Notice is hereby given that the Company has acquired 50% of the rights in land in the old city of Jaffa. The primary details of the transaction are as follows:
• The purchase price of half of the rights in the property before expenses is about NIS 27.4 M plus related expenses in the sum of approx. NIS 2 M.
• The property consists of a section of land covering approx. 5,000 m2 on which a building for conservation is constructed, known as "the French Hospital", covering approx. 2,500 m2. Pursuant to the applicable Zoning rights, buildings may be constructed on the land covering a total gross area of approx. 15,000 m2, for mixed usage of hotel and residential apartments plus an underground parking lot.
• The Company and its partners intend to construct on the property a prestige hotel, covering approx. 10,000 m2, with 130 rooms, and on the remaining area (approx. 5,000 m2), to construct up-market residential apartments for sale. The partners estimate that the project will be completed by the end of 2010.
• The total anticipated investment in the project is approx. $ 60 M (including the land component), and the Company's share is approx. $ 30 M, which will be financed from the Company's own resources and from loans from financial institutions.
• For the purpose of the management of the hotel a Letter of Intent (LOI) has been entered into with Starwood, one of the largest leading international companies for the management and maintenance of hotels, which manages hundreds of hotels worldwide under several brands, including W Hotels, Sheraton, Meridian, Westin, St. Regis, and more.
• The management agreement with Starwood, if and when signed, will be for a term of 30 years, with an option for extension by 10 additional years.
• The completion of the transaction is conditioned on the approval of the parties' authorized organs.