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Exhibit 4.28

# UNDERWRITING AGREEMENT

# Made and entered into
at Tel Aviv on the 15th day of August, 2006

# Between

| | BLUE SQUARE REAL ESTATE LTD.(hereinafter: "the Company")
| | --------------------------------------------------------

# And

| | POALIM I.B.I. - UNDERWRITING AND ISSUES LTD.
AFRICA-ISRAEL ISSUES LTD.
DISCOUNT UNDERWRITING AND ISSUES LTD.
CLAL FINANCE UNDERWRITING LTD.
ALTSCHULER SHACHAM MANAGEMENT, UNDERWRITING AND INVESTMENTS LTD.
ANALYST ISSUE MANAGEMENT LTD.
MENORA UNDERWRITING AND MANAGEMENT LTD.
Y.A.Z. INVESTMENTS AND PROPERTIES LTD.
EPSILON UNDERWRITING AND ISSUES LTD.
ROSARIO CAPITAL LTD.
MEITAV UNDERWRITING LTD.
L.L. UNDERWRITING AND INVESTMENTS LTD.
GILON - TAU UNDERWRITING AND ISSUES LTD.
SYNERGETICA UNDERWRITING LTD.
JERUSALEM CAPITAL MARKETS UNDERWRITING AND ISSUES (1994) LTD.
P.R. HACKER CAPITAL MARKETS LTD.
REVAVOT UNDERWRITING LTD.
YAAD (Z.R.) UNDERWRITING AND ISSUES LTD.
SIGMA P.C.M. UNDERWRITING AND BUSINESS PROMOTION (1993) LTD.
SHOHAR TOV LTD.
SIMODAN UNDERWRITING AND ISSUES (1993) LTD.
GOREN UNDERWRITERS LTD.(hereinafter: "the Underwriters")
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS: |  | The
Company is due to publish a prospectus pursuant to which it will offer the public
2,500,000 ordinary shares, NIS 100,000,000 par value Debentures (Series A) linked to the
index and convertible into ordinary shares of the Company, and NIS 650,000,000 par value
Debentures (Series B) linked to the index (hereinafter: the Securities);
and
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS: |  | The
Securities will be offered to the public in a composition, a quantity, at a price, in a manner, at the times and on the conditions set forth in the prospectus that
is due to be published in connection therewith (hereinafter: the Prospectus);
and
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|WHEREAS: |  | The
Company represents and warrants that the Securities are not and will not be, at the date
of their allotment, pledged or encumbered, that there is no right or claim by any third
party in respect thereof, that the Company has the full and exclusive right to issue and
offer the Securities to the public, and that all the permits and approvals required for
the purpose have been obtained, apart from a permit from the Securities Authority for
publication of the Prospectus and the approval of the Stock Exchange for the listing of
the Securities for trading; and
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS: |  | The
Securities will be offered to the public in 500,000 units (hereinafter: theUnits),
each comprised of 5 ordinary shares, NIS 200 par value Debentures (Series A) and NIS
1,300 par value Debentures (Series B) at a price of NIS 1,205.5 per Unit, in a tender
regarding the rate of interest that the Debentures (Series B) will bear which shall not
be less than 4.25% and shall not exceed 5% (hereinafter: the MaximumRate
of Interest); and
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS: |  | Institutional
investors have undertaken, by way of a prior commitment as described in
Prospectus, to apply for 400,000 Units forming part of the Units
offered to the public (hereinafter: "the Institutional Investors'
Units"); and
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS: |  | The
Underwriters have undertaken to underwrite the purchase of the Units offered to
the public, apart from the Institutional Investors' Units
(hereinafter: "the Underwritten Units"or "the Underwritten
Securities") at a price of NIS 1,205.5 per unit and in a manner that
the Debentures (Series A) will bear interest at the Maximum Rate of
Interest (hereinafter: "the Price to the Underwriters");
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|1. | Preamble
|-- | --------

| | The
preamble to this Agreement and the appendices hereto form an integral part hereof. Words
in the plural in this Agreement shall also mean the singular, and vice versa.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
this Agreement the following terms will have the meanings set opposite them. Terms which
are not defined in this Agreement and which appear in the Prospectus, will have the
meaning ascribed to them in the Prospectus.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |                                               |   |                                                                                                                                                                                                                                                         
| | --------------------------------------------- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | "The Lead Managers"                           | - | Poalim I.B.I. - Underwriting Issues Ltd., Africa-Israel Issues Ltd., Discount Underwriting and Issues Ltd.                                                                                                                                              
| |                                              
| | "Entities authorized to receive applications" | - | Stock Exchange members.                                                                                                                                                                                                                                 
| |                                              
| | "Coordinator of the issue"                    | - | Poalim I.B.I. - Underwriting Issues Ltd.                                                                                                                                                                                                                
| |                                              
| | "The Prospectus"                              | - | Means the Prospectus the Company will publish in connection with the issue described above, which is attached to this Agreement as Appendix A, including any amendment to the Prospectus that may be agreed to between the Company and the Underwriters.
| |                                              
| | "The Stock Exchange"                          | - | The Tel Aviv Stock Exchange Ltd.                                                                                                                                                                                                                        

|2. | General
|-- | -------

| | This
Agreement is based on a prospectus the Company will publish in connection with the
offering of the Securities, and such changes as may be agreed upon between the Company
and the Lead Managers.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | This
Agreement reflects the mutual obligations between the Underwriters, except where
otherwise expressly stated and with such changes as may be agreed upon between the
Underwriters in relation to the Underwriters purchase undertakings as described in
Clause 3 below.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company hereby undertakes to deliver 400 copies of the Prospectus to the Lead Managers
immediately after publication of the Prospectus.
| | -------------------------------------------------------------------------------------------------------------------------------------------

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|3. | Percentage
participation of the Underwriters
|-- | --------------------------------------------

| | Each
of the individual Underwriters participates in underwriting the purchase of the
Underwritten Securities in accordance with the details set forth below:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Name                                                             | No. underwritten
Units
| | ---------------------------------------------------------------- | ----------------------
|
| | Poalim I.B.I. - Underwriting And Issues Ltd.                     |                       
| | Africa-Israel Issues Ltd.                                        |                       
| | Discount Underwriting And Issues Ltd.                            |                       
| | Clal Finance Underwriting Ltd.                                   |                       
| | Altschuler Shacham Management, Underwriting And Investments Ltd. |                       
| | Analyst Issue Management Ltd.                                    |                       
| | Menora Underwriting And Management Ltd.                          |                       
| | Y.A.Z. Investments And Properties Ltd.                           |                       
| | Epsilon Underwriting And Issues Ltd.                             |                       
| | Rosario Capital Ltd.                                             |                       
| | Meitav Underwriting Ltd.                                         |                       
| | L.L. Underwriting And Investments Ltd.                           |                       
| | Gilon - Tau Underwriting And Issues Ltd.                         |                       
| | Synergetica Underwriting Ltd.                                    |                       
| | Jerusalem Capital Markets Underwriting And Issues (1994) Ltd.    |                       
| | P.R. Hacker Capital Markets Ltd.                                 |                       
| | Revavot Underwriting Ltd.                                        |                       
| | Yaad (Z.R.) Underwriting And Issues Ltd.                         |                       
| | Sigma P.C.M. Underwriting And Business Promotion (1993) Ltd.     |                       
| | Shohar Tov Ltd.                                                  |                       
| | Simodan Underwriting And Issues (1993) Ltd.                      |                       
| | Goren Underwriters Ltd.                                          |                       
| | Total                                                            |                       

|4. | The
underwriting undertaking
|-- | ----------------------------

| | 4.1 | The
Underwriters hereby undertake to purchase from the Company, each according to its
percentage share as set forth in Clause 3 above, all the Underwritten Securities in
relation to which the Company gives notice that applications for the purchase thereof
have not been submitted to it up to the time of closing of the subscriptions list, or
that the Company has not been paid the full price thereof for any reason up to the time
specified for payment in the Prospectus.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
purchase of the Underwritten Securities, if and to the extent that it is required as
aforesaid, shall be effected at the Price to the Underwriters, less taxes and levies, in
the event that there are such.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2 | Each
of the individual Underwriters will be responsible to the Company according to its
percentage participation as set forth above and without any mutual responsibility between
the Underwriters.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.3 | For
purposes of calculating the number of Securities each of the Underwriters is obliged to
purchase according to its percentage participation as set forth in Clause 3 above, a
deduction shall be made from all the Underwritten Units, of Securities for which
applications for the purchase thereof were lodged other than through the Underwriters or
by the Underwriters, or other than through corporations under the control of the
Underwriters or persons acting on their behalf.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 4.4 | Each
of the Underwriters will be obliged to purchase Securities forming part of the
Underwritten Securities in a quantity equivalent to the difference:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | Between:
the total number of Securities it undertook to participate in underwriting (as set forth
in Clause 3 above) and after the adjustment required by virtue of the fulfillment of the
provisions of Clause 4.3 above;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | And:
the total number of Securities for which applications for the purchase thereof were
lodged through the Underwriter or through a corporation on its behalf or by the
Underwriter or through an Entity Authorized to Receive Applications acting on its behalf
as stated in Clause 4.7 below, and which were met and the full consideration for which
was paid.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.5 | Subject
to the foregoing, if applications were lodged through any Underwriter or through a
corporation acting on its behalf or by an Underwriter for the purchase of Securities in a
total number exceeding the number of Securities it is obliged to purchase as aforesaid,
the entire surplus balance as aforesaid shall be deemed to be an application for the
purchase thereof lodged by the Underwriters who have not abided by the percentage of
their participation (any surplus balance will be deemed to be an application for the
purchase thereof lodged as aforesaid only to the extent that same is required to
supplement the number of Securities which another Underwriter is obliged to purchase).
The policy with regard to apportionment of fractional units, if any, will be decided by
the Lead Managers.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.6 | Corporation
acting on behalf of one of the Underwriters as stated in Clause 4.5 above means any
corporation which forms part of such Underwriters group. In the case of any doubt
regarding the affiliation of a corporation to the group of such Underwriter as aforesaid,
Poalim I.B.I. will decide and its decision will be final.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.7 | Where
an Underwriter who is not an Entity Authorized to Receive Applications, has lodged
applications for the purchase of Securities through Entities Authorized to Receive
Applications, the following provisions will apply:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.7.1 | The
Underwriter shall give notice, at the time of lodging of the applications, to the
authorized entity, and shall obtain confirmation from the authorized entity, that the
aforesaid applications are lodged on its behalf or by an Underwriter of the Prospectus.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 4.7.2 | The
Underwriter shall give written notice to the Coordinator of the Issue on the date of
lodgment of the applications regarding the lodgment of the applications through the
authorized entity, coupled with mention of the name of the authorized entity and the
number of Securities that have been applied for as aforesaid, and shall attach a copy of
the application to its notice to the Coordinator, as well as the confirmation from the
authorized entity. The Underwriters notice in accordance with this sub-clause,
accompanied by a copy of the application and the confirmation, shall be final and binding.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.7.3 | Where
an Underwriter has notified the Coordinator of the lodgment of applications through an
authorized entity, as described in sub-clause 4.7.2 above, the Securities included in
such applications shall be deemed to be securities the applications for the purchase op
which were lodged through such Underwriter, and subject to the condition that the
applications were lodged and the full consideration in respect thereof was paid to the
Company in accordance with the terms and conditions of the Prospectus, and the number of
Securities included in the applications will be deducted from the total Securities such
Underwriter is obliged to purchase, in accordance with Clause 3 above. For the removal of
doubt, these Securities will not under any circumstances be counted as part of the count
of Securities the applications for the purchase of which were lodged through another
Underwriter or another authorized entity.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 4.8 | The
Underwriters or any of them shall not lodge applications for the purchase for themselves,
of Units in the issue pursuant to the Prospectus unless a notice is included in the
Prospectus regarding the total number of Units for which they have undertaken to apply
for themselves. The following is a list of the Underwriters who have given notice of
their intention to apply for Units for themselves in the scope of the tender to the
public:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Name                                                             | No. of units it has
undertaken to order for
itself
| | ---------------------------------------------------------------- | --------------------------------------------------
|
|
|
|
| | Poalim I.B.I. - Underwriting And Issues Ltd.                     |                                                   
| | Africa-Israel Issues Ltd.                                        |                                                   
| | Discount Underwriting And Issues Ltd.                            |                                                   
| | Altschuler Shacham Management, Underwriting And Investments Ltd. |                                                   
| | Clal Finance Underwriting Ltd.                                   |                                                   
| | Analyst Issue Management Ltd.                                    |                                                   
| | Menora Underwriting And Management Ltd.                          |                                                   
| | Y.A.Z. Investments And Properties Ltd.                           |                                                   
| | Epsilon Underwriting And Issues Ltd.                             |                                                   
| | Rosario Capital Ltd.                                             |                                                   
| | Meitav Underwriting Ltd.                                         |                                                   
| | L.L. Underwriting And Investments Ltd.                           |                                                   
| | Gilon - Tau Underwriting And Issues Ltd.                         |                                                   
| | Synergetica Underwriting Ltd.                                    |                                                   
| | Jerusalem Capital Markets Underwriting And Issues (1994) Ltd.    |                                                   
| | P.R. Hacker Capital Markets Ltd.                                 |                                                   
| | Revavot Underwriting Ltd.                                        |                                                   
| | Yaad (Z.R.) Underwriting And Issues Ltd.                         |                                                   
| | Sigma P.C.M. Underwriting And Business Promotion (1993) Ltd.     |                                                   
| | Goren Underwriters Ltd.                                          |                                                   

| | The
Company undertakes to include these notices in the Prospectus.
| | ------------------------------------------------------------------

|5. | Declaration
of fitness
|-- | ----------------------

| | 5.1 | Each
of the Underwriters hereby declares and represents to the Company that at the date of
signing of this Agreement the conditions of fitness which are required pursuant to the
Securities Regulations (Underwriting), 5753-1993, apply with respect to it, and it
declares and undertakes that it will have such fitness until the fulfillment of all its
aforesaid obligations, or until it becomes apparent that it has no obligation, and
undertakes that it will immediately notify the Company and the Lead Managers in regard to
any change in the correctness of its declaration regarding its fitness to serve as an
Underwriter.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 5.2 | Each
of the individual Underwriters hereby declares that at the date of signing of this
Agreement it has undoubted and unconditional financial capability to comply with all its
obligations pursuant to this Agreement, and declares and undertakes that it will have
such financial capability until the fulfillment of all its aforesaid obligations, or
until it becomes apparent that it has no obligations, and that it will give immediate
notice to the Company and to the Lead Managers with regard to any change in the
correctness of its declaration or in its ability to comply with its obligations as
aforesaid.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.3 | Poalim
I.B.I.  Underwriting and Issues Ltd. hereby declares and represents to the Company
that on the date of signing of this Agreement, Bank Hapoalim B.M. is not a controlling
shareholder therein, and consequently the restrictions prescribed in Regulations 10A(2)
and (3) of the Securities Regulations (Underwriting), 5753-1993, do not apply to it in
relation to the offering of Securities by the Company.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.4 | If
notice as referred to in Clauses 5.1 and 5.2 above is received, and/or if The Lead
Managers are of the opinion that a change has occurred in the correctness of the
declarations or the capability of another Underwriter to fulfil its obligations as set
forth above, the Lead Managers may, in their sole discretion, notify the Underwriter that
it has been removed from the consortium of Underwriters and has been replaced by another
or by others, or that its share has been reduced, or may take any other step which
appears to them to be conducive in order to guarantee the performance of full and proper
underwriting of the Underwritten Securities. In the event that the Lead Managers exercise
their power as aforesaid, they shall give notice to that effect to the Company, and the
Company shall without delay give notice to that effect to the Securities Authority and to
the Stock Exchange.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
such circumstances, each of the Underwriters undertakes to sign an amendment to the
Prospectus, in the event that such notice necessitates an amendment to the Prospectus
according to Section 25 of the Securities Law, 5728-1968, in the opinion of the
Securities Authority or of the Lead Managers.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Such
amendment shall not in itself constitute grounds for the release of any Underwriter from
its obligations pursuant to this Agreement.
| | -----------------------------------------------------------------------------------------------------------------------------------------

|6. | Transfer
of money
|-- | -----------------

| | 6.1 | Shortly
before the day of the tender, the Coordinator of the Issue shall open a trust account
with a banking corporation (hereinafter: the Special Account). The
Special Account shall be managed and conducted exclusively by the Coordinator of the
Issue for and on behalf of the Company, and the amounts that have been paid, inter alia,
in respect of Securities the applications for the purchase of which through the
Coordinator of the Issue and through other members of the Stock Exchange, have been met,
shall be deposited in accordance with the terms and conditions of the Prospectus, and the
Coordinator of the Issue shall deal therewith and shall act in accordance with the
conditions of the Prospectus.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

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| | 6.2 | The
Coordinator shall transfer to the Company the money that will be paid for Securities the
applications for which are met (including the fruits), less the full amounts of the
commissions as described in Clause 9 below, within one business day after such money is
received by it.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.3 | The
transfer of the money is contingent upon the Coordinator receiving, simultaneous with the
transfer of the money as stated in Clause 6.2 above, letters of allotment in respect of
the Securities that have been purchased by the public, for the nominees company through
which the Securities will be traded on the Stock Exchange.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.4 | The
amounts of commissions that have been deducted by the Coordinator shall be transferred to
the Underwriters and to the Entities Authorized to Receive Applications who are entitled
thereto pursuant to the Prospectus.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.5 | Notwithstanding
the contents of Clauses 6.2 and 6.4 above and in accordance with this Agreement, the
Coordinator shall not transfer any money to the Company and to the Underwriters, unless
the conditions specified in the Stock Exchange directives for the existence of a minimum
spread, and for the listing for trading on the Stock Exchange, as described in the
Prospectus have been fulfilled.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.6 | If
the Securities are not listed for trading, the Coordinator shall return to the applicants
the consideration for the Units that has been paid by them, if paid, together with the
fruits that have accrued in respect thereof, if any, and less any tax according to law,
if such tax applies.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | Realization
of the underwriting obligation
|-- | ------------------------------------------

| | 7.1 | On
the first day of trading following the day of the tender, not later than 3:00 p.m., the
Company will notify the Coordinator of the Issue as to the total number of Securities
forming part of the Securities offered which the Underwriters are obliged to purchase in
accordance with the terms and conditions of this Agreement.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.2 | If
the Underwriters are obliged to purchase Securities forming part of the Securities
offered in accordance with the notice as aforesaid, the Underwriters shall send to the
Company, through the Coordinator of the Issue, and in accordance with the terms and
conditions of the Prospectus, the consideration for those Securities they are obliged to
purchase as stated in this Agreement, by not later than 5:00 p.m. on the third trading
day following the day of the tender, subject to the condition that the requirements for
the minimum spread and the remaining conditions for listing for trading on the Stock
Exchange, as defined in the Prospectus, have been fulfilled.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.3 | Against
receipt of any amount forming part of the aforesaid consideration, the Company shall
transfer and allot the Securities to the Underwriters which they have purchased, and
shall deliver letters of allotment in respect thereof to the Underwriters.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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| | 7.4 | The
Underwriters will be entitled to deduct from the consideration in respect of the
Securities offered to the public which they are obliged to purchase, all amounts of the
commissions that are due to them in accordance with this Agreement, provided that the
amounts of the commission have not been deducted at that time in accordance with Clause
6.4 above.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.5 | This
Agreement will be deemed to be an irrevocable application by the Underwriters to purchase
the Underwritten Securities which they have undertaken to buy as stated in this
Agreement.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Listing
for trading and arrangements
|-- | ------------------------------------

| | The
Company shall take steps and shall do everything it can to cause a situation that the
Securities offered pursuant to the Prospectus will be traded on the Stock Exchange.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Commissions
|-- | -----------

| | In
consideration for the undertakings and services of the Lead Managers and the Underwriters
in accordance with this Agreement, including the services for coordination of the issue,
and in consideration for the services of the Entities Authorized to Receive Applications
and the services and undertakings of the Institutional Investors, the Company will make
payment, through the Coordinator of the Issue, by not later than the first business day
following the day of the tender (subject to Clause 6 above), of the amounts specified
below, out of the Special Account:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.1 | To
the Underwriters
| | --- | -------------------

| | An
underwriting commission at a rate of 1% of the overall immediate proceeds of the
Underwritten Units, where same are calculated according to the price per unit. The
commission will be divided between the Underwriters according to their proportionate
share in their undertaking as set forth in Clause 3 above, and without reference to the
number of Units that were applied for through them.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.2 | To
the Institutional Investors
| | --- | ------------------------------

| | The
Company will pay a prior commitment commission to the Institutional Investors at a rate
of 1% of the total immediate proceeds in respect of the Securities in relation to which
the Institutional Investors have undertaken to lodge applications, where such commission
is calculated according to the price per unit.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.3 | To
the Entities Authorized to Receive Applications
| | --- | --------------------------------------------------

| | A
distribution commission at a rate of 0.1% of the total immediate proceeds which are
actually received in respect of the Securities that are purchased as a consequence of
applications that will be lodged through them. This commission will also be paid to the
Institutional Investors in respect of Securities they have purchased in order to comply
with their prior commitment (accordingly, the Entities Authorized to Receive Applications
will not be entitled to the distribution commission in respect of Units the Institutional
Investors have purchased as aforesaid to comply with their prior commitment).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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| | 9.4 | To
the Lead Managers and to the Underwriters
| | --- | --------------------------------------------

| | A
management and participations commission at a rate of 2% of the overall immediate
proceeds that will actually be received in respect of the Units offered pursuant to the
Prospectus. This commission will be divided between the Lead Managers and the
Underwriters in accordance with the sole discretion of Poalim I.B.I.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.5 | To
Poalim I.B.I.
| | --- | ----------------

| | A
success commission in a case in which the rate of interest that will be fixed in the
tender for the Debentures (Series A) is lower than the Maximum Rate of Interest, in an
amount equivalent to a multiplication of the par value of the Debentures (Series B) which
are offered in the Prospectus by the difference between the Maximum Rate of Interest and
the rate of interest that will be fixed in the tender. However under no circumstances
shall the success commission exceed 0.4% of the proceeds of the issue under the
Prospectus.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.6 | Reimbursement
of expenses
| | --- | -------------------------

| | The
Company will pay Poalim  I.B.I.  a  reimbursement  of expenses in an amount of $20,000
              and a coordination commission in a sum of NIS 20,000.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
commissions mentioned above shall be paid in full, also in a case of the purchase of
Securities by the Underwriters in accordance with the provisions of this Agreement. If
the Underwriters are obliged to purchase Securities in accordance with the provisions of
this Agreement, the commissions will be paid to each Underwriter after such Underwriter
has purchased the Securities the purchase of which it undertook to effect in accordance
with this Agreement and has paid the full consideration in respect thereof.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the case of Underwriters and entities who are an authorized trader within the
meaning of the Value Added Tax Law, the Company will pay the commissions and the amounts
specified above together with Value Added Tax against receipt of a valid tax invoice.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Underwriters and the Entities Authorized to Receive Applications are entitled to give
their customers a discount out of the distribution commissions to which they are
entitled. The payments will be effected by the Company through the Coordinator of the
Issue. The foregoing constitutes an irrevocable instruction from the Company to the
Coordinator of the Issue.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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|10. | Declarations
by the Company
|--- | ---------------------------

| | The
Company hereby represents and warrants to the Underwriters that: 
| | ----------------------------------------------------------------------

| | 10.1 | It
has carried out all the examinations in order to check and verify the information
contained in the Prospectus, that the Prospectus, including any amendment that may be
inserted therein as stated below, faithfully describes all the material information in
relation to the Company, the facts, the agreements (verbal and in writing), the permits,
licenses and all the remaining details mentioned therein, and that the Prospectus does
not omit any particular likely to be important to a reasonable investor contemplating the
purchase of securities pursuant thereto and it does not contain any misleading particular
as defined in the Securities Law, 5728-1968 (hereinafter: MisleadingParticular).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 | The
Company will indemnify the Underwriters, or any one of them, in respect of pecuniary
liability imposed on an Underwriter in favor of another person pursuant to a judgment,
including a judgment given in a compromise or an arbitrators award confirmed by a
court, by virtue of the fact that there was a Misleading Particular in the Prospectus, as
well as in respect of reasonable costs of litigation, including attorneys fees that
any of the Underwriters has incurred or been ordered to pay by a court in such
proceedings or in connection with a criminal indictment of which the Underwriter was
acquitted or of which it was convicted of an offense that does not require criminal
intent or as a consequence of an investigation or proceeding conducted against it by an
authority competent to conduct an investigation or proceeding, and which culminated
without an indictment being filed against it and without monetary liability being imposed
on it as a substitute for criminal proceedings (as defined in the Companies Law,
5759-1999) or which culminated in no indictment being filed against it but with the
imposition of a monetary obligation as a substitute for criminal proceeding on an offense
that does not require the proof of criminal intent, all by virtue of the Prospectus
containing a Misleading Particular.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Each
of the Underwriters will be entitled to demand from the Company in writing that the
Company conduct on its behalf any negotiations or defense against such claim. If the
Company does not comply with the aforesaid request within 15 days, such Underwriter may
compromise with the plaintiff for any amounts it sees fit, and the Company shall be
obliged to indemnify it for the amount of the compromise and for any reasonable amount it
incurred in the course of handling the claim and which is directly connected therewith,
provided that the Company was given written notice 7 days in advance of the intention to
compromise as aforesaid, and the Company did not take upon itself the conduct of the
claim.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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| | Notwithstanding
the foregoing, the amounts of indemnity shall not under any circumstances exceed a sum of
NIS 911 million (linked to the Consumer Price Index commencing from the date of signing
of this Agreement). Notwithstanding the foregoing, no amount in respect of the indemnity
will be paid which is greater than 25% of the Companys equity capital according to
the Companys last consolidated financial statements at the time of the demand for
indemnity by the Underwriters in accordance with this Agreement (hereinafter: the
Interim Amount), in the event that there is a reasonable fear that the payment
thereof will prevent the Company from meeting its existing and anticipated obligations
(apart from the Companys obligations to the controlling shareholders therein) at
the date of the demand by the Underwriters for indemnity (hereinafter: the
Condition). It is clarified that payment of the indemnity up to the Interim
Amount is not subject to the Condition, and that the Condition does not derogate from the
rights of the Underwriters to remedies against the Company in accordance with and subject
to any law, and that the Condition shall not apply in the event that a liquidation order
is issued against the Company or a provisional receiver is appointed for it in a
proceeding initiated other than by any of the Underwriters on causes of action pursuant
to this Agreement. Such indemnity will not be given unless it has been proved that the
Underwriter believed in good faith that the Prospectus did not contain a Misleading
Particular. Likewise no indemnity will be given in respect of an act performed by the
Underwriter intentionally or recklessly.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
aforesaid obligations for indemnity will not apply vis-à-vis any
Underwriter in connection with the inclusion of a Misleading Particular in the Prospectus
that was based on information given to the Company by such Underwriter in writing, or on
a request in writing, for purposes of such information being used in the preparation of
the Prospectus.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Upon
the service of any claim and/or demand for payment, as aforesaid, on any Underwriter,
such Underwriter shall forthwith give notice to that effect to the Company and to the
Lead Managers.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | Without
derogating from the generality of the Companys representations and warranties, as
set forth in this Clause 10, the Company will deliver to the Underwriters, simultaneous
with the signing of this Agreement, the following documents:
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3.1 | An
opinion from the attorneys for the issue in accordance with the text set forth in
Appendix B.
| | ------ | ------------------------------------------------------------------------------------------------

| | 10.3.2 | A
certificate from the Companys accountant according to the text attached as Appendix
C.
| | ------ | -----------------------------------------------------------------------------------------

| | 10.3.3 | A
certificate signed by the chairman of the Companys board of directors, the CEO of
the Company and its financial officer, according to the text set forth in Appendix D.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | Additional
duties of disclosure
|--- | -------------------------------

| | From
the date of signing of this Agreement and up to the date of payment for the Securities
offered pursuant to the Prospectus:
| | -------------------------------------------------------------------------------------------------------------------------------

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| | 11.1 | The
Company will enable the Lead Managers to regularly peruse and inspect, at their request,
all the minutes of its general meetings, of meetings of its board of directors and
committees of directors (including an audit committee) and of any material agreement (or
a draft of such agreement prior to the signing thereof) to which the Company is a party.
The Company undertakes to draw the attention of the Lead Managers to every signing of a
material agreement immediately after the signing thereof, and with regard to the conduct
of negotiations relating to the signing of a material agreement as aforesaid.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.2 | The
Company shall furnish the Lead Managers, in writing with any information the Company is
obliged to report to the Securities Authority in accordance with the Securities Law
(including a report under Chapter D and Chapter F) of the Law, and in accordance with the
Securities Regulations (Furnishing of Notices to the Authority), 5744-1984, as well as
all the reports the Company is obliged to report to the Stock Exchange, in accordance
with the Stock Exchange requirements, and it shall comply with its obligations for
rendering reports to the Securities Authority and to the Stock Exchange as aforesaid.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company shall without delay notify the Lead Managers about any material change or the
development of a tendency for a material adverse change in the Companys financial
statements or in the method of presentation of the data therein.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.3 | If
as a result of a disclosure as referred to in Clauses 11.2 and 11.3, the Lead Managers
should decide to demand an amendment to the Prospectus or an amended Prospectus, the
parties will immediately take all the necessary steps, to the satisfaction of the Lead
Managers, to effect the amendment as quickly as possible, including an application to the
Securities Authority in accordance with Section 25 and/or 25A of the Securities Law.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.4 | Upon
the publication of any financial statement by the Company, the statement shall be
attached to the Prospectus, without delay, by way of an amendment to the Prospectus or an
amended prospectus, in a manner that is acceptable to the Lead Managers.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | Coming
into force of the Underwriters undertakings
|--- | ---------------------------------------------------

| | The
Underwriters undertakings pursuant to this Agreement will come into immediate force
(but not retroactively) once a permit is received from the Securities Authority for
publication of the Prospectus in accordance with the contents of Section 21 of the
Securities Law. The Company undertakes that not later than one business day after the
date of the Prospectus, it will publish a notice as referred to in Section 23(c)(2) of
the aforesaid law in two newspapers.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Additional
approvals
|--- | --------------------

| | The
Company will deliver to the Lead Managers, within two business days after the date of the
Prospectus, a copy of a certificate from the attorneys for the issue to the effect that
an approval has been received from the Stock Exchange and a permit has been received from
the Securities Authority for publication of the Prospectus and effecting of the issue
pursuant thereto, and that a duly signed Prospectus by the Company and its directors was
indeed reported on Magna.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|14. | Release
of Underwriter from obligations
|--- | ---------------------------------------

| | Notwithstanding
everything stated in this Agreement, if it should transpire that the Prospectus contains
any Misleading Particular or that an important particular was omitted from the Prospectus
or in a case that the Securities Authority gives an instruction to the Company in
accordance with Section 25(a) and/or Section 25A(b) of the Securities Law, to publish an
amendment to the Prospectus or to publish an amended prospectus, or in a case that the
Company should request (without having received the prior consent thereto of The Lead
Managers) to make an amendment to the Prospectus in accordance with Section 25A(a) of the
aforesaid law, the Underwriters or any of them will be entitled, by giving notice to the
Company within 2 business days from the date on which it became aware of one of the
events enumerated above, as the case may be, but not later than 12 hours before the
subscriptions list, to be released from all their obligations to the Company pursuant to
the Underwriting Agreement. This shall apply if the Misleading Particular or the
important particular omitted from the Prospectus as aforesaid was not known to such
Underwriter at the time of signing of the Underwriting Agreement, or if the instruction
was given or the request submitted as a consequence of something that was not known to
such Underwriter at the time of signing of the Underwriting Agreement, which had same
been known to it would reasonably not have contracted with the Company and the offeror
under the Underwriting Agreement, or would not have entered into this Agreement under the
same conditions.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company shall give notice on the same day to the Lead Managers as to an instruction
having been given by the Securities Authority to publish an amendment to the Prospectus
as aforesaid or of the Company having submitted a request to publish an amended
prospectus as aforesaid.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
one or more of the Underwriters exercises its right as aforesaid and is released from its
obligations pursuant to the Underwriting Agreement as aforesaid, the Company will apply
to the Securities Authority with an application to amend the Prospectus in accordance
with the provisions of Section 25A(a) of the Securities Law. Such application and the
amendment of the Prospectus in consequence thereof shall not in themselves serve as
grounds for the release of any Underwriter from its obligations pursuant to this
Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
any of the Lead Managers should act in accordance with this provision and be released
from its obligations as aforesaid without another Lead Manager assuming the obligations
of the Lead Managers who has been released, the Underwriting Agreement will also be
cancelled with the remaining underwriters, and the Company will refer to the Securities
Authority with an application to amend the Prospectus or to cancel the issue, in the
Companys discretion. In a situation where the Company has chosen not to cancel the
issue and to implement it without an underwriting obligation, it shall refer to the
Securities Authority with a request to publish an amended prospectus in which the
Underwriting Agreement will not be included and the signatures of the Underwriters will
not be included. If for any reason such amended prospectus is not published, the issue
will be cancelled.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|15. | Circumstances
for cancellation of the Issue
|--- | -------------------------------------------

| | Notwithstanding
the contents of this Agreement, it is agreed that the Lead Managers will be entitled, in
their absolute discretion, to cancel all the obligations of the Underwriters pursuant to
the Underwriting Agreement not later than 12 hours before the time of opening of the
subscriptions list in the tender to the public, if in their discretion there has been an
adverse change in the securities market in Israel or there has been a change in the
security, economic, or political situation in Israel or around the world which has an
adverse affect or is likely to have an adverse affect on the securities market in Israel
or on the Company, as compared with the situation prevailing at the time of signing of
this Agreement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
such case this Agreement will be cancelled also with the remaining Underwriters, and the
Company will refer to the Securities Authority with an application to amend the
Prospectus or to cancel the issue, in the Companys discretion.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Notice
of cancellation of the Underwriters obligation and cancellation of the Underwriting
Agreement as aforesaid shall be given under the signature of the Lead Managers, and shall
be deemed to have been delivered to the Company at the time of its delivery at the Companys
registered office or at the office of the attorneys for the issue.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
a case in which the Company has elected not to cancel the issue, it shall refer to the
Securities Authority with an application to publish an amended prospectus in which the
Underwriting Agreement will not be included and it will also not contain the signatures
of the Underwriters. If for any reason no amended prospectus is published as aforesaid,
the issue will be cancelled.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16. | Actions
in the case of cancellation of the issue
|--- | ------------------------------------------------

| | In
the event of a cancellation of the issue as stated in Clauses 14 or 15 above, the Company
shall give notice to that effect by an immediate report, and shall publish a notice to
that effect on the same day if possible, in one newspaper, and on the following day in
two widely circulating Hebrew dailies published in Israel. The Company shall attend to
dissemination of the immediate report amongst all Stock Exchange members, the Securities
Authority and the Entities Entitled to Receive Applications in accordance with this
Agreement, on the date of cancellation of the Agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It
is hereby clarified that if the issue is cancelled in the circumstances as described in
Clauses 14 or 15 above as aforesaid, the Lead Managers and/or the Underwriters and each
of them will not be liable to the Company, and the Company will not be liable to the
Underwriters and/or to the Lead Managers, in respect of any damage that may be caused as
a result of and/or in connection with the aforesaid cancellation and/or in respect of any
expense incurred in the course of and/or in connection with dealing with the preparation
of drafts of the prospectus and the Prospectus and/or in the course of negotiations
leading up to the signing of this Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|17. | Power
of attorney to the Lead Managers
|--- | --------------------------------------

| | 17.1 | The
Underwriters hereby empower the Lead Managers to postpone dates specified in the
Prospectus, on their behalf, including, but without limitation, the day of the tender
and/or in their name to cancel this Agreement in the discretion of the Lead Managers.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.2 | The
Underwriters hereby empower the Lead Managers to agree in their name and on their behalf
and to sign on their behalf and in their name on any amendment to the final draft of the
Prospectus and to any amendment to this Agreement.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.3 | The
Underwriters hereby empower the Lead Managers to sign in their name on any amendment to
the Prospectus, also after it has been published, if in the discretion of the Lead
Managers there is a legal, commercial or other necessity for amending it.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.4 | It
is hereby clarified that the Lead Managers will not be liable to the Company and/or to
the Underwriters for any damage that has been caused and/or may be caused to them as a
result of and/or in connection with the postponement or cancellation or amendment in
circumstances as described in Clauses 14 or 15 above, including in respect of any expense
they incurred in the course of and in connection with the preparations of drafts of the
prospectus and of the Prospectus and/or in the course of negotiations in advance of
entering into this Agreement.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18. | Entire
Agreement
|--- | ----------------

| | This
Agreement embodies all the agreements between the parties and it replaces any prior
agreement, accord, representations or document between the parties in connection with the
matters stated herein. Likewise there shall be no validity to any alteration to this
Agreement, unless it is drawn up in writing and signed by all the parties or their lawful
representatives.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|19. | Authorization
for Magna
|--- | -----------------------

| | By
their signatures to this Agreement the Underwriters authorize the authorized persons to
sign an electronic signature of the Company to report in their name on the Magna system
about the Underwriters having entered into this Agreement and their signature hereto, and
also of their signature to the Prospectus.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# In Witness Whereof the
Parties have Hereunto Signed:

| |  | By: /s/ David Weissman/s/ Dror Moran
Blue Square Real Estate Ltd.
| |  | -------------------------------------------------------------------------------

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