Unassociated Document


     

    Exhibit
      4.35


    DOCUMENT
      OF PRINCIPLES OF THE TRANSACTION

    


    SIGNED
      ON JULY 26, 2007

    


    The
      principal points of the transaction set forth below give expression to the
      agreements reached by:

    


    
      	
              1.

            	
              ORIN
                PROVIZOR HOLDINGS LTD.,
                Private Co. 51-3097980

            


    

    of
      8
      Hamasger Street, Or Yehuda

    (hereinafter:
      “Orin”)

    


    
      	
              2.

            	
              M.A.Sh.
                – M.I.S. LTD.,
                Private Co. 51-3326199

            


    

    of
      26
      Sakharov Street, Rishon-le-Zion 

    (both
      referred collectively below as: “the
      Sellers”)

    of
      the first part;

    


    Mr.
      GUY PROVIZOR,
      I.D.
      058087214

    of
      7
      Chavatselet Street, Alfei Menashe

    (hereinafter:
      “Guy”)

    of
      the second part;

    


    EDEN
      NATURAL HEALTH MARKET LTD. 

    Private
      Co. 513330209

    of
      8
      Hamasger Street, Or Yehuda

    (hereinafter:
      “the
      Company”)

    of
      the third part;

    


    BLUE
      SQUARE ISRAEL LTD. Publ. Co. 5200042847

    of
      2 Amal
      Street, Park Afeq, Rosh Ha’ayin 

    (hereinafter:
      “the
      Purchaser”)

    of
      the fourth part;

    


    
      	
              1.

            	
              The
                transaction–
                the Purchaser hereby acquires 51% of the shares of the Company, with
                the
                intention of the parties being to act as shareholders in the Company
                for
                the accelerated development of the Company (in the course of maintaining
                the Company’s profitability) and for an issue of its shares to the public
                on the stock exchange. Some of the Company’s shares will be transferred to
                the Purchaser by the Sellers and some will be allotted to it by the
                Company, so that at the date of closing of the transaction the Purchaser’s
                total holdings in the Company will be 51% of its issued
                capital.

            


    

    


    
      	 	
              The
                Sellers and the Company declare and undertake to the best of their
                knowledge:

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (a)

            	
              The
                Company’s financial statements fairly reflect the state of the Company’s
                business, the results of its operations and its cash flows for the
                dates
                and periods mentioned in them. The Company’s financial statements have
                been drawn up according to the law which applies to the preparation
                thereof and in accordance with accepted accounting principles, which
                are
                consistently applied in relation to previous reporting periods. In
                addition, at the date of the Company’s financial statements there is no
                liability and/or obligation (whether absolute, contingent or otherwise)
                of
                a material nature of the Company which has not received proper expression
                or in respect of which suitable provisions have been made in the
                Company’s
                financial statements.

            


    

    


    
      	 	
              (b)

            	
              All
                the Company’s operations in connection with the conduct of its business up
                to the date of signing of this Agreement were performed in accordance
                with
                the laws that apply to it, and the Company and/or the Sellers are
                not
                aware that any material breach was committed of any of the provisions
                of
                such laws.

            


    

    


    
      	 	
              (c)

            	
              They
                have furnished the Purchaser with all the material information in
                their
                possession and under their control, which is required by a reasonable
                buyer for purposes of his entering into a transaction for acquiring
                shares
                of the Company.

            


    

    


    
      	 	
              (d)

            	
              There
                is no legal, contractual or other bar or impediment to the Sellers
                and the
                Company entering into the transaction and fulfilling all their obligations
                pursuant thereto.

            


    

    


    
      	
              2.

            	
              Purchase
                price–
a
                sum of NIS 22,500,000 which will be paid by the Purchaser to the
                Sellers
                on the effective date and against transfer of 50% of the shares of
                the
                Company to the Purchaser, where such shares are free and clear of
                any
                debt, charge, attachment or any third party
                rights.

            


    

    


    
      	
              3.

            	
              Providing
                of finance to the Company–
                (a) the Purchaser undertakes to transfer to the Company an additional
                sum
                of NIS 33,000,000 which will be injected into the Company by the
                Purchaser
                as a shareholder’s loan on the effective date. Against the furnishing of
                the shareholder’s loan the Company will allot shares to the Purchaser in a
                quantity that will bring the Purchaser’s total holdings to 51% in
                consideration for which the Purchaser shall pay the Company the par
                value
                thereof. This shareholder’s loan will bear linked interest accumulating at
                a rate of 4% per annum, with it being agreed that at any time at
                which it
                may be agreed on repayment of the loan referred to in this sub-clause
                (a)
                or part thereof (whether on account of the interest or on account
                of the
                principal) the Sellers will be entitled to receive a preferential
                dividend
                from the Company in an amount equivalent to the ratio between the
                Sellers’
                holdings in the Company at such time and the Purchaser’s holdings in the
                Company at such time, where same is multiplied by the amount which
                has
                been repaid to the Purchaser (for the sake of example: in a case
                in which
                at the date of such repayment the Purchaser holds 51% of the shares
                of the
                Company and the Sellers hold 49% of the shares of the Company, the
                Sellers
                will be entitled to receive a preferential dividend in an amount
                equivalent to 49/51 of the amount that has been repaid to the Purchaser)
                (hereinafter: “the
                Preferential Dividend”),
                and for that purpose the Company shall, prior to the signing of this
                Agreement, allot to each of the Sellers a preference share (against
                payment of the par value thereof) the sole and exclusive right that
                will
                attach thereto is to receive the Preferential Dividend simultaneous
                with
                and up to completion of repayment of the aforesaid shareholder’s loan, in
                accordance with the terms and conditions of this Clause 3. Repayment
                of
                this shareholder’s loan shall be made solely simultaneous with payment of
                the Preferential Dividend to the Sellers as aforesaid;
                

            


    

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (b) The
      Purchaser undertakes to transfer to the Company an additional shareholder’s loan
      in a sum of NIS 14,000,000 which will be provided by the Purchaser as a
      shareholder’s loan to the Company on the date of providing the loan referred to
      in sub-clause (a) above, which bears interest at the same rate as the rate
      of
      interest in respect of the Purchaser’s short-term loans, where the interest in
      respect of the loan referred to in this sub-clause (b) shall be paid regularly
      once each quarter, and the principal shall be repaid in accordance with the
      Company’s ability.

    


    If
      the
      conditions for the giving of a bonus to the CEO in an amount of $5,000,000
      as
      stated in Clause 4 below are fulfilled, one-half of the shareholder’s loan which
      the Purchaser has provided as stated in sub-clause (b) will be deemed to be
      a
      shareholder’s loan to which all the conditions mentioned in connection with the
      shareholder’s loan as referred to in sub-clause (a) will apply, including with
      regard to calculations of the interest and repayments to the Purchaser
      simultaneous with payment of dividends in identical amounts to the
      Sellers.

    


    If
      the
      conditions for the giving of a bonus to the CEO in an amount of $2,500,000
      as
      stated in Clause 4 below are fulfilled, then one-quarter of the shareholder’s
      loan which the Purchaser has provided as mentioned in sub-clause (b) will be
      deemed to be a shareholder’s loan to which all the conditions mentioned in
      connection with the shareholder’s loan as referred to in sub-clause (a) shall
      apply, including with respect to calculations of the interest and repayments
      to
      the Purchaser simultaneous with payment of dividends in identical amounts to
      the
      Sellers.

    


    It
      is
      agreed that any payment and discharge of any of the shareholder’s loan mentioned
      in this Clause 3 above, or any portion thereof, shall be effected by way of
      payment and discharge of two shareholder’s loans mentioned above simultaneously,
pro
      rata.

    


    
      	
              4.

            	
              Repayment
                of shareholder’s loans and release of guarantees–
                the
                Sellers are entitled to withdraw from the Company within 14 days
                from the
                date of injection of money into the Company as stated in Clause 3(a)
                above
                in repayment of a shareholder’s loan in a sum of NIS 4,700,000. In
                addition, the Purchaser alone is responsible for providing any guarantee,
                collateral and financing that may be required in connection with
                the
                Company’s activities and within 60 days from the effective date it shall
                release the Sellers as well as anyone who provided a personal guarantee
                or
                collateral on behalf of the Sellers, from guarantees and collateral
                that
                were given by the Sellers to banks, credit card companies and to
                suppliers
                in connection with the Company’s
                operations.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              5.

            	
              CEO–
                the parties shall mutually undertake that as long as Orin is a shareholder
                in the Company, managerial services will be provided by Orin to the
                Company which will include installing Mr. Guy Provizor in the post
                of CEO
                or as chairman of the Company, against payment of management fees
                to Orin
                in a sum of NIS 85,000 per month + V.A.T., which will be paid against
                receipt of a valid tax invoice from Orin and will be revised and
                updated
                once each year in accordance with the rise in the Consumer Price
                Index,
                and in circumstances where Guy will have all the powers and authorities
                required for developing the business of the Company. For the avoidance
                of
                doubt it is clarified that commencing from the effective date no
                employer-employee relationship will apply between the Company and
                Mr. Guy
                Provizor, and that Orin shall be the party who bears, to the exclusion
                of
                the Company’s liability, all the payments of whatsoever nature to Guy
                Provizor in connection with his serving as CEO or as chairman of
                the
                Company (including and without derogating from the generality of
                the
                foregoing, salary, social conditions, severance pay, Company car,
                telephone and so forth).

            


    

    


    
      	 	
              Bonus–
                in
                a case that: (a) in July 2011 the Company owns 8 branches (the 2
                existing
                branches and 6 new branches) and (b) the percentage operating profit
                of
                the Company’s branches which are put into operation up to the end of 2009
                amount in 2010 to at least 7.5%, then and in that event Mr. Guy Provizor
                will be entitled to receive from the Company a one-time bonus in
                a sum of
                5,000,000 US dollars. In a case in which only one of the targets
                mentioned
                in Clauses (a) and (b) above is achieved, then Mr. Guy Provizor will
                be
                entitled to receive from the Company a one-time bonus in a sum of
                2,500,000 US dollars. In the event that one or both of the aforesaid
                targets is not achieved due to reasons that are not dependent on
                Guy
                and/or in a case in which the Company is close to attaining the targets,
                a
                bonus will be paid by the Company to Guy in an amount that will be
                decided
                by Mr. Dudy Weisman.

            


    

    


    
      	
              6.

            	
              Management
                of the Company–
                the Company shall be conducted independently and separately, except
                for
                the financial and control aspect and reports required to the Purchaser’s
                legal department, having regard to the fact that the Purchaser is
                a public
                company. The Company’s trade secrets will not be passed on to any entity
                involved in the Purchaser’s activities and members of the board of
                directors of the Company, except for the chairman of the Purchaser,
                the
                CEO of the Purchaser and the financial director of the Purchaser,
                will not
                be involved in any activity that competes with the Company’s business. The
                Purchaser and the Sellers will appoint members to the board of directors
                of the Company, who will be appointed in an odd number of members
                on a
                basis that the Purchaser will have a majority of one director on
                the board
                of directors of the Company. In addition, a reduced- size executive
                will
                be established, the members of which will be representatives of the
                parties, on a basis that the Purchaser’s representatives will constitute a
                majority on the executive. The executive shall, inter
                alia,
                decide on the Company’s business plan and its targets and shall also set
                conditions and timing for the providing of finance for development
                of the
                Company’s business as stated in Clause 4
                above.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              Resolutions
                regarding allotment of shares, a change in the structure of the Company’s
                capital, raising of capital on the stock exchange, providing of collateral
                security by the Company to an interested party in the Company in
                material
                amounts and entering new fields of activity shall be passed by a
                majority
                of 55% on the board of directors (if the resolution is passed by
                the board
                of directors) and by a majority of 55% at the general meeting (if
                the
                resolution is passed by the general meeting). All the remaining
                resolutions in the Company shall be passed by a simple
                majority.

            


    

    


    
      	 	
              The
                Sellers undertake not to compete, directly or indirectly, with the
                business of the Company.

            


    

    


    
      	 	
              It
                is agreed that subject to any law and subject to the condition that
                the
                Company’s cash flows permit this, at least 25% of the Company’s profits
                will be allocated each year for distribution of dividends to the
                shareholders. It is further agreed that the Company will take steps
                for
                the issue of its shares to the public on a stock exchange at the
                earliest
                possible time, with the parameters for making the public offering
                (namely
                number of branches, turnover and profitability) being determined
                by the
                board of directors of the Company in accordance with market conditions
                in
                this regard. Resolutions which adopt this accord and implement same
                shall
                be approved by the board of directors of the
                Company.

            


    

    


    
      	
              7.

            	
              Transfer
                of shares–
                every transfer of shares in the Company by any of the shareholders
                (excluding a transfer of shares between the individual parties who
                make up
                the Sellers as between themselves) shall be subject to the giving
                of a
                right of first refusal and the giving of a tag-along right (in the
                event
                that the right of refusal is not exercised) to the remaining shareholders
                in the Company. It is further agreed that the Sellers will not be
                entitled
                to transfer their shares in the Company to any third party, unless
                the
                identity of such transferee has been approved by the Purchaser, which
                shall not unreasonably withhold the giving of such
                approval.

            


    

    


    
      	
              8.

            	
              Conditions
                precedent–
                the transaction is contingent upon the fulfillment of the following
                conditions: (a) approval of this Document of Principles by the board
                of
                directors of the Purchaser; (b) completion of due diligence examination
                to
                the Purchaser’s satisfaction within 5 business days from the date on which
                all the necessary documents and the documents requested by the Purchaser
                for purposes of performing the due diligence examination are delivered
                to
                the Purchaser. For that purpose, the Sellers and the Company will
                furnish
                the Purchaser and will confirm that they have delivered to it all
                the
                information and the documents required by the Purchaser in order
                to
                complete the due diligence examination and to close the transaction;
                (c)
                approval by the Commissioner of Restrictive Trade Practices and any
                additional regulatory approval that may be required (if required).
                This
                document shall be brought for consideration to the board of directors
                of
                the Purchaser by not later than August 2,
                2007.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              9.

            	
              Closing
                the transaction–
                subject
                to the fulfillment of the conditions precedent, the date of closing
                of the
                transaction shall be not later than 60 days from the date of signing
                of
                this document (hereinbefore and hereinafter: “the
                Effective Date”).
                To the extent that any approvals from any public authority which
                are
                required for purposes of closing the transaction are not received
                up to
                the Effective Date, the Effective Date for closing the transaction
                will be
                postponed to the nearest date on which it will be possible to obtain
                the
                aforesaid approvals, on a basis that the parties will make their
                best
                efforts to complete the process of obtaining the approvals
                quickly.

            


    

    


    The
      Sellers and the Company undertake that in the period commencing from the date
      of
      signing of this document and up to the Effective Date, the Company will be
      managed and conducted in the ordinary and regular course of business as it
      has
      been conducted up to the date of signing of this document, that no material
      resolutions will be taken in the Company which have the effect of altering
      the
      condition of the Company and/or its representations pursuant to this Agreement,
      and that the Sellers will not withdraw money from the Company (apart from
      payments of salary to Guy, the directors’ remuneration and the management fees
      which are payable to Orin in accordance with the agreement with her, with this
      being in accordance with what is set forth in the Company’s financial statements
      and as was paid prior to the date of signing of this document, and altogether
      which shall not exceed NIS 90,000 per month (excluding V.A.T.). It is agreed
      that payments of salary to Guy, the directors’ remuneration and the management
      fees aforesaid shall come to an end on the Effective Date, without this
      derogating from Orin’s entitlement to management fees as mentioned in Clause 5
      above.

    


    
      	
              10.

            	
              The
                Sellers will be exclusively liable and shall indemnify the Purchaser
                in
                respect of any liability of the Company to any person and/or to any
                body,
                including vis-à-vis
                customers and/or suppliers and/or various administrative authorities
                (including the tax authorities) and/or any third party, the origin
                of
                which and/or the cause of action of which was at a date prior to
                the date
                of this document, and which were not disclosed to the Purchaser in
                the
                scope of the financial statements that were delivered to the Purchaser
                and
                in the due diligence examination documents which were delivered to
                the
                Purchaser in the course of signing of this document. It is agreed
                that the
                indemnity obligation as set forth above in this Clause 10 will not
                apply
                in respect of liabilities the existence of which, origin of which,
                cause
                of action for which and the facts which serve as the basis therefor
                are
                unknown to the Sellers and/or to the shareholders in the Sellers,
                after
                investigation and inquiry carried out by them, and which they were
                not
                obliged to know about.

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              11.

            	
              Detailed
                agreement–
                it
                is the intention of the parties to enter into a detailed agreement
                on the
                basis of the main points of the transaction set forth above and to
                do so
                within 60 days from the date of signing of this document. However,
                if for
                any reason a detailed agreement is not signed up to the date mentioned
                above in this clause, then the parties will implement the transaction
                between them in accordance with the principles set forth above in
                this
                document, and subject to the terms and conditions
                hereof.

            


    

     

    
      	
              (
                -
                )

            	 	
              (
                -
                )

            	 	
              (
                -
                )

            
	
              ORIN
                PROVIZOR Holdings Ltd.

            	 	
              M.A.Sh.
                M.I.S. Ltd. 

            	 	
              Blue
                Square – Israel Ltd. 

            
	 	 	 	 	 
	 	 	 	 	
              (
                -
                )  (
                -
                )

            
	
              Eden
                Natural Health Market Ltd.

            	 	 	 	 


    

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    ADDENDUM
      NO. 1 TO DOCUMENT OF PRINCIPLES OF TRANSACTION DATED JULY 26,
      2007

    


    Made
      and
      entered into at ___________ on the 16th
      day of
      August 2007

    


    Between:

    


    
      	
              1.

            	
              ORIN
                PROVIZOR HOLDINGS LTD.,
                Private Co. 51-3097980

            


    

    of
      8
      Hamasger Street, Or Yehuda

    (hereinafter:
      “Orin”)

    


    
      	
              2.

            	
              M.A.Sh.
                – M.I.S. LTD.,
                Private Co. 51-3326199

            


    

    of
      26
      Sakharov Street, Rishon-le-Zion 

    (both
      referred collectively below as: “the
      Sellers”)

    of
      the first part;

    


    Mr.
      GUY PROVIZOR,
      I.D.
      058087214

    of
      7
      Chavatselet Street, Alfei Menashe

    (hereinafter:
      “Guy”)

    of
      the second part;

    


    EDEN
      NATURAL HEALTH MARKET LTD. 

    Private
      Co. 513330209

    of
      8
      Hamasger Street, Or Yehuda

    (hereinafter:
      “the
      Company”)

    of
      the third part;

    


    BLUE
      SQUARE ISRAEL LTD. Publ. Co. 5200042847

    of
      2 Amal
      Street, Park Afeq, Rosh Ha’ayin 

    (hereinafter:
      “the
      Purchaser”)

    of
      the fourth part;

    


    The
      parties agree between them that the Document of Principles of the transaction
      dated July 26, 2007 (hereinafter: “the
      Document of Principles of the Transaction”)
      shall
      be amended as follows: 

    


    In
      Clause
      6 of the Document of Principles of the Transaction, after the words: “the
      Sellers undertake not to compete, directly or indirectly, with the business
      of
      the Company”, the following will be inserted: “During the period of the Sellers
      being shareholders in the Company and for a period which does not exceed two
      years from the date on which the Sellers ceased to be shareholders in the
      Company and under all circumstances not less than four years from the date
      of
      the signing of the Document of Principles of the Transaction”. 

    


    
      	
              (
                -
                )

            	 	
              (
                -
                )

            	 
	
              ORIN
                PROVIZOR Holdings Ltd.

            	 	
              M.A.Sh.
                M.I.S. Ltd. 

            	 
	 	 	 	 
	
              (
                -
                )

            	 	
              (
                -
                )

            	 
	
              Guy
                Provizor

            	 	
              Eden
                Natural Health Market

            	 
	 	 	 	 
	
              (
                -
                )

            	 	 	 
	
              Blue
                Square – Israel Ltd. 

            	 	 	 


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ADDENDUM
      NO. 2 TO DOCUMENT OF PRINCIPLES OF TRANSACTION DATED JULY 26,
      2007

    


    Made
      and entered into at Rosh Ha’ayin on the 10th
      day of October 2007

    


    Between:

    


    
      	
              1.

            	
              ORIN
                PROVIZOR HOLDINGS LTD.,
                Private Co. 51-3097980

            


    

    of
      8
      Hamasger Street, Or Yehuda

    (hereinafter:
      “Orin”)

    


    
      	
              2.

            	
              M.A.Sh.
                – M.I.S. LTD.,
                Private Co. 51-3326199

            


    

    of
      26
      Sakharov Street, Rishon-le-Zion 

    (both
      referred collectively below as: “the
      Sellers”)

    of
      the first part;

    


    Mr.
      GUY PROVIZOR,
      I.D.
      058087214

    of
      7
      Chavatselet Street, Alfei Menashe

    (hereinafter:
      “Guy”)

    of
      the second part;

    


    EDEN
      NATURAL HEALTH MARKET LTD. 

    Private
      Co. 513330209

    of
      8
      Hamasger Street, Or Yehuda

    (hereinafter:
      “the
      Company”)

    of
      the third part;

    


    BLUE
      SQUARE ISRAEL LTD. Publ. Co. 5200042847

    of
      2 Amal
      Street, Park Afeq, Rosh Ha’ayin 

    (hereinafter:
      “the
      Purchaser”)

    of
      the fourth part;

    


    
      	
              WHEREAS:

            	
              On
                July 26, 2007 the parties signed an agreement of principles (hereinafter:
                “the
                Agreement of Principles”),
                in connection with the Company; and

            


    

    


    
      	
              WHEREAS:

            	
              On
                August 16, 2007 the parties signed an addendum to the agreement
                (hereinafter: “the
                Addendum”)
                (the Agreement of Principles and the Addendum will henceforth be
                referred
                to collectively as: “the
                Agreement”);
                and

            


    

    


    
      	
              WHEREAS:

            	
              The
                parties wish to put into writing accords at which they have arrived
                in
                connection with the implementation of the Agreement;
                

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Now
      therefore it is declared, stipulated and agreed by the parties as follows:
      

    


    
      	
              1.

            	
              The
                parties agree that the Agreement will be amended on the basis of
                the
                contents of this document below and that this document will be called
                “second addendum to the Agreement” and for all intents and purposes shall
                constitute part of the Agreement.

            


    

    


    
      	
              2.

            	
              The
                parties agree that the Effective Date, as defined in the Agreement,
                shall
                be amended to October 10, 2007. For the avoidance of doubt, the parties
                agree that simultaneous with the signing of this Addendum, all the
                conditions precedent that were specified in Clause 8 of the Agreement
                have
                been fulfilled to the satisfaction of the
                parties.

            


    

    


    
      	
              3.

            	
              Additional
                representation 

            


    

    


    
      	 	
              Without
                derogating from the representations and undertakings of the Sellers
                and
                the Company in accordance with the Agreement and this Addendum, the
                Sellers and the Company declare and undertake
                that:

            


    

    


    
      	 	
              3.1

            	
              As
                at the Effective Date, all the amounts that were supposed to be paid
                to
                the employees of the Company have been paid to them up to the date
                of
                closing of the transaction in accordance with the terms of their
                employment and pursuant to the provisions of any law. Without derogating
                from the foregoing, all the deductions and contributions which appear
                in
                the pay slips of the Company’s employees have been transferred to their
                destination according to law. Likewise, as at the Effective Date,
                all the
                moneys which the Company is obliged according to law and/or according
                to
                the employment agreements to cover payments of the Company’s employees in
                accordance with their employment agreements and according to any
                law in
                respect of the period of their employment and in respect of cessation
                of
                their employment, in the event that it should occur, have been contributed
                or provided for and/or deposited by the
                Company.

            


    

    


    
      	 	
              3.2

            	
              To
                the best of their knowledge the returns and reports that were submitted
                by
                the Company to the various tax authorities were submitted on due
                date and
                are correct and accurate and the Company is not likely to be held
                liable
                in respect thereof for any additional payment, and that the full
                tax and
                the other payments for which the Company is liable according to any
                law
                and/or for which the Company is indebted pursuant to the returns
                and
                reports that it lodged, all up to the date of closing of the transaction,
                have been paid in full.

            


    

    


    
      	 	
              3.3

            	
              That
                commencing from July 26, 2007 and up to the Effective Date (hereinafter:
                “the
                Interim Period”),
                the Sellers and the Company furnished the Purchaser with all the
                information and the documents that were requested by the Purchaser
                and
                with all the documents required in order to complete the due diligence
                examination referred to in Clause 8 of the Document of Principles
                of the
                Transaction and in order to close the transaction that is the subject
                of
                the Agreement.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.4

            	
              That
                during the Interim Period the Company was managed and conducted in
                the
                ordinary and regular course of business in the same way as it was
                conducted up to the date of signing of the Document of Principles
                of the
                Transaction, and that no material resolutions were passed in the
                Company
                which have the effect of altering the condition of the Company and/or
                the
                representations of the Sellers and the Company pursuant to the Agreement,
                and that the Sellers did not withdraw money from the Company (apart
                from
                payments of salary to Guy, the directors remuneration and the management
                fees which are payable to Orin in accordance with the agreement with
                it),
                with this being in accordance with the provisions of Clause 9 of
                the
                Document of Principles of the
                Transaction.

            


    

    


    
      	 	
              3.5

            	
              That
                Bank Hapoalim B.M., in whose favor there is a floating charge over
                the
                assets of the Company (hereinafter: “the
                Floating Charge”)
                has given its consent to a transfer of shares, to the allotment of
                shares
                and to the excluding of the shares that are allotted to the Purchaser
                in
                accordance with the provisions of the Agreement from the applicability
                of
                the Floating Charge, and its approval is attached to this Addendum
                as
                Appendix
                A.

            


    

    


    
      	 	
              3.6

            	
              That
                the board of directors of the Company has approved the Company entering
                into the Agreement and the transfer of shares from the Sellers to
                the
                Purchaser.

            


    

    


    
      	 	
              3.7

            	
              That
                without derogating from Orin’s right to repayments of the shareholder’s
                loan as stated in the Agreement, Orin waives its right to registration
                of
                a charge in its favor over the assets of the Company and/or the
                subsidiary, Eden Natural Health Market 2 Ltd. (hereinafter: “the
                Subsidiary”)
                with respect to repayments of shareholder’s loans which Orin provided for
                the Company and/or the Subsidiary. Accordingly, the Company’s resolution
                of February 28, 2005 in connection with a charge over the Company’s assets
                in favor of Orin is revoked and is devoid of any
                force.

            


    

    


    
      	 	
              3.8

            	
              That
                in accordance with an arrangement between the Company and its employees,
                within 90 days from the date of signing of this Addendum, a determination
                of sales targets for purposes of giving bonuses to those amongst
                the
                employees of the Company who are entitled thereto will be completed,
                in
                the form of the Company and the aforesaid employees signing an appropriate
                addendum to the employment agreement in the scope of which the aforesaid
                sales targets will be specified.

            


    

    


    
      	 	
              3.9

            	
              That
                all the representations and undertakings of the Sellers and the Company
                in
                accordance with the Agreement which relate to the Company apply both
                in
                relation to the Company as well as to the
                subsidiary.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              4.

            	
              For
                the removal of doubt it is clarified and agreed that on the Effective
                Date
                Guy will be dismissed from his employment in the Company. Upon termination
                of his employment as aforesaid Guy will be entitled to receive severance
                pay from the Company in an amount equivalent to NIS 356,250, as well
                as
                redemption of 44 days of annual leave, on a basis that the Sellers
                and the
                Company declare that this amount of severance pay is equivalent to
                the
                total of all the payments that are due to Guy as recorded in the
                books of
                the Company and/or the Subsidiary as at September 30, 2007. By his
                signature at the foot of this Addendum Guy agrees and declares that
                upon
                receipt of the aforesaid amount, he does not have and will not have
                any
                allegation and/or claim and/or demand against the Company in connection
                with his employment and/or the termination of his employment in the
                Company (including in connection with severance pay, salary payments,
                related payments and so forth).

            


    

    


    
      	 	
              If
                it should transpire that Guy is entitled to additional payments in
                respect
                of the period of his employment in the Company in excess of the amount
                specified in this Clause 4, then the Sellers’ will bear these additional
                payments, including in a manner in which, if the Company is held
                liable
                for these payments, the Sellers will indemnify the Company in respect
                of
                any such payment.

            


    

    


    
      	
              5.

            	
              For
                the avoidance of doubt it is clarified and agreed that upon the signing
                of
                this Addendum any agreement entered into between the Sellers amongst
                themselves prior to the date of signing of this Addendum regarding
                the
                cooperation between them in the management and operation of the Company
                is
                cancelled, and that the Sellers are bound by the Agreement and the
                Articles of the Company as will be adopted by the Company on the
                Effective
                Date, and that no agreement will be entered into between the Sellers
                amongst themselves which does not conform with the Agreement and/or
                the
                Articles of the Company. The Sellers further declare that they waive
                the
                right of first refusal which they have as against one another and
                as
                against the Company in regard to the sale and allotment of shares
                to Blue
                Square as stated in the Agreement. 

            


    

    


    The
      text
      of the Company’s Articles that will be adopted on the Effective Date is attached
      to this Addendum as Appendix
      B.

    


    
      	
              6.

            	
              The
                Sellers, the Company and the Purchaser undertake to deliver to the
                Purchaser by not later than November 15, 2007 audited financial statements
                of the Company as at September 30,
                2007.

            


    

    


    
      	
              7.

            	
              Additional
                undertakings for indemnity


            


    

    


    Without
      derogating from the representations and undertakings of the Sellers and the
      Company under the Agreement, it is hereby agreed that the Sellers will indemnify
      the Company in the cases mentioned below in this Clause 7, whether or not the
      obligations that are the subject of the indemnity and/or the facts which serve
      as the basis for such obligations were disclosed to the Purchaser in the course
      of the due diligence examination. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              a.

            	
              In
                a case in which:

            


    

    


    
      	
            	I.	
              The
                Company is held liable to pay any payment to any of its employees
                (including in respect of salary and/or social rights) by virtue of
                an
                agreement and/or according to law (apart from payments to employees
                the
                due date for payment of which is subsequent to the Effective Date)
                and/or
                by virtue of an undertaking that was given to the employees in excess
                of
                the agreements that were exhibited to the Purchaser, with this being
                in
                respect of the period prior to the Effective Date, save and except
                payments in respect of which a provision was made in the Company’s books;
                and

            


    

    


    
      	
            	II.	
              The
                extent of the Company’s liability mentioned in Clause I above to the
                employees in respect of the period prior to the Effective Date
                cumulatively exceeded NIS 50,000. 

            


    

    


    
      	 	 	
              Upon
                the fulfillment of the two conditions in Clauses I and II above,
                the
                Sellers shall indemnify the Company in respect of any payment to
                employees
                as aforesaid in excess of a cumulative amount of NIS
                50,000.

            


    

    


    
      	 	
              b.

            	
              If
                the Company is held liable to pay the tax authorities money in respect
                of
                the non-recognition of any expenses of the Company or of the Subsidiary
                which were incurred in the period prior to the Effective Date, then
                and in
                that event the Sellers shall indemnify the Company in respect of
                such
                payments for which the Company was held liable to the tax authorities
                in
                Israel, by way of a transfer to the Company of an amount equivalent
                to the
                total payments for which the Company was held liable as
                aforesaid.

            


    

    


    
      	 	
              c.

            	
              Before
                the end of the civil year the Company shall perform a stock count
                in the
                presence of representatives of the Purchaser. If it transpires in
                this
                count that there are shortages in stock as compared with the stock
                appearing in the books of the Company as at the date of the stock
                count to
                an extent exceeding 3% of the sales turnover of all the Company’s branches
                during the period which commenced from the previous stock count performed
                by the Company and up to the stock count mentioned in this sub-clause
                above (hereinafter: “the
                Maximum Permitted Shortage”),
                then and in that event the Sellers will indemnify the Company in
                respect
                of the entire amount of the stock shortages which exceeds the Maximum
                Permitted Shortage.

            


    

    


    
      	
              8.

            	
              The
                Sellers undertake that by not later than December 31, 2007 all the
                disputes between the Company and A. Aloni – Marble Ceramics, Utensil
                (hereinafter: “the
                Aloni Company”)
                will be resolved, so that the Company will no longer be a party to
                a
                dispute with Aloni, to the extent that there are such in respect
                of the
                period preceding the signing of this Addendum. The parties further
                agree
                that if at any time Aloni should file checks for execution which
                were
                drawn in its favor by the Company, the Company will immediately pay
                the
                checks and without derogating from the right of the Sellers and/or
                of Guy
                to have their allegations against the Aloni Company adjudicated in
                a
                separate proceeding. It is further agreed that all the costs and/or
                expenses connected with the dispute with Aloni, apart from payment
                of the
                checks that were given to Aloni by the Company and which have not
                yet been
                paid, shall be borne by the Sellers alone, and the Sellers shall
                indemnify
                the Company in respect of any damage and/or expense that may be incurred
                by the Company in connection
                therewith.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              9.

            	
              Indemnity
                in respect of closure of
                branches

            


    

    


    
      	 	
              9.1

            	
              The
                parties agree that in the event that during a period of 60 months
                commencing from the Effective Date the activities are closed down
                and
                ceased of one or both of the branches which the Company operates
                at the
                time of signing of this Document of Principles at Poleg (hereinafter:
                “the
                Poleg Branch”)
                and in Or Yehuda (hereinafter: “the
                Or Yehuda Branch”)
                and in addition the following conditions are
                met:

            


    

    


    
      	
            	I.	
              The
                branch or branches were closed down in accordance with a judgment
                the
                execution of which was not stayed, after exhausting all the proceedings
                for preventing the closure; and

            


    

    


    
      	
            	II.	
              The
                reason for closure of the branch or branches is inappropriate planning
                zoning or the absence of a business license in respect of inappropriate
                planning zoning for the activities of the
                branches;

            


    

    


    then
      and
      in that event the Sellers will indemnify the Purchaser in the following amounts
      (hereinafter: “the
      Amounts of Indemnity”).

    


    
      	
            	a.	
              If
                the Poleg Branch is closed in the period from the Effective Date
                and up to
                the end of 60 months from the Effective Date, then the Sellers will
                indemnify the Purchaser in an amount of: NIS 21,680,000 from which
                a
                deduction shall be made of a sum equivalent to NIS 361,333 in respect
                of
                each month which has passed commencing from the Effective
                Date.

            


    

    


    
      	
            	b.	
              If
                the Or Yehuda Branch is closed in the period commencing from the
                Effective
                Date and up to the end of 60 months from the Effective Date, then
                the
                Sellers will indemnify the Purchaser in a sum of: NIS 10,840,000
                less a
                sum equivalent to NIS 180,667 in respect of each month that has passed
                commencing from the Effective Date.

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    For
      the
      sake of example:


    In
      a case
      in which the Poleg Branch is closed down after 12 months have elapsed from
      the
      Effective Date, the Sellers shall indemnify the Purchaser in an amount of NIS
      17,344,004 (21,680,000 – (361,333*12)).

    


    In
      a case
      in which the Or Yehuda Branch is closed down after 20 months have elapsed from
      the Effective Date, the Sellers shall indemnify the Purchaser in an amount
      of
      NIS 7,226,660 (10,840,000 – (180,667*20)).

    


    
      	 	
              9.2

            	
              In
                the event that the Sellers’ obligation to indemnify the Purchaser in
                respect of closure of the branches as stated in this clause should
                come to
                fruition, then and in that event the indemnity which is the subject
                of
                this clause shall be effected by way of converting an amount equivalent
                to
                the Amounts of the Indemnity (hereinafter: “the
                Converted Portion”)
                out of the shareholder’s loan mentioned in Clause 3(a) of the Agreement
                into a shareholder’s loan under the conditions as set forth in Clause 3(b)
                of the Agreement, in a manner whereby the Converted Portion as aforesaid
                shall for all intents and purposes be deemed to be a shareholder’s loan
                pursuant to Clause 3(b) of the Agreement and all the terms and conditions
                of the shareholder’s loan mentioned in Clause 3(b) of the Agreement shall
                apply as if the Converted Portion was included from the outset in
                the
                shareholder’s loan mentioned in Clause 3(b) of the Agreement (including
                with regard to the manner and times of repayment and including the
                manner
                in which partial or full repayments of the Converted Portion will
                not
                entitle the Sellers to a preferential dividend). The parties agree
                that if
                for purposes of regulating the absence of entitlement of the Sellers
                to a
                preferential dividend in respect of repayments of the Converted Portion
                as
                mentioned in this sub-clause above, there is a necessity for amending
                the
                Company’s Articles, then and in that event the parties will make an
                amendment to the Company’s Articles as
                required.

            


    

    


    
      	 	
              9.3

            	
              It
                is agreed that at the date of the conversion as mentioned in sub-clause
                9.2 above Blue Square will be entitled to decide, in its sole and
                absolute
                discretion, on immediate repayment of the Converted Portion, with
                it being
                clarified for the avoidance of doubt that the Sellers will not be
                entitled
                to payment of any dividend in respect of such
                repayments.

            


    

    


    
      	 	
              9.4

            	
              It
                is further agreed that the Company shall exhaust all the proceedings
                against the property owners who leased the properties to it in which
                the
                branches operate to obtain full compensation in respect of the closure
                of
                the branch or the branches, and in a case in which any payments are
                received from the property owners in respect of closure of the branches
                as
                aforesaid, then and in that event in respect of each payment that
                is
                received as aforesaid, if and to the extent that it is received,
                up to an
                amount equivalent to the Amounts of Indemnity (hereinafter: “the
                Amount of the Refund”),
                portion of the shareholder’s loan mentioned in Clause 3(b) of the
                Agreement shall be converted, in an amount equivalent to the Amount
                of the
                Refund, into a shareholder’s loan under the conditions as set forth in
                Clause 3(a) of the Agreement. If at the date of receipt of the
                compensation Blue Square has already withdrawn the Converted Portion,
                then
                and in that event the dividend in a sum equivalent to the Converted
                Portion shall be paid to the Sellers according to the conditions
                as set
                forth in Clause 3(a) of the Agreement, which shall be done immediately
                but
                subject to any law.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              Payment
                of the purchase price and providing of the shareholder’s
                loans

            


    

    


    
      	 	
              10.1

            	
              It
                is agreed that effecting payment of the purchase price mentioned
                in Clause
                2 of the Agreement shall be in the following
                manner:

            


    

    


    
      	 	
              10.1.1

            	
              A
                sum of NIS 11,250,000 shall be paid by way of a check to the order
                of ORIN
                PROVIZOR Holdings Ltd. at the time of signing of this Addendum against
                the
                furnishing to the Purchaser of a certificate regarding the maintaining
                of
                books and an exemption from the deduction of tax at
                source.

            


    

    


    
      	 	
              10.1.2

            	
              A
                sum of NIS 11,250,000 shall be paid by way of a check to the order
                of
                M.A.Sh. – M.I.S. Ltd. at the time of signing of this Addendum against the
                furnishing to the Purchaser of a certificate regarding the maintaining
                of
                books and an exemption from the deduction of tax at
                source.

            


    

    


    In
      the
      event that Orin or M.A.Sh. does not have a certificate regarding the maintaining
      of books and an exemption from deduction of tax at source at the time of signing
      of this Addendum, then the date for payment to either of Orin or M.A.Sh. who
      does not furnish the certificates will be postponed until same are furnished
      to
      the Purchaser, with it being clarified for the avoidance of doubt that the
      postponement of the date of payment as aforesaid shall not defer the date of
      transfer and/or allotment of the shares to the Purchaser in accordance with
      the
      provisions of the Agreement.

    


    
      	 	
              10.2

            	
              The
                parties shall cooperate for regulating the rights of signature in
                the
                Company’s bank account and it is agreed that the shareholder’s loans
                mentioned in Clause 3 in the Agreement in a total amount of NIS 47,000,000
                shall be provided to the Company by the Purchaser immediately after
                the
                rights of signature in the Company’s bank account are regulated and
                arranged, in a manner whereby the performing of operations in the
                account
                will not be possible without the signature of a representative of
                the
                Purchaser.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    


    In
      witness whereof the parties have hereunto signed:

    


    
      	
              (
                -
                )

            	 	
              (
                -
                )

            
	
              ORIN
                PROVIZOR Holdings Ltd.

              ORIN
                PROVIZOR Holdings Ltd. 

            	 	
              M.A.Sh.
                M.I.S. Ltd. 

              M.A.Sh.
                – M.I.S. Ltd. 

            
	 	 	 
	
              (
                -
                )

            	 	
              (
                -
                )

            
	
              Guy
                Provizor

            	 	
              Eden
                Natural Health Market Ltd. 

            
	 	 	 
	
               

            	
              (
                -
                )

            	 	
              (
                -
                )

            	 
	
              Blue
                Square – Israel Ltd. 

              Blue
                Square Israel Ltd. 

            


    

    


    Attestations
      of signature 

    


    I
      the
      undersigned, Ilan Ronen, Adv., Lic. No. 15755, 55 Menachem Begin Rd., Tel Aviv,
      hereby certify that this Agreement was signed by Orin Provizor Holdings Ltd.
      through Guy
      Provizor
      who is
      authorized to sign its name on this Agreement and to bind it.

    (-)

    


    I
      the
      undersigned, Ilan Ronen, Adv., Lic. No. 15755, 55 Menachem Begin Rd., Tel Aviv,
      hereby certify that this Agreement was signed by Ltd. through Marco
      Shalom
      who is
      authorized to sign its name on this Agreement and to bind it.

    (-)

    


    I
      the
      undersigned, Ilan Ronen, Adv., Lic. No. 15755, 55 Menachem Begin Rd., Tel Aviv,
      hereby certify that this Agreement was signed by Guy Provizor.

    


    I
      the
      undersigned, Ilan Ronen, Adv., Lic. No. 15755, 55 Menachem Begin Rd., Tel Aviv,
      hereby certify that this Agreement was signed by Eden Natural Health Market
      Ltd.
      through Guy Provizor, who is authorized to sign its name on this Agreement
      and
      to bind it.

    


    I
      the
      undersigned, Eli Levinson-Sela, Adv., Lic. No. 15877, hereby certify that this
      Agreement was signed by Blue Square – Israel Ltd., through Gaby Kalini and Dudu
      Weisman who are authorized to sign in its name on this Agreement and to bind
      it.

    (-)

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    BANK
      HAPOALIM

    Or
      Yehuda Branch – 657

    126
      Hahagana Street, Or Yehuda 60250

    


    Date:
      October 9, 2007 

    Telephone:
      03-5389111

    Fax:
      03-5335278

    


    Eden
      Natural Health Market Ltd. 

    8
      Hamasger Street

    Or
      Yehuda 60223

    


    Dear
      Sirs,

    


    re:
      Sale
      Agreement and Allotment of Shares to Blue Square Ltd. 

    Letter
      of
      Mr. Ilan Ronen by e-mail dated October 1, 2007, 11:08

    


    As
      requested by you and for the sake of good order, we have pleasure in notifying
      you as follows: 

    


    
      	
              1.

            	
              We
                have no objection to the sale of shares of the Company and allotment
                of
                shares of the Company to Blue Square Ltd. If in the scope of the
                agreement
                with Blue Square Ltd. the Company allots shares out of its unissued
                share
                capital, we confirm that the shares that will be allotted by the
                Company
                as aforesaid, are excluded from the charge registered in our favor
                over
                the Company’s assets.

            


    

    


    
      	
              2.

            	
              We
                have no objection to repayment of the shareholder’s loans by the Company
                on the dates as shall be decided by the management of the Company,
                and
                naturally on condition that you notify us in advance about such dates
                and
                that the Company continues to make payment of its obligations to
                the Bank
                on due date.

            


    

    


    
      	 	 	
              Yours
                truly,

            
	 	 	
               

            
	 	 	
              Bank
                Hapoalim B.M.

            
	 	 	
              Or
                Yehuda branch

            
	 	 	 	 
	 	 	
              (
                -
                )

            	
              (
                -
                )

            
	 	
               

            	
              R.
                Karlman

            	
              E.
                Michaelson