Whereas:

a)           The Board of Governors approved a resolution in February 2005 regarding the forgiveness of debt for 5 Kibbutzim situated near the confrontation line with the Gaza Strip border;

b)           In the past year there has been an escalation in the security situation in this region and additional settlements have become vulnerable to hostile activity, acts of terror, financial difficulties and demographic threats, especially the settlements within geographical proximity and in great danger to injury from rocket and mortar fire;

c)            These settlements, listed in the attached Appendix A to this Resolution, owe monies to JAFI as a result of loans granted to them from JAFI, in an amount of loans of approximately 26.5 million
NIS, as of May 2008, the collection of which is spread over the coming years.

d)           The Government of Israel is acting to strengthen these settlements, and has approached JAFI with a request that JAFI assist these settlements by forgiving debts, in a similar manner to the debts forgiven by JAFI in February 2005 and to the debts forgiven by resolution of the Board of Governors regarding the northern confrontation line in June 2000;

e)           JAFI considers it to be a national imperative to assist these settlements and is interested in strengthening and firmly establishing  them;

Now therefore be it resolved as follows:

1.    To implement debt forgiveness to the settlers in the settlements listed in Appendix A (settlements and settlers), who are in collection directly to JAFI from the date of adoption of this decision, applicable to repayable loans for means of production and for infrastructure (opposed to standing loans and loans for construction), all of which were awarded within the context of the Settlement Agreement.

2.    Any debt forgiveness will only relate to the repayable debt of the settlement and settlers and not to proceeds deposited within the Gal Law administration for distribution to creditors or to those currently in receivership or liquidation. The 75% standing loans (for means of production) will remain as such, but will not be realized as long as the agricultural nature of the settlement is preserved, subject to the Settlement Agreement, and all the rights of JAFI in connection with the standing loans, as well as its other rights according to the Settlement Agreement and the tri-partite contract are hereby preserved.

3.    Any debt will be forgiven only in a way which ensures the direct benefit of the respective settlements and settlers themselves and not to any of their creditors.

4.    The Finance Department of JAFI is authorized to forgive the debts of the settlements as defined hereinabove and of their individual settlers, according to the principles set-out in this resolution. For that purpose, the Finance Department of JAFI is authorized to conduct negotiations, enter into agreements and sign documents which implement this resolution.

5.    Debt forgiveness shall apply only after the signing of an explicit agreement and shall apply from the day such agreement is signed and shall not apply retroactively. In no case shall monies paid to JAFI on account of debt be returned.

6.    Nothing in this resolution shall be interpreted to detract from the rights and claims of compensation that JAFI may have in any case of change of zoning of the land of the settlement or in expropriation/reduction of areas assigned to the settlement.

7.    This resolution will only apply to the settlements listed in Appendix A and their settlers and will not be considered as a precedent for any other area in
Israel or for any other settlement. It is made without any legal obligation whatsoever, and does not detract from any of JAFI's outstanding claims or contentions.

8.    No debt is considered to be waived or forgiven by mere virtue of the adoption of this resolution.

Appendix A