Statements" Shall mean, for each Legal Entity, its annual audited and duly signed consolidated financial statements, submitted in accordance with the provisions of Clause 4.2.5 (Content and Format of the Submission) of this Invitation.

"Financial Pre- Qualification Requirements"

Shall mean the Pre-Qualification Requirements set forth in Clauses 4.2.2 (Turnover), 4.2.3 (Operating Cash Flow) and 4.2.4 (Equity) of this Invitation (the "Financial Pre-Qualification Requirements").

"Guarantor" Shall mean a Legal Entity, which by itself complies with all the applicable Financial Pre-Qualification Requirements, and which exercises Control over, or is Controlled by, the Legal Entity seeking to rely on the financial results thereof.

"Interested Parties" Shall have the meaning ascribed thereto in The Communication Law (Bezeq and Broadcasting), 5742- .("בעל עניין") 1982

"Invitation" Shall mean this invitation for Pre-Qualification, its Appendices and the Pre-Qualification Forms.

"Law(s)" The various national (or state) laws and legislation, statutes, ordinance, codes, and regulations as enacted by the State, judicial decisions and any by-laws, standards, codes and regulations and precedents enacted by the relevant authorities or municipalities, as modified, amended, replaced or created from time to time.

"Legal Entity" Any corporation, company, voluntary association, partnership or trust recognized by law within its domicile, excluding individuals.

"Member" Shall mean, in the event that the Participant is an SPV, each of the Legal Entities committed to hold shares in the Participant as evidenced by Pre-Qualification Form "C".

"NATM" Shall mean the New Austrian Tunneling Method, which uses the geological stress of surrounding soil mass to

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provide stabilization and support to the tunnel itself, using a thin sprayed concrete lining.

"NIS" New Israeli Shekel.

"NTA" N.T.A – Metropolitan Mass Transit System Ltd.

"Parent Company" Shall mean the Legal Entity who exercises Control, directly or indirectly, over the relevant Legal Entities.

"Participant" Shall have the meaning ascribed thereto in Clause 2.1 (INVITATION FOR PRE-QUALIFICATION) of this Invitation.

"Pre-Qualification Conference"

A conference which may be held by the Tender Committee, at its exclusive discretion, in accordance with the provisions of this Invitation.

"Pre-Qualification Process"

Shall mean the pre-qualification process described under this Invitation.

"Pre-Qualification Submission"

The complete written pre-qualification submission, complying with the terms and conditions contained in this Invitation and including all the information and completed Pre-Qualification Forms called for pursuant to this Invitation, as submitted and duly signed by Participants.

"Pre-Qualification Submission Date"

Shall mean the pre-qualification submission date specified in Clause 1.6 (Anticipated Schedule) of this Invitation, as may be extended from time to time by the Tender Committee in accordance with the provisions hereof.

"Pre-Qualification Requirement"

Shall mean any of the requirements specified in Clause 4.1.1 (Tunneling Contractor Experience), 4.1.2 (Tunneling Experts Experience), 4.1.3 (Tunneling Designers Experience), 4.1.4 (Civil Engineering Contractor Experience), 4.2.2 (Turnover), 4.2.3 (Operating Cash Flow) and 4.2.4 (Equity) of this Invitation (and collectively the "Pre-Qualification Requirements").

"Project" The "Red Line" which is the first Light Rail Transit Line of a mass transit system in the Tel Aviv metropolitan area to be implemented by NTA.

"Regulations" Shall mean the Mandatory Tender Regulations, 5753-1993.

"Soft Soil" Shall mean soil which is unstable under its geotechnical conditions, such as raveling sand, gravel and/or cohesive

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soil with low un drained shear strength.

"SPC" A single purpose company.

"SPV" Shall have the meaning ascribed thereto in Clause 2.1 (The Participant) of this Invitation.

"State" State of Israel.

"Successful Bidder" The Eligible Participant awarded with the Agreement pursuant to completion of the selection process as defined in Clause 1.2.2 (The Selection Process).

"The Tender Committee"

The committee appointed by the CEO of NTA, in accordance with the provisions of the Regulations, in order to manage the Pre-Qualification Process.

"Tender Documents" Shall mean the invitation to submit bids, including the procedures, requirements, selection criteria and the Agreement.

"Urban Area" A NATM Tunnel shall be deemed to be located in an Urban Area only if buildings and/or underground infrastructures and/or in-ground infrastructures are located within the strip extending 50 meters on each side of the axis of such NATM Tunnel.

"Works" Shall have the meaning ascribed thereto in Clause 1.2.1 (Introduction) of this Invitation.

"Year(s)" The twelve (12) months period immediately preceding the Pre-Qualification Submission Date.

1.2. General Description of the Works

1.2.1. Introduction

Without derogating from the provisions of Clause 6.8 (Reservation of Rights) of this Invitation, Participants' attention is drawn to the following indicative and non-binding description of the Works, attached hereto as Appendix "A" (the "Works"):

Introduction

1.2.2. The Selection Process

The Tender Committee intends to select one (1) Successful Bidder to execute Works, through the following stages:

a. This Pre-Qualification Process; and

b. The tender process.

The Selection Process

1.3. The Pre-Qualification Process

The purpose of this Pre-Qualification Process is to identify Eligible Participants, who will be invited to participate in the tender process.

The Pre-Qualification

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During the Pre-Qualification Process, Participants will be required to submit Pre-Qualification Submissions, in accordance with the provisions of this Invitation, in order to demonstrate their compliance with all Pre-Qualification Requirements.

Process

Pre-Qualification Submissions submitted by the Participants will be evaluated by the Tender Committee, in accordance with the provisions of this Invitation. Without derogating from the provisions of Clause 6 (Examination of the Pre-Qualification Submissions) of this Invitation, at the end of its evaluation, the Tender Committee will announce the Eligible Participants.

For the removal of any doubt, the number of Participants to be announced as Eligible Participants is not limited.

1.4. The Tender Process

a. Following the completion of the Pre-Qualification Process, the Tender Committee intends to invite all Eligible Participants to participate in the tender process, and submit bids for the Works.

The Tender Process

b. Without derogating from the Tender Committee's rights to postpone any of the dates detailed in Clause 1.6 (Anticipated Schedule) in accordance with the provisions of this Invitation and/or Tender Committee's rights pursuant to Clause 6.8 (Reservation of Rights), it is expected that the Tender Documents will be issued to Eligible Participants following the completion of the Pre-Qualification Process.

c. Without derogating from the provisions of Clause 6.8 (Reservation of Rights), it is hereby clarified that the publication of the Tender Documents is subject to NTA's sole discretion and the Participants shall have no claims and/or demands against NTA in the event the Tender Documents shall not be published or shall be published under a different process without taking into account the results of this Invitation.

d. Without derogating from any of the provisions of the Tender Documents issued during the tender process or from any of the prerogatives of the Tender Committee pursuant to this Invitation, including, inter alia, Clause 6.8 (Reservation of Rights), and/or any Law, it is anticipated that:

(i) the evaluation of the bids which will be submitted to the tender process and the selection of the Successful Bidder will be conducted by the Tender Committee based on: (a) the scores which will be granted to the price proposals; and (b) the scores which will be granted to other elements of the bids, which may include, inter alia: the technical proposal, within the framework of which the Bidders may be required to submit documentation and information regarding their proposed methodology and design or any other issue determined by the Tender Committee.

(ii) The Works to be undertaken by the Successful Bidder may include, inter alia: (a) the detailed design of the tunneling works, based on guidelines which will be provided to the Bidders; (b) conducting a structure and infrastructure condition survey; (c) mitigation works; (d) dewatering of groundwater and grouting works; (e) tunneling

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construction and evacuation of excess materials; (f) treatment of polluted soil and water; (g) preparation works for future installment of fixed systems and rail systems; (h) all ancillary works and services which may be required, including the provision of equipment, materials, utilities, temporary lighting and ventilation, all in order to hand over complete and safe rail tunnels; and (i) any other works determined by the Tender Committee.

It is clarified that the Participants will not be entitled to rely on the description of the tender process included in this Clause 1.4 d above, which is merely an estimate and is provided to the Participants for information purposes only. The Tender Committee may determine and/or amend the evaluation process and the scope of works which will be specified in the Tender Documents, at its exclusive discretion.

1.5. Invitation for Pre Qualification

The Tender Committee hereby invites Legal Entities to participate in the Pre-Qualification Process, according to the terms and conditions of this Invitation.

Invitation for Pre-

Qualification

1.6. Anticipated Schedule

Without in any way limiting the right of the Tender Committee to postpone any of the following dates in accordance with the provisions of this Invitation, the anticipated schedule of the Pre-Qualification Process is as follows:

Anticipated Schedule

a. Publication of the Invitation: 28.6.12

b. Pre-Qualification Conference: 30.7.12

c. Questions submission deadline: 30.8.12

d. Pre-Qualification Submission Date: 14.10.12

1.7. Pre-Qualification Conference

a. The Tender Committee reserves the right to hold a Pre-Qualification Conference. The participation of the Participant or its authorized representative, in the Pre-Qualification Conference shall be mandatory. Notwithstanding the above, the Tender Committee shall be entitled, at its sole discretion, to refrain from holding such Pre-Qualification Conference and in such event proper cancelation notice shall be published on NTA's website at: http://www.nta.co.il/site/en/neta.asp?pi=464.

Pre-Qualification

Conference

b. At the Pre-Qualification Conference, the Tender Committee may answer questions referred to it by Participants in accordance with the provisions of Clause 7.10 (Clarification of this Invitation) of this Invitation.

c. Should the Tender Committee answer or present any questions referred to it by a Participant, or any clarification, interpretation or amendment resulting from any request for clarification or interpretation submitted to it by a Participant, the identity of that Participant shall not be disclosed.

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d. Following the Pre-Qualification Conference, the Tender Committee may issue minutes of the Pre-Qualification Conference to all Participants, and may issue an Addendum to this Invitation. Only the written minutes issued by the Tender Committee at the end of the Pre-Qualification Conference or any Addenda to this Invitation issued thereafter shall be binding. The Tender Committee shall not be bound by, and Participants shall not rely on, any oral information provided by the Tender Committee or by Participants during the Pre-Qualification Conference.

e. The fact that questions, clarifications, interpretations and amendments to this Invitation will be presented by the Tender Committee at the Pre-Qualification Conference does not, in any way, restrict the Tender Committee’s right to issue an Addendum to this Invitation or to postpone any of the dates contained therein in accordance with the provisions of Clause 7.11 (Addenda) of this Invitation.

f. Without derogating from the provisions of this Clause 1.7 (Conference) above, the Tender Committee reserves the right to hold an additional Pre-Qualification Conference. Bidders which participated in the first Pre-Qualification Conference may not be required to participate in such additional Pre-Qualification Conference

1.8. Information Supplied to the Participants

a. The attention of all Participants is drawn to the fact that the information contained in this Invitation did not undergo any independent verification of the Tender Committee and may be incomplete or inaccurate.

Information Supplied to the

Participants

b. It is expressly understood that any reliance of the Participants or anyone on their behalf on any such information and the making of any deductions, interpretations or conclusions from information which is made available by the Tender Committee or anyone on its behalf, is at the Participants' sole responsibility.

c. The Tender Committee or anyone on its behalf, shall not be responsible in any respect of any loss or damage whatsoever suffered by the Participants, any Legal Entity, their employees, officers, agents, or any other persons for whom the Participants may be contractually or legally responsible or accountable, by reason of any use of information contained in the Invitation or provided in connection therewith, or any action or forbearance in reliance thereon.

2. GENERAL PROVISIONS RELATING TO PARTICIPANTS

2.1. The Participant

A Participant shall mean either:

a. A Legal Entity existing on the Pre-Qualification Submission Date, and submitting a Pre-Qualification Submission on its own; or

b. A joint venture or an SPC specifically established or to be established for the purposes of the execution of the Works, and submitting a Pre-Qualification Submission (an "SPV")

The Participant

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(either, a "Participant").

The attention of the Participants is drawn to the provisions of Clause 6.7 (Formation of a Single Purpose Company) below.

2.2. The Participant and Members of the Participant

a. In the event that the Participant is an SPV, each of the Members shall be required to demonstrate compliance with the requirements of Clause 2.8 (General Requirements for a participating Legal Entity) of this Invitation. The attention of all Participants is drawn to the fact that it is expected that pursuant to the Tender Documents, Bidders will be required to submit a Member’s undertaking, as shall be detailed in the Tender Documents.

The Participant and Members

of the Participant

b. In the event that the Participant is not an SPV, the Participant shall also be required to demonstrate compliance with the requirements of Clause 2.8 (General Requirements for a participating Legal Entity) by itself.

2.3. Tunneling Contractor

a. The Tunneling Contractor is the Legal Entity whose experience is relied on for the purpose of demonstrating compliance with the Pre-Qualification Requirements specified in Clause 4.1.1 (Tunneling Contractor Experience) below (the "Tunneling Contractor").

b. The Tunneling Contractor shall be either (i) the Participant; or (ii) in the event that the Participant is an SPV - a Member holding a share of at least 40% in the Participant.

2.4. Tunneling Experts

a. The Tunneling Experts are the Legal Entity(s) whose experience is relied on for the purpose of demonstrating compliance with the Pre-Qualification Requirements specified in Clause 4.1.2 (Tunneling Experts Experience) below (the "Tunneling Experts").

b. The Tunneling Expert shall be either (i) the Participant; (ii) in the event that the Participant is an SPV – a Member; or (iii) a subcontractor of the Participant.

2.5. Tunneling Designer

a. The Tunneling Designer is the Legal Entity whose experience is relied on for the purpose of demonstrating compliance with the Pre-Qualification Requirements specified in Clause 4.1.3 (Tunneling Designers Experience) below (the "Tunneling Designers").

b. The Tunneling Designer shall be either (i) the Participant; (ii) in the event that the Participant is an SPV – a Member; or (iii) a subcontractor of the Participant.

2.6. Civil Engineering Contractor

a. The Civil Engineering Contractor is the Legal Entity whose experience is relied on for the purpose of demonstrating compliance with the Pre-Qualification Requirement in Clause 4.1.4 (Civil Engineering Contractor Experience) below

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(the "Civil Engineering Contractor").

b. The Civil Engineering Contractor shall be either (i) the Participant; (ii) in the event that the Participant is an SPV – a Member; or (iii) a subcontractor of the Participant.

2.7. General provisions relating the Experience Provider

For the avoidance of doubt, it is hereby clarified that the requirements specified in Clauses 2.3 (Tunneling Contractor), 2.4 (Tunneling Experts), 2.5 (Tunneling Designer) and 2.6 (Civil Engineering Contractor), are separate and independent and shall not derogate from one other.

2.8. General Requirements for a participating Legal Entity

2.8.1. General Requirements for a participating Legal Entity - General Provisions

The Participant, each of the Members (in the event that the Participant is an SPV) and each of the Experience Providers, is required to demonstrate compliance with all of the following:

General Requirements

for a participating Legal Entity

a. It is duly organized and validly existing under the laws of the jurisdiction in which it is organized. It is clarified that a Participant which is an SPV is not required to comply with this requirement, provided that each of the Members of such Participant complies with this requirement; and

b. It and each of the Interested Parties therein, is not and shall not be a resident of or domiciled in a country which does not have diplomatic relations with the State and/or of a country which does not have proper and reliable trade relations with the State; and

c. The directors and managers of the Participant, each of the Members (in the event that the Participant is an SPV) and each of the Experience Providers (including Interested Parties therein), who are expected to have any control over or any involvement in the Pre-Qualification Process, the tender process or the execution of the Works are not and shall not be residents or nationals of a country which does not have diplomatic relations with the State or of a country which does not have proper and reliable trade relations with the State;

d. In the event it is incorporated in or is a resident of the State it must demonstrate compliance with the requirements of and provide all approvals and affidavits required pursuant to the Public Entities Transactions Law, 5736-1976; and

e. It is not under any voluntary or involuntary bankruptcy (liquidation or reorganization), or receivership or commencement of a similar insolvency proceeding, and its most recent financial statements, as of the Pre-Qualification Submission Date, do not include a "going concern notice".

2.8.2. Content and Format of the Submission

a. In order to, inter alia, demonstrate compliance with the requirements specified under Clause 2.8 (General Requirements for a participating Legal Entity), Pre-

Pre-Qualification

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Qualification Forms "B" and "C" should be duly completed and signed by each Member or Participant, as applicable.

b. In order to, inter alia, demonstrate compliance with the requirements specified under Clause 2.8 (General Requirements for a participating Legal Entity), Pre-Qualification Form "E" should be duly completed and signed by the Experience Provider, if applicable.

Forms "B", "C" and "E"

2.9. Participation in One Pre-Qualification Submission

2.9.1. General

a. Each Participant may submit only one Pre-Qualification Submission. Participation in One Pre-

Qualification Submission

b. Each Member may participate in only one Participant.

c. Each Experience Provider may participate in only one Pre-Qualification Submission, expect for the Tunneling Expert which may participate in more than one Pre-Qualification Submission.

2.9.2. Interpretations

For the purpose of the provisions of Clause 2.9.1 above, the terms "Participant", "Member" (if applicable) and "Experience Provider" shall be deemed to include any Legal Entity which exercises Control over such entity, is under the common Control of such entity or Controlled by such entity.

Interpretations

3. PRE-QUALIFICATION SUBMISSIONS

3.1. Pre-Qualification Submission Letter

Each Participant shall attach to its Pre-Qualification Submission the Pre-Qualification Submission Letter in the form of Pre-Qualification Form "A", duly completed and signed.

Pre-Qualification

Form "A"

3.2. Description of the Participant, Members and the Experience Provider

Each Participant shall submit Pre-Qualification Forms "B", "C", " and "E" duly completed and signed, in order to demonstrate compliance with the provisions of Clauses 2.1 (The Participant), 2.2 (The Participant and Members of the Participant), 2.3 (Tunneling Contractor), 2.4 (Tunneling Experts), 2.5 (Tunneling Designer), and 2.6 (Civil Engineering Contractor) above.

Pre-Qualification

Forms "B", "C", and "E"

3.3. Identification of Sensitive Information

Without derogating from the generality of the provisions of Regulation 21(e) of the Regulations (and the discretion granted thereunder to the Tender Committee), each Participant shall detail in Pre-Qualification Form "A" all information contained in its Pre-Qualification Submission which it considers to be of a commercially sensitive or secret nature, in accordance with the provisions of Clause 5.6 (Identification of Sensitive Information) below.

Sensitive Information

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4. PRE-QUALIFICATION REQUIREMENTS

The Participant will be required to demonstrate its compliance with all of the Pre-Qualification Requirements.

The Pre-Qualification Requirements may be stricter than those specified in the supplement of the Mandatory Tender Laws, 1992 due to the exceptional technical and interface complexity and vast scope of Works.

Pre-Qualification

Requirements

4.1. Technical Pre-Qualification Requirements

4.1.1. Tunneling Contractor Experience

The Participant is required to demonstrate that the Tunneling Contractor Completed, during the ten (10) Years immediately preceding the Pre-Qualification Submission Date, projects which included all of the following:

a. the Construction of one (1) or more NATM Tunnels, having a total aggregate length of at least 20km;

b. the Construction of one (1) or more NATM Tunnels located in Urban Areas, having a total aggregate length of at least 7.5km;

c. the detailed design and Construction of NATM Tunnels in at least three (3) different design- build projects, having a total aggregate length of at least 10km;

d. the Construction of NATM Tunnels in Soft Soil and in an Urban Area in at least three (3) different projects, provided that each project included one (1) or more NATM Tunnels having:

(i) a total aggregate length of at least 50m;

(ii) total excavation face area of more than 100m²; and

(iii) a Cover of no more than 15m;

e. the execution of at least four (4) different earthworks projects and/or tunnel excavation projects, in each case – provided that such projects involved the dewatering of groundwater; and

f. the Construction of NATM Tunnels in Soft Soil, using jet grouting for the initial lining works, in at least two (2) different projects;

It is clarified that the Participant is required to demonstrate compliance with the Pre-Qualification Requirements specified in paragraphs (a)-(f) above by relying on the experience of only one (1) Legal Entity.

4.1.2. Tunneling Expert Experience

The Participant is required to demonstrate that the Tunneling Expert(s) Completed during the ten (10) Years immediately preceding the Pre-Qualification Submission Date, projects which included all of the following:

a. the dewatering of groundwater in Soft Soil in Urban Areas for the purpose of excavating NATM Tunnels in at least three (3) different projects, having a total aggregate length of at least 2km;

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b. the execution of vertical and/or inclined jet grouting in sand, in at least four (4) different projects; and

c. the execution of compensation grouting in at least three (3) different projects, provided that the compensation grouting in at least two (2) of such projects was Completed during the ten (10) Years immediately preceding the Pre-Qualification Submission Date.

It is clarified that the Participant may demonstrate compliance with the Pre-Qualification Requirements specified in paragraphs (a)-(c) above by relying on the experience of one (1) or more Legal Entities, provided that with respect to each of paragraphs (a), (b) and (c), only one (1) Legal Entity will be relied on.

4.1.3. Tunneling Designer Experience

The Participant is required to demonstrate that during the ten (10) Years immediately preceding the Pre-Qualification Submission Date, the Tunneling Designer has Completed the detailed design in projects that include the following:

a. The Construction of NATM Tunnels in at least five (5) different projects, having a total aggregate length of at least 20km, provided that at least 3.5 km of such NATM Tunnels were Completed.;

b. The Construction of NATM Tunnels outside its country of incorporation and registration in at least two (2) projects, having a total aggregate length of at least 15km;

c. The Construction of NATM Tunnels in Urban Areas, having a total aggregate length of at least 3.5km;

d. The Construction of NATM Tunnels in Soft Soil with groundwater, in Urban Areas, having a total aggregate length of at least 4km;

e. The Construction of at least two (2) NATM Tunnels in Soft Soil, having:

(i) diameter cross sections of more than 100m; and

(ii) a Cover of no more than 15m;

in each project, in at least two (2) different projects;

f. The Construction of at least three (3) "design-build" projects of NATM Tunnels;

g. The execution of grouting works in soil, in at least three (3) different projects; and

h. the execution of jet grouting in soil, in at least two (2) different projects.

It is clarified that the Participant is required to demonstrate compliance with the Pre-Qualification Requirements specified in paragraphs (a)-(i) above by relying on the experience of only one (1) Legal Entity.

4.1.4. Civil Engineering Contractor Experience

The Participant is required to demonstrate that the Civil Engineering Contractor complies with all of the following requirements:

a. it is a "registered contractor" pursuant to the Registration of Contractors for

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Construction Engineering Works Law, 5729-1969, and has all of the following classifications:

i. field 200 (roads, infrastructures and development), classification C-5 (unlimited) ]200 5-ג[ ; and

ii. field 300 (bridges), classification C-5 (unlimited) ]300 5- ג[ ;

provided, however, that in the event that the Civil Engineering Contractor is a Legal Entity incorporated outside the State, it shall not be required to present said classifications but shall be required, at a later stage, to obtain an exemption in accordance with the provisions of the Registration of Contractors for Construction Engineering Works Law, 5729-1969, all in accordance with the provisions of the Tender Documents.

b. it is a "certified contractor for performing governmental works" (in the fields recognized for such purpose), as certified by the inter-ministerial committee, provided, however, that in the event that the Civil Engineering Contractor is a Legal Entity incorporated outside the State, it shall not be required to present said classification but shall be required, at a later stage, to obtain an exemption from said certification, all in accordance with the provisions of the Tender Documents; and

c. it has Completed:

(1) at least two (2) transportation infrastructure projects in the field of civil engineering, provided that each of such projects:

i. was completed between 1.1.2005 and 31.12.2011;

ii. was executed in an urban municipal area; and

iii. the aggregate consideration with respect to the paving, development, underground urban utilities (water, sewage, drainage, communication infrastructure, etc.), temporary traffic arrangements and traffic relocation, was at least NIS 50,000,000 (fifty million NIS) excluding VAT; or

(2) one (1) project which complies with all of the requirements specified in paragraphs 4.1.4(c)(1)(i)-(iii) above, provided that in such project the consideration referred to in paragraph 4.1.4(c)(1)(iii) above was at least NIS 100,000,000 (one hundred million NIS) excluding VAT.

It is clarified that the Participant is required to demonstrate compliance with the Pre-Qualification Requirements specified in paragraphs (a)-(c) above by relying on the experience of only one (1) Legal Entity.

4.1.5. Execution as a Joint Venture

For purposes of demonstrating compliance with the Pre-Qualification Requirement specified in Clause 4.1 (Technical Pre-Qualification Requirements), each of the Tunneling Contractor, the Tunneling Expert, the Tunneling Designer and the Civil Engineering Contractor, is allowed to present applicable projects which it executed as part of a joint venture, provided that it was jointly and severally responsible for the execution of the applicable projects or that it held a share of at least 50% in the joint

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venture.

4.1.6. Currencies Conversion

All financial data submitted with respect to the Pre-Qualification Requirement in section 4.1 (Technical Pre-Qualification Requirements) shall be converted by NTA to NIS according to the official relevant annual (calendar year) average exchange rate published by the Bank of Israel Based on the year on which the relevant project was Completed. Currencies which are not officially published by the Bank of Israel, will be converted by NTA to CAD on the basis of the official relevant annual (calendar year) average exchange rates published by the Bank of Canada and thereafter shall be converted from CAD to NIS according to the following:

2005 (NIS)

2006 (NIS)

2007 (NIS)

2008 (NIS)

2009(NIS)

2010 (NIS)

2011 (NIS)

USD 4.488 4.457 4.108 3.588 3.933 3.733 3.578

GBP 8.162 8.200 8.219 6.618 6.139 5.771 5.736

CAD 3.707 3.928 3.836 3.374 3.450 3.625 3.619

EURO 5.583 5.592 5.624 5.259 5.469 4.953 4.978

4.1.7. Content and Format of the Submission

In order to demonstrate compliance with the Pre-Qualification Requirements specified under Clauses Clause 4.1.1 (Tunneling Contractor Experience), 4.1.2 (Tunneling Expert Experience), 4.1.3 (Tunneling Designer Experience) and 4.1.4 (Civil Engineering Contractor Experience), Pre-Qualification Forms "F", "G", "H", and "I" should be duly completed and signed by the applicable Experience Provider.

Pre-Qualification

Forms "F", "G", "H" and

"I"

4.1.8. The Tender Process - Expected Requirement

The attention of all Participants is drawn to the fact that it is expected, that pursuant to the Tender Documents, Bidders will be required to demonstrate that the Legal Entity which demonstrated compliance with the Pre-Qualification Requirements detailed in Clauses 4.1.1 (Tunneling Contractor Experience), 4.1.2 (Tunneling Expert Experience), 4.1.3 (Tunneling Designer Experience) and 4.1.4 (Civil Engineering Contractor Experience) shall be responsible to execute the applicable scope of the Works and shall be required to assume responsibility for execution of such scope as shall be defined in the Tender Documents.

4.2. Financial Pre-Qualification Requirements

4.2.1. Financial Pre-Qualification Requirements - General Provisions

a. The Participant shall demonstrate that each of the Tunneling Contractor and the Civil Engineering Contractor is in compliance with all of the Financial Pre-Qualification Requirements.

Financial Pre-Qualification

Requirements

b. For the purpose of demonstrating compliance with the Financial Pre-Qualification Requirements, the Tunneling Contractor and/or the Civil Engineering Contractor (as the case may be) may seek to rely on a Guarantor, provided that such Guarantor provides the Legal Entity seeking to rely on the

Pre-Qualification

Form "K"

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financial results thereof with a Guarantor's undertaking in the form of Pre-Qualification Form "K".

c. In the event that the Tunneling Contractor or the Civil Engineering Contractor (as the case may be) wishes to rely on a Guarantor for the purposes of any Pre-Qualification Requirement specified in Clauses 4.2.2 (Turnover), 4.2.3 (Operating Cash Flow) and 4.2.4 (Equity) of this Invitation, provided that such Guarantor complies with all Pre-Qualification Requirements specified in Clauses 4.2.2 (Turnover), 4.2.3 (Operating Cash Flow) and 4.2.4 (Equity).

4.2.2. Turnover

a. The Weighted Average Annual Turnover of the Tunneling Contractor, based on the Financial Statements of the Tunneling Contractor for the fiscal years of 2009, 2010 and 2011, is at least NIS 500,000,000 (five hundred million NIS).

b. The Weighted Average Annual Turnover of the Civil Engineering Contractor, based on the respective Financial Statements of the Civil Engineering Contractor for the fiscal years of 2009, 2010 and 2011, is at least NIS 100,000,000 (one hundred million NIS).

c. For the purposes of this Clause 4.2.2 (Turnover) the Weighted Average Annual Turnover of a Legal Entity shall be calculated as follows:

Weighted Average Annual Turnover = (3*TOt +2*TOt-1+TOt-2) / 6

Where:

TO - the turnover as per the Financial Statements; and

t – Represents the fiscal year of 2011

d. Financial data will be converted by NTA to NIS on the basis of the official relevant annual (calendar year) average exchange rate published by the Bank of Israel as detailed below. Currencies which are not officially published by the Bank of Israel, will be converted by NTA to CAD on the basis of the official relevant annual (calendar year) average exchange rates published by the Bank of Canada and thereafter shall be converted from CAD to NIS as aforementioned:

2009 (NIS) 2010 (NIS) 2011 (NIS)

USD 3.933 3.733 3.578

GBP 6.139 5.771 5.736

CAD 3.450 3.625 3.619

EURO 5.469 4.953 4.978

Turnover

4.2.3. Cash Flow

a. The Participant shall demonstrate that the Weighted Average Annual Cash flow of the Tunneling Contractor, based on the Financial Statements of the

Cash Flow

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Tunneling Contractor for the fiscal years of 2009, 2010 and 2011, is positive.

b. The Participant shall demonstrate that the Weighted Average Annual Cash flow of the Civil Engineering Contractor, based on the Financial Statements of the Civil Engineering Contractor for the fiscal years of 2009, 2010 and 2011, is positive.

c. For the purposes of this Clause 4.2.3 (Cash Flow) the Weighted Average Annual Cash flow of a Legal Entity shall be calculated as follows:

Weighted Average Annual Cash flow = (3*CFt +2*CFt-1+CFt-2) / 6

Where:

CF - the cash flow as per the Financial Statements; and

t – Represents the fiscal year of 2011.

d. In the event that the relevant Legal Entity fails to demonstrate compliance with the requirements specified in paragraph (a) and/or paragraph (b) above, the Participant may demonstrate compliance with (i) or (ii) below, where:

i. Capital erosion test

The weighted cash flow from operating activity (in absolute value) is less than 33% of the shareholders’ equity:

|CF |E

33 %

Where:

CF – Weighted Average cash flow from operating activity from the Financial Statements for the fiscal years of 2009, 2010 and 2011, weighted as described above.

− Shareholders’ equity of the relevant Legal Entity.

– Represents the fiscal year of 2011.

ii. Debt to EBITDA

This ratio demonstrates the Legal Entity’s ability to settle its liabilities using only its operating activities. The ratio of debt to EBITDA is required to be lower than 10, according to the Financial Statements for the fiscal years of 2010 and 2011.

The weighted average shall be calculated according to the following ratios:

66% attributed to the Financial Statement of the fiscal year of 2011.

34% attributed to the Financial Statements of the fiscal year 2010.

EBITDA – Earnings before Interest, Taxes, Depreciation and Amortization – operating profit from the profit and loss statement, plus depreciation and amortization.

Debt – Represents the financial liabilities (including current maturities of long-term debt and excluding shareholders' loan and related parties loan)

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of the relevant Legal Entity.

4.2.4. Equity

a. The Participant shall demonstrate that the equity of the Tunneling Contractor, based on the Financial Statements of the Tunneling Contractor for the fiscal year of 2011, is at least NIS 300,000,000 (three hundred million NIS).

b. The Participant shall demonstrate that the equity of the Civil Engineering Contractor, based on the Financial Statements of the Civil Engineering Contractor for the year 2011, is at least NIS 60,000,000 (sixty million NIS).

c. The financial data should be converted by NTA to NIS on the basis of the official relevant official exchange rate on the applicable last day of Fiscal Year 2011 as was published by the Bank of Israel. Currencies which are not officially published by the Bank of Israel will be converted by NTA to CAD on the basis the official relevant official exchange rate on the applicable last day of Fiscal Year 2011 as was published by the Bank of Canada and thereafter shall be converted from CAD to NIS as aforementioned.

Equity

4.2.5. Content and Format of the Submission

a. In order to demonstrate compliance with the Financial Pre-Qualification Requirements, the Participant shall submit the required Financial Statements of each of the Tunneling Contractor, the Civil Engineering Contractor and/or the Guarantors (where applicable), duly prepared and presented in accordance with one of the following:

Financial Statements

(i) Israeli GAAP (including, with respect to the cash flow statements, Standard No. 51 of the Institute of Certified Public Accountants in Israel);

(ii) US GAAP (including, with respect to the cash flow statements, FAS (Financial Accounting Standards) No. 95); or

(iii) International GAAP (including, with respect to the cash flow statements, IAS (International Accounting Standards) IAS No. 7 and IFRS updates);

(iv) Any accounting principle other than the accounting principles set out in sub-Clauses 4.2.5(a)(i) – 4.2.5(a)(iii) above;

and duly executed by said Legal Entities' management (or the equivalent thereof) and duly audited and signed by their external auditors.

b. Without derogating from sub-Clause (a) above, all the Financial Statements must include balance sheet, profit and loss, cash flow, and auditor’s report and notes.

c. A Legal Entity whose Financial Statements do not include cash flow statements should provide such statements in accordance with one of the GAAP versions set out in sub-Clause (a) above (as applicable), duly executed by its external auditors.

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d. The Financial Statements will be provided either in English or in Hebrew, but in no other language.

e. In the event of reliance by a Tunneling Contractor or a Civil Engineering Contractor on a Guarantor, the Financial Statements of such Guarantor shall be included (instead of those of the Tunneling Contractor or a Civil Engineering), and shall be subject to the provisions of this Clause 4.2.5.

f. With derogating from the foregoing, a Legal Entity whose Financial Statements for the fiscal year 2011 contain comparative figures for the fiscal years 2009 and 2010, is not required to submit Financial Statements for the fiscal years 2009 and 2010, and for the purpose of demonstrating compliance with the Pre-Qualification Requirements set forth in Clauses 4.2.2 (Turnover), 4.2.3 ( Cash Flow) above and may present such comparative figures in the Financial Statements for the fiscal year 2011.

g. In order to demonstrate compliance with the Financial Pre-Qualification Requirements, Pre-Qualification Forms "J" should be duly completed and submitted, in accordance with one of the GAAP principles set out in sub-Clause (a) above (as applicable).

Notwithstanding the above, Tunneling Contractor, Civil Engineering Contractor and/or the Guarantors (where applicable) whose Financial Statement are prepared and presented in accordance with the accounting principles set out in sub of sub-Clause 4.2.5(a)(iv), shall be required to present the financial data in Pre-Qualification Form "J" based on the accounting principles set out in sub-Clause (a)(iii) above.

Pre-Qualification

Form "J",

h. Without derogating from the rights of the Tender Committee under the Invitation and under Law, in the event of a contradiction between the Financial Statements for a Legal Entity submitted within the Pre-Qualification Submission, and the Pre-Qualification Forms or any other document submitted within the Pre-Qualification Submission, the Financial Statements will prevail.

5. METHOD OF SUBMISSION

The Pre-Qualification Submission shall be submitted in accordance with the following provisions:

Method of Submission

5.1. 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 parts relevant to 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 submitted by the Participant.

Compliance with

Requirement of the Invitation

5.2. No Unauthorized Modification

Participants shall not modify or supplement the instructions of this Invitation. Unauthorized conditions, limitations, modifications, supplements, reservations, disclaimers or provisions attached to a Pre-Qualification Submission may be subject

No Unauthorized

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to disqualification, at the Tender Committee's sole discretion. In the event that such Pre-Qualification Submission has not been disqualified, for any reason whatsoever, the Tender Committee will ignore such Unauthorized conditions, limitations, modifications, supplements, reservations, disclaimers or provisions. For the purposes of this Clause 5.2, any conditions, limitations, modifications, supplements, reservations, disclaimers or provisions attached to the Pre-Qualification Submission, which were not submitted by the Participant to the Tender Committee in accordance with the provisions of Clause 7.10 (Clarification of this Invitation) below and approved by the Tender Committee in the form of an Addendum to this Invitation, issued in accordance with the provisions of Clause 7.11 (Addenda) below, may be deemed unauthorized.

Modification

5.3. Language of the Pre-Qualification Submission

Other than the Pre-Qualification Forms and the statements contained therein which are to be submitted in English, Pre-Qualification Submissions may be in English or Hebrew.

Language of the Pre-

Qualification Submissions

Supporting documents and printed literature furnished by a Participant in any other language should be accompanied with a translation to Hebrew or English (authenticated by a Notary Public), in which case, for purposes of interpretation, the translation to Hebrew or English (as the case may be), shall prevail.

5.4. Signing of the Pre-Qualification Submission

The Pre-Qualification Submission and all forms submitted by Participants or their Members shall be duly signed by the Participant, its Members, the Experience Provider(s) of the Participant and/or by the Guarantor(s) (all to the extent applicable).

Signing the Pre-Qualification

Submission

All pages of the Pre-Qualification Submission will be enumerated, and the Pre-Qualification Submission will include a detailed table of contents.

5.5. Authorization of Signatures by an Attorney

Adjacent to every full signature of the Participants, their Members, Guarantor(s) and the Experience Provider (if applicable) within the Pre-Qualification Submission, there shall be a confirmation by an attorney that the signatory is authorized to commit such Legal Entity in relation to the document on which such signatures appear.

Authorization by an Attorney

5.6. Identification of Sensitive Information

Without derogating from the generality of the provisions of Regulation 21(e) of the Regulations (and the discretion granted thereunder to the Tender Committee), Participants will detail, within the Pre-Qualification Submission Letter, in a clear, complete and legible manner, all information contained in their Pre-Qualification Submissions, which they consider to be of a commercially sensitive or secret nature, and shall submit additional, separate, copy of its Pre-Qualification Submission specifying such sensitive information.

Identification of Sensitive

Information

5.7. Number of Pre-Qualification Submission Copies

Pre-Qualification Submissions must be submitted, and clearly marked so, as an Number of

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original and three (3) identical copies (four (4) altogether) and, as applicable, additional copy for sensitive information as described in Clause 5.6 (Identification of Sensitive Information) above.

In the event of a discrepancy between the original and the other Pre-Qualification Submission documents, and/or the CD, the original shall prevail.

Copies

5.8. Sealing and Marking of Pre-Qualification Submissions

Participants shall seal the original and each of the three (3) copies of the Pre-Qualification Submissions (and, as applicable, additional copy for sensitive information as described in Clause 5.6 (Identification of Sensitive Information) above) in separate envelopes. The envelopes shall then be sealed in an outer envelope or a box, clearly marked with the name and number of this Invitation "17/2012", and no other markings shall be made.

The envelopes and boxes shall be delivered, on week days, Sunday to Thursday, during opening hours 09:00:17:00 Israel time, to the tender box located at the following address:

Sealing and Marking of the

PQ Submissions

132 Menachem Begin Rd, Tel Aviv, Israel

Azrieli Towers, the Round Tower

Floor No. 16

For the removal of any doubt, any question or clarification, other than the Pre-Qualification Submission should be submitted in accordance with the provisions of Clause 7.10 (Clarification of this Invitation) below.

5.9. Pre-Qualification Submission Date

a. Pre-Qualification Submissions should be submitted at the address noted in Clause 5.8 (Sealing and Marking of Pre-Qualification Submissions) above by the date designated for such submission, as set forth in Clause 1.6 (Anticipated Schedule) above ("Pre-Qualification Submission Date"), no later than 17:00 Israel time.

Pre-Qualification

Submission Date

b. The Tender Committee may, at its sole discretion, extend the Pre- Qualification Submission Date by issuing an Addendum in accordance with the provisions of Clause 7.11 (Addenda) below.

c. The Tender Committee will leave unopened any and all Pre-Qualification Submissions received after the deadline for submission of the Pre-Qualification Submissions specified in this Clause 5.9 (Pre-Qualification Submission Date). All unopened Pre-Qualification Submissions will be promptly returned to the applicable Participants.

5.10. Opening of Pre-Qualification Submissions

The opening of the Pre-Qualification Submissions shall be documented in a protocol. Opening of the Pre-

Qualification Submissions

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6. EXAMINATION OF THE PRE-QUALIFICATION SUBMISSIONS

6.1. Examination of the Pre-Qualification Submissions by the Tender Committee

The Tender Committee shall examine the Pre-Qualification Submissions in order to determine whether the Participants submitting such meet the requirements of this Invitation, including all Pre-Qualifications Requirements.

Examination of the Pre-

Qualification Submission

The Pre-Qualification Submissions will not be graded by the Tender Committee.

6.2. Requests for Clarifications

a. The Tender Committee may request a Participant to clarify any item contained in its Pre-Qualification Submission and to submit any additional information necessary, in the opinion of the Tender Committee, for the evaluation of its Pre-Qualification Submission.

Requests for Clarifications

b. Participants will comply with the requests of the Tender Committee and will submit all clarification and additional information requested within the time period stipulated by the request.

c. The requests for clarifications will be in writing, delivered to the Participants by email, mail, messenger or facsimile. Their receipt should be confirmed by return mail, messenger or facsimile, to the address or facsimile number or E-mail noted in Clause 5.8 (Sealing and Marking of Pre-Qualification Submissions) above, within forty-eight (48) hours of receipt.

d. Participants’ responses to the requests for clarifications will form an integral part of their Pre-Qualification Submissions. The said responses will be attached to the Pre-Qualification Submission, along with copies of the requests for clarifications, and will replace or take precedence over corresponding items within the Pre-Qualification Submission documents that are contradictory.

e. Participants may be invited to meet the Tender Committee and/or to supply clarifications and/or additional information to the Tender Committee. For that purpose, the Tender Committee may meet any of the Participants in either separate or joint meetings, and/or request clarification and/or additional information and documents from any of the Participants and, in addition, the Tender Committee may ask any of the Participants to modify, amend, correct, withdraw and/or delete any part of their Pre-Qualification Submission.

f. The Tender Committee may exercise its rights under this Clause 6.2 any number of times during the examination of the Pre-Qualification Submissions.

6.3. Announcement of Eligible Participants

Upon the completion of its examination of the Pre-Qualification Submissions, the Tender Committee will announce the Eligible Participants.

Announcement of Eligible

Participants

Without derogating from the generality of the provisions of Clause 6.8 (Reservation

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of Rights) below, following the publication of the Tender Documents, only the Eligible Participants will be invited to submit a bid in accordance with the provisions of the Tender Documents.

Participants who will be deemed by the Tender Committee to have failed to meet any one of the requirements of this Invitation, including with all Pre-Qualification Requirements will not be announced as Eligible Participants.

6.4. Rejection of the Pre-Qualification Submissions

Without derogating from the Tender Committee’s rights under the Invitation and under the Law:

Rejection of Pre-

Qualification Submissionsa. The Tender Committee reserves the right, upon its sole discretion, to reject any

or all Pre-Qualification Submissions.

b. The Tender Committee reserves the right, upon its sole discretion, to reject any Pre-Qualification Submission in the event that the Tender Committee is of the opinion that such Pre-Qualification Submission or any part thereof does not conform to the requirements of the Invitation.

c. Without derogating from the Tender Committee’s rights under the Invitation and under the Law, the Tender Committee reserves the right, upon its sole discretion, to waive minor irregularities or errors in any Pre-Qualification Submission if it appears to the Tender Committee that such irregularities or errors were made inadvertently with the opportunity to remedy its non-compliance within a fixed period of time, through a request for clarifications issued by the Tender Committee to the relevant Participant in accordance with the provisions of Clause 6.2 (Requests for Clarifications) hereto.

6.5. Disqualification of the Pre-Qualification Submissions

Without derogating from the rights of the Tender Committee under the Invitation and under the Law, the Tender Committee, upon its sole discretion, will be entitled to disqualify any Participant, or impose any condition or instruction on its participation in the Pre-Qualification Process and/or the subsequent tender process in the following events:

Disqualification of Pre-

Qualification Submissions

a. Any changes of the holdings of the Members or their Anticipated Holdings in the Participant (if applicable), including with respect to its Guarantors; changes in the Control over a Member, or over a Guarantor; change of a Legal Entity demonstrating compliance with any or all of the Pre-Qualification Requirements; without the prior written approval of the Tender Committee; (for purposes of this Clause 6.5 (Disqualification of the Pre-Qualification Submissions) Participant, Member, Parent Company, a Legal Entity demonstrating compliance with the Pre-Qualification Requirements, a Guarantor, or an Experience Provider, shall be referred to as a "Company");

b. The commencement of a proceeding, in any court of competent jurisdiction, of bankruptcy, receivership, liquidation or reorganization proceedings against a Company, or any similar situation, as determined by the Tender Committee, or if a Company has become insolvent, or if permanent, or if an interim receiver

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or liquidator is appointed over a Company, unless such proceedings are discharged within a reasonable period of time at the Tender Committee’s sole discretion and determination and except for the purposes of merger or restructuring on terms approved by the Tender Committee in writing;

c. Any Company (including Interested Parties therein) is or becomes a resident of or domiciled in a country which does not have diplomatic relations with the State or of a country which does not have proper and reliable trade relations with the State;

d. Any director or manager of a Company (including Interested Parties therein) who is expected to have any control over or any involvement in the Pre-Qualification Process, the tender process or the execution of the Works is or becomes a resident or a national of a country which does not have diplomatic relations with the State or of a country which does not have proper and reliable trade relations with the State;

e. Any director or manager of a Participant (including Interested Parties therein and officers), Member or Experience Provider, have been convicted in an Offence, or in the event of any criminal proceedings with respect to an Offence are being conducted against either of them.

f. For the purpose of this Clause the term "Offence" shall mean: a criminal offence, in Israel or abroad, which constitutes a felony ")עוון(" or worse, or another criminal offence which resulted in a prison sentence of at least one (1) year (or longer), and which verdict was given during the last seven (7) Years preceding the Pre-Qualification Submission.

g. Employment or engagement of any Legal Entity as defined under Clause 7.12 (Advisors to the Tender Committee) below by any Company, directly or indirectly, for the purposes of the Pre-Qualification Process or the subsequent tender process, without the prior written approval of the Tender Committee;

h. In the event of unusual events which materially and adversely affect, to the Tender Committee judgment, the Company's financial ability to execute the Works;

i. The Financial Statements submitted under Clause 4.2.5 (Content and Format of the Submission) above of a Company's contain a going concern comment by the auditors regarding said Company's ability to manage its business activities;

j. The submission of any false or misleading information to the Tender Committee.

k. The Participant shall be required to notify the Tender Committee of the existence, during the Pre-Qualification Process, of any of the events described in this Clause 6.5, within a reasonable period of time, under the circumstances. The Tender Committee may base its decision under this Clause 6.5 on the information provided by the Participant as well as on any other information available to it, and may request the Participant to provide it with additional information, as the Tender Committee deems necessary.

l. The Tender Committee may without derogating from the Participants’

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obligation to provide the Tender Committee certain information, perform independent examinations of the Participant, the Members, the Guarantor or the Experience Provider, as applicable, and may approach third parties with requests to provide information with respect to certain Participants, Guarantors, Members or Experience Provider(s), as applicable, as the Tender Committee deems necessary at its sole discretion.

6.6. Issuance of the Tender Documents; Update Statement

It is expected that pursuant to the Tender Documents, each Eligible Participant will be required to include updated financial statements according to the provisions of the Tender Documents and a statement detailing any and all changes with respect to the Participant, its Members, and, if applicable, its Guarantors and/or its Experience Provider, which will have occurred since the Pre-Qualification Submission Date. It is expected that even in the absence of any changes, a statement to that effect will be required.

Issuance of the Tender

Documents; Update

Statement

The Tender Committee will review the information and, without derogating from its rights under the Law or under the Tender Documents, shall be entitled to either disqualify any Eligible Participant in the event that such Eligible Participant will no longer meet the requirements of this Invitation or impose any condition or instruction on its participation in the tender process.

6.7. Formation of a Single Purpose Company

The Participants hereby acknowledge that in the event that the Successful Bidder is an SPC, it shall be obliged to incorporate a special purpose company in the State (if not already incorporated), immediately after being awarded the tender and as a condition precedent for the execution of the Agreement,

Single Purpose Company

The shares and other interests in such SPC will be held by either the Members who participated, through the Participant, in the Pre-Qualification Submissions and were approved by the Tender Committee pursuant to the Pre-Qualification Process. The shareholdings and the holdings of other interests by each such Member in the said SPC shall be as provided in Pre-Qualification Form "B".

6.8. Reservation of Rights

a. All Participants acknowledge that the Works description as specified in this Invitation is general and indicative only. The issuance of this Invitation is not intended to give rise to or create any representation, undertaking or warranty on behalf of the Tender Committee or anyone on their behalf with respect to the Works.

Reservation of Rights;

Definition of the Project

b. Furthermore, the Tender Committee reserves the right to redefine the Works, and the terms and conditions for the selection of the Eligible Participant (including additional pre-qualification or minimum requirements), as it shall deem appropriate and/or to include additional threshold or minimum requirements in the Tender Documents .

For the removal of doubt, subject to the provisions of this Invitation, participation in this Pre-Qualification Process shall not confer upon a Legal

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Entity, a Participant or an Eligible Participant any right with respect to the Works or any future proceedings which will be conducted with respect thereto, including the tender process.

c. The issuance of this Invitation is not intended to guarantee publication of the Tender Documents or the initiation, execution or the implementation of the Works or any part thereof. It is expressly understood that the participation of any Legal Entity or Participant on any intention in their Pre-Qualification Submissions and the making of any deductions, interpretations or conclusions from the intention which is made available by the Tender Committee is at the Entity or Participant’s sole risk and responsibility. The Tender Committee and/or anyone on their behalf, shall not be responsible in any respect to any expense, loss or damage whatsoever suffered by any Legal Entity or Participant, their employees, officers, agents, or any other persons for whom any Legal Entity or Participant may be contractually or legally responsible or accountable, by reason of any use of information contained in this Invitation in connection therewith, or any action or forbearance in reliance thereon.

Issuance of Tender

Documents

d. Without derogating from the generality of the above, the Tender Committee reserves the right not to proceed with this Pre-Qualification Process, or with the tender process or any part thereof for any reason whatsoever including for reasons concerning financial resources, and may terminate or cancel this Invitation or any other proceedings which are conducted with respect thereto, or with respect to the Works or any part thereof, at any time, as it shall deem appropriate.

e. Neither the Tender Committee nor anyone on its behalf shall be responsible in any respect to any expense, loss or damage whatsoever suffered by any Legal Entity or Participant, their employees, officers, agents, or any other persons for whom any Legal Entity or Participant may be contractually or legally responsible or accountable, and shall not be required to compensate the Legal Entity or the Participant, their employees, officers, agents, or any other persons for whom the Legal Entity or Participant may be contractually or legally responsible or accountable.

f. The Tender Committee may publish a new invitation to pre-qualify or other proceedings with respect to the Works, which may include other pre-qualification requirements, or require additional Pre-Qualification or minimum requirements in the Tender Documents, or publish a different project, inviting or not the Participants or Eligible Participants to take part in such process, or execute the Works in other way deemed appropriate, including not by issuing a tender.

7. TENDERING RULES

7.1. Governing Law and Jurisdiction

a. The Pre-Qualification Process shall be governed and construed in accordance with the provisions of all applicable Laws, including the Mandatory Tenders Law 5752-1992, and the Regulations.

Governing Law

b. The applicable court in Tel Aviv shall have the sole and exclusive jurisdiction Jurisdiction

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over all matters and all disputes arising in connection with the Pre-Qualification Process and the tender process.

c. By submitting a Pre-Qualification Submission, a Participant, its Members, Guarantors and Experience Providers (to the extent applicable) and anyone on their behalf, will be deemed to have waived any claim with respect to the Invitation and/or the tender process as well as their right to seek any injunction or interim order or any other remedy or relief from the courts with respect to the Invitation and/or the tender process

7.2. Conformity with All Applicable Laws

Each Participant is assumed to have obtained legal advice. The Participants and the Pre-Qualification Submissions shall abide by the Laws. Participants shall be subject to any changes in any of the Laws, should such changes be introduced during the Pre-Qualification Process.

Conformity with Applicable

Law

7.3. Mandatory Industrial Cooperation

a. Without derogating from the generality of the provisions of this Invitation, each Participant confirms and undertakes to comply with the requirements of the Mandatory Tender Regulations (Mandatory Industrial Cooperation), 5767-2007 and the instructions of the Industrial Cooperation Authority ("ICA") regarding the requirements of industrial cooperation with respect to the execution of the Works.

Mandatory Industrial

Cooperation

b. As part of the tender process, each Eligible Participant may be required to submit to the ICA, an industrial cooperation undertaking in a form to be provided by the Tender Committee.

c. As of the date of publishing this Invitation, to the extent of industrial cooperation currently required by the ICA, is equal to 35% (for suppliers of non-excluded products and services from GPA member states, the extent of industrial cooperation is 20%) of the total value of the imported products or services included in the bid submitted in the tender process. it is hereby clarified that NTA is not obligated to inform the Participants of any change in the abovementioned.

d. For additional information concerning the fulfillment of the industrial cooperation undertaking, Participants may address the ICA at:

Industrial Cooperation Authority

Ministry of Industry Trade and Labor

86 Menachem Begin Rd.

P.O. Box 36049

Tel Aviv 67138, Israel

Tel.972-3-734 7515

Fax.972-3-734 7639

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7.4. The Invitation

Without derogating from the provisions of Clauses 5.1 (Compliance with the Requirements of the Invitation) and 5.2 (No Unauthorized Modification) above, the Pre-Qualification Forms are also provided to all Participants in MS-Word format.

7.5. Order of Precedence

Should a discrepancy be found between any parts of the Invitation, the following order of precedence will apply with respect to the other parts of the Invitation:

Order of Precedence

a. Part A;

b. Part B.

7.6. Severability

The invalidity or unenforceability of any part, provision or section of this Invitation and any of its Appendices shall not affect the validity or enforceability of other parts, provisions or sections thereof. Any invalid or unenforceable part, provision or section shall be deemed severed from this Invitation, and this Invitation shall be construed and enforced as if this Invitation did not contain such invalid or unenforceable part provision or section.

Severability

7.7. Access to Documents

Copies of this Invitation are provided to all Participants for no charge and may be downloaded from NTA's website at: http://www.nta.co.il/site/en/neta.asp?pi=464 or from the following file server: http://ftp.nta.co.il (login: 1, password: 123456). No participation fee is required for participation in this Pre-Qualification Process.

Access to Documents

7.8. Cost of Participation in the Pre-Qualification Process

Any and all costs and expenses incurred by Legal Entities (including Participants) and anyone on their behalf and connected to their participation in the Pre-Qualification Process will be borne by such Legal Entities or Participants. Legal Entities or Participants will not be reimbursed by the Tender Committee for any costs or expenses so incurred thereby for any reason or circumstance.

Cost of Participation

7.9. Language of this Invitation

This Invitation is published in English. However, the Tender Committee reserves the right to issue a Hebrew version of any part thereof.

In the event of a discrepancy between the English and Hebrew versions of a certain document, the English version shall prevail.

Language

7.10. Clarification of this Invitation

a. Participants are responsible for examining, with appropriate care, this Invitation, including all Appendices and Addenda thereto, and for any and all conditions which may in any way affect their participation in the Pre-Qualification Process, including in the preparation and submission of the Pre-

Clarification of the Invitation

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Qualification Submissions.

b. Participants, may raise questions and request clarifications or interpretations to this Invitation, in writing, from the Tender Committee, by no later than the questions submission deadline under Clause 1.6 (Anticipated Schedule) above. Such requests shall be addressed to the Tender's email address at: [email protected].

c. Although the Tender Committee has no obligation to clarify or interpret this Invitation, the Tender Committee may issue an Addendum for the purposes of clarification or interpretation in response to such questions or requests, in accordance with the provisions of Clause 7.11 (Addenda) below.

d. The Tender Committee shall not be bound by, and Participants shall not rely on, any oral interpretation or clarification to this Invitation.

e. It is hereby clarified, that when replying to a question or clarification, the Tender Committee will not necessarily use the exact wording of the submitted request for clarification. It is further clarified that any response or non-response by the Tender Committee to any submitted request for clarification by a Participant shall not be construed as approval or agreement unless explicitly stated so by the Tender Committee.

f. The Tender Committee may decide, at its exclusive discretion, to address a question or request for clarification or interpretation of this Invitation raised by Participants following the deadline for the submission of questions.

7.11. Addenda

a. Notwithstanding any of the provisions of this Invitation and without derogating from the discretion of the Tender Committee under the provisions of Clause 6.8 (Reservation of Rights) above, the Tender Committee reserves the right to revise, modify, amend, clarify, add, eliminate or otherwise change this Invitation or any part thereof, including but not limited to any instruction, requirement, specification, Pre-Qualification Requirement(s) or date contained therein, up to the dates set for the submission of Pre-Qualification Submissions. Such revisions, if any, shall be announced by written Addenda.

Addenda

b. Should any Addendum result from any request for clarification or interpretation submitted by a Participant, the identity of that Legal Entity or Participant shall not be disclosed.

c. Copies of Addenda shall be published on the NTA's website specified under the provisions of Clause 7.7 ( Access to Documents) above. It is hereby emphasized that Addenda shall not be furnished individually to any Participant. Each Participant is responsible for frequently visiting the said website and for reviewing all Addenda. Each Participant shall be deemed to have received all Addenda so published.

d. Receipt of requests submitted by Legal Entities or Participants in accordance with the provisions of Clause 7.10 (Clarification of this Invitation) above will not restrict the discretion of the Tender Committee in any way, and it will be free to exercise its rights under this Clause 7.11 (Addenda) whenever it is of the

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opinion that this Invitation or any part thereof requires amendment or revision.

e. Without derogating from the generality of the provisions of Clause 1.6 (Anticipated Schedule) above, the date set for the submission of Pre-Qualification Submissions may be postponed by such number of days as shall be necessary, in the opinion of the Tender Committee, to enable the Participants to revise their Pre-Qualification Submissions as a result of any Addendum issued. The announcement of such new date, if any, will be included in the Addendum.

7.12. Conflict of Interests

a. Participants acknowledge that in preparation for submission of their Pre-Qualification Submissions and throughout the performance of the Works, they are strictly prohibited from engaging, employing or be otherwise assisted by, directly or indirectly (including through subcontractors), any consultant or expert who was in the 3 years preceding the date of publication of this Invitation or still is employed or engaged by NTA with respect to the Red Line Project or whose employment or engagement may be in conflict with NTA's interests, without NTA’s prior written approval, which approval shall not be unreasonably withheld, at NTA's sole discretion. The Participants are requested to verify the above with their consultants and experts.

Notwithstanding the above, Participants acknowledge that they may not employ, or engage or be otherwise assisted by, directly or indirectly (including through subcontractors), any of the entities specified in Appendix "B".

b. At any time throughout the performance of the Works, NTA shall be entitled to reasonably require the Successful Bidder, by written notice, to replace any consultant, expert, supplier or subcontractor, for any justified reason, at NTA's sole discretion, including in the event such engagement of such entity may be in conflict with NTA’s interest, and the Successful Bidder shall replace such consultant, expert, supplier or subcontractor with an appropriate person or entity with equivalent skills and abilities which shall not be in conflict with NTA's interest as specified above (and is not listed in Appendix "B"), as soon as possible, and no later than within thirty (30) days following NTA’s demand. It is clarified, that the Successful Bidder must receive NTA’s prior approval for the substitute person or entity, which approval shall not be unreasonably withheld at NTA's sole discretion.

Advisors to the Tender

Committee

7.13. Intellectual Property Rights

The Invitation documents and any and all intellectual property right therein are exclusively owned by the Tender Committee and are supplied to the Participants for the purpose of participation in the Pre-Qualification Process, only.

Intellectual Property

Rights

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APPENDIX "B"

LIST OF ADVISORS

(i) Geoconsult ZT GmbH.

(ii) Dr. Sauer & Partner GmbH.

(iii) Müller + Hereth GmbH.

(iv) Weissbach Consult.

(v) PB - Parson Brinckerhoff.

(vi) INTECSA - INARSA, S.A.

(vii) IBI GROUP.

(viii) DHV BV.

(ix) YSS Engineering Consultants Ltd.

(x) Z. Hemly Engineers ltd.

(xi) Gash Building and Bridge Engineering.

(xii) Muller-Shnabel-Zachar Consulting Engineers.

(xiii) Dr. Israel Keissar, G.Y.A Soil and Foundation Engineering Ltd.

(xiv) Shaar Project & Bid Management Ltd.

(xv) Amphibio Environment Ltd.

(xvi) BDO Ziv Haft Consulting Group.

(xvii) SHEVAH ENGINEERING & INITIATION LTD.

(xviii) LDD Ltd.

(xix) Ecolog Engineering Ltd.

(xx) Netivei-Hakama

(xxi) Egisrail.

(xxii) Delcan.

(xxiii) Northcroft.

(xxiv) Poyry.

(xxv) (PARSONS) DeLEUW CATHER.

(xxvi) HC – Hamburg Consult.

(xxvii) Zeta Tech.

(xxviii) AMCG GROUP.

(xxix) LTK.

(xxx) S. Netanel Eng. Consulting.