October 25, 2009

Securities AuthorityTel Aviv Stock Exchange Ltd.

Re:Supplementary Immediate Report on the Calling of an Extraordinary General Meeting of Shareholders of The Phoenix Holdings Ltd. in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730-1970, and in accordance with the Securities Regulations (Transaction between a Company and a Controlling Shareholder Therein), 5761-2001

Further to the Immediate Reports issued by the Company on August 21, 2008 (Reference No. 2008-01-241449), on November 19, 2008 (Reference No. 2008-01-322584), on August 10, 2009 (Reference No. 2009-01-191364), on August 21, 2009 (Reference No. 2009-01-204540), on September 24, 2009 (Reference No. 2009-01-241086), on October 6, 2009 (Reference No. 2009-01-248895) ("the Supplementary Report"), on October 14, 2009 (Reference No. 2009-01-255282) and on October 15, 2009 (Reference No. 2009-01-256809), concerning the entry of the Company and The Phoenix Insurance Company Ltd. (a wholly controlled subsidiary of the Company) ("Phoenix Insurance") into an agreement amending the Loan Agreements which were signed between the Company and Phoenix Insurance (jointly: "the Lender"), and Delek Real Estate Ltd. ("Delek Real Estate" or "the Borrower") ("the Transaction Report"), the Company herewith provides supplementary details to the Transaction Report, with respect to the description of the principles of the transaction on the agenda of the Extraordinary General Meeting of Company Shareholders, in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730-1970, and in accordance with the Securities Regulations (Transaction between a Company and a Controlling Shareholder Therein), 5761-2001.

The Extraordinary General Meeting of Company Shareholders will be held on Wednesday, November 4, 2009, at 4:00 p.m., for the purpose of approving the Company's entry into the aforesaid amending agreement to the Loan Agreements.

1.Section 2 of the Transaction Report – Description of Principles of the Transaction on the Agenda of the Extraordinary General Meeting of Company Shareholders

As set forth in the Supplementary Report, Delek Real Estate requested the Lender to consider further changes to the Loan Agreements, including as regards the financial criteria and/or rating covenant included in the Loan Agreements, beyond the changes detailed in the Transaction Report.

Wording of proposed resolution:

Further to the resolutions of the Audit Committee and subsequent resolutions of the Board of Directors from August 9, 2009, October 14, 2009 and October 22, 2009 – to approve Delek Real Estate's request for a deferral of the principal and interest payments on the First Loans and the Second Loan (as defined in the Transaction Report), which stand respectively at NIS 30,123,684 and NIS 11,002,624, and which, according to the terms of the Loan Agreements (as defined in the Transaction Report), were to have been paid on August 2, 2009 and August 20, 2009. Said requested deferral of the payments is until January 1, 2010.

In addition, to approve Delek Real Estate's request that, subject to compliance with all the cumulative conditions set forth below, the Lender not be permitted to demand immediate repayment of the debt, even if Delek Real Estate fails to meet the financial criteria and the credit rating of Delek Real Estate falls below the aforesaid rating, in consideration for all of the following changes:

  • Change in the amortization schedule and advancement of the times of expected payments:
  • A payment in the amount of NIS 10 million will be made by November 30, 2009.
  • A payment in the amount of NIS 40 million plus interest and linkage differentials, which was to have been made in August 2009, and which, as reported in the Supplementary Report, it was agreed to pay on February 20, 2010, will be advanced to January 1, 2010.
  • The forthcoming payments from August 2, 2010 and August 20, 2010, in the amount of NIS 40 million plus interest and linkage differences, will be advanced to July 1, 2010 and the amortization schedule will be shortened.
  • The final payments in the amount of NIS 50 million due in the years 2013 and 2014 will be advanced to July 1, 2010.
  • An additional amount of NIS 30 million due in the years 2012 and 2013 will be paid by January 1, 2011.

In other words, by January 1, 2011, Delek Real Estate will have made the above payments for a total of NIS 170 million with the addition of interest and within a shortened period, such that the balance of the loans after these payments will amount to NIS 65 million plus interest and linkage differences.

  • Interest at a rate of 2.5% will be added to the present interest rate, i.e. – in respect of the First Loan, as specified in the Transaction Report, 8.75% per annum; in respect of the First Loan, as further specified in the Transaction Report, 8.6% per annum; and in respect of the Second Loan, 9.4% per annum.
  • Furthermore, Delek Real Estate will pledge additional assets, namely, its holdings in Vitania Ltd. (48% of all Vitania shares), and grant an option to add an additional 2% of self-owned shares of Vitania upon a sale pursuant to the realization of the pledge ("pledge of shares and rights"). In the event that Delek Real Estate transfers to Delek Real Estate Yielding Properties ("Delek Yielding Properties") all the company's shares and rights in Vitania, Delek Yielding Properties will be required to pledge the Vitania shares in the Lender's favor, and the existing pledge in the Lender's favor on the shareholders' loans to Delek Yielding Properties will increase up to a limit of NIS 280 million. The additional pledge will be released simultaneously with the defrayal of the payments on account of the loan.
  • These additional collaterals will be released only upon defrayal of payments for a total of NIS 170 million (instead of NIS 90 million as stated in the Supplementary Report) and payment of the outstanding loan balance of NIS 65 million plus interest and linkage differences.
  • In addition, a lot designated for construction of a commercial center in Kfar Saba and a lot owned by Delek Real Estate in Kfar Silver will be pledged in favor of the Company and Phoenix Insurance (these pledges will be lifted only after repayment of all the loans).

1.1The Required Majority for Passing the Resolution in the General Meeting

The majority required for approval of the resolution on the agenda is a majority of the votes of shareholders entitled to participate in the meeting, and present and voting at the meeting in person or by proxy or through a voting instrument, provided one of the following is satisfied:

1.1.1The majority vote at the meeting must include at least one third of the total votes of shareholders participating in the vote who have no personal interest in the approval of the resolution. The total count of said shareholders’ votes may not take into account abstainee votes.

1.1.2.Total dissenting votes among the shareholders mentioned in section 1.1.1 above may not exceed one percent of the total voting rights in the Company.

1.2Record Date

1.2.1The record date for determining eligibility to vote at the meeting under section 182 of the Companies Law, 5759-1999, and under regulation 3 of the Companies Regulations (Voting by an Instrument and Position Statements), 5766-2005, is September 21, 2009, at the end of the trading day on the Tel Aviv Stock Exchange ("the Record Date"). The deadline for the submission of position statements to the Company by its shareholders is September 13, 2009.

1.2.2In accordance with the Companies Regulations (Proof of Ownership for Voting in General Meetings), 5760-2000, a shareholder having a share registered in his favor with a stock exchange member, that is included among the shares registered in the shareholders register in the name of the nominee company, will furnish to the Company a certificate from the stock exchange member with whom his right to the share is registered, attesting to his ownership of the share on the Record Date, at least 48 hours before the designated hour for convening the meeting or the adjourned meeting, as stated below, in accordance with the provisions of the aforesaid regulations and the form in the schedule to those regulations ("confirmation of title").

1.3Quorum

The quorum for holding the general meeting is the presence of at least three shareholders holding at least one-third of total voting rights in the Company, within half-an-hour after the time set for opening the meeting.

If no quorum is present within half-an-hour after the time set for the meeting, the meeting will be automatically adjourned by one week, to the same time and place. If no quorum is present within half-an-hour after the time set for the adjourned meeting, then the presence of at least two shareholders will constitute a quorum for holding the adjourned meeting.

A shareholder wishing to appoint an attorney to participate in the meeting, will deposit the power-of-attorney at the Company secretariat’s offices at the aforementioned address, at least 48 hours before the designated hour for convening the meeting or adjourned meeting.

1.4Voting Instrument and Position Statements

A shareholder may vote in the general meeting with respect to the resolution on the agenda by means of a voting instrument, as set forth below. The wording of the voting instrument and position statements in respect of the aforesaid meeting can be found on the distribution site of the Israeli Securities Authority ( and on the website of the Tel Aviv Stock Exchange Ltd. ( A shareholder may apply directly to the Company to receive from it, free of charge, the wording of the voting instrument and the position statements (should any be submitted to the Company). Voting will be done on the second part of the voting instrument, as published on the distribution site of the Israeli Securities Authority indicated above.

The deadline for the submission of a voting instrument is: Sunday, November 1, 2009, at 4:00 p.m.

There has been no change in the deadline for the submission of a position statement to the Company by Company shareholders.

A Stock Exchange member must send by email, free of charge, a link to the wording of the voting instrument and the position statements on the distribution site, to any shareholder not registered in the shareholders register and whose shares are registered with such Stock Exchange member, where the shareholder has so requested, provided that the notice containing such a request is submitted prior to the record date for a particular securities account.

A shareholder whose shares are registered with a Stock Exchange member may receive the confirmation of title from the Stock Exchange member through whom he holds his shares, at the branch of the Stock Exchange member or, if he so requested, by postal delivery to his address solely against postage. Such a request must be submitted in advance for a particular securities account.

Sincerely yours,

THE PHOENIX HOLDINGS LTD.

The above is a freely rendered translation of the main points of the report. The formal and binding wording is the wording of the Immediate Report in Hebrew as issued by the Company.

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