Document:

Unassociated Document

    Exhibit
4.45

    [Unofficial
Translation]

    

    DOCUMENT OF PRINCIPLES DATED
APRIL 15, 2010

    

    Between:

    

    1.        BLUE SQUARE REAL ESTATE TEL AVIV
MARKET COMMERCIAL LTD.

    Pvte. Co. 514433986.

    

    2.        BLUE SQUARE REAL ESTATE TEL AVIV
MARKET HOUSING LTD.

    Pvte. Co. 514434000.

    

    (hereinafter – “Blue Square”).

    of the
one part;

    

    And:

    

    1.        GINDI COMMERCIAL TEL AVIV
LTD.

    Pvte. Co. 514434372

    

    2.        GINDI HOUSING TEL AVIV
LTD.

    Pvte. Co. 514434380

    

    (hereinafter – “Gindi”)

    of the other
part;

    

    
      	
              1.

            	
              The
      parties agree to purchase the “Property Sold” from the
      “Sellers” (as
      these terms are defined in the “Sale Agreements”, as
      defined below), in equal shares between them (50% - 50% of the rights and
      obligations), all in the manner, in the ways of incorporation and subject
      to what is set forth below in this Document of
  Principles.

            

    

    

    
      	
              2.

            	
              For
      purposes of purchasing the Property Sold, the “Housing Company” and
      “the Mall
      Company”, as defined below, will contract with the Sellers under
      the Sale Agreements, the Construction of Public Buildings Contract,
      including the appendices thereto, in the text and on the conditions as
      shall be agreed with the Sellers on the basis of the drafts attached
      hereto as Appendix
      A (the Construction Contract and the Sale Agreements will
      henceforth be referred to as – “the Sale
      Agreements”).

            

    

    

    
      	
              3.

            	
              Up
      to the time of signing of the Sale Agreements the parties will establish
      two companies: the one, which will purchase the “Residential Section”
      (hereinafter – “the
      Housing Company”) and the other which will purchase the “Commercial
      Rights” (which will also be referred to below as “the Commercial Precinct”
      or “the Commercial
      Section” or “the
      Mall”) (hereinafter – “the Mall
      Company”).  Each of the parties will have one half (50%)
      of the rights and obligations in each such company.  In
      addition, the provisions of this Document of Principles will apply
      respectively and as the case may be to the relationship between the
      parties in each of the companies in a manner whereby everything stated in
      relation to the joint company, in the absence of an express provision to
      the contrary, means that it applies both in relation to the Housing
      Company and also in relation to the Mall Company (each of the Housing
      Company and the Mall Company will henceforth be referred to as – “the Company” or “the Joint
      Company”).  The parties will act in such a manner that
      the articles of each of the companies will be adapted to the provisions of
      this Document of Principles.  In the case of a conflict between
      the provisions of this Document of Principles and the articles of the
      companies, the provisions of this Document of Principles shall
      prevail.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2

     

    
      	
              4.

            	
              The
      Joint Company:

            

    

    

    
      	
               
      

            	
              The
      name of the Housing Company will be Lev Tel Aviv Towers Ltd. and the name
      of the Mall Company will be City of Tel Aviv Mall
  Ltd.

            

    

    

    
      	
               
      

            	
              4.1

            	
              The
      object of the Joint Company will be: acquisition of the Property Sold (the
      Mall Company with respect to the commercial rights and the Housing Company
      with respect to the residential rights), the planning, development,
      branding, construction, marketing and management thereof.  For
      purposes of this clause marketing means – with respect to the residential
      section, sale, and for purposes of the Commercial Precinct, leasing
      only.

            

    

    

    
      	
               
      

            	
              4.2

            	
              50%
      of the shares and rights in the Housing Company and in the Mall Company
      will be allotted to Blue Square and the same to
  Gindi.

            

    

    

    
      	
               
      

            	
              4.3

            	
              Unless
      otherwise stipulated in this document, decisions in the Joint Company
      shall be passed by a majority vote of the
  directors.

            

    

    

    
      	
               
      

            	
              4.4

            	
              The
      board of directors of the Company shall formulate its
      policy.  The board of directors shall be comprised of 4 members,
      one half of whom will be appointed by Blue Square and the other half by
      Gindi, and the same will apply to the replacement of such members and the
      appointment of others in their
stead.

            

    

    

    
      	
              5.

            	
              Unanimous
      resolutions

            

    

    

    
      	
               
      

            	
              The
      parties hereby stipulate that there shall be no validity to any resolution
      of the board of directors and/or any resolution of the general meeting
      and/or of any of its committees on any of the matters described below,
      unless such resolution is passed unanimously, provided that the holdings
      of each of the parties at the time the resolution is passed shall not be
      less than 25% of the issued and paid-up share capital of the relevant
      company.  The following are the
  subjects:

            

    

    

    
      	
               
      

            	
              5.1

            	
              A
      resolution on the basic planning layouts – basic design concept of the
      Project (which will serve as a basis for detailed planning) and a general
      business and commercial plan including the indicative price lists, both
      with respect to residential areas and also in relation to the
      Mall.  In this connection it is clarified that under all
      circumstances a closed mall will be
designed.

            

    

    

    
      	
               
      

            	
              5.2

            	
              Approval
      of a budget for the Housing Project or for the Commercial Project or for
      the Public Buildings, whether annual or multi-annual, and whether the
      amendment, increase or decrease of the budget, will be divided into two
      subjects: one, direct building construction items (“the Construction
      Items”) and the other the remaining subjects (“Other
      Items”).  On each of the abovementioned subjects
      unforeseen expenses will be fixed of 5% of the total costs on that
      subject.  It is clarified that Gindi will be entitled to take
      decisions on its own (without requiring the consent of Blue Square) in
      each of the following cases: (a) in the case of a deviation of up to 2%
      from the total construction costs item (including unforeseen expenses) and
      5% of the total costs of the Other Items (including unforeseen expenses);
      notwithstanding the foregoing, under no circumstances shall a budget item
      exceed what was fixed with the consent of the parties by more than double;
      (b) to reduce the revenues budget by a percentage of up to 5%, provided
      that under no circumstances will residential units be sold at less than
      90% of the price lists, except with unanimous consent.  It is
      clarified that for purposes of this clause “costs” do not include the
      costs of acquiring the land and Land Acquisition Tax.  It is
      further agreed that the advertising and the marketing budget may be up to
      6% of the total anticipated revenues of the
  Project.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3

     

    
      	
               
      

            	
              5.3

            	
              Contractual
      arrangements with a bank/s, credit institutions, under a finance and
      construction loan agreement.

            

    

    

    
      	
               
      

            	
              5.4

            	
              Entering
      into encumbrance agreements of all
types.

            

    

    

    
      	
               
      

            	
              5.5

            	
              A
      resolution regarding the raising of money from the shareholders and/or
      from any third parties.

            

    

    

    
      	
               
      

            	
              5.6

            	
              Rights
      of signature – the rights of signature in each company will be in
      accordance with the rights of signature protocol which is attached hereto
      as Appendix
      B.  The rights of signature shall not be altered except
      by way of a unanimous decision of the parties.  Gindi’s
      representatives in the Company will have a right to sign any contractual
      arrangement (excluding checks) of the Company, the extent or implications
      of which do not exceed NIS 5 million and which is in accordance with the
      budget referred to in Clause 5.2 above, and it will not require a
      signature by Blue Square.

            

    

    

    
      	
               
      

            	
              5.7

            	
              Transactions
      with interested parties or transactions with a third party in which either
      of the parties has a personal interest, including transactions between the
      Mall Company and the Housing Company and/or between the management
      company, and except as stated in this
Document.

            

    

    

    
      	
               
      

            	
              5.8

            	
              Appointment
      / replacement / dismissal of: senior officers in the Company to the extent
      that there is a necessity for their appointment and of a management and
      supervision company for the Project and fixing of their
      remuneration.  It is clarified that the contents of this clause
      do not apply to the appointment or replacement of directors of the
      Company, in relation to whom the contents of Clause 4.4 above will
      apply.

            

    

    

    
      	
               
      

            	
              5.9

            	
              Any
      financial contractual arrangement of the Company the extent or
      implications of which exceeds NIS 5
million.

            

    

    

    
      	
            	
              5.10

            	
              The
      making of an offer and/or participation in the acquisition of rights in
      “the Remainder of the
      Project Lands”, as defined in the Sale Agreements.  A
      party to this Document of Understanding shall not give and shall not
      participate in, directly or indirectly, an offer and/or in initiating the
      purchase of the remaining market rights in the Project Lands or any part
      thereof, without the offer being brought for deliberation by the board of
      directors of the Joint Company prior thereto and only if the Joint Company
      should decide that it is not interested in purchasing those rights that
      have been offered, will the party interested in doing so be entitled to
      enter into a transaction in connection
  therewith.

            

    

    

    
      	
            	
              5.11

            	
              Contractual
      arrangements with companies for the management of the areas of the Mall,
      the parking garages and the maintenance of the public
    areas.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4

     

    
      	
            	
              5.12

            	
              Deciding
      on the trade name for the commercial areas.  As opposed to that
      the trade name of the residential project, including the name of the
      Project on Plot No. 6 shall be decided by
Gindi.

            

    

    

    
      	
            	
              5.13

            	
              Any
      alteration and/or amendment to the Sale Agreements and/or any other
      document that has been signed and/or may be signed with the Sellers and/or
      with the bank and/or with a third party where the original contractual
      arrangement with such party requires the consent of both third
      parties.

            

    

    

    
      	
            	
              5.14

            	
              Conversion
      of the obligation for payment of “the additional consideration”, as
      defined in the Sale Agreements (upside) and/or receiving an option for
      such conversion.

            

    

    

    
      	
            	
              5.15

            	
              The
      bringing in of an additional shareholder into the Company and/or any
      transaction which in essence constitutes a merger or sale or allotment of
      shares in the Company.

            

    

    

    
      	
            	
              5.16

            	
              A
      decision with regard to the giving of discounts to buyers of apartments in
      the residential section and/or an increase of selling prices of the
      apartments of more than 10% of the prices specified in the “zero report”
      that will be prepared for the Project and subject to the approval of the
      bank, to the extent that it is required.  If at the time of
      marketing the apartments there are no “zero report” that has been approved
      by the bank, then the price lists that will be agreed by the parties prior
      to the commencement of marketing will come in its
  stead.

            

    

    

    
      	
              6.

            	
              The
      parties agree that the Commercial Section of the Project will be operated
      as a yield producing property and that there is no intention to sell
      individual shops forming part
thereof.

            

    

    

    
      	
              7.

            	
              Management
      Services

            

    

    

    
      	
               
      

            	
              7.1

            	
              The
      Company hereby appoints Gindi to provide the Company with “the management
      services” as defined below.  The period for the providing
      of management services will be: in relation to the residential section
      until delivery of the last building in the residential section or up to 5
      years from the date of signing of the Sale Agreements, whichever is the
      later, and in relation to the Commercial Precinct – up to one year from
      the date of initial operation of the Mall (hereinafter – “the Management
      Period”).  Gindi will have the right to extend the period
      of overriding management of the Mall for an additional two years, without
      any consideration.

            

    

    

    
      	
               
      

            	
              7.2

            	
              In
      the framework of the management services and subject to the provisions of
      this Agreement, Gindi will be responsible for and will have the full power
      and authority on all aspects of the current, daily, basic and detailed
      management of the Project, including, without limitation, design of the
      Project (selecting professional consultants, managing the planning,
      detailed planning, design, licensing etc.), marketing and sales of the
      Project (including the selecting of the entities who will market and sell
      the Project, managing them, laying down and implementing the marketing,
      sales and advertising policy, etc.), structuring and managing the Project
      budget, carrying out and constructing the Project, including in connection
      with managing the construction of the Public Buildings in accordance with
      the provisions of the Construction Contract (including choosing executing
      contractors, issuing tenders and managing same, managing implementation,
      etc.). (Everything stated in this clause will be referred to above and
      below as “the Management
      Services”).

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5

     

    
      	
               
      

            	
              It
      is hereby agreed that prior to any contractual arrangement in connection
      with the construction of the Project, including, without limitation,
      entrusting of contracting works, procuring of services of any sort and/or
      procuring of goods, at least 2 quotations shall be obtained (to the extent
      that it is possible to obtain two quotations).  The foregoing
      will not apply to contractual arrangements the overall scope and extent of
      which is less than a sum of NIS
200,000.

            

    

    

    
      	
               
      

            	
              7.3

            	
              It
      is hereby agreed that for purposes of constructing the Project, the Joint
      Company and/or someone on its behalf will contract with the following
      consultants:

            

    

    

    
      
        	 	
                7.3.1 

              	
                Architect
      for the Housing Project:    Yashar
      Architects.

              

      

    

    

    
      	 	
              Commercial:

            	
              Yasky
      or Zur

            

    

    

    
      	
               
      

            	
              7.3.2

            	
              Management
      and supervision: Margolin Brothers or Waxman
  Govrin.

            

    

    

    
      
        	 	
                7.3.3 

              	
                Traffic
      Consultants:                                               
      Dagesh

              

      

    

    

    
      	
               
      

            	
              7.4

            	
              Gindi
      undertakes to provide the Management Services during the management period
      through at least one of the following persons Manor Gindi and/or Uri Levi,
      all for the period, on the conditions and for the consideration as
      specified in this Document of Principles (hereinafter – “the Managers” / “the
      Manager”).  Without derogating from Gindi’s commitment as
      aforesaid, in any event that at least one of the Managers does not provide
      the Management Services to the Company and/or in any event in which
      control in Gindi is transferred to any third party, the Company will be
      entitled to terminate the contractual agreement with Gindi in connection
      with the providing of Management Services to the Company, and in such case
      the management fees will be adjusted to the period in which the Management
      Services were actually provided.  The formula for adjustment
      will be decided upon in the scope of the detailed
      agreement.  The Managers are not and will not be deemed to be
      employees of the Company and their remuneration, as well as their social
      conditions, will be given to them by Gindi and on its
      responsibility.  The Company will not bear any expense and/or
      social benefits in respect of the Managers.  Provisions which
      guarantee this will be stipulated in the framework of the detailed
      agreement.

            

    

    

    
      	
               
      

            	
              The
      appointment of the Managers as aforesaid is a personal appointment and
      cannot be assigned and/or endorsed either fully or
    partially.

            

    

    

    
      	
              8.

            	
              Finance

            

    

    

    
      	
               
      

            	
              8.1

            	
              The
      parties will finance the Project, including the purchase, out of their own
      independent resources and by way of external banking / financial
      construction loans.  The parties will take steps to maximize the
      external financing element in the transaction to the greatest extent
      possible.  In the absence of written agreement to the contrary,
      each party will be responsible for and obliged to provide only its pro
      rata share.

            

    

    

    
      	
               
      

            	
              8.2

            	
              Notwithstanding
      the fact that the holdings of the parties in the Joint Company are equal
      shares, Blue Square will provide the Joint Company for purposes of making
      “First Payment”, “the Additional First Payment” and “the Later First
      Payment”, as these terms are defined in the Sale Agreements (which will be
      referred to below in this Document of Principles as – “the First Payment”) with
      60% of any such payment and Gindi will provide 40% of the amount of each
      such payment.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6

     

    
      	
               
      

            	
              8.3

            	
              The
      parties will act together and in unison to obtain a line of frame, on a
      guarantee by the owners in equal shares between them, for purposes of
      financing the investments and expenses of the Joint Company, prior to the
      giving of the banking construction loans, including payments to
      consultants, real estate agents and other service providers that may be
      required during the period from the date of making of the First Payment
      and up to the time the banking construction loans are provided
      (hereinafter: “the
      Additional Expenses”).  The parties’ working assumption
      is that they will not be required to pay Land Acquisition Tax before the
      Second Payment and that this does not form part of the Additional
      Expenses.  However, if the Company is obliged to make payments
      of Land Acquisition Tax prior to the date of the Second Payment,
      notwithstanding what is stated above, then this amount will also be taken
      into account in the scope of the Additional Expenses and the situation
      regarding the excess amount that will be provided by Blue Square as
      aforesaid, will be deemed to be the same as the early payment and in a
      manner that this will bear costs, interest and indexation differences from
      the date on which it is provided.

            

    

    

    
      	
               
      

            	
              8.4

            	
              If
      the Joint Company does not succeed in obtaining a line of credit as
      aforesaid, for cover of the Additional Expenses or any part thereof, then
      Blue Square will provide 60% of the Additional Expenses or of that part in
      respect of which a line of credit as aforesaid was not obtained, and Gindi
      40% of the amounts that have been paid / will be paid in excess of the
      amount that was paid by Gindi, i.e.: 20% of the amount of the First
      Payment and of the Additional Expenses as defined below by Blue Square
      instead of Gindi as stated in Clauses 8.2 and 8.3 above, (hereinafter
      referred to – “the
      Anticipated Payment”).

            

    

    

    
      	
               
      

            	
              8.5

            	
              It
      is agreed that the Anticipated Payment will be deemed to be a loan by Blue
      Square in a manner that Gindi and Dirot Yukra will be guarantors for
      reimbursement of one half of the amount that was anticipated (together
      with linkage and interest, as specified in this Document of Principles),
      if this is not repaid within 8 years from the date of this
      document.

            

    

    

    
      	
               
      

            	
              8.6

            	
              The
      Anticipated Payment shall, during the period from the date of the purchase
      agreement and up to the time of making of the Second Payment, will bear
      indexation differences and interest at the minimum rate required in
      accordance with the Income Tax Regulations (linkage and the interest on
      the Anticipated Payment will be referred to below as – “the Amount of the Costs in the
      First Period”) and in respect of the period subsequent to making of
      the Second Payment, will be linked to the Consumer Price Index and will
      bear interest and costs as follows: if the source of financing of the
      Anticipated Payment is from a loan which Blue Square has taken for such
      purpose – then Blue Square will be entitled to receive its costs,
      including interest at an identical rate to that it will be required to pay
      the bank (back to back) and in a case in which Blue Square provides the
      Additional Payment not by way of such loan, then the interest will be
      fixed according to the cost of raising of a similar amount (debentures)
      and on similar conditions (such as duration) which prevails for the time
      being in a company having a similar rating to Blue
  Square.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7

     

    
      	
               
      

            	
              8.7

            	
              Any
      payment that may be required commencing from and including “the Second
      Payment”, as defined in the Sale Agreements, including, but without
      limitation, the expenses necessary for purposes of erecting and completing
      the Project, including all the parts thereof, if same was not provided
      within the scope of the construction loans, will be provided by the
      parties themselves, in equal
shares.

            

    

    

    
      	
               
      

            	
              8.8

            	
              Any
      withdrawal of equity capital will be repaid according to the proportions
      of the parties’ investments, including the interest and the indexation
      differences that have accrued in respect of the equity capital, including
      in respect of the Anticipated Amount as aforesaid, at the time of such
      repayment of equity capital (if for example up to the date of withdrawal
      of the equity capital, Blue Square invests 55% and Gindi 45%, then and at
      that time Blue Square will receive 55% of such repayment of equity capital
      and Gindi 45%).

            

    

    

    
      	
               
      

            	
              8.9

            	
              Each
      party declares that it has the ability to meet its obligations in
      accordance with this Document of Principles and the Sale
      Agreements.

            

    

    

    
      Management fees to
Gindi

    

    

    
      	
               
      

            	
              9.1

            	
              In
      consideration for Gindi’s Management Services, Gindi will be entitled to
      receive Management Fees from the Housing Company at a rate equal to 16% of
      “Profits of the Housing
      Project”, as defined below and Management Fees from the Mall
      Company at a rate equivalent to 16% of “the calculated profit of the
      Company from the Commercial Precinct”, as defined
      below.

            

    

    

    
      	
               
      

            	
              9.2

            	
              For
      purposes of calculation and payment of the Management Fees to Gindi, the
      terms and expressions set forth below will have the meanings set opposite
      them:

            

    

    

    
      	
               
      

            	
              Cost of construction:
      All expenses of whatsoever nature connected with constructing the Project
      (the residential or the commercial areas, as the case may be), until the
      full completion thereof, without exception, where such expenses do not
      include V.A.T., including, without limitation, the costs of purchase of
      the Property Sold (including “the Extra Consideration”, as defined in the
      Sale Agreements), Land Acquisition Tax, building fees and levies,
      investments in the leased premises, betterment levies and similar other
      public impositions, management expenses (excluding the Management Fees to
      Gindi) planning and coordinating supervision, financial expenses, building
      construction, materials, marketing, real estate agency commission,
      attorneys, registration and payment to the Municipality in respect of
      registration and any other expense that is connected or demanded for
      purposes of the Project, all as will be recorded in the books of the Joint
      Company and subject to the provisions of this
  document.

            

    

    

    
      	
               
      

            	
              Costs of construction of the
      residential areas means the cost of construction within the meaning
      thereof above and in relation to the Housing Project only.  This
      will include the costs of constructing the open public areas, and in the
      absence of a directive to the contrary from the Company’s auditors stating
      that these expenses must be attributed  to the cost of
      construction of the commercial section, also the cost of construction of
      the Public Buildings.

            

    

    

    
      	
               
      

            	
              Costs of construction of the
      Commercial Section: means the cost of construction within the
      meaning thereof above in relation to the commercial project
      only.

            

    

    

    
      	
               
      

            	
              Profits of the Housing
      Project: the amount of proceeds (excluding V.A.T.) received from
      the sale of residential units and the areas ancillary thereto (storerooms,
      parking places and so forth), including any other amount that may be
      received in the Housing Project (including legal expenses and/or
      registration expenses), and in the absence of a directive to the contrary
      from the Company’s auditors to the effect that these receipts must be
      attributed to the calculated profit from the Commercial Precinct, also all
      the revenues in respect of works for erecting the Public Buildings, less
      the cost of construction of the residential
  areas.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8

     

    
      	
               
      

            	
              The Company’s calculated profit
      from the Commercial Precinct: The NOI that will be calculated at
      the beginning of the fourth year from the opening of the Mall in respect
      of the operation of the Mall in the third year after the opening of the
      Mall multiplied by 10, less the costs of construction of the Commercial
      Section.

            

    

    

    
      	
               
      

            	
              9.3

            	
              The
      Management Fees that are due to Gindi from the Mall Company in accordance
      with the provisions of Clauses 9.1 and 9.2 above are derived from the
      Company’s calculated profit from the Commercial Precinct (hereinafter –
      “the Mall Management
      Fees”) shall be paid together with V.A.T. as prescribed by law
      against a tax invoice, in the eight equal and successive annual payments
      on a basis that Gindi will be entitled to the first payment at the time of
      opening of the Mall and in the manner described below.  Subject
      to the approval of the lending bank, Gindi will be entitled to receive an
      advance payment on account of the Mall Management Fees, at the time of
      opening of the Mall and likewise at the end of one year and at the end of
      two years from the time of opening of the Mall, where the NOI for purposes
      of calculating such advance, shall be done according to the revenues
      expected by the Mall Company, in the first year of lease from the date of
      opening of the Mall and as arising from the lease agreements and an
      assessment of the anticipated expenses in respect of the first year of
      lease.  Amounts of the advance payment (both the aforesaid
      advance payment as well as the advance payment mentioned in Clause 9.9
      below) which will pay to Gindi up to such time shall be deducted from the
      Mall Management Fees, where such advance payments are linked to the index
      from the date of payment thereof to Gindi and up to the date of the
      set-off as aforesaid (hereinafter – “the Balance of the Management
      Fees”). The Balance of the
      Management Fees will be paid together with linkage differences to the
      Consumer Price Index where the basic index is the index that was known at
      the time of fixing the amount of the Mall Management Expenses, and this
      shall be done in five equal annual payments from the date of calculation
      of the Management Fees.  In the event of a sale of the
      Commercial Section or in the case of refinancing of the Commercial
      Project, then upon receipt of the consideration in respect of the sale or
      receipt of refinance and release of the equity capital (including the
      Anticipated Payment) to the shareholders in the Mall Company, the Balance
      of the Mall Management Fees which have not yet been paid shall be paid to
      Gindi at such time by the Mall
Company.

            

    

    

    
      	
               
      

            	
              9.4

            	
              Calculation
      and total of the amounts mentioned in this Clause 9 above, both with
      respect to its expenses and also in regard to proceeds, as well as with
      respect to construction costs and in regard to a definition of the
      relevant profit, shall be done in values linked to the Consumer Price
      Index, from the known index at the time of the charge, expense, payment,
      receipt of proceeds, as the case may be, and as against the known index at
      the time of the accounting.

            

    

    

    
      	
               
      

            	
              9.5

            	
              For
      purposes of calculating the amount of the construction costs or any
      calculation deriving from the costs of construction, of both of the
      Commercial Project and also of the Housing
  Project:

            

    

    

    
      	
               
      

            	
              a.

            	
              No
      depreciation of any sort and at any percentage will be taken into account,
      whether or not actually
recorded.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9

     

    
      	
               
      

            	
              b.

            	
              Expenses
      that are considered and recorded from the aspect of the tax laws and as
      revenue expenses, and not as capital expenses, will also be taken into
      account.

            

    

    

    
      	
               
      

            	
              9.6

            	
              The
      Company will record in its books direct expenses as the case may be, i.e.
      – those which belong to the residential areas will be recorded to the
      Housing Project and those which belong to the Commercial Project will be
      recorded to the Commercial Project.  With respect to mixed
      expenses the parties will act in accordance with the directives of
      whomever the parties may appoint for this
  purpose.

            

    

    

    
      	
               
      

            	
              9.7

            	
              Payment
      of the Management Fees deriving from the profit on the residential areas,
      will be paid to Gindi immediately after and subject to fulfillment of the
      following cumulative conditions:

            

    

    

    
      	
               
      

            	
              9.7.1

            	
              The
      Anticipated Payment as referred to in Clause 8.4 above will be repaid in
      full to Blue Square together with all the interest that has accrued up to
      such time.

            

    

    

    
      	
               
      

            	
              9.7.2

            	
              Repayment
      of the full equity capital that was furnished by the parties together with
      financial costs and simultaneous with the distribution of the balance of
      the profits due to the
shareholders.

            

    

    

    
      	
               
      

            	
              9.7.3

            	
              Approval
      of the lending banks is given to the payment of such Management
      Fees.

            

    

    

    
      	
               
      

            	
              9.8

            	
              Calculation
      of the calculated profit from the Commercial Precinct and the profits of
      the Housing Project and Gindi’s Management Fees in respect thereof, shall
      be made only in accordance with the contents of Clause 9 and all the
      sub-clauses hereof, notwithstanding any other existing or future
      accounting instruction and/or
standard.

            

    

    

    
      	
               
      

            	
              9.9

            	
              Gindi
      will be entitled to receive from the Company, once each year commencing
      from the date of signing of the Sale Agreements, an advance payment on
      account of the Management Fees in an amount of NIS 3 million per annum
      plus V.A.T. as prescribed by law, where such amount is linked to the index
      commencing from the known index at the time of signing of the Sale
      Agreements, during a period of 5 years only, and with regard to the
      Commercial Section during a period of 5 years or until the opening of the
      Mall whichever is the earlier, at which time payment of the advance
      payments shall cease.  That is to say, altogether – not more
      than NIS 15 million plus V.A.T. as prescribed by law.  Out of
      the aforesaid amount, NIS 7.5 million plus V.A.T. as prescribed by law,
      where same is linked to the index as aforesaid, will be deemed to be an
      advance payment on account of the Management Fees from the Housing
      Company, and NIS 7.5 million plus V.A.T. as prescribed by law where same
      is linked to the index as aforesaid, will be deemed to be an advance
      payment on account of the Mall Management Fees.  The parties
      will take steps to obtain approval for this payment by the lending bank in
      the scope of the construction loan agreement.  Only upon the
      lending bank’s approval will cumulative amounts of the advance payments to
      which Gindi is entitled in respect of the period commencing from the date
      of signing of the Sale Agreements and up to the date of actual payment be
      paid and from that date onwards the amounts of the advance payments will
      be paid until the full payment of the amount of the advance payment, all
      in accordance with the bank’s approval.  It is hereby expressly
      clarified that if eventually the Housing Project and/or the Commercial
      Project does not have profits, then Gindi will not be entitled to any
      Management Fees in respect of such Project (the Housing or the Commercial
      Project as aforesaid), but the amount of the advance payment in respect of
      such Project will not be
refunded.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10

     

    
      	
            	
              9.10

            	
              It
      is further clarified that commencing from the date of Gindi’s entitlement
      to payment of the advance payment stipulated in Clause 9.3 above, only one
      advance payment will be paid to Gindi in respect of the commercial areas,
      being either the advance payments specified in Clause 9.3 above or that
      which is specified in this clause, whichever is the
  higher.

            

    

    

    
      	
            	
              9.11

            	
              Gindi
      will be entitled to a bonus in an amount which is equivalent to “the total
      costs in the first period”, as defined in Clause 8.6 above, less an amount
      equivalent to the indexation differences in respect of the Anticipated
      Payment, all in relation to the period from the date of the purchase
      agreement and up to the making of a Second Payment.  The amounts
      that will be due to Gindi as aforesaid will be paid at the time
      at  which the amount of costs in the first period, as defined
      above, are paid to Blue Square.

            

    

    

    
      	
            	
              9.12

            	
              In
      the event of a dispute regarding calculation of the Management Fees, the
      matter will be decided by Ronen Barel C.P.A. or another senior partner of
      the Kost office who will be appointed by him, all in accordance with the
      provisions of this Document of Principles (hereinafter – “the Arbiter
      Accountant”).  His status will be that of an expert
      arbiter and not the status of an arbitrator and his decision shall be
      final and it shall be made on the basis of the provisions of this document
      only.  The Management Fees shall be paid out of the company’s
      resources – in other words, during the construction stage in the scope of
      the construction loans and later on out of
  profits.

            

    

    

    
      	
            	
              9.13

            	
              A
      tax invoice according to law shall be delivered against payment of the
      Management Fees.

            

    

    

    
      	
            	
              9.14

            	
              If
      the execution of the Management Services necessitates the engaging of
      office bearers, then such persons will be appointed by Gindi and will be
      employed by the Company and at its expense.  If what are
      involved are senior office bearers, their appointment and the terms of
      their employment will be according to consensus agreement of both the
      parties.  However, use of a base (platform) comprising, inter
      alia, employees and the equipment of Gindi and/or of Blue Square, as the
      case may be, will not impose on the Company and will not entitle the
      provider to any participation in the costs of such relevant base or
      platform.

            

    

    

    
      	
            	
              9.15

            	
              For
      the removal of doubt it is hereby clarified that the Housing Company and
      the Mall Company will, with the consent of both the parties, appoint
      management and maintenance companies whose function will be to attend to
      the current and ongoing care of the commercial areas and the residential
      areas, as the case may be, and that the Management Services do not include
      these services, but they do include overriding management of the suppliers
      of such services, and this will apply until the end of the relevant
      management period of Gindi’s Management
  Services.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    11

     

    
      	
              10.

            	
              Management
      of monies and bookkeeping and
accounting

            

    

    

    
      	
            	
              10.1

            	
              The
      Company’s ongoing accounting, including, without limitation, maintaining
      of bank accounts, suppliers’ accounts, issue of checks, issue of invoices,
      issue of accounts, issue of receipts, V.A.T. reports, social payments and
      various reports, work with the banking system (apart from current and
      ongoing work vis-à-vis the bank for purposes of implementing the
      construction loan agreement, which will be under Gindi’s
      responsibility,  nothing in the foregoing shall derogate from
      the provisions of Clause 5 and the sub-clauses thereof), current monthly
      reports to real estate appraisers and quarterly reports will be under the
      responsibility and the authority of Blue Square.  For purposes
      of performing this task the Company shall employ employees
      (comptroller,  bookkeeper and so forth) as necessary, who will
      be appointed by Blue Square and will be under its supervision and
      responsibility.  The remuneration of such employees shall be
      paid by the Company.

            

    

    

    
      	
            	
              10.2

            	
              The
      Company’s accountants will be Kesselman and Kesselman or any other firm
      that may be recommended by Blue
Square.

            

    

    

    
      	
            	
              10.3

            	
              The
      Company’s financial statements shall be drawn in accordance with the
      Securities Regulations and in the format necessitated by the fact of the
      Company being a subsidiary of public companies and according to the
      accepted standards practiced by the
parties.

            

    

    

    
      	
            	
              10.4

            	
              It
      is clarified that the Company will be obliged to deliver its statements to
      the parties for purposes of being attached to the financial statements of
      the parties and for the publication thereof as required by the law
      enforcement authorities.

            

    

    

    
      	
            	
              10.5

            	
              The
      board of directors of the Company shall convene to consider and approve
      the Company’s financial statements in the following manner: the annual
      statements – 45 days before the last date required for approving of
      financial statements by public companies whose shares are traded on the
      Tel Aviv Stock Exchange Ltd., and quarterly reports – 30 days before the
      last date is required for approving of quarterly reports by public
      companies whose shares are traded on the Tel Aviv Stock Exchange
      Ltd.

            

    

    

    
      	
              11.

            	
              Advertising
      

            

    

    

    
      	
            	
              11.1

            	
              Gindi
      shall report regularly to Blue Square about advertisements it intends to
      publish by various forms of media in connection with the
      Project.  If any obligation should arise according to law for
      Blue Square to report on such advertising, the advertising will be
      coordinated in advance between the
parties.

            

    

    

    
      	
            	
              11.2

            	
              In
      every advertisement of the Project and in any media, including, without
      limitation, adverts in the press, billboards, advertising in newspapers,
      television, Internet and so forth, to the extent that this is dependent on
      Gindi or on Blue Square, the names of the parties as the promoters of the
      Project shall be exhibited equally.

            

    

    

    
      	
              12.

            	
              Dilution

            

    

    

    
      	
            	
              12.1

            	
              Subject
      to the contents of this Document of Principles, including and in
      particular Clause 8.2 above, each party shall provide its share of
      investments in the equity capital, in guarantees and in collateral for
      purposes of planning, development, construction and marketing of the
      Project.  The providing of the share of each party shall be done
      in accordance with decisions that will be taken from time to time and/or
      as necessitated by the budget and/or as called for under the Sale
      Agreements and the obligations of the Company to a third
      party.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    12

     

    
      	
            	
              12.2

            	
              If
      either of the parties (hereinafter – “the Defaulting Party”)
      does not furnish the Joint Company with the finance required up to the
      date required for the purpose (hereinafter – “the Date of Payment”),
      then the other party which has furnished the financing required to the
      extent of its share (hereinafter – “the Complying Party”)
      will have the possibility, in its sole discretion, also to provide the
      share in the necessary financing of the Defaulting Party (hereinafter –
      “the Additional
      Financing”) on its own, subject to giving the Defaulting Party
      prior written notice of at least 15 days from the Date of the
      Payment.  If during the aforesaid period the Defaulting Party
      also fails to provide its share of the necessary financing, on its own,
      the Complying Party will be entitled to give the Defaulting Party written
      notice that it has decided to provide the Additional Financing for the
      Defaulting Party as a loan.  This amount, to the extent that it
      is actually provided as aforesaid and together with interest linked to the
      Consumer Price Index at an annual rate (or pro rata portion) of 12% plus
      V.A.T. in respect of the interest and the indexation differences, if any
      (hereinafter – “the
      Additional Financing Loan”) shall be repaid as a first repayment on
      account of the shareholders’ loans, before any payment and/or distribution
      of profits and before the Management Fees to Gindi, and subject to the
      obligations to the lending bank.  The calculation and charging
      of the interest shall be on a quarterly
basis.

            

    

    

    
      	
            	
              12.3

            	
              The
      Defaulting Party will have the right to rectify the breach during 60 days
      from the date on which the Additional Financing Loan was provided by the
      Complying Party.  After the elapse of 60 days from the date on
      which the Additional Financing Loan was provided, without having been
      repaid in full by the Defaulting Party, the Complying Party will be
      entitled, without derogating from any other remedy according to law, to
      dilute the share of the Defaulting Party in the relevant company, in
      accordance with the provisions set forth
below:

            

    

    

    
      	
               
      

            	
              The
      percentage holdings of  the Complying Party after the dilution
      in the Housing Company or in the Mall Company, as the case may be, will be
      determined as follows: a multiplication by 150% of the amount of the
      investment made by the Complying Party in lieu of the Defaulting Party,
      where this amount is divided by the total investments of the parties in
      that company.  For example: at the time of the initial
      investment each party invested NIS 500 in the relevant
      company.  The parties were called upon to provide an additional
      NIS 100 to the Mall Company (each party NIS 50).  The Complying
      Party paid its share and the Defaulting Party did not.  The
      Complying Party wishes to provide the Defaulting Party’s share, against
      dilution of the Defaulting Party’s share.  Calculation of the
      percentage dilution is:

            

    

    

    
      	
               
      

            	
              50/1100
      x 150%  = 6.8%

            

    

    

    
      	
               
      

            	
              Shares
      to an extent of 6.8% will be allotted to the Complying Shareholder against
      the furnishing of the aforesaid amount instead of the Defaulting
      Shareholder.

            

    

    

    
      	
            	
              12.4

            	
              Calculation
      of the dilution according to the above principles will be done
      by  the  Arbiter Accountant in accordance with the
      above principle.  His determination will be made in writing,
      shall be delivered to the parties and shall be deemed to be a decision of
      an expert arbiter and his decision will be final and absolute
      (hereinbefore and hereinafter – “the Percentage
      Dilution”).  Determining of the Percentage Dilution shall
      be binding on the attorneys as stated in Clause 14.7 [12.6]
      below.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    13

     

    
      	
            	
              12.5

            	
              The
      validity of the dilution shall be commencing from the date on which the
      Complying Party notified the Defaulting Party about the dilution in
      accordance with this Document of Principles and after determination of the
      percentage dilution has been delivered to the parties.  Once
      such dilution has been made, the Defaulting Party will no longer be
      treated as a debtor in respect of the amount of the Additional Financing
      Loan, but this amount shall be recorded in the Company’s books as a
      shareholder’s loan to the Company from the Complying
  Party.

            

    

    

    
      	
            	
              12.6

            	
              It
      is hereby agreed that at the time of signing of this Document of
      Principles, or at the latest within 7 days from the date of signing of
      this Document of Principles, the parties will lodge with the attorneys of
      the law office of M. Firon & Co. and the attorneys of the law office
      of Goldfarb, Levy, Eran, Meiri, Tsafrir & Co. (hereinafter – “the Attorneys”) the
      following documents as security for implementation of such dilution:
      minutes authenticated by an attorney and an irrevocable power of attorney
      in the text attached to this Document of Principles as Appendix
      C, duly and properly signed, empowering the Attorneys to perform
      any act in the name and on behalf of the parties and/or to sign any
      document that may be required for purposes of performing dilution
      operations as described in this clause.  The signature of the
      parties to this Document of Principles shall be tantamount to an
      authorization to the Attorneys to complete whatever is required in the
      Documents (for example, the Percentage Dilution, in accordance with the
      determination of the Arbiter
Accountant).

            

    

    

    
      	
            	
              12.7

            	
              Without
      derogating from the foregoing if either parties should object by act
      and/or omission, directly and/or indirectly, itself and/or through someone
      on its behalf, to a dilution of its share, notwithstanding that such
      dilution was made in accordance with the provisions of this Document of
      Principles, it will be deemed to have committed a material breach of this
      Document of Principles and in that case that portion of its shares in the
      Joint Company and in “the Management Company”, as defined below, which are
      equivalent to the Percentage Dilution, will – upon a demand by the other
      parties – be deemed to be someone whose rights in respect thereof have
      been absolutely and fully deferred, and same will be without any rights
      including, but without limitation, the right to receive notice of a
      general meeting of any class and the right to receive a pro rata share in
      a winding-up of the Joint Company.

            

    

    

    
      	
            	
              12.8

            	
              On
      the demand of the party demanding dilution, the Attorneys shall be obliged
      to act to implement the dilution in accordance with the provisions of this
      clause above.  The signature by the parties to this Document of
      Principles is tantamount to the giving of an irrevocable instruction to
      the Attorneys to act as aforesaid.  The Attorneys shall confirm
      to the parties in writing immediately after the signing of this Document
      of Principles that they will act
accordingly.

            

    

    

    
      	
            	
              12.9

            	
              Until
      such time as it is otherwise agreed between the parties, monies that will
      be provided by either of the parties to the Company shall be recorded as
      shareholders loans.  The loans will bear interest from the date
      on which they were given to the Company and up to the date of actual
      repayment thereof at a rate which is 1% higher per annum than the rate of
      interest prevailing for the time being in respect of a deposit of an
      identical amount and for an identical period at the lending
      bank.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    14

     

    
      	
              13.

            	
              Restrictions
      on transfer rights

            

    

    

    
      	
               
      

            	
              Right of first
      refusal

            

    

    

    
      	
            	
              13.1

            	
              A
      party wishing to transfer and/or sell any of its rights and obligations in
      the Joint Company, including an assignment and/or grant of any other right
      to a third party, including, without limitation, by way of an allotment
      and/or by way of realizing an encumbrance [except to the lending bank]
      whether for consideration or otherwise (hereinafter – “the Offered Object for
      Sale”) (hereinafter – “the Seller” and/or
      “the Offeror”),
      will be obliged first to offer the entire Object offered for sale to the
      other party at the price and on the conditions (including with regard to
      collateral security, terms of payment and so forth) which are being
      offered to him in binding fashion in writing by third party (hereinafter:
      “the Offeree,
      “the Offer”, as
      the case may be), in the following
manner.

            

    

    

    
      	
            	
              13.2

            	
              The
      Offer shall be made by giving written notice of sale, containing details
      regarding Object Offered for Sale, the price thereof, the terms of
      payment, the identity of the third party, including – if the third party
      is a legal entity – the identity of any controlling shareholder therein up
      to the private ultimate controlling shareholders therein, all as are known
      to it, or if the third party wishes to purchase the Object Offered for
      Sale as a trustee for another person or body in any manner, the identity
      of the beneficiary and the private ultimate controlling shareholder
      therein, all to the extent known to it, and the remaining terms and
      conditions of the sale (hereinafter – “the Notice of
      Sale”).  A binding offer by the third party shall be
      attached to the Notice of Sale.  The Offeree shall keep
      confidential the matters stated in the Notice of Sale, except to the
      extent required to realize its rights in accordance with this Document of
      Principles.  In addition a comfort letter from one of the five
      largest banks in Israel shall be attached to the Notice of Sale stating
      that the third party has the ability to raise the monies and the
      collateral security for financing the purchase of the Joint Company or the
      relevant share.

            

    

    

    
      	
            	
              13.3

            	
              The
      Offeree will be entitled to notify the Offeror in writing, within thirty
      (30) days from the date of the Notice of Sale (hereinafter – “the Notice of the Acceptance
      Period”) that it accepts the Offer and wishes to purchase the
      rights which are offered at the price stated in the Notice of Sale, on the
      conditions of the Notice of Sale and subject to obtaining any approval
      required at law for purposes of the sale transaction coming into force, if
      and to the extent that same is required (hereinafter – “Notice of the
      Acceptance”).

            

    

    

    
      	
            	
              13.4

            	
              Where
      Notice of Acceptance has been given by the Offeree, the Offeree shall
      purchase the Object Offered for Sale from the Offeror within fourteen (14)
      business days from the date of the Notice of the Acceptance (hereinafter –
      “the Period for
      Realization of the Notice of Acceptance”), subject to obtaining any
      approval required at law for purposes of the sale transaction coming into
      force, if required, in consideration for payment of the price specified in
      the Notice of Sale, and on the conditions set forth in the Notice of
      Sale.

            

    

    

    
      	
            	
              13.5

            	
              If
      no Notice of Acceptance is given within the Notice of the Acceptance
      Period, or if a notice is given to the effect that the Offeree does not
      accept the Notice of Sale, or accepts on conditions that differ from the
      Notice of the Acceptance, or if the Offeree fails to sign the sale
      agreement and to make payment in accordance therewith within the Period of
      Realization of the Notice of Acceptance, the Offeror will be entitled to
      sell the Object Offered for Sale to a third party at a price and on
      conditions that are not less favorable than those specified in the third
      party’s offer as was attached to the Notice of Sale, provided that the
      sale agreement between the Offeror and the third party shall be signed
      within sixty (60) days from the date of termination of the Notice of the
      Acceptance Period or from the end of the Period for Realization of the
      Notice of the Acceptance, if there is such – and subject to the condition
      that the third party shall, prior to the effecting of the transfer and as
      a pre-condition for the execution thereof and for its validity, sign an
      undertaking pursuant to which it unconditionally assumes, with the
      approval of the lending bank, all the Offeror’s obligations and rights
      pursuant to this Document of Principles, and will agree to become a party
      to this Document of Principles for all intents and purposes, as if it had
      from the outset signed this Document in place of and/or together with the
      Offeror, as the case may be.  If the Offeree so demands from the
      Offeror, the Offeror shall disclose to the Offeree and to an accountant
      who will be appointed for this purpose by the Offeree, the full set of
      agreements between it and the third party in connection with the sale of
      the Object Offered for Sale.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15

     

    
      	
            	
              13.6

            	
              Without
      derogating from the foregoing, a sale and/or transfer and/or allotment
      and/or realization of shares in the Joint Company in accordance with this
      Clause 13 above will be of no validity, unless approved in accordance with
      the provisions of the Sale Agreements and the party who acquires the
      rights as aforesaid shall, with the approval of the lending bank, step
      into the shoes of the selling party (back to back) in all respects,
      including vis-à-vis the Sellers, third parties and in accordance with this
      Document of Principles and the co-ownership agreements, and shall produce
      an approval thereto from the lending bank and shall cause the release of
      all (or a pro rata portion, as the case may be) of the collateral security
      the selling party has furnished to the lending bank and/or to the Sellers,
      all of which shall be at the time of payment of the consideration and
      against transfer of substitute collateral security to whatever extent may
      be required.

            

    

    

    
      	
            	
              13.7

            	
              If
      an agreement is not signed for the sale of the Object Offered for Sale to
      a third party within 60 days from the end of the Notice of the Acceptance
      Period or from the end of the Period for Realization of the Notice of
      Acceptance, if there was such, the Offeror will not be entitled to sell
      the Object Offered for Sale to the third party until after having given a
      fresh right of first refusal as described above, including the giving of a
      new notice of sale.

            

    

    

    
      	
            	
              13.8

            	
              It
      is clarified that there shall be no validity to any sale, unless the
      lending bank has delivered written approval to the effect that this is
      being done with its acquiescence and with its knowledge and that the buyer
      has furnished all the necessary collateral security and undertakings in
      place of the Seller.

            

    

    

    
      	
              14.

            	
              Tag-Along
      right

            

    

    

    
      	
              14.1

            	
              In
      the event that either of the parties should wish to sell and/or to
      transfer and/or to allot, directly or indirectly, any of its shares in the
      Company to third parties and the right of first refusal described in
      Clause 13 above has not been exercised in connection with such sale, the
      aforesaid sale – transfer – allotment shall be subject to the right of the
      other party to join in the sale to a third party in accordance with the
      provisions set forth below.

            

    

    

    
      	
              14.2

            	
              The
      party wishing to transfer (hereinafter – “the Offeree Seller”) its
      shares in the Company (hereinafter – “the Shares being Sold”)
      to any third party (hereinafter – “the Offeror Buyer”)
      shall be obliged, prior to such sale, to send in writing the offer of the
      Offeror Buyer to purchase the Shares being Sold to the other party in
      writing (hereinafter – “the Other Party”), which
      shall include the identity of the third party, including, in the event
      that the third party is a legal entity, the identity of all the
      controlling shareholders therein up to and including the ultimate private
      controlling shareholders therein, as are known to it, or if the third
      party wishes to buy the shares as a trustee for another person or body in
      any way, the identity of the beneficiary and the ultimate private
      controlling shareholders therein, as far as are known to it, as well as
      the consideration offered to it by a third party for the purchase of the
      Shares being Sold and the terms of payment thereof, and the remaining
      terms and conditions of the proposed transaction for the sale of all the
      Shares being Sold.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    16

     

    
      	
              14.3

            	
              The
      Other Party will be entitled, within 30 (thirty) days from the date on
      which details of the Offeror Buyer’s offer are received by it, to give
      notice in writing to the Offeree Seller of its desire to participate in a
      sale to the Offeror Buyer of the Shares being Sold under the conditions
      set forth in the details of the Offeror Buyer’s offer which has been
      received by him as aforesaid (hereinafter – “Tag-Along Notice” and
      “Tag-Along Notice
      Period”, respectively).  Where such Tag-Along Notices
      have been given and an agreement has been signed for the sale of the
      Shares being Sold between the Offeror Seller, the Other Party who served a
      Tag-Along Notice in time and the Offeror Buyer, within fourteen (14)
      business days from the end of the Tag-Along Notice Period (hereinafter –
      “the Period for Exercise
      of the Tag-Along Notice”), the sale of the Shares being Sold will
      be divided between the Offeree Seller and the Other Party according to the
      proportion of the holdings of each of the foregoing in the share capital
      of the Joint Company, but under no circumstances not more than one share
      against each share sold.

            

    

    

    
      	
              14.4

            	
              If
      no Tag-Along Notices as aforesaid are given within the Tag-Along Notice
      Period, or if a Tag-Along Notice is given stating that the party giving
      the notice confirms its participation on conditions that differ from those
      set forth in the offer of the Offeror Buyer, or the party who delivers the
      Tag-Along Notice fails to sign the agreement for sale of the Shares being
      Sold within the period of exercise of the Tag-Along Notice, the Offeree
      Seller will be entitled to sell all the Shares being Sold to the Offeror
      Buyer in accordance with the details of the offer as was sent to the Other
      Party, provided that an agreement for the sale of the Shares being Sold to
      the third party shall be signed between them within 60 days from the end
      of the Tag-Along Notice Period or from the end of the period for exercise
      of the Tag-Along Notice, if there was
such.

            

    

    

    
      	
              14.5

            	
              Subject
      to the foregoing, the shareholders shall cooperate and shall sign any
      document that is required in order to implement a sale of the Shares being
      Sold and the shares of the Other Party which are offered for sale to a
      third party in good time.

            

    

    

    
      	
              14.6

            	
              In
      addition to the foregoing, it is hereby expressly agreed that a sale of
      the shares been sold and/or the shares of the Other Party that are offered
      for sale, to any third party, is conditional upon the third party assuming
      all the rights and obligations of the Offeree Seller (and of the Other
      Party who delivered a Tag-Along Notice as aforesaid, if there was such) in
      accordance with this Document of Principles and the Sale Agreements, and
      it shall agree to become a party to those Agreements in all respects, as
      if it had signed same from the outset instead of and/or together with the
      Offeree Seller and/or the parties to whom a Tag-Along offer was made, as
      the case may be.

            

    

    

    
      	
              14.7

            	
              It
      is clarified that no sale and/or transfer and/or allotment will be of any
      validity, unless the lending bank has given written approval pursuant to
      which this is being done with its knowledge and consent and that the Buyer
      has furnished all the necessary collateral and undertakings instead of the
      Seller.

            

    

    

    
      	
              15.

            	
              Prohibition
      on transfer of rights

            

    

    

    
      	
              15.1

            	
              Notwithstanding
      any other provision in this Agreement, it is agreed that none of the
      parties will be entitled to transfer or sell or to confer means of
      control, directly or indirectly, which are cumulatively greater than 20%
      of that party’s portion of the issued share capital, including by way of
      an allotment of any of the companies until completion of the Project (in
      other words the obtaining of Form 4 for the residential buildings and the
      commercial areas).

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    17

     

    
      	
              16.

            	
              General

            

    

    

    
      	
              16.1

            	
              Without
      derogating from the contents of Clause 15.1 above, it is hereby clarified
      that in every case of the party who transfers its rights, in whole or in
      part, to another/others in accordance with the mechanisms that are the
      subject of this Document of Principles, the transferor party undertakes,
      as a pre-condition to the validity of the transfer of rights, as
      follows:

            

    

    

    
      	
              16.2

            	
              To
      cause a situation that the buyer/s or the transferee/s take upon
      himself/themselves as against the remaining party the obligations pursuant
      to this Document of Principles, in accordance with the Sale Agreements,
      and in accordance with any contractual arrangements of the parties with
      third parties, including the lending bank, prior to the date of transfer
      of the Object Offered for Sale to such buyer/s or transferee/s and shall
      sign this Document of Principles with the remaining party, and the lending
      bank shall approve such transfer (such approval is a pre-condition to the
      validity of the transfer) as also releasing the selling party from its
      obligations to the lending bank, in whole or in part, as the case may
      be.

            

    

    

    
      	
              16.3

            	
              To
      pay all its debts to the Joint Company and to the remaining party up to
      the date of transfer of the rights, if there are
  such.

            

    

    

    
      	
              16.4

            	
              To
      remove any encumbrance that is registered over its portion of the Joint
      Company and to release the other party from such encumbrance and to give
      the other party a written declaration stating that it has reported the
      fact of the sale and/or transfer to any entity required according to any
      law.

            

    

    

    
      	
              16.5

            	
              The
      provisions of Clauses 13 and 14 above shall apply, mutatis mutandis, also
      in a case in which any of the parties wishes to sell and/or transfer
      and/or allot and/or to realize an encumbrance (“Transfer of Rights”) any
      of its shares in the Company which are held directly or indirectly, in the
      Mall Company and/or in the Housing Company, except in companies the
      securities of which are traded on the Stock Exchange, but same will not
      apply to a Transfer of Rights of any of the parties to a corporation under
      the direct and/or indirect control of the transferor party or of the
      controlling shareholders in the transferor and/or the controlling
      shareholders in the controlling shareholder (hereinafter – “Controlled
      Corporation”), or to a corporation under the control of the
      controlling shareholders in the transferor (hereinafter – “a Sister Corporation”),
      or to a corporation which directly or indirectly controls the transferor
      (hereinafter – “Controlling
      Corporation”), provided that the Controlled Corporation or the
      Sister Corporation or the Controlling Corporation, as the case may be, is
      under the full control (100%) of the controlling shareholder therein and
      that the Controlling Corporation shall confirm in writing that it is
      stepping into the shoes of the transferor in all respects connected with
      this Document of Principles, and shall sign this Document of Principles
      and shall undertake to abide by the provisions hereof and of the Sale
      Agreements, the co-ownership agreement and any existing agreement with a
      third party.

            

    

    

    
      	
              16.6

            	
              If
      the shares in the Management Company are registered directly in the names
      of the parties, then wherever in this Document of Principles a transfer
      and/or sale and/or allotment of shares in the Joint Company is referred to
      this shall also mean the Management Company, all in the same
      ratio.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    18

     

    
      	
              17. 

            	
              Handling
      of legal matters

            

    

    

    
      	
              17.1

            	
              It
      is agreed that handling of the legal aspects connected with “the
      residential precinct” shall be entrusted to the law office of Goldfarb,
      Levy, Eran, Meiri, Tsafrir & Co., in accordance with the fees
      agreement attached to this Document of Principles as Appendix
      C and the handling of the legal aspects connected with the
      Commercial Precinct will be entrusted to the attorneys who will be decided
      by Blue Square in accordance with a fees agreement that was attached to
      this Document of Principles and Appendix
      D.

            

    

    

    
      	
              18.

            	
              Liability
      and indemnity

            

    

    

    
      	
              18.1

            	
              Each
      party will be liable on its own for the fulfillment of all its obligations
      under this Document of Principles, in full and punctually on due
      date.

            

    

    

    
      	
              18.2

            	
              Each
      party (in this clause below – “the Indemnifying Party”)
      shall indemnify the other party and/or the Joint Company, as the case may
      be (hereinafter in this clause – “the Indemnified Party”),
      in respect of any damage and/or loss and/or expense that may be incurred
      by the Indemnified Party in respect of a claim and/or demand the
      Indemnified Party has been ordered to pay and which arises from an act
      and/or omission of the Indemnifying Party, which constitutes a material
      breach by that party of this Document of Principles and/or of the Sale
      Agreement and/or of the Co-ownership Agreement, which has not been cured,
      provided that the Indemnified Party delivered written notice to the
      Indemnifying Party with regard to the claim and/or the demand as
      aforesaid, immediately same was received by it, and gave the Indemnifying
      Party a fair opportunity of defending it, and did not compromise without
      the written consent of the Indemnifying Party, or a judgment was granted
      which ordered such payment in favor of such third party, the execution of
      which has not been stayed. Without derogating from the foregoing, if an
      attachment is imposed over the assets and/or rights of the Indemnified
      Party, the Indemnifying Party shall attend to the immediate removal of the
      attachment, including by way of furnishing collateral security and
      guarantees to the third party who requests the attachment, upon the
      fulfillment of conditions which oblige the Indemnifying Party to indemnify
      the Indemnified Party in accordance with the
  foregoing.

            

    

    

    
      	
              19.

            	
              Reimbursement
      of expenses for payment to
consultants

            

    

    

    
      	
              19.1

            	
              The
      Company shall bear the full expenses that are incurred by the parties,
      plus V.A.T. as prescribed by law, which were disbursed up to and prior to
      the date of signing of this Document of Principles, all against vouchers
      and receipts, and shall do so not later than 20 business days from the
      date of signing of this Document of Principles. The foregoing shall
      include the Company bearing the full expenses mentioned in Appendix
      E to this Document of
Principles.

            

    

    

    
      	
              20.

            	
              Letting
      of areas

            

    

    

    April 15, 2010

    

    It
is agreed between the parties that if the general meeting of Blue Square Real
Estate Ltd. does not approve the transaction and if as a result thereof or in
connection therewith the Sellers or any of them should foreclose on the
guarantee that is lodged with them, then and in that event Blue Square will be
released from participation in the amount that has been foreclosed upon and such
amount shall be borne by Gindi.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    19

     

    
      	
              20.1

            	
              The
      Mall Company will let to Blue Square or to any member of the Blue Square
      Group, an area of 400 sq.m., whether as one unbroken area on floor minus
      one or on the commercial level of the fabric building (for residential
      purposes) or in two sections on the above-mentioned levels, all at the
      election of Blue Square, for purposes of a supermarket / convenience
      stores / organic products store, against rentals per gross sq.m. that will
      be equivalent to the average rentals per gross sq.m. of five (5) AM-PM
      branches whose rentals per sq.m. are the highest of the branches of the
      aforesaid chain in Tel Aviv. The lease period will be for a long term and
      will be renewed from time to time at Blue Square’s request, but not for
      more than 24 years and eleven months, and in each period which renews as
      aforesaid the rentals will be fixed afresh according to the format
      specified above. Blue Square’s aforesaid right will remain in
      force so long as the shops have not been let to third parties. The parties
      agree that no supermarket or convenience store of a similar type to the
      stores of the type operated by the Blue Square Group shall be operated in
      the Commercial Precinct, except those of the Blue Square
      group.

            

    

    

    
      	
              20.2

            	
              It
      is further agreed that if Blue Square or any one on its behalf should
      request to hire areas that exceed the abovementioned areas but under no
      circumstances more than 1,500 sq.m. gross (which include the areas
      mentioned in Clause 20.1 above), then and in that event Gindi will have a
      corresponding right to hire areas (up to 1100 sq.m.) in the same area, and
      location and on identical conditions. This right will be available to Blue
      Square subject to the condition that areas remain both for Blue Square as
      well as for Gindi.  In such case Gindi will have the right to
      let such areas to any third party who may wish to hire same and all the
      revenues in respect of such areas shall belong to Gindi
    alone.

            

    

    

    
      	
              20.3

            	
              It
      is agreed that the supply of gas to units in the Residential Precinct and
      in the Commercial Precinct shall be performed by Dorgas at competitive
      prices that shall be agreed upon with
it.

            

    

    

    
      	
              21.

            	
              Guarantees

            

    

    

    
      	
              21.1

            	
              Blue
      Square shall cause a situation that Blue Square Real Estate Ltd. (Blue
      Square Real Estate) shall, subject to the fulfillment of the conditions
      precedent, sign a guarantee for the performance of the obligations of Blue
      Square pursuant to this Document of Principles. In addition, Blue Square
      shall sign the guarantees that are required from it in the scope of the
      Purchase Agreements and in the scope of the contractual arrangement with
      the Lending Bank.

            

    

    

    
      	
              21.2

            	
              Gindi
      shall cause a situation that Gindi Investments 1 Ltd., and Dirot Yukra
      Ltd., shall, subject to the fulfillment of the conditions precedent, sign
      a guarantee for the performance of the obligations of Gindi pursuant to
      this Document of Principles in a manner whereby Gindi Investment 1 Ltd.,
      shall guarantee one half (50%) of the obligations of Gindi, and Dirot
      Yukra will guarantee the full (100%) of the obligations of Gindi. In
      addition Gindi Investments 1 Ltd. and Dirot Yukra shall sign the
      guarantees that are required from them in the scope of the Purchase
      Agreements and in the scope of the contractual arrangement with the
      Lending Bank, according to the aforesaid
  division.

            

    

    

    
      	
              21.3

            	
              If
      guarantees that have been given by Blue Square Real Estate or by Dirot
      Yukra and Gindi Investments 1, or by any one on their behalf, as the case
      may be, be realized, then the guarantor whose guarantee has been realized
      shall be indemnified by the other in an amount equivalent to one half of
      the amount of realization plus expenses incurred in the matter and
      together with interest at a rate of prime plus 6% per annum in respect of
      the realized amount from the date of the realization and up to the date of
      actual payment. It is hereby agreed that the failure of either of the
      parties to abide by the provisions of this clause shall be deemed to be a
      material breach and in such case the provisions of Clause 14 (dilution)
      shall apply, mutatis mutandis.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    20

     

    
      	
              22.

            	
              Conditions
      precedent

            

    

    

    Conditions
precedent for this Document of Principles coming into force are cumulatively as
follows:

    

    
      	
              22.1

            	
              The
      signing of the Sale Agreements with the Sellers and the fulfillment of the
      conditions precedent. If this condition precedent is not fulfilled, then
      the provisions of this Document of Principles the time for fulfillment of
      which is not contingent upon the Sale Agreements coming into force will
      apply, such as: each party bearing one half of the expenses which have
      been incurred and/or which may be incurred by the
  parties.

            

    

    

    
      	
              22.2

            	
              Approval
      by the authorized organs of Blue Square to entering into this Document of
      Principles.

            

    

    

    
      	
              22.3

            	
              Approval
      by the authorized organs of Gindi to entering into this Document of
      Principles.

            

    

    

    
      	
              23.

            	
              Full
      extent of obligations

            

    

    

    
      	
              23.1

            	
              This
      document fully reflects, on an updated basis, everything that has been
      agreed between the parties and cancels any prior document. All the
      documents made between the parties or anyone on their behalf prior to this
      document are null and void as if never made and in particular the document
      dated January 20, 2010.

            

    

    

    
      	
              23.2

            	
              This
      document shall not be deemed to be an agreement in favor of a third
      party.

            

    

    

    
      	
              24. 

            	
              Resolution
      of disputes

            

    

    

    In the
event of a dispute between the parties regarding implementation of the
provisions of this Document of Principles and/or the interpretation hereof, the
parties shall, within 3 days from the date on which one party applied to the
other, refer the dispute between them to mediation before the attorneys of the
parties Adv. Shlomo Shafir and Adv. Levy Amitai (hereinafter – “the Mediators”). If the
Mediators do not reach overall agreement between them within seven (7) days from
the date the subject of the dispute was referred to them, the decision will be
referred to arbitration before “the Arbitrator”, as defined
below. The Arbitrator shall be a retired District Court Judge who shall be
appointed with the consent of the parties and in the absence of agreement
between them, he will be appointed by the Tel Aviv District Court, on an
application to the court by either of the parties. The court shall not appoint
as Arbitrator anyone who does not agree to take upon himself to give his award
within the times specified below in this clause (hereinafter – “the Arbitrator”). The
Arbitrator shall not be bound by the rules of civil procedure but will be
obliged to give written reasons for his award. The Arbitrator’s
award  shall be final and binding and shall not be
appealable.  The Arbitrator’s decision shall be given with the urgency
necessitated by the subject that is the issue in dispute, but under all
circumstances not later than 30 days from the date of his
appointment.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    21

     

    
      	
              25.

            	
              The
      parties will be prohibited from encumbering their rights, directly or
      indirectly, pursuant to the Sale Agreements and/or this Agreement and/or
      their rights in the Property Sold, except in favor of the Lending Bank
      only and subject to the provisions of this Document of
      Principle.  Notwithstanding the foregoing it is agreed that in a
      situation in which either of the parties to this Agreement requests to
      provide the companies with loans together with the Lending Bank, then and
      in that event, subject to obtaining the consent of the Lending Bank, the
      parties will be entitled to encumber their rights as aforesaid in favor of
      such party, under an encumbrance ranking pari passu with the Lending Bank,
      or by a second ranking encumbrance which ranks behind the Lending Bank,
      provided that the encumbrance shall conform, mutatis mutandis, with the
      construction loan documents that will be signed with the Lending
      Bank.

            

    

    

    
      	
              26.

            	
              The
      parties shall act in such a way that within 60 days a detailed agreement
      will be signed between them which regulates the relationship between the
      parties on the basis of the principles set forth in this Document of
      Principles and until such time as the aforesaid detailed agreement is
      signed, the provisions of this Document of Principles shall apply to and
      be binding on the parties.

            

    

    

    
      	
              27.

            	
              Interpretation

            

    

    

    
      	
               
      

            	
              This
      document shall be interpreted and construed solely according to what is
      stated herein. Drafts and/or documents that were made and/or exchanged
      between the parties prior to this document shall be deemed never to have
      been made and it shall not be possible to make use thereof for purposes of
      interpretation of this document.

            

    

    

    
      In
witness whereof the parties have hereunto signed:

    

    

    
      
        	
                /s/ Dror Moran, Zeev Stein

              	 
      	
                /s/

              
	
                Blue
      Square

              	 
      	
                Gindi

              

      

    

    

    
      Guarantee of Interested
Parties (Gindi)

    

    

    We, the
undersigned, Dirot Yukra Ltd., hereby confirm and undertake to Blue Square Real
Estate Ltd. (hereinafter – “Blue Square”) as
follows:

    

    
      	
               
      

            	
              1.

            	
              That
      the declarations and the undertakings that have been given by Gindi Trade
      Tel Aviv Ltd. and Gindi Housing Tel Aviv Ltd. (hereinafter – “Gindi”) in the scope of
      this Document of Principles are true and correct and are up to
      date.

            

    

    

    
      	
               
      

            	
              2.

            	
              We
      are fully conversant with the provisions of this Document of Principles
      and we declare and undertake that we have the capability of complying with
      all the obligations of Gindi under this Document of Principles, in
      accordance with the contents of Paragraph 3
  below.

            

    

    

    
      	
               
      

            	
              3.

            	
              We
      are guarantors to Blue Square for the fulfillment of all Gindi’s
      obligations under this Document of Principles, including payment of all
      the payments which Gindi is obliged to pay in accordance
      therewith.

            

    

    

    
      	
               
      

            	
              4.

            	
              Our
      abovementioned obligations are absolute, irrevocable and unconditional,
      and included in this nothing in our undertakings to Blue Square is
      contingent upon a prior reference by Blue Square to Gindi and/or the
      exhausting of any proceedings and/or remedies that are available to Blue
      Square pursuant to the Document of Principles and/or according to any
      law.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    22

     

    
      	
               
      

            	
              5.

            	
              The
      parties waive their rights under Sections 5, 6 and 7 of the Guarantee Law
      and the necessity for prior reference to them as
  aforesaid.

            

    

    

    
      
        	
                /s/

              
	
                Dirot
      Yukra Ltd

              

      

    

    

    
      Certification by
Attorney

    

    

    I the
undersigned Yitzhak Cobos, Adv., hereby certify that Mr. Kfir Gindi, who is
personally known to me, signed this Document of Principles and that he is
authorized to sign in the name and on behalf of Dirot Yukra Ltd. and that his
signature binds Dirot Yukra Ltd.

    

    
      
        	
                /s/ Yitzhak Cobos

              
	
                Yitzhak
      Cobos, Adv.

              

      

    

    

    
      Guarantee of Interested
Parties (Gindi)

    

    

    We, the
undersigned, Gindi Investments 1 Ltd., hereby confirm and undertake to Blue
Square Real Estate Ltd. (hereinafter – “Blue Square”) as
follows:

    

    
      	
               
      

            	
              1.

            	
              That
      the declarations and the undertakings that have been given by Gindi Trade
      Tel Aviv Ltd. and Gindi Housing Tel Aviv Ltd. (hereinafter – “Gindi”) in the scope of
      this Document of Principles are true and correct and are up to
      date.

            

    

    

    
      	
               
      

            	
              2.

            	
              We
      are fully conversant with the provisions of this Document of Principles
      and we declare and undertake that we have the capability of complying with
      all the obligations of Gindi under this Document of Principles, in
      accordance with the contents of Paragraph 3
  below.

            

    

    

    
      	
               
      

            	
              3.

            	
              We
      are guarantors to Blue Square for the fulfillment of all Gindi’s
      obligations under this Document of Principles, including payment of all
      the payments which Gindi is obliged to pay in accordance
      therewith.

            

    

    

    
      	
               
      

            	
              4.

            	
              Our
      abovementioned obligations are absolute, irrevocable and unconditional,
      and included in this nothing in our undertakings to Blue Square is
      contingent upon a prior reference by Blue Square to Gindi and/or the
      exhausting of any proceedings and/or remedies that are available to Blue
      Square pursuant to the Document of Principles and/or according to any
      law.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    23

     

    
      	
               
      

            	
              5.

            	
              The
      parties waive their rights under Sections 5, 6 and 7 of the Guarantee Law
      and the necessity for prior reference to them as
  aforesaid.

            

    

    

    
      
        	
                /s/

              
	
                Gindi
      Investments 1 Ltd.

              

      

    

    

    
      Certification by
Attorney

    

    

    I the
undersigned Yitzhak Cobos, Adv., hereby certify that Mr. Manor Gindi, Mr. Uri
Levy and Mr. Eliahu Friedman who are personally known to me, signed this
Document of Principles and that they are authorized to sign in the name and on
behalf of Gindi Investments 1 Ltd. and that their signature binds Gindi
Investments 1 Ltd.

    

    
      
        	
                /s/ Yitzhak Cobos

              
	
                Yitzhak
      Cobos, Adv.

              

      

    

    

    
      Guarantee of Interested
Parties (Blue Square Real Estate)

    

    

    We, the
undersigned, Blue Square Real Estate Ltd., hereby confirm and undertake to Dirot
Yukra Ltd. and Gindi Investments 1 Ltd (hereinafter – “Gindi”) as
follows:

    

    
      	
               
      

            	
              1.

            	
              That
      the Declarations and Undertakings that were given by Blue Square Real
      Estate Tel Aviv Market Residential Ltd. and Blue Square Real Estate Tel
      Aviv Market Housing Ltd. (hereinafter – “Blue Square”) in the
      scope of this Document of Principles are true and correct and are up to
      date.

            

    

    

    
      	
               
      

            	
              2.

            	
              We
      are fully conversant with the provisions of this Document of Principles
      and we declare and undertake that we have the capability of complying with
      all the obligations of Gindi under this Document of Principles, in
      accordance with the contents of Paragraph 3
  below.

            

    

    

    
      	
               
      

            	
              3.

            	
              We
      are guarantors to Blue Square for the fulfillment of all Gindi’s
      obligations under this Document of Principles, including payment of all
      the payments which Gindi is obliged to pay in accordance
      therewith.

            

    

    

    
      	
               
      

            	
              4.

            	
              Our
      abovementioned obligations are absolute, irrevocable and unconditional,
      and included in this nothing in our undertakings to Blue Square is
      contingent upon a prior reference by Blue Square to Gindi and/or the
      exhausting of any proceedings and/or remedies that are available to Blue
      Square pursuant to the Document of Principles and/or according to any
      law.

            

    

    

    
      	
               
      

            	
              5.

            	
              The
      parties waive their rights under Sections 5, 6 and 7 of the Guarantee Law
      and the necessity for prior reference to them as
  aforesaid.

            

    

    

    
      
        	
                /s/ Dror Moran, Zeev
  Stein

              
	
                Blue
      Square Real Estate Ltd.

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    24

     

    
      Certification by
Attorney

    

    

    I the
undersigned Yael Avner, Adv., hereby certify that Mr. Dror Moran and Mr. Zeev
Stein who are personally known to me, signed this Document of Principles and
that they are authorized to sign in the name and on behalf of Blue Square Real
Estate Ltd. and that their signature binds Blue Square Real Estate
Ltd.

    

    
      
        	
                /s/ Yael Avner

              
	
                Yael
      Avner, Adv.Unassociated Document

     

    
      Exhibit
10.1

    

     

    FAR EAST WIND POWER
CORP.

    

    CONSULTING
AGREEMENT

    

    This Consulting Agreement (the “Agreement”), is made and entered into as of June 24, 2010 (the “Effective Date”), by and between Far East Wind Power Corp., a Nevada corporation located at 11811 N. Tatum Blvd.,
Suite 3031, Phoenix, Arizona 85028 (the “Company”), and J Crane & Company Limited, located at 47
Third Street, Cambridge, Massachusetts 02141 (the “Consultant”).  The
Company desires to retain Consultant as an independent contractor to perform
such services, on terms set forth more fully below.  In consideration
of the mutual promises contained herein, the parties agree as
follows:

    

    1.           SERVICES AND
COMPENSATION

    

    (a)         Services. Consultant shall serve as the Company’s Chief Financial
Officer and shall perform the customary duties and responsibilities implied by
such position including, without limitation, the duties and responsibilities set
forth in Exhibit A hereto (the “Services”). In such capacities Consultant shall report directly
to the Chief Executive Officer of the Company, or, in the absence of a Chief
Executive Officer, the Board of Directors of the Company (the “Board”). Consultant’s
position, duties, and responsibilities can be modified as reasonably required
to suit the specific requirements and needs of the Company. Consultant shall perform the Services for the
Company in a professional and diligent fashion. Consultant agrees that James
Crane (the “Principal”) shall
exclusively perform the Services on behalf of Consultant pursuant to this
Agreement and failure to do so shall be deemed a material breach of this
Agreement subject to termination of this Agreement by the Company pursuant to
Section 8(d) hereof.

     

    (b)         Compensation.

    

    (i)           Initial
Fee.  On the Effective Date, the
Company shall pay to Consultant a fee of 68,000 Chinese Renminbi (the “Initial Fee”), as payment for Consultant (i) modifying and refining
the Company’s financial forecast and other related models and (ii) preparing an
initial presentation in Microsoft Powerpoint format.

    

    (ii)         Monthly
Fee.  The Company shall pay Consultant a monthly fee (the
“Monthly Fee”)
of 68,000 Chinese Renminbi which shall be increased as follows:

    

    (A) the
Monthly Fee shall be increased to 81,600 Chinese Renminbi if and when the value
of the Company’s total wind turbine and related assets classified as property,
plant and equipment on the Company’s balance sheet (“Balance Sheet”) filed
as part of the Company’s quarterly and annual financial statements in accordance
with the Securities Exchange Act of 1934, as amended (the “Operating Assets”),
exceeds $50,000,000;

    

    (B) the
Monthly Fee shall be increased to 102,000 Chinese Renminbi if and when the value
of the Operating Assets exceeds $100,000,000;

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (C)  as
determined by the Board or the Company’s compensation committee if and when the
value of the Operating Assets exceeds $200,000,000, provided, that the
Monthly Fee shall not be less than $102,000 Chinese Renminbi.

    

    The
Monthly Fees shall accrue each month and shall be
paid to Consultant at such time as the Company completes a capital raise in any
form as of or subsequent to the Effective
Date whereby the Company receives gross
proceeds in excess of $250,000 (the “Financing”).  No interest will apply to any portion of
the accrued Monthly Fees.  For any month following the completion of
the Financing the Company shall pay Consultant the Monthly Fee on the first day
of each month.

    

    (c)         Stock Awards.

    

    (i)           Initial Stock Award.
Subject to approval by the Board, on the Effective Date the Company will grant
to Consultant 250,000 shares of the Company’s common stock (the “Initial Stock
Award”). The Initial Stock Award shall be subject to vesting at the rate
of one sixth (1/6) of the shares per month commencing on the Effective Date,
subject to Consultant continuing to be a service provider to the Company
pursuant to this Agreement on such dates. The vesting schedule of the Initial
Stock Award shall be subject to acceleration as described in Sections 1(c)(iv)
and 8(e)(i)(B) of this Agreement.

    

    (ii)         Second Stock
Award.  Subject to approval by the Board, on the Effective Date
the Company will grant to Consultant 400,000 shares of the Company’s common
stock (the “Second
Stock Award”).  The Second Stock Award shall be subject to
vesting at the rate of 1/36 of the shares per month commencing on the Effective
Date, subject to Consultant continuing to be a service provider to the Company
pursuant to this Agreement on such dates.  The vesting schedule of the
Second Stock Award shall be subject to acceleration as described in Sections
1(c)(iv) and 8(e)(i)(B) of this Agreement.

    

    (iii)       Third Stock
Award.  Subject to approval by the Board, upon successful
listing by the Company on a stock exchange, the Company will grant to Consultant
150,000 shares of the Company’s common stock (the “Third Stock
Award”).  The grant of the Third Stock Award is subject to
Sections 1(c)(iv) and 8(e)(i)(C) of this Agreement.

    

    (iv)      Acceleration of Rights upon
Change of Control. If at any time during the term of this Agreement there
is a Change of Control (as defined below), then (A) all of the then unvested
shares subject to the Initial Stock Award and the Second Stock Award shall
become vested and any repurchase right on behalf of the Company shall lapse as
to such shares immediately prior to the closing of such Change of Control and
(B) Consultant shall be entitled to receive all of the shares subject to the
Third Award immediately prior to the closing of such Change of Control. For
purposes of this Agreement “Change of Control”
shall mean (i) any acquisition of the Company in any transaction or series or
related transactions by means of merger, consolidation, reorganization, stock
acquisition or otherwise in which outstanding shares of the Company are
exchanged for securities or other consideration issued, or caused to be issued,
by an acquiring entity or its subsidiary whose assets or revenues are larger
than the Company’s assets on its Balance Sheet or revenues, respectively, and
that results in the transfer of fifty percent (50%) or more of the outstanding
voting power of the Company (other than a merger effected primarily for the
purpose of changing the domicile of the Company); (ii) a sale or other
conveyance of all or substantially all of the assets of the Company; or (iii) a
liquidation, dissolution or winding up of the Company. Notwithstanding the prior
sentence, the sale of the Company’s securities in a bona fide equity financing
transaction shall not be deemed a Change of Control.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (d)         Anti-dilution.  In the event the Company shall issue
Additional Shares of Common Stock (as defined below) that would result in
Consultant’s Holdings representing less than one percent (1%) of the Company’s
outstanding common stock and Common Stock Equivalents, then the Company shall
issue to Consultant, on a quarterly basis as set forth below, without any
additional consideration from Consultant and subject to the same acceleration
and vesting provisions as set forth in this Agreement, the number of shares of
common stock such that Consultant’s Holdings shall represent one percent (1%) of
the outstanding shares of common stock and Common Stock Equivalents outstanding
after the issuance of the Additional Shares of Common Stock.  “Consultant’s
Holdings” shall mean the total number of shares of common stock received
by Consultant as stock compensation from the Company, without regard to (i) any
open market purchases of the Company’s common stock by Consultant, (ii) the
Third Stock Award, and (iii) any sales by Consultant of any shares of stock
received as compensation from the Company.

    

    (e)         “Additional Shares of Common
Stock” shall mean any shares of common stock issued subsequent to the
Effective Date by the Company or Common Stock Equivalents deemed issued
subsequent to the Effective Date by the Company (as set forth below), other than
shares of common stock or Common Stock Equivalents issued or
issuable:

    

    (i)          pursuant
to stock splits, stock dividends, recapitalizations or the like;

    

    (ii)         to
employees, directors, consultants or advisors under stock option, stock bonus or
stock purchase plans or agreements or similar plans or agreements approved by
the Board or an authorized committee thereof;

    

    (iii)       to
financial institutions, lessors or other lenders in connection with loans,
commercial credit arrangements, equipment financing, commercial property lease
transactions, or similar transactions with primarily non-equity financing
purposes;

    

    (iv)       in
connection with mergers, acquisitions or similar transactions approved by the
Board of Directors; or

    

    (v)        in
strategic partnership transactions or similar transactions with primarily
non-equity financing purposes.

    

    (f)         “Common Stock
Equivalents” means any debt or preferred stock instruments of the Company
which are convertible into or exchangeable for, or otherwise entitles the holder
thereof to receive, common stock.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    In the
event the Company shall issue any Common Stock Equivalents then the maximum
number of shares (as set forth in the instrument relating thereto without regard
to any provisions contained therein designed to protect against dilution) of
common stock issuable upon the conversion or exchange of such Common Stock
Equivalents, shall be deemed to be Additional Shares of Common Stock issued as
of the time of such issue, provided that in any such case in which Additional
Shares of Common Stock are deemed to be issued:

    

    (i)           no
further adjustments in the number of shares of common stock held by Consultant
shall be made upon the subsequent issue of common stock or Common Stock
Equivalents upon the conversion or exchange of such Common Stock
Equivalents;

     

    (ii)         if
such Common Stock Equivalents by their terms provide, with the passage of time
or otherwise, for any decrease or increase in the number of shares of common
stock issuable, upon the conversion or exchange thereof, the number of shares of
common stock held by Consultant and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed to
reflect such increase or decrease insofar as it affects Common Stock Equivalents
or rights of conversion or exchange under such Common Stock
Equivalents;

    

    (iii)        upon
the expiration of Common Stock Equivalents which shall not have been converted
or exchanged into common stock, the number of shares of common stock held by
Consultant, and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if the only Additional Shares of Common Stock
issued were the shares of common stock, if any, actually issued upon the
conversion or exchange of such Common Stock Equivalents.  In the case
of any recomputation under this subsection, Consultant shall reassign to the
Company the number of shares of common stock equal to the difference between (x)
the number of shares issued to Consultant pursuant to Section 1(d) and (y) the
number of shares of common stock that would have been issued as result of the
adjustment pursuant to this Section 1(f)(iii).

    

    (g)         Review of Consultant’s Stock
Holdings.  The Company will review Consultant’s right to
receive any additional shares of the Company’s common stock pursuant to this
Section on a quarterly basis.  Any additional shares of common stock
to be issued to Consultant pursuant to this Section will be issued by the
Company, subject to approval by the Board, as soon as practical after the end of
the applicable quarter.

    

    (h)         Termination of Anti-Dilution
Rights.  The right to receive additional shares of the
Company’s common stock pursuant to Section 1(d) shall terminate upon the earlier
of (i) the Company reporting within an SEC filing on Form 10-Q or 10-K at least
$50,000,000 in revenue in accordance with the Generally Accepted Accounting
Principles in the United States of America (“GAAP”) or (ii) the
Company reporting within an SEC filing on Form 10-Q or 10-K at least
$100,000,000 in assets on its Balance Sheet in accordance with
GAAP.

    

    (i)         Expenses. The Company will pay or reimburse Consultant for all
necessary out-of-pocket transportation, hotel, and other expenses reasonably
incurred by Consultant in the conduct of the business of the Company upon
submission of such itemized vouchers, receipts or other documentation with
respect to any such expenses as shall be reasonably requested by the Company,
and, in any event, in accordance with the guidelines of the Company, if any,
published from time to time. In the event Consultant incurs or plans to incur
expenses in excess of $5,000 individually or in the aggregate in any calendar
month, Consultant shall obtain the prior written approval from the
Company.  All international travel expenses to be incurred by
Consultant originating in Beijing, China, will be advanced by the Company to
Consultant seven (7) days before Consultant departs Beijing,
China.  The Company will pay Consultant on the first day of each month
a monthly stipend of $450 for international call
reimbursements.                         

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.           PROPRIETARY INFORMATION;
CONFIDENTIALITY

    

    (a)           “Confidential
Information” means any Company proprietary information, technical data,
trade secrets or know-how, including, but not limited to, research and
development, product plans, products, services, customers, customer lists,
suppliers, manufacturers, government contacts, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances, in addition to
financial, accounting, statistical, marketing and personnel information of the
Company and/or its customers or other third-parties or other business
information disclosed by the Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment.

    

    (b)           Consultant
while performing the Services, will be exposed to and handling the Company’s
Confidential Information.  Consultant will not, during or subsequent
to the term of this Agreement, use the Company’s Confidential Information for
any purpose whatsoever other than the performance of the Services on behalf of
the Company or disclose the Company’s Confidential Information to any third
party.  Consultant agrees that the restrictions in this Section 2
shall also apply to Confidential Information conceived, originated, discovered
or developed by Consultant during the term of this Agreement.  It is
understood that said Confidential Information shall remain the sole property of
the Company. Consultant further agrees to take all reasonable precautions to
prevent any unauthorized disclosure of such Confidential Information including,
but not limited to, having each employee of Consultant, if any, with access to
any Confidential Information, execute a nondisclosure agreement containing
provisions in the Company’s favor identical to Sections 2, 3 and 8 of this
Agreement. Confidential Information does not include information which (i) is
known to Consultant at the time of disclosure to Consultant by the Company as
evidenced by written records of Consultant, (ii) has become publicly known and
made generally available through no wrongful act of Consultant, or (iii) has
been rightfully received by Consultant from a third party who is authorized to
make such disclosure. Without the Company’s prior written approval, Consultant
will not directly or indirectly disclose to anyone the contents of this
Agreement.

    

    (c)           Consultant
agrees that Consultant will not, during the term of this Agreement, improperly
use or disclose any proprietary information or trade secrets of any former or
current employer or other person or entity with which Consultant has an
agreement or duty to keep in confidence information acquired by Consultant, if
any, and that Consultant will not bring onto the premises of the Company any
unpublished document or proprietary information belonging to such employer,
person or entity unless consented to in writing by such employer, person or
entity. Consultant will indemnify the Company and hold it harmless from and
against all claims, liabilities, damages and expenses, including reasonable
attorneys fees and costs of suit, arising out of or in connection with any
violation or claimed violation of a third party’s rights resulting in whole or
in part from the Company’s use of the work product of Consultant under this
Agreement.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (d)           Consultant
recognizes that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty on
the Company’s part to maintain the confidentiality of such information and to
use it only for certain limited purposes. Consultant agrees that Consultant owes
the Company and such third parties, during the term of this Agreement and
thereafter, a duty to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out the Services for
the Company consistent with the Company’s agreement with such third
party.

    

    (e)           Return of
Property.  Upon the termination of this Agreement, or upon
Company’s earlier request, Consultant will deliver to the Company all devices,
records, data, disks, computer files, notes, reports, proposals, lists,
correspondence, materials, equipment, other documents or property, reproductions
of any aforementioned items developed by Consultant pursuant in the performance
of the Services to the Company, or Confidential Information that Consultant may
have in Consultant’s possession or control.

    

    (f)           Consultant
Information.  Consultant represents and warrants to the Company
that information provided by Consultant in connection with this Agreement and
any supplemental information provided to the Company is complete, true and
materially correct in all respects.   Consultant has not omitted
any information that is or may reasonably be considered necessary or useful to
evaluate the information provided by Consultant to the
Company.  Consultant shall immediately notify the Company in writing
of any change in the accuracy or completeness of all such
information.

    

    (g)           Other
Agreements.  Consultant represents that the performance of all
the terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by Consultant in confidence or in trust prior
to the execution of this Agreement. Consultant has not and shall not: (i)
disclose or use in the course of the Services to the Company, any proprietary or
trade-secret information belonging to another; or (ii) enter into any oral or
written agreement in conflict with this Agreement.

    

    3.           OWNERSHIP

    

    (a)           Consultant
agrees that all copyrightable material, notes, records, drawings, designs,
inventions, improvements, developments, discoveries and trade secrets conceived,
made or discovered by Consultant, solely or in collaboration with others, during
the period of this Agreement which relate in any manner to the business of the
Company that Consultant may be directed to undertake, investigate or experiment
with, or which Consultant may become associated with in work, investigation or
experimentation in the line of business of Company in performing the Services
hereunder (collectively, “Inventions”), are the
sole property of the Company. In addition, any Inventions which are related in
any manner to the business of the Company constitute copyrightable subject
matter shall be considered "works made for hire" as that term is defined in the
United States Copyright Act. Consultant further agrees to assign (or cause to be
assigned) and does hereby assign fully to the Company all Inventions and any
copyrights, patents, mask work rights or other intellectual property rights
relating to the business of the Company. Attached as Exhibit B hereto is a
list describing all inventions, original works of authorship, developments,
improvements and trade secrets which were made by Consultant prior to the date
of this Agreement, which belong to Consultant, and which are not assigned to the
Company (“Prior
Inventions”). Consultant represents and warrants that no patent
applications relating to Inventions or Prior Inventions are pending under his
name and no Inventions or designs provided to the Company have been used by
prior customers of Consultant or patented by such customers.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b)           Consultant
agrees to assist Company, or its designee, at the Company’s expense, in every
proper way to secure the Company’s rights in the Inventions and any copyrights,
patents, mask work rights or other intellectual property rights relating thereto
in any and all countries, including the disclosure to the Company of all
pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other instruments which
the Company shall deem necessary in order to apply for and obtain such rights
and in order to assign and convey to the Company, its successors, assigns and
nominees the sole and exclusive right, title and interest in and to such
Inventions, and any copyrights, patents, mask work rights or other intellectual
property rights relating thereto. Consultant further agrees that Consultant’s
obligation to execute or cause to be executed, when it is in Consultant’s power
to do so, any such instrument or papers shall continue after the termination of
this Agreement.

    

    (c)           Consultant
agrees that if in the course of performing the Services, Consultant incorporates
into any Invention relating to the business of the Company developed hereunder
any invention, improvement, development, concept, discovery or other proprietary
information owned by Consultant or in which Consultant has an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
perpetual, irrevocable, worldwide license to make, have made, modify, use and
sell such item as part of or in connection with such Invention.

    

    (d)           Consultant
agrees that if the Company is unable because of Consultant’s unavailability,
dissolution, mental or physical incapacity, or for any other reason, to secure
Consultant’s signature to apply for or to pursue any application for any United
States or foreign patents or mask work or copyright registrations covering the
Inventions assigned to the Company above, then Consultant hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as Consultant’s agent and attorney in fact, to act for and in Consultant’s
behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of patents,
copyright and mask work registrations thereon with the same legal force and
effect as if executed by Consultant.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.           UNFAIR COMPETITION;
NON-SOLICITATION

    

    (a)           Unfair
Competition.  During the term of this Agreement, Consultant has
a duty of loyalty and a fiduciary responsibility to the Company. Consultant
shall not, directly or indirectly, whether as a partner, employee, creditor,
stockholder, or otherwise, promote, participate, or engage in any activity or
other business which is directly competitive to the current operations of the
Company or the currently contemplated future operations of the
Company.   The obligation of Consultant not to compete with the
Company shall not prohibit Consultant from owning or purchasing not more than a
five percent (5%) beneficial interest in any securities that are regularly
traded on a recognized stock exchange or on the
over-the-counter market subject to relevant federal and state securities
laws.  To the fullest extent permitted by law, upon the termination of
this Agreement for any reason, Consultant shall not use any of the Confidential
Information to directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or any other individual or representative capacity, engage or participate in any
business, wherever located, that is in direct competition with the business of
the Company. Should any portion of this Section be deemed unenforceable because
of the scope, duration or territory encompassed by the undertakings of the
Consultant hereunder, and only in such event, then the Consultant and the
Company consent and agree to such limitation on scope, duration or territory as
may be finally adjudicated as enforceable by a court of competent jurisdiction
after the exhaustion of all appeals.

    

    (b)           Non-Solicitation of
Customers.  While providing
Services to the Company, Consultant shall
not divert or attempt to divert (by solicitation or other means), whether
directly or indirectly, the Company’s customers for the purpose of inducing or
encouraging them to sever their relationship with the Company or to solicit them
in connection with any product or service competing with those products and
services offered and sold by the Company.  Also, to the fullest extent
permissible under applicable law, following termination of this Agreement
for any reason, Consultant agrees not use any of the Confidential
Information to directly or indirectly divert or attempt to divert (by
solicitation or other means) the Company’s customers for the purpose of inducing or encouraging them to
sever their relationship with the Company or to solicit them in connection with
any product or service competing with those products and services offered and
sold by the Company.

    

    (c)           Non-Solicitation of
Employees.  To the fullest extent permissible under applicable
law, Consultant agrees that both during the period of this Agreement and for a
period of two (2) years following termination of this Agreement, Consultant
shall not take any action to induce employees or independent contractors of the
Company to sever their relationship with the Company and accept an employment or
an independent contractor relationship with any other
business.   However, this obligation will not affect any
responsibility Consultant may have as an employee of the Company with respect to
the bona fide hiring and firing of Company personnel.

    

    (d)           Non-Disparagement.  Upon
termination of this Agreement, Consultant agrees to not make any disparaging
remarks about the Company, or any officers, directors, employees, executive or
independent contractors of or to any of the foregoing.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.           TRADE
SECRETS.  Consultant shall not disclose to any others, or take
or use for Consultant’s own purposes or purposes of any others, during the term
of this Agreement or at any time thereafter, any of the Company’s trade secrets,
including without limitation, Confidential Information, customer lists, wind
farm operators, government contacts, applications, software or intellectual
property of the Company.  Consultant agrees that these restrictions
shall also apply to (i) trade secrets belonging to third parties in Company’s
possession and (ii) trade secrets conceived, originated, discovered or developed
by Consultant during the term of this
Agreement relating to the affairs of the
Company.

    

    6.           REPORTS.  Consultant
agrees that it will from time to time during the term of this Agreement or any
extension thereof keep the Company advised as to Consultant’s progress in
performing the Services hereunder and that Consultant will, as requested by the
Company, prepare written reports with respect thereto. It is understood that the
time required in the preparation of such written reports shall be considered
time devoted to the performance of Consultant’s Services.

    

    7.           CONFLICTING
OBLIGATIONS.  Consultant certifies
that Consultant has no outstanding agreement or obligation that is in conflict
with any of the provisions of this Agreement, or that would preclude Consultant
from complying with the provisions hereof, and further certifies that Consultant
will not enter into any such conflicting agreement during the term of this
Agreement.

    

    8.           TERM AND
TERMINATION

    

    (a)           This
Agreement will commence on the Effective Date and will continue for three (3)
years from the Effective Date or until termination as provided
below.

    

    (b)           Either
party hereto may terminate this Agreement upon thirty (30) days prior written
notice to the other party.

    

    (c)           Consultant
may terminate this Agreement for material breach by the Company which is not
cured after fourteen (14) days written notice to the Company.

    

    (d)           Notwithstanding
anything herein to the contrary, the Company may terminate this Agreement
immediately and without prior notice if Consultant refuses to or is unable to
perform the Services, the Principal does not exclusively perform the Services on
behalf of Consultant, or is in breach of any material provision of this
Agreement.

    

    (e)           Upon
such termination all rights and duties of the parties toward each other shall
cease except:

    

    (i)           that
the Company shall be obliged to pay, within thirty (30) days of the effective
date of termination, all undisputed amounts owing to Consultant for Services
completed and accepted by the Company prior to the termination date and related
expenses, if any, in accordance with the provisions of Section 1, provided that if the
Company terminates this Agreement for any reason other than for Cause (as
defined below) thirty (30) days after the Effective Date:

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (A)
           Consultant
shall continue to receive the Monthly Fees for a period of three (3) months
based on the Monthly Fee paid to Consultant for the last month prior to
termination,

     

    (B)
           a number of
shares equal to twenty-five percent (25%) of the then unvested shares subject to
the First Stock Award and the Second Stock Award shall become vested and any
repurchase right on behalf of the Company shall lapse as to such shares,
and

    

    (C)
           in the event
Consultant is terminated within twelve (12) months of the effective date of an
application by the Company to list its common stock on a stock exchange, subject
to Board approval, the Company will grant Consultant a number of shares of the
Company’s common stock equal to the product of 1/24 of the Third Stock Award and
the number of full months from the date of Consultant’s termination and the
effective date of the application; provided, however, if the
listing occurs after twenty-four (24) months from the date of Consultant’s
termination pursuant to this paragraph, Consultant will no longer be eligible to
receive any of the Third Stock Award.

    

    (ii)           Consultant’s
entitlement to receive the payments and benefits described in Sections
8(e)(i)(A), 8(e)(i)(B) and 8(e)(i)(C) above is conditioned upon and subject to
Consultant’s execution of a full general release, releasing all claims, known or
unknown, that Consultant may have against the Company arising out of or any way
related to the relationship between the Company and Consultant or termination of
Consultant.

    

    (iii)           As
used herein, the term “Cause” shall mean (i)
Consultant’s engagement in any acts or omissions constituting gross negligence,
recklessness or willful misconduct with respect to performance of the Services;
(ii) material breach by Consultant of any term of this Agreement or any other
agreement between Consultant and the Company; (iii) Consultant’s conviction for
fraud, embezzlement or a felony or crime of moral turpitude; (iv) Consultant’s
failure to perform the Services due to the Principal’s mental or physical
disability; (v) Consultants’ willful engagement in conduct materially injurious
to the business interests of the Company or any of its subsidiaries or
affiliates; (vi) performance of the Services by someone other than the
Principal; or (vii) the Principal’s death.

     

    (iv)
           Sections 2, 3,
4, 5, 8 and 12 shall survive termination of this Agreement.

    

    9.           ASSIGNMENT.  Neither
this Agreement nor any right hereunder or interest herein may be assigned,
delegated or transferred by Consultant without the express written consent of
the Company.

    

    10.           INDEPENDENT
CONTRACTOR.  Nothing in this Agreement shall in any way be
construed to constitute Consultant as an agent, employee or representative of
the Company, but Consultant shall perform the Services hereunder as an
independent contractor. Consultant agrees to furnish (or reimburse the Company
for) all tools and materials necessary to accomplish this Agreement, and shall
incur all expenses associated with performance, except as provided herein.
Consultant acknowledges and agrees that Consultant is obligated to report as
income all compensation received by Consultant pursuant to this Agreement, and
Consultant agrees to and acknowledges the obligation to pay all self-employment
and other taxes thereon. Consultant further agrees to indemnify the Company and
hold it harmless to the extent of any obligation imposed on Company to pay in
withholding taxes or similar items.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    11.           EQUITABLE
RELIEF.  Consultant agrees that it would be impossible or
inadequate to measure and calculate the Company’s damages from any breach of the
covenants set forth in Sections 2, 3, 4, and 5 herein. Accordingly, Consultant
agrees that if Consultant breaches Sections 2, 3, 4, or 5, the Company will have
available, in addition to any other right or remedy available, the right to
obtain from any court of competent jurisdiction an injunction restraining such
breach or threatened breach and specific performance of any such provision.
Consultant further agrees that no bond or other security shall be required in
obtaining such equitable relief and Consultant hereby consents to the issuances
of such injunction and to the ordering of such specific
performance.

    

    12.           GOVERNING LAW; JURISDICTION;
ARBITRATION.  This Agreement shall be governed and construed
and enforced in accordance with the internal, substantive laws of the State of
New York, without giving effect to the conflict of law rules thereof; provided, however, that the
interpretation and enforcement of the arbitration provision set forth in this
Section shall be governed by the Federal Arbitration Act.  Any dispute or controversy between the Company and
Consultant, arising out of or relating to this Agreement, the breach of this
Agreement, or otherwise, shall be settled by binding arbitration in New York
City, New York administered by the American
Arbitration Association in accordance with
its Commercial Arbitration Rules then in
effect by a single arbitrator. Both the Company and Consultant shall be
precluded from bringing or raising in court or another forum any dispute that
was or could have been submitted to binding arbitration.  This
arbitration requirement does not apply to claims for any provisional or
injunctive relief remedies as set forth in any New York statute or
law.  The parties irrevocably agree to
submit to the jurisdiction of the federal and state courts within the County of
New York, New York for any injunctive relief and in connection with any suit
arising out of the confirmation or enforcement of any award rendered by the
arbitrator, and waive any defense based on forum non convenience or improper
venue with respect thereto.  

    

    No remedy conferred in this Agreement upon Consultant or
the Company is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law or in equity or by statute
or otherwise.

     

    THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
CONSULTANT’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
RELATING TO ALL ASPECTS OF CONSULTANT’S RELATIONSHIP WITH THE
COMPANY.

    

    13.           TAX ADVICE.  Consultant acknowledges
that Consultant has not relied and will not rely upon the Company or the
Company’s counsel with respect to any tax consequences related to the terms and
conditions of this Agreement.  Consultant assumes full responsibility
for all such consequences and for the preparation and filing of all tax returns
and elections which may or must be filed in connection with this
Agreement.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    14.           REPRESENTATION.  The
parties to this Agreement, and each of them, acknowledge, agree, and represent
that it: (a) has directly participated in the negotiation and preparation of
this Agreement; (b) has read the Agreement and has had the opportunity to
discuss it with counsel of its own choosing; (c) it is fully aware of the
contents and legal affect of this Agreement; (d) has authority to enter
into and sign the Agreement; and (e) enters into and signs the same by its
own free will.

    

    15.           ENTIRE AGREEMENT AND
AMENDMENTS.  This Agreement is the entire agreement of the
parties and supersedes any prior or contemporaneous agreements whether oral or
written between them with respect to the subject matter hereof. This Agreement
may be changed only if agreed to in writing by both parties.

    

    16.           COUNTERPARTS.  This
Agreement may be executed in one or more counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.

    

    17.           SEVERABILITY.  If
any provision of this Agreement is held to be unenforceable for any reason, such
provision shall be adjusted rather than voided, if possible, in order to achieve
the intent of the parties to the maximum extent possible.  In any
event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.

    

    18.           WAIVER. The waiver of any term
or condition contained in this Agreement by any party to this Agreement shall
not be construed as a waiver of a subsequent breach or failure of the same term
or condition or a waiver of any other term or condition contained in this
Agreement.

    

    [Signatures on following page]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN WITNESSETH WHEREOF, the undersigned have executed
this Agreement as of the date first above written.

            

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                COMPANY:

                                              
	 
      
	
                                                FAR
      EAST WIND POWER CORP.

                                              
	 
      
	
                                                By:
      

                                              	 
      
	 
      
	
                                                Name: Han Xiaoping

                                              
	 
      
	
                                                Title: President and Chief Executive
      Officer

                                              
	 
      
	
                                                CONSULTANT:

                                              
	 
      
	
                                                J
      CRANE & COMPANY LIMITED

                                              
	 
      
	
                                                By:

                                              	 
      
	 
      	 
      
	
                                                Name:

                                              	 
      
	 
      	 
      
	
                                                Title:

                                              	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    SERVICES

    

    
      	
              1) 
      

            	
              Ensure
      that filings with the United States Securities and Exchange Commission
      (“SEC”)
      are timely filed, complete and
accurate;

            

    

    
      	
              2) 
      

            	
              Represent
      the Company for any registration statements filed with the SEC, SEC
      inquiries or investigations;

            

    

    
      	
              3) 
      

            	
              Function
      as the Company’s primary representative with individual and institutional
      investors, be available for conference calls, on-site meetings, roadshows
      in the United States of America or Asia, and potentially
      elsewhere;

            

    

    
      	
              4) 
      

            	
              Develop,
      maintain and update all financial forecasts and models related to the
      Company’s operations and be able to explain and support all assumptions
      included within the financial forecasts and
  models;

            

    

    
      	
              5) 
      

            	
              Provide
      all translation services as deemed necessary for the Company to operate in
      China unless and until the Company’s total revenues or assets as reported
      in an SEC filing on Form 10-Q or 10-K exceed
  $50,000,000;

            

    

    
      	
              6) 
      

            	
              Provide
      additional accounting staff as needed, subject to additional compensation
      payable directly to the accounting staff or through an entity controlled
      by Consultant;

            

    

    
      	
              7) 
      

            	
              Maintain
      all financial records, and have all records available for delivery to
      investors, the Board or others as
needed;

            

    

    
      	
              8) 
      

            	
              Coordinate
      all financial presentations as requested for Board meetings, shareholder
      meetings; and

            

    

    
      	
              9) 
      

            	
              As
      necessary and by order of the Board, manage all communications and
      activities with the Company’s securities attorneys, auditors, stock
      transfer agent and investor relations
firm.

            

    

     

    
      
        
        

      

      
        EXHIBIT A

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
B

    

    LIST OF PRIOR
INVENTIONS

    AND ORIGINAL WORKS OF
AUTHORSHIP

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Title

                            	 	
                              Date

                            	 	
                              Identifying
      Number or Brief Description

                            
	 
      	 	 
      	 	 
      

                    

                  

                

              

            

          

        

      

    

    

    

    x    No
inventions or improvements

    

    o    Additional
Sheets Attached

    

    Signature
of Consultant:                                                         

    

    Print
Name of Consultant:                                                         

    

    Date:
June 24, 2010

     

    
      
        
          
            	
                    Acknowledged
      and agreed:

                  
	 
      
	
                    FAR
      EAST WIND POWER CORP.

                  
	 
      
	
                    By:

                  	 
      
	 
      
	
                    Name:
      Han Xiaoping

                  
	 
      
	
                    Title:
      President and Chief Executive Officer

                  
	 
      
	 
      
	
                    Date:
      June 24, 2010

                  

          

           

          
            
              
              

            

            
              Exhibit
B

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