Strauss : AGM Summons 03.10.2017 - English

October 3, 2017

Messrs Messrs

The Israel Securities Authority Tel Aviv Stock Exchange Ltd. Via MAGNA Via MAGNA

Dear Sir/Madam:

Re: Immediate Report Regarding the Convening of an Annual General and Special Meeting of the Company

In accordance with the provisions of the Companies Law, 1999 (the "Companies Law"), the Securities Regulations (Periodic and Immediate Reports), 1970 (the "Reporting Regulations"), the Companies Regulations (Written Votes and Position Statements), 2005 (the "Voting Regulations"), the Securities Regulations (Transaction between a Company and a Controlling Shareholder Therein), 2001 (the "Controlling Shareholder Regulations") and the Companies Regulations (Notice and Announcement of General Meetings and Class Meetings in Publicly Owned Companies and Addition of an Item to the Agenda), 2000 (the "Notice and Announcement Regulations"), an Immediate Report is hereby given with regard to the convening of an Annual General and Special Meeting of the Shareholders of the Company, which shall be held on Wednesday, November 8, 2017 at 3:00 p.m. at the offices of the Company at 49 Hasivim Street, Petach Tikva (the "Meeting").

1. Items on the Agenda and Proposed Resolutions

2. Discussion of the Annual Financial Statements of the Company and the Board of Directors' Report for the year ended December 31, 2016, published by the Company on March 28, 2017 (reference no. 2017-01-025621) (the "2016 Periodic Report"), with no resolution being passed.

3. Reappointment of the auditor - in light of their experience and professionalism, reappoint KPMG Somekh Chaikin of 17 Ha'arba'a Street, Millennium Tower, Tel Aviv as the Company's auditors until the next Annual General Meeting; empower the Board of Directors of the Company to determine their fee for 2017 and report on their fee for 2016 (for information on the auditor's fee for 2016, see the Board of Directors' Report Regarding the Company's Business Position, which is attached to the 2016 Periodic Report).

   Proposed resolution: "Appoint KMPG Somekh Chaikin of 17 Ha'arba'a Street, Millennium Tower, Tel Aviv as the Company's auditors until the next Annual General Meeting, and empower the Board of Directors of the Company to determine their fee for 2017".

4. Reappointment of directors - reappoint Ms. Ofra Strauss, Arie Ovadia and Mr. David Mosevics, who are retiring by rotation in accordance with the provisions of the Articles of Association of the Company, as directors of the Company. The directors' terms and conditions of office shall remain unchanged, as set forth in section 2 of this report (subject to the amendment of the letter of undertaking of indemnification, as provided in the proposed resolution in section 1.5.1 of this convening report).

   Proposed resolution (to clarify, the vote with respect to each candidate for the office of director shall be held separately): "Reappoint Ms. Ofra Strauss, Arie Ovadia and Mr. David Mosevics, who are retiring by rotation in accordance with the provisions of the Articles of Association of the Company, as directors of the Company".

5. Amendment of the Articles of Association of the Company

6. Approve the amendment of Article 67.1 of the Articles of Association of the Company, such that notice of a General Meeting may be posted on the Company's website (in lieu of publication in two widely distributed daily newspapers, published in Israel in the Hebrew language, further to the amendment of the Notice and Announcement Regulations) and to change the word "announcement" to the word "advertisement" in Article 67.2 of the Articles of Association of the Company. The proposed versions of the amendments to the Articles of Association, with changes marked in relation to the current version, are attached as Annex "A" to this convening report.

   Proposed resolution: "Approve the amendment of Article 67.1 of the Articles of Association of the Company, in accordance with the version attached as Annex

   "A" to the report regarding the convening of the Meeting".

7. Amendment of letters of undertaking of indemnification

8. Amendment of the letters of undertaking of indemnification for directors and officers of the Company who are not among the controlling shareholders of the Company and their

   relatives - approve the amendment of the letters of undertaking of indemnification for directors and officers of the Company who are not among the controlling shareholders of the Company and their relatives, subject to the amendment of the Articles of Association of the Company as set forth in section 1.4.2 of the convening report. The proposed version of amendment to the undertaking of indemnification, with changes marked in relation to the current version, is attached as Annex "B " to this convening report.

   To clarify, said amendment shall not derogate from the validity of prior resolutions or undertakings by the Company for the indemnification of directors and officers of the Company.

   Proposed resolution: "Amend the letters of undertaking of indemnification that were given to directors and officers of the Company, who are not among the controlling shareholders of the Company and their relatives, in the form attached as Annex "B " to this convening report, subject to the approval of the amendment of the Articles of Association of the Company as set forth in section 1.4.2 of the report regarding the convening of the Meeting".

9. Amendment of the letters of undertaking of indemnification for directors and officers of the Company who are among the controlling shareholders of the Company and their relatives - subject to the amendment of the Articles of Association as set forth in section 1.4.2 of this convening report and to the amendment of the letters of undertaking of indemnification for directors and officers of the Company who are not among the controlling shareholders and their relatives as provided in the proposed resolution in section 1.5.1 of this convening report, approve the amendment of the letters of undertaking of indemnification for directors and officers of the Company who are among the controlling shareholders of the Company and their relatives, in the form and scope proposed for other directors and officers of the Company, as provided in the proposed resolution in section 1.5.1 of this convening report. For further information, see section 3 of this convening report.

   To clarify, said amendment shall not derogate from the validity of prior resolutions or undertakings by the Company for the indemnification of directors and officers of the Company, who are among the controlling shareholders of the Company and their relatives.

   Proposed resolution: "Subject to the amendment of the Articles of Association of the Company as set forth in section 1.4.2 of the convening report, amend the letters of undertaking of indemnification for directors and officers of the Company who are among the controlling shareholders of the Company and their relatives, in the identical form and scope to those proposed for other directors and

   officers of the Company, as provided in the proposed resolution in section 1.5.1 of the report regarding the convening of the Meeting".

10. Reappointment of Directors

11. Reappoint Ms. Ofra Strauss, Arie Ovadia and Mr. David Mosevics, who are retiring by rotation in accordance with the provisions of the Articles of Association of the Company, as directors of the Company.

12. To clarify, the directors' terms and conditions of office shall remain unchanged (subject to the amendment of the letter of undertaking of indemnification, as provided in the proposed resolution in section 1.5 of this convening report). The conditions of office and employment of Ms. Ofra Strauss (who is the controlling shareholder of the Company together with her father, Mr. Michael Strauss, (indirectly) through their holdings in Strauss Holdings Ltd. ("Strauss Holdings") and through a direct holding of the Company's shares by Mr. Michael Strauss) were approved by the shareholders of the Company at the meeting of September 26, 20161. For further information, see regulation 21 in the chapter "Additional Information on the Company" in the Company's 2016 Periodic Report, which is included herein by way of reference.

    The fee that shall be paid to Arie Ovadia and Mr. David Mosevics is in accordance with the compensation paid to external directors of the Company pursuant to the Companies Regulations (Rules Regarding Compensation and Expense Reimbursement of an External Director), 2000 (the "Compensation Regulations"), which is the maximum amount determined in the Compensation Regulations, with the compensation that shall be paid to directors who are candidates for reappointment being the compensation for expert directors. For further information, see regulation 21 in the chapter "Additional Information on the Company" in the Company's 2016 Periodic Report, which is included herein by way of reference.

13. For information required pursuant to Regulation 36B(10) of the Reporting Regulations with respect to the candidates for the office of director, see regulation 26 in the chapter "Additional Information on the Company" in the Company's 2016 Periodic Report, which is included herein by way of reference, and also the voting deed attached to this convening report.

14. The candidates for reelection to the Board of Directors of the Company have signed the required declarations pursuant to section 224B of the Companies Law, and they are attached as Annex "C" to this convening report.

15. To clarify, the vote with respect to each candidate for the office of director shall be held separately.

1 For information, see the Company's Immediate Report of September 27, 2016 (reference no. 2016-01-054906).