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Exhibit 4.3

# INTERNATIONAL
SECURITIES PURCHASE AGREEMENT

This
International Securities Purchase Agreement (the Agreement) is dated as
of June 14, 2007, by and among Formula Systems (1985) Ltd. (the Seller)
and each of the non-US investors identified on the signature pages hereto (each, a
Purchaser and collectively, the Purchasers).

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Regulation
S promulgated under the Securities Act (as defined below), the Seller intends to sell to
the Purchasers, and the Purchasers, severally but not jointly, intend to purchase, an
aggregate of 8,038,526 ordinary shares (the Shares) of the outstanding
ordinary shares, NIS .01 per share (the Ordinary Shares) of BluePhoenix
Solutions Ltd. (the Company), held by the Seller, pursuant to the terms
hereof.

In
consideration of the mutual covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged, the
Seller and each Purchaser agree as follows:

1.        Purchase
and Sale. On the Closing Date, in accordance with and subject to           the terms
and conditions described in this Agreement, the Seller shall sell to           each
Purchaser, and each Purchaser, severally, and not jointly, shall purchase           from
the Seller, at the Per Share Purchase Price, that number of Shares, for the
          total purchase price, set forth opposite such Purchasers name on Schedule
          A.

Capitalized
terms used but not otherwise defined herein shall have the respective meanings set forth
in Section 7 hereof.

2.        Closing.

| | (a)        Closing.
On the Closing Date, each Purchaser shall purchase from the           Seller, and the
Seller shall sell to each Purchaser, the Shares as set forth in           Section 1, and
each Purchaser shall pay to the Seller, in consideration for such           Shares, the
purchase price as set forth in Section 1. On the Closing Date, the           Closing
shall occur at 4:00 p.m., Israel time, at the offices of Herzog Fox           & Neeman,
located at Asia House, 4 Weizman Street, Tel Aviv 64239, Israel or           such other
time and location as the parties shall mutually agree.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Deliveries.
| | ----------------------

| | (1)        On
or prior to the Closing Date, the Seller shall deliver or cause to be           delivered
to the applicable Purchaser the following:
| | --------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | this Agreement duly executed by the Seller;
| | -- | -------------------------------------------

| | ii. | a certificate, executed by the President of the Seller, dated as of the Closing
          Date, certifying on behalf of the Seller that the conditions specified in
          Sections 2(c)(2)(i), (ii), and (iii) have been satisfied;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii. | the opinion of Israeli counsel to Seller, substantially in the form of Exhibit A
          to this Agreement;
| | ---- | -------------------------------------------------------------------------------------------------------------

| | iv. | the opinion of Kramer, Levin, Naftalis & Frankel LLP, special US counsel to
          Seller, substantially in the form of Exhibit B to this Agreement; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



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| | v. | the Shares delivered by DWAC to an account designated by such Purchaser.
| | -- | ------------------------------------------------------------------------

| | (2)        On
or prior to the Closing Date, each of the Purchasers shall deliver or cause           to
be delivered to the Seller the following:
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | this Agreement duly executed by such Purchaser; and
| | -- | ---------------------------------------------------

| | ii. | the purchase price to be paid by such Purchaser, by wire transfer to an account
          designated in writing by the Seller.
| | --- | ------------------------------------------------------------------------------------------------------------------------------

| | (c)        Closing
Conditions.
| | ------------------------------

| | (1)        The
obligations of the Seller hereunder in connection with the Closing are           subject
to the following conditions being met:
| | ----------------------------------------------------------------------------------------------------------------------------------------------

| | i. | the accuracy in all material respects on the Closing Date of the representations
          and warranties of each of the Purchasers contained herein;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | all obligations, covenants and agreements of each of the Purchasers required to
          be performed at or prior to the Closing Date shall have been performed; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii. | the delivery by each of the Purchasers of the items listed in Section 2(b)(2) of
          this Agreement.
| | ---- | ----------------------------------------------------------------------------------------------------------

| | (2)        The
obligations of each of the Purchasers in connection with the Closing are
          subject to the following conditions being met:
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | the accuracy in all material respects on the Closing Date of the representations
          and warranties of the Seller contained herein;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------

| | ii. | all obligations, covenants and agreements of the Seller required to be performed
          at or prior to the Closing Date shall have been performed;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | iii. | there shall have been no Material Adverse Effect as defined in Section 4(a)
          hereof with respect to the Company since the date hereof;
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | iv. | On or after the date hereof there shall not have occurred any of the following:
          (i) a suspension in trading in the Companys securities on the NASDAQ
          Global Market; or (ii) a suspension in trading in the Companys securities
          on the Tel Aviv Stock Exchange.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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3.        Purchaser
Representations, Warranties and Covenants. Each Purchaser           hereby for itself
and for no other Purchaser, represents, warrants, acknowledges           and agrees as of
the date hereof and as of the Closing Date to the Seller as           follows:

| | (a)        The
Shares are not registered under the Securities Act of 1933, as amended (the
          Securities Act), or any state securities laws and neither
the           Company nor the Seller has present or future obligation to register or
cause the           registration of the Shares under the Securities Act. The Purchaser
understands           that the offering and sale of the Shares is intended to be not
subject to such           registration requirement by virtue of Regulation S promulgated
under the           Securities Act, based, in part, upon the representations, warranties
and           agreements of the Purchaser contained in this Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        The
Purchaser has not engaged on its behalf any placement agent, including the
          Placement Agents, or any broker or finder relating to this Agreement or the
          transactions contemplated hereby.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        The
Purchaser has such knowledge and experience in financial, tax, and business
          matters, and, in particular, investments in securities similar to the Shares so
          as to enable the Purchaser to evaluate the merits and risks of an investment in
          the Shares and to make an informed investment decision with respect thereto.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        The
Purchaser is not relying on the Company or any of its employees, officers or
          agents with respect to the legal, tax, economic and related considerations as
to           an investment in the Shares and the Purchaser has relied on the advice of,
or           has consulted with, only its own advisors.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)        The
Purchaser is not a U.S. Person within the meaning of Regulation S (a           U.S.
Person), is not acquiring the Shares of the Company for           the account
or benefit of, directly or indirectly, any U.S. Person, was not           organized under
the laws of any United States jurisdiction and was not formed           for the purpose
of investing in securities not registered under the Securities           Act. At the time
the application for the Shares was originated, the Purchaser           was outside the
United States or the person to whom any offer was made in the           United States is
a professional fiduciary organized in the United States holding           a discretionary
or similar account (other than an estate or trust) into which           the Shares are to
be sold for the benefit of a non-U.S. Person.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)        The
Purchaser has not acquired the Shares as a result of, and, during the 40-day
          distribution compliance period, will not itself engage in, any
          directed selling efforts (as defined in Regulation S) in the United
          States in respect of any of the Shares and it is not aware of, and has not
          purchased the Shares as a result of, any form of general solicitation or
general           advertising, including advertisements, articles, notices or other
communications           published in any newspaper, magazine or similar media or
broadcast over radio,           television or other form of telecommunications, including
Internet or web-based           communications, or any seminar or meeting whose attendees
have been invited by           general solicitation or general advertising.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        The
Purchaser understands and agrees that the Shares have not been and will not           be
registered under the Securities Act and that they may not be offered or sold
          within the United States or to, or for the account or benefit of, U.S.
          Persons unless registered under the Securities Act or an exemption from
          registration under the Securities Act is available.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        The
Purchaser will not offer or sell the Shares to a U.S. Person or for the           account
or benefit of a U.S. Person until the end of the 40-day           distribution
compliance period, as defined in Regulation S.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)        The
Purchaser will comply with the offering restrictions requirement           of
Regulation S during the 40-day distribution compliance period.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (j)        The
Shares are purchased for investment purposes, for the Purchasers own
          account, and without any present intention to sell or distribute the Shares
          except pursuant to sales that are exempt from the registration requirements of
          the Securities Act and/or sales registered under the Securities Act and, in
          particular, it has no intention to distribute either directly or indirectly any
          of the Shares in the United States or to U.S. Persons.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k)        Each
Purchaser that is not an entity represents that he or she has full power           and
authority to execute and deliver this Agreement and all other related
          agreements or certificates and to carry out the provisions hereof and thereof
          and to purchase and hold the Shares; this Agreement has been duly executed and
          delivered on behalf of the Purchaser and constitutes a legal, valid and binding
          obligation of the Purchaser, enforceable against the Purchaser in accordance
          with its terms subject to applicable bankruptcy, insolvency, fraudulent
          conveyance, reorganization, moratorium and similar laws affecting
          creditors rights and remedies generally and general principles of equity
          and the execution; and delivery of this Agreement by Purchaser will not violate
          or be in conflict with any order, judgment, injunction, agreement or
controlling           document to which Purchaser is a party or by which Purchaser is
bound.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l)        Each
Purchaser that is an entity represents that it is a corporation,           partnership,
limited liability company or partnership, association, joint stock           company,
trust, unincorporated organization or other entity, and that (A) the           Purchaser
is duly organized, validly existing and in good standing under the           laws of the
jurisdiction of its organization; (B) the consummation of the           transactions
contemplated hereby is authorized by, and will not result in a           violation of law
or the charter or other organizational documents of the           Purchaser; (C) the
Purchaser has full power and authority to execute and deliver           this Agreement
and all other related agreements or certificates and to carry out           the
provisions hereof and thereof and to purchase and hold the Shares; (D) the
          execution and delivery of this Agreement has been duly authorized by all
          necessary action of the Purchaser; (E) this Agreement, when executed and
          delivered in accordance with the terms hereof, will constitute the legal, valid
          and binding obligation of the Purchaser, enforceable against the Purchaser in
          accordance with its terms subject to applicable bankruptcy, insolvency,
          fraudulent conveyance, reorganization, moratorium and similar laws affecting
          creditors rights and remedies generally and general principles of equity;
          and (F) the execution and delivery of this Agreement by Purchaser will not
          violate or be in conflict with any order, judgment, injunction, agreement or
          controlling document to which Purchaser is a party or by which Purchaser is
          bound.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (m)        The
Purchaser represents that any information that it has heretofore furnished           or
that it hereafter furnishes in connection herewith is accurate and may be
          relied upon in determining the availability of an exemption from registration
          under Federal and state securities laws in connection with the Shares.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (n)        THE
SECURITIES OFFERED HEREBY ARE BEING OFFERED AND SOLD IN TRANSACTIONS NOT
          SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
          SECURITIES LAWS OF CERTAIN STATES. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
          APPROVED OR DISAPPROVED BY THE COMMISSION, ANY STATE SECURITIES COMMISSION, OR
          ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES
PASSED           UPON OR ENDORSED THE MERITS OF THE OFFERING OF THE SHARES. ANY
REPRESENTATION TO           THE CONTRARY IS UNLAWFUL.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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4.        Seller
Representations and Warranties.The Seller hereby represents,           warrants,
acknowledges and agrees as of the date hereof and as of the Closing           Date to
each of the Purchasers as follows:

| | (a)        Organization
and Qualification. Each of Seller and the Company is an           entity duly
incorporated or otherwise organized, validly existing and in good           standing
under the laws of the State of Israel, with the requisite power and           authority
to own and use its properties and assets and to carry on its business           as
currently conducted. Neither the Company nor the Seller is in violation of           any
of the provisions of its memorandum or articles of association. Each of           Seller
and the Company is duly licensed or qualified to do business, and in good
          standing, in each other jurisdiction in which the nature of its business
          requires licensing, qualification or good standing, except for any failure to
be           so licensed or qualified or in good standing such as would not, individually
or           in the aggregate (a) adversely affect the legality, validity or
enforceability           of this Agreement, (b) have or result in a material adverse
effect on the           results of operations, assets, prospects, business or condition
(financial or           otherwise) of the Company, taken as a whole, or (c) adversely
impair the           Sellers ability to perform fully on a timely basis its
obligations under           this Agreement (any of (a), (b) or (c), a Material
Adverse           Effect).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Authorization;
Enforcement. The Seller has the requisite corporate power           and authority to
enter into and to execute and deliver this Agreement and all           other related
agreements or certificates and to carry out the provisions hereof           and thereof.
The execution and delivery of this Agreement by the Seller and the           consummation
by it of the transactions contemplated hereby have been duly           authorized by all
necessary action on the part of the Seller, and no further           consent or action is
required by the Seller. This Agreement, when executed and           delivered in
accordance with the terms hereof, will constitute the valid and           binding
obligation of the Seller enforceable against the Seller in accordance           with its
terms, subject to applicable bankruptcy, insolvency, fraudulent           conveyance,
reorganization, moratorium and similar laws affecting           creditors rights
and remedies generally and general principles of equity.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        No
Conflicts. The offer and sale of the Shares by the Seller and the
          execution, delivery and performance of this Agreement by the Seller and the
          consummation by the Seller of the transactions contemplated hereby do not and
          will not: (i) conflict with or violate any provision of the Sellers or
          Companys memorandum or articles of association, or (ii) except as
provided           in Schedule 4(c) attached hereto, conflict with, or
constitute a           default (or an event that with notice or lapse of time or both
would become a           default) under, or give to others any rights of termination,
amendment,           acceleration or cancellation (with or without notice or lapse of
time or both)           of, any agreement, credit facility, debt or other instrument or
other           understanding to which the Seller, the Company, or any subsidiary is a
party or           by which any material property or asset of the Seller, the Company or
any           subsidiary is bound or affected, or (iii) result in a violation of any law,
          rule, regulation, order, judgment, injunction, agreement, document, decree or
          other restriction of any court or governmental authority as currently in effect
          to which the Seller, the Company, or any subsidiary is subject (including
          federal and state securities laws and regulations), or by which any property or
          asset of the Seller, the Company, or any subsidiary is bound or affected;
except           in the case of each of clauses (ii) and (iii), such as could not,
individually           or in the aggregate result in a Material Adverse Effect.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        Filings,
Consents and Approvals. The Seller is not required to obtain any           consent,
waiver, authorization or order of, give any notice to, or make any           filing or
registration with, any court or other federal, state, local or other
          governmental authority or other Person in connection with the execution,
          delivery and performance by the Seller of this Agreement other than filings
          under the Securities Act of 1934, as amended (the Exchange Act).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)        Capitalization.
To Sellers knowledge: (i) the Company has an           authorized capitalization as
set forth in the SEC Reports (as defined below),           and all of the issued Ordinary
Shares in the share capital of the Company           (including the Shares) have been
duly and validly authorized and issued and are           fully paid and non-assessable
and conform to the description of the share           capital contained in the SEC
Reports and are not subject to any preemptive or           other similar rights; and (ii)
all of the issued share capital of each           subsidiary of the Company have been
duly and validly authorized and issued, are           fully paid and non-assessable and,
except as would not have a Material Adverse           Effect, are owned directly or
indirectly by the Company, free and clear of all           liens, encumbrances, equities
or claims. As used in this Agreement,           Sellers knowledge means
the actual knowledge of officers of           Seller who serve on the Board of Directors
of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (f)        SEC
Reports; Financial Statements. To Sellers knowledge, the           Company has
filed all reports, schedules, forms, statements and other documents           required to
be filed or submitted by it under the Securities Act and the           Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two           years
preceding the date hereof (the foregoing materials, including the exhibits
          thereto and documents incorporated by reference therein, being collectively
          referred to herein as the SEC Reports) on a timely basis. To
          Sellers knowledge, as of their respective dates, the SEC Reports complied
          in all material respects with the requirements of the Securities Act and the
          Exchange Act and the rules and regulations of the Securities and Exchange
          Commission (SEC) promulgated thereunder, and none of the SEC
          Reports, when filed, contained any untrue statement of a material fact or
          omitted to state a material fact required to be stated therein or necessary in
          order to make the statements therein, in the light of the circumstances under
          which they were made, not misleading. To Sellers knowledge, the financial
          statements of the Company and its subsidiaries included in the SEC Reports have
          been prepared in accordance with United States generally accepted accounting
          principles applied on a consistent basis during the periods involved           (GAAP),
except as may be otherwise specified in such           financial statements or the notes
thereto, and fairly present in all material           respects the financial position of
the Company and its subsidiaries as of and           for the dates thereof and the
results of operations and cash flows for the           periods then ended.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        Material
Changes. To Sellers knowledge, since March 30, 2007 there           has been no
event, occurrence or development that has had or could reasonably be           expected
to result in a Material Adverse Effect, except as disclosed in the SEC           Reports.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        Offering
Activities. None of the Seller or any Affiliate of Seller, or           any person
acting on its or their behalf, has engaged or will engage in any form           of
directed selling efforts (as that term is used in Regulation S under the
          Securities Act) with respect to the Shares, and each of the Seller, its
          Affiliates, and any person acting on its or their behalf, has complied and will
          comply with the offering restrictions requirement of Regulation S. None of the
          Seller or any person acting on its behalf has, directly or indirectly, made or
          will make any offers or sales of any security or solicited any offers to buy
any           security under circumstances that would require registration of the Shares
under           the Securities Act.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)        Passive
Foreign Investment Company. To Sellers knowledge, the           Company is not
a passive foreign investment company (a           PFIC)
within the meaning of the Internal Revenue Code of           1986, as amended.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (j)        Investment
Company Act. To Sellers knowledge, the Company is not an           investment
company within the meaning of the Investment Company Act           of 1940, as
amended.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k)        Foreign
Private Issuer. The Company is a foreign private           issuer as
defined in Rule 3b-4 of the Exchange Act, and a reporting           foreign issuer, as
meant in Rule 903(b)(2) of Regulation S.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l)        Agents Fees.
The Seller shall be responsible for the payment of any           placement agents
fees, financial advisory fees or brokers          commissions (other than for
persons engaged by any Purchaser or its investment           advisors) relating to or
arising out of the transactions contemplated hereby,           including all fees of the
Placement Agents.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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5.        Additional
Representations and Warranties of the Seller.

| | (a)        Transfer
Taxes. Assuming that none of the Purchasers is otherwise subject           to
taxation in Israel, no stamp or other transfer taxes or duties and no capital
          gains, income, withholding or other taxes are payable by or on behalf of the
          Purchasers to the State of Israel or any political subdivision or taxing
          authority thereof or therein in connection with the sale and delivery by such
          Seller of the Shares to be sold by such Seller hereunder outside the State of
          Israel.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Title
to Shares. The Seller has, and immediately prior to the Closing           Date the
Seller will continue to have, good and valid title to the Shares, free           and
clear of all liens, encumbrances, equities, adverse claims or other third           party
rights (Encumbrances) and does not require any consent or           approval
of any third party for the sale of the Shares free and clear of           Encumbrances;
the Shares are and, immediately prior to Closing Date, will           continue to be,
fully paid in and non-assessable; and, upon delivery of the           Shares and payment
therefor pursuant hereto, good and valid title to the Shares,           free and clear of
all Encumbrances, will pass to the several Purchasers.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6.        Covenants
of each Purchaser and the Seller.

| | (a)        Disclosure;
Publicity. On or before 8:30 a.m., New York City time, on the           second
Business Day following the date of this Agreement, the Seller shall issue           a
press release describing the terms of the transactions contemplated by this
          Agreement (the Press Release). From and after the issuance
of           the Press Release, no Purchaser shall be in possession of any material
nonpublic           information about the Company received before the issuance of the
Press Release           from the Seller, any of its Affiliates or any of their respective
officers,           directors, employees or agents. No Purchaser shall issue any press
release or           otherwise make any such public statement with respect to the
transactions           contemplated hereby without the prior consent of the Seller,
except if such           disclosure is required by law, in which case such Purchaser
shall promptly           provide the Seller with prior written notice of such public
statement or           communication. The Seller shall not publicly disclose the name of
any Purchaser,           or include the name of any Purchaser in any filing with the
Commission or any           regulatory agency without the prior written consent of the
Purchaser, except if           such disclosure is required by law, in which case the
Seller shall promptly           provide the Purchaser with prior written notice of such
public statement or           communication.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Independent
Nature of Purchasers Obligations and Rights. The           obligations of each
Purchaser this Agreement are several and not joint with the           obligations of any
other Purchaser, and no Purchaser shall be responsible in any           way for the
performance of the obligations of any other Purchaser hereunder. The           decision
of each Purchaser to purchase Shares pursuant to this Agreement has           been made
by such Purchaser independently of any other Purchaser and           independently of any
information, materials, statements or opinions as to the           business, affairs,
operations, assets, properties, liabilities, results of           operations, condition
(financial or otherwise) or prospects of the Company or of           any subsidiary which
may have been made or given by any other Purchaser or by           any agent or employee
of any other Purchaser, and no Purchaser or any of its           agents or employees
shall have any liability to any other Purchaser (or any           other person) relating
to or arising from any such information, materials,           statements or opinions.
Nothing contained herein, and no action taken by any           Purchaser pursuant hereto,
shall be deemed to constitute the Purchasers as a           partnership, an association,
a joint venture or any other kind of entity, or           create a presumption that the
Purchasers are in any way acting in concert or as           a group with respect to such
obligations or the transactions contemplated           hereby. Each Purchaser
acknowledges that no other Purchaser has acted as agent           for such Purchaser in
connection with making its investment hereunder and that           no other Purchaser
will be acting as agent of such Purchaser in connection with           monitoring its
investment hereunder. Each Purchaser shall be entitled to           independently protect
and enforce its rights, including without limitation the           rights arising out of
this, and it shall not be necessary for any other           Purchaser to be joined as an
additional party in any proceeding for such           purpose.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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| | (c)        Indemnification
of Purchasers. The Seller will indemnify and hold each           Purchaser and its
directors, officers, shareholders, partners, employees and           agents (each, a
Purchaser Party) harmless from any and all           losses,
liabilities, obligations, claims, contingencies, damages, costs and           expenses,
including all judgments, amounts paid in settlements, court costs and
          reasonable attorneys fees and costs of investigation that any such
          Purchaser Party may suffer or incur as a result of or relating to (i) any
          breach of any of the representations, warranties, covenants or agreements made
          by the Seller in this Agreement, (ii) the failure of the Company to
receive           by July 31, 2007 executed amendments to the debt instruments with
the banks           listed in Schedule 4(c) hereto stating that no default or event of
default would           result from the transactions contemplated by the Agreement or
(iii) any damages           relating to or caused by any default or event of default with
regard to the           subject matter of such Schedule 4(c). If any action shall be
brought against any           Purchaser Party in respect of which indemnity may be sought
pursuant to this           Agreement, such Purchaser Party shall promptly notify the
Seller in writing, and           the Seller shall have the right to assume the defense
thereof with counsel of           its own choosing. Any Purchaser Party shall have the
right to employ separate           counsel in any such action and participate in the
defense thereof, but the fees           and expenses of such counsel shall be at the
expense of such Purchaser Party           except to the extent that (A) the employment
thereof has been specifically           authorized by Seller in writing, (B) Seller has
failed, after a reasonable           period of time, to assume such defense and employ
counsel, or (C) in such action           there is, in the reasonable opinion of such
separate counsel, a material           conflict on any material issue between the
position of Seller, on the one hand,           and the position of such Purchaser Party,
on the other. The Seller will not be           liable to any Purchaser Party under this
Agreement (I) for any settlement by a           Purchaser Party effected without the
Sellers prior written consent, which           shall not be unreasonably withheld,
conditioned or delayed; or (II) to the           extent, but only to the extent that a
loss, claim, damage or liability is           attributable to any Purchaser Partys
breach of any of the representations,           warranties, covenants or agreements made
by the Purchaser in this Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.        Definitions.
In addition to the terms defined elsewhere in this           Agreement: the following
terms have the meanings indicated in this Section 7:

| | (a)        Affiliate means
any Person that, directly or indirectly           through one or more intermediaries,
controls or is controlled by or is under           common control with a Person. With
respect to a Purchaser, any investment fund           or managed account that is managed
on a discretionary basis by the same           investment manager as the Purchaser will
be deemed to be an Affiliate of the           Purchaser.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Business
Day means any day except Saturday, Sunday and any           day which shall be
a Federal holiday or a day on which banking institutions in           the State of New
York are authorized or required by law or other governmental           action to close.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        Closing
Date means June 18, 2007, provided that, with respect           to 250,000
Shares purchased by Newland Capital Management, LLC, it shall mean           July 2,
2007.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        Liens means
a lien, charge, security interest, encumbrance,           right of first refusal,
preemptive right or other restriction.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)        Per
Share Purchase Price means $8.00.
| | --------------------------------------------------

8

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| | (f)        Person means
an individual or corporation, partnership,           trust, incorporated or
unincorporated association, joint venture, limited           liability company, joint
stock company, government (or an agency or subdivision           thereof) or other entity
of any kind.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        Placement
Agents means C.E. Unterberg Towbin and Roth Capital           Partners, the
placement agents for the offering of the Shares.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

8.        Successors
and Assigns. Each Purchaser hereby acknowledges and agrees           that this
Agreement shall be binding upon and inure to the benefit of the           parties and
their heirs, executors, administrators, successors, legal           representatives and
permitted assigns.

9.        Modification.
This Agreement shall not be modified or waived except by an           instrument in
writing signed by the party against whom any such modification or           waiver is
sought.

10.        Notices.
Any notice or other communication required or permitted to be           given hereunder
shall be in writing and shall be mailed by certified mail,           return receipt
requested, sent by nationwide overnight courier or delivered           against receipt to
the party to whom it is to be given (a) if to Seller, at

Formula Systems (1985) Ltd.
3 Hagalim Boulevard
Herzliya 46725
Israel
Attn: Naamit Solomon
Telephone No.:  (972)-9-959-8812
Facsimile No.: +972 (9) 959-8877
With a copy to:
Herzog Fox & Neeman
Asia House
4 Weizman Street
Tel Aviv 64239
Israel Attn:  Yael Bar-Shai, Esq.
Telephone No.: (972) 3 692 2020
Facsimile No.: (972) 3 696 6464

, or (b) if to the Purchaser, at the
address set forth on the signature page hereof

, and in either case, with a copy to:

CE Unterberg Tobin
350 Madison Avenue
New York NY  10017
ATTN:   Jennifer Buckley
FAX:  212-389-8810
ATTN:   Michelle O'Conner
FAX:  212-389-8880
with a copy to:
David C. Fischer
Loeb & Loeb LLP
345 Park Avenue
New York NY  10154-0037
Tel.:  212-407-4827
Fax.:  212-214-0686

9

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(or
to such other address as the party shall have furnished in writing in accordance with the
provisions of this Section). Any notice or other communication given by certified mail
shall be deemed given at the time that it is signed for by the recipient except for a
notice changing a partys address which shall be deemed given at the time of receipt
thereof. Any notice or other communication given by nationwide overnight courier shall be
deemed given the next business day following being deposited with such courier.

11.        Assignability.
Except as otherwise provided in this Agreement, this           Agreement and the rights,
interests and obligations hereunder are not           transferable or assignable by any
Purchaser except to an Affiliate of such           Purchaser. This Agreement and the
rights, interests and obligations hereunder           are not transferable or assignable
by the Seller.

12.        Applicable
Law.All questions concerning the construction, validity,           enforcement and
interpretation of this Agreement shall be governed by and           construed and
enforced in accordance with the internal laws of the State of New           York, without
regard to the principles of conflicts of law thereof. Each party           hereby
irrevocably submits to the exclusive jurisdiction of the state and           federal
courts sitting in the City of New York, borough of Manhattan for the
          adjudication of any dispute hereunder or in connection herewith or with any
          transaction contemplated hereby or discussed herein (including with respect to
          the enforcement of this Agreement), and hereby irrevocably waives, and agrees
          not to assert in any suit, action or Proceeding, any claim that it is not
          personally subject to the jurisdiction of any such court, that such suit,
action           or Proceeding is improper or inconvenient venue for such Proceeding.
Each party           hereby irrevocably waives personal service of process and consents
to process           being served in any such suit, action or Proceeding by mailing a
copy thereof           via registered or certified mail or overnight delivery (with
evidence of           delivery) to such party at the address in effect for notices to it
under this           Agreement and agrees that such service shall constitute good and
sufficient           service of process and notice thereof. Nothing contained herein
shall be deemed           to limit in any way any right to serve process in any manner
permitted by law.           The parties hereby waive to the fullest extent permitted by
applicable law, all           rights to a trial by jury in any legal proceeding arising
out of or relating to           this Agreement or the transactions contemplated hereby.

13.        Use
of Pronouns. All pronouns and any variations thereof used herein           shall be
deemed to refer to the masculine, feminine, neuter, singular or plural           as the
identity of the person or persons referred to may require.

14.        Miscellaneous.

| | (a)        This
Agreement and its exhibits and schedules constitutes the entire agreement
          between each Purchaser and the Seller with respect to the subject matter hereof
          and supersedes all prior oral or written agreements and understandings, if any,
          relating to the subject matter hereof. The terms and provisions of this
          Agreement may be waived, or consent for the departure therefrom granted, only
by           a written document executed by the party entitled to the benefits of such
terms           or provisions.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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| | (b)        Each
Purchasers and the Sellers covenants, agreements,           representations
and warranties made in this Agreement shall survive the           execution and delivery
hereof and delivery of the Shares for a period of twelve           months.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        Except
as expressly set forth in this Agreement to the contrary, each of the           parties
hereto shall pay its own fees and expenses (including the fees of any
          attorneys, accountants, appraisers or others engaged by such party) in
          connection with this Agreement and the transactions contemplated hereby whether
          or not the transactions contemplated hereby are consummated. The Seller shall
          pay all transfer agent fees, stamp taxes and other taxes and duties levied in
          connection with the delivery of any Shares.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        This
Agreement may be executed in one or more counterparts, each of which shall           be
deemed an original, but all of which shall together constitute one and the           same
instrument. In the event that any signature is delivered by facsimile
          transmission, such signature shall create a valid, binding obligation of the
          party executing (or on whose behalf such signature is executed) the same with
          the same force and effect as if such facsimile signature were the original
          thereof.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)        Each
provision of this Agreement shall be considered separable and, if for any
          reason any provision or provisions hereof are determined to be invalid or
          contrary to applicable law, such invalidity or illegality shall not impair the
          operation of or affect the remaining portions of this Agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)        Section
titles are for descriptive purposes only and shall not control or alter           the
meaning of this Agreement as set forth in the text.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)        Seller
shall, no later than July 22, 2007, retain an agent for service of           process in
New York to serve on its behalf.
| | ------------------------------------------------------------------------------------------------------------------------------------------

| | (h)        Unless
otherwise indicated, all dollar amounts referred to in this Agreement are           in
United States Dollars.
| | -------------------------------------------------------------------------------------------------------------------------------

| | (i)        Each
party shall do and perform, or cause to be done and performed, all such           further
acts and things, and shall execute and deliver all such other           agreements,
certificates, instruments and documents, as any other party may           reasonably
request in order to carry out the intent and accomplish the purposes           of this
Agreement and the consummation of the transactions contemplated hereby.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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IN
WITNESS WHEREOF, the parties hereto have caused this International Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date
first indicated above.

| |  | FORMULA SYSTEMS (1985) LTD.By:
Name:Title:
| |  | --------------------------------------------------------

12

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IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated
above.

| |  | Purchaser
| |  | -----------------------

| |  | By: 
Name:Title:Purchase Price:  $____________________ADDRESS FOR NOTICE
Street:  ____________________________
City/State/Zip: ______________________
Attention: _________________________
Tel: ______________________________
Fax: ______________________________
WITH A COPY TO:
_______________________________
Street: ____________________________
City/State/Zip: ______________________
Attention: __________________________
Tel: _______________________________
Fax: _______________________________
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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| |  | DELIVERY INSTRUCTIONS(if different from above)c/o: ______________________________
Street: ___________________________
City/State/Zip: _____________________
Attention: _________________________
Tel: ______________________________
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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# SCHEDULE A

|Name of Purchaser | Number of Shares | Total Purchase Price
|----------------- | ---------------- | --------------------
|                  |                  |                     
|                  |                  |                     
|                  |                  |                     
|                  |                  |                     
|                  |                  |                     

15

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EXHIBIT A

# OPINION TO BE
DELIVERED BY SELLERS ISRAELI COUNSEL

(a)    
          Each of the Seller and the Company has been duly incorporated and is validly
          existing as a corporation under the laws of the State of Israel; the Company has
          the requisite power and authority (corporate and other) to own its properties
          and conduct its business as described in the SEC Reports;

(b)    
          The Shares being delivered on the Closing Date have been duly and validly
          authorized and issued and are fully paid and non-assessable; and the Shares
          conform to the description thereof contained in the SEC Reports. None of the
          Shares was issued in violation of any preemptive or similar rights of any
          security holder of the Company arising under the Companys Memorandum or
          Articles of Association, Israeli law or, to our knowledge, any agreement or
          instrument to which the Company is a party or by which it may be bound; except
          as described in the SEC Reports, there are no restrictions upon the voting or
          transfer of any of the Shares pursuant to the Companys Memorandum or
          Articles of Association or, to our knowledge, any agreement or instrument to
          which the Company is a party or by which it may be bound;

(c)    
          The International Securities Purchase Agreement has been duly authorized,
          executed and delivered by the Seller;

(d)    
          Subject to specified time limitations, Israeli courts may enforce a United
          States final executory judgment in a civil matter obtained after due process
          before a court as contemplated by Section 12 of the International Securities
          Purchase Agreement, provided that such court is a competent jurisdiction
          according to the laws of the state in which the judgment is given and the rules
          of private international law currently prevailing in Israel. The rules of
          private international law currently prevailing in Israel do not prohibit the
          enforcement of a final, non-appealable judgment by Israeli courts provided that:

| | (i)
          the judgment is enforceable in the state in which it was given;
| | -----------------------------------------------------------------------------

| | (ii)
            adequate service of process has been effected and the defendant has had a
          reasonable opportunity to present his arguments and evidence;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)
            the judgment and the enforcement of the judgment are not contrary to the law,
          public policy, security or sovereignty of the state of Israel;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)
            the judgment was not obtained by fraud;
| | --------------------------------------------------------

| | (v)
            the judgment does not conflict with any other valid judgment in the same
matter           between the same parties; and
| | ---------------------------------------------------------------------------------------------------------------------------------------

| | (vi)
            an action between the same parties in the same matter is not pending in any
          Israeli court at the time the lawsuit is instituted in a foreign court.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

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EXHIBIT B

# OPINION TO BE
DELIVERED BY SELLERS U.S. COUNSEL

(a)    
          Assuming the accuracy of the representations and warranties of the Purchasers
          contained in the International Securities Purchase Agreement, no registration of
          the Shares under the US Securities Act of 1933, as amended, pursuant to
          Regulation S thereunder, is required in connection with the initial offer and
          sale of the Shares to the Purchasers in the manner contemplated therein,
          provided that no opinion is given with respect to any subsequent resale.

(b)    
          Assuming that the International Securities Purchase Agreement has been duly
          authorized, executed and delivered by the Seller insofar as Israeli law is
          concerned, the International Securities Purchase Agreement is a valid and
          binding obligation of the Seller, enforceable in accordance with its terms,
          subject to bankruptcy, insolvency, winding up, reorganization, moratorium,
          fraudulent transfer or other similar laws affecting the enforcement of
          creditors rights generally and the application of general principles of
          equity, regardless of whether considered in a proceeding in equity or at law.

17

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Schedule 4(c)Consents

The offer and sale of the Shares by
the Seller would create an event of default under debt instruments of the Company with the
banks listed below (the Banks). The Company has notified each of the
Banks of the transactions contemplated by this Agreement. The Banks and the Company have
agreed in principle to amend the covenants in the applicable debt instruments so that the
events of default would not result from the transactions contemplated by the Agreement.
These amendments are expected to be executed by July 31, 2007. Formula has been
informed by the Company that it believes that the likelihood that these amendments will
not be executed by the Banks by the date mentioned in the previous sentence is remote and
therefore disclosure of the facts contained in this Schedule are not material. Formula has
also been informed by the Company that in the event that any of these amendments are not
executed, alternative financing would be readily available to the Company.

1.
          First International Bank of Israel.

2.
          Bank Leumi

3.
          Bank Hapoalim

4.
          Israel Discount Bank Ltd.



---

---

# AMENDMENT NO. 1 TO
INTERNATIONAL SECURITIES PURCHASE AGREEMENT

This
Amendment No. 1 (this Amendment), dated as of June 18, 2007, is by and
among Formula Systems (1985) Ltd. (the Seller) and each of the non-US
investors signatory hereto (collectively, the Purchasers).

WHEREAS,
Seller and the Purchasers entered into an International Securities Purchase Agreement (the
Purchase Agreement), dated as of June 15, 2007; and

WHEREAS,
the Seller and the Purchasers desire to amend the Purchase Agreement in accordance with
the terms of this Amendment.

NOW,
THEREFORE, in consideration of the foregoing, the parties hereby agree as follows:

| | 1. | Amendment.
Section 7(c) of the Purchase Agreement is hereby amended by                deleting June
18, 2007 and replacing it with June 20,                2007.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Miscellaneous.
| | -- | --------------

| | a. | Counterparts.
This Amendment may be executed in two or more separate                counterparts, each
of which, when so executed and delivered, shall be deemed to                constitute an
original, but all of which together shall constitute one and the                same
instrument.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b. | Governing
Law. This Amendment shall be governed by and construed in                accordance
with the Laws of the State of New York, without regard to principles                of
conflicts of law that might apply the Laws of any other jurisdiction.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c. | Entire
Agreement. Except as expressly set forth herein, this Amendment                shall
not, by implication or otherwise, limit, impair, constitute a waiver of,
               or otherwise affect the rights and remedies of any party under the
Purchase                Agreement, and shall not alter, modify, amend or in way affect
any of the terms,                conditions, obligations, covenants or agreements
contained in the Purchase                Agreement, all of which are ratified and
affirmed in all material respects and                shall continue in full force and
effect.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# [THE REMAINDER OF THIS
PAGE IS INTENTIONALLY LEFT BLANK.]



---

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IN
WITNESS WHEREOF, Seller has caused this Amendment No. 1 to the Purchase Agreement to be
duly executed by its authorized signatory as of the date first indicated above.

| |  | FORMULA SYSTEMS (1985) LTD.By: 
Name:Title:
| |  | ---------------------------------------------------------



---

---



IN
WITNESS WHEREOF, each of the Purchasers has caused this Amendment No. 1 to the Purchase
Agreement to be duly executed by its respective authorized signatory as of the date first
indicated above.

| |  | PurchaserBy: Name:Title:
| |  | ----------------------------------------------------



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