| Between:  | BLUE      SQUARE – ISRAEL LTD. |
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| And:  | BLUE      SQUARE CHAIN PROPERTIES & INVESTMENTSLTD. |
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| And:  | THE      NEW GENERAL FEDERATION OF LABOR –HISTADRUT      HAMAOF |
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| WHEREAS | Blue      Square employs employees; and |
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| WHEREAS | A      general collective agreement dated February 15, 1982 applies to Blue      Square and its employees, which was made between the Central Consumer      Cooperative Covenant Cooperative Society Ltd. and the Organization of      Clerks, and which was adopted by Blue Square under a special collective      agreement date May 28, 1996 (hereinafter: “the General Collective      Agreement”), and amendments and additions to the General Collective      Agreement and special collective agreements as have been signed from time      to time (hereinafter: “the Existing      Agreements”); and |
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| WHEREAS | The      Company is a subsidiary under the full control of Blue Square;      and |
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| WHEREAS | An      agreement was made between Blue Square and the Company in regard to the      transfer of Blue Square’s assets to the Company;  and |
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| WHEREAS | For      purposes of implementing the agreement for the transfer of assets it was      agreed that Blue Square would be entitled to transfer Blue Square      employees – in whole or in part – to being employees of the Company, all      under the conditions as set forth below;and |
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| WHEREAS | Blue      Square and the Workers Representation have agreed on the giving of a      salary supplement to the employees who are employed and/or who will in the      future be employed under the Collective  Agreement; |
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| 1. | The      preamble to this Agreement constitutes an integral part      hereof. |
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| 2. | If      and to the extent that Blue Square should decide to transfer its employees      – in whole or in part – to being employees of the Company (hereinafter:      “the Transferred      Employees”) the Transferred Employees will move over, on the day to      be specified by Blue Square for their transfer (hereinafter: “the Day of Transfer”)      to being employees of the Company, and they will be employees of the      Company from the Day of Transfer onwards, save and except the employees      who will be mentioned in a schedule to be sent to the Workers      Representation. |
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| 3. | The      Company and the Workers Representation will become parties, commencing      from the Day of Transfer, to the Existing Agreements in a manner whereby      the Existing Agreements will apply to the Company and to the Transferred      Employees and to the remaining parties to this Agreement, to whatever      extent is necessary, as though such agreements were made from the outset      between the Company and the Workers Representation, including revisions      and updates and/or alterations that may be made in the future, from time      to time. |
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| 4. | The      seniority of the employees who were transferred to the Company on the Day      of Transfer will be the same as their seniority at Blue Square immediately      prior to the Day of Transfer, as appearing in the books of Blue      Square. |
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| 5. | The      Company will be responsible to the Transferred Employees for all their      rights in respect of the period of their employment at Blue Square up to      the day of transfer, as such rights exist on such day and in accordance      with the records in the books of Blue Square, and as if the Transferred      Employees had continued their employment at Blue Square after the Day of      Transfer (hereinafter: “the Accumulated      Rights”).  Blue Square will be a guarantor to the      Transferred Employees in respect of the Accumulated Rights, and by its      signing this Agreement it confirms its aforesaid  guarantee. |
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| 6. | Nothing      in this Agreement shall adversely affect the rights of any of the      employees of Blue Square who perform their work in the scope of a personal      contract nor will this Agreement add rights for any of them in excess of      what is stated in the aforesaid personal  contracts. |
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| 7. | A      list of the Existing Agreements is attached to this Agreement as an      integral part hereof and is marked “A”. |
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| 8. | The      employees will be given a salary increment at a rate of 4% on the basic      salary (hereinafter: “the      Salary Increment”). |
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| 9. | The      Salary Increment will be given to each employee after he has completed or      in the future completes 24 months of his employment, and will be paid to      each employee commencing from the 25th      month of his employment onwards. |
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| 10. | The      Salary Increment will be paid commencing from the salary for the month of      April 2009. |
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| 11. | The      salary tables will be updated accordingly, and will be in force commencing      from April 1, 2009.  The updated salary tables are attached to      this special collective agreement as Appendix “B” and constitute an      integral part hereof. |
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| 12. | It      is agreed by the parties that the Salary Increment will not be taken into      account for purposes of calculating the topping-up of a minimum wage      within the meaning thereof under the Minimum Wage Law, 5747-1987, and      accordingly the salary element known by the name of “ranking increment”      will not be reduced and/or will not be affected upon payment of the Salary      Increment or upon updating of the minimum if and to the extent that it is      updated up until March 31, 2010. |
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| 13. | In      addition, no other salary increments which are paid to the employees will      be affected upon payment of the Salary Increment in accordance with this      Agreement, but it is clarified that nothing in the foregoing shall prevent      Blue Square and/or the Company from updating the other salary increments      in the future upon a change occurring in the circumstances of the      employment of the employee, as is customary at present at Blue Square      and/or in accordance with the Existing  Agreements. |
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| 14. | It      is clarified and agreed that the Salary Increment will constitute salary      for all intents and purposes and it will be taken into account for      purposes of calculating value of an hour for the purpose of payment of      incentive salary, seniority, special standby and split, and for purposes      of social payment contributions, and any other contribution customarily      made with respect to the combinedsalary. |
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| 15. | For      the avoidance of doubt it is expressly clarified that the Salary Increment      will be paid only to employees who are employed under the collective      agreement and it is not the Company’s intention to make it applicable to      employees who are signatories to personal  contracts. |
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| 16. | The      Workers Representation declares that the Salary Increment given pursuant      to this Agreement constitutes full compliance with all their claims for a      salary increment for the next two years commencing April 1, 2009, in the      course of which the Workers Representation undertakes to maintain      industrial peace at Blue Square and/or at the Company on matters regulated      by this Agreement. |
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| 17. | All      the collective agreements, the collective arrangements which are practiced      and which apply to the parties at the date of signing of this special      Collective Agreement remain in force and will continue to apply subject to      the changes in this Agreement. |
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| 18. | The      parties agree to register this Agreement as a collective agreement in      accordance with the Collective Agreements Law,  5717-1957. |
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| /s/ David      Wiessman, Zeev Vurembrand |   | /s/ Reuven Perry                             |
|-----------------------------------------------|--------|----------------------------------------------|
| Blue      Square – Israel Ltd.          |   | New      General Federation of Labor – |
|                                          |   | Histadrut      Hamaof                        |
|                                          |   |                                         |
| /s/      David Wiessman, Zeev Vurembrand      |   | /s/ Eyal      Eli                            |
| Blue      Square Chain                        |   | Blue      Square Workers Committee           |
| Properties      & Investments Ltd.        |   |                                         |
|                                          |   | Eyal      Eli                                |
|                                          |   | Chairman      of WorkersCommittee            |

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