Document:

20-F

Exhibit 4.30  

BLUE SQUARE REAL
ESTATE LTD. 

First Schedule  

Debentures (Series A)  

The Company will issue a series of up to
NIS 100,000,000 par value registered Debentures (Series A), repayable in 4 equal annual
payments on the 31st day of August of each of the years 2013 – 2016
(inclusive), which are offered to the public at a price equal to their par value. The
Debentures (Series A) bear interest at a rate of 6.25% per annum, which will be paid twice
per year, on February 28 and on August 31 of each the years 2007 and 2016 (inclusive),
until the final redemption of the Debentures. The Debentures (Series A) are linked (as to
principal and interest) to the Consumer Price Index for the month of July 2006. The
Debentures (Series A) are convertible on any trading day, commencing from the date of
their listing for trading on the Stock Exchange and until August 16, 2016 (inclusive),
except during the periods from August 17 until August 31 of each of the years 2013 until
2015 (inclusive), into registered ordinary shares of NIS 1 par value each of the Company,
at a conversion rate of NIS 100 par value Debentures (Series A) for one ordinary share of
NIS 1 par value until August 31, 2008 and after that date and until August 16, 2016, at a
conversion rate of NIS 300 par value Debentures (Series A) for one ordinary share of NIS 1
par value (subject to adjustments as described in Clause 10.3 of the conditions overleaf). 

Registered Debentures
(Series A) 

Number       1

Par value NIS 100,000,000 

Annual interest 6.25% 

	1.  	This
certificate witnesses that Blue Square Real Estate (hereinafter: “the Company”)
will pay the Bank Hapoalim Nominees Company                     Ltd., or whomever is the
registered owner of this Debenture (hereinafter: “Holder of the Debenture (Series
A)”), at the end of the                     trading day of August 31 in each of
the years 2013 – 2016 part of the par                     value principal of the
Debentures (Series A) which are in circulation, all                     subject to the
conditions of linkage and the remaining terms and conditions set
                    forth in the Conditions Overleaf. 

	2.  	Payments
of the principal of the Debentures and payments of the interest will be
                    made against delivery of the Debenture to the Company at its
registered office,                     as stated in the Conditions Overleaf, or at any
other place of which the Company                     gives notice, not later than five
business days prior to the date of payment. 

1

	3.  	In
addition, this certificate witnesses that the Company will convert for a
                    holder of the Debenture (Series A) or for anyone who is the
registered owner of                     this Debenture (Series A), at the time of
surrender of this Debenture (Series A)                     for conversion, the Debenture
(Series A) into ordinary shares of NIS 1 par value                     of the Company on
any trading day commencing from the date of their listing for                     trading
and until August 16, 2016 (inclusive), except in the period between
                    August 17 and August 31 (inclusive) of each of the years 2013 until
2015                     (inclusive), on a basis that every NIS 100 par value Debentures
(Series A) will                     be converted into one ordinary share of NIS 1 par
value of the Company until                     August 31, 2008, and after that date and
until August 16, 2016, according to a                     conversion rate of NIS 300 par
value Debentures (Series A) for one ordinary                     share of NIS 1 par value
(subject to adjustments as set forth in Clause 10.3 of                     the Conditions
recorded overleaf), provided that the conversion rate shall not                     be
lower than the par value of the conversion shares. 

	4.  	Debentures
(Series A) are issued in accordance with a deed of trust
                    (hereinafter: “Deed of Trust”) dated August
14, 2006,                     which was signed between the Company and Hermetic Trust
(1975) Ltd.                     (hereinafter: “the Trustee”). 

	5.  	All
the Debentures (Series A) will have a security ranking which is pari
                    passu between the debentures in connection with the Company’s
                    obligations pursuant to the Debentures (Series A) and without any
preferential                     right or priority for one debenture over another. 

	6.  	This
Debenture (Series A) is issued subject to the conditions set forth
                    overleaf, and to the conditions set forth in the Deed of Trust and in
the                     Prospectus. 

	 	
Signed
and sealed with the rubber stamp of the Company on ____________ 

In the presence of: 

Chairman of the board of directors: 

By: /s/ D. Weissman 

2

CONDITIONS RECORDED
OVERLEAF  

	1.  	General  

	 	1.1 	In
this Debenture (Series A) the following expressions will have the following meanings,
unless a different meaning is to be implied from the context, namely: 

		"The Company" and/or "the Issuer" 
	–	Blue Square Real Estate Ltd.

		"The Deed of Trust"
  	–	A deed of trust  signed  between the Company and the Trustee on August 14, 2005,
including the  appendices  attached  thereto  which  constitute an integral part
thereof;

		"The Prospectus"
  	–	The Company's Prospectus which is about to be published, inter alia, in respect
of the issue of the Debentures (Series A); 

		"Debentures (Series A)"
  	–	Registered  Debentures  (Series  A) of the  Company  which  will  be  issued  in
accordance  with the  Prospectus,  and  which are in  circulation,  for the time
being;

		"The Trustee"
  	–	Hermetic  Trust (1975) Ltd.  and/or  whoever serves from time to time as trustee
for the  holders of the  Debentures  (Series A) in  accordance  with the Deed of
Trust;

		"Register"  	–	A register of holders of the Debentures  (Series A) as mentioned in Clause 24 of
the Deed of Trust;

		"Holders of the Debentures (Series A)"
  	–	The persons  whose names are  registered  for the time being in the  register of
holders of Debentures  (Series A) and in the case of several joint holders,  the
joint holder whose name stands first in the register;

		"Debentures (Series A) certificate"
  	–	A  certificate  of Debenture  (Series A) the text of which  appears as the First
 Schedule to this deed;

		"The Law"
  	–	The Securities Law,  5728-1968 and the regulations  pursuant thereto as in force
from time to time;

		"Principal"  	–	The par value of the Debentures (Series A) which are in circulation;

3

		"Consumer Price Index"
  	–	The price index known by the name of "Consumer  Price  Index",  including  fruit
and  vegetables,  published  by the Central  Bureau of  Statistics  and Economic
Research,  and including that index even if it is published by another  official
body or institution,  and also including any official index that may come in its
stead,  whether or not same is structured on the same data on which the existing
index is  structured.  If another index should  replace it which is published by
such body or  institution,  and such body or institution has not fixed the ratio
between that index and the replaced  index,  the ratio will be determined by the
Central  Bureau  of  Statistics,  and if  such  ratio  has  not  been  fixed  as
aforesaid,  then it will be fixed by the Trustee who will, in consultation  with
experts on economics  chosen by the  Trustee,  determine  the ratio  between the
other index and the replaced index;

		"Known index"
  	–	The last-known Consumer Price Index;

		"Basic Index"
  	–	The Consumer Price Index in respect of July 2006,  which was published on August
15, 2006;

		"Payment index"
  	–	The Consumer  Price Index known on the date of effecting  any payment on account
of the principal or the interest;

		"Trading day"
  	–	A day on which the banks in Israel are open for the execution of transactions;

		"Stock Exchange"
  	–	The Tel Aviv Stock Exchange Ltd.

	 	1.2 	This
Debenture is one of a series of registered Debentures (Series A) in an aggregate par
value of up to NIS 100,000,000. The Debentures of this series will rank pari passu in
connection with the Company’s obligations pursuant to the Debentures (Series A)
without any preference or priority for one over another in relation to the amounts that
are due. 

	2.  	Securing
of the Debentures (Series A)  

	 	2.1 	The
Company’s obligation for repayment of the Debentures (Series A) (principal, interest
and linkage differentials) is not secured by any charge or encumbrance. 

4

	 	
For
the avoidance of doubt it is clarified that there is no obligation on the Trustee to
examine, and in practice the Trustee has not examined, the necessity for furnishing
collateral to secure the payments to the debenture holders. By its entering into this
Deed of Trust, and the Trustee’s consent to serve as a trustee for the debenture
holders, the Trustee does not express its opinion, expressly or impliedly, as to the
Company’s ability to meet its obligations to the debenture holders. Nothing in the
foregoing shall derogate from the Trustee’s duties according to law and/or the Deed
of Trust, and nothing therein derogates from the Trustee’s obligation (to the extent
that such obligation is imposed on the Trustee according to any law) to examine the
impact of changes in the Company from the date of the Prospectus onwards to the extent
that same could adversely affect the Company’s ability to meet its obligations to
holders of the Debentures (Series A). Nothing in the foregoing shall derogate from the
Trustee’s duties according to law and/or the Deed of Trust. 

	 	2.2 	It
is hereby clarified that the Company will be entitled to charge and encumber its
property, in whole or in part, under any encumbrance and in any manner without a
necessity for consent of any sort from the Trustee. 

	 	2.3 	The
Debentures (Series A) will rank pari passu in connection with the Company’s
obligations pursuant to the Debentures (Series A) without preference or priority for one
over another. 

	3.  	Date
of repayment of the principal of the Debentures (Series A)

	 	
The
Debentures (Series A) are repayable in 4 equal annual installments on August 31 of each
of the years 2013 – 2016 (inclusive).  

	4.  	The
interest  

	 	
The
principal of the Debentures (Series A) will bear annual interest at a rate of 6.25%. The
interest will be calculated on the basis of an interest period of one year and will be
paid every 6 months on August 31 and on February 28 of each of the years between 2007 and
2016 (inclusive) until the final redemption of the principal of the Debentures (Series A)
in respect of the 6 month period ended on the last day prior to the date of payment,
apart from the first payment of interest which will be made on February 28, 2007, for the
period commencing on the first trading day after closing of the subscriptions list, and
which will end on February 28, 2007, on the basis of 365 days in a year.  

	 	
The
last payment of interest in respect of the Debentures (Series A) will be made on August
31, 2016, concurrent with payment of the balance of the principal of the Debentures
(Series A) in circulation, and against return and surrender of the debenture
certificates.  

	5.  	Deferment
of times  

	 	
Where
the date prescribed for any payment of interest and/or of principal of the Debentures
(Series A) falls on a day that is not a business day, the time will be deferred to the
immediately following business day thereafter and no interest shall be payable in respect
of this deferment. A business day is any day on which the banks in Israel are open for
purposes of executing transactions.  

5

	6.  	Conditions
of linkage of the principal and the interest

	 	
The
principal of the Debentures and the interest thereon will be linked to the Consumer Price
Index in accordance with the following conditions of linkage:  

	 	
The
term “Consumer Price Index” (hereinafter: “the Index”) means
– the price index known by the name of “Consumer Price Index”, including
fruit and vegetables, which is published by the Central Bureau of Statistics, and
including such index even if it is published by another official body or institution
instead of the Central Bureau of Statistics, and also including any official index that
may replace it, whether or not such other index is structured on the same data on which
the existing index is structured. If another index should replace it which is published
by a body or institution as aforesaid, and such body or institution has not fixed the
ratio between that index and the replaced index, the ratio will be fixed by the Central
Bureau of Statistics. If such ratio is not fixed as aforesaid, then the ratio between the
other index and the replaced index will be determined by the Company in consultation with
experts in economics who will be selected by it.  

	 	
The
term “the payment index” means – the Consumer Price Index which is known
on the date of effecting any payment on account of the principal and/or the interest.
However if the payment index is lower than the basic index, the payment index will be the
basic index.  

	 	
The
term “basic index” means – the Consumer Price Index in respect of the
month of July, published on August 15, 2006.  

	 	
The
term “the known index” means – the last-known Consumer Price Index.  

	 	
If
it should become apparent at the time of effecting of any payment on account of the
principal and/or the interest that the payment index has risen as compared with the basic
index, the Company will make such payment of the principal and/or the interest where same
is increased proportionately to the extent of the rise in the payment index as against
the basic index, but if it becomes apparent that the payment index is equal to or less
than the basic index, the Company will make such payment according to the basic index.  

	7.  	Payments
of principal and interest of the debentures

	 	
The
payments on account of the principal in respect of the Debentures (Series A) will be made
to the persons whose names are registered in the register of debenture holders as holders
at the end of the day on August 19 immediately preceding the date on which the effecting
of such payment falls in the years 2013 – 2016 (hereinafter: “the Date
Specified for Payment of the Principal”).  

	 	
Payments
on account of the interest in respect of the Debentures (Series A) will be made to the
persons whose names are registered in the register of debenture holders as holders at the
end of the day on February 16 or August 19, as the case may be, immediately preceding the
date on which the effecting of such payment falls in the years 2007 until 2016
(inclusive) (hereinafter: “the Date Stipulated for Payment of Interest”).  

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The
last payment of the principal and the interest will be made on August 31, 2016, against
delivery and surrender of the debenture certificates to the Company at its registered
office, or at such other place of which the Company shall give notice. The Debentures
must be delivered to the Company at least five business days before the Date Specified
for Effecting the Payment of the Principal.  

	 	
Payment
to the entitled persons will be made by checks or by bank transfer to the credit of the
bank account of those persons whose names are registered in the register of debenture
holders, or who deliver the debenture certificates, respectively, as aforesaid. The
payment will be made subject to the conditions of linkage as set forth above and with
deduction of tax at source.  

	 	
If
a holder of a Debenture who is entitled to payment as aforesaid has not furnished the
Company in good time with details about his bank account, each payment on account of the
interest and the principal will be made by way of check that will be sent by registered
mail to his last address recorded in the register of debenture holders. Sending of a
check by registered mail to the entitled person as aforesaid shall, for all intents and
purposes, be deemed to be payment of the amount denominated therein on the date of
dispatch by post, provided that the check is met upon its due presentation for
collection. No check will be sent for an amount of less than NIS 50, but it will be
possible to obtain the payment in cash at the Company’s offices.  

	 	
A
debenture holder wishing to alter the payment instructions he has given may do so by way
of notice by registered letter, but the Company will only comply with the instruction if
it reaches the Company’s registered office at least 30 days before the date
specified for effecting any payment pursuant to the Debentures. In a case that the notice
is received by the Company late, the Company will act pursuant thereto only in relation
to payments the due date for payment of which is subsequent to the date of payment
immediately following receipt of the notice.  

	8.  	Failure
to make payment for a reason not dependent on the Company

	 	
Any
amount due to a debenture holder which is not actually paid for a reason that is not
dependent on the Company at the date of redemption and/or at the date of payment of the
interest, in circumstances where the Company was prepared to pay it, will cease to bear
interest and linkage differentials that were stipulated for the payment thereof, and the
debenture holder will only be entitled to those amounts he would have been entitled to on
the date specified for effecting of such payment on account of the interest or in respect
of the principal.  

	 	
Within
14 days from the date specified for payment, the Company shall deposit with the Trustee
the amount for payment which was not paid for a reason not dependent on the Company, and
such deposit shall be deemed to be a discharge of such payment, and in the case of
discharge of everything due in respect of the Debentures, also as redemption of the
Debenture.  

	 	
The
Trustee shall invest every amount that has been deposited, as aforesaid, in its name and
to its order in favor of those debenture holders and may invest in investments that are
permitted to it according to the laws of the State of Israel and the provisions of the
Deed of Trust, as the Trustee shall deem fit and subject to the provisions of the law.
Where the Trustee has done so, it will not be liable to the entitled persons in respect
of such amounts, other than for the proceeds that are received from a realization of the
investments, less the expenses connected with the aforesaid investment, the maintaining
of the trust account and a deduction of the Trustee’s remuneration, and it shall
make payment thereof to the entitled persons against presentation of such proof as may be
demanded by it to its full satisfaction, and with deduction of all the compulsory
payments.  

7

	 	
The
Trustee shall hold the aforesaid amounts and shall invest same in the manner aforesaid up
to the end of one year from the date of redemption of the Debentures (Series A). After
that date the Trustee shall return the amounts which have accumulated in its hands
(including the fruits thereof), less its expenses, to the Company, which shall hold these
amounts in trust for the debenture holders.  

	9.  	Register
of holders of Debentures (Series A)

	 	
The
Company shall keep and maintain at its registered office a register of holders of the
Debentures (Series A), in which the names and addresses of holders of the Debentures
(Series A) shall be recorded, as well as the number and par value of the registered
Debentures (Series A). In addition every transfer of ownership of Debentures shall be
registered in the register in accordance with the provisions of the Deed of Trust. The
Trustee and any holder of a Debenture (Series A) may inspect the register of holders of
the Debentures (Series A) at any reasonable time. The Company is entitled to close the
register from time to time for a period or periods which shall not in aggregate exceed 30
days in a year.  

	 	
The
Company will not be obliged to register any notice in the register of holders of the
Debentures (Series A) with regard to an express, implied or presumed trust, or a pledge
or charge of any sort, or of any equitable right, claim or set-off or any other right in
connection with the Debentures. The Company will only recognize the title of the person
in whose name the Debentures are registered, provided that his lawful heirs, the
administrators of the estate or executors of the registered holder and any person who may
be entitled to the Debentures as a consequence of the bankruptcy of any registered holder
(and if it is a body corporate – by virtue of its liquidation) will be entitled to
be registered as holders thereof, after providing such proof as is sufficient, in the
Company’s opinion, to prove the right of any of them to be registered as a holders.  

	10.  	Splitting
of certificate of Debentures (Series A) and transfer thereof

	 	
Every
certificate of Debentures (Series A) may be split into a number of certificates of
Debentures (Series A) the aggregate amount of the principal of which is equivalent to the
amount denominated in the certificate the splitting of which is requested, provided that
the new debenture certificates that will be issued will each be in par value amounts in
whole shekels, and this will be done against the delivery and surrender of such debenture
certificate to the Company at its registered office for purposes of effecting the split.
The split will be effected within 30 days from the end of the month in which the
certificate was delivered to the Company’s office.  

8

	 	
The
Debenture is transferable in respect of any liquidated amount, provided that it shall be
in whole shekels, by way of a deed of transfer drawn in the usual form as applies in the
Company for the transfer of shares, duly signed by its registered holder or his lawful
representative/s.  

	 	
The
deed of transfer must be delivered for registration to the Company’s registered
office accompanied by the Debenture and such appropriate proof of identity and right as
the Company may demand, and together with proof, to the Company’s satisfaction, in
regard to payment of stamp duty and other compulsory governmental payments, if there are
such. The Company will be entitled to retain the deed of transfer in its possession.  

	 	
All
the expenses connected with a split and/or transfer of Debentures, including stamp duty
and other levies, if there are such, shall be borne by the party requesting the split
and/or the transfer. The provisions contained in this clause shall also apply to a
renunciation of debentures, mutatis mutandis.  

	 	
The
Company’s Articles which apply to the transfer of fully paid-up shares shall apply
–mutatis mutandis – to the transfer of the debentures.  

	11.  	Early
redemption  

	 	
If
it should be decided by the Stock Exchange to expunge the Debentures (Series A) in
circulation from trading due to the fact that the value of the public’s holdings
thereof is less than the minimum amount specified in the Stock Exchange directives with
regard to deletion from trading, the Company will act as follows:  

	 	11.1 	Within
45 days from the date of the Stock Exchange notice regarding deletion of the Debentures
(Series A) from trading, the Company will give notice of a date of early redemption at
which the holder of Debentures (Series A) will be entitled to redeem same. 

	 	11.2 	The
notice regarding the date of early redemption will be published in two widely circulating
Hebrew dailies appearing in Israel, and in an immediate report on the Magna system and
shall be delivered in writing to the Trustee and to all the registered holders of the
Debentures (Series A). 

	 	11.3 	The
date of early redemption will fall not less than 30 days from the date of publication of
the notice and not later than 45 days from the aforesaid date, but not in a period
between the date specified for payment of interest and the date of actual payment
thereof. 

	 	11.4 	On
the date of early redemption the Company will redeem the Debentures (Series A) which the
holders thereof have requested to redeem, according to the balance of the par value
thereof, plus linkage differentials and the interest which has accrued on the principal,
calculated pro rata to the period commencing after the last date in respect of
which the interest was paid and up to the aforesaid date of early redemption. 

	 	
Fixing
a date for early redemption as aforesaid shall not prejudice the rights of conversion and
the rights stipulated in the Debentures (Series A) with respect to any holders of the
Debentures (Series A) who did not redeem the Debentures on the date of early redemption
as aforesaid, but the Debentures (Series A) shall be expunged from trading on the Stock
Exchange and, inter alia, the tax implications arising from this, shall apply to
them.  

9

	 	
Early
redemption of the Debentures (Series A) as aforesaid shall not confer on anyone who held
Debentures (Series A) which were redeemed as aforesaid, the right to payment of interest
in respect of the period subsequent to the date of redemption.  

	12.  	Rights
of conversion of Debentures (Series A) into shares

	 	12.1 	Terms
of conversion 

	 	
The
Debentures (Series A) are convertible on any trading day, commencing from their listing
for trading on the Stock Exchange and until August 16, 2016 (inclusive), (the last date
for conversion will henceforth be referred to as: “Last Day for Conversion”),
except the periods from August 17 until August 31 in each of the years 2013-2016
(inclusive), into registered ordinary shares of NIS 1 par value of the Company
(hereinafter: “the Conversion Shares”), according to a conversion rate
of NIS 100 par value debentures for one ordinary share of NIS 1 par value until August
31, 2008, and thereafter and until the Last Day for Conversion, according to a conversion
rate of NIS 300 par value Debentures (Series A) for one ordinary share of NIS 1 par value
(the conversion rates are subject to adjustments as described in Paragraph 2.10.13 of the
Prospectus).  

	 	
Every
holder of Debentures (Series A) wishing to convert the Debentures (Series A) held by him
which have not yet been converted at such time (hereinafter: “the Applicant”)
shall lodge with the Company, through the banks and Stock Exchange members, or in the
case of a registered holder of Debentures (Series A), directly with the Company, a
conversion application in the customary form (hereinafter: “the Notice of
Conversion”), accompanied by the debenture certificate.  

	 	
The
Applicant shall, at any time he is called upon by the Company to do so, sign any
additional document that is necessary in accordance with the provisions of any law and
the Company’s instructions for purposes of giving effect to the allotment of the
Conversion Shares. The date on which the Stock Exchange clearing house (hereinafter: “the
Clearing House”) receives a notice from a Stock Exchange member in regard
to conversion of a Debenture shall be deemed to be “the day of conversion”. For
these purposes, notice regarding a conversion received by the Stock Exchange Clearing
House after the hour of 12 noon shall be deemed to have been received on the next trading
day. The Company’s board of directors has the power to appoint any person the board
of directors shall deem fit to sign any additional document required for purposes of
allotting the Conversion Shares, for and on behalf of the Applicant. No fractional
debenture certificates may be converted, but the Applicant shall be entitled to split the
certificate, as described above.  

10

	 	12.2 	Timetables
for conversion  

	 	
The
bylaws of the Stock Exchange Clearing House with regard to the timetable for execution of
an instruction for the conversion of Debentures (Series A) state as follows: 

	 	1. 	A
notice by a customer with regard to conversion received before the hour of
          12:00 at the office of a Stock Exchange member shall be transferred by the
          member to the Clearing House not later than 12:00 noon on the next trading day
          on the Stock Exchange;  

	 	2. 	Where
the Clearing House has received notice from the Stock Exchange member           regarding
a conversion before the hour of 12:00 noon, the Stock Exchange           Clearing House
will credit the Nominees Company, by not later than 12:00 on the           trading day
following the day on which such notice was delivered to it;  

	 	3. 	Where
the Nominees Company has received a Notice of Conversion as referred to           in
sub-clause (b) above up to the hour of 12:00 noon, the Nominees Company will
          transfer the conversion application to the Company’s offices not later
than           12:00 on the next trading day;  

	 	
Any
notice as enumerated in sub-clauses (a) to (c) above received after the hour of 12:00
noon, on a trading day, will be deemed to have been received before the hour of 12:00
noon on the next trading day. 

	 	
Notwithstanding
the foregoing, on the Last Day for Conversion prior to the final ex redemption or before
partial ex redemption, as the case may be, Stock Exchange members are obliged to transfer
the final conversion applications to the Clearing House before the hour of 12:00 noon. A
Stock Exchange member who does not lodge the application up to the aforesaid hour, will
be treated by the Clearing House as not having exercised its right. If the Last Day for
Conversion before a partial redemption or the Last Day for Conversion falls on a day that
is not a trading day, that day will be postponed to the next trading day. 

	 	
Debentures
(Series A) which have not been converted up to the end of the Conversion Period will not
confer on the holder thereof any right to convert same into Conversion Shares, and the
right of conversion in respect thereof will be null and void after that date. 

	 	
A
Notice of Conversion lodged with the Company cannot be revoked or altered.  

	 	
The
Applicant will not be entitled to an allotment of a fraction of one Conversion Share, but
all surplus Conversion Shares that are created at the time of conversion, if any, will be
sold by the Company on the Stock Exchange within 30 days after such surpluses have
accumulated into whole shares in a reasonable quantity for sale on the Stock Exchange,
having regard to the costs attendant thereon, and the net proceeds, after deduction of
the selling expenses, commissions and other levies, will be paid to the persons entitled
thereto, according to their pro rata share, within 14 business days from the date
of the sale, provided that the Company will not send entitled persons checks in an amount
of less than NIS 50 (however it will be possible to obtain payment in cash at the Company’s
offices). 

11

	 	
Within
two trading days after the conversion, the Company will allot to every applicant the
Conversion Shares that are due to him. Up to the end of the month following the date of
allotment of the shares, the Company will deliver to each Applicant the appropriate share
certificates. In light of the approval for listing for trading on the Stock Exchange of
the Conversion Shares that will be allotted, and subject to the condition that at such
time the Company’s ordinary shares are listed for trading on the Stock Exchange, the
Company will, by taking all the steps available to it, cause the listing of the
Conversion Shares for trading on the Stock Exchange within 3 days from the aforesaid time. 

	 	
The
Conversion Shares will confer on their holders the full dividend and any other
distribution the effective date for the right to receive same is the date of conversion
or subsequent thereto, and they will rank pari passu in all respects with the
existing ordinary shares in the Company’s capital at such date. 

	 	
The
Debentures (Series A) that will be converted will be removed from circulation on the date
of their conversion and will be absolutely void, retroactively to the date of the
conversion, from the date of allotment of the Conversion Shares in respect thereof, and
will not confer any right to any interest (including interest that has accrued) after the
interest payment the last effective date for the payment of which fell prior to the date
of conversion. 

	 	
Debentures
which are converted into shares after the effective date for payment of interest in
respect thereof shall confer on the person who was registered in the register of
debenture holders on the effective date for the payment of interest, the right to the
interest the date for payment of which is at the interest payment date immediately
thereafter, but not the interest payments the date for payment of which is subsequent
thereto. 

	 	12.3 	Provisions
for protection of holders of the Debentures (Series A) during the Conversion Period

	 	12.3.1 	Distribution
of bonus shares  

	 	
If
the Company should distribute bonus shares from the date of the Prospectus and up to the
end of the Conversion Period, the rights of the debenture holders will be safeguarded in
such a way that immediately after the effective date the number of shares a debenture
holder will be entitled to upon conversion of the Debentures will increase, by the
addition of a number of shares the debenture holder would have been entitled to receive
as bonus shares, had he converted the Debenture prior to the effective date for receipt
of the bonus shares. 

	 	
The
method of adjustment is not capable of being changed.  

	 	
The
number of Conversion Shares to which the debenture holders will be entitled will be
adjusted only in the case of a distribution of bonus shares as aforesaid and in the case
of a rights issue as described below, and not in the case of any other issues. 

12

	 	12.3.2 	Rights
issue  

	 	
From
the date of the Prospectus and up to the end of the Conversion Period, if securities of
any class are offered to the ordinary shareholders of the Company, by way of a rights
issue, where the effective date for the right to receive same falls prior to the date of
conversion, the number of shares arising from the conversion will be adjusted for the
benefit element inherent in the rights as expressed in relation to the closing price of
the share on the Stock Exchange on the effective date for the offer of the rights as
against the basic price “ex rights” as will be fixed by the Stock Exchange. The
method of adjustment cannot be altered. 

	 	12.3.3 	Adjustment
in respect of distribution of dividend 

	 	
If
the Company distributes a cash dividend, the effective date for the right to receive same
falls after the date of the Prospectus and during the Conversion Period, the conversion
rate of the Debentures (Series A) in circulation will be adjusted by multiplying the
ratio between the basic price “ex dividend” and the closing price fixed on the
Stock Exchange for the Company’s shares on the effective date for the entitlement to
receive the dividend. The Company shall give notice of the adjusted conversion rate as
aforesaid not later than the day on which the Company’s shares are traded “ex” such
dividend payment. The conversion rate of the Debentures (Series A) will be adjusted as
aforesaid in respect of a distribution of a cash dividend – but not in respect of
any other distribution. 

	 	12.4 	Additional
provisions for the protection of the debenture holders during the Conversion
Period  

	 	
From
the date of publication of the Company’s Prospectus and so long as the Debentures
(Series A) which are issued pursuant to the Company’s Prospectus have not been
converted or been repaid, but under all circumstances not later than the end of the
Conversion Period, the following provisions will apply: 

	 	12.4.1 	The
Company will refrain from a distribution of bonus shares likely to lead to a reduction in
the price of a Conversion Share below its par value.  

	 	12.4.2 	The
Company will refrain from distributing a cash dividend and/or bonus shares and/or rights
for the purchase of securities, if the effective date for the right to receive same is
less than 10 business days after the date of passing of the resolution on the Company’s
board of directors with regard to such distribution.  

	 	12.4.3 	The
Company will make available at its registered office, or at any other place of which the
Company may give notice, during normal working hours, a copy of its last periodic report
as well as interim financial statements published subsequent thereto, for the perusal of
holders of Debentures (Series A). On a written request from any registered holder of
Debentures (Series A), the Company will send him a copy of the aforesaid reports and
statements.  

13

	 	12.4.4 	Within
ten days of any distribution of bonus shares and a transfer to a special fund, the
Company will publish a notice in two widely circulating Hebrew dailies appearing in
Israel, regarding the right of holders of the Debentures (Series A) to convert their
debentures, coupled with an indication of the Conversion Period, the conversion rate and
the number of Conversion Shares and the bonus shares to which a debenture holder will be
entitled in consequence of the conversion at such time. 

	 	12.4.5 	The
Company will maintain a sufficient number of ordinary shares of NIS 1 par value in its
authorized capital, to guarantee the allotment of all the shares likely to arise from a
conversion of all the Debentures in circulation, and to the extent necessary will cause
an increase of its authorized capital. 

	 	12.4.6 	Not
later than 21 days and not earlier than 30 days from the end of the Conversion Period,
the Company will publish a notice in two widely circulating Hebrew dailies appearing in
Israel (and will send a written notice to the Trustee) to all holders of the Debentures
(Series A) whose names are registered in the register of holders of the Debentures
(Series A), one month before the end of the Conversion Period, regarding the Last Day for
Conversion of the Debentures. Such notice will indicate the conversion rate, the number
of Conversion Shares and bonus shares to which the debenture holder will be entitled at
the time of conversion during this period of time. 

	 	12.4.7 	If
the Company should consolidate the shares of NIS 1 par value in its issued capital into
shares of a larger denomination, or sub-divide same into shares of a smaller
denomination, the number of Conversion Shares that will be allotted in consequence of a
conversion of the Debentures (Series A) after such act, will be increased or decreased,
as the case may be. 

	 	12.4.8 	A
holder of a Debentures (Series A) will not be entitled to receive a fractional Conversion
Share. All fractions of shares that come about as a result of such operation, after a
reasonable number have accumulated for sale on the Stock Exchange, will be sold by the
Company on the Stock Exchange during a period of one month from the date of the aforesaid
allotment, and the net proceeds, after deduction of the selling expenses, commissions and
other levies, will be paid to the persons entitled thereto within 15 days from the date
of the sale. The Company will not send checks in respect of amounts of less than NIS 50
(but it will be possible to obtain the payment in cash at the Company’s offices). 

	 	12.4.9 	According
to the Stock Exchange directives, the terms and conditions of the Debentures (Series A)
cannot be altered with regard to the method of linkage, the conversion rate and the dates
of conversion. 

	 	
Notwithstanding
the foregoing it is possible, in accordance with the Stock Exchange directives, to alter
the conversion rate or the Conversion Period, provided that this is done in the scope of
an arrangement or compromise approved by the court in the scope of Section 350 of the
Companies Law, 5759-1999. 

14

	 	12.5 	Voluntary
winding-up  

	 	
The
Company shall give written notice to every holder of the Debentures (Series A) and to the
Trustee in the case of the passing of a resolution for the voluntary winding-up of the
Company, and shall also publish a notice to that effect in two widely circulating Hebrew
dailies published in Israel, and every holder of a Debenture (Series A) will be entitled
to notify the Company in writing within 3 months from the date of the notice, of his
desire to be deemed to have exercised the conversion right immediately prior to the
passing of the resolution. In such case a holder of the Debenture (Series A) will be
entitled to a payment equivalent to the amount which would have been due to him on a
winding-up, had he held the Conversion Shares prior to the passing of the winding-up
resolution, less an amount equivalent to the interest and/or the linkage differentials
that were paid in respect of the Debentures (Series A) on the date of the resolution or
subsequent thereto (apart from interest and/or linkage differentials the due date for
payment of which fell before the date of the resolution, even if paid on or after the
date of the resolution). 

	13.  	Purchase
of Debentures (Series A) by the Company and/or by a subsidiary           and additional
issues

	 	13.1 	The
Company reserves the right to purchase on the open market at any time, whether on the
Stock Exchange or off the Stock Exchange, Debentures forming part of this issue at any
price it may deem fit, without prejudice to the obligation for repayment as set forth
above. In the case of such a purchase by the Company, the Company will give notice to
that effect in an immediate report, a copy of which shall be delivered to the Trustee.
Debentures that are purchased by the Company will be cancelled and will be expunged from
trading on the Stock Exchange, and the Company will not be entitled to reissue same. 

	 	13.2 	A
subsidiary of the Company, an investee company, an affiliate or the controlling
shareholders are entitled to buy and sell Debentures at any time at such price as they
see fit, and to sell same accordingly. In the case of a purchase and/or sale as
aforesaid, the Company shall render an immediate report to that effect / a notice to the
Trustee immediately after it becomes aware of the fact. The Debentures which are held as
aforesaid by a subsidiary will be deemed to be an asset of the subsidiary, and will not
be expunged from trading on the Stock Exchange. 

	 	
At
the time of holding of a meeting of debenture holders, the Trustee shall examine whether
a conflict of interest exists amongst the holders of certificates, in accordance with the
circumstances of the matter. The Company and the Trustee shall take steps to convene
class meetings of certificate holders in accordance with the provisions of any law,
decided cases, provisions of the Securities Law and the regulations and directives issued
pursuant thereto, as the Trustee shall direct. It is presumed that a subsidiary, investee
company, affiliate or the controlling shareholders (hereinafter in this clause: “Related
Holders”) have conflicting interests. In a case in which any of the Related
Holders holds Debentures (Series A), class meetings of debenture holders will be required
in a manner that one of the classes of holders will be a group which does not include
Related Holders. In a case that class meetings are held approval of a resolution shall
require the approval of each of the class meetings that are called and at a meeting of
all the debenture holders, all by the majority required in accordance with the provisions
of this deed and the appendices hereto. The Trustee may, in its sole discretion,
stipulate that such resolution does not require a meeting of Related Holders or that such
meeting will not be called. Under no circumstances will a meeting of the Related Holders
have the power to prevent the passing of a resolution brought for the approval of the
class meetings. 

15

	 	13.3 	The
Company may at any time, subject to any law, including in the period up to the time of
final redemption of the Debentures (Series A), issue additional Debentures (Series A) the
terms and conditions of which will be identical to the terms and conditions of the
Debentures (Series A) offered pursuant to the Company’s Prospectus, at the same rate
of discount or at a different rate of discount (higher or lower) than the discount rate
of the Debentures (Series A)2, without requiring the consent of the Trustee
and/or the consent of the holders Debentures (Series A) and without being obliged to
obtain the Trustee’s consent to creating additional charges over its assets, but
subject to giving notice to the Trustee in regard to an enlargement of the series as
aforesaid, but the Trustee shall, in such case, have the right to demand an increase in
its remuneration pro rata to the increase of the series, and the Company gives its
consent in advance, by contracting under this deed, to an increase of the Trustee’s
remuneration as aforesaid. The Company will apply to the Stock Exchange to list the
additional Debentures (Series A) for trading on the Stock Exchange. 

	 	13.4 	The
Company will be entitled at any time, without requiring the consent of the Trustee and/or
the consent of holders of the Debentures (Series A), to issue additional series of
debentures, whether or not same confer a right to convert into shares of the Company as
aforesaid, under the same conditions of redemption, interest, linkage, ranking for
payment in the case of a winding-up and other conditions as the Company shall deem fit,
whether same are more favorable than the terms and conditions of the Debentures (Series
A), ranking pari passu  with them or inferior thereto. This right the Company has
shall in no way release the Trustee from examining such issue, to the extent that such
obligation is imposed on the Trustee according to law, and it shall not have the effect
of derogating from the rights of the Trustee and of a meeting of the debenture holders
pursuant to this deed, including their right to make the Debentures (Series A)
immediately due and payable as stated in Clause 7.2 or 7.3 below. 

	 	
The
Company shall notify the Trustee, and the Trustee shall notify the debenture holders with
regard to the issue of debentures as aforesaid. 

	 	13.5 	Nothing
set forth above in this clause shall in itself oblige the Company or the debenture
holders to buy debentures or sell debentures held by them. 

	 	13.6 	The
Company reserves the right to effect early repayment of the Debentures (Series A) on the
fulfillment of the conditions set forth in Clause 6 of this deed. 

          	2 	
               With regard to the tax implications of an issue at a discount, see Paragraph
               2.13 of the Company’s Prospectus. 

               

16

	14.  	Waiver;
compromise and modifications to the terms and conditions of the           Debentures
(Series A)

	 	14.1 	Subject
to the provisions of any law, the Trustee may from time to time and at any time, if it
has been persuaded that this does not, in its opinion, constitute a prejudice to the
rights of holders of the Debentures (Series A), waive any breach or non-fulfillment by
the Company of any of the conditions of this deed. 

	 	14.2 	Subject
to the provisions of the law and with prior approval to be obtained from a general
meeting of holders of the Debentures (Series A) by a majority of 75% of the persons
participating in the vote, at which holders of at least 50% of the balance of the par
value of the Debentures (Series A) in circulation were personally present or represented
by proxy, or at an adjourned meeting, at which holders of at least 10% of the aforesaid
balance were personally present or represented by proxy, the Trustee may, either before
or after the principal of the Debentures (Series A) is due for repayment, compromise with
the Company in connection with any right or claim of holders of the Debentures (Series A)
and may agree with the Company on any arrangement in connection with its rights or the
rights of holders of the Debentures (Series A), including its waiving any right or claim
of holders of the Debentures (Series A) vis-à-vis the Company pursuant to
this deed. Where the Trustee has compromised with the Company after having received prior
approval from the debenture holders as aforesaid, the Trustee will be released from all
liability in respect of such act. 

	 	14.3 	Subject
to the provisions of the law, the Trustee and the Company may, either before or after the
principal of the Debentures (Series A) is due for repayment, alter the Deed of Trust
(including an alteration of the conditions of the Debentures (Series A)), if one of the
following conditions is fulfilled: 

	 	14.3.1 	The
Trustee has been persuaded that the alteration is not prejudicial to holders of the
Debentures (Series A). 

	 	14.3.2 	The
holders of the Debentures (Series A) have agreed to the proposed alteration, by way of a
special resolution passed at a general meeting of holders of the Debentures (Series A) at
which holders of at least 50% of the unpaid balance of the principal of the Debentures
(Series A) in circulation are personally or represented by proxy, or at an adjourned
meeting, at which the holders of at least 10% of the aforesaid balance were personally or
represented by proxy. 

	 	14.4 	The
Company shall render an immediate report in regard to any such alteration or
modification. 

	 	14.5 	The
general meetings as referred to in this clause shall be convened in the manner stated in
the Second Schedule to this deed. 

	 	
In
every case of the exercise of the Trustee’s right pursuant to this clause as
aforesaid, the Trustee will be entitled to demand from holders of the Debentures (Series
A) to deliver their debenture certificates to it or to the Company, for purposes of
recording a note with regard to any compromise, waiver, modification or amendment as
aforesaid, and on the Trustee’s request, the Company will record such note on the
certificates that are delivered to it.  

17

	15.  	Meetings
of holders of the Debentures (Series A)

	 	
The
general meetings of holders of the Debentures (Series A) will be convened and conducted
in accordance with the contents of the Second Schedule to the Deed
of Trust.  

	16.  	Immediate
reports and notices to the Trustee

	 	
The
Company shall render an immediate report in regard to any notice or invitation to a
general meeting that may be sent to holders of the Debentures (Series A). Notices on the
Magna system in the abovementioned matters will be deemed to be notices to the Trustee.  

	17.  	Receipts
as proof  

	 	
Without
derogating from any other condition contained in these Conditions, a receipt signed by
one registered holder of a Debenture by any of the joint registered holders of a
Debenture, will constitute proof of full discharge of any payment that was made by the
Company in respect of the Debenture.  

	18.  	Replacement
of certificates of Debentures (Series A)

	 	
In
the event that a debenture certificate should become worn, lost or destroyed, the Company
shall be entitled to issue a new debenture certificate in its place, under the same
conditions. The person requesting replacement of a Debenture shall bear all the expenses
in relation to proof, indemnity and cover of expenses incurred by the Company for
purposes of investigation with regard to the right of title, as the board of directors
shall deem fit, on condition that in the case of a certificate having become worn and
defaced, the defaced debenture certificate shall be returned to the Company before the
new certificate is issued. Stamp duty and other levies, as well as other expenses
attendant on the issue of a new certificate, shall be borne by the party requesting such
certificate.  

	19.  	Full
tender offer  

	 	
In
accordance with Regulation 24 of the Securities Regulations (Tender Offer), 5760-2000, in
the case of the Company’s shares being de-listed on the Stock Exchange as a
consequence of the acceptance of a full tender offer, the party making the tender offer
shall be obliged to offer to purchase all the convertible securities listed for trading
on the Stock Exchange, under the conditions as set forth in the aforesaid regulation
(hereinafter: “Tender Offer for Convertible Securities”).  

	 	
Nothing
in the foregoing shall prejudice the conversion rights of the Debentures (Series A) of
any of the holders of the Debentures (Series A) who do not sell same in the scope of the
Tender Offer for Convertible Securities, but if the Debentures (Series A) are expunged
from trading on the Stock Exchange, the tax implications arising therefrom shall, inter
alia, apply by virtue thereof.  

18

	20.  	Making
of debentures immediately due and payable

	 	20.1 	On
the occurrence one or more of the events mentioned below: 

	 	20.1.1 	If
the Company does not pay any amount that is due from it in connection with the Debentures
within 30 days after the due date for payment thereof has arrived. 

	 	20.1.2 	If
a provisional liquidator has been appointed by a court or a valid resolution has been
passed for the winding-up of the Company (except a winding-up for purposes of merger with
another company and/or a change in the structure of the Company) and such appointment or
such resolution has not been set aside within 20 business days from the date on which it
was given or taken. 

	 	20.1.3 	If
an attachment is imposed on material assets of the Company [of the Company], in whole or
in part, and the attachment is not removed within 60 days. 

	 	20.1.4 	An
execution office act is executed against a material asset of the Company, in whole or in
part, and the action is not set aside within 60 days. 

	 	20.1.5 	If
a receiver is appointed for the assets of the Company and/or for its material assets, in
whole or in part, and the appointment is not set aside within 60 days. 

	 	20.1.6 	If
the Company ceases payments on the Debentures and/or gives notice of its intention to
cease payments on the Debentures. 

	 	20.1.7 	If
the Company ceases to continue engaging in and/or carrying on its business and/or gives
notice of its intention to cease continuing to engage in its business and/or to manage
same. 

	 	20.1.8 	If
another series of debentures issued by the Company has been made immediately due and
payable. 

	 	20.1.9 	If
a stay of proceedings order has been granted in accordance with Section 350 of the
Companies Law, 5759-1999, against the Company, and such order has not been set aside
within 60 (sixty) days from the date of its commencement. 

	 	20.1.10	If
an application has been filed in relation to the Company for making an arrangement with
creditors of the Company in accordance with Section 350 of the Companies Law, 5759-1999,
or a stay of proceedings order has been granted against the Company in accordance with
the aforesaid section, and the application or the order has not been withdrawn or set
aside, within 60 days from the date of the filing or grant thereof, as the case may be.  

19

	 	20.1.11 	If
the Company is liquidated or expunged for any reason. 

	 	20.1.12	If
there is a genuine fear that the Company will cease payments of the Debentures and/or
will cease to continue its business and/or is about to cease carrying on its business
and/or a genuine fear exists that it will cease conducting its business.  

	 	20.1.13	On
the occurrence of any other event that constitutes material prejudice and/or could cause
material prejudice to the rights of the holders of the Debentures (Series A).  

	 	
The
provisions of Clauses 17.2 or 17.3 [sic] below, as the case may be, shall apply. 

	 	
For
purposes of this clause “material asset” means – an asset the value of
which in the Company’s books exceeds 25% of the Company’s equity capital
according to the last financial statements it published. 

	 	20.2 	On
the occurrence of any of the events mentioned in Clauses 17.1.1 to 17.1.11 (inclusive)
above: 

	 	20.2.1 	The
Trustee will be obliged to call a meeting of holders of Debentures (Series A) the date
for convening of which shall be after the elapse of 30 days from the date on which it is
called (or such shorter period in accordance with the provisions of Clause 7.2.4 below)
the agenda of which shall contain a resolution with regard to making the entire unpaid
balance of the Debentures (Series A) immediately due and payable by virtue of the
occurrence of one of the events mentioned in Clauses 17.1.1 to 17.1.11 (inclusive) above. 

	 	20.2.2 	In
a case in which up to the date for convening the meeting any of the events mentioned in
Clauses 17.1.1 to 17.1.11 (inclusive) above has not been set aside or withdrawn, and a
resolution of the meeting of debenture holders as aforesaid has been passed as a special
resolution (as defined in the Second Schedule to this deed), the Trustee will be obliged,
within a reasonable time, to make the entire unpaid balance of the Debentures (Series A)
immediately due and payable. 

	 	20.2.3 	A
copy of the notice calling such meeting shall be sent by the Trustee to the Company
immediately upon publication of the notice and will constitute a prior written warning to
the Company regarding the Trustee’s intention to act as aforesaid. 

	 	20.2.4 	The
Trustee may, in its discretion, shorten the period of 30 days as aforesaid (in Clause
20.2.1 above) in a case in which the Trustee believes that any postponement in making the
Company’s debt payable endangers the rights of the holders of the Debentures (Series
A), but under no circumstances shall the aforesaid period be shortened to less than 7
days. 

20

	 	20.3 	On
the occurrence of any of the events mentioned in Clauses 17.1.12 to 17.1.13 (inclusive)
above: 

	 	20.3.1 	Each
of the debenture holders and the Trustee will be entitled (but not obliged) to call a
meeting of the holders of the Debentures (Series A) the time for convening of which shall
be after the elapse of 30 days from the date it is called (or a shorter period in
accordance with the provisions of Clause 7.2.4 below), the agenda of which shall contain
a resolution with regard to making of the entire unpaid balance of the Debentures (Series
A) immediately due and payable by virtue of the occurrence of any of the events set forth
in Clauses 17.1.12 to 17.1.13 (inclusive) above. 

	 	20.3.2 	In
a case in which a resolution is passed at a meeting of debenture holders as referred to
in Clause 17.3.1 above as a special resolution (as defined in the Second Schedule to this
deed), the Trustee will be obliged, within a reasonable time, to make the entire unpaid
balance of the Debentures (Series A) immediately due and payable. 

	 	20.3.3 	A
copy of the notice calling such meeting shall be sent by the party calling the meeting to
the Company and to the Trustee immediately upon the publication of the notice and this
will constitute prior written warning to the Company of the intention to act in the
aforesaid manner. 

	 	20.3.4 	A
debenture holder or the Trustee, as the case may be, who calls the meeting will be
entitled, at his or its discretion, to shorten the aforesaid 30 day period (as mentioned
in Clause 17.3.1 above) in a case in which the party calling the meeting is of the
opinion that any postponement in making the Company’s debt payable endangers the
rights of holders of the Debentures (Series A), but under no circumstances shall the
aforesaid period be shortened to less than 7 days. 

	 	20.3.5 	The
Trustee will be responsible for reporting to the debenture holders in regard to the
occurrence of any of the events mentioned in Clauses 17.1.12 to 17.1.13 (inclusive)
above, whether on the strength of publicized reports the Company may publish or in
accordance with the notice the Company may send to it in accordance with a provisions of
Clause 22 below, shortly after this has been brought to the notice of the Trustee and/or
has been delivered to it. 

	21.  	Notices  

	 	21.1 	Any
notice by the Company and/or the Trustee to holders of the Debentures (Series A) shall be
given as follows: 

	 	21.1.1 	By
reporting on the Magna system of the Securities Authority; (the Trustee is entitled to
instruct the Company, and the Company will be obliged immediately to render a report on
behalf of the Trustee to the Magna system in such text as will be transmitted to the
Company in writing by the Trustee); 

21

	 	
and
also by:  

	 	              21.1.2 	A
notice to be  published  in two  widely  circulating  Hebrew  dailies  published  in
                       Israel; 

	 	
or  

	 	
By
sending a notice by registered mail to every registered holder of Debentures (Series A)
according to the last address recorded in the register of debenture holders (in the case
of joint holders – to the joint holder whose name stands first in the register). 

	 	21.2 	Any
notice or demand by the Trustee to the Company may be given by way of a letter sent by
registered mail according to the address set forth in the Deed of Trust, or according to
another address of which the Company shall notify the Trustee in writing, or by the
transmission thereof by facsimile or via messenger, and any such notice or demand shall
be deemed to have been received by the Company: (1) in the case of dispatch by registered
mail – after three business days from the date of its posting; (2) in the case of
transmission by facsimile (coupled with telephonic confirmation as to the receipt
thereof) – after one business day from the day of its transmission; (3) and in the
case of delivery via a messenger – upon delivery thereof by the messenger to the
addressee or the offer thereof to the addressee, as the case may be. 

	 	21.3 	Any
notice or demand by the Company to the Trustee may be given by way of a letter sent by
registered mail according to the address set forth in the Deed of Trust, or according to
another address of which the Trustee shall notify the Company in writing, or by the
transmission thereof by facsimile or via messenger, and any such notice or demand will be
deemed to have been received by the Trustee: (1) in the case of dispatch by registered
mail – after three business days from the date of its posting; (2) in the case of
transmission by facsimile (coupled with telephonic confirmation as to the receipt
thereof) – after one business day from the day of its transmission; (3) and in the
case of delivery via a messenger – upon delivery thereof by the messenger to the
addressee or the offer thereof to the addressee, as the case may be. 

	 	21.4 	Copies
of notices and invitations to meetings which the Company and/or the Trustee give to
holders of the Debentures (Series A) shall be sent by the Company also by way of an
immediate report a copy of which shall be delivered to the Trustee. 

2220-F

Exhibit 4.31  

DEED OF TRUST  

Made and entered at Tel Aviv on the 14th day of August 2006 

Between: 

	 	
BLUE
SQUARE REAL ESTATE LTD.    
           of 2 Amal Street, Rosh Ha'ayin

              Telephone: 03-9282670/1            
   Fax: 03-9282498

              (hereinafter: "the Company") 

of the one part; 

And: 

	 	
HERMETIC
TRUST (1975) LTD. 
 of 113 Hayarkon Street, Tel Aviv 
Telephone:
03-5272272 
 Fax: 03-5271736 
 (hereinafter: "the Trustee")  

of the other part; 

	WHEREAS:  	The
board of  directors  of the  Company  decided  on August  13,  2006 to  approve an issue
of                   Debentures (Series B), in accordance with the terms and conditions
of the Prospectus; and 

	WHEREAS:  	The
Trustee is a company  limited by shares which was  incorporated  in Israel in February
1975                   in  accordance  with  the  Companies  Ordinance,  whose  main
 object  is to  engage  in  trust                   functions; and 

	WHEREAS:  	The
Trustee has represented and declared that there is no impediment under the Securities
Law, 5728-1968, or any other law, to its contracting with the Company under this Deed of
Trust and that it meets the requirements and the conditions of qualification specified in
the Securities Law to serve as a trustee for the issue of the Debentures (Series B) that
are the subject to the Prospectus; and  

	WHEREAS:  	In
the  scope of the  Prospectus  the  Company  will  issue  up to NIS  100,000,000  par
 value                   Debentures (Series B) as stated in Clause 2 of this Deed of
Trust; and 

	WHEREAS:  	The
 Company  has made a request  to the  Trustee to serve as  trustee  for the  holders of
the                   Debentures  (Series B), and the Trustee has agreed  thereto,  all
subject to and in  accordance                   with the terms and conditions of this
Deed of Trust; 

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

1

	1.  	Preamble,
interpretation and definitions

	 	1.1 	The
preamble to this Deed of Trust and the appendices attached hereto constitute a material
and integral part hereof. 

	 	1.2 	The
division of this Deed of Trust into clauses and the assigning of headings to the clauses
has been done for reasons of convenience and as place-finders only, and no use shall be
made thereof for purposes of interpretation. 

	 	1.3 	Everything
appearing in this deed in the plural shall include the singular, and vice versa,
and everything appearing in the masculine gender shall also include the feminine, and vice
versa, and words importing a person shall also imply a body corporate, unless there
is an express and/or implied provision to the contrary in this deed and/or unless the
context otherwise dictates. 

	 	1.4 	In
this Deed of Trust and in the Debentures (Series B), the following terms and expressions
will have the meanings set opposite them, unless a different intention is to be implied
from the context: 

		 		
		 		
		 		
		 		
		 		
	 	"This deed" or "the Deed of Trust" 	-	This Deed of Trust including the appendices attached hereto and which form an integral part hereof;
	 
	 	"The Prospectus" 	-	The Company's Prospectus which is due to be published, inter alia, in respect of the issue of the Debentures (Series B); 
	 
	 	"The Debentures (Series B)" 	-	Registered Debentures (Series B) of the Company, which will be issued in accordance with the Prospectus;
	 
	 	"The Trustee" 	-	Hermetic Trust (1975) Ltd. and/or any one who may serve from time to time as trustee for holders of the Debentures (Series B) pursuant to this deed;
	 
	 	"Register" 	-	A register of holders of the Debentures (Series B) as referred to in Clause 24 of this deed;
	 
	 	"Holders of the Debentures (Series B)" 	-	The persons whose names are registered for the time being in the register of holders of the Debentures (Series B), and in the case of several joint holders, the joint holder whose name stands first in the register;
	 
	 	"Debenture (Series B) certificate" 	-	A Debenture (Series B) certificate the wording of which appears as the First Schedule to this deed;  
	 
	 	"The Law" or "the Securities Law"  	-	The Securities Law, 5728-1968 and the regulations thereunder, as in force from time to time;
	 
	 	"Principal" 	-	The par value of the Debentures (Series B) which are in circulation;

2

	 
	 	"Consumer Price Index" ("index") 	-	The price index known by the name of "Consumer Price Index", including fruit and vegetables, published by the Central Bureau of Statistics and Economic Research, and including that index even if it is published by another official body or institution, and also including any official index that may come in its stead, whether or not same is structured on the same data on which the existing index is structured. If another index should replace it which is published by such body or institution, and such body or institution has not fixed the ratio between that index and the replaced index, the ratio will be determined by the Central Bureau of Statistics, and if such ratio has not been fixed as
	 
	 	"The known index" 	-	The last-known Consumer Price Index;
	 
	 	"The Basic Index" 	-	The Consumer Price Index in respect of July 2006, which was published on August 15, 2006;
	 
	 	"The payment index" 	-	The Consumer Price Index known on the date of effecting any payment on account of the principal or the interest;
	 
	 	"Trading day" 	-	A day on which the banks in Israel are open for the execution of transactions;
	 
	 	"The Stock Exchange" 	-	The Tel Aviv Stock Exchange Ltd.

	2. 	Issue of the Debentures (Series B) and applicability of the Deed of Trust

	 	
The
Company will issue a series of up to 650,000,000 par value registered Debentures (Series
B), repayable in 4 equal annual payments on August 31 of each of the years from 2013
– 2016 (inclusive), which are offered to the public at a price of 92.5% of their par
value. The Debentures (Series B) bear annual interest, payable every six months on
February 28 and on August 31 of each of the years from 2007 until 2016 (inclusive) until
the final redemption of the Debentures. The rate of interest on the Debentures (Series B)
will be fixed in a tender and shall not exceed 5% (hereinafter: “the Maximum Rate
of Interest”) and shall not be less than 4.25% (hereinafter: “the
Minimum Rate of Interest”). The Debentures (Series B) are linked (as to
principal and interest) to the Consumer Price Index for the month of July 2006.  

	 	
The
provisions of this Deed of Trust will apply to the Debentures (Series B) which will be
issued as aforesaid pursuant to the Prospectus and which will be held from time to time
by the public, unless otherwise stated. For purposes of this Deed of Trust, “the
public” means – anyone who holds a Debenture (Series B), excluding a subsidiary
of the Company, for so long as same is held by it.  

3

	3. 	 Terms
of issue; buyback

	 	3.1 	The
Company will issue the Debentures (Series B) on the terms and conditions as set forth in
the Prospectus and in the Debentures (Series B) and will secure same as stated in this
deed. 

	 	3.2 	The
Company reserves the right to purchase on the open market at any time, whether on the
Stock Exchange or off the Stock Exchange, Debentures forming part of this issue at any
price it may deem fit, without prejudice to the obligation for repayment as set forth
above. In the case of such a purchase by the Company, the Company will give notice to
that effect in an immediate report, a copy of which shall be delivered to the Trustee.
Debentures that are purchased by the Company will be cancelled and will be expunged from
trading on the Stock Exchange, and the Company will not be entitled to reissue same. 

	 	3.3 	A
subsidiary of the Company, an investee company, an affiliate or the controlling
shareholders are entitled to buy and sell Debentures at any time at such price as they
see fit, and to sell same accordingly. In the case of a purchase and/or sale as
aforesaid, the Company shall render an immediate report to that effect / a notice to the
Trustee immediately after it becomes aware of the fact. The Debentures which are held as
aforesaid by a subsidiary will be deemed to be an asset of the subsidiary, and will not
be expunged from trading on the Stock Exchange. 

	 	
At
the time of holding of a meeting of debenture holders, the Trustee shall examine whether
a conflict of interest exists amongst the holders of certificates, in accordance with the
circumstances of the matter. The Company and the Trustee shall take steps to convene
class meetings of certificate holders in accordance with the provisions of any law,
decided cases, provisions of the Securities Law and the regulations and directives issued
pursuant thereto, as the Trustee shall direct. It is presumed that a subsidiary, investee
company, affiliate or the controlling shareholders (hereinafter in this clause: “Related
Holders”) have conflicting interests. In a case in which any of the Related
Holders holds Debentures (Series B), class meetings of debenture holders will be required
in a manner that one of the classes of holders will be a group which does not include
Related Holders. In a case that class meetings are held approval of a resolution shall
require the approval of each of the class meetings that are called and at a meeting of
all the debenture holders, all by the majority required in accordance with the provisions
of this deed and the appendices hereto. The Trustee may, in its sole discretion,
stipulate that such resolution does not require a meeting of Related Holders or that such
meeting will not be called. Under no circumstances will a meeting of the Related Holders
have the power to prevent the passing of a resolution brought for the approval of the
class meetings. 

	 	3.4 	The
Company may at any time, subject to any law, including in the period up to the time of
final redemption of the Debentures (Series B), issue additional Debentures (Series B) the
terms and conditions of which will be identical to the terms and conditions of the
Debentures (Series B) offered pursuant to the Company’s Prospectus, at the same rate
of discount or at a different rate of discount (higher or lower) than the discount rate
of the Debentures (Series B)1, without requiring the consent of the Trustee
and/or the consent of the holders Debentures (Series B) and without being obliged to
obtain the Trustee’s consent to creating additional charges over its assets, but
subject to giving notice to the Trustee in regard to an enlargement of the Series Bs
aforesaid, but the Trustee shall, in such case, have the right to demand an increase in
its remuneration pro rata to the increase of the series, and the Company gives its
consent in advance, by contracting under this deed, to an increase of the Trustee’s
remuneration as aforesaid. The Company will apply to the Stock Exchange to list the
additional Debentures (Series B) for trading on the Stock Exchange. 

	1 	               With
regard to the tax implications of an issue at a discount, see Paragraph
               2.13 of the Company’s Prospectus. 

4

	 	3.5 	The
Company will be entitled at any time, without requiring the consent of the Trustee and/or
the consent of holders of the Debentures (Series B), to issue additional series of
debentures, whether or not same confer a right to convert into shares of the Company as
aforesaid, under the same conditions of redemption, interest, linkage, ranking for
payment in the case of a winding-up and other conditions as the Company shall deem fit,
whether same are more favorable than the terms and conditions of the Debentures (Series
B), ranking pari passu with them or inferior thereto. This right the Company has
shall in no way release the Trustee from examining such issue, to the extent that such
obligation is imposed on the Trustee according to law, and it shall not have the effect
of derogating from the rights of the Trustee and of a meeting of the debenture holders
pursuant to this deed, including their right to make the Debentures (Series B)
immediately due and payable as stated in Clause 7.2 or 7.3 below. 

	 	
The
Company shall notify the Trustee, and the Trustee shall notify the debenture holders with
regard to the issue of debentures as aforesaid. 

	 	3.6 	Nothing
set forth above in this clause shall in itself oblige the Company or the debenture
holders to buy debentures or sell debentures held by them. 

	 	3.7 	The
Company reserves the right to effect early repayment of the Debentures (Series B) on the
fulfillment of the conditions set forth in Clause 6 of this deed. 

	4.  	The
Company’s undertakings  

	 	
The
Company hereby undertakes to pay all amounts of principal, interest and linkage
differentials that will be payable pursuant to the terms and conditions of the Debentures
(Series B) and to comply with all the remaining conditions and obligations imposed on it
in accordance with the conditions of the Debentures (Series B) and pursuant to this deed.  

	5.  	Securing
of the Debentures (Series B)  

	 	5.1 	The
Company’s obligation to repay the Debentures (Series B) (principal, interest and
linkage differentials) is not secured by any charge or encumbrance. 

5

	 	
For
the avoidance of doubt it is clarified that there is no obligation on the Trustee to
examine, and in practice the Trustee has not examined, the need for the furnishing of
collateral security to guarantee the payments to the debenture holders. By entering into
this Deed of Trust, and by the Trustee’s consent to serve as a trustee for the
debenture holders, the Trustee does not express an opinion, whether expressly or
impliedly, regarding the Company’s ability to meet its obligations to the debenture
holders. Nothing in the foregoing shall derogate from the duties of the Trustee according
to law and/or the Deed of Trust, and this shall include the fact that it does not
derogate from the Trustee’s obligation (to the extent that such obligation applies
to the Trustee according to any law) to examine the impact of changes in the Company from
the date of the Prospectus onwards, to the extent that such changes have an adverse
affect on the Company’s ability to meet its obligations to holders of the Debentures
(Series B). Nothing in the foregoing shall derogate from the Trustee’s duties and
obligations according to law and/or pursuant to the Deed of Trust. 

	 	5.2 	The
Company will be entitled from time to time to create additional charges and encumbrances,
fixed and/or floating of any ranking over its assets, in whole or in part, without the
necessity for obtaining any consent from the Trustee, or from the debenture holders, and
without it being obliged to notify the Trustee about the creation of such charges or
encumbrances. 

	 	5.3 	The
Debentures (Series B) will rank pari passu for purposes of security ranking as
between themselves in connection with the Company’s obligations pursuant to the
Debentures (Series B), and without a preferential or prior right for one debenture over
another. 

	6.  	Early
redemption  

	 	
If
it should be decided by the Stock Exchange to expunge the Debentures (Series B) in
circulation from trading due to the fact that the value of the public’s holdings
thereof is less than the minimum amount specified in the Stock Exchange directives with
regard to deletion from trading, the Company will act as follows, subject to the
condition that the date of early redemption shall not fall less than 17 days from the
date of publication of the notice and not more than 45 days from the aforesaid date, but
not in a period between the effective date for payment of interest and the date of actual
payment thereof:  

	 	6.1 	Within
45 days from the date of the Stock Exchange’s notice regarding deletion of the
Debentures (Series B) from trading, the Company will give notice of a date of early
redemption at which the holder of Debentures (Series B) will be entitled to redeem same. 

	 	6.2 	The
notice regarding the date of early redemption will be published in two widely circulating
Hebrew dailies appearing in Israel, and in an immediate report on the Magna system and
shall be delivered in writing to the Trustee and to all the registered holders of the
Debentures (Series B). 

	 	6.3 	The
date of early redemption will fall not less than 30 days from the date of publication of
the notice and not later than 45 days from the aforesaid date, but not in a period
between the date specified for payment of interest and the date of actual payment
thereof. 

	 	6.4 	On
the date of early redemption the Company will redeem the Debentures (Series B) which the
holders thereof have requested to redeem, according to the balance of the par value
thereof, plus linkage differentials and the interest which has accrued on the principal,
calculated pro rata to the period commencing after the last date in respect of
which the interest was paid and up to the aforesaid date of early redemption. 

6

	 	
Early
redemption of the Debentures (Series B) as aforesaid shall not confer on anyone who holds
the Debentures (Series B) which are redeemed as aforesaid the right to payment of
interest in respect of the period subsequent to the date of redemption.  

	7.  	Immediate
repayment  

	 	       7.1 	On
the occurrence one or more of the events enumerated below: 

	 	7.1.1 	If
the Company does not pay any amount that is due from it in connection with the Debentures
within 30 days after the due date for payment thereof has arrived. 

	 	7.1.2 	If
a provisional liquidator has been appointed by a court or a valid resolution has been
passed for the winding-up of the Company (except a winding-up for purposes of merger with
another company and/or a change in the structure of the Company) and such appointment or
such resolution has not been set aside within 20 business days from the date on which it
was given or taken. 

	 	7.1.3 	If
an attachment is imposed on material assets of the Company [of the Company], in whole or
in part, and the attachment is not removed within 60 days. 

	 	7.1.4 	An
execution office act is executed against a material asset of the Company, in whole or in
part, and the action is not set aside within 60 days. 

	 	7.1.5 	If
a receiver is appointed for the assets of the Company and/or for its material assets, in
whole or in part, and the appointment is not set aside within 60 days. 

	 	7.1.6 	If
the Company ceases payments on the Debentures and/or gives notice of its intention to
cease payments on the Debentures. 

	 	7.1.7 	If
the Company ceases to continue engaging in and/or carrying on its business and/or gives
notice of its intention to cease continuing to engage in its business and/or to manage
same. 

	 	7.1.8 	If
another series of debentures issued by the Company has been made immediately due and
payable. 

	 	7.1.9 	If
a stay of proceedings order has been granted in accordance with Section 350 of the
Companies Law, 5759-1999, against the Company, and such order has not been set aside
within 60 (sixty) days from the date of its commencement. 

7

	 	7.1.10 	If
an application has been filed in relation to the Company for making an arrangement with
creditors of the Company in accordance with Section 350 of the Companies Law, 5759-1999,
or a stay of proceedings order has been granted against the Company in accordance with
the aforesaid section, and the application or the order has not been withdrawn or set
aside, within 60 days from the date of the filing or grant thereof, as the case may be. 

	 	              7.1.11 	If
the Company is liquidated or expunged for any reason. 

	 	7.1.12 	If
there is a genuine fear that the Company will cease payments of the Debentures and/or
will cease to continue its business and/or is about to cease carrying on its business
and/or a genuine fear exists that it will cease conducting its business. 

	 	7.1.13 	On
the occurrence of any other event that constitutes material prejudice and/or could cause
material prejudice to the rights of the holders of the Debentures (Series B). 

	 	
The
provisions of Clauses 7.2 or 7.3 below, as the case may be, shall apply. 

	 	
For
purposes of this clause “material asset” means – an asset the value of
which in the Company’s books exceeds 25% of the Company’s equity capital
according to the last financial statements it published. 

	 	7.2 	On
the occurrence of any of the events mentioned in Clauses 7.1.1 to 7.1.11 (inclusive)
above: 

	 	7.2.1 	The
Trustee will be obliged to call a meeting of holders of Debentures (Series B) the date
for convening of which shall be after the elapse of 30 days from the date on which it is
called (or such shorter period in accordance with the provisions of Clause 7.2.4 below)
the agenda of which shall contain a resolution with regard to making the entire unpaid
balance of the Debentures (Series B) immediately due and payable by virtue of the
occurrence of one of the events mentioned in Clauses 7.1.1 to 7.1.11 (inclusive) above. 

	 	7.2.2 	In
a case in which up to the date for convening the meeting any of the events mentioned in
Clauses 7.1.1 to 7.1.11 (inclusive) above has not been set aside or withdrawn, and a
resolution of the meeting of debenture holders as aforesaid has been passed as a special
resolution (as defined in the Second Schedule to this deed), the Trustee will be obliged,
within a reasonable time, to make the entire unpaid balance of the Debentures (Series B)
immediately due and payable. 

	 	7.2.3 	A
copy of the notice calling such meeting shall be sent by the Trustee to the Company
immediately upon publication of the notice and will constitute a prior written warning to
the Company regarding the Trustee’s intention to act as aforesaid. 

8

	 	7.2.4 	The
Trustee may, in its discretion, shorten the period of 30 days as aforesaid (in Clause
7.2.1 above) in a case in which the Trustee believes that any postponement in making the
Company’s debt payable endangers the rights of the holders of the Debentures (Series
B), but under no circumstances shall the aforesaid period be shortened to less than 7
days. 

	 	7.3 	On
the occurrence of any of the events mentioned in Clauses 7.1.12 to 7.1.13 (inclusive)
above: 

	 	7.3.1 	Each
of the debenture holders and the Trustee will be entitled (but not obliged) to call a
meeting of the holders of the Debentures (Series B) the time for convening of which shall
be after the elapse of 30 days from the date it is called (or a shorter period in
accordance with the provisions of Clause 7.2.4 below), the agenda of which shall contain
a resolution with regard to making of the entire unpaid balance of the Debentures (Series
B) immediately due and payable by virtue of the occurrence of any of the events set forth
in Clauses 7.1.12 to 7.1.13 (inclusive) above. 

	 	7.3.2 	In
a case in which a resolution is passed at a meeting of debenture holders as referred to
in Clause 7.3.1 above as a special resolution (as defined in the Second Schedule to this
deed), the Trustee will be obliged, within a reasonable time, to make the entire unpaid
balance of the Debentures (Series B) immediately due and payable. 

	 	7.3.3 	A
copy of the notice calling such meeting shall be sent by the party calling the meeting to
the Company and to the Trustee immediately upon the publication of the notice and this
will constitute prior written warning to the Company of the intention to act in the
aforesaid manner. 

	 	7.3.4 	A
debenture holder or the Trustee, as the case may be, who calls the meeting will be
entitled, at his or its discretion, to shorten the aforesaid 30 day period (as mentioned
in Clause 7.3.1 above) in a case in which the party calling the meeting is of the opinion
that any postponement in making the Company’s debt payable endangers the rights of
holders of the Debentures (Series B), but under no circumstances shall the aforesaid
period be shortened to less than 7 days. 

	 	7.3.5 	The
Trustee will be responsible for reporting to the debenture holders in regard to the
occurrence of any of the events mentioned in Clauses 7.1.12 to 7.1.13 (inclusive) above,
whether on the strength of publicized reports the Company may publish or in accordance
with the notice the Company may send to it in accordance with a provisions of Clause 22
below, shortly after this has been brought to the notice of the Trustee and/or has been
delivered to it. 

9

	8.  	Claims
and proceedings by the Trustee

	 	8.1 	Without
derogating from any other provision in this deed, the Trustee will be entitled, in its
discretion, and will be obliged to do so pursuant to a special resolution passed at a
meeting of holders of the Debentures (Series B), and without giving the Company further
notice, to take all such proceedings, including legal proceedings as it sees fit and
subject to the provisions of any law, in order to enforce the Company’s obligations
under this deed, or the exercise of the rights of the holders of the Debentures (Series
B) and protection of their rights pursuant to this deed. Subject to the provisions set
forth below, the Trustee will be obliged to do so on the demand of a special resolution
of holders of the Debentures (Series B). The Trustee will be entitled to commence legal
and/or other proceedings also if the Debentures have not been made immediately due and
payable, and may do all this to protect the rights of the debenture holders and subject
to any law. Notwithstanding the foregoing in this clause, the right to make the
Debentures immediately due and payable will only arise in accordance with the provisions
of Clause 7 above and not on the strength of this clause. 

	 	8.2 	The
Trustee will be entitled, subject to any special resolution of holders of the Debentures
(Series B) as aforesaid, to waive, on such conditions as it deems fit, the fulfillment of
such obligations of the Company, in whole or in part. 

	 	8.3 	The
Trustee may, in its discretion and without the necessity for giving notice to the
Company, apply to the appropriate court with an application for instructions on any
matter connected with and/or arising out of this deed. 

	 	8.4 	Subject
to the provisions of this deed, the Trustee will be entitled, but not obliged, to convene
a general meeting of holders of the Debentures (Series B) at any time in order to
consider and discuss and/or to receive its instructions on any matter pertaining to this
deed, and it shall be entitled to reconvene such meeting. 

	 	8.5 	The
Trustee may, in its sole discretion, delay the performance of any act by it in accordance
with this deed, for purposes of referring to a meeting of holders of the Debentures
(Series B) and/or to the court until it receives instructions from a meeting of holders
of the Debentures (Series B) and/or instructions from the court as to how to act.
Notwithstanding the foregoing, the Trustee is not entitled to delay proceedings for
making the Debentures immediately due and payable on which a meeting of debenture holders
has decided in accordance with the provisions of Clauses 7.2 and 7.3 above. 

	 	8.6 	For
the avoidance of doubt it is hereby clarified that nothing contained in the provisions
set forth above shall prejudice and/or derogate from the Trustee’s right, which is
hereby conferred on it, to apply to judicial instances, at its sole discretion, even
before the Debentures (Series B) are made immediately due and payable, for purposes of
the grant of any order relating to matters of the trust. 

10

	9.  	Distribution
of receipts  

	 	
All
the receipts that the Trustee may receive as a result of proceedings it institutes, if
any, against the Company, shall be held by it in trust and shall serve in its hands for
the purposes and according to the order of priority as follows:  

	 	
Firstly
for the discharge of the expenses, payments, levies and obligations that have been
incurred by the Trustee, imposed on it, or caused by virtue or as a result of actions for
implementing the trust, or otherwise, or in another connection with the terms and
conditions of this deed, including its remuneration (on condition that the Trustee shall
not receive double remuneration both from the Company and also from the debenture
holders). Secondly – in order to pay holders of the Debentures (Series B) the arrear
interest due to them pursuant to the terms and conditions of the Debentures (Series B)
and subject to the conditions of linkage contained in the Debentures (Series B) pro
rata and proportionately to the amount of interest in arrear which is due to each of
them, without any preference or prior right in respect of any of them; thirdly – in
order to pay holders of the Debentures (Series B) the amounts of the principal that are
due to them in accordance with the Debentures (Series B) held by them, pro rata and
subject to the conditions of linkage contained in the Debentures (Series B), whether or
not the due date for payment of the amounts of principal have arrived and pro rata to
the amounts due to them, without any preference in regard to priority in time of the
issue of the Debentures (Series B) by the Company, or otherwise, and the surplus, if
there should be such, shall be paid by the Trustee to the Company or to its
successors-in-title.  

	 	
Payment
of the amounts by the Trustee to holders of the Debentures (Series B) is subject to the
rights of other creditors of the Company, if there are such.  

	10. 	Power
to delay distribution of money

	 	10.1 	Notwithstanding
the contents of Clause 9 above, if the monetary amount that is received as a result of
instituting proceedings as aforesaid which is available for distribution at any time, as
stated in that clause, is less than NIS 20,312 thousand, the Trustee will not be obliged
to distribute it and will be entitled to invest the aforesaid amount, in whole or in
part, in investments that are permitted under this deed and to vary such investments from
time to time with other permitted investments, all as it sees fit. 

	 	10.2 	When
the aforesaid investments together with the profits thereon and together with additional
moneys that will be due to the Trustee for purposes of payment to holders of the
Debentures (Series B), if any, reach the amount specified in Clause 10.1 above, the
Trustee shall make payment thereof to holders of the Debentures (Series B) in the manner
stated in Clause 9 above. 

	11.  	Notice
regarding distribution and deposit with the Trustee

	 	11.1 	The
Trustee shall notify holders of the Debentures (Series B) as to the day and the place at
which any of the payments mentioned in Clause 9 and Clause 10 above will be effected, and
shall do so by way of prior notice of 14 days that shall be delivered in the manner
stipulated in Clause 22 below. 

11

	 	
After
the date specified in the notice, holders of the Debentures (Series B) will be entitled
to interest in respect of the Debentures according to the rate stipulated in the
Debentures (Series B), solely on the balance of the amount of the principal (if there is
such) after deduction of the amount which has been paid or which has been offered to them
as aforesaid. 

	 	11.2 	Any
amount due to a holder of Debentures (Series B) which has not actually been paid for a
reason that is not dependent on the Company, at a time the Company was prepared to make
payment thereof, shall cease to bear interest and linkage differentials from the date
specified for the payment thereof, and the holder of the Debenture (Series B) will be
entitled only to those amounts he would have been entitled to at the date specified for
effecting of such payment on account of the principal, the linkage differentials or the
interest. 

	 	11.3 	The
Company shall deposit with the Trustee, not later than 14 business days from the date
specified for such payment, the amount of the payment which has not been paid for a
reason that is not dependent on the Company, and such deposit shall be deemed to be
discharge of such payment, and in the event of discharge of everything due in respect of
the Debenture (Series B), also as redemption of the Debenture (Series B). 

	 	11.4 	The
Trustee shall deposit any such amount at a bank, in favor of those account owners and
shall invest same in investments permissible for it in accordance with the Deed of Trust,
which are securities of the State of Israel and other securities in which the laws of the
State of Israel make it permissible to invest trust moneys, all as the Trustee shall deem
fit and subject to the provisions of the law. Once the Trustee has done so it will not be
liable to the entitled persons in respect of such amounts, but only for the proceeds that
will be received from realization of the investments, less the expenses, commissions and
compulsory payments, if any, connected with the aforesaid investment in conducting the
trust account, less the Trustee’s remuneration. 

	 	11.5 	The
Trustee shall transfer to every holder of a Debenture (Series B) for whom amounts and/or
moneys that are due to holders of the Debentures (Series B) have been deposited with the
Trustee out of those moneys that were deposited as aforesaid, less all the expenses,
commissions, compulsory payments and the Trustee’s remuneration as stated in Clause
11.4 above, against presentation of such proof as may be demanded by the Trustee to its
full satisfaction. 

	12. 	Receipt
from holders of the Debentures (Series B) as proof

	 	12.1 	A
receipt from a holder of a Debenture (Series B) in respect of amounts of the principal,
the interest and the linkage differentials that have been paid to him by the Trustee in
respect of the Debenture (Series B) shall release the Trustee by way of absolute release
in all respects connected with payment of the amounts mentioned in the receipt. 

	 	12.2 	A
receipt from the Trustee regarding the deposit of amounts of the principal, the interest
and the linkage differentials with it for the benefit of holders of the Debentures
(Series B) as stated in Clause 11.3 above will be deemed to be a receipt from a holder
the Debenture (Series B) for purposes of the provisions of Clause 12.1 above. 

12

	 	12.3 	Moneys
that have been distributed as stated in Clause 11 above will be deemed to be payment on
account of the repayment. 

	13.  	Presentation
of Debenture (Series B) to the Trustee and recording of a                     note with
regard to partial payment

	 	13.1 	A
holder of a Debenture (Series B) shall be obliged to present to the Trustee, at the time
of payment of any interest or partial payment of principal, interest and linkage
differentials in accordance with Clauses 9, 10 and 11 above, the Debenture (Series B) in
respect of which the payments are made. 

	 	13.2 	The
Trustee shall record a note on the Debenture (Series B) with regard to the amounts that
have been paid as aforesaid and the date of the payment thereof. 

	 	13.3 	The
Trustee will be entitled in any special situation, in its discretion, to waive
presentation of the Debenture (Series B), after it has been given a deed of indemnity
and/or an adequate guarantee to its satisfaction with respect to the damage likely to be
caused by virtue of the failure to record the note as aforesaid, all as the Trustee shall
see fit. 

	 	13.4 	Notwithstanding
the foregoing, the Trustee shall be entitled, in its discretion, to maintain records in a
different manner with regard to partial payments as aforesaid. 

	14.  	The
Company’s undertakings to the Trustee  

	 	
As
long as the Debentures (Series B) (including the linkage differentials on the Debentures)
have not been paid, the Company hereby undertakes to the Trustee as follows:  

	 	14.1 	To
give the Trustee immediate written notice of a reasonable fear of the Company that all or
any of the events described in Clause 7.1 above are likely to eventuate and also in
regard to the occurrence of any of the events mentioned in Clause 7.1 above. 

	 	14.2 	Not
later than the end of 30 days from the date of this Deed of Trust to deliver to the
Trustee a schedule of payments regarding the payment of the Debentures (principal and
interest) in an Excel file. 

	 	14.3 	To
give the Trustee written notice within 4 business days in regard to the effecting of any
payment to the debenture holders and in regard to the balance of the amounts the Company
owes at such time to the debenture holders, after the effecting of the aforesaid payment. 

	 	14.4 	To
continue constantly to manage and conduct the business of the Company in an orderly,
proper and efficient manner. 

13

	 	14.5 	Immediately
upon the publication of the Company’s consolidated audited financial statements for
the financial year ended December 31 of the preceding year, and of the periodic reports,
to deliver same to the Trustee. 

	 	14.6 	To
deliver to the Trustee immediately, upon the publication thereof any consolidated interim
financial statement of the Company and any quarterly report, accompanied by a review
report from a C.P.A. in relation thereto. 

	 	14.7 	To
deliver to the Trustee immediately upon service thereof any report it is obliged to
submit to the Securities Authority. 

	 	14.8 	On
December 31 of each year, and so long as this deed is in force, the Company shall furnish
the Trustee with a certificate signed by an officer of the Company to the effect that to
the best of his knowledge or their knowledge, as the case may be, there has been no
breach of this deed by the Company (including a breach of the terms and conditions of the
Debenture (Series B), unless otherwise expressly stated. 

	 	14.9 	To
cause a situation that the Company’s auditors shall, within a reasonable time, give
the Trustee and/or persons the Trustee may direct, any explanation, document, calculation
or information relating to the Company, its business and/or its assets which may be
reasonably required, in the discretion of the Trustee, for examinations that are made by
the Trustee for purposes of safeguarding holders of the Debentures (Series B). 

	 	14.10 	To
keep proper books of account in accordance with accepted accounting principles. 

	 	14.11 	The
Trustee undertakes, by its signature to this Deed of Trust, to keep confidential any
information given as aforesaid. It is clarified that the passing on of information to
holders of the Debentures (Series B) for purposes of passing a resolution pertaining to
their rights under the Debentures (Series B), or for purposes of giving a report about
the state and condition of the Company, does not constitute a breach of the Trustee’s
aforesaid confidentiality undertaking. 

	 	14.12 	To
notify the Trustee, immediately it became aware thereof, of any case in which an
attachment has been imposed on its assets, in whole or in part, and also in every case in
which a receiver has been appointed for its assets, in whole or in part, and immediately
to take all the reasonable measures, at its expense, that are required for the removal of
such attachment or for cancellation of the receivership of assets. 

	 	14.13 	To
give the Trustee notice of all its general meetings (whether annual general meetings or
special general meetings of the shareholders of the Company), without conferring on the
Trustee a right to vote at such meetings. 

	 	14.14 	To
deliver to the Trustee, upon the Trustee’s written demand, a certificate in writing
signed by the Company’s auditor to the effect that all the payments to holders of
the Debentures (Series B) have been paid on due date, and specifying the balance of the
par value of the Debentures (Series B) in circulation. 

14

	 	14.15 	A
copy of every document the Company transmits to its shareholders or to debenture holders
and any additional information, upon the Trustee’s reasonable request, which is
required for fulfilling the Trustee’s duty in order to protect and safeguard the
rights of the debenture holders. 

	15.  	Additional
undertakings  

	 	
After
the Debentures (Series B) have been made immediately due and payable, as defined in
Clause 7 above, the Company shall from time to time and at any time it is called upon to
do so by the Trustee, perform all the reasonable actions in order to facilitate the
exercise of all the powers vested in the Trustee, and in particular the Company shall
perform the following acts:  

	 	15.1 	It
shall make the declarations and/or shall sign all the documents and/or shall perform
and/or cause the performance of all the requisite and/or necessary acts according to law
for giving validity to the exercise of the powers, authorities and authorizations of the
Trustee and/or its representatives. 

	 	15.2 	It
shall give all the notices, the orders and the instructions the Trustee shall deem
conducive and shall demand. 

	 	15.3 	For
purposes of this clause – a notice in writing signed by the Trustee confirming that
an act demanded by it, in the scope of its powers, is a reasonable act, shall constitute
prima facie  proof of such fact. 

	16.  	Other
agreements  

	 	
Subject
to the provisions of the law and the restrictions imposed on the Trustee by law, the
fulfillment of the Trustee’s duties, in accordance with this deed, or the fact of it
holding the status as Trustee, shall not have the effect of preventing it from entering
into various contracts with the Company or from transacting transactions with it in the
ordinary course of its business.  

	17.  	Reporting
by the Trustee  

	 	
The
Trustee shall, by the end of the second quarter of each calendar year, draw up an annual
report regarding the affairs of the trust (hereinafter: “the Annual Report”).  

	 	
The
Annual Report shall contain details on the following subjects:  

	 	       17.1 	Current
details about the course of the affairs of the trust in the preceding year.

	 	17.2 	A
report on irregular events in connection with the trust that occurred during the
preceding year. 

	 	
Holders
of the Debentures (Series B) will be entitled to peruse the Annual Report at the offices
of the Trustee during normal working hours, and will be entitled to receive a copy of the
report on request.  

15

	 	
The
Trustee shall deliver to holders of the Debentures (Series B) a notice regarding the date
of submission of the report, as stated in Clause 22 below. Where the Trustee has become
aware of a material breach of this deed on the part of Company, it shall notify holders
of the Debentures (Series B) about the breach and about the steps that it has taken to
prevent same or for the fulfillment of the Company’s obligations, as the case may
be.  

	18.  	Remuneration
and cover of the Trustee’s expenses

	 	18.1 	The
Company shall pay the Trustee a remuneration for the Trustee’s services in
accordance with this deed, in the manner set forth below: 

	 	18.1.1 	Within
one business day after publication of the results of the offering to the public in
respect of the first year of the trust – that is to say up to the end of 12 months
from the date of the issue, NIS 11,250. 

	 	18.1.2 	In
respect of each of the years and commencing from the second year (that is to say,
commencing from the end of 12 months from the date of the issue) in which Debentures
(Series B) which have not yet been repaid, a sum of NIS 7,500 linked to the index known
at the time of publication of the Prospectus (“the annual remuneration”).
The annual remuneration shall be paid to the Trustee at the beginning of each year of the
trust. The annual remuneration shall be paid to the Trustee in respect of the period up
to the end of the trust period in accordance with the terms and conditions of this deed,
even if a receiver and/or a receiver and special manager has been appointed for the
Company and/or in the event that the trust pursuant to this deed is conducted under the
supervision of a court. In a case in which the Trustee’s right to receive an annual
payment in respect of its serving as trustee for holders of the Debentures (Series A)
which the Company issued pursuant to the Prospectus has, for any reason, expired, the
annual remuneration will stand at NIS 15,000, linked to the index which is known at the
date of publication of the Prospectus 

	 	18.1.3 	If
the Trustee’s term of office should expire, as stated in Clause 26 below, the
Trustee will not be entitled to payment of its remuneration commencing from the date of
expiration of its term of office. If the Trustee’s term of office has expired during
the course of a year of the trust, the remuneration that was paid in respect of the
months in which the Trustee did not serve as a trustee for the Company shall be refunded.
The contents of this sub-clause (c) [sic] will not apply with respect to the first year
of the trust. 

	 	18.1.4 	In
addition the Trustee will be entitled to a reimbursement of the reasonable expenses
incurred by it in the course of fulfilling its function and/or pursuant to the powers
conferred on it under this deed, including in respect of advertisements in newspapers,
provided that in respect of expenses for an expert opinion, as referred to in Clause 19.2
below, the Trustee shall give prior notice of its intention to obtain an expert opinion. 

16

	 	18.1.5 	The
Trustee will also be entitled to a further payment, in respect of an act arising from a
breach of this Deed of Trust by the Company or in respect of an act for making the
Debentures (Series B) immediately due and payable and in respect of special actions that
it may be required to perform, if required, for purposes of fulfilling its functions
pursuant to this deed, all without prejudice to the generality of the contents of this
Clause 18. 

	 	
It
is hereby agreed between the parties that the Trustee will be entitled to a remuneration
in an amount of 120 US dollars for each hour of work that it is called upon to perform as
aforesaid. 

	 	18.1.6 	In
respect of every annual meeting of shareholders or a meeting of debenture holders which
the Trustee attends, an additional remuneration of NIS 500 per meeting will be paid. 

	 	18.1.7 	If
there are changes in the provisions of the law pursuant to which the Trustee will be
called upon to perform acts and/or examinations and/or to prepare additional reports, the
Company undertakes to bear all the reasonable expenses that may be incurred by the
Trustee by virtue thereof, including a reasonable remuneration in respect of such actions. 

	 	18.1.8 	The
Trustee will be entitled to an additional payment in respect of the hours devoted to
discussions with the Securities Authority immediately prior to the signing of this deed,
according to the amount per hour specified in Clause 18.1.5 above. 

	 	       18.2 	V.A.T.,
 if same applies,  shall be added to the payments due to the Trustee in accordance with
the               provisions of this clause, and shall be paid by the Company. 

	19.  	Special
powers  

	 	19.1 	The
Trustee will be entitled to deposit all the deeds and the documents which evidence,
represent and/or specify its right in connection with any asset held by it for the time
being, in a safe and/or at another place it may elect, with any banker and/or any banking
corporation and/or with an attorney. Where the Trustee has done so, it will not be
responsible for any loss that may be caused in connection with such deposit, unless the
Trustee acted negligently or with malicious intent. 

	 	19.2 	The
Trustee may, in the scope of carrying out the affairs of the trust pursuant to this deed,
act in accordance with an opinion and/or advice of any attorney, accountant, chartered
appraiser, valuer, surveyor, broker or other expert, whether such opinion and/or advice
was prepared at the request of the Trustee and/or by the Company, and the Trustee will
not be responsible for any loss or damage that may be caused as a result of any act
and/or omission on its part in reliance on such advice or opinion, unless the Trustee
acted negligently or with malicious intent. 

	 	19.3 	Any
such advice and/or opinion may be given, sent or received by way of letter, telegram,
facsimile and/or any other electronic means for the transmission of information, and the
Trustee will not be responsible in respect of acts performed in reliance on advice and/or
an opinion or notification transmitted by one of the ways mentioned above, even though
there were errors in it and/or same were not authentic, unless the Trustee acted
negligently or with malicious intent. 

17

	 	19.4 	Should
the Trustee receive a certificate signed by the Company through two directors of the
Company and/or an assessment confirming that in their opinion a transaction, step, action
or anything else done or intended to be done by the Company is desirable and for the
benefit of the Company, this will constitute adequate proof that the transaction, the
step, the action or the thing is indeed desirable for the Company and in its best
interests. 

	 	
Where
the Trustee has acted in reliance on such certificate, it will not be responsible in any
manner for any damage and/or loss that may be caused as a result of such step, operation
and/or thing.  

	 	19.5 	Subject
to the provisions of this deed, the Trustee shall be entitled, but not obliged, to call a
general meeting of holders of the Debentures (Series B), at any time, in order to
consider and discuss and/or to obtain the instructions of the meeting on any matter
pertaining to this deed and it may reconvene such meeting. 

	 	19.6 	The
Trustee will not be obliged to notify any party about the signing of this deed and it
will not be entitled to interfere in any manner in the management of the business of the
Company or its affairs, except pursuant to the powers and authorities conferred on the
Trustee under this deed. 

	 	19.7 	The
Trustee shall loyally and faithfully exercise the powers, authorizations and authorities
conferred on it under this deed, in its absolute discretion and without being liable for
any damage caused as a result of an error in its discretion as aforesaid, unless the
Trustee acted with gross negligence or with malicious intent. 

	20. 	The
Trustee’s power and authority to employ agents

	 	
The
Trustee will be entitled to appoint an agent/s to act in its stead, whether an attorney
or otherwise, in order to perform or participate in the performance of special actions
that require to be performed in connection with the trust, and without derogating from
the generality of the foregoing, the instituting of legal proceedings. The Trustee will
further be entitled to discharge, at the Company’s expense, the reasonable fee or
remuneration of any such agent, and the Company shall refund to the Trustee, immediately
upon its first demand, any such expense, on condition that the Trustee has given the
Company notice in advance in regard to the appointment of such agents.  

	 	
The
Trustee may at any time delegate any of the trusts, the powers, authorizations and
authorities conferred on it pursuant to this Deed of Trust, in whole or in part, to
another person or to other persons, and any such delegation shall be made under the
conditions and instructions (including permission to an agent to appoint another agent)
which the Trustee shall deem expedient, but the delegation of powers as aforesaid shall
not release the Trustee from any liability and responsibility that would have been
imposed on it had it not been for the delegation of the powers.  

18

	21.  	Indemnification
of the Trustee  

	 	21.1 	The
Trustee will be entitled to receive indemnity from holders of the Debentures (Series B)
or from the Company, as the case may be, in respect of reasonable expenses incurred by it
and/or which it may incur in connection with actions it has performed or which it is
obliged to perform by virtue of its duties under this Deed of Trust, and/or according to
statute and/or on an instruction from a competent authority and/or any law and/or on a
demand by holders of the Debentures (Series B) and/or on a demand by the Company,
provided that: 

	 	              21.1.1 	The
expenses in respect of liability for damage are reasonable. 

	 	21.1.2 	The
Trustee acted in good faith, and such act was performed within the scope of fulfilling
its duties. 

	 	21.1 	Without
prejudice to the rights to compensation granted to the Trustee according to the law
and/or to the Company’s obligations pursuant to this deed, the Trustee, its
representative, manager, agent or other person appointed by the Trustee in accordance
with this deed, will be entitled to receive indemnity out of the moneys that will be
received by the Trustee as a consequence of proceedings it has instituted and/or
otherwise in accordance with this deed, with respect to obligations they have assumed,
with respect to expenses they have incurred in the course of performing the trust or in
connection with such actions which, in their opinion, were required for performance of
the foregoing and/or in connection with the exercise of the powers and authorities
conferred by virtue of this deed, and also in connection with all kinds of legal
proceedings, opinions from attorneys and other experts, negotiations, discussions,
expenses, claims and demands relating to any matter and/or thing that has been done
and/or has not been done in any manner in relation to the foregoing, and the Trustee may
withhold moneys in its possession and make payment out of them of the amounts necessary
for payment of the aforesaid indemnity. All the abovementioned amounts will rank
preferentially to the debenture holders and subject to the provisions of any law,
provided that the Trustee has acted in good faith. 

	 	21.3 	Wherever
the Trustee is obliged pursuant to the terms and conditions of the Deed of Trust and
according to statute and/or a directive from a competent authority and/or any law and/or
on a demand by holders of the Debentures (Series B) and/or on a demand by the Company, to
perform any act, including, but without limitation, the commencing of proceedings or
institution of claims on a demand by holders of the Debentures (Series B), as stated in
the Deed of Trust, the Trustee will be entitled to refrain from taking any such action,
until it has received, to its satisfaction, a deed of indemnity from holders of the
Debentures (Series B) or from any of them, and if the act is performed by virtue of a
demand from the Company – from the Company in respect of any liability for damages
and/or expenses that may be incurred by the Trustee and the Company or either of them, as
a consequence of performing the aforesaid act. All this will be with the exception of
circumstances in which urgent action is required, where failure to perform it prior to
receipt of a deed of indemnity as aforesaid will inflict damage and/or a loss on holders
of the Debentures (Series B). Notwithstanding the foregoing, in a case in which there is
a necessity for taking legal proceedings, the Company shall deposit with the Trustee an
amount that will be fixed by the Trustee as the anticipated amount of the Trustee’s
expenses in connection with such proceedings. In a case in which the Company has not
deposited the aforesaid amount at the time it was requested by the Trustee to do so, and
in the Trustee’s opinion there will be doubt regarding the Company’s ability to
cover the expenses involved in the taking of proceedings by the Trustee, the Trustee
shall immediately call a meeting of debenture holders in order to confirm their liability
to cover the expenses involved in the proceedings which the Trustee will take. In the
event that the debenture holders should refuse to bear the expenses connected with the
taking of proceedings by the Trustee, there will be no obligation on the Trustee to
institute such proceedings. 

19

	22.  	Notices  

	 	22.1 	Any
notice by the Company and/or the Trustee to holders of the Debentures (Series B) shall be
given as follows: 

	 	22.1.1 	By
reporting on the Magna system of the Securities Authority; (the Trustee is entitled to
instruct the Company, and the Company will be obliged immediately to render a report on
behalf of the Trustee to the Magna system in such text as will be transmitted to the
Company in writing by the Trustee); 

and also by: 

	 	22.1.2 	A
notice to be published in two widely circulating Hebrew dailies published in Israel;  

	 	
or  

	 	
By
sending a notice by registered mail to every registered holder of Debentures (Series B)
according to the last address recorded in the register of debenture holders (in the case
of joint holders – to the joint holder whose name stands first in the register). 

	 	22.2 	Any
notice or demand by the Trustee to the Company may be given by way of a letter sent by
registered mail according to the address set forth in the Deed of Trust, or according to
another address of which the Company shall notify the Trustee in writing, or by the
transmission thereof by facsimile or via messenger, and any such notice or demand shall
be deemed to have been received by the Company: (1) in the case of dispatch by registered
mail – after three business days from the date of its posting; (2) in the case of
transmission by facsimile (coupled with telephonic confirmation as to the receipt
thereof) – after one business day from the day of its transmission; (3) and in the
case of delivery via a messenger – upon delivery thereof by the messenger to the
addressee or the offer thereof to the addressee, as the case may be. 

	 	22.3 	Any
notice or demand by the Company to the Trustee may be given by way of a letter sent by
registered mail according to the address set forth in the Deed of Trust, or according to
another address of which the Trustee shall notify the Company in writing, or by the
transmission thereof by facsimile or via messenger, and any such notice or demand will be
deemed to have been received by the Trustee: (1) in the case of dispatch by registered
mail – after three business days from the date of its posting; (2) in the case of
transmission by facsimile (coupled with telephonic confirmation as to the receipt
thereof) – after one business day from the day of its transmission; (3) and in the
case of delivery via a messenger – upon delivery thereof by the messenger to the
addressee or the offer thereof to the addressee, as the case may be. 

20

	 	22.4 	Copies
of notices and invitations to meetings which the Company and/or the Trustee give to
holders of the Debentures (Series B) shall be sent by the Company also by way of an
immediate report a copy of which shall be delivered to the Trustee. 

	23. 	Waiver;
compromise; and modifications of terms and conditions of the Deed           of Trust

	 	23.1 	Subject
to the provisions of any law, the Trustee may from time to time and at any time, if it
has been persuaded that this does not, in its opinion, constitute a prejudice to the
rights of holders of the Debentures (Series B), waive any breach or non-fulfillment by
the Company of any of the conditions of this deed. 

	 	23.2 	Subject
to the provisions of the law and with prior approval to be obtained from a general
meeting of holders of the Debentures (Series B) by a majority of 75% of the persons
participating in the vote, at which holders of at least 50% of the balance of the par
value of the Debentures (Series B) in circulation were personally present or represented
by proxy, or at an adjourned meeting, at which holders of at least 10% of the aforesaid
balance were personally present or represented by proxy, the Trustee may, either before
or after the principal of the Debentures (Series B) is due for repayment, compromise with
the Company in connection with any right or claim of holders of the Debentures (Series B)
and may agree with the Company on any arrangement in connection with its rights or the
rights of holders of the Debentures (Series B), including its waiving any right or claim
of holders of the Debentures (Series B) vis-à-vis the Company pursuant to
this deed. Where the Trustee has compromised with the Company after having received prior
approval from the debenture holders as aforesaid, the Trustee will be released from all
liability in respect of such act. 

	 	23.3 	Subject
to the provisions of the law, the Trustee and the Company may, either before or after the
principal of the Debentures (Series B) is due for repayment, alter the Deed of Trust
(including an alteration of the conditions of the Debentures (Series B)), if one of the
following conditions is fulfilled: 

	 	23.3.1 	The
Trustee has been persuaded that the alteration is not prejudicial to holders of the
Debentures (Series B). 

	 	23.3.2 	The
holders of the Debentures (Series B) have agreed to the proposed alteration, by way of a
special resolution passed at a general meeting of holders of the Debentures (Series B) at
which holders of at least 50% of the unpaid balance of the principal of the Debentures
(Series B) in circulation are personally or represented by proxy, or at an adjourned
meeting, at which the holders of at least 10% of the aforesaid balance were personally or
represented by proxy. 

21

	 	23.4 	The
Company shall render an immediate report in regard to any such alteration or
modification. 

	 	23.5 	The
general meetings as referred to in this clause shall be convened in the manner stated in
the Second Schedule to this deed. 

	 	
In
every case of the exercise of the Trustee’s right pursuant to this clause as
aforesaid, the Trustee will be entitled to demand from holders of the Debentures (Series
B) to deliver their debenture certificates to it or to the Company, for purposes of
recording a note with regard to any compromise, waiver, modification or amendment as
aforesaid, and on the Trustee’s request, the Company will record such note on the
certificates that are delivered to it.  

	24. 	Register
of holders of Debentures (Series B)

	 	24.1 	The
Company shall keep and maintain at its registered office a register of holders of the
Debentures (Series B), in which the names and addresses of holders of the Debentures
(Series B) shall be recorded, as well as the number and par value of the registered
Debentures (Series B). Every transfer of ownership of the debentures shall also be
registered in the register. The Company may close the register from time to time for a
period or periods which shall not in aggregate exceed 30 days in a year. The Trustee and
any holders of the Debentures (Series B) will be entitled to inspect the register of
holders of the Debentures (Series B) at any reasonable time. 

	 	24.2 	The
Company will not be obliged to register any notice in the register of holders of the
Debentures (Series B) with regard to an express, implied or presumed trust, or a pledge
or charge of any sort, or of any equitable right, claim or set-off or any other right in
connection with the Debentures (Series B). The Company will only recognize the title of
the person in whose name the Debentures (Series B) are registered, provided that his
lawful heirs, administrators of the estate or executors of the registered holder and any
person who may be entitled to a debenture as a consequence of the bankruptcy of any
registered holder (and if it is a body corporate – as a result of its liquidation)
will be entitled to be registered as holders thereof, after providing such proof as is
sufficient, in the Company’s opinion, to prove the right of any of them to be
registered as a holder thereof. 

	25.  	Release  

	 	
Once
it has been proved to the Trustee’s satisfaction that all the Debentures (Series B)
have been repaid, or redeemed, or when the Company deposits in trust with the Trustee
amounts of money that will be sufficient for redemption, and also once it has been proved
to the Trustee’s satisfaction that all the undertakings and the expenses made or
incurred by the Trustee in connection with this deed and in accordance with the
provisions hereof, have been paid in full, the Trustee will then be obliged, upon the
Company’s first demand, to deal with the moneys that have been deposited in respect
of the Debentures (Series B) the redemption of which has not been demanded, in accordance
with the conditions set forth in this deed.  

22

	26.  	Appointment
of new trustee and expiry of term of office as Trustee

	 	26.1 	The
provisions of the law will apply to the Trustee’s term of office and to the
expiration thereof, as well as to the appointment of a new trustee. Subject to the
provisions of the law, the Trustee and any trustee who may come in its stead, will be
entitled to resign from their positions as trustees after having given the Company prior
written notice of three (3) months, which notice shall specify the reasons for the
resignation. 

	 	
The
resignation will come into force only after the court’s approval and from the date
fixed for this in the approval. 

	 	
In
the case of such resignation or in the event of the expiration of the Trustee’s term
of office, the court may appoint another trustee in place of the Trustee, for such period
and on such conditions as the court deems fit. 

	 	26.2 	In
accordance with the provisions of the Deed of Trust, where the Trustee or any trustee who
may come in its stead have acted in such manner, they will not be liable for expenses or
losses that are caused as a result of their resignation. 

	 	26.3 	The
court may dismiss a trustee if he or it has not fulfilled his or its function properly or
if the court finds another reason for dismissing him or it. 

	 	26.4 	The
holders of ten percent of the unpaid balance of the Debentures (Series B) and/or the
Company may convene a general meeting of holders of certificates of the Debentures
(Series B). Every meeting convened as aforesaid may decide by a vote of the holders of at
least fifty percent of the unpaid balance of the Debentures (Series B) on removing the
Trustee from its position. 

	 	26.5 	The
Securities Authority is entitled to apply to the court with an application to terminate
the Trustee’s term of office, in accordance with Section 35N of the Law. 

	 	26.6 	The
Trustee and the Company shall submit an immediate report to the Securities Authority in
regard to any event as referred to above in this clause, in connection with the Trustee’s
term of office. 

	 	26.7 	Every
new trustee will have the same powers, authorities and other authorizations and will be
able to act in all respects as if appointed Trustee from the outset, subject to the
provisions of Section 35N of the Law. 

	27. 	 Meetings
of holders of the Debentures (Series B)

	 	
Meetings
of holders of the Debentures (Series B) shall be conducted as stated in the Second
Schedule to this deed.  

	28.  	Investment
of money  

	 	
All
the money the Trustee is entitled to invest pursuant to this deed, shall be invested by
it at a bank/banks, in its name or to its order, in investments in which the laws of the
State of Israel permit such moneys to be invested, as shall be found suitable, and all
subject to the terms and conditions of this Deed of Trust, provided that any investment
in securities shall be in securities that have been rated with a rating that is not less
than an AA rating. Where the Trustee has done so, it will not be liable to the persons
entitled in respect of such amounts, except for the proceeds received from the
realization of the investments, less the expenses connected with the aforesaid
investments and with maintaining and managing the trust accounts, the commissions and
less the compulsory payments which are imposed on the trust accounts. Out of such moneys
the Trustee shall transfer amounts to the debenture holders who are entitled thereto, as
soon as possible after proof and confirmation have been furnished to the Trustee in
regard to their right to such amount, to the Trustee’s full satisfaction, but less
the Trustee’s expenses and its commission at a rate that is customary with it at
such time.  

23

	29.  	Governing
law  

	 	
The
Debentures (Series B) are subject to the provisions of the Israeli law. In regard to any
matter that has not been mentioned in this deed and also in every case of a conflict
between the provisions of the law and the provisions of this deed, the parties will act
in accordance with the provisions of the Israeli law. In every case of a conflict between
the provisions described in the Prospectus regarding this deed and/or the Debentures
(Series B), the provisions of this deed shall prevail.  

	30.  	Addresses  

	 	
The
Debentures (Series B) are subject to the provisions of the Israeli law. On any matter
that has not been mentioned in this deed and also in every case of a conflict between the
provisions of the law and this deed, the parties will act in accordance with the
provisions of the law [sic].  

	31.  	Authorization
for Magna  

	 	
In
accordance with the provisions of the Securities Regulations (Electronic Signature and
Reporting), 5763-2003, the Trustee hereby gives approval for an authorized entity for the
purpose on behalf of the Company, to report electronically to the Securities Authority in
regard to this Deed of Trust.  

In Witness Whereof the
Parties have Hereunto Signed: 

	
By: /s/ Hermetic Trust (1975) Ltd.

——————————————

Hermetic Trust (1975) Ltd.	
By: /s/ David Weissman
      /s/ Dror Moran
——————————————

The Company

I, the undersigned, Elli
Levinson-Sela, Adv., certify that this Deed of Trust was signed by Mr. David Weissman and
Dror Moran and their signatures bind the Company in connection with this Deed of Trust. 

			
By: /s/ Elli Levinson-Sela, Adv.
Lic. No. 15877
——————————————

Elli Levinson-Sela, Adv.

24

BLUE SQUARE REAL
ESTATE LTD.  

Second Schedule  

Meetings of Holders of
the Debentures (Series B)  

	1.  	The
Trustee or the Company may call meetings of holders of the Debentures
                    (Series B). Where the Company has called such meeting, it shall
immediately send                     written notice to the Trustee regarding the place,
the day and the hour at which                     the meeting will be held and also the
matters that will be brought for                     consideration thereat, and the
Trustee or a representative on its behalf will be                     entitled to attend
such meeting. The Company will be obliged to call a general                     meeting
on a written request from the Trustee or on a requisition by holders of
                    the Debentures (Series B) who hold at least 10% of the unpaid balance
of                     principal of the Debentures (Series B) in circulation, as the case
may be. In a                     case that the persons requisitioning the calling of the
meeting are holders of                     Debentures (Series B), the Company and/or the
Trustee, as the case may be, will                     be entitled to request indemnity
from the persons requisitioning the calling of                     the meeting for the
reasonable expenses connected therewith. 

	 	
Prior
notice of at least fourteen (14) days shall be given in respect of every meeting of
holders of the Debentures (Series B), specifying the place, the day and the hour of the
meeting, and also mentioning in general terms the subjects that will be considered and
discussed at the meeting. The notice shall be given to holders of the Debentures (Series
B), to the Trustee and in an immediate report.  

	 	
If
the purpose of the meeting is to consider and pass a special resolution, prior notice
regarding the convening of the meeting of at least twenty-one (21) days before the date
planned for the convening thereof, shall be given. Such notice shall, in addition to the
foregoing, also give details of the main points of the proposed resolution. The Trustee
may shorten the period of the aforesaid prior notice if it believes that a postponement
of convening the meeting constitutes prejudice to the rights of the holders of Debentures
(Series B). No resolution duly passed at a meeting called as aforesaid will be
invalidated if, due to an inadvertent omission, notice was not given to all holders of
the Debentures (Series B) or if such notice was not received by all holders of the
Debentures (Series B).  

	 	
Every
notice as aforesaid by the Company and/or the Trustee to the debenture holders shall be
given by way of an immediate report and also by way of a notice to be published in two
(2) widely circulating Hebrew dailies published in Israel, or by sending a notice by
registered mail to every registered holder of the Debentures (Series B) according to his
last address as recorded in the register of holders of Debentures (Series B) (in the case
of joint holders – to the joint holder whose name stands first in the register of
holders of Debentures (Series B)). Every notice that is published or sent as aforesaid
will be deemed to have been delivered to holders of the Debentures (Series B) on the date
of its publication as aforesaid, or after three (3) days from the date of its posting, as
the case may be.  

25

	2.  	The
chairman of the meeting shall be a person to be appointed by the Trustee. If
                    the Trustee has not appointed a chairman or if the chairman is absent
from the                     meeting, the holders of the Debentures (Series B) present at
the meeting shall                     elect a chairman from amongst their number. 

	3.  	A
meeting of holders of the Debentures (Series B) shall be opened after it has
                    been proved that the quorum required for the start of business is
present. 

	4.  	Subject
to the required quorum at a meeting convened to pass a special
                    resolution, and subject to the required quorum for dismissal of a
trustee in                     accordance with the Securities Law, two holders of
Debentures (Series B),                     personally or represented by proxy and jointly
holding or representing at least                     one-tenth (1/10) of the unpaid
balance of the Debentures (Series B) in                     circulation for the time
being, shall constitute a quorum. 

	5.  	At
a meeting convened to pass a special resolution, and inter alia on the
                    subjects set forth below: 

	 	       5.1 	An
alteration and/or amendment to the Deed of Trust.

	 	       5.2 	An
arrangement for reorganization of the Company with any other company.

	 	5.3 	Any
amendment, alteration or arrangement of the rights of holders of the Debentures (Series
B), whether such rights flow from the Debentures (Series B), the Deed of Trust or
otherwise, or any compromise or waiver in connection with the such rights. 

	 	5.4 	Making
of the Debentures (Series B) immediately due and payable in accordance with the terms and
conditions of the Deed of Trust. 

	 	
A
quorum will be constituted if at least 50% of the unpaid balance of the Debentures
(Series B) in circulation for the time being are present at the meeting, or at an
adjourned meeting, if holders of at least 10% of the abovementioned balance are present.  

	6.  	The
holders of the Debentures (Series B) are entitled to attend and vote through
               proxies. 

	7.  	Every
meeting of holders of the Debentures (Series B) shall be held at the place
               of which the Company gave notice, unless the Trustee gives notice of a
different                place for the convening thereof. 

	8.  	Except
as otherwise expressly provided, if within half an hour from the time
               appointed for the start of a meeting, no quorum is present, the meeting
will be                adjourned to the same day in the following week (and in the event
that such day                is not a trading day, to the immediately following trading
day) and to the same                place, without there being an obligation to give
notice to that effect to                holders of the Debentures (Series B), or to such
other day, place and hour, at                the election of the party calling the
meeting, of which notice shall be given to                the holders of the Debentures
(Series B) at least three (3) days in advance. If                no quorum is present at
such adjourned meeting, two (2) holders of Debentures                (Series B)
personally present or represented by proxy at such meeting, without                taking
account of the par value held by them, shall constitute a quorum, on
               condition that the provision which stipulates the quorum as aforesaid
shall be                published in the scope of the notice of the original meeting and
on condition                that the notice to holders of the Debentures (Series B) with
regard to the                holding of the adjourned meeting shall be published in
accordance with the                contents of Clause 8 below [sic], not later than seven
(7) days before the date                for convening of the adjourned meeting. Such
notice may be published in the                scope of the notice regarding the original
meeting (the general meeting that was                adjourned). 

26

	9.  	With
the consent of the majority at a meeting at which a quorum is present, the
               chairman may, and on a demand by the meeting shall be obliged to, adjourn
the                meeting from time to time and from place to place, as the meeting
shall decide.                If the meeting is adjourned for ten (10) days or more,
notice of the adjourned                meeting shall be given in the same way as notice
was given in regard to the                first meeting. Save for the foregoing, a holder
of a Debenture (Series B) will                not be entitled to receive any notice about
an adjourned meeting and/or about                the matters which will be considered and
discussed at the adjourned meeting.                Only matters which it was possible to
consider at a meeting at which it was                decided on the adjournment may be
considered and discussed at an adjourned                meeting. 

	10.  	In
a vote every holder, personally or represented by proxy, will have one vote
               in respect of each NIS 1 par value of the total face value principal of
the                Debentures (Series B) by virtue of which he is entitled to vote, which
remains                unpaid. 

	11.  	The
majority required for an ordinary resolution is a simple majority of the
               number of votes represented in a vote at a meeting. The majority required
for a                special resolution at such meeting is a majority of not less than
75% of the                number of votes represented in such vote. For these purposes no
distinction                shall be drawn between persons who are interested parties in
the Company and                persons who are not. 

	12.  	An
instrument appointing a proxy shall be in writing and shall be signed by the
               appointer or by his representative holding due written authorization to do
so.                If the appointer is a body corporate, the appointment shall be made in
writing                and shall be signed with the rubber stamp of the body corporate,
together with                the signature of the secretary of the body corporate or a
representative of the                body corporate having the power and authority to do
so. The instrument                appointing a proxy shall be drawn in the usual form. A
proxy need not himself be                a holder of a Debenture (Series B). An
instrument of proxy and the power of                attorney or other certificate
pursuant to which the instrument of proxy was                signed, or a certified copy
of such power of attorney, shall be lodged at the                registered office of the
Company, or at such other address of which the Company                shall give notice,
not less than forty-eight (48) hours before the time of the                meeting in
respect of which the power of attorney was given, unless otherwise                stated
in the notice calling the meeting. Any body corporate which is the holder
               of a Debentures (Series B) may by duly-signed written authorization
appoint such                person as it deems fit to act as its representative at every
meeting of holders                of the Debentures (Series B), and the person who has
been authorized will be                entitled to act in the name and on behalf of the
body corporate he represents. 

27

	13.  	Every
proposed resolution put to the vote at a meeting of holders shall be
               decided on a show of hands, unless a poll has been demanded by the
chairman or                at least two (2) holders of Debentures (Series B), personally
present or                represented by proxy, whether before a vote was held on a show
of hands or                subsequent thereto, and the vote on a poll shall be decisive.
In the case of                joint holders only the vote of the senior joint holder
wishing to vote, whether                personally or by way of proxy, will be accepted,
and for this purpose seniority                shall be determined according to the order
in which the names stand in the                register of holders. 

	14.  	The
Trustee, who attends the meeting on an invitation from the Company, shall
               attend without having a right to vote. 

	15.  	In
a vote the holder of a Debentures (Series B), or his proxy, may vote in
               respect of some of his votes in favor of the motion that has been put to
the                vote, and in respect of portion thereof against the motion, as he
deems fit. 

	16.  	A
vote given in accordance with the conditions contained in a document
               appointing a proxy shall be valid even if prior thereto the appointer has
died                or been declared legally incompetent, or the instrument of proxy has
been                revoked, or the Debentures (Series B) in respect of which the vote
was given has                been transferred, unless written notice has been received at
the registered                office of the Company or at such other place of which the
Company shall give                notice, before the meeting, in regard to the death of
the appointer, the fact of                his being legally incompetent, or with regard
to the revocation or transfer as                aforesaid. 

	17.  	The
announcement by the chairman of the meeting that a resolution has been
               passed or has been defeated and an entry to that effect in the minute book
shall                serve as conclusive proof of such fact. 

	18.  	A
resolution for a modification of the Deed of Trust, to the extent that this is
               submitted to a meeting, shall be passed by a special resolution as
aforesaid,                and subject to the provisions of the Securities Law. 

	19.  	The
chairman of the meeting shall cause minutes to be kept of the meeting of
               holders of the Debentures (Series B) which shall be recorded in the minute
book.                Every such minute shall be signed by the chairman of the meeting or
by the                chairman of the next meeting, and every minute signed as aforesaid
shall serve                as conclusive evidence as to the proceedings at the meeting,
and until the                contrary is proved, any resolution passed at such meeting
shall be deemed to                have been duly passed. 

	20.  	A
person or persons who may be appointed by the Trustee, the secretary of the
               Company and any other person or persons who are authorized to do so by the
               Company, will be entitled to be present at the aforesaid meetings of
holders of                the Debentures (Series B), without having a right to vote. 

28

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