1. Odelia – Center for Therapy, Rehabilitation & Recovery from Breast Cancer Arad, Isaral Economic Model – Main Assumptions - Establishment: - Public hotel construction in accordance with standards (Fire, HFC, environment, accessibility, etc.) - Construction and development at a better than reasonable level - Infrastructure: Including electrical room, sewage pumping station & basic restoration of the access road - Duration of design and construction: 2 years - Obstacle: Zoning yet to be approved - Operations: - Price for accommodation (basic scenario): NIS 750 per room, B&B - Number of guests/room: average of 1.5 - Separate payment for meals: NIS 100 per person per meal (lunch or dinner) - Average annual occupancy (basic scenario): 60% - Business: - The hotel operates as a limited company and pays taxes (based on its disposable income) -The basic scenario does not take into account the costs of the real estate transaction, for either the land rights (a function of the results of the model) or taxes (improvement tax, purchase tax) - Revenue from the association for the use of dedicated activity space – covers relevant current expenses and overhead - Financing /funding: - The model is spread over 12 years, including one remodeling cycle. The prices are linked and do not include VAT (guest prices include VAT and adjustments were made) - Construction grant (Ministry of Tourism): 20% of total investment - Financing of the project cost, net of grants: - 70% - Bank loan for 7 years, repayment begins in the third year of operations, 4.5% interest rate - 30% - Equity / donations January 2015 1

2. Economic Model - Principal Findings and Conclusions - Investment: about NIS 48.6 m, not including land - Financing needs / donations / equity: 30% of the total investment required - Basic scenario (60 rooms / NIS 750/room / 60% occupancy), not including the price of land: - Economic viability data: IRR = 16.25%; ROI = 5 years - Partially dependent on a construction grant from the Ministry of Tourism / tax exemption - As noted, the plan does not include the price of the land. With the land (including taxes) valued at NIS 10 m (for test purposes only): IRR = 9.4%; ROI = 11 years - A bridge loan may be required for the renovations 2 Odelia – Center for Therapy, Rehabilitation & Recovery from Breast Cancer Arad, Isaral January 2015

3. Appendix - Program -Requirements for Construction & Development - for up to 150 guests, simultaneously: 3 UseArea (m 2 )Notes Rooms2,400‏60 rooms at 40 m 2 /room Special public, activity spaces 600 10 rooms, average area: 60 m 2 each, for activities, treatments, and other meetings, including restrooms and showers Conference hall600Approximately 200 people General public areas400 General, roofed areas, such as the entrance hall, service and reception, library, music room, tea corner, restrooms Kitchen and dining‏400‏ Vegetarian kitchen for cooking: 240 m 2 ; dining area for approximately 60 people simultaneously: approximately 160 m 2 (More guests at one time will require dining in shifts) Maintenance, storage logistics ‏150‏ Administrative offices‏100‏Shared by the hotel and the association Total construction4,650 m 2 Exterior development to support activities Approx. 3,000 m 2 Intensive development, including paved areas, awnings, garden furniture, appropriate landscaping, background lighting; initial estimate General development and parking Approx. 6,000 m 2 Extensive, combination of stone and concrete sidewalks; Initial estimate Odelia – Center for Therapy, Rehabilitation & Recovery from Breast Cancer Arad, Isaral January 2015

4. 4 Appendix - Program Management and Operations : - Self-management, “lean”, based on an experienced management core + recruiting and training of local staff - Organization: (in brackets is the number of jobs in for hotel only, excl. activities/content/treatments, etc.) - Hotel manager (1) - Purchasing, organization, HR & administration manager (1) - Service and guest information supervisor– Reception and secretarial (3) - Rooms and cleaning, including public and open spaces (3) - Operations and maintenance coordinator (1) - Security (3) - Sales, marketing and PR, including conferences (1) - Accounting (0.5) - External services: accounting and payroll, computing, legal advice, technical maintenance - Catering: - Chef (1) - Kitchen workers (3) - Waiters (3) to serve to 60 people at a time - Reinforcement as needed (conferences, special events) - Total jobs: 20.5, including 7 for catering - Management, coordination and operation of the special activities and content will be based in the center’s management offices (separate office space will be allocated for this purpose – an integral part of the model) - Marketing channels to be mapped separately - Emphasis on recruiting from Arad area and employing women Odelia – Center for Therapy, Rehabilitation & Recovery from Breast Cancer Arad, Isaral January 2015