Further to the immediate report of Koor Industries Ltd. ("the Company") on August 29, 2013 (Ref. 2013-01-132831) concerning an application for the removal of discrimination and an application for its certification as a class action against the Company, Discount Investments Ltd. ("DIC") and IDB Development Ltd. ("IDB") in the matter of the merger transaction between Koor and DIC ("the Request for Certification"), and further to the Company's immediate report on November 22, 2013 (Ref. 2013-01-199788) concerning a settlement agreement signed with the plaintiff in that legal proceeding ("the Settlement Agreement Report" and "the Settlement Agreement"), the Company hereby reports as follows:

The court decided to allow the Settlement Agreement, subject to the p[arties' consent to the following amendments:

· Implementation of the supplementary arrangement described in section 2.2 of the Settlement Agreement Report was made contingent, inter alia, on the holders of at least 2% of the issued share capital of the Company responding affirmatively to the supplementary arrangement, as described in sub-section 2.2.10 of the Settlement Agreement Report. Approval of the Settlement Agreement is subject to cancellation of the term concerning that minimum rate of response or alternatively, this term will remain in the Settlement Agreement with a determination that if the supplementary arrangement is not implemented owing to that term, the shareholders of the Company who wish to join the supplementary arrangement will not be precluded from filing a claim in the future against any of the aforementioned companies.

· In addition, the Settlement Agreement will be amended so that it cancels claims and allegations relating only to the causes of claim alleged in the aforementioned legal proceeding by the plaintiff, and will create res judicata against the aforementioned companies only.

The Court instructed the parties to the Settlement Agreement to give notice within 7 days if they agree to the above amendments to the Settlement Agreement. The Court also determined that if the parties approve the amendments, the Court will hear and decide on an application filed in the Court by the Company for approval of a distribution as described in section 2.8 of the merger transaction report (approval of that distribution is one of the conditions precedent for closing the merger transaction). At this stage the position of the parties to the Settlement Agreement on the amendments is not yet known.

It is noted that the Court reduced to some extent the amounts awarded to the plaintiff and the fees of its counsel compared to the recommended amounts noted in the Settlement Agreement.

As noted in the Settlement Agreement Report, the force of the Settlement Agreement is contingent upon other conditions precedent which have not yet been fulfilled. Those conditions are described in section 2.3 of the Settlement Agreement Report.

It is noted that the Company is a subsidiary of DIC, which currently holds approximately 67% in the Company, and IDB, a controlling shareholder in DIC, holds 1.2% in the Company and 74% in DIC.


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