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# Exhibit 4.23

# AGREEMENT

Made
and entered on the 21st day of June 2006

|Between: |  | BLUE
SQUARE ISRAEL LTD.Publ. Co. 520042847of 2 Amal Street, Afeq Industrial Zone, Rosh Ha'ayin
(hereinafter: "the Seller")
|-------- |  | --------------------------------------------------------------------------------------------------------------------------

| | of
the one part;
| | ----------------

|And: |  | BLUE
SQUARE REAL ESTATE LTD.Pvte. Co. 513765859of 2 Amal Street,
Afeq Industrial Zone, Rosh Ha'ayin(hereinafter: "the Buyer")
|---- |  | -----------------------------------------------------------------------------------------------------------------------------

| | of
the other part;
| | ------------------

|WHEREAS |  | The
Seller carries on business in operating a chain of retail stores and is the owner of
activities in the field of letting, management, development and improvement of real
estate properties owned by it; and
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS |  | In
accordance with a resolution of the Sellers board of directors, the Seller wishes
to split its activities, in a manner whereby properties in the sphere of letting,
management, development and improvement of real estate properties owned by it will be
transferred to the Buyer in consideration for the allotment of shares of the Buyer to the
Seller (hereinafter: the Spin-Off Process); and
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS |  | The
Buyer is a wholly-owned subsidiary of the Seller which was established for the purpose of
constituting a real estate development, initiation and management company; and
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS |  | In
the scope of a process preliminary to the Spin-Off Process, and in accordance with a
pre-ruling from the tax authorities, the Seller wishes to transfer to the Buyer, and the
Buyer wishes to receive from the Seller, the Property Sold, as hereinafter defined, in
accordance with and pursuant to the provisions of Section 104A of the Income Tax
Ordinance, against an allotment of the consideration shares to the Seller and all in
accordance with the provisions set forth below in this Agreement; and
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WHEREAS |  | The
parties wish to regulate the terms and conditions of the contractual arrangement between
them, as set forth and as stipulated below in this Agreement;
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

1

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

|1. | Preamble
and interpretation
|-- | ---------------------------

| | 1.1 | The
preamble to the Agreement, the appendices hereto and the declarations of the parties
constitute an integral part of the Agreement.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------

| | 1.2 | The
division of this Agreement into clauses and sub-clauses and the headings appearing in it
have been done for reasons of convenience only, and no use shall be made thereof for
purposes of the interpretation of this Agreement.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Definitions
|-- | -----------

| | In
this Agreement, the terms set forth below will have the meanings set opposite them:
| | --------------------------------------------------------------------------------------

| | 2.1 | The
Property Sold  the real estate properties describes in Appendix A which
will be attached to this Agreement on the date of closing (hereinafter: the Real
EstateProperties), including all the Sellers rights in relation
to the Real Estate Properties (including the Sellers rights vis-à-vis Coop
Blue Square Services Society Ltd. in respect of the Real Estate Properties), as well as
the agreements.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.2 | The
Agreements  contractual arrangements between the Seller and third parties
in connection with the Real Estate Properties, including leasehold agreements and/or
lease agreements and/or joint ownership agreements and/or purchase agreements and/or any
other agreement between the Seller and any third party in connection with the Real Estate
Properties.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.3 | The
Effective Date  December 31, 2005, or any other date that may be agreed
upon between the parties, in accordance with an approval from the tax authorities.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Representations
and warranties by the Seller
|-- | --------------------------------------------

| | The
Seller hereby represents and warrants to the Buyer that:
| | ------------------------------------------------------------

| | 3.1 | Subject
to the fulfillment of the suspensive conditions, there is no legal, contractual or other
bar to its entering into this Agreement and to performing its obligations under this
Agreement in full and punctually on due date.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 | It
accepts the consideration shares as hereinafter defined, in the state in which they are
as is without any representation and/or declaration on the part of the Buyer,
including, but without limitation, the condition of the Buyer, its liabilities, assets
and its business, and any other matter and thing likely to be of interest to a reasonable
purchaser of the consideration shares. The Seller waives any allegation of defect or flaw
in connection with the consideration shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

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|4. | Representations
and warranties by the Buyer
|-- | -------------------------------------------

| | The
Buyer hereby represents and warrants to the Seller that:
| | ------------------------------------------------------------

| | 4.1 | It
is purchasing the Property Sold in its present condition as is at the date of
signing of this Contract, without any representation and/or declaration on the part of
the Seller, including, but without limitation, in regard to the state of the Real Estate
Properties from the physical and/or zoning and/or legal aspect and/or any other aspect
and/or any other matter and thing likely to be of interest to a reasonable purchaser of
rights in land. The Buyer waives any allegation of defect or flaw in connection with the
Property Sold.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2 | Subject
to the fulfillment of the suspensive conditions, there is no legal, contractual or other
bar to its entering into this Agreement and to the performance of its obligations under
this Agreement in full and punctually on due date.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | Suspensive
conditions
|-- | ---------------------

| | 5.1 | This
Agreement and its implementation is contingent upon the fulfillment and
compliance with the following cumulative conditions (hereinafter:
"the Suspensive Conditions"):
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.1.1 | Obtaining
of all the resolutions and approvals required for implementing the transactions covered
by this Agreement from the competent organs of the Seller.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.1.2 | Obtaining
of all the resolutions and approvals required for implementing the transactions covered
by this Agreement from the competent organs of the Buyer.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.1.3 | Receiving
an approval from the Income Tax Commission for implementation of the Spin-Off Process.
| | ----- | ------------------------------------------------------------------------------------------------

| | 5.1.4 | Obtaining
the consent of third parties to the transfer of the Property Sold from the Seller to the
Buyer, to the extent that such consents are required.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.1.5 | The
fulfillment of all the Suspensive Conditions specified in the agreement for transfer of
assets and liabilities under Section 105A(2) of the Income Tax Ordinance, which was
signed by the parties on April 2, 2006.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.2 | If
the Suspensive Conditions or any of them is not fulfilled within 6 months from the date
of signing of this Agreement, and the parties have not agreed to an extension of the time
as stated in Clause 5.3 below, this Agreement will be null and void, without this being
deemed to be a breach hereof and without any party having a right to any remedy as a
consequence thereof.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 5.3 | Notwithstanding
the contents of Clause 5.2 above, each of the parties will be entitled, by way of written
notice to the other party, to extend the date for fulfillment of the Suspensive
Conditions, each time for a period of an additional 60 days over and above the last date
that was specified for the fulfillment of the Suspensive Conditions prior to the giving
of the notice, but it is agreed that under no circumstances shall the period for
fulfillment of the Suspensive Conditions be extended beyond a period of 24 months from
the date of signing of this Agreement.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.4 | Notwithstanding
the contents of Clause 5.1 above, it is agreed that the parties will be entitled to waive
the fulfillment of any of the Suspensive Conditions and/or to postpone the date for the
fulfillment of any of the Suspensive Conditions.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | The
transaction and the Effective Date
|-- | --------------------------------------

| | 6.1 | On
the date of closing, as defined below, the Seller will transfer the Property Sold to the
Buyer and the Buyer will accept the Property Sold from the Seller, with effect from the
Effective Date, including on a basis whereby, with effect from the Effective Date, the
Seller will assign the Agreements to the Buyer, and in a manner whereby all the income
and expenditure in respect of the Property Sold, commencing from the Effective Date,
shall be for and shall be borne by the Buyer and shall be paid by it.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | To
the extent that either of the parties should bear any payment and/or receive any income
in connection with the Property Sold which is in excess of its entitlement or its
obligation, as the case may be, in accordance with the provisions of this Clause 6.1
above, the parties will carry out an accounting between them, so that each party will
bear the expenses and will receive the income in accordance with the provisions of this
Clause 6.1 above.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.2 | Included
in what is stated in Clause 6.1 above, it is agreed between the parties in relation to
the Real Estate Properties as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------

| | 6.2.1 | In
relation to properties forming part of the Real Estate Properties that are leased to
third parties (including properties leased to Blue Square Chain Properties and
Investments Ltd. or to Blue Square Chain Hyper-Hyper Ltd.)  it is agreed that all
the Sellers rights and obligations pursuant to the lease agreements will be
assigned to the Buyer, commencing from the Effective Date, on a basis that the Buyer will
be entitled and liable to third parties as aforesaid, commencing from the Effective Date,
for everything connected with the lease agreements.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.2.2 | In
relation to properties forming part of the Real Estate Properties of which the Seller
itself makes use  it is agreed that these properties will be leased to the Seller
by the Buyer, commencing from the Effective Date onwards, in accordance with the
conditions of lease as set forth in a lease agreement that will be signed between the
Seller and the Buyer, as stated in Clause 8.2 below.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 6.3 | To
the extent that consent is required from third parties to the transfer of the Property
Sold and/or to any part thereof, the Seller undertakes to act diligently and
persistently, in order to obtain the consent of such third parties. Where consent of any
third party is required as aforesaid and such consent has not been received (hereinafter:
Transfers Requiring Consent), the Seller will continue with the
implementation of the contractual arrangement, in trust for the Buyer until the transfer
is completed. All receipts which the Seller may receive in respect of Transfers Requiring
Consent of the transfer which has not been completed, will be accepted by the Seller in
trust for the Buyer and will be transferred to the Buyer immediately upon the receipt
thereof. The Seller will not have a proprietary and/or other right in and to a receipt
that may be received by it as aforesaid. The Seller will be entitled to indemnity from
the Buyer in respect of its expenses, and in respect of any damage that may be sustained
by it in connection with such Transfers Requiring Approval.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It
is agreed that consent fees to the Israel Lands Administration in respect of the transfer
of the rights in any of the Real Estate Properties to the Buyer, to the extent that same
apply, shall be borne by the Buyer and shall be paid by it.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.4 | The
parties shall act in cooperation until completion of registration of the transfer of
rights in the Real Estate Properties from the Seller to the Buyer, and included in this
the parties will sign any deed and/or application and/or any other document that may be
necessary for purposes of completing the registration as aforesaid. It is agreed that the
Buyer will bear all the costs and/or fees connected with completion of registration as
aforesaid.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It
is agreed that to the extent that there are and/or may be attachments and/or encumbrances
imposed on any of the Real Estate Properties, the Seller undertakes to act for the
removal of such attachments and/or encumbrances, including in a manner that will
facilitate completion of registration of the transfer of rights from the Seller to the
Buyer.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | The
consideration
|-- | -----------------

| | As
consideration in respect of the Property Sold, the Buyer undertakes to allot to the
Seller, on the date of closing, 2,484 ordinary shares of NIS 1 par value each in the Buyer
(hereinbefore and hereinafter: the Consideration Shares).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
parties declare and represent that no consideration has been transferred and/or will be
transferred between them in respect of the Property Sold, apart from the allotment of the
Consideration Shares and as set forth in the approval from the tax authorities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|8. | The
closing
|-- | -----------

| | 8.1 | Within
7 days from the date of fulfillment of the Suspensive Conditions (hereinbefore and
hereinafter: the Date of Closing), after the parties have verified
that all the Suspensive Conditions have been fulfilled to their satisfaction, the parties
will perform all the following acts and operations at one and the same time:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.1.1 | Possession
of the Real Estate Properties will be transferred from the Seller to the Buyer.
| | ----- | ------------------------------------------------------------------------------------------

| | 8.1.2 | The
Buyer will allot the Consideration Shares to the Seller and will deliver to the Seller an
allotment of shares report for the Registrar of Companies which relates to the allotment
of the Consideration Shares to the Seller. The parties will sign a document for effecting
an allotment in the form of Appendix B, which will be attached to
this Agreement on the Date of Closing.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.1.3 | The
Seller will deposit with the Buyer a notarial irrevocable power of attorney in 2 copies
in favor of the Buyer, enabling the Buyer to perform any act in connection with the Real
Estate Properties and/or the Property Sold, including the transfer of rights in the Real
Estate Properties into the name of the Buyer.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.1.4 | The
parties will sign any document and will perform any act which may be required for
purposes of consummating the transaction that is the subject of this Agreement.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.2 | Within
30 days from the Date of Closing, the parties will enter into a lease agreement in
relation to properties forming part of the Real Estate Properties, which will be let to
the Seller by the Buyer.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Liability
and indemnity
|-- | -----------------------

| | Commencing
from the Date of Closing and starting from the Effective Date, the Buyer will be the owner
of all the rights and obligations in respect of the Property Sold, and all responsibility
and/or liability to any person and/or body, including vis-à-vis the various
administrative authorities, in connection with the Property Sold, the origin of which
and/or the cause of action for which and/or the works the basis for which relates to any
date subsequent to the Effective Date  shall be borne by the Buyer alone. The Buyer
shall indemnify the Seller in respect of any damage or expense that may be incurred by the
Seller, as a result of a claim in connection with the Property Sold the responsibility for
which is shouldered by the Buyer in accordance with the foregoing.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|10. | Taxes
|--- | -----

| | 10.1 | The
transfer of the Consideration Shares shall be effected in accordance with Section 104A of
the Income Tax Ordinance and in accordance with the conditions thereof, which are known
to the parties, and in the scope of this it is agreed that no additional or other
consideration will be given to the Seller, in cash or in cash equivalent, for the
Property Sold. Notwithstanding the foregoing, if any tax should apply in connection with
the implementation of the transaction as aforesaid, then the following provisions will
apply:
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1.1 | The
Seller shall bear the payment of any tax or levy, if and to the extent that same should
apply to it, as seller of the Property Sold, pursuant to the provisions of any law in
respect of any transfer of a right in the real estate covered by this Agreement.
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1.2 | The
Buyer will bear the payment of any tax or levy, if and to the extent that same should
apply to it, as purchaser of the Property Sold, pursuant to the provisions of any law in
respect of any acquisition of a right in the real estate covered by this Agreement, and
included in this the Buyer shall bear the Land Acquisition Tax at a rate of 0.5% in
accordance with an approval from the tax authorities. For the removal of doubt it is
clarified that the Buyer will bear the consent fees and the costs of registration as
stated in Clause 6.3 and Clause 6.4 above, and the betterment levy as referred to in
Clause 10.3 below. It is clarified in this regard that to the extent that the Seller has
a right against any third party for reimbursement and/or contribution and/or indemnity in
respect of such betterment levies, the Seller will act in trust for the Buyer in regard
to the exercise of this right, and all the receipts that may be received by the Seller
from a third party shall be accepted by it in trust for the Buyer and same will be
transferred to the Buyer immediately upon the receipt thereof. The Seller will not have
any proprietary and/or other right to a receipt that may be received by it as aforesaid.
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 | All
the taxes, municipal rates, fees and current payments which applied and/or which apply
and exist and/or which may apply in the future in connection with the real estate,
whether or not payment thereof has been demanded, including debts to property tax, if
same exist, in relation to a period which is up to the Effective Date, will be borne by
the Seller, and from the Effective Date onwards the payments mentioned in this clause
will be borne by the Buyer.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | A
betterment levy which applies and/or which may in the future apply in respect of any of
the Real Estate Properties, shall apply to the Buyer and shall be paid by it. It is
clarified in this regard that to the extent that the Seller has a right against any third
party for reimbursement and/or contribution and/or indemnity in respect of such
betterment levies, such right is hereby endorsed over to the Buyer in the scope of this
Agreement.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|11. | Arbitration
|--- | -----------

| | 11.1 | Any
disputes that may arise between the parties, inter alia, in connection with and/or
in relation to this Agreement and/or in connection with any of the provisions hereof
and/or in connection with the implementation and/or breach hereof, if any, shall be
referred for the decision of an arbitrator who shall be appointed by the parties by
consensus agreement and in the absence of agreement the arbitrator will be appointed by
the legal advisor to Blue Square.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.2 | The
arbitrator shall adjudicate on the aforesaid disputes or on any of them after having been
requested to do so by notice in writing signed by any of the parties to this Agreement.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.3 | The
arbitrator will be bound by the substantive law, but shall not be bound by the rules of
evidence and of procedure.
| | ---- | ----------------------------------------------------------------------------------------------------------------------

| | 11.4 | This
clause constitutes a valid arbitration agreement within the meaning thereof under the
Arbitration Law, 5728-1968.
| | ---- | ----------------------------------------------------------------------------------------------------------------------

|12. | Miscellaneous
|--- | -------------

| | 12.1 | This
Agreement does not constitute an agreement in favor of a third party.
| | ---- | --------------------------------------------------------------------------

| | 12.2 | The
parties hereby ratify that the validity of this Agreement, in accordance with the
conditions hereof, is commencing from December 31, 2005.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------

| | 12.3 | The
expenses of the transaction covered by this Agreement (including attorneys fees,
payments to consultants, etc.) shall be borne by the Buyer and shall be paid by it.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.4 | No
modification, amendment and/or addition to this Agreement will be of any force and shall
be deemed not to have been made, unless drawn up in writing and signed by all the parties
to this Agreement.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.5 | The
parties mutually undertake to sign any deed and document and to furnish any approval and
document required for the actual implementation of the transaction pursuant to this
Agreement. For the removal of doubt it is clarified that the parties will be entitled to
extend the validity of any date fixed in this Agreement.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.6 | The
parties shall render reports according to law to the competent authorities in connection
with this transaction and the implementation hereof, to whatever extent is required
according to law.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# In Witness Whereof the
Parties have Hereunto Signed:

|By: /s/ David Weissman/s/ Yitzhak Bader Blue Square Israel Ltd. | By: /s/ David Weissman/s/ Uri BogomilskyBlue Square Real Estate Ltd.
|----------------------------------------------------------------------------- | ----------------------------------------------------------------------------------

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# APPENDIX A

| | List
of properties being transferred in advance of the split in the framework of Section
104A of the Ordinance
| | --------------------------------------------------------------------------------------------------------------

|Serial No. | Serial
number in
list of all
Blue Square
assets only | Town or city | Name of Property                 | Address of Property             | Block                    | Parcel (incl. portions of
parcels)
|---------- | ---------------------------------------------------- | ------------ | -------------------------------- | ------------------------------- | ------------------------ | ----------------------------------
|1          | 7                                                    | Elyachin     | Elyachin Plot                    | Hatamar/Hate'ena/
Harmon        | 6977                     | 48                                
|2          | 10                                                   | Ashdod       | Ashdod Yad Aleph Plot            | Yarmuch/Kinneret                | 2192                     | 109                               
|3          | 20                                                   | Givat Ada    | Givat Ada Plot                   | Harimon                         | 12105                    | 59                                
|4          | 32A                                                  | Haifa        | Mega Admiralty (Vacant plot)     | Yigal Yadin/Halutzei Taasiya 71 | 11636                    | 3                                 
|5          | 35                                                   | Haifa        | Kiryat Haim plot                 | Shenkar/Ha-Itztadion            | 11578                    | 58, 59                            
|6          | 59A                                                  | Afula        | Mega Afula vacant plot (parking) | Kehilat Zion                    | 16699                    | 17-19                             
|7          | 62                                                   | Kiryat Ono   | Givat Bracha                     | 53 Herzl                        | 6495                     | Parcel 24 sub-parcels 3 + 4       
|8          | 70                                                   | Rechasim     | Rechasim plot                    | Haruv/Savyon                    | Block 10393 Parcels 4341 | Block 4145 Parcels 103, 25, 26    
|9          | 71A                                                  | Ramle        | Ramle Fire Brigade vacant plot   | Yerushalayim Blvd./Nofei Hemed  | 4341                     | 25, 26                            
|10         | 74                                                   | Raanana      | Raanana Amami                    | 88 Borochov/Kinneret            | 7655                     | 291                               
|11         | 81                                                   | Tel Aviv     | Ramat Hatayassim                 | 4 Oded                          | 6163                     | Parcels 46 and 24 sub parcel 10   

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# APPENDIX B

# Effecting Transfer Of
Assets Against Allotment Of Shares

|Between: |  | BLUE
SQUARE ISRAEL LTD.Publ. Co. 520042847(hereinafter: "Blue
Square")
|-------- |  | ----------------------------------------------------------------------

| | of
the one part;
| | ----------------

|And: |  | BLUE
SQUARE REAL ESTATE LTD.Pvte. Co. 513765859(hereinafter:
"Square Real Estate")
|---- |  | ----------------------------------------------------------------------------------

| | of
the other part;
| | ------------------

In accordance with what has been
agreed between the parties, Blue Square hereby transfers to Square Real Estate, and Square
Real Estate accepts the Property Sold, as defined in an agreement between the parties
dated ____________.

In consideration for the transfer of
the Property Sold to Square Real Estate, and as agreed, Square Real Estate hereby allots
to Blue Square 2,484 shares of Square Real Estate of NIS 1 par value each.

The foregoing is being implemented
within the framework of Section 104 of the Income Tax Ordinance.

In Witness Whereof the Parties have Hereunto Signed,
this Day ____________ Day of ____________ 2006

|By: /s/ David Weissman/s/ Yitzhak Bader
Blue Square | By: /s/ David Weissman/s/ Uri Bogomilsky
Square Real Estate
|----------------------------------------------------------------- | -------------------------------------------------------------------------

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