It is a condition of our offer that prior to the expiration of our offer either –

699,025 or more Optibase Shares shall have been validly tendered, and not validly withdrawn, and the majority of those Optibase Shares shall have been tendered by offerees who do not have a “personal interest,” within the meaning of the Israeli Companies Law and as described below, in the offer; or

855,512 or more Optibase Shares shall have been validly tendered, and not validly withdrawn.

Our offer is subject to customary additional conditions but our offer is not conditioned on the availability of financing or the approval of the board of directors of Optibase.

Under the Israeli Companies Law, a “personal interest” of a person in an action or transaction of a company (i) includes a personal interest of (a) any spouse, sibling, parent, grandparent or descendant of the person, any descendant, sibling or parent of a spouse of the person and the spouse of any of the foregoing; and (b) a company with respect to which the person (or any of the foregoing relatives of the person) owns at least 5% of the outstanding shares or voting rights, serves as a director or chief executive officer or has the right to appoint one or more directors or the chief executive officer; and (ii) excludes a personal interest arising solely from the ownership of shares.  Under the Israeli Companies Law, in the case of a person tendering by proxy “personal interest” includes the personal interest of either the proxy holder or the shareholder granting the proxy, whether or not the proxy holder has discretion how to tender the shares.  In accordance with the Israeli Companies Law, each tendering shareholder is required to inform us when tendering their Optibase Shares, by indicating in the Letter of Transmittal, whether or not it has a personal interest in the acceptance of the offer; otherwise, such tendering shareholder will be deemed to have not tendered its Optibase Shares in the offer and its Optibase Shares will not be counted for the purposes of determining if the minimum condition has been satisfied.

If any condition is not satisfied, we may elect not to purchase, or may be prohibited from purchasing, any Optibase Shares tendered pursuant to the offer, or, subject to applicable law, we may waive such conditions. We will  not waive the minimum condition. See “Introduction,” Section 9 - “Terms of the Offer; Expiration Date” and Section 19 – “Conditions of the Offer.”

The purpose of the offer is for Capri to acquire the entire equity interest in Optibase. See “Special Factors – Purpose of the Offer; Effects of the Offer; Plans for Optibase.”

We are offering to pay $11.20 per Optibase Share, net to you (subject to withholding taxes, as applicable), in cash, without interest (the “Offer Price”). All shareholders tendering their Optibase Shares in the offer will be paid solely in United States dollars. See “Introduction,” Section 9 - “Terms of the Offer; Expiration Date,” Section 10 – “Acceptance for Payment and Payment,” and, with respect to withholding taxes, Section 13 – “Material U.S. Federal Income Tax and Israeli Income Tax Consequences.”

Capri currently owns 4,097,201 Optibase Shares, or approximately 78.6% of the outstanding Optibase Shares, and Mr. Wyler owns an additional 159,218 Optibase Shares, or approximately 3.1% of the outstanding Optibase Shares.

On June 29, 2021, the last full trading day before we announced our intention to make an offer for all of the outstanding Optibase Shares not owned by the bidder group, the last reported closing price per Optibase Share reported on Nasdaq was $11.00 and on the TASE was NIS 35.78.

Yes. We possess all of the necessary funds to consummate the offer from cash on hand and an existing loan facility with a third party lender. The offer is not conditioned on the availability of financing.

According to Israeli law, to secure the payment for the Optibase Shares tendered pursuant to the offer, the Israeli Depositary, which is a TASE member, has agreed to guarantee our obligation to pay for the Optibase Shares tendered and accepted by us for payment pursuant to the offer. To secure this guarantee, we have engaged the Israeli Depositary to act as an escrow agent and have deposited cash into an escrow account in an amount sufficient to pay for the maximum number of Optibase Shares that we are offering to purchase in the offer.

We do not believe that our financial condition is material to your decision whether to tender Optibase Shares and accept the offer because --

The offer consideration consists solely of cash;

the offer is not subject to any financing condition;

all of the funds necessary to consummate the offer are available to us either as cash on hand or from an existing loan facility with a third party lender, and we have deposited cash into an escrow account with the Israeli Depositary in an amount sufficient to pay for the maximum number of Optibase Shares that we are offering to purchase in the offer;

we are already a controlling shareholder of Optibase; and

we are a private foundation and our financial statements primarily reflect our management’s ability to manage an investment portfolio, rather than our ability to manage an operating company such as Optibase.

You may tender your Optibase Shares until 10:00 a.m., New York time, or 5:00 p.m., Israel time, on December 30, 2021 (as may be extended, the “Expiration Date”).

If you hold your Optibase Shares through a TASE member, you should tender your Optibase Shares to the Israeli Depositary by following the applicable procedures and instructions described in Section 11 - “Procedures for Tendering Shares”; and

All other holders of Optibase Shares should tender their Optibase shares to the U.S. Depositary by following the applicable procedures and instructions described in Section 11 - “ Procedures for Tendering Shares.”

You may withdraw your tender at any time before 10:00 a.m., New York time, or 5:00 pm Israel time, on December 30, 2021 or, if we extend our offer, before 10:00 a.m., New York time, or 5:00 pm Israel time, on the date to which the offer is extended.

All of the Optibase Shares validly tendered pursuant to the offer and not properly withdrawn will be paid for promptly following the Expiration Date.  We expect to make such payment within four U.S. business days following the Expiration Date. See Section 9 - “Terms of the Offer; Expiration Date,” Section 10 – “Acceptance for Payment and Payment” and Section 19 – “Conditions of the Offer.”

We have the right, in our sole discretion, to extend the Expiration Date, subject to applicable law. In addition, in certain circumstances, we may be required by law to extend the Expiration Date.  See Section 9 - “Terms of the Offer; Expiration Date.”

If we decide to extend the Expiration Date, we will inform the Depositaries, the Information Agent and our Israeli legal counsel of that fact. We will also publicly announce the new Expiration Date in accordance with applicable law, and in any event we will issue a press release no later than 9:00 a.m., New York time, or 4:00 p.m., Israel time, on the first U.S. business day following the day on which we decide to extend the Expiration Date. Under Israeli law, we are required to file an immediate report with the ISA no later than one Israeli business day prior to the previously scheduled Expiration Date, and, within one Israeli business day thereafter, publish the notice in two daily newspapers having a mass circulation and published in Israel in Hebrew. See Section 9 - “Terms of the Offer; Expiration Date.”

Under applicable U.S. law, no later than ten U.S. business days from the date of this offer to purchase, Optibase is required to publish, send or give to you a statement disclosing that it either recommends acceptance or rejection of the offer, expresses no opinion and remains neutral toward the offer, or is unable to take a position with respect to the offer.

Under Israeli law, Optibase’s board of directors is not required to express its opinion to the shareholders on the advisability of the offer, and it may refrain from expressing an opinion on the offer.

Yes. Capri currently owns approximately 78.6% of the outstanding Optibase Shares and controls Optibase. Mr. Wyler owns approximately 3.1% of the outstanding Optibase Shares and serves as the Chief Executive Officer of its subsidiary, Optibase Inc. Mr. Rouven Schwarz serves as a member of both the board of directors of Optibase and the board of trustees of Capri, and Mr. Schwarz entered into a service agreement with Optibase under which Mr. Schwarz provides real estate related consulting services to Optibase, its subsidiaries and affiliates. Mr. Wyler is the father in law of Mr. Schwarz. These relationships may be deemed to create a conflict between the interest of each member of our bidder group to fulfill their duties to Optibase and its unaffiliated shareholders, on one hand, and their interest in consummating the offer on the best possible terms for Capri, on the other hand.

Yes. However, we believe this offer is not a necessary part of a going private transaction because we believe, based on the number of record holders of Optibase Shares during recent periods, that Optibase currently is able to delist the Optibase Shares from Nasdaq and deregister the Optibase Shares under the Exchange Act. See Section 2 – “Position of Capri Regarding the Fairness of the Transaction.”

Capri currently is an affiliate of Optibase and, if the offer is consummated, the shares of Optibase will cease to be traded on Nasdaq and cease to be registered under the Exchange Act. Because of these features, our offer is part of a “going private” transaction as that term is used in SEC Rule 13e-3. In addition, if the offer is consummated, we will become a private company (within the meaning of Israeli law) and Optibase Shares will cease to trade on the TASE. See Section 6 – “Rule 13e-3.”

Each member of our bidder group believes that the offer, and the Offer Price to be received by holders of Optibase Shares who are unaffiliated with Optibase pursuant to the offer, are fair to such holders.

The Offer Price represents a premium of approximately:

1.8% to the closing price of the Optibase Shares on Nasdaq on June 29, 2021, the last trading day prior to the date that we announced that we were taking initial steps to commence the offer;

9.27% to the closing price of the Optibase Shares on Nasdaq on November 30, 2021, the last trading day prior to commencement of our offer; and

2.84% to the average closing price of the Optibase Shares on Nasdaq during the six months prior to commencement of the offer.

MNS Consulting, the financial advisor to Capri, delivered to us a fairness opinion, attached as Annex A to this Offer to Purchase, as to the fairness of the Offer Price to be received by holders of Optibase Shares who are unaffiliated with Optibase.

Our offer has procedural features that help ensure fairness to holders of Optibase Shares who are not affiliated with Optibase.

The receipt of cash for Optibase Shares accepted for payment by us from tendering shareholders who are “United States persons” for United States federal income tax purposes will be treated as a taxable transaction for United States federal income tax purposes.

The receipt of cash for Optibase Shares accepted for payment by us from tendering shareholders generally will be a taxable transaction for Israeli income tax purposes for both Israeli residents and non-Israeli residents, unless a specific exemption is available or a tax treaty between Israel and the shareholder’s country of residence provides otherwise.

We have obtained an approval from the Israel Tax Authority with respect to the Israeli withholding tax rates applicable to shareholders as a result of the sale of Optibase Shares pursuant to the offer. The approval provides, among other things, that (1) shareholders who meet the following criteria will not be subject to Israeli withholding tax: (a) they acquired their Optibase Shares after its initial public offering in the United States on Nasdaq in 1999; (b) they do not hold their Optibase Shares through an Israeli broker or Israeli financial institution; (c) they hold less than 5% of Optibase Shares; (d) they certify that they are not, and at the date of purchase of their Optibase Shares were not Israeli residents (and, (i) in the case of a corporation, that no Israeli residents hold 25.0% or more of the means to control such corporation or are the beneficiaries of, or are entitled to, 25.0% or more of the revenues or profits of such corporation, whether directly or indirectly, or (ii) in the case of a partnership, that no partner in the partnership is an Israeli resident and no Israeli resident holds, directly or indirectly via shares or through a trust or in any other manner or with another who is an Israeli resident, 25.0% or more of any right in the partnership or, of the right to direct the manner of exercising any of the rights in the partnership); provided that (A) with respect to shareholders who are individuals, they timely provide a copy of their passport; and (B) with respect to shareholders that shall receive an aggregate Offer Price that is in an amount in excess of US$100,000, they timely submit a valid certificate of residency for tax purposes issued by the applicable tax authority of their country of residence, (2) payments to be made to tendering shareholders who hold their Optibase Shares through an Israeli broker or Israeli financial institution will be made by us without any Israeli withholding at source, and the relevant Israeli broker or Israeli financial institution will withhold Israeli tax, if any, as required by Israeli law, and (3) shareholders who are not described in clauses (1) and (2) above will be subject to Israeli withholding tax at the applicable rate of the gross proceeds payable to them pursuant to the offer, unless such shareholders obtain a tax withholding certificate from the Israel Tax Authority, all as prescribed by Israeli tax law.

We (MSN Consulting Ltd.) have been asked by The Capri Family Foundation (the “Client”) to provide an opinion on the fairness, from a financial point of view, to the unaffiliated holders of the outstanding ordinary shares (the “Shares” or “OBAS Shares”) of Optibase Ltd. (the “Company”) of the Offer Price to be received by such holders in the Tender Offer (as those terms are defined below)(the “Fairness Opinion”). The Tender Offer is for all of the Shares not held by the Client or members of its bidder group (the “Tender Offer”), pursuant to which the Client will pay, in cash, $11.2 per Share (the “Offer Price”).

We were asked to present our opinion solely regarding financial aspects of the Tender Offer. Our economic assessment intends to reflect in a fair and reasonable manner a given situation, based on known data and in respect to the basic assumptions and estimated forecasts.

The date of initial contact between the Client and ourselves was June 30, 2021.

In connection with the Fairness Opinion we conducted an evaluation of the Company (the “Evaluation”).

The Evaluation was presented to the Client on November 30, 2021 and relies on Optibase’s financial statements as of March 31, 2021.

This document includes a specification of the methodology which was used in the Evaluation. However, the specification does not include the complete details of the procedures which we implemented in structuring the Evaluation.

In the framework of the Evaluation, we tested the fair value of the Company using net asset value methodology and by adjusting the values of items on the Company's balance sheet to their fair values. Among other things, we based on appraisals or used discounted cash flow methodology in relation to the value of the Company's assets and regarding the fair value of the Company’s loans.

In conducting the Evaluation, we have relied on, among other things, the following sources:

The Company’s financial statements

Third party appraisals, furnished to us by Company, of its main assets (in Chemin des Aulx, Switzerland; Rumlang, Switzerland; and Miami, Florida)

Conversations with the management of the Company

Historical data regarding market prices

Public reports on the Company from the ‘TASE’

Public information and data including the general background of the Company along with its sectors of activity

This Fairness Opinion is directed to the Client in connection with the Tender Offer and is not a recommendation to, and does not substitute independent judgment to be carried out by, any holder of Shares regarding the Tender Offer. Without derogating from the above, this Fairness Opinion shall not be quoted or used for any other purpose without the prior written consent of MNS Consulting Ltd. (“MNS”), except that this Fairness Opinion may be reproduced in full in, and reference to this Fairness Opinion, and to MNS and its relationship to the Client, may be included in, any tender offer materials or other materials relating to the Tender Offer that the Client files with the U.S. Securities and Exchange Commission or otherwise as required by law.

In composition of this Evaluation, we have relied on the sources listed above. We have relied on additional sources that, according to our personal long-term experience, we consider reliable. However, we have not independently investigated such sources and information, and therefore do not express our opinion regarding the authenticity, completeness, and/or the accuracy of the aforementioned data. Furthermore, we have not reviewed the aforementioned additional sources’ data and thus cannot speak to the authenticity, integrity, and/or accuracy of the data.

An economic evaluation should reasonably reflect a given situation at a specific time, based on known data and forecasts. It should be noted that the Evaluation relies on forward-looking assumptions and, as such, has no certainty regarding their realization. The information upon which we have relied may change or be affected by various factors which cannot be foreseen or controlled. The information on which we have relied on may differ substantially, in various manners, in light of any additional material, information, and/or event that shall or may be obtained or in light of events that shall or may occur after the preparation of the Evaluation.

This Fairness Opinion does not constitute a due diligence report and does not pretend in any form or manner to include any information, examinations, and conclusions provided by a due diligence report.

It should be emphasized that this Fairness Opinion does not constitute as legal advice or a legal opinion, nor as advice regarding investments in the Company's securities. Additionally, this Fairness Opinion does not take into consideration taxation aspects of the potential transactions.

MNS, its shareholders, senior management, and officers hereby declare that they have no conflict of interest regarding the Fairness Opinion. They have no personal connections to the Company, its shareholders, its board of directors and officers and any of the Company’s subsidiaries, nor have previously been employed by or hold any securities associated with any of the aforementioned.

The remunerations received for the Fairness Opinion have been pre-determined between the Client and MNS and are not dependent on the results and/or recommendations provided in the Fairness Opinion.

MNS shall bear no liability for any damages or financial loss that may occur to any person or company due to any flaw in the information on which we have relied, or arising from any failure to furnish us with other information that may be relevant to our Evaluation. In addition, and without derogating from the generality of the above, our limitation of liability for damages of any kind, other than damage caused due to our action in gross negligence and/or malice, is limited to up to three times the remunerations paid by the Client for this Fairness Opinion (the “Cap of Liability”). MNS shall not pay any compensation in excess of the Cap of Liability. The Client shall indemnify and/or reimburse MNS in any event in which MNS shall be required to pay an amount in excess of the Cap of Liability. In addition, the Client is obligated to indemnify MNS for reasonable expenses that will be incurred or be required to be paid for legal representation, legal advice, professional advice, defense against legal proceedings, negotiations, etc. The aforementioned indemnification obligation shall not apply if MNS acted, with respect to the services provided in the preparation of this document, in malice or in gross negligence.