<SEC-DOCUMENT>0001144204-18-002974.txt : 20180122
<SEC-HEADER>0001144204-18-002974.hdr.sgml : 20180122
<ACCEPTANCE-DATETIME>20180122110040
ACCESSION NUMBER:		0001144204-18-002974
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20180122
FILED AS OF DATE:		20180122
DATE AS OF CHANGE:		20180122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MAGIC SOFTWARE ENTERPRISES LTD
		CENTRAL INDEX KEY:			0000876779
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				330477418
		STATE OF INCORPORATION:			L3
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19415
		FILM NUMBER:		18539071

	BUSINESS ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			60218
		BUSINESS PHONE:		97235389322

	MAIL ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			60218
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>tv483713_6k.htm
<DESCRIPTION>6-K
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM 6-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For the month of January 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">MAGIC SOFTWARE ENTERPRISES LTD.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Name of Registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">5 HaPlada Street, Or-Yehuda, Israel
6021805</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Address of Principal Executive Office)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><B>Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B>Form
20-F </B></FONT><B><FONT STYLE="font-family: Wingdings">x</FONT><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form
40-F </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 10pt"><B>Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): </B></FONT><B><FONT STYLE="font-family: Wingdings">&uml;</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-size: 10pt"><B>Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): </B></FONT><B><FONT STYLE="font-family: Wingdings">&uml;</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><B>Indicate by check mark whether by furnishing
the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Yes </B></FONT><B><FONT STYLE="font-family: Wingdings">&uml;</FONT><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
</FONT><FONT STYLE="font-family: Wingdings">x</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><B>If &ldquo;Yes&rdquo; is marked, indicate
below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><U>MAGIC SOFTWARE ENTERPRISES LTD.</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 50%"><FONT STYLE="font-size: 10pt">(Registrant)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">By</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">/s/Amit Birk</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Amit Birk</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">VP, General Counsel</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Date: January 22<SUP>nd</SUP> , 2018</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>EXHIBITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 15%"><FONT STYLE="font-size: 10pt">Exhibit 99.1</FONT></TD>
    <TD STYLE="width: 85%"><FONT STYLE="font-size: 10pt">Notice of and Proxy Statement for 2017 Annual General Meeting of Shareholders.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit 99.2</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Proxy Card</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in">&nbsp;</P>


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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>tv483713_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT 99.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MAGIC SOFTWARE ENTERPRISES LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">5 HaPlada Street, Or Yehuda 6021805, Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTICE OF 2017 ANNUAL GENERAL MEETING
OF SHAREHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>TO BE HELD ON FEBRUARY 28, 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Magic Software Enterprises Ltd. Shareholders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cordially invite
you to attend the 2017 Annual General Meeting of Shareholders of Magic Software Enterprises Ltd., or the Meeting, to be held at
2:00 p.m. (Israel time) on Wednesday, February 28, 2018, at our offices at 5 HaPlada Street, Or Yehuda 6021805, Israel. At the
Meeting, shareholders will be asked to adopt the following resolutions, as further detailed in the attached proxy statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">To elect three directors for terms expiring at our 2018 Annual General Meeting of Shareholders;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify">To re-elect Mr. Ron Ettlinger to serve as an external director (as such term is defined in the
Israeli Companies Law) for a second three-year term;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">To approve a revised compensation policy for our directors and officers;
</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">4.</TD><TD STYLE="text-align: justify">To approve the grant of indemnity and exculpation undertakings to directors and officers;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">5.</TD><TD STYLE="text-align: justify">To approve a directors and officers&rsquo; liability insurance policy;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">6.</TD><TD STYLE="text-align: justify">To approve a Services Agreement with a company affiliated with Guy Bernstein, the Company&rsquo;s
CEO, director and an affiliate of our controlling shareholder; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">7.</TD><TD STYLE="text-align: justify">To ratify and approve the re-appointment of Kost Forer Gabbay &amp; Kasierer, registered public
accounting firm, a member firm of Ernst &amp; Young Global, as our independent registered public accounting firm for the year ending
December 31, 2017 and to authorize our Board of Directors to delegate to the Audit Committee the authority to fix the compensation
for such independent registered public accountants in accordance with the volume and nature of their services.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, our auditor&rsquo;s
report and consolidated financial statements for the year ended December 31, 2016 will be reviewed and discussed at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Board of Directors
recommends that you vote in favor of all of the proposals, which are described in the attached Proxy Statement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shareholders of record
at the close of business on January 19, 2018 are entitled to notice of and to vote at the meeting. You can vote either by mailing
in your proxy or in person by attending the meeting. If voting by mail, the proxy must be received by our transfer agent or at
our registered office at least 72 hours prior to the time of the meeting to be validly included in the tally of ordinary shares
voted at the meeting. If you attend the meeting, you may vote in person and your proxy will not be used. Detailed proxy voting
instructions are provided both in the Proxy Statement and on the enclosed proxy card. Beneficial owners who hold their shares through
members of the Tel Aviv Stock Exchange (&ldquo;TASE&rdquo;) may either vote their shares in person at the Meeting by presenting a
certificate signed by a member of the TASE which complies with the Israel Companies Regulations (Proof of Ownership for Voting
in General Meetings)-2000 as proof of ownership of the shares, or send such certificate along with a duly executed proxy to the
Company at 5 HaPlada Street, Or Yehuda, 6021805, Israel, Attention: Corporate Secretary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 50%; text-align: justify">Sincerely,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Naamit Salomon</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chairman of the Board of Directors</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>MAGIC SOFTWARE ENTERPRISES LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">5 HaPlada Street, Or Yehuda 6021805, Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">+972-3-538-9480</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>PROXY STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This Proxy Statement
is being furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Magic Software Enterprises
Ltd. to be voted at the 2017 Annual General Meeting of Shareholders, or the Meeting, and at any adjournment thereof, pursuant to
the accompanying Notice of 2017 Annual General Meeting of Shareholders. The Meeting will be held at 2:00 p.m. (Israel time) on
Wednesday, February 28, 2018, at our offices at 5 HaPlada Street, Or Yehuda 6021805, Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This Proxy Statement,
the attached Notice of 2017 Annual General Meeting and the enclosed proxy card are being mailed to shareholders on or about January
24, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Purpose of the Annual General Meeting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Meeting, shareholders
will be asked to vote upon the following matters: (i) to elect three directors for terms expiring at our 2018 Annual General Meeting
of Shareholders; (ii) to re-elect Mr. Ron Ettlinger to serve as an external director (as such term is defined in the Israeli Companies
Law) for a second three-year term; (iii) to approve a revised compensation policy for our directors and officers; (iv) to approve
the grant of indemnity and exculpation undertakings to directors and officers; (v) to approve a directors and officers&rsquo; liability
insurance policy; (vi) to approve a Services Agreement with a company affiliated with Guy Bernstein, the Company&rsquo;s CEO, director
and an affiliate of our controlling shareholder; and (vii) to ratify and approve the re-appointment of Kost Forer Gabbay &amp;
Kasierer, registered public accounting firm, a member firm of Ernst &amp; Young Global, as our independent registered public accounting
firm for the year ending December 31, 2017 and to authorize our Board of Directors to delegate to the Audit Committee the authority
to fix the compensation for such independent registered public accountants in accordance with the volume and nature of their services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, our auditor&rsquo;s
report and consolidated financial statements for the year ended December 31, 2016 will be reviewed and discussed at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recommendation of the Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B>Our Board of Directors recommends a vote
FOR each of the nominees for director listed in this Proxy Statement and FOR all of the other proposals set forth in this Proxy
Statement. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proxy Procedure </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Only holders of record of our ordinary shares,
par value of NIS 0.1 per share, as of the close of business on January 19, 2018 are entitled to notice of, and to vote in person
or by proxy at the Meeting. As of January 19, 2018, the record date for determination of shareholders entitled to vote at the Meeting,
there were 44,488,578 outstanding ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Voting in Person</I></B>. If your shares are registered directly in your name with our transfer
agent (i.e. you are a &ldquo;registered shareholder&rdquo;), you may attend and vote in person at the Meeting. If you are a beneficial
owner of shares registered in the name of your broker, bank, trustee or nominee (i.e. your shares are held in &ldquo;street name&rdquo;),
you are also invited to attend the Meeting; however, to vote in person at the Meeting as a beneficial owner, you must first obtain
a &ldquo;legal proxy&rdquo; from your broker, bank, trustee or nominee authorizing you to do so.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Voting by Mail. </I></B>You may submit your proxy by mail by completing, signing and mailing
the enclosed proxy card in the enclosed, postage-paid envelope, or, for shares held in street name, by following the voting instructions
provided by your broker, bank trustee or nominee. If directions are not given or directions are not in accordance with the options
listed on a proxy card, such shares will be voted FOR the nominees for director and each proposal for which the Board of Directors
recommends a vote FOR.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><B><I>Voting Electronically</I></B>. Shareholders in &ldquo;Street Name&rdquo; whose shares are
held through Members of the TASE may also vote their shares electronically via the electronic voting system of the Israel Securities
Authority, which vote shall be cast no later than February 28, 2018 at 8:00 a.m. Israeli time (6 hours before the Meeting time).
You may receive guidance on the use of the electronic voting system from the TASE member through which you hold your shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If voting by virtue of a &ldquo;legal proxy&rdquo;
or by mail, the proxy must be received by our transfer agent or at our registered office in Israel at least 72 hours prior to the
designated time for the Meeting to be validly included in the tally of ordinary shares voted at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Change or Revocation of Proxy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you are a registered
shareholder, you may change your vote at any time prior to the exercise of authority granted in the proxy by delivering a written
notice of revocation to our Corporate Secretary, by granting a new proxy bearing a later date, or by attending the Meeting and
voting in person. Attendance at the Meeting will not cause your previously granted proxy to be revoked unless you specifically
so request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If your shares are
held in &ldquo;Street Name&rdquo;, you may change your vote by submitting new voting instructions to your broker, bank, trustee
or nominee or, if you have obtained a legal proxy from your broker, bank, trustee or nominee giving you the right to vote your
shares, by attending the Meeting and voting in person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Position Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shareholders are permitted
to express their position on the proposals to be voted on at the Meeting by submitting a written statement, through the company,
to the other shareholders (a &ldquo;Position Statement&rdquo;). Position Statements should be submitted to our company at our registered
offices. Any Position Statement received will be furnished to the SEC on Form 6-K and will be made available to the public on the
SEC&rsquo;s website at&nbsp;http://www.sec.gov, and in addition at&nbsp;http://www.magna.isa.gov.il&nbsp;or&nbsp;http://maya.tase.co.il.
Position Statements should be submitted no later than February 18, 2018. A shareholder is entitled to contact us directly and receive
the text of the proxy card and any Position Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Quorum</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A quorum of shareholders is necessary to
transact business at the Meeting. The presence of two shareholders, holding at least one-third of our voting rights, represented
in person or by proxy at the Meeting, will constitute a quorum. If there is not a legal quorum within half an hour of the scheduled
time of the Meeting, the Meeting will be adjourned to the same day in the following week at the same time and place or to any other
time and place as the chairman of the board of directors may determine with the consent of a majority of the voting power represented
at the Meeting, in person or by proxy, and voting on the question of adjournment. At the reconvened Meeting, the presence of at
least two shareholders, represented in person or by proxy, will constitute a quorum. This notice shall serve as notice of such
reconvened meeting if no quorum is present at the original date and time and no further notice of the reconvened meeting will be
given to shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Abstentions and broker non-votes will be
counted towards the quorum. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted
with respect to a particular proposal because (i)&nbsp;the broker has not received voting instructions from the beneficial owner
and (ii)&nbsp;the broker lacks discretionary voting power to vote such shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unsigned or unreturned proxies, including
those not returned by banks, brokers, or other record holders, will not be counted for quorum or voting purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Majority Vote Standard</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each ordinary share
entitles the holder to one vote. An affirmative vote of the holders of a majority of the ordinary shares represented at the Meeting,
in person or by proxy, entitled to vote and voting thereon, is required to approve each of the proposals, unless otherwise stated
in the proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In tabulating the voting
results for any particular proposal, shares that constitute broker non-votes and abstentions are not considered votes cast on that
proposal. Thus, broker non-votes will not affect the outcome of any of the matters being voted on at the Annual Meeting. Unsigned
or unreturned proxies, including those not returned by banks, brokers, or other record holders, will not be counted for voting
purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have received indications
from our principal shareholder, Formula Systems (1985) Ltd., or Formula Systems, which holds approximately 47.12% of our issued
and outstanding ordinary shares, that it presently intends to vote for all of the nominees for director and in favor of all of
the other proposals to be acted upon at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of Soliciting Votes for the Annual
Meeting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will bear the cost
of soliciting proxies from our shareholders. Proxies will be solicited by mail and may also be solicited in person, by telephone
or electronic communication, by our directors, officers and employees. We will reimburse brokerage houses and other custodians,
nominees and fiduciaries for their expenses in accordance with the regulations of the Securities and Exchange Commission, or the
SEC, concerning the sending of proxies and proxy material to the beneficial owners of our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Voting Results of the Annual General
Meeting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will publish the
final results in a Form 6-K filed with the SEC promptly following the Meeting. You may obtain a copy of the Form 6-K by reviewing
our SEC filings through the SEC&rsquo;s EDGAR filing system at&nbsp;www.sec.gov&nbsp;or through the Tel-Aviv Stock Exchange filings
at&nbsp;www.tase.co.il&nbsp;or through the Tel-Aviv Stock Exchange filings at http://www.magna.isa.gov.il/.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B>Security Ownership
of Certain Beneficial Owners and Management</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth certain information as of January 19, 2018 regarding the beneficial ownership by (i) all shareholders known to us to
beneficially own 5% or more of our outstanding ordinary shares, (ii) each director and executive officer; and (iii) all directors
and executive officers as a group:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid"><B>Name</B></TD><TD><B>&nbsp;</B></TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><B>Number of<BR> Ordinary Shares<BR> Beneficially
    Owned <SUP>(1)</SUP></B></TD><TD STYLE="padding-bottom: 1pt"><B>&nbsp;</B></TD><TD STYLE="border-bottom: Black 1pt solid"><B>&nbsp;</B></TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="background-color: white"><B>Percentage
    of </B></FONT><B><BR> <FONT STYLE="background-color: white">Ownership <SUP>(2)</SUP></FONT></B></TD><TD STYLE="padding-bottom: 1pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 54%; text-align: justify">Asseco Poland S.A. <SUP>(3)</SUP></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: right">20,962,734</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: right">47.12</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Formula Systems (1985) Ltd. <SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,962,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47.12</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">The Phoenix Holding Ltd. <SUP>(4)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,851,393</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.41</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Clal Insurance Enterprises Holdings Ltd <SUP>(5)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,276,349</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.12</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Yelin Lapidot<SUP>(6)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,224,321</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.00</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Guy Bernstein</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Asaf Berenstin <SUP>(7)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Udi Ertel <SUP>(8)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Ron Ettlinger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Naamit Salomon<SUP>(9)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Sagi Schliesser</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -1.5pt; padding-left: 1.5pt">Yehezkel Zeira</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -1.5pt; padding-left: 1.5pt">Amit Birk<SUP>(10)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">129,062</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -1.5pt; padding-left: 1.5pt">Arik Faingold</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -1.5pt; padding-left: 1.5pt">Yuval Baruch</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -1.5pt; padding-left: 1.5pt">Arik Kilman</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -1.5pt; padding-left: 1.5pt">Yakov Tsaroya<SUP>(10)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -1.5pt; padding-left: 1.5pt">All directors and executive officers as a <BR> group (12 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417,562</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">* Less than 1%</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">Beneficial ownership is determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect to securities. Ordinary shares relating to options currently
exercisable or exercisable within 60 days of the date of this table are deemed outstanding for computing the percentage of the
person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated
by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and
investment power with respect to all shares shown as beneficially owned by them.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.7pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.7pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">The percentages shown are based on 44,488,578 ordinary shares issued and outstanding as of January
19, 2018.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.7pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">Asseco owned 26.31% of the outstanding shares of Formula Systems based on the Schedule 13D filed
by Asseco with the SEC on October 19, 2017. As such, Asseco may be deemed to be the beneficial owner of the aggregate 20,962,734
ordinary shares held directly by Formula Systems. Guy Bernstein, who is the CEO of Formula Systems, owns 13.4% of the outstanding
shares of Formula Systems. In addition, both Guy Bernstein and Asseco reported on October 11, 2017, that they entered into a shareholders&rsquo;
voting agreement that covers all the ordinary shares of Formula Systems beneficially owned by them. Under the shareholders&rsquo;
voting agreement, Guy Bernstein and&nbsp; Asseco appointed a proxy granting him an irrevocable power of attorney to vote on behalf
of each other in respect of all ordinary shares held by them. The initial proxy under the shareholders voting agreement is Mr.
Marek Panek. The address of Formula Systems is 5 HaPlada Street, Or-Yehuda, Israel. The address of Asseco is 35-322 Rzeszow, ul.
Olchowa 14, Poland.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.7pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">Based on a Schedule 13G filed by The Phoenix Holding Ltd. and Delek Group Ltd. with the SEC on
August 17, 2017. The Phoenix Holding Ltd. is a majority-owned subsidiary of Delek Group Ltd.&nbsp; The majority of Delek Group
Ltd.&rsquo;s outstanding share capital and voting rights are owned, directly and indirectly, by Itshak Sharon (Tshuva) through private
companies wholly-owned by him. The address of Itshak Sharon (Tshuva) and Delek Investments and Properties Ltd. is 7 Giborei Israel
Street, P.O.B. 8464, Netanya, 42504, Israel. The address of the Phoenix Holding Ltd. is Derech Hashalom 53, Givataim, 53454, Israel.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.7pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">Based on a Schedule 13G filed by Clal Insurance Enterprises Holdings Ltd. with the SEC on January
1, 2018. Their address is 36 Raul Wallenberg St., Tel Aviv 66180, Israel.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -33.75pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%; text-align: justify"></TD><TD STYLE="width: 0.5in; text-align: justify">(6)</TD><TD STYLE="text-align: justify">Based on a Schedule 13G filed by Dov Yelin, Yair Lapidot and Yelin Lapidot Holdings Management Ltd. with the SEC on July 11,
2017. Their address is 50 Dizengoff St., Dizengoff Center, Gate 3, Top Tower, 13th floor, Tel Aviv 64332, Israel.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -33.75pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%; text-align: justify"></TD><TD STYLE="width: 0.5in; text-align: justify">(7)</TD><TD STYLE="text-align: justify">Includes 70,000 currently exercisable options granted under our 2007 Stock Option Plan, having an exercise price ranging from
$0.73 to $3.61 per share that expire in 2021 at the latest.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -34.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%; text-align: justify"></TD><TD STYLE="width: 0.5in; text-align: justify">(8)</TD><TD STYLE="text-align: justify">Currently exercisable options granted under our 2007 Stock Option Plan, having an exercise price of $5.70 per share, with expiration
dates through 2023.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -34.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%; text-align: justify"></TD><TD STYLE="width: 0.5in; text-align: justify">(9)</TD><TD STYLE="text-align: justify">Includes 6,000 currently exercisable options granted under our 2007 Stock Option Plan, having an exercise price of $1.87 per
share, with expiration dates through 2020.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -34.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%; text-align: justify"></TD><TD STYLE="width: 0.5in; text-align: justify">(10)</TD><TD STYLE="text-align: justify">Includes 30,000 currently exercisable options granted under our 2007 Stock Option Plan, having an exercise price of $3.61 per
share that expire in 2021.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -34.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%; text-align: justify"></TD><TD STYLE="width: 0.5in; text-align: justify">(11)</TD><TD STYLE="text-align: justify">Includes 40,000 currently exercisable options granted under our 2007 Stock Option Plan, having an exercise price of $1.87 per
share, with expiration dates through 2020.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -33.75pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Terms of Service and Employment of Executive Officers and
Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For information relating
to the compensation of our five most highly compensated office holders during or with respect to the year ended December 31, 2016,
please see &ldquo;Item 6. Directors, Senior Management and Employees &ndash; B. Compensation&rdquo; in our Annual Report on Form
20-F for the year ended December 31, 2016, which was filed with the SEC on April 27, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.4in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ELECTION
OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 1 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our articles of association
provide for a board of directors consisting of no less than three and no more than 11 members or such other number as may be determined
from time to time at a general meeting of shareholders. Our board of directors is currently composed of three directors, and two
external directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to our articles
of association, our directors, who are not external directors, are elected at our annual general meetings of shareholders, which
are required to be held at least once during every calendar year and not more than 15 months after the last preceding meeting.
Except for our external directors (as described below), our directors are elected by a vote of the holders of a majority of the
voting power represented and voting at such meeting and hold office until the next annual meeting of shareholders following the
annual meeting at which they were appointed. Directors (other than external directors) may be removed earlier from office by resolution
passed at a general meeting of our shareholders. Our board of directors may temporarily fill vacancies on the board until the next
annual meeting of shareholders, provided that the total number of directors does not exceed the maximum number permitted under
our articles of association.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are exempt from
the NASDAQ Stock Market Rules&rsquo; requirement regarding the process for the nomination of directors; instead, we follow Israeli
law and practice in accordance with which directors are elected by the shareholders, unless otherwise provided in a company&rsquo;s
articles of association. Our articles of association do not provide otherwise. Our practice has been that our director nominees
are presented in our&nbsp;proxy statement&nbsp;for election at our annual meetings of shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Meeting, shareholders
are being asked to elect three directors, who are not external directors, to hold office until our 2018 Annual General Meeting
of Shareholders and until their successors are elected and qualified. Two of the nominees, Mr. Guy Bernstein and Ms. Naamit Salomon,
are current directors who were elected to serve in such capacity by our shareholders at our 2016 Annual General Meeting of Shareholders.
Mr. Avi Zakay is a nominee for the first time. Mr. Yehezkel Zeira, a current director, is not standing for re-election.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As required by Israeli
law, each of the director nominees named above has declared in writing that: (i) he or she possess the requisite skills and expertise,
as well as sufficient time, to perform his/her duties as a director of our company; (ii) he or she has not been convicted by a
conclusive judgment for one of the following offenses less than five years prior to the date of the declaration: (a) an offense
under Sections 290 to 297, 392, 415, 418 to 420 and 422 -428 of the Penal Law, 5737-1977, or under Sections 52C, 52D, 53(a) or
54 of the Israeli Securities Law, 5728-1968; (b) by a court outside Israel for bribery, deceit, an offense by a manager of a corporate
body or an offense involving misuse of inside information; and (c) for any other offense in respect of which a court holds that,
due to the substance, gravity or circumstances of such offense, such person is not fit to serve as director in a public company;
(iii) he or she is not subject to a court or committee decision in an administrative enforcement proceeding pursuant to Section
226A of the Israeli Companies Law that prohibits him or her from serving as a director; and (iv) he or she has not been declared
bankrupt or incompetent. Such declarations are available for review at our registered office.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If elected at the Meeting,
we will pay each of Ms. Salomon and Mr. Zakay compensation in the amount equal to the amount paid to our external directors, as
provided in the regulations adopted under the Israeli Companies Law. Mr. Bernstein does not receive any compensation for his role
as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Set forth below is information about each
nominee, including age, position(s) held with our company, principal occupation, business history and other directorships held.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Guy Bernstein
(49)</I></B> has served as our chief executive officer since April 2010 and has served as a director of our company since January
2007 and served as the chairman of our board of directors from April 2008 to April 2010. Mr. Bernstein has served as the chief
executive officer of Formula Systems, our parent company, since January 2008. From December 2006 to November 2010, Mr. Bernstein
served as a director and the chief executive officer of Emblaze Ltd. or Emblaze, our former controlling shareholder. Mr. Bernstein
also serves as the chairman of the board of directors of Sapiens International Corporation N.V., or Sapiens, and is the chairman
of the board of directors of Matrix IT Ltd., both of which are subsidiaries of Formula Systems. From April 2004 to December 2006,
Mr. Bernstein served as the chief financial officer of Emblaze and he has served as a director of Emblaze since April 2004. Prior
to that and from 1999, Mr. Bernstein served as our chief financial and operations officer. Prior to joining our company, Mr. Bernstein
was a senior manager at Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global, from 1994 to 1997. Mr. Bernstein
holds a B.A. degree in accounting and economics from Tel Aviv University and is a certified public accountant (CPA) in Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Naamit Salomon
(53)&nbsp;</I></B>has served as a director of our company since March 2003. Since January 2010, Ms. Salomon has been a partner
in an investment company. Ms. Salomon also serves as a director of Sapiens, which is part of the Formula group. Ms. Salomon served
as the chief financial officer of Formula Systems from August 1997 until December 2009. From 1990 through August 1997, Ms. Salomon
served as the controller of two large privately held companies in the Formula group. Ms. Salomon holds a B.A. degree in Economics
and Business Administration from Ben Gurion University and an LL.M. degree from Bar-Ilan University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Avi Zakay (39)</I></B>
<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;has served as the sales manager of the Volkswagen dealership and
showroom in Rishon Letzion (Champion Motors) since 2014. In 2013 he served as the sales manager of the showroom of Mitsubishi&nbsp;Motors
in Netanya, and from 2007 to 2013, he served as a sales manager of BMW and Mercedes-Benz in Tel Aviv. Mr. </FONT>Zakay <FONT STYLE="font-family: Times New Roman, Times, Serif">holds
a B.A. degree in Business Administration and studied for an M.B.A. degree, both from Michlala Le-minhal&nbsp;College in&nbsp;Tel-Aviv.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For details about beneficial
ownership of our shares held by any of these nominees, see above under the title &ldquo;Security Ownership of Certain Beneficial
Owners and Management.&rdquo; We are not aware of any reason why any of the nominees, if elected, would be unable or unwilling
to serve as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Board of Directors
recommends a vote FOR the election of each of the nominees named above.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, the affirmative vote of the holders of a majority of the ordinary shares represented at the Meeting, in person or by proxy,
entitled to vote and voting on the matter, is required to elect as directors the nominees named above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEPENDENT DIRECTORS; BOARD COMMITTEES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the Israeli
Companies Law and our Articles of Association, the management of our business is vested in our board of directors. The board of
directors may exercise all powers and may take all actions that are not specifically granted to our shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, our board of directors is required to determine the minimum number of directors who must have &ldquo;accounting and financial
expertise&rdquo; (as such term is defined in regulations promulgated under the Israeli Companies Law). In determining such number,
the board of directors must consider, among other things, the type and size of the company and the scope of and complexity of its
operations. Our board of directors has determined that at least one director must have &ldquo;accounting and financial expertise,&rdquo;
within the meaning of the regulations promulgated under the Israeli Companies Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Independent Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Independent Directors</I>.
NASDAQ Stock Market Rules require us to establish an audit committee comprised of at least three members and only of independent
directors each of whom satisfies the respective &ldquo;independence&rdquo; requirements of the SEC and NASDAQ.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Israeli
Companies Law, a director may be qualified as an independent director if such director is either (i) an outside director; or (ii)
a director that serves as a board member less than nine years and the audit committee has approved that he or she meets the independence
requirements of an outside director. A majority of the members serving on the audit committee must be independent under the Israeli
Companies Law. In addition, an Israeli company whose shares are publicly traded may elect to adopt a provision in its articles
of association pursuant to which a majority of its board of directors will constitute individuals complying with certain independence
criteria prescribed by the Israeli Companies Law. Pursuant to Israeli regulations adopted in January 2011, directors who comply
with the independence requirements of NASDAQ and the SEC are deemed to comply with the independence requirements of the Israeli
Companies Law. We have not included such a provision in our articles of association.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our board of directors
has determined that both Mr. Ettlinger and Mr. Schliesser qualify as independent directors under the SEC and NASDAQ requirements
and as external directors under the Israeli Companies Law requirements. Our board of directors has further determined that Mr.
Zakay, a nominee, if elected, will qualify as an independent director under the SEC, NASDAQ and Israeli Companies Law requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We provided NASDAQ
with a notice of non-compliance with respect to the NASDAQ requirement that independent directors have regularly scheduled meetings
at which only independent directors are present. Instead, we follow Israel law and practice, under which independent directors
are not required to hold executive sessions. In compliance with NASDAQ Stock Market Rule&nbsp;5605(e)(1)(A),&nbsp;our independent
directors take a vote in which only independent directors participate with respect to the recommendation for election of the nominees
by approving the&nbsp;proxy statement&nbsp;draft and the recommendation to elect the directors before the&nbsp;proxy statement&nbsp;is
filed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Committees of the Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Audit Committee</I>.
Our audit committee, established in accordance with Sections 114-117 of the Israeli Companies Law and Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, assists our board of directors in overseeing the accounting and financial reporting processes
of our company and audits of our financial statements, including the integrity of our financial statements, compliance with legal
and regulatory requirements, our independent public accountants&rsquo; qualifications and independence, the performance of our
internal audit function and independent public accountants, finding any irregularities in the business management of our company
for which purpose the audit committee may consult with our independent auditors and internal auditor, proposing to the board of
directors ways to correct such irregularities and such other duties as may be directed by our board of directors. The responsibilities
of the audit committee also include approving related-party transactions as required by law. Under Israeli law, an audit committee
may not approve an action or a transaction with a controlling shareholder, or with an office holder, unless at the time of approval
two external directors are serving as members of the audit committee and at least one of the external directors was present at
the meeting in which an approval was granted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our audit committee
also serves as our Financial Statement Review Committee, as defined in regulations promulgated under the Israeli Companies Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our audit committee
is currently composed of Messrs. Ettlinger, Schliesser and Zeira (who will be replaced by Mr. Zakay), each of whom satisfies the
respective &ldquo;independence&rdquo; requirements of the SEC and NASDAQ. We also comply with Israeli law requirements for audit
committee members. Our board of directors has determined that Mr. Ettlinger qualifies as a financial expert. The audit committee
meets at least once each quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Compensation Committee.&nbsp;</I>In
accordance with the Israeli Companies Law, we have a compensation committee, whose role is to: (i) recommend a compensation policy
for office holders and to recommend to the board, once every three years, on the approval of the continued validity of the compensation
policy that was determined for a period exceeding three years; (ii) recommend an update the compensation policy from time to time
and to examine its implementation; (iii) determine whether to approve the terms of service and employment of office holders that
require the committee&rsquo;s approval; and (iv) exempt a transaction from the requirement of shareholders&rsquo; approval in accordance
with the provisions of the Israeli companies Law. The compensation committee also has oversight authority over the actual terms
of employment of directors and officers and may make recommendations to the board of directors and the shareholders (where applicable)
with respect to deviation from the compensation policy that was adopted by the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
the Israeli Companies Law, a compensation committee must consist of no less than three members, including all of the external directors
(who must constitute a majority of the members of the committee), and the remainder of the members of the compensation committee
must be directors whose terms of service and employment were determined pursuant to the applicable regulations. The same restrictions
on the actions and membership in the audit committee as discussed above under &ldquo;Audit Committee,&rdquo; including the requirement
that an external director serve as the chairman of the committee and the list of persons who may not serve on the committee, also
apply to the compensation committee. We have established a compensation committee that is currently composed of our external directors,
Messrs. Ettlinger, Schliesser and Zeira (who will be replaced by Mr. Zakay).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Our
Compensation Policy was formulated and will be periodically reevaluated in accordance with the following considerations: (i) the
advancement of the company&rsquo;s goals, its work plan and its policy with a long term view; and (ii) the creation of appropriate
incentives for the office holders of the company, considering, among other things, the risk management policy of the company; the
size of the company and the nature of its operations; and(iii) in connection with the terms of service and employment that include
variable components &ndash; the contribution of the office holder to the achievement of the company&rsquo;s goal and to the maximization
of its profits, all with a long term view and in accordance with the position of the office holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>II.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RE-ELECTION
OF AN EXTERNAL DIRECTOR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 2 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, Israeli companies whose shares have been offered to the public are required to appoint at least two external directors. &nbsp;The
Israeli Companies Law provides that a person may not be appointed as an external director if (i) the person is a relative of a
controlling shareholder; (ii) the person, or the person&rsquo;s relative, partner, employer or an entity under that person&rsquo;s
control, has or had during the two years preceding the date of appointment any affiliation (as such term is defined in the Israeli
Companies Law) with the company, or the controlling shareholder or at the date of appointment to a relative of the controlling
shareholder or to another corporation; (iii) in a company that does not have a controlling shareholder or a shareholder holding
a controlling block &ndash; also an affiliation, at the date of appointment, to the chairman of the board of directors, the chief
executive officer, a substantial shareholder or the most senior financial officer &nbsp;and (iv) if such person&rsquo;s relative,
partner, employer, supervisor, or an entity he controls, has other than negligible business or professional relations with any
of the persons with whom the external director himself may not be affiliated. &nbsp;The term &ldquo;relative&rdquo; means a spouse,
sibling, parent, grandparent and child, and child, sibling or parent of a spouse or the spouse of any of the foregoing. &nbsp;The
term &ldquo;affiliation&rdquo; includes an employment relationship, a business or professional relationship maintained on a regular
basis, control and service as an office holder (excluding service as an external director of a company that is offering its shares
to the public for the first time). &nbsp;In addition, no person may serve as an external director if the person&rsquo;s position
or other activities create or may create a conflict of interest with the person&rsquo;s responsibilities as director or may otherwise
interfere with the person&rsquo;s ability to serve as director. &nbsp;If, at the time an external director is appointed all members
of the board of directors who are not controlling shareholders or their relatives, are of the same gender, then that external director
must be of the other gender. &nbsp;A director of one company may not be appointed as an external director of another company if
a director of the other company is acting as an external director of the first company at such time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At least one of the
external directors must have &ldquo;accounting and financial expertise&rdquo; and the other external directors must have &ldquo;professional
qualifications,&rdquo; as such terms are defined by regulations promulgated under the Israeli Companies Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each committee of the
board of directors must include at least one external director and the audit committee must be comprised of at least three directors
and include all the external directors. An external director is entitled to compensation as provided in regulations adopted under
the Israeli Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection
with such service. Until the lapse of two years from termination of office, we may not engage an external director to serve as
an office holder and cannot employ or receive services from that person, either directly or indirectly, including through a corporation
controlled by that person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our current external
directors are Mr. Ron Ettlinger and Mr. Sagi Schliesser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">External directors
are elected by shareholders. &nbsp;External directors serve for a three-year term, which may be renewed for two additional three-year
periods through one of the following mechanisms: (i) the board of directors proposed the nominee and his appointment was approved
by the shareholders in the manner required to appoint external directors for their initial term (described above); or (ii) one
or more shareholders holding 1% or more of the voting rights proposed the nominee, and the nominee is approved by the majority
set forth above. &nbsp;External directors can be removed from office only by the same special percentage of shareholders as can
elect them, or by a court, and then only if the external directors cease to meet the statutory qualifications with respect to their
appointment or if they violate their duty of loyalty to the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Ettlinger was initially
elected to serve as an external director at our 2014 annual general meeting of shareholders. He is standing for re-election for
a second three-years&rsquo; term at this Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
has determined that Mr. Schliesser and Mr. Ettlinger both qualify as external directors under the Israeli Companies Law requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As required by Israeli
law, Mr. Ettlinger has declared in writing that: (i) he meets the requirements of an external director; (ii) he possess the requisite
skills and expertise, as well as sufficient time, to perform his duties as a director of our company; (iii) he was not convicted
by a conclusive judgment: (a) for an offense under Sections 290 to 297, 392, 415, 418 to 420 or 422 of the Penal Law, 5737-1977,
or under Sections 52C, 52D, 53(a) or 54 of the Israeli Securities Law, 5728-1968; (b) by a court outside Israel for bribery, deceit,
an offense by &nbsp;a manager of a corporate body or an offense involving misuse of inside information; (c) for any other offense
in respect of which a court holds that, due to the substance, gravity or circumstances of such offense, such person is not fit
to serve as director in a public company; (iv) he is not subject to a court or committee decision in an administrative enforcement
proceeding pursuant to Section 226A of the Israeli Companies Law that prohibits him from serving as a director; &nbsp;(v) he has
not been declared bankrupt or incompetent; and (vi) he possesses accounting and financial expertise. &nbsp;Such declaration is
available for review at our registered office.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are not aware of
any reason why the nominee, if re-elected, would be unable or unwilling to serve as an external director. &nbsp;In the event that
the named nominee for external director would be unable to serve, the proxies will be voted for the election of such other person
as shall be nominated by our Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Set forth below are
brief biographies of our external directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Nominee for Re-Election as an External Director</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Ron Ettlinger&nbsp;(50)
</I></B>has served as an external director of our company since December 2014 and is a member of our audit committee. Mr. Ettlinger
is the founder and has been the chief executive officer of &ldquo;Nippon Europe Israel Ltd.,&rdquo; a leading provider of car multimedia
advanced systems, since October 2000. Prior to that, Mr. Ettlinger was the owner and general manager of Universal Ltd., a car service.
Mr. Ettlinger is the founder and since July 2014 has served as chief executive officer of Nippon Lights Ltd., a leading provider
of LED lights and panels. Mr. Ettlinger holds a B.A. degree in Business, with a major in finance and marketing from Tel-Aviv College
of Management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>External Director Continuing to Serve</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Sagi Schliesser&nbsp;(45)
</I></B>has served as an external director of our company since November 2015 and is a member of our audit committee. Mr. Schliesser
is the co-founder and has been the chief executive officer of TabTale, a creator of innovative games, interactive books and educational
apps since 2010. Prior to founding TabTale, Mr. Schliesser was the CTO of Sapiens International Corporation (NASDAQ and TASE: SPNS),
managing Sapiens Technologies. Previously Mr. Schliesser served for seven years as VP of R&amp;D and CTO of IDIT Technologies Ltd.,
a global provider of insurance software solutions. Before that, Mr. Schliesser was one of the founders of WWCOM, a B2B enablement
software startup.&nbsp;Mr. Schliesser holds a B.Sc.&nbsp;degree with honors in Computer Science and Psychology from Tel Aviv University,
as well as a Master&rsquo;s degree in Computer Science from the Interdisciplinary Center in Herzliya&nbsp; and an M.B.A. degree
with honors in Business Psychology from Hamaslool Ha&rsquo;akademi Shel Hamichlala Leminhal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The re-election of
Mr. Ettlinger<B><I>&nbsp;</I></B> for external director requires the affirmative vote of (i) the majority of the votes actually
cast with respect to such proposal including at least a majority of the voting power of the non-controlling shareholders (as such
term is defined in the Israel Securities Law, 1968) or those shareholders who do not have a personal interest in approval of the
nomination except for a personal interest that is not as a result of the shareholder&rsquo;s connections with the controlling shareholder,
who are present in person or by proxy and vote on such proposal, or (ii) the majority of the votes cast on such proposal at the
meeting, provided that the total votes cast in opposition to such proposal by the non-controlling shareholders or those shareholders
who have a personal interest in approval of the nomination except for a personal interest that is not as a result of the shareholder&rsquo;s
connections with the controlling shareholder (as such term is defined in the Israel Securities Law, 1968) does not exceed 2% of
all the voting power in the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Board of Directors recommends a vote FOR the re-election
of Ron Ettlinger&nbsp; for external director.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>III.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;APPROVAL
OF A COMPENSATION POLICY FOR OUR DIRECTORS AND OFFICERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 3 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Background</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">According
to the Israeli Companies Law, a public company must adopt a compensation policy, recommended by the compensation committee and
approved by the board of directors and the shareholders, in that order. In general, all office holders&rsquo; terms of compensation -
including fixed remuneration, bonuses, equity compensation, retirement or termination payments, indemnification, liability insurance
and the grant of an exemption from liability - must comply with the company&rsquo;s compensation policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">In
addition, the compensation terms of directors, the chief executive officer, and any employee or service provider who is considered
a controlling shareholder, generally must be approved separately by the compensation committee, the board of directors and the
shareholders of the company (by a special majority), in that order.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white">The
compensation terms of other officers require the approval of the compensation committee and the board of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
compensation policy must comply with specified criteria and guidelines and, in general, will be determined, among others, according
to the following factors: (i) promoting the company&rsquo;s objectives, business plan and long term policy; (ii) creating appropriate
incentives for the company&rsquo;s office holders, considering, among others, the company&rsquo;s risk management policy; (iii) the company&rsquo;s
size and nature of operations; and (iv) with respect to variable elements of compensation, the office holder&rsquo;s contribution to
achieving corporate objectives and increasing profits, with a long-term view and in accordance with the office holder&rsquo;s position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">A
compensation policy must be re-approved once every three years. The board of directors is required to reevaluate the compensation
policy from time to time, and upon any material change to the circumstances that existed at the time of its formulation. Our initial
compensation policy was approved by our compensation committee and board of directors and subsequently approved by our shareholders
on December 22, 2014.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">Our
Board of Directors approved, following the recommendation of our Compensation Committee, a revised Compensation Policy for Executive
Officers and Directors (the &ldquo;Compensation Policy&rdquo;), attached hereto as&nbsp;<B><U>Exhibit A</U></B>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">In
approving the Compensation Policy, our Compensation Committee and Board of Directors considered various factors, including, among
others, the factors set forth in the Companies Law, and reviewed various data and information they deemed relevant, with the advice
and assistance of legal and compensation advisors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">At
the Meeting, shareholders will be asked to approve the Compensation Policy, attached hereto as&nbsp;<B><U>Exhibit A</U></B>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Proposal</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">At
the Meeting, following resolution is proposed to be adopted:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white"><B>&ldquo;RESOLVED,
</B>that the Compensation Policy attached hereinafter as<B>&nbsp;<U>Exhibit A</U>, </B>be, and hereby is, approved and adopted.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Vote Required</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
approval of the Compensation Policy requires the affirmative vote of the holders of a majority of the voting power in the Company
present, in person or by proxy, and voting on the matter, provided that either (i) at least a majority of the shares of non-controlling
shareholders and shareholders who do not have a personal interest in the approval of the Compensation Policy voted at the meeting
vote in favor of the approval of the Compensation Policy; or (ii) the total number of shares among the shareholders described in
clause (i) above voted against the approval of the Compensation Policy does not exceed 2% of the aggregate voting rights in the
Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">Under
the Companies Law, (1) the term &ldquo;controlling shareholder&rdquo; means a shareholder having the ability to direct the activities
of a company, other than by virtue of being an office holder. A shareholder is presumed to be a controlling shareholder if the
shareholder holds 50% or more of the voting rights in a company or has the right to appoint the majority of the directors of the
company or its chief executive officer; and (2) a &ldquo;personal interest&rdquo; of a shareholder (i) includes a personal interest
of any members of the shareholder&rsquo;s family (or spouses thereof) or a personal interest of a company with respect to which the shareholder
(or such family member) serves as a director or the CEO, owns at least 5% of the shares or has the right to appoint a director
or the CEO but (ii) excludes an interest arising solely from the ownership of our ordinary shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white"><B>IV.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;APPROVAL
OF THE GRANT OF INDEMNITY AND EXCULPATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white"><B>UNDERTAKINGS
TO OFFICERS AND DIRECTORS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 4 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Background</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">Following
the approval of the Company&rsquo;s Compensation Committee and the Board of Directors, the Company&rsquo;s shareholders are being asked to
approve the revised version of the Company&rsquo;s indemnification and exculpation agreement for directors and office holders (&ldquo;<I>Noseh
Misra</I>&rdquo; under the Companies Law), including officers and directors that are deemed &ldquo;Controlling Shareholders&rdquo;
and their relatives. A copy of the agreement is attached hereto as&nbsp;<B><U>Exhibit B</U></B>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Proposal</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">It
is proposed that the following resolution be adopted at the Meeting:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="background-color: white">&ldquo;<B>RESOLVED,
</B>to approve the form of indemnity and exculpation agreements signed by the Company for officers and directors, including persons
deemed &ldquo;controlling shareholders&rdquo; under Section 268 of the Companies Law and their relatives in the form attached hereto
as&nbsp;<B><U>Exhibit B</U>.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Vote Required</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
approval of the indemnification agreements requires the affirmative vote of the holders of a majority of the voting power in the
Company present, in person or by proxy, and voting on the matter, provided that either (i) at least a majority of the shares of
non-controlling shareholders and shareholders who do not have a personal interest in the approval of the indemnification agreements
voted at the meeting vote in favor of the approval of the indemnification agreements; or (ii) the total number of shares among
the shareholders described in clause (i) above voted against the approval of the indemnification agreements does not exceed 2%
of the aggregate voting rights in the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>V.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;APPROVAL
OF THE PURCHASE OF A DIRECTORS&rsquo; &amp;OFFICERS&rsquo; LIABILITY INSURANCE POLICY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 5 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Background</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law permits an Israeli company to procure a liability insurance policy covering its office holders, subject to limitations that
appear in the Companies Law and provided that such company&rsquo;s articles permit such liability insurance. It is permitted to
enter into an agreement for the insurance of the liability of office holders, in whole or in part, for any of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in">(i)</TD>
    <TD STYLE="text-align: justify">A breach of a cautionary duty toward the company or toward another person;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify">(ii)</TD>
    <TD STYLE="text-align: justify">A breach of a fiduciary duty toward the company, provided the office holder acted in good faith and has had reasonable ground to assume that the act would not be detrimental to the company;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify">(iii)</TD>
    <TD STYLE="text-align: justify">A monetary liability imposed upon an office holder toward another;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify">(iv)</TD>
    <TD STYLE="text-align: justify">Reasonable litigation expenses, including attorney fees, incurred by the office holder as a result of an administrative enforcement proceeding instituted against him. Without derogating from the generality of the foregoing, such expenses will include a payment imposed on the office holder in favor of an injured party as set forth in Section 52[54](a)(1)(a) of the Israeli Securities Law and expenses that the office holder incurred in connection with a proceeding under Chapters H&rsquo;3, H&rsquo;4 or I&rsquo;1 of the Israeli Securities Law, including reasonable legal expenses, which term includes attorney fees; or</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: justify">(v)</TD>
    <TD STYLE="text-align: justify">Any other matter in respect of which it is permitted or will be permitted under applicable law to insure &nbsp;the liability of an office holder in the company.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The current coverage
of our directors&rsquo; and officers&rsquo; liability insurance policy (the &ldquo;D&amp;O Policy&rdquo;) is $50 million per incident
and in the aggregate, for which we currently pay an annual premium of approximately $67,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation Policy
prescribes conditions according to which the Compensation Committee will be entitled to approve, from time to time and as long
as the Compensation Policy is in force, our obtaining and maintaining a D&amp;O liability insurance policy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the revised
compensation policy, subject of the proposal in Item 3 above, the engagement in connection with the liability insurance of Office
Holders is conditioned on the following terms:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">o</FONT></TD><TD STYLE="text-align: justify">The total cover amount for an Office Holder under an insurance policy will not be greater than
$80 million.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">o</FONT></TD><TD STYLE="text-align: justify">The total annual premium will not be greater than $250,000.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">o</FONT></TD><TD STYLE="text-align: justify">The deductible for a claim for the Company will not be greater than $350,000, in connection with
the main cause of action and coverage.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Compensation Committee
and Board of Directors also confirmed that the D&amp;O Policy provided to any directors who are appointed by controlling shareholders
is: (i) on the same terms as those provided to the company&rsquo;s other officers and directors, (ii) consistent with market conditions,
and (iii) not likely to materially affect the company&rsquo;s profitability, assets or liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Meeting, the
shareholders will also be asked to approve any renewal and/or extension of the D&amp;O Policy, and the purchase of any other&nbsp;D&amp;O
insurance policy&nbsp;upon the expiration of the D&amp;O Policy from the same or a different insurance company with coverage that
meets the conditions prescribed under the compensation policy. The approval will apply to current and future directors who may
serve from time to time and to current and future office holders who are deemed to be appointed by &ldquo;controlling shareholders&rdquo;
under the Israeli Companies Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is therefore proposed
that at the Meeting the following resolution be adopted:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&ldquo;<B>RESOLVED</B>, to approve
the purchase of a D&amp;O Policy and any renewals, extensions or substitutions thereof, at the Company&rsquo;s expense, for the
benefit of the Company&rsquo;s current and future office holders, including any current and future office holders who may be deemed
to be controlling shareholders, and to determine that this resolution is in the best interest of the Company.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white"><B>Vote
Required</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
approval of the purchase of the </FONT>D&amp;O <FONT STYLE="background-color: white">Policy requires the affirmative vote of the
holders of a majority of the voting power in the Company present, in person or by proxy, and voting on the matter, provided that
either (i) at least a majority of the shares of non-controlling shareholders and shareholders who do not have a personal interest
in the approval of the purchase of the </FONT>D&amp;O <FONT STYLE="background-color: white">Policy voted at the meeting vote in
favor of the approval of the purchase of the </FONT>D&amp;O <FONT STYLE="background-color: white">Policy; or (ii) the total number
of shares among the shareholders described in clause (i) above voted against the approval of the purchase of the </FONT>D&amp;O
<FONT STYLE="background-color: white">Policy does not exceed 2% of the aggregate voting rights in the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Upon the receipt of a properly signed and
dated proxy, which&nbsp;with respect to the applicable portion of this resolution&nbsp;includes an indication as to whether or
not the shareholder has a &ldquo;personal interest&rdquo; in the approval of this proposal, and unless otherwise instructed in
the proxy, the person named as proxy will vote the shares represented thereby&nbsp;<B>&ldquo;FOR&rdquo;</B>&nbsp;the&nbsp;above-mentioned
proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VI. <FONT STYLE="background-color: white">APPROVAL
OF AN AGREEMENT BETWEEN THE COMPANY AND A COMPANY CONTROLLED BY GUY BERNSTEIN, THE COMPANY&rsquo;S CHIEF EXECUTIVE OFFICER, WHO IS ALSO
CONSIDERED A CONTROLLING SHAREHOLDER OF THE COMPANY, FOR THE PROVISION OF BUSINESS AND FINANCIAL CONSULTING SERVICES TO THE COMPANY
AND ITS SUBSIDIARIES AND AFFILIATES</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 6 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">Following
approval by the Compensation Committee and Board of Directors, it is proposed that the shareholders approve an agreement between
the Company and Emil Sharvit (2001) Consulting and Project Management Ltd. (the &ldquo;<B>Consultant</B>&rdquo;) for the provision
of business and financial consulting services to the Company and its subsidiaries and affiliates (the &ldquo;<B>Services Agreement</B>&rdquo;),
as detailed below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
Consultant will provide the Company with business and financial consulting services, and other related services of a chief executive
officer (the &ldquo;<B>Services</B>&rdquo;) with at least 60% of his working time devoted to the Company . The Services will include
advising the Company on its commercial agreements, negotiations with third parties and general roles of a chief executive officer,
as requested by the Company&rsquo;s Board of Directors from time to time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
Services will be provided by Mr. Guy Bernstein, who will render the Services faithfully and diligently for the benefit of the Company,
its subsidiaries and affiliates, and will devote all the time and attention necessary for the performance of the Services. The
Consultant is a wholly-owned corporation of Guy Bernstein.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">Guy Bernstein also serves
as the Chief Executive Officer of Formula Systems, currently the controlling shareholder of the Company, and serves as a director
in certain private and public companies affiliated with Formula Systems.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">In
consideration for the Services, the Company will pay the Consultant a monthly fee of NIS 132,000 linked to any increase in the
Israeli Consumer Price Index as of September 15, 2017 (the &ldquo;Consulting Fee&rdquo;). At the end of each year, the Compensation
Committee will evaluate the performance of the Consultant, and will determine, in its sole discretion, whether to increase the
Consulting Fee and, if so, in what amount, and will make the necessary recommendation to the Board. In addition to the Consulting
Fee, the Consultant shall be entitled to receive annual performance-based consulting fees in an amount equal to 3.3% of the Company&rsquo;s
net earnings, as defined in the Services Agreement and under certain terms and subject to provisions described in the Services
Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
Consultant shall also be granted, subject to certain conditions, 150,000 restricted shares of the Company as established under
the Company&rsquo;s 2007 Stock Incentive Compensation Plan for the initial five-year period of the Services Agreement. Such restricted
shares shall vest in 20 equal quarterly installments, each with respect to 5.0% of the restricted shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
Services Agreement will be in effect retroactively from October 1, 2017 and for a period of five years thereafter, after which
the Services Agreement will be automatically renewed for unlimited one-year periods. Each of the Consultant and the Company may
terminate the agreement by giving a prior written notice of six (6) months. During such advance notice period, Consultant will
be required to continue the provision of the Services (unless the Company has instructed it otherwise) and Consultant will be entitled
to receive the consideration for such period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>The Reasoning for the
Compensation Committee and Board of Directors for the Approval of this Proposal:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The Company&rsquo;s need to preserve the services provided by Guy Bernstein based on the level of familiarity of Guy Bernstein with
the Company&rsquo;s business, customers and strategy that is unique and therefore provides the Board of Directors and its committees
with meaningful contribution in its decision making process.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-indent: -22.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 22.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The Compensation Committee and Board of Directors consider the consideration to be paid to the Consultant to be fair and reasonable
taking into consideration the scope of services granted and the benefit to the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-indent: -22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white">It
is proposed that the following resolution be adopted at the Meeting:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&ldquo;RESOLVED, </B>that
the Services Agreement between the Company and Emil Sharvit (2001) Consulting and Project Management Ltd., a company affiliated
with Mr. Guy Bernstein, the Company&rsquo;s CEO and member of the board of directors, who is also considered a controlling shareholder
of the Company, for the provision of CEO, business and financial consulting services to the Company and its subsidiaries and affiliates,
having been approved by the Compensation Committee and Board of Directors, and its terms as presented to the shareholders, be,
and same hereby is, approved.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>Vote Required</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
approval of the </FONT>Services Agreement <FONT STYLE="background-color: white">requires the affirmative vote of the holders of
a majority of the voting power in the Company present, in person or by proxy, and voting on the matter, provided that either (i)
at least a majority of the shares of non-controlling shareholders and shareholders who do not have a personal interest in the approval
of the </FONT>Services Agreement <FONT STYLE="background-color: white">voted at the meeting vote in favor of the approval of the
</FONT>Services Agreement<FONT STYLE="background-color: white">; or (ii) the total number of shares among the shareholders described
in clause (i) above voted against the approval of the </FONT>Services Agreement <FONT STYLE="background-color: white">does not
exceed 2% of the aggregate voting rights in the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white">We
have been advised by Israeli legal counsel that the transaction is not considered an &ldquo;irregular/deviated transaction&rdquo;
(<I>iskaa chariga</I>) since it is on market terms, and therefore the approval of the resolution according to Israeli Companies
Law is pursuant to Section 272(c1) of the Israeli Companies Law rather than Section 270(4) and 275(a). As such, in the event that
the Company&rsquo;s shareholders do not approve entry into the Services Agreement, the Compensation Committee and Board of Directors
may, in special situations, approve the Services Agreement, subject to their providing detailed reasons and after discussion and
examination of the rejection by the Company&rsquo;s shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white"><B>The Board of Directors
recommends a vote FOR approval of the resolution.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VII.&nbsp;&nbsp;&nbsp;&nbsp;RATIFICATION
AND APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Item 7 on the Proxy Card)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Meeting, shareholders
will be asked to ratify and approve the re-appointment of Kost Forer Gabbay &amp; Kasierer, registered public accounting firm,
a member firm of Ernst &amp; Young Global, as our independent registered public accounting firm for the year ending December 31,
2017 and until the annual general meeting of shareholders to be held in 2018, pursuant to the recommendation of our Audit Committee
and Board of Directors. Kost Forer Gabbay &amp; Kasierer has no relationship with us or any of our subsidiaries or affiliates except
as independent registered public accountants and, from time to time and to a limited extent, as tax consultants and providers of
some audit-related services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with
applicable law and our Articles of Association, our Board of Directors has delegated to our Audit Committee the authority to determine
the remuneration of Kost Forer Gabbay &amp; Kasierer according to the volume and nature of their services. With respect to fiscal
year 2016, we paid Kost Forer Gabbay &amp; Kasierer approximately $266,000 for audit services and approximately $74,000 for tax
services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">It is therefore proposed that at the Meeting
the following resolution be adopted:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&ldquo;RESOLVED,</B> that
the appointment of Kost Forer Gabbay &amp; Kasierer, registered public accounting firm, a member firm of Ernst &amp; Young Global,
as the independent registered public accountants of Magic Software Enterprises Ltd. to conduct the annual audit of its financial
statements for the year ending December 31, 2017 and until its 2018 annual general meeting of shareholders, be and hereby is ratified
and approved, and that the Board of Directors be, and it hereby is, authorized to delegate to the Audit Committee the authority
to fix the remuneration of such independent registered public accountants in accordance with the volume and nature of their services.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>The Board of Directors recommends a vote
FOR the foregoing resolution.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The affirmative vote
of the holders of a majority of the ordinary shares represented at the Meeting, in person or by proxy, entitled to vote and voting
on the matter, is required to approve the foregoing resolution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VIII.&nbsp;&nbsp;&nbsp;&nbsp;REVIEW AND
DISCUSSION OF AUDITOR&rsquo;S REPORT AND CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Meeting, our
auditor&rsquo;s report and consolidated financial statements for the year ended December 31, 2016 will be presented. We will hold
a discussion with respect to the financial statements at the Meeting. This Item will not involve a vote of the shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our annual report on
Form 20-F for the year ended December 31, 2016, including the auditor&rsquo;s report and our audited consolidated financial statements
for the year ended December 31, 2016, which was filed with the Securities and Exchange Commission on April 17, 2017, is available
on our website at www.magicsoftware.com or through the EDGAR website of the Securities and Exchange Commission at www.sec.gov.
Shareholders may receive a hard copy of the annual report on Form 20-F containing the consolidated financial statements free of
charge upon request. None of the auditor&rsquo;s report, consolidated financial statements, the Form 20-F or the contents of our
website form part of the proxy solicitation material.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 50%; text-align: justify">By Order of the Board of Directors,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amit Birk</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Corporate Secretary</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dated: January 19, 2018</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT A TO THE PROXY STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Magic Software Enterprises Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Compensation Policy for Office Holders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in; text-align: left"><B>A.</B></TD><TD STYLE="text-align: justify"><B><U>Background and Basic Principles for the Compensation
Policy</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in; text-align: left"><B>1.</B></TD><TD STYLE="text-align: justify"><B><U>Introduction</U></B></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">1.1</TD><TD STYLE="text-align: justify">The purpose of the Compensation Policy is to define, describe and specify Magic Software Enterprises
Ltd. (&ldquo;Magic&rdquo; or the &ldquo;Company&rdquo;) overall compensation strategy for &ldquo;Office Holders&rdquo;, as defined in
the Companies Law, (collectively, the &ldquo;<B>Office Holders</B>&rdquo;) and to provide guidelines for setting compensation of
its Office Holders. The terms of the Compensation Policy of the Company and its approval are subject to the provisions of Section
267A of the Companies Law - 1999 (the &ldquo;<B>Companies Law</B>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">1.2</TD><TD STYLE="text-align: justify">The adoption of this Compensation Policy does not and will not entitle any Office Holders of the
Company to receive any elements of compensation described herein. The elements of compensation to which an Office Holder will be
entitled will be exclusively those that are determined specifically in relation to him or her in accordance with the requirements
of the Companies Law and the regulations promulgated thereunder and specifically approved by the authorized corporate organs of
the Company (the CEO, the Compensation Committee, the Board of Directors and/or the General Meeting of Shareholders, as applicable).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">1.3</TD><TD STYLE="text-align: justify">In case of an Office Holder receiving compensation that is lower than the compensation that may
be provided under this policy, this shall not be deemed to be a deviation or an exception from this Compensation Policy, and such
terms of employment will not require the approval of the General Meeting of Shareholders (which may be required with respect to
approval of terms that deviate from this Compensation Policy).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">1.4</TD><TD STYLE="text-align: justify">In the event that the compensation to be paid to any Office Holder pursuant to the Compensation
Policy in a given year exceeds, by less than ten percent (10%), the applicable percentage or amount otherwise stated herein as
an annual limit for such Office Holder, this Compensation Policy will be deemed amended for the mere sake of increasing the applicable
compensation limit for such Office Holder, so that the compensation to be paid will not be deemed a deviation from the terms of
this Compensation Policy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt"><B>2.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>The Adoption of the Compensation Policy; Approval of Particular
Compensation and changes thereto</U></B></FONT><U>:</U></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">2.1</TD><TD STYLE="text-align: justify">This Compensation Policy has been approved by the Compensation Committee of the board of directors
of the Company on November 9, 2017 and by the Company&rsquo;s board of directors on November 13, 2017 and by the general meeting of the
Company&rsquo;s shareholders on [___________________] and it shall replace the Compensation Policy for Office Holders approved by the
Compensation Committee of the Board of Directors of the Company and by the Board of Directors of the Company on November 10, 2014
and by the General Meeting of the Shareholders of the Company on December 22, 2014.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">2.2</TD><TD STYLE="text-align: justify">The provisions and implementation of this Compensation Policy are subject to Magic&rsquo;s Articles
of Association and any applicable law in any territory in which Magic operates and that affects the provisions of this Compensation
Policy. The Compensation Policy constitutes Magic&rsquo;s Executive Officers Compensation Policy as defined in section 267a (a)
of the Companies Law, and as required by the Companies Law (Amendment No. 20)-2012, and will govern and set the guidelines for
the compensation plans for all Office Holders/ The Compensation Policy may be ratified from time to time in accordance with the
dates stipulated in Section 267A(d) of the Companies Law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">2.3</TD><TD STYLE="text-align: justify">Without limiting the foregoing, the Compensation Committee and the Board of Directors shall review
the Compensation Policy, from time to time, and monitor its implementation, and may recommend to the Board and shareholders to
amend the Compensation Policy as it deems necessary from time to time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">2.4</TD><TD STYLE="text-align: justify">The provisions and implementation of this Compensation Policy shall apply to any compensation determined
after the date of approval of the Compensation Policy by the General Meeting of Shareholders. Existing agreements with Office Holders
signed before the date of approval of this Compensation Policy will be reviewed from time to time and, should it be found that
they differ materially from the provisions of this Compensation Policy, the Company will examine the possibility of amending them
in accordance with the circumstances of the matter.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">2.5</TD><TD STYLE="text-align: justify">Office Holders of the Company will be entitled to the compensation components detailed in this
Compensation Policy only after the granting thereof is duly approved by the authorized corporate organs of the Company in accordance
with any applicable law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in; text-align: left">2.6</TD><TD STYLE="text-align: justify">The Compensation Committee will be composed of at least
three members of the Board. Each member of the Compensation Committee must meet the independence requirements established under
applicable law.&nbsp;&nbsp;All of Magic&rsquo;s External Directors (within the meaning of the Companies Law) will be members of the
Compensation Committee, and will constitute a majority of the Compensation Committee members.&nbsp;&nbsp;The Chairman of the Compensation
Committee will be an External Director.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>3.</B></TD><TD STYLE="text-align: justify"><B><U>Principles of the Compensation Policy and its Purposes</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">3.1</TD><TD STYLE="text-align: justify">Magic&rsquo;s goals in setting the Compensation Policy for the Office Holders is to attract, motivate
and retain highly experienced personnel who will contribute to Magic&rsquo;s growth and success in the future and enhance shareholder
value.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">3.2</TD><TD STYLE="text-align: justify">The Compensation Policy is intended to align the need to incentivize Office Holders to succeed
in achieving their goals and to create financial value for the Company and for its shareholders in the long term with the need
to assure that the compensation structure meets Magic&rsquo;s interests and its overall financial and strategic objectives.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">3.2</TD><TD STYLE="text-align: justify">The Compensation Policy is also designed to offer Office Holders a compensation package that is
competitive with other companies in our industry, and in particular in the IT industry.&nbsp; In support of this goal, Magic&rsquo;s
Office Holder compensation practices are designed to meet the following objectives:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(i)</TD><TD STYLE="text-align: justify">Promote Magic&rsquo;s long term goals via its business units, objectives, business plan, financial
status, nature of business and shareholder value;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -27.4pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(ii)</TD><TD STYLE="text-align: justify">Create appropriate incentives for the Office Holders while taking into account the risks accompanying
Magic&rsquo;s operations and ensuring that the interests of the Office Holders are closely aligned with the interests of Magic&rsquo;s shareholders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -27.4pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(iii)</TD><TD STYLE="text-align: justify">Provide Office Holders with compensation in light of Magic&rsquo;s size and its line of business;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -27.4pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(iv)</TD><TD STYLE="text-align: justify">Create appropriate incentives to the Office Holders to pursue the achievement of Magic&rsquo;s
goals and maximize its profits with integrity and fairness;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -27.4pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(v)</TD><TD STYLE="text-align: justify">Establish a balance between various compensation components including long term and short term
incentives as well as between fixed and variable compensation; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -27.4pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(vi)</TD><TD STYLE="text-align: justify">Provide increased rewards for superior individual and corporate performance, and substantially
reduced or no rewards for average or inadequate performance.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in; text-align: left">3.3</TD><TD STYLE="text-align: justify"><B><U>Factors affecting the compensation of each Office
Holder</U></B>:</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.7pt; text-align: justify">The specific compensation of
each Office Holder will be reviewed and determined by the Compensation Committee and by the Board while considering, among other
things, the following parameters:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.7pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(i)</TD><TD STYLE="text-align: justify">The Office Holder&rsquo;s education, qualifications, professional experience, expertise and achievements,
both prior to and during his engagement with Magic;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -26.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(ii)</TD><TD STYLE="text-align: justify">The Office Holder&rsquo;s position and area of responsibility;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -26.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(iii)</TD><TD STYLE="text-align: justify">Past compensation agreements, whether with Magic or a different company;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -26.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(iv)</TD><TD STYLE="text-align: justify">The need for Magic to retain Office Holders with special qualifications, knowledge and experience;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -26.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(v)</TD><TD STYLE="text-align: justify">Market data of peer companies, including the terms of service which are offered to the Office Holder
in the relevant industry and/or in the geographic area in which he/she operates;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(vi)</TD><TD STYLE="text-align: justify">The performance of the Office Holder compared to established goals and his or her expected contribution
to Magic&rsquo;s future growth and profitability;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -26.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(vii)</TD><TD STYLE="text-align: justify">Past experience that Magic has concerning compensation to its Office Holders and the competitive
environment in which Magic operates; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -26.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(viii)</TD><TD STYLE="text-align: justify">Any requirements prescribed by applicable law from time to time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">Each of the
Compensation Committee and the Board members may engage compensation advisors and other professionals to assist in formulating
compensation packages in line with the Compensation Policy, including, without limitation, to assist in collecting relevant data,
framing the appropriate factors to be considered and evaluating the different factors being considered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>4.</B></TD><TD STYLE="text-align: justify"><B><U>Components of Office Holder Compensation</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">The
compensation of an Office Holder may include any of the following components</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">4.1</TD><TD STYLE="text-align: justify">Fixed Cash Compensation (the &ldquo;<B>Fixed Cash Compensation Component</B>&rdquo;)-</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.1.1</TD><TD STYLE="text-align: justify">Fixed Cash Compensation (or base salary) - the Fixed Cash Compensation Component is intended to
compensate the Office Holder for the time he or she invests in executing his or her current duties and tasks in the Company. The
Fixed Cash Compensation Component will be an absolute number and may be linked to any index or currency</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.1.2</TD><TD STYLE="text-align: justify">In exceptional circumstances - fixed payment for a fixed period of time and conditional on continued
employment, for the retention of the Office Holder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.1.3</TD><TD STYLE="text-align: justify">Various additional related benefits and perquisites - these additional related benefits and perquisites,
arising in part from the provisions of the law (for example, provisions for social welfare benefits such as pension fund and life
and disability insurance, vacation days, sick leave, convalescence pay, etc.), in part are customary to office holders in similar
positions (for example, contributions to an education fund) and in part are intended to compensate the employee for expenses incurred
by him or her in fulfilling such duties (for example, car expenses, mobile phone, parking, subscriptions to relevant literature
, certain membership fees, travel expenses per diem etc.).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">4.2</TD><TD STYLE="text-align: justify">Variable Compensation Component - this component is intended to create a link between the performance
of the Company and the performance of its Office Holders.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.2.1</TD><TD STYLE="text-align: justify">Variable Cash Compensation Component - this component for office holders other than directors is
aimed to compensate and incentivize the Office Holder for his or her achievements and his or her contribution for obtaining the
goals of the Company and its work program during the course of the period for which it is paid. The Variable Cash Compensation
Components may include an annual bonus, a Management by Objectives (MBO), Objective Target Bonus (OTB) and Sales Commission or
other similar bonuses as applicable to each Office Holder (the &ldquo;<B>Variable Cash Compensation Component</B>&rdquo;). The
Company believes that the weight of this component out of the overall compensation package of the Office Holder should be substantive
so that it clearly links between the performance of the Office Holder and his contribution to the Company to the performance of
the Company, in a manner that will allow him or her to benefit from the financial success of the Company in the long term, and
<I>vice versa</I>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.2.2</TD><TD STYLE="text-align: justify">Equity Based Compensation Component &ndash; this component is aimed to align compensation of the
Office Holders with the long term goals of Magic and with creating and increasing shareholder value (as reflected in the market
price of the Company&rsquo;s shares). This compensation creates a uniformity of interests between the shareholders of the Company
and its Office Holders, assists in retaining Office Holders holding key positions in the Company and in maintaining their motivation
and constitutes a useful risk management tool for the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>5.</B></TD><TD STYLE="text-align: justify"><B><U>Office Holders of the Company</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">5.1</TD><TD STYLE="text-align: justify">As of the date of the approval of the Compensation Policy by the Company&rsquo;s shareholders, its Office
Holders are the members of the Company&rsquo;s Board of Directors, the Company&rsquo;s CEO, the Company&rsquo;s CFO, the Company&rsquo;s CTO, the
Vice President of Operations, the Company&rsquo;s General Council and Company&rsquo;s Secretary, the Vice President of Mergers &amp;
Acquisitions, the managers of the Company&rsquo;s divisions, and the managers of the substantive subsidiaries of the Company in Israel
and overseas.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">6.</TD><TD STYLE="text-align: justify"><B><U>The Ratio between the Variable Components and the Fixed Components</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">6.1</TD><TD STYLE="text-align: justify">At the time of the approval of the compensation of the Office Holders, the authorized corporate
organs of the Company will examine, among other factors, the entire compensation package in order to guarantee that the various
components create the correct balance of benefits for the relevant Office Holder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">6.2</TD><TD STYLE="text-align: justify">The weight of the variable components (the Variable Cash Compensation Component and the Equity
Based Compensation Component) (the <B>&ldquo;Variable Components&rdquo;</B>) out of the total compensation amount which is to be
granted for any year will not be greater than 67%<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>1</SUP></FONT> (sixty-seven
percent) for each Office Holder and may vary from one Office Holder to the other.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>7.</B></TD><TD STYLE="text-align: justify"><B><U>Ratio between the Terms of Tenure and Employment of the Office Holder and the Salaries of
other Company Employees</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">7.1</TD><TD STYLE="text-align: justify">In setting the terms of the Compensation Policy, the Company aims to compensate its Office Holders
for their contribution to its business success over time, taking into account the extensive responsibility and authority imposed
upon them. The Compensation Committee and the Board have examined the ratio between the terms of service and employment of Office
Holders and the average and median cost of employment of the other Company employees and contractors. As of the date of the approval
of the Compensation Policy, the Average and Median Ratios are as follows:</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"><B>Position</B></TD><TD><B>&nbsp;</B></TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><B>Average Ratio</B></TD><TD><B>&nbsp;</B></TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><B>Median Ratio</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 68%; text-align: justify; text-indent: 0in">CEO</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center; text-indent: 0in">16</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center; text-indent: 0in">17</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">President, CEO of a Substantive Subsidiary in Israel, Division Manager (average compensation cost)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; text-indent: 0in">7</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; text-indent: 0in">8</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in">Other Office Holders (average compensation cost)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; text-indent: 0in">3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; text-indent: 0in">3</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: justify; text-indent: 0in">The Compensation
Committee and the Board believe that the ratio is appropriate and reasonable taking into account the nature of the Company, its
size, value, scale of activity in the various fields, the fact that the Office Holders, insofar as quantities are concerned, represent
a small part of the total work force of the Company group, the mixture of manpower and its field of activity and that it does not
adversely impact labor relations within the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>B.</B></TD><TD STYLE="text-align: justify"><B><U>Fixed Cash Compensation</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">8.</TD><TD STYLE="text-align: justify"><B><U>Guidelines for Determining the Fixed Cash Compensation Component, its Examination and Updating</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">8.1</TD><TD STYLE="text-align: justify">The Fixed Cash Compensation Component will vary among Office Holders, and will be individually
determined according to the Office Holder&rsquo;s respective performance, educational background, prior business experiences, seniority,
aptitude, qualifications, role and responsibility and previous salary agreements signed with the Office Holder. At the time of
determining the fixed fee, an examination will also be made of the office holder&rsquo;s education, skills, expertise, professional experience
and achievements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">8.2</TD><TD STYLE="text-align: justify">The fixed fee, in terms of the gross salary of the Office Holders in the Company, will not be greater
than the amounts detailed below:<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>2</SUP></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: justify; text-indent: -35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: justify; text-indent: 0pt"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><SUP>1</SUP> <FONT STYLE="font-size: 10pt">With respect to the
CEO, the weight of the Variable Components may reach approximately 80% (eighty percent) of the total compensation amount.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><SUP>2</SUP> <FONT STYLE="font-size: 10pt">The following detailed
amounts do not include the additional fringe benefits detailed in Section 9 below and do not include payments for Office Holders
which are subject to the continued engagement as detailed in Section 10 below. In the event that the services of the Office Holder
are provided via a personal management or service company and not as an employee of Magic, the fees paid to such personal management
or service company will reflect, to the extent determined by Magic in the applicable service agreement, the Fixed Cash Compensation
Component and the additional related benefits and perquisites (plus applicable taxes such as Value Added Tax), in accordance with
the guidelines of the Compensation Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: justify; text-indent: -35.3pt">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: justify; text-indent: -35.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Rank</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Maximum<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>3</SUP></FONT></B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in">CEO</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">NIS150,000</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">President, CEO of a Substantive Subsidiary in Israel, Division Manger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">NIS100,000</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in">CFO, Senior Vice President</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">NIS75,000</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Other Officeholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">NIS65,000</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 82%; text-align: justify; text-indent: 0in">CEO of a Substantive Subsidiary Overseas</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">35,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">8.3</TD><TD STYLE="text-align: justify">Without derogating from Section 8.2 above, the Company may determine a link between the fee of
an Office Holder and the increase in the consumer price index.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">9.</TD><TD STYLE="text-align: justify"><B><U>Fringe Benefits</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">9.1</TD><TD STYLE="text-align: justify">Office Holders of the Company are entitled to social welfare conditions and benefits in accordance
with applicable law and to various additional related benefits and perquisites, which are customary to office holders in similar
positions, such as life insurance, pension fund, social benefits, recuperation payment, education fund, sick leave, vacation, disability
insurance, etc. Such benefits and perquisites may vary depending on geographic location and other circumstances.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">9.2</TD><TD STYLE="text-align: justify">Furthermore, Office Holders of the Company may be entitled to further fringe benefits as is acceptable
in the Company and in similar companies in the marketplace, including car expense, telephone, communications and computing, relevant
literature (newspapers), certain membership fees etc., provided that the total fringe benefits in excess of those granted in accordance
with applicable law is not greater than 20% (twenty percent) of the Fixed Compensation Component.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">10.</TD><TD STYLE="text-align: justify"><B><U>Payment to an Office Holder Conditional on Continued Tenure</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0pt">In exceptional
circumstances, in order to preserve the continued employment of an Office Holder in the Company, an Office Holder may be entitled,
in addition to his salary, to an amount of up to NIS 500,000 per annum for a limited period of time, which payment shall be conditional
on the continued employment of such Office Holder in the Company. This payment is subject to the approval of the relevant corporate
organs of the Company and will not exceed 20% of the maximum value of the Variable Cash Compensation Component of an Office Holder,
as provided under Section 11.3 below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in; text-align: left"><B>C.</B></TD><TD STYLE="text-align: justify"><B><U>Annual Grant</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>11.</B></TD><TD STYLE="text-align: justify"><B><U>Guidelines for Determining the Variable Cash Compensation Component, Threshold Conditions,
Installments, Setoff and Cap</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">11.1</TD><TD STYLE="text-align: justify">The Variable Cash Compensation Components will be based on Magic&rsquo;s Key Performance Indicators
(the &ldquo;<B>KPIs</B>&rdquo;), which will be determined annually by the relevant corporate organs of Magic and/or on personal
criteria which will be determined by the CEO (except with respect to the CEO, for whom the criteria will be determined by the Board).
Magic&rsquo;s KPIs as well as Office Holders personal criteria will be mostly based on quantifiable and measurable criteria. Examples
of criteria which may serve as relevant KPIs or personal criteria for Magic are:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(i)</TD><TD STYLE="text-align: justify">Various financial parameters of Magic&rsquo;s (or its business units&rsquo;) performance, such
as Revenues, EBITDA, Net Income, etc.;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -21.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(ii)</TD><TD STYLE="text-align: justify">Execution of strategic agreements with partners or investors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -21.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(iii)</TD><TD STYLE="text-align: justify">Capital raising activities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -21.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(iv)</TD><TD STYLE="text-align: justify">Internal and external customers&rsquo; satisfaction;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -21.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(v)</TD><TD STYLE="text-align: justify">Magic&rsquo;s expenses and efficiency metrics; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><SUP>3</SUP> <FONT STYLE="font-size: 10pt">The amounts shall
be linked to the Israeli Consumer Price Index, as published by the Israeli Central Bureau of statistics from time to time or by
any other official Israeli governmental body. The basis CPI linkage shall be based on the known CPI as of July 1, 2014.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 34.9pt"></TD><TD STYLE="width: 21.8pt">(vi)</TD><TD STYLE="text-align: justify">Shareholder value (as measured by the market price of Magic&rsquo;s ordinary shares).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -21.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">11.2</TD><TD STYLE="text-align: justify">Threshold - unless stipulated otherwise in this policy, the grant of Variable Cash Compensation,
as detailed in Section 11.3 below, with respect to any calendar year is subject to Magic, a Magic subsidiary or a Magic division
(as applicable to the relevant Office Holder&rsquo;s responsibilities) achieving, for the calendar year to which the Variable Cash
Compensation relates, an EBITDA (or net income, as applicable) which is no less than 70% of the EBITDA (or net income, as applicable)
for the preceding calendar year. &ldquo;EBITDA&rdquo; (or net income, as applicable) means the EBITDA (or net income, as applicable)
calculated based on the audited financial statements for the respective calendar year of Magic, a Magic subsidiary or a Magic division
(as applicable to the relevant Office Holder&rsquo;s responsibilities) (the &ldquo;<B>Normative Profit</B>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">11.3</TD><TD STYLE="text-align: justify">Maximum value for the annual Variable Cash Compensation Component - the annual monetary grant to
be paid to an Office Holder will not exceed an amount equal to 200% (two-hundred percent) of the fixed component of that Office
Holder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>12.</B></TD><TD STYLE="text-align: justify"><B><U>Indices for Determining the Annual Variable Cash Compensation</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">12.1</TD><TD STYLE="text-align: justify"><U>Annual Variable Cash Compensation to the Company&rsquo;s CEO</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">12.1.1</TD><TD STYLE="text-align: justify">The Company&rsquo;s CEO may be entitled to an annual Variable Cash Compensation Component in an amount
equivalent up to 3.3% (three and three-tenths of a percent) of the annual net income attributable to the Company&rsquo;s shareholders,
as shall be published in the Company&rsquo;s consolidated and audited annual financial statements (the <B>&ldquo;Net Annual Income&rdquo;</B>).
The Compensation Committee and the Board of directors of the Company may, in calculating the annual Variable Cash Compensation
Component, determine that the impact of non-recurring events or events which mainly bear an accounting aspect (e.g., amortizations
of intangible assets or revaluations of contingent liabilities due to acquisition of activities) will be neutralized.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">12.1.2</TD><TD STYLE="text-align: justify">Payment of an annual Variable Cash Compensation Component as stipulated in Section 12.1.1 shall
be subject to the terms of Section 11 above, including the threshold conditions and the maximum amount set forth therein.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">12.2</TD><TD STYLE="text-align: justify"><U>Annual Variable Cash Compensation to Other Office Holders</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">12.2.1</TD><TD STYLE="text-align: justify">Subject to the provision for determining the annual Variable Cash Compensation Component set forth
in Section 11 above, including the threshold conditions and the maximum amount set forth therein, the Company&rsquo;s Office Holders
may be entitled to an annual Variable Cash Compensation Component which will be determined in advance within the framework of an
annual variable cash compensation scheme whilst a specific percentage thereof will be determined in accordance with one of the
following, all in accordance with the duties of the Office Holder and the discretion of the relevant authorized corporate organs
in the Company: i) compliance of the Office Holder with the combination of personal targets, Company goals and over-achievement
and/or ii) as a certain percentage of the profit (whether operating, EBITDA or net, as the case may be) of the division or the
employment unit to which the Office Holder belongs and/or as a iii) as a certain percentage of the profit (whether net or operating,
as the case may be) of the Company. All of the foregoing shall be determined in the annual variable cash compensation scheme in
accordance with the discretion of the relevant organs of the Company. The Compensation Committee and the Board of Directors of
the Company may, for purposes of calculating the annual Variable Cash Compensation Component, determine that the impact of non-recurring
events or events which mainly bear an accounting aspect (e.g., amortizations of intangible assets or revaluations of contingent
liabilities due to acquisition of activities) will be neutralized.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">12.2.2</TD><TD STYLE="text-align: justify">The Company&rsquo;s CEO shall have discretion to reduce the annual Variable Cash Compensation Component
detailed in Section 12.2.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">12.3</TD><TD STYLE="text-align: justify"><U>Discretional Grant to Office Holders Subordinated to the CEO</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0pt">Subject to
the provisions determining the annual Variable Cash Compensation Component grant set forth in Section 11 above:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">12.3.1</TD><TD STYLE="text-align: justify">The compensation committee and the board of directors of the Company may determine that, in addition
to the annual Variable Cash Compensation Component, or instead of the annual Variable Cash Compensation Component, an Office Holder
who is subordinated to the CEO will be entitled to a discretionary grant (for example following: a merger, significant acquisition,
sale of subsidiary, spin-off, significant debt raise, public/private offerings, or any other specific task that seems fit to the
Compensation Committee and Board).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">12.3.2</TD><TD STYLE="text-align: justify">As part of the variable component for an Office Holder who is subordinate to the CEO, the Company&rsquo;s
CEO may approve, for every calendar grant year, a discretionary grant, which will not be greater than five monthly salaries of
the Office Holder. The said grant will be reported to the compensation committee promptly after the approval by the CEO.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>13.</B></TD><TD STYLE="text-align: justify"><B><U>Reduction of Grant Amounts at the Discretion of the Company&rsquo;s Board of Directors</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0pt">The Compensation
Committee and the Board of Directors may reduce the annual Variable Cash Compensation Component of an Office Holder in exceptional
circumstances, considering the business and financial condition of the Company and the duties of the Office Holder, and for reasons
which shall be recorded by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>14.</B></TD><TD STYLE="text-align: justify"><B><U>Return of Annual Grant Amounts in Case of a Restatement of the Financial Statements</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">14.1</TD><TD STYLE="text-align: justify">Office Holders are required to return any compensation paid to them on the basis of data included
in financial statements that turned out to be erroneous and were subsequently restated during the three year period following filing
thereof. In such case, compensation amounts will be returned net of taxes that were withheld thereon, unless the Office Holder
has reclaimed or will reclaim such tax payments from the relevant tax authorities (in which case the Office Holder will also be
obligated to return such tax amounts).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0pt">Notwithstanding
the foregoing, where the required amount for repayment from the annual grant is less than 10% (ten percent) of the amount of the
grant for that year, the Office Holder will not be required to repay it.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">14.2</TD><TD STYLE="text-align: justify">Notwithstanding the above, a restatement due to a change in applicable law, regulations or accounting
rules that become applicable after the date of the publication of the financial statements of the Company for that year will not
be deemed a restatement for which the foregoing return of grant amounts shall apply.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>D.</B></TD><TD STYLE="text-align: justify"><B><U>Equity Based Compensation Component</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>15.</B></TD><TD STYLE="text-align: justify"><B><U>The Purpose of the Capital Compensation Mechanism</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">15.1</TD><TD STYLE="text-align: justify">As part of the overall compensation package of an Office Holders, the Company may offer an Equity
Based compensation Component with the purpose of providing an incentive for an Office Holder to continue to contribute to the success
of the Company in the future, success which is expected to be expressed, <I>inter alia</I>, in the long term business results of
the Company and in its share price, and by advancing the best interests of the Company to generate profits in the long term.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">15.2</TD><TD STYLE="text-align: justify">The Equity Based Compensation Component is intended to create an incentive for the continued employment
in the long term of talented, experienced and capable Office Holders.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">15.3</TD><TD STYLE="text-align: justify">The Office Holders may be entitled to Equity Based Compensation Component in the form of options
to purchase shares of the Company, which options may be conditional on performance, as well as other securities permitted under
Magic&rsquo;s equity incentive plans, as in effect from time to time, including, restricted share units and restricted stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>16.</B></TD><TD STYLE="text-align: justify"><B><U>Details of the Capital Compensation Mechanism</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">16.1</TD><TD STYLE="text-align: justify">The Equity Based Compensation Component will be granted to an Office Holder considering, <I>inter
alia</I>, the duties and areas of responsibility of the Office Holder in the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">16.2</TD><TD STYLE="text-align: justify">As a rule, the Equity Based Compensation Component will mature over the overall period which will
in any event not be less than 3 (three) years.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">16.3</TD><TD STYLE="text-align: justify">As provided in section 15.3, the Equity Based Compensation Component may be in the form of options
to purchase shares of the Company (the <B>&ldquo;Options&rdquo;</B>) or other securities. The exercise price of the Options will
not be less than the price of the Company&rsquo;s shares on the applicable stock exchanges on the end of the preceding day of grant
of such Options.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">16.4</TD><TD STYLE="text-align: justify">Except in exceptional circumstances, if the termination date of employment of an Office Holder
occurs before the vesting of the Equity Based Compensation Component units (including the period of the prior notice), the Equity
Based Compensation Component units shall immediately expire prior to the vesting thereof and the Office Holder shall not be entitled
to exercise them.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>17.</B></TD><TD STYLE="text-align: justify"><B><U>Maximum value of Equity Based Compensation Component</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">17.1</TD><TD STYLE="text-align: justify">The economic value of the Equity Based Compensation Component granted to any Office Holder (based
on an evaluation prepared in accordance with an accepted methodology), at the date of the capital compensation grant, for the vesting
year (on a linear basis) will not be greater than the sum of 2 (two) million shekels for the CEO and 500 (five hundred) thousand
shekels for the other Office Holders. Moreover, the allotment of Options may also be subject to the achievement of additional minimum
financial criteria which will be determined in advance by the Compensation Committee on the grant date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">17.2</TD><TD STYLE="text-align: justify">No Equity based Compensation component maximum economic value has been determined at the time of
its realization because there is a difficulty in determining the maximum value of the equity benefit at this date, <I>inter alia</I>,
for the following reasons:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">17.2.1</TD><TD STYLE="text-align: justify">The determination of such maximum value is contrary to the rationale underlying the basis for granting
the Equity Based Compensation Component, which is the solution of the problem of the representation between the management and
the shareholders and the uniformity of the interests of the management with the shareholders.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">17.2.2</TD><TD STYLE="text-align: justify">Significant technical difficulties exist with respect to determining a maximum economic value for
the income arising to the Office Holder from the future sale of the Company&rsquo;s shares, especially with respect to a sale that is
to be carried out many years after the granting of the Equity Based Compensation Component, including when the Office Holder sells
shares after his or her employment with the Company has terminated. One of the purposes of the Compensation Policy is to incentivize
the holding of the shares for a long period, a purpose which may be missed due to technical difficulties if the said ceiling is
determined.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>18.</B></TD><TD STYLE="text-align: justify"><B><U>Acceleration of Vesting Dates and Realization of the Capital Compensation</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">18.1</TD><TD STYLE="text-align: justify">The Company&rsquo;s Board of Directors and the General Meeting of the Company&rsquo;s Shareholders (if its
approval is required under applicable law), after the approval of the compensation committee, may extend the expiry date of Equity
Based Compensation Component units.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">18.2</TD><TD STYLE="text-align: justify">The Company&rsquo;s Board of Directors and the General Meeting of the Company&rsquo;s Shareholders (if its
approval is required under applicable law), after the approval of the Compensation Committee, may provide instructions in connection
with the vesting period, including the acceleration of the vesting period of the Equity Based Compensation Component units of the
Office Holders under special circumstances.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>19.</B></TD><TD STYLE="text-align: justify"><B><U>Non-Material Change to Terms of Tenure of an Office Holder</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0pt">Notwithstanding
anything to the contrary set forth in this Compensation Policy, the Company&rsquo;s CEO may approve a non-material change of the terms
of tenure and employment of an Office Holder subordinate to him, provided that such change is in accordance with this Compensation
Policy and its scope is not greater than 5% (five percent) of the compensation amount of the Office Holder. A non-material change
that has been approved by the said CEO, will be reported to the compensation committee promptly after its approval by the CEO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>E.</B></TD><TD STYLE="text-align: justify"><B><U>Retirement Arrangements</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>20.</B></TD><TD STYLE="text-align: justify"><B><U>Principles for Determining Retirement Arrangements</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0pt">An Office
Holder shall be entitled to retirement payments owing to him pursuant to applicable law (such as severance pay compensation).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>21.</B></TD><TD STYLE="text-align: justify"><B><U>Prior Notice and Adjustment Period</U></B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">21.1</TD><TD STYLE="text-align: justify">An Office Holder will be entitled to a prior notice period of 6 (six) months. During the prior
notice period, the Office Holder will be required to continue to fulfill his duties, unless the Company decides that he will not
continue to fulfill his duties in effect, and the Office Holder will be entitled to a continuation of all the conditions of his
tenure and employment, during the prior notice period, without change.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">21.2</TD><TD STYLE="text-align: justify">The Authorized Corporate organs of the Company may, under special circumstances, approve for an
Office Holder an adjustment period that will not be greater than 12 months after the end of the prior notice period, subject to
noncompetition. During the adjustment period, the Office Holder will be entitled to a fixed fee and fringe benefits only.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">21.3</TD><TD STYLE="text-align: justify">In determining the adjustment period of an Office Holder, the Company may take into consideration
the following considerations, fully or partially: the period of tenure or employment of the Office Holder, terms of tenure and
employment during this period, performance of the Company during the said period, the contribution of the Office Holder to obtaining
the Company&rsquo;s goals and for the earning of its profits and the circumstances of the retirement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>F.</B></TD><TD STYLE="text-align: justify"><B><U>Compensation of Directors</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">22.</TD><TD STYLE="text-align: justify">External directors and directors who are not employed by the Company shall be entitled to compensation
pursuant to the Companies Regulations (Rules Regarding Compensation and Expenses of External Directors) including a fixed annual
amount and an amount for participation in meetings where their fee shall not be greater than the maximum fee permitted in these
regulations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">23.</TD><TD STYLE="text-align: justify">The directors of the Company may be entitled to an Equity Based Compensation in accordance with
Chapter D of this Compensation Policy and subject to approval of the competent organs.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in"><B>G.</B></TD><TD STYLE="text-align: justify"><B><U>Indemnification and Insurance</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">24.</TD><TD STYLE="text-align: justify">An Office Holder (including a director) is entitled, in addition to a compensation package pursuant
to this Compensation Policy, and subject to the approval of the authorized corporate organs of the Company, to insurance coverage
with respect to such Office Holder&rsquo;s liability and to indemnification arrangements, all subject to applicable law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">25.</TD><TD STYLE="text-align: justify">The engagement in connection with the liability insurance of the Office Holder will be determined
in accordance with the market conditions and in such a way so that it will not materially influence the profitability, assets or
liabilities of the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">25.1</TD><TD STYLE="text-align: justify">The total cover amount for an Office Holder under an insurance policy will not be greater than
80 million US Dollars.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">25.2</TD><TD STYLE="text-align: justify">The total annual premium will not be greater than 250,000 US Dollars.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">25.3</TD><TD STYLE="text-align: justify">The deductible for a claim for the Company will not be greater than 350,000 US Dollars, in connection
with the main cause of action and coverage.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">26.</TD><TD STYLE="text-align: justify">The amount of compensation which the Company shall pay (in addition to the amounts which shall
be received from the insurance company, if received under the insurance procured by the Company) for every Office Holder, accumulatively,
will not be greater than 25% of the equity of the Company in accordance with the latest financial statements in effect as of the
date of the actual payment of the indemnification.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>EXHIBIT B TO THE PROXY STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>MAGIC SOFTWARE ENTREPRISES LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LETTER OF INDEMNIFICATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">___________ __, 2018</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear ________________,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This letter agreement (the &ldquo;<B><U>Letter</U></B>&rdquo;)
is provided to you in recognition that it is in the best interests of Magic Software Enterprises Ltd. (the &ldquo;<B><U>Company</U></B>&rdquo;)
to provide hereunder for your indemnification to the fullest extent permitted by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">1.</TD><TD STYLE="text-align: justify">The Company hereby undertakes to indemnify you to the maximum extent permitted by the Companies Law&mdash;1999 (the &rsquo;&rsquo;<B><I>Companies
Law</I></B>&rsquo;&rsquo;), and by the Securities Law-1968 (the &rsquo;&rsquo;<B><I>Securities Law</I></B>&rsquo;&rsquo;) in respect
of the following:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">1.1.</TD><TD STYLE="text-align: justify">any monetary liability imposed on you pursuant to a judgment in favor of another person, including
in a compromise or an arbitrator&rsquo;s award approved by court, in respect of any act or omission (&rsquo;&rsquo;<B><I>action</I></B>&rsquo;&rsquo;)
taken or made by you in your capacity as a director or office holder of the Company or in your capacity as a director or office
holder of any other Subsidiary;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt; text-indent: -21.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">1.2.</TD><TD STYLE="text-align: justify">all reasonable litigation expenses, including reasonable attorneys&rsquo; fees, expended by you
or charged to you by a court of law, in a proceeding instituted against you by the Company or on its behalf or by another person,
or in any criminal prosecution in which you are acquitted, or in any criminal prosecution of an offense which does not require
proof of <I>mens rea</I> (criminal intent) in which you are convicted, all in respect of actions taken by you in your capacity
as a director or officer of the Company or in your capacity as a director or office holder of any other Subsidiary;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">1.3.</TD><TD STYLE="text-align: justify">all reasonable litigation expenses, including reasonable attorneys&rsquo; fees, expended by you
due to an investigation or a proceeding instituted against you by an authority qualified to conduct such investigation or proceeding,
where such investigation or proceeding is concluded without the filing of an indictment against you (as defined in Section 260(a)(1a)
of the Companies Law) and without any financial obligation imposed on you in lieu of criminal proceedings (as defined in Section
260(a)(1a) of the Companies Law), or that is concluded without your indictment but with a financial obligation imposed on you in
lieu of criminal proceedings with respect to an offense that does not require proof of <I>mens rea</I> (criminal intent) or in
connection with a financial sanction,, all in respect of actions taken by you in your capacity as a director or office holder of
the Company or in your capacity as a director or office holder of any other Subsidiary;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">1.4.</TD><TD STYLE="text-align: justify">expenses, including reasonable litigation expenses and attorneys&rsquo; fees, incurred by you as
a result of a proceeding instituted against you in relation to (A) infringements that may impose financial sanction pursuant to
the provisions of Chapter H&rsquo;3 under the Securities Law or (B) administrative infringements pursuant to the provisions of
Chapter H&rsquo;4 under the Securities Law or (C) infringements pursuant to the provisions of Chapter I&rsquo;1 under the Securities
Law, all in respect of actions taken by you in your capacity as a director or office holder of the Company or in your capacity
as a director or office holder of any other Subsidiary; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">1.5.</TD><TD STYLE="text-align: justify">payments to an injured party of infringement under Section 52ND(a)(1)(a) of the Securities Law
made by you in your capacity as a director or office holder of the Company or in your capacity as a director or office holder of
any other Subsidiary.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">1.6.</TD><TD STYLE="text-align: justify">Notwithstanding anything herein to the contrary, the Company&rsquo;s undertaking to indemnify you
in advance under Section <FONT STYLE="font-family: Times New Roman, Times, Serif">&lrm;</FONT>3 below, shall only apply with respect
to events described in <B><U>Exhibit A</U></B> hereto.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">2.</TD><TD STYLE="text-align: justify">Notwithstanding the aforesaid, the Company will not indemnify you for any amount you may be obligated
to pay in respect of:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">2.1.</TD><TD STYLE="text-align: justify">a breach of your fiduciary duty, except, to the extent permitted by law, for a breach of your fiduciary
duty to the Company or a Subsidiary while acting in good faith and having reasonable cause to assume that the action was in the
best interest of the Company or Subsidiary, as applicable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">2.2.</TD><TD STYLE="text-align: justify">a grossly negligent or intentional violation of your duty of care;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">2.3.</TD><TD STYLE="text-align: justify">an intentional action in which you intended to reap a personal gain illegally;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">2.4.</TD><TD STYLE="text-align: justify">a fine, civil fine or financial sanction levied against imposed upon you;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">2.5.</TD><TD STYLE="text-align: justify">a proceeding instituted against you pursuant to the provisions of Chapter H&rsquo;3, H&rsquo;4
or I&rsquo;1 under the Securities Law, except as permitted hereunder;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">2.6.</TD><TD STYLE="text-align: justify">a counterclaim brought by the Company or in its name in connection with a claim against the Company
filed by you, other than by way of defense or by way of third party notice in connection with a claim brought against you by the
Company, or in specific cases in which the Company&rsquo;s Board of Directors has approved the initiation or bringing of such suit
by you, which approval shall not be unreasonably withheld.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">3.</TD><TD STYLE="text-align: justify">The Company will make available all amounts payable to you in accordance with Section 1 above on
the date on which such amounts are first payable by you and in any event not later than fifteen (15) days following receipt by
the Company of your written request therefor (&rsquo;&rsquo;<B><I>Time of Indebtedness</I></B>&rsquo;&rsquo;), including with respect
to any claim against you initiated by the Company or by any Subsidiary or in their right, and with respect to items referred to
in Sections 1.2, 1.3, 1.4 and 1.5 above, not later than the date on which the applicable court or other competent authority renders
its decision. Advances given to cover legal expenses in criminal proceedings will be repaid by you to the Company, if you are found
guilty of a crime which requires proof of criminal intent. Other advances will be repaid by you to the Company if it is determined
by an unappealable court judgment that you are not lawfully entitled to such indemnification. As part of the aforementioned undertaking,
the Company will make available to you any security or guarantee that you may be required to post in accordance with an interim
decision given by a court or an arbitrator or other competent authority, including for the purpose of substituting liens imposed
on your assets.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">4.</TD><TD STYLE="text-align: justify">The Company will indemnify you even if at the relevant Time of Indebtedness you are no longer a
director or officer of the Company or of a Subsidiary, as applicable, provided, that the obligations are in respect of actions
taken by you while you were a director and/or officer, and in such capacity.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">5.</TD><TD STYLE="text-align: justify">The Company&rsquo;s undertaking to indemnify you for the expenses mentioned in Section 1.2, 1.3,
1.4 and 1.5 (pursuant and subject to Section 3 and insofar as indemnification with respect thereto is not restricted by law or
by the provisions of Section 2 above) and for the matters mentioned in Section 1.1 above shall apply only insofar as such expenses
and/or matters result from your actions in the following matters or in connection therewith:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.1.</TD><TD STYLE="text-align: justify">The offering of securities by the Company and/or by a shareholder to the public and/or to private
investors or the offer by the Company to purchase securities from the public and/or from private investors or other holders pursuant
to a prospectus, agreement, notice, report, tender and/or other proceeding, whether in Israel or abroad;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.2.</TD><TD STYLE="text-align: justify">Occurrences in connection with investments the Company and/or Subsidiaries make in other corporations
whether before and/or after the investment is made, entering into the transaction, the execution, development and monitoring thereof,
including actions taken by you in the name of the Company and/or a Subsidiary as a director, officer and/or board observer of the
corporation which is the subject of the transaction and the like;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.3.</TD><TD STYLE="text-align: justify">The sale, purchase and holding of negotiable securities or other investments for or in the name
of the Company or a Subsidiary;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.4.</TD><TD STYLE="text-align: justify">Actions in connection with the merger of the Company and/or a Subsidiary with or into another entity;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.5.</TD><TD STYLE="text-align: justify">Actions in connection with the sale of the operations and/or business, or part thereof, of the
Company and/or a Subsidiary;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.6.</TD><TD STYLE="text-align: justify">Without derogating from the generality of the above, actions in connection with the purchase or
sale of companies, legal entities or assets, and the division or consolidation thereof;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.7.</TD><TD STYLE="text-align: justify">Actions taken in connection with labor relations and/or employment matters in the Company and/or
the Subsidiaries and trade relations of the Company and/or the Subsidiaries, including with employees, independent contractors,
customers, suppliers and various service providers;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.8.</TD><TD STYLE="text-align: justify">Actions in connection with the development or testing of products developed by the Company and/or
the Subsidiaries, or in connection with the distribution, sale, license or use of such products, including without limitation in
connection with professional liability and product liability claims;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.9.</TD><TD STYLE="text-align: justify">Actions taken in connection with the intellectual property of the Company and/or the Subsidiaries,
and its protection, including the registration or assertion of rights to intellectual property and the defense of claims related
to intellectual property, including any assertion that the Company&rsquo;s products infringe on the intellectual property rights
or constitute a misappropriation of any third party&rsquo;s trade secrets; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.10.</TD><TD STYLE="text-align: justify">Actions taken pursuant to or in accordance with the policies and procedures of the Company and/or
the Subsidiaries (including tax policies and procedures), whether such policies and procedures are published or not.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.11.</TD><TD STYLE="text-align: justify">Approval of corporate actions, in good faith, including the approval of the acts of the Company&rsquo;s
management, their guidance and their supervision.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.12.</TD><TD STYLE="text-align: justify">Claims of failure to exercise business judgment and a reasonable level of proficiency, expertise
and care in regard of the Company&rsquo;s business.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.13.</TD><TD STYLE="text-align: justify">Violations of laws requiring the Company to obtain regulatory and governmental licenses, permits
and authorizations in any jurisdiction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">5.14.</TD><TD STYLE="text-align: justify">Claims in connection with publishing or providing any information, including any filings with governmental
authorities, on behalf of the Company in the circumstances required under applicable laws.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">6.</TD><TD STYLE="text-align: justify">The total aggregate amount of indemnification for which the Company undertakes to indemnify you
hereunder and all other officers and directors of the Company who are entitled to indemnification, for all of the matters and circumstances
described herein (cumulative), shall not exceed an amount equal to 25% of the shareholders equity in the aggregate, based on the
Company&rsquo;s most recently published audited financial statements at the time of such indemnification. If the foregoing amount
is insufficient to cover the aggregate amount of indemnification of all officers and directors of the Company entitled to indemnification,
then the amount of indemnification available for all such officers and directors shall be allocated among all such officers and
directors based on their relative exposure to such indemnifiable claims.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">7.</TD><TD STYLE="text-align: justify">The Company will not indemnify you for any liability with respect to which you have received payment
by virtue of an insurance policy or another indemnification agreement other than for amounts which are in excess of the amounts
actually paid to you pursuant to any such insurance policy or other indemnity agreement (including deductible amounts not covered
by insurance policies), within the limits set forth in Section 6 above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">8.</TD><TD STYLE="text-align: justify">Subject to the provisions of Sections 6 and 7 above, the indemnification hereunder will, in each
case, cover all sums of money (100%) that you will be obligated to pay, in those circumstances for which indemnification is permitted
under the law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">9.</TD><TD STYLE="text-align: justify">The Company will be entitled to any amount actually received from a third party in connection with
liabilities indemnified hereunder, to be paid by you to the Company within fifteen (15) days following the receipt of the said
amount.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">10.</TD><TD STYLE="text-align: justify">In all indemnifiable circumstances, indemnification will be subject to the following:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">10.1.</TD><TD STYLE="text-align: justify">You shall promptly notify the Company in writing of any legal proceedings initiated against you
and of all possible or threatened legal proceedings without delay following your first becoming aware thereof, and you shall deliver
to the Company, or to such person as it shall advise you, without delay all documents you receive or possess in connection with
these proceedings or possible or threatened proceedings. Notice to the Company shall be directed to the Chief Executive Officer
of the Company at the address shown in the signature page of this Letter (or such other address as the Company shall designate
to you).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">10.2.</TD><TD STYLE="text-align: justify">Similarly, you must notify the Company in writing (addressed as described in Section 10.1 above)
on an ongoing and current basis concerning all events that you suspect may possibly give rise to the initiation of legal proceedings
against you.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">10.3.</TD><TD STYLE="text-align: justify">Other than with respect to proceedings that have been initiated against you by the Company or in
its name, the Company shall be entitled to undertake the conduct of your defense in respect of such legal proceedings and/or to
hand over the conduct thereof to any attorney which the Company may choose for that purpose, except to an attorney that you reasonably
deem to be unacceptable. The Company and/or the attorney as aforesaid shall be entitled, within the context of the conduct as aforesaid,
to conclude such proceedings, all as it shall see fit, including by way of settlement. At the request of the Company, you shall
execute all documents required to enable the Company and/or its attorney as aforesaid to conduct your defense in your name, and
to represent you in all matters connected therewith, in accordance with the aforesaid. For the avoidance of doubt, in the case
of criminal proceedings the Company and/or the attorneys as aforesaid will not have the right to plead guilty in your name or to
agree to a plea-bargain in your name without your consent. Furthermore, in a civil proceeding (whether before a court or as a part
of a compromise arrangement), the Company and/or its attorneys will not have the right to admit to any occurrences that are not
indemnifiable pursuant to this Letter and/or pursuant to law, without your consent. However, the aforesaid will not prevent the
Company and/or its attorneys as aforesaid, with the approval of the Company, to come to a financial arrangement with a plaintiff
in a civil proceeding without your consent so long as such arrangement will not be an admittance of an occurrence not fully indemnifiable
pursuant to this Letter and/or pursuant to law and further provided that any such settlement or arrangement does not impose on
you any liability or limitation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">10.4.</TD><TD STYLE="text-align: justify">You will fully cooperate with the Company and/or any attorney as aforesaid in every reasonable
way as may be required of you within the context of their conduct of such legal proceedings, including but not limited to the execution
of power(s) of attorney and other documents, provided that the Company shall cover all costs incidental thereto such that you will
not be required to pay the same or to finance the same yourself.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">10.5.</TD><TD STYLE="text-align: justify">If, in accordance with Section 10.3, the Company has taken upon itself the conduct of your defense,
you shall have the right to employ counsel in any such action, suit or proceeding, but the fees and expenses of such counsel, incurred
after the assumption by the Company of the defense thereof, shall be at your expense unless: (i) the employment of counsel by you
has been authorized by the Company; or (ii) you and the Company shall have reasonably concluded that there may be a conflict of
interest between the Company and yourself in the conduct of the defense of such action, in each of which cases the reasonable fees
and expenses of counsel shall be at the expense of the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.3in"></TD><TD STYLE="width: 0.3in">10.6.</TD><TD STYLE="text-align: justify">The Company will have no liability or obligation pursuant to this Letter to indemnify you for any
amount expended by you pursuant to any compromise or settlement agreement reached in any suit, demand or other proceeding as aforesaid
without the Company&rsquo;s prior written consent to such compromise or settlement, which consent shall not be unreasonably withheld.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 100%; text-align: center">B-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">11.</TD><TD STYLE="text-align: justify">The Company hereby exempts you, to the fullest extent permitted by law, from any liability for
damages caused as a result of a breach of your duty of care to the Company, provided that in no event shall you be exempt with
respect to any actions listed in Section 2 above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">12.</TD><TD STYLE="text-align: justify">If for the validation of any of the undertakings in this Letter any act, resolution, approval or
other procedure is required, the Company undertakes to make its best efforts to cause them to be done or adopted in a manner which
will enable the Company to fulfill all its undertakings as aforesaid.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">13.</TD><TD STYLE="text-align: justify">For the avoidance of doubt, it is hereby clarified that nothing contained in this Letter derogates
from the Company&rsquo;s right (but in no way obligation) to indemnify you post factum for any amounts which you may be obligated
to pay as set forth in Section 1 above without the limitations set forth in Sections 5 and 6 above. The Company may, in its sole
discretion, following receipt of necessary corporate approvals, and subject to applicable law, indemnify you retroactively for
actions committed prior to the date of this Letter. Your rights of indemnification hereunder shall not be deemed exclusive of any
other rights you may have under the Company&rsquo;s Articles of Association or applicable law or otherwise.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">14.</TD><TD STYLE="text-align: justify">In the event of payment under this Letter, the Company shall be subrogated to the extent of such
payment to all of the rights of your recovery, and you shall execute all documents required and shall do everything that may be
necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">15.</TD><TD STYLE="text-align: justify">If any undertaking included in this Letter is held invalid or unenforceable, such invalidity or
unenforceability will not affect any of the other undertakings, which will remain in full force and effect. Furthermore, if such
invalid or unenforceable undertaking may be modified or amended so as to be valid and enforceable as a matter of law, such undertakings
will be deemed to have been modified or amended, and any competent court or arbitrator are hereby authorized to modify or amend
such undertaking, so as to be valid and enforceable to the maximum extent permitted by law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">16.</TD><TD STYLE="text-align: justify">No supplement, modification or amendment of this Letter shall be binding unless executed in writing
by both of the parties hereto. No waiver of any of the provisions of this Letter shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. Any waiver shall be
in writing.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">17.</TD><TD STYLE="text-align: justify">Neither party hereto may assign any of its rights or obligations hereunder except with the express
prior written consent of the other party. Nothing herein in this Letter shall be deemed to create or imply an obligation for the
benefit of a third party. Without limitation of the foregoing, nothing herein shall be deemed to create any right of any insurer
that provides directors and officers&rsquo; liability insurance, to claim, on your behalf, any rights hereunder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in">18.</TD><TD STYLE="text-align: justify">This Letter and the agreements contained herein shall be governed by and construed and enforced
in accordance with the laws of the State of Israel.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This Letter is being issued to you pursuant
to the resolution adopted by the Audit Committee on ___________, 2017, Board of Directors on ___________, 2017 and the Company&rsquo;s
shareholders on ____________, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Kindly sign in the space provided below to acknowledge your
agreement to the contents hereof, and return this Letter to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%">Very truly yours,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>MAGIC SOFTWARE ENTERPRISES LTD.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">Agreed:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%">Name:</TD>
    <TD STYLE="width: 29%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 65%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Title:</TD>
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>CATEGORY
OF INDEMNIFIABLE EVENT</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.5in">1.</TD>
    <TD>Matters, events, occurrences or circumstances in connection or associated with employment relationships with employees or consultants or any employee union or similar or comparable organization.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>2.</TD>
    <TD>Matters, events, occurrences or circumstances in connection or associated with business relations of any kind between the Company and its employees, independent contractors, customers, suppliers, partners, distributors, agents, resellers, representatives, licensors, licensees, service providers and other business associates.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>3.</TD>
    <TD>Negotiations, execution, delivery and performance of agreements of any kind or nature and any decisions or deliberations relating to actions or omissions relating to the foregoing, any acts, omissions or circumstances that do or may constitute or are alleged to constitute anti-competitive acts, acts of commercial wrongdoing, or failure to meet any standard of conduct which is or may be applicable to such acts, omissions or circumstances.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>4.</TD>
    <TD>Approval of and recommendation or information provided to shareholders with respect to any and all corporate actions, including the approval of the acts of the Company&rsquo;s management, their guidance and their supervision, matters relating to the approval of transactions with Office Holders (including, without limitation, all compensation related matters) or shareholders, including controlling persons and claims and allegations of failure to exercise business judgment, reasonable level of proficiency, expertise, care or any other applicable standard, with respect to the foregoing or otherwise with respect to the Company&rsquo;s business, strategy, operations and prospective outlook, and any discussions, deliberations, reviews or other preparatory or preliminary phases relating to any of the foregoing.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>5.</TD>
    <TD>Violation, infringement, misappropriation, dilution and other misuse of copyrights, patents, designs, trade secrets, confidential information, proprietary information and any intellectual property rights, acts in connection with the registration, assertion or protection of rights to intellectual property and the defense of claims related to intellectual property, breach of confidentiality obligations, acts in regard of invasion of privacy including with respect to databases, acts in connection with slander and defamation, and claims in connection with publishing or providing any information, including any filings with any governmental authorities, whether or not required under any applicable laws.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>6.</TD>
    <TD>Violations of or failure to comply with securities laws, and any regulations or other rules promulgated thereunder, of any jurisdiction, including without limitation, claims under the U.S. Securities Act of 1933 or the U.S. Exchange Act of 1934 or under the Israeli Securities Law, fraudulent disclosure claims, failure to comply with any securities authority or any stock exchange disclosure or other rules and any other claims relating to relationships with investors, debt holders, shareholders, optionholders, holders of any other equity or debt instrument of the Company, and otherwise with the investment community (including without limitation any such claims relating to merger, change in control, issuances of securities, restructuring, spin out, spin off, divestiture, recapitalization or any other transaction relating to the corporate structure or organization of the Company) ; claims relating to or arising out of financing arrangements, any breach of financial covenants or other obligations towards investors, lenders or debt holders, class actions, violations of laws requiring the Company to obtain regulatory and governmental licenses, permits and authorizations in any jurisdiction, including in connection with disclosure, offering or other transaction related documents; actions taken in connection with the issuance, purchase, holding or disposition of any type of securities of Company, including, without limitation, the grant of options, warrants or other rights to purchase any of the same or any offering of the Company&rsquo;s securities (whether on behalf of the Company or on behalf of any holders of securities of the Company) to private investors, underwriters, resellers or to the public, and listing of such securities, or the offer by the Company to purchase securities from the public or from private investors or other holders, and any undertakings, representations, warranties and other obligations related to any of the foregoing or to the Company&rsquo;s status as a public company or as an issuer of securities.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">7.</FONT></TD>
    <TD>Liabilities arising in connection with any products or services developed, distributed, rendered, sold, provided, licensed or marketed by the Company or any Affiliate thereof, and any actions or omissions in connection with the distribution, provision, sale, marketing, license or use of such products or services, including without limitation in connection with professional liability and product liability claims.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">8.</FONT></TD>
    <TD>The offering of securities by the Company (whether on behalf of itself or on behalf of any holder of securities and any other person) to the public and/or to offerees or the offer by the Company to purchase securities from the public and/or from private investors or other holders pursuant to a prospectus, offering documents, agreements, notices, reports, tenders and/or other processes.</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="text-underline-style: double">9.</FONT></TD>
    <TD>Events, facts or circumstances in connection with change in ownership or in the structure of the Company, its reorganization, dissolution, winding up, any other arrangements concerning creditors rights, merger, change in control, issuances of securities, restructuring, spin out, spin off, divestiture, recapitalization or any other transaction relating to the corporate structure or organization of the Company, and the approval of failure to approve of any corporate actions and any matters relating to corporate governance, capital structure, articles of association or other charter or governance documents, appointment or dismissal of office holders or compensation thereof and appointment or dismissal of auditors, internal auditor or any other person performing any services for the Company.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">10.</FONT></TD>
    <TD>Any claim or demand made in connection with any transaction not in the ordinary course of business of the Company, as well as the sale, lease, purchase or acquisition of, or the receipt or grant of any rights with respect to, any assets or business.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">11.</FONT></TD>
    <TD>Any claim or demand made by any third party suffering any personal injury and/or bodily injury or damage to business or personal property or any other type of damage through any act or omission attributed to the Company, or its employees, agents or other persons acting or allegedly acting on its behalf, including, without limitation, failure to make proper safety arrangements for the Company or its employees and liabilities arising from any accidental or continuous damage or harm to the Company&rsquo;s employees, its contractors, its guests and visitors as a result of an accidental or continuous event, or employment conditions, permanent or temporary, in the Company&rsquo;s offices.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">12.</FONT></TD>
    <TD>Any claim or demand made directly or indirectly in connection with complete or partial failure, by the Company or its directors, officers and employees, to pay, report, keep applicable records or otherwise, of any local or foreign federal, state, county, municipal or city taxes or other taxes or compulsory payments of any nature whatsoever, including, without limitation, income, sales, use, transfer, excise, value added, registration, severance, stamp, occupation, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll or employee withholding or other withholding, including any interest, penalty or addition thereto, whether disputed or not.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">13.</FONT></TD>
    <TD>Any administrative, regulatory, judicial or civil actions orders,&#9;decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or violation by any governmental entity or other person alleging potential responsibility or liability (including potential responsibility or liability for costs of enforcement investigation, cleanup, governmental response, removal or remediation, for natural resources damages, property damage, personal injuries or penalties or for contribution, indemnification, cost recovery, compensation or injunctive relief) arising out of, based on or related to (a) the presence of, release, spill, emission, leaning, dumping, pouring, deposit, disposal, discharge, leaching or migration into the environment (each a &ldquo;<B>Release</B>&rdquo;) or threatened Release of, or exposure to, any hazardous, toxic, explosive or radioactive substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing material, polychlorinated biphenyls (&ldquo;<B>PCBs</B>&rdquo;) or PCB-containing materials or equipment, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any environmental law, at any location, whether or not owned, operated, leased or managed by the Company or any of its subsidiaries, or (b) circumstances forming the basis of any violation of any environmental law or environmental permit, license, registration or other authorization required under applicable environmental law.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">14.</FONT></TD>
    <TD>Any administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or violation by any governmental or regulatory entity or authority or any other person alleging the failure to comply with any statute, law, ordinance, rule, regulation, order or decree of any governmental entity applicable to the Company or any of its businesses, assets or operations, or the terms and conditions of any operating certificate or licensing agreement.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">15.</FONT></TD>
    <TD>Participation and/or non-participation at Company Board meetings, expression of opinion or view and/or voting and/or abstention from voting at Company Board meetings, including, in each case, any committee thereof, as well as expression of opinion publicly in connection with the service as an Office Holder.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">16.</FONT></TD>
    <TD>Review and approval of the Company&rsquo;s financial statements and any specific items or matters within, including any action, consent or approval related to or arising from the foregoing, including, without limitations, engagement of or execution of certificates for the benefit of third parties related to the financial statements.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">17.</FONT></TD>
    <TD>Violation of laws, rules or regulations requiring the Company to obtain regulatory and governmental licenses, permits and authorizations (including without limitation relating to export, import, encryption, antitrust or competition authorities) or laws related to any governmental grants in any jurisdiction.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">18.</FONT></TD>
    <TD>Resolutions and/or actions relating to investments in the Company and/or its subsidiaries and/or affiliated companies and/or investment in corporate or other entities and/or investments in other traded or non-traded securities and/or any other form of investment.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">19.</FONT></TD>
    <TD>Liabilities arising out of advertising, including misrepresentations regarding the Company&rsquo;s products or services and unlawful distribution of emails.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">20.</FONT></TD>
    <TD>Management of the Company&rsquo;s bank accounts, including money management, foreign currency deposits, securities, loans and credit facilities, credit cards, bank guarantees, letters of credit, consultation agreements concerning investments including with portfolio managers, hedging transactions, options, futures, and the like.</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="text-underline-style: double">21.</FONT></TD>
    <TD>All actions, consents and approvals, including any prior discussions, reviews and deliberations, relating to a distribution of dividends, in cash or otherwise, or to any other &ldquo;distribution&rdquo; as such term is defined under the Companies Law.</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="text-underline-style: double">22.</FONT></TD>
    <TD>Any administrative, regulatory, judicial, civil or criminal, actions orders,&#9; decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance, violation or breaches alleging potential responsibility, liability, loss or damage (including potential responsibility or liability for costs of enforcement, investigation, cleanup, governmental response, removal or remediation, property damage or penalties, or for contribution, indemnification, cost recovery, compensation or injunctive relief), whether alleged or claimed by customers, consumers, regulators, shareholders or others, arising out of, based on or related to: (a) cyber security, cyber attacks, data loss or breaches, unauthorized access to databases and use or disclosure of information contained therein, not preventing or detecting the breach or failing to otherwise disclose or respond to the breach; (b) circumstances forming the basis of any violation of any law, permit, license, registration or other authorization required under applicable law governing data security, data protection, network security, information systems, privacy or any cyber environment (including, users, networks, devices, software, processes, information systems, databases, information in storage or transit, applications, services, and systems that can be connected directly or indirectly to networks); (c) failure to implement a reporting system or control, or failure to monitor or oversee the operation of such a system; (d) data destruction, extortion, theft, hacking, and denial of service attacks; losses or liabilities to others caused by errors and omissions, failure to safeguard data or defamation; or (e) security-audit, post-incident public relations and investigative expenses, criminal reward funds, data breach/privacy crisis management (including, management of an incident, investigation, remediation, data subject notification, call management, credit checking for data subjects, legal costs, court attendance and regulatory fines), extortion liability (including, losses due to a threat of extortion, professional fees related to dealing with the extortion), or network security liability (including, losses as a result of denial of access, costs related to data on third-parties and costs related to the theft of data on third-party systems).</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>EXHIBIT
A*</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">*</TD><TD STYLE="text-align: justify">Any reference in this Exhibit A to the Company shall include
the Company and any entity in which the Indemnitee serves in a Corporate Capacity.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>tv483713_ex99-2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT 99.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>MAGIC SOFTWARE ENTERPRISES
LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
appoints Asaf Berenstin and Amit Birk, or either of them, attorneys or attorney of the undersigned, for and in the name(s) of the
undersigned, with power of substitution and revocation in each to vote any and all ordinary shares, par value NIS 0.1 per share,
of Magic Software Enterprises Ltd. (the &ldquo;Company&rdquo;), which the undersigned would be entitled to vote as fully as the undersigned
could if personally present at the 2017 Annual General Meeting of Shareholders of the Company to be held on Wednesday, February
28, 2018 at 2:00 p.m. (Israel time) at the offices of the Company, 5 HaPlada Street, Or Yehuda 6021805, Israel, and at any adjournment
or adjournments thereof, hereby revoking any prior proxies to vote said shares, upon the following items of business more fully
described in the notice of and proxy statement for such 2017 Annual General Meeting (receipt of which is hereby acknowledged):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED.
IN THE ABSENCE OF SUCH SPECIFICATION, THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS
IN ITEM 1 AND ITEMS 2 THROUGH 7 SET FORTH ON THE REVERSE. ON ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE 2017 ANNUAL GENERAL
MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED ABOVE AS PROXIES.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>VOTES CAST FOR ITEMS 2 THROUGH 6 WILL
NOT BE COUNTED UNLESS &ldquo;YES&rdquo; OR &ldquo;NO&rdquo; HAS BEEN SPECIFIED AS TO WHETHER THE SHAREHOLDER IS A CONTROLLING SHAREHOLDER
OR HAS A PERSONAL INTEREST (AS DEFINED IN THE PROXY STATEMENT) WITH RESPECT TO THE PROPOSAL.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(Continued and to
be signed on the reverse side)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>2017 ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>MAGIC SOFTWARE ENTERPRISES LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>February 28, 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Please date, sign and mail</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>your proxy card in the</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>envelope provided as soon</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>as possible.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Please detach along perforated line and
mail in the envelope provided.</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">THE BOARD OF DIRECTORS RECOMMENDS A VOTE &ldquo;FOR&rdquo; THE ELECTION OF THE DIRECTORS NAMED IN ITEM 1 AND &ldquo;FOR&rdquo; PROPOSALS 2 THROUGH 7. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE </FONT><FONT STYLE="font-family: Wingdings">x</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">To re-elect three directors for terms expiring at the Company&rsquo;s 2018 Annual General Meeting
of Shareholders.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR</B></FONT></TD>
    <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-size: 10pt"><B>AGAINST</B></FONT></TD>
    <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-size: 10pt"><B>ABSTAIN</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">GUY BERNSTEIN</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">NAAMIT SALOMON</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">ART ZAKAY</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">To re-elect Mr. Ron Ettlinger to serve as an external director (as such term is defined in the
Israeli Companies Law) for a three-year term.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">ABSTAIN</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Are you (a) a controlling shareholder of
the Company; or (b) do you have a personal interest in the election of the nominee for external director?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">YES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">NO</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">To approve a revised compensation policy for the Company&rsquo;s directors and officers.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">ABSTAIN</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Are you (a) a controlling shareholder of
the Company; or (b) do you have a personal interest in the approval of the revised compensation policy?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">YES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">NO</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">To approve the grant of indemnity and exculpation undertakings to directors and officers.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">ABSTAIN</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Are you (a) a controlling shareholder of
the Company; or (b) do you have a personal interest in the grant of indemnity and exculpation undertakings to the directors and
officers?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">YES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">NO</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">To approve a directors and officers&rsquo; liability insurance policy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">ABSTAIN</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Are you (a) a controlling shareholder of
the Company; or (b) do you have a personal interest in the approval of a directors and officers&rsquo; liability insurance policy?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">YES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">NO</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(6)</TD><TD STYLE="text-align: justify">To approve a Services Agreement with a company affiliated with Guy Bernstein, the Company&rsquo;s
CEO, director and affiliate of the Company&rsquo;s controlling shareholder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">ABSTAIN</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Are you (a) a controlling shareholder of
the Company; or (b) do you have a personal interest in the approval of the Services Agreement with a company affiliated with Guy
Bernstein, the Company&rsquo;s CEO, director and affiliate of Company&rsquo;s controlling shareholder?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">YES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt">NO</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(7)</TD><TD STYLE="text-align: justify">To ratify and approve the re-appointment of Kost Forer Gabbay &amp; Kasierer, registered public
accounting firm, a member firm of Ernst &amp; Young Global, as the Company&rsquo;s independent registered public accounting firm
for the year ending December 31, 2017 and to authorize its Board of Directors to delegate to the Audit Committee the authority
to fix the compensation for such independent registered public accountants in accordance with the volume and nature of their services.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt"><B>FOR</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt"><B>AGAINST</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT>
<FONT STYLE="font-size: 10pt"><B>ABSTAIN</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">To change
the address on your account, please check the box at right and indicate your new address in the address space above. Please note
that changes to the registered name(s) on the account may not be submitted via this method. </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Signature of Shareholder _______ Date _____ Signature of Shareholder__________
Date _____</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Note: Please sign exactly as your name
or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name
by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized
person.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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