8-K










Exhibit 10.1  



SECURITIES PURCHASE
AGREEMENT 



        This
Securities Purchase Agreement (this “Agreement”) is dated as of November
28, 2006, among Ampal-American Israel Corporation, a New York corporation (the
“Company”), and the investors identified on the signature pages hereto
(each, an “Investor” and collectively, the “Investors”). 



        WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Regulation
S of the Securities Act (as defined below) promulgated thereunder, the Company desires to
issue and sell to each Investor, and each Investor, severally and not jointly, desires to
purchase from the Company certain securities of the Company, as more fully described in
this Agreement. 



        NOW,
THEREFORE, 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 Company and the Investors agree as follows: 



ARTICLE 1. 

DEFINITIONS 



    1.1.        Definitions.
In addition to the terms defined elsewhere in this           Agreement, for all purposes
of this Agreement, the following terms shall have           the meanings indicated in
this Section 1.1:  



	 	        “Action” means
any action, suit, inquiry, notice of violation, proceeding (including any partial
proceeding such as a deposition) or investigation pending or threatened in writing
against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency, regulatory
authority (federal, state, county, local or foreign), stock market, stock exchange or
trading facility.  







	 	        “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, as such terms are used in and
construed under Rule 144.  







	 	        “Business
Day” means any day except Saturday, Sunday and any day that is a federal legal
holiday in the United States or Israel or a day on which banking institutions in the
State of New York or Israel are authorized or required by law or other government action
to close.  







	 	        “Closing” means
the closing of the purchase and sale of the Securities pursuant to Article II.  







	 	        “Closing
Date” means the Business Day on which all of the conditions set forth in
Sections 5.1 and 5.2 hereof are satisfied, or such other date as the parties may agree.  







	 	        “Commission” means
the Securities and Exchange Commission.  


















	 	        “Common
Stock” means the Class A Stock of the Company, par value $1.00 per share, and
any securities into which such Class A Stock may hereafter be reclassified.  







	 	        “Common
Stock Equivalents” means any securities of the Company or any Subsidiary which
entitle the holder thereof to acquire Common Stock at any time, including without
limitation, any debt, rights, options, warrants or other instrument that is at any time
convertible into or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.  







	 	        “Company
Deliverables” has the meaning set forth in Section 2.2(a).  







	 	        “Company
Party” has the meaning set forth in Section 4.3(b).  







	 	        “Disclosure
Materials” has the meaning set forth in Section 3.1(h).  







	 	        “Effective
Date” means the date that the Registration Statement required by Section 2(a) of
the Registration Rights Agreement is first declared effective by the Commission.  







	 	        “Exchange
Act” means the Securities Exchange Act of 1934, as amended.  







	 	        “GAAP” means
U.S. generally accepted accounting principles.  







	 	        “Investment
Amount” means, with respect to each Investor, the Investment Amount indicated on
such Investor’s signature page to this Agreement.  







	 	        “Investor
Deliverables” has the meaning set forth in Section 2.2(b).  







	 	        “Investor
Party” has the meaning set forth in Section 4.3(a).  







	 	        “Lien” means
any lien, charge, encumbrance, security interest, right of first refusal or other
restrictions of any kind.  







	 	        “Losses” has
the meaning set forth in Section 4.3(a).  







	 	        “Material
Adverse Effect” means any of (i) a material and adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and adverse
effect on the results of operations, assets, prospects, business or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) an adverse
impairment to the Company’s ability to perform on a timely basis its obligations
under any Transaction Document.  







	 	        “NASD” means
the National Association of Securities Dealers.  







	 	        “New
York Courts” means the state and federal courts sitting in the City of New York,
Borough of Manhattan.  







	 	        “Outside
Date” means December 31, 2006.  







	 	        “Per
Unit Purchase Price” equals [$4.65.  









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	 	        “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.  







	 	        “Proceeding” means
an action, claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.  







	 	        “Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date
of this Agreement, among the Company and the Investors, in the form of Exhibit A hereto.  







	 	        “Registration
Statement” means a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale by the Investors of the Shares
and the Warrant Shares.  







	 	        “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.  







	 	        “SEC
Reports” has the meaning set forth in Section 3.1(h).  







	 	        “Securities” means
the Shares, the Warrants and the Warrant Shares.  







	 	        “Securities
Act” means the Securities Act of 1933, as amended.  







	 	        “Shareholder
Approval” has the meaning set forth in Section 4.6(a).  







	 	        “Shares” means
the shares of Common Stock issued or issuable to the Investors pursuant to this
Agreement.  







	 	        “Short
Sales” include, without limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct
and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and
similar arrangements (including on a total return basis).  







	 	        “Subsidiary” means
any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
promulgated by the Commission under the Exchange Act.  







	 	        “Trading
Day” means (i) a day on which the Common Stock is traded on a Trading Market
(other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a
Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if
the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices); provided, that
in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.  







3










	 	        “Trading
Market” means whichever of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on
the date in question.  







	 	        “Transaction
Documents” means this Agreement, the Warrants, the Registration Rights
Agreement, and any other documents or agreements executed in connection with the
transactions contemplated hereunder.  







	 	        “Warrants” means
the Common Stock purchase warrants in the form of Exhibit B, which are issuable to
the Investors at the Closing.  







	 	        “Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.  







ARTICLE 2. 

PURCHASE AND SALE 



    2.1.        Closing.
Subject to the terms and conditions set forth in this Agreement,           at the Closing
the Company shall issue and sell to each Investor, and each           Investor shall,
severally and not jointly, purchase from the Company, the Shares           and the
Warrants representing such Investor’s Investment Amount. The           Closing shall
take place at the offices of the Company, offices in Israel the           Company, 111
Arlozorov Street, Tel Aviv, Israel 62098 on the Closing Date or at           such other
location or time as the parties may agree.  



    2.2.        Closing
Deliveries. (a) At the Closing, the Company shall deliver or           cause to be
delivered to each Investor the following (the “Company           Deliverables”):  



		    (i)        a
certificate evidencing a number of Shares equal to such Investor’s
          Investment Amount divided by the Per Unit Purchase Price, registered in the
name           of such Investor;  







		    (ii)        a
Warrant, registered in the name of such Investor, pursuant to which such
          Investor shall have the right to acquire the number of shares of Common Stock
          equal to 50% of the number of Shares issuable to such Investor pursuant to
          Section 2.2(a)(i);  







		    (iii)        the
Registration Rights Agreement, duly executed by the Company; and  







		    (iv)        an
opinion of counsel of the Company reasonably satisfactory to the Investors.  







		    (b)        At
the Closing, each Investor shall deliver or cause to be delivered to the
          Company the following (the “Investor Deliverables”):  







		    (i)        its
Investment Amount, in United States dollars and in immediately available           funds,
by wire transfer to an account designated in writing by the Company for           such
purpose; and  







		    (ii)        the
Registration Rights Agreement, duly executed by such Investor.  







4










ARTICLE 3. 

REPRESENTATIONS AND
WARRANTIES 



	    3.1.        Representations
and Warranties of the Company. The Company hereby makes           the following
representations and warranties to each Investor:  







		    (a)        Subsidiaries.
The Company has no direct or indirect Subsidiaries other           than as specified in
the SEC Reports.  







		    (b)        Organization
and Qualification. The Company and each Subsidiary are duly           incorporated or
otherwise organized, validly existing and in good standing under           the laws of
the jurisdiction of its incorporation or organization (as           applicable), with the
requisite power and authority to own and use its           properties and assets and to
carry on its business as currently conducted.  







		    (c)        Authorization;
Enforcement. The Company has the requisite corporate power           and authority to
enter into and to consummate the transactions contemplated by           each of the
Transaction Documents and otherwise to carry out its obligations           thereunder.
The execution and delivery of each of the Transaction Documents by           the Company
and the consummation by it of the transactions contemplated thereby           have been
duly authorized by all necessary action on the part of the Company and           no
further action is required by the Company in connection therewith. Each
          Transaction Document has been (or upon delivery will have been) duly executed
by           the Company and, when delivered in accordance with the terms hereof, will
          constitute the valid and binding obligation of the Company enforceable against
          the Company in accordance with its terms, except as such enforceability may be
          limited by applicable bankruptcy, insolvency, reorganization, moratorium,
          liquidation or similar laws relating to, or affecting generally the enforcement
          of, creditors’ rights and remedies or by other equitable principles of
          general application.  







		    (d)        No
Conflicts. The execution, delivery and performance of the Transaction
          Documents by the Company and the consummation by the Company of the
transactions           contemplated thereby do not and will not (i) conflict with or
violate any           provision of the Company’s or any Subsidiary’s
certificate or articles           of incorporation, bylaws or other organizational or
charter documents, or (ii)           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,           lapse of time or both) of, any agreement,
credit facility, debt or other           instrument (evidencing a Company or Subsidiary
debt or otherwise) or other           understanding to which the Company or any
Subsidiary is a party or by which any           property or asset of the Company or any
Subsidiary is bound or affected, or           (iii) result in a violation of any law,
rule, regulation, order, judgment,           injunction, decree or other restriction of
any court or governmental authority           to which the Company or a Subsidiary is
subject (including federal and state           securities laws and regulations), or by
which any property or asset of the           Company or a 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,           have or reasonably be expected to result
in a Material Adverse Effect.  







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		    (e)        Filings,
Consents and Approvals. The Company 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 Company of the Transaction Documents, other
than           (i) the filing with the Commission of the Registration Statement in
accordance           with the requirements of the Registration Rights Agreement, (ii)
filings           required by state securities laws, (iii) the filings required in
accordance with           Section 4.2, (iv) the filings required in connection with
obtaining Shareholder           Approval, (v) the filings required to be made with the
NASD in connection with           obtaining Shareholder Approval and increasing the
outstanding shares of the           Company, (vi) those that have been made or obtained
prior to the date of this           Agreement, (vii) obtaining Shareholder Approval for
the issuance of the           Warrants, and (viii) obtaining consent of the NASD that no
Sharheolder Approval           is necessary for the issuance of the Shares.  







		    (f)        Issuance
of the Securities. The Securities have been duly authorized and,           when
issued and paid for in accordance with the Transaction Documents, will be           duly
and validly issued, fully paid and nonassessable, free and clear of all           Liens.
The Company has reserved from its duly authorized capital stock the           shares of
Common Stock issuable pursuant to this Agreement and the Warrants in           order to
issue the Shares and the Warrant Shares.  







		    (g)        Capitalization.
The number of shares and type of all authorized, issued           and outstanding capital
stock of the Company, and all shares of Common Stock           reserved for issuance, is
specified in the SEC Reports. Except as specified in           the SEC Reports, no
securities of the Company are entitled to preemptive or           similar rights, and no
Person has any right of first refusal, preemptive right,           right of
participation, or any similar right to participate in the transactions
          contemplated by the Transaction Documents. Except as specified in the SEC
          Reports, there are no outstanding options, warrants, scrip rights to subscribe
          to, calls or commitments of any character whatsoever relating to, or
securities,           rights or obligations convertible into or exchangeable for, or
giving any Person           any right to subscribe for or acquire, any shares of Common
Stock, or contracts,           commitments, understandings or arrangements by which the
Company or any           Subsidiary is or may become bound to issue additional shares of
Common Stock, or           securities or rights convertible or exchangeable into shares
of Common Stock.           The issue and sale of the Securities will not, immediately or
with the passage           of time, obligate the Company to issue shares of Common Stock
or other           securities to any Person (other than the Investors) and will not
result in a           right of any holder of Company securities to adjust the exercise,
conversion,           exchange or reset price under such securities.  







		    (h)        SEC
Reports; Financial Statements. The Company has filed all reports           required
to be filed by it under the Securities Act and the Exchange Act,           including
pursuant to Section 13(a) or 15(d) thereof, for the twelve months           preceding the
date hereof (or such shorter period as the Company was required by           law to file
such reports) (the foregoing materials being collectively referred           to herein as
the “SEC Reports” and, together with the Schedules           to this
Agreement (if any), the “Disclosure Materials”) on a           timely
basis or has timely filed a valid extension of such time of filing and           has
filed any such SEC Reports prior to the expiration of any such extension.  







6










		    (i)        Disclosure.
The Company confirms that neither it nor any Person acting on           its behalf has
provided any Investor or its respective agents or counsel with           any information
that the Company believes constitutes material, non-public           information except
insofar as the existence and terms of the proposed           transactions contemplated
hereunder may constitute such information. The Company           understands and confirms
that the Investors will rely on the foregoing           representations and covenants in
effecting transactions in securities of the           Company. All disclosure provided to
the Investors regarding the Company, its           business and the transactions
contemplated hereby, furnished by or on behalf of           the Company (including the
Company’s representations and warranties set           forth in this Agreement) are
true and correct and do not contain any untrue           statement of a material fact or
omit to state any material fact necessary in           order to make the statements made
therein, in light of the circumstances under           which they were made, not
misleading.  







    3.2.        Representations
and Warranties of the Investors. Each Investor hereby,           for itself and for
no other Investor, represents, warrants and covenants to the           Company as
follows:  



		    (a)        Organization;
Authority. Such Investor is an entity duly organized,           validly existing and
in good standing under the laws of the jurisdiction of its           organization with
the requisite corporate or partnership power and authority to           enter into and to
consummate the transactions contemplated by the applicable           Transaction
Documents and otherwise to carry out its obligations thereunder. The           execution,
delivery and performance by such Investor of the transactions           contemplated by
this Agreement has been duly authorized by all necessary           corporate or, if such
Investor is not a corporation, such partnership, limited           liability company or
other applicable like action, on the part of such Investor.           Each of this
Agreement and the Registration Rights Agreement has been duly           executed by such
Investor, and when delivered by such Investor in accordance           with the terms
hereof, will constitute the valid and legally binding obligation           of such
Investor, enforceable against it in accordance with its terms, except as           such
enforceability may be limited by applicable bankruptcy, insolvency,
          reorganization, moratorium, liquidation or similar laws relating to, or
          affecting generally the enforcement of, creditors’ rights and remedies or
          by other equitable principles of general application.  







		    (b)        Investor
Status. At the time such Investor was offered the Securities, it           was, and
at the date hereof it is, and on each date on which it exercises           Warrants it
will be, an “accredited investor” as defined in Rule           501(a) under the
Securities Act.  







		    (c)        General
Solicitation. Such Investor is not purchasing the Securities as a           result of
any advertisement, article, notice or other communication regarding           the
Securities published in any newspaper, magazine or similar media or           broadcast
over television or radio or presented at any seminar or any other           general
solicitation or general advertisement.  







7










		    (d)        Access
to Information. Such Investor acknowledges that it has reviewed           the
Disclosure Materials and has been afforded (i) the opportunity to ask such
          questions as it has deemed necessary of, and to receive answers from,
          representatives of the Company concerning the terms and conditions of the
          offering of the Shares and the merits and risks of investing in the Securities;
          (ii) access to information about the Company and the Subsidiaries and their
          respective financial condition, results of operations, business, properties,
          management and prospects sufficient to enable it to evaluate its investment;
and           (iii) the opportunity to obtain such additional information that the
Company           possesses or can acquire without unreasonable effort or expense that is
          necessary to make an informed investment decision with respect to the
          investment. Neither such inquiries nor any other investigation conducted by or
          on behalf of such Investor or its representatives or counsel shall modify,
amend           or affect such Investor’s right to rely on the truth, accuracy and
          completeness of the Disclosure Materials and the Company’s representations
          and warranties contained in the Transaction Documents.  







		    (e)        Certain
Trading Activities. Such Investor has not directly or indirectly,           nor has
any Person acting on behalf of or pursuant to any understanding with           such
Investor, engaged in any Short Sales or other hedging transactions in the
          securities of the Company since the earlier to occur of (1) the time that such
          Investor was first contacted by the Company or a Person acting on the
          Company’s behalf regarding an investment in the Company and (2) the
          30th day prior to the date of this Agreement. Such Investor
covenants           that neither it nor any Person acting on its behalf or pursuant to
any           understanding with it will engage in any transactions in the securities of
the           Company (including Short Sales) prior to the time that the transactions
          contemplated by this Agreement are publicly disclosed, except in connection
with           a distribution as permitted by Regulation S under the Securities Act  







		    (f)        Independent
Investment Decision. Such Investor has independently           evaluated the merits
of its decision to purchase Securities pursuant to the           Transaction Documents,
and such Investor confirms that it has not relied on the           advice of any other
Investor’s business and/or legal counsel in making such           decision.  







		    (g)        Limited
Ownership. The purchase by such Investor of the Securities           issuable to it
at the Closing will not result in such Investor (individually or           together with
any other Person with whom such Investor has identified, or will           have
identified, itself as part of a “group” in a public filing made           with
the Commission involving the Company’s securities) acquiring, or           obtaining
the right to acquire, in excess of 19.999% of the outstanding shares           of Common
Stock or the voting power of the Company on a post transaction basis           that
assumes that the Closing shall have occurred. Such Investor does not           presently
intend to, alone or together with others, make a public filing with           the
Commission to disclose that it has (or that it together with such other           Persons
have) acquired, or obtained the right to acquire, as a result of the           Closing
(when added to any other securities of the Company that it or they then           own or
have the right to acquire), in excess of 19.999% of the outstanding           shares of
Common Stock or the voting power of the Company on a post transaction           basis
that assumes that the Closing shall have occurred.  







		    (h)        Experience
of such Investor. Such Investor, either alone or together with           its
representatives, has such knowledge, sophistication and experience in           business
and financial matters so as to be capable of evaluating the merits and           risks of
the prospective investment in the Securities, and has so evaluated the           merits
and risks of such investment. Such Investor is able to bear the economic           risk
of an investment in the Securities, at the present time, is able to afford           a
complete loss of such investment.  







8










		    (i)        Foreign
Investor. Such Investor is not a U.S. person (as defined in Rule           902(k) of
the Securities Act) and is not acquiring the Securities for the           account or
benefit of any U.S. person, and the Investor on is located outside of           the
United States.  







		    (j)        Offers,
Sales and Resales of Securities. All offers, sales and resales of
          Securities by such Investor shall be made only in accordance with the
provisions           of Regulation S of the Securities Act, pursuant to registration
under the           Securities Act or pursuant to another available exemption from
registration           under the Securities Act. Unless the Securities are registered
under the           Securities Act or an exemption from the registration requirements of
the           Securities Act is available, all offers, sales and resales by such Investor
          shall be made to purchasers who are not U.S. persons (as defined in Rule 902(k)
          of the Securities Act) and shall occur outside the United States, other than in
          offerings deemed to meet the definition of “offshore transaction” as
          defined in Rule 902(h) of the Securities Act. Neither such Investor nor any
          Affiliate has engaged or will engage in any directed selling efforts (as
defined           in Rule 902 of Regulation S of the Securities Act) in the United
States. If such           Investor is a “dealer” or a person “receiving a
selling           concession fee or other remuneration” within the meaning of
Regulation S of           the Securities Act, it acknowledges that until the expiration
of the one-year           “distribution compliance period” within the meaning
of Rule 903 of           Regulation S under the Securities Act, any offer or sale of the
Securities shall           not be made by it to a U.S. person or for the account or
benefit of a U.S.           person (as defined in Rule 902(k) of the Securities Act).  







		    (k)        Offering
Materials. All offering materials and documents (other than           press releases)
used in connection with offers (including the offering by the           Company
hereunder), sales and resales by such Investor of the Securities shall           include
statements to the effect that (i) the Securities have not been           registered under
the Securities Act and may not be offered or sold in the United           States or to
U.S. persons (as defined in Rule 902(k) of the Securities Act)           unless the
Securities are registered under the Securities Act, or an exemption           from the
registration requirements of the Securities Act is available and (ii)           the
hedging transactions with respect to the Class A Stock may only be conducted           in
accordance with the Securities Act. Such statements shall be placed on any           such
Offering Material as set forth on the definition of “offering           restrictions” set
forth in Rule 902(g) under the Securities Act.  







		    (l)        U.S.
Person. All offers, sales and resales by such Investor shall not be           made to
a U.S. person or for the account or benefit of a U.S. person unless the
          Securities are registered under the Securities Act or an exemption from the
          registration requirements of the Securities Act is available.  







		    (m)        Investor
Acknowledgements. Such Investor acknowledges and consents that           the Company
may refuse to register any transfer of the Securities not made in           accordance
with the provisions of Regulation S of the Securities Act, pursuant           to
registration under the Securities Act or pursuant to another available
          exemption under the Securities Act. Such Investor acknowledges that the Company
          and others will rely upon the truth and accuracy of the foregoing
          representations, warranties and agreements and agrees that, if any of the
          representations, warranties and agreements made by such Investor are no longer
          accurate, such Investor shall promptly notify the Company.  







9










		    (n)        Sale
Confirmation. Upon a sale by an Investor of any Securities, such           Investor
shall send written confirmation, in a form reasonably satisfactory to           the
Company, to any other purchaser stating that the purchaser shall be subject           to
the same restrictions on offers, sales and resales that apply to such           Investor
herein and that the purchaser has agreed to be subject to such           restrictions. A
copy in the form set forth as Exhibit C-1 of any such           confirmation shall
be sent to the Company by the Investor. In addition, upon a           sale by an Investor
of any Securities, such Investor shall also deliver a           Selling Securityholder
Questionnaire, a copy of which is attached hereto as Exhibit C-2, which has been
completed and signed by the purchaser of such           Securities.  







ARTICLE 4. 

OTHER AGREEMENTS OF THE
PARTIES 



    4.1.        (a) Securities
may only be disposed of in compliance with state and           federal securities laws.
In connection with any transfer of the Securities other           than pursuant to an
effective registration statement, to the Company or to an           Affiliate of an
Investor, the Company may require the transferor thereof to           provide to the
Company an opinion of counsel selected by the transferor, the           form and
substance of which opinion shall be reasonably satisfactory to the           Company, to
the effect that such transfer does not require registration of such           transferred
Securities under the Securities Act.  



		    (b)        Certificates
evidencing the Shares will contain the following legend:  







	 	
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.  






	 	
THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”),
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH AMPAL-AMERICAN ISRAEL CORPORATION (“AMPAL”) OR ANY AFFILIATE OF AMPAL WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO AMPAL OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO AMPAL’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO AMPAL OR AMPAL’S
TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.  






10










		    (c)        Certificates
evidencing the Warrants and Warrant Shares will contain the           following legend:  







	 	
THIS
SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.  






	 	
THE
HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, BY ITS
ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY AND THE
WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE OF THIS SECURITY OR THE WARRANT SHARES, AS THE CASE MAY BE, AND THE LAST DATE
ON WHICH AMPAL-AMERICAN ISRAEL CORPORATION (“AMPAL”) OR ANY AFFILIATE OF AMPAL
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO AMPAL OR
ANY SUBSIDIARY THEREOF, (B) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT, (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO AMPAL’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO IT, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO AMPAL OR AMPAL’S
TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.  






11










	 	
THE
HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, BY ITS
ACCEPTANCE HEREOF, AGREES NOT TO ENGAGE IN ANY HEDGING TRANSACTION UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT. THE HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED
UPON ITS EXERCISE, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THESE LEGENDS.  






	 	
THIS
SECURITY MAY NOT BE EXERCISED BY OR ON BEHALF OF A U.S. PERSON (AS SUCH TERM IS DEFINED
IN RULE 902(K) OF THE SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  






    4.2.        Securities
Laws Disclosure; Publicity. On the Trading Day following the           execution of
this Agreement, and on the Trading Day following the Closing Date,           the Company
shall issue press releases disclosing the transactions contemplated           hereby and
the Closing. The Company will file a Current Report on Form 8-K           disclosing the
material terms of the Transaction Documents (and attach as           exhibits thereto the
Transaction Documents), and the Company will file an           additional Current Report
on Form 8-K to disclose the Closing. In addition, the           Company will make such
other filings and notices in the manner and time required           by the Commission and
the Trading Market on which the Common Stock is listed.  



12










    4.3.        Indemnification
of Investors.  



		    (a)        In
addition to the indemnity provided in the Registration Rights Agreement, and
          without duplication thereof, the Company will indemnify and hold the Investors
          and their directors, officers, shareholders, partners, employees and agents
          (each, an “Investor 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 (collectively, “Losses”)
that any such Investor Party may suffer or incur as a           result of or relating to
any misrepresentation, breach or inaccuracy of any           representation, warranty,
covenant or agreement made by the Company in any           Transaction Document, provided
that such Losses did not arise from willful           misconduct or gross negligence by
such Investor Party. In addition to the           indemnity contained herein, the Company
will reimburse each Investor Party for           its reasonable legal and other expenses
(including the cost of any           investigation, preparation and travel in connection
therewith) incurred in           connection therewith, as such expenses are incurred.  







		    (b)        In
addition to the indemnity provided in the Registration Rights Agreement, each
          Investor shall severally and not jointly indemnify and hold the Company and its
          directors, officers, shareholders, partners, employees and agents (each, a “Company
Party”) harmless from any and all Losses that any such           Company Party
may suffer or incur as a result of or relating to any           misrepresentation, breach
or inaccuracy of any representation, warranty,           covenant or agreement made by
such Investor in any Transaction Document,           provided that such Losses did not
arise from willful misconduct or gross           negligence by such Company Party. In
addition to the indemnity contained herein,           such Investor will reimburse each
Company Party for its reasonable legal and           other expenses (including the cost
of any investigation, preparation and travel           in connection therewith) incurred
in connection therewith, as such expenses are           incurred.  







		    (c)        Except
as otherwise set forth herein, the mechanics and procedures with respect           to the
rights and obligations under this Section 4.4 shall be the same as those           set
forth in Section 5 of the Registration Rights Agreement.  







    4.4.        Non-Public
Information. The Company covenants and agrees that neither it           nor any other
Person acting on its behalf will provide any Investor or its           agents or counsel
with any information that the Company believes constitutes           material non-public
information, unless prior thereto such Investor shall have           executed a written
agreement regarding the confidentiality and use of such           information. The
Company understands and confirms that each Investor shall be           relying on the
foregoing representations in effecting transactions in securities           of the
Company.  



    4.5.        Use
of Proceeds. The Company will use the net proceeds from the sale of           the
Securities hereunder for working capital purposes of the Company (but will           not
be used for working capital of East Mediterranean Gas Co. S.A.E.) and not           for
the satisfaction of any portion of the Company’s debt (other than           payment
of trade payables and accrued expenses in the ordinary course of the           Company’s
business and consistent with prior practices), or to redeem any           Common Stock or
Common Stock Equivalents.  



13










    4.6.        Shareholder
Approval.  



		    (a)        The
Warrants may not be exercised in whole or in part and the Company may not           issue
any Warrant Shares until such time as the Company has obtained the           approval of
its shareholders approving the issuance of the Warrants (the “Shareholder Approval”).
If Shareholder Approval is not           obtained, the Warrants shall be void and of no
value.  







		    (b)        In
furtherance of the obligations of the Company under Section 4.6(a), the           Company
shall use its best commercial efforts to obtain Shareholder Approval in
          connection with this Section 4.6, and in pursuit thereof (a) the Board of
          Directors of the Company shall adopt proper resolutions authorizing the actions
          set forth in subsection (a) above, (b) the Board of Directors of the Company
          shall recommend and the Company shall otherwise use its best efforts to
promptly           and duly obtain shareholder approval, including, without limitation,
soliciting           proxies from its shareholders in connection therewith in the same
manner as all           other management proposals in such proxy statement and having all
          management-appointed proxy-holders vote their proxies in favor of such
proposals           to carry out such resolutions (and hold a special meeting of the
shareholders as           soon as practicable, but in any event not later than the 60th day
          after delivery of the proxy or other applicable materials relating to such
          meeting) and (c) within 10 Business Days of obtaining such shareholder
          authorization, take all actions necessary to effectuate the actions set forth
          above.  







ARTICLE 5. 

CONDITIONS PRECEDENT TO
CLOSING 



    5.1.        Conditions
Precedent to the Obligations of the Investors to Purchase           Securities. The
obligation of each Investor to acquire Securities at the           Closing is subject to
the satisfaction or waiver by such Investor, at or before           the Closing, of each
of the following conditions:  



		    (a)        Representations
and Warranties. The representations and warranties of the           Company contained
herein shall be true and correct in all material respects as           of the date when
made and as of the Closing as though made on and as of such           date;  







		    (b)        Performance.
The Company shall have performed, satisfied and complied in           all material
respects with all covenants, agreements and conditions required by           the
Transaction Documents to be performed, satisfied or complied with by it at           or
prior to the Closing;  







		    (c)        No
Injunction. No statute, rule, regulation, executive order, decree,           ruling
or injunction shall have been enacted, entered, promulgated or endorsed           by any
court or governmental authority of competent jurisdiction that prohibits           the
consummation of any of the transactions contemplated by the Transaction
          Documents;  







		    (d)        Company
Deliverables. The Company shall have delivered the Company           Deliverables in
accordance with Section 2.2(a);  







		    (e)        Nasdaq
Listing. If applicable, (i) the Nasdaq Stock Market shall have           waived
application of the 15 day prior notice contained in NASD Marketplace Rule
          4310(c)(17)(D) or such timeframe shall have expired without objection and (ii)
          the Nasdaq Stock Market shall have confirmed in writing that shareholder
          approval is not required for the issuance of the Shares pursuant to this
          Agreement;  







14










		    (f)        Shareholder
Voting Agreement. The Investor shall have received a letter           from each of
Y.M. Noy Investments Ltd. and Merhav (m.n.f.) Ltd. that each of           them will vote
their shares at a shareholders meeting of Ampal Shareholders in           favor of the
issuance of the Warrants.  







		    (g)        Termination.
This Agreement shall not have been terminated as to such           Investor in accordance
with Section 6.5.  







    5.2.        Conditions
Precedent to the Obligations of the Company to sell           Securities. The
obligation of the Company to sell Securities at the Closing           is subject to the
satisfaction or waiver by the Company, at or before the           Closing, of each of the
following conditions:  



		    (a)        Representations
and Warranties. The representations and warranties of           each Investor
contained herein shall be true and correct in all material           respects as of the
date when made and as of the Closing Date as though made on           and as of such
date;  







		    (b)        Performance.
Each Investor shall have performed, satisfied and complied           in all material
respects with all covenants, agreements and conditions required           by the
Transaction Documents to be performed, satisfied or complied with by such
          Investor at or prior to the Closing;  







		    (c)        No
Injunction. No statute, rule, regulation, executive order, decree,           ruling
or injunction shall have been enacted, entered, promulgated or endorsed           by any
court or governmental authority of competent jurisdiction that prohibits           the
consummation of any of the transactions contemplated by the Transaction
          Documents;  







		    (d)        Investors
Deliverables. Each Investor shall have delivered its Investors           Deliverables
in accordance with Section 2.2(b);  







		    (e)        Nasdaq
Listing. If applicable, the (i) Nasdaq Stock Market shall have           waived
application of the 15 day prior notice contained in NASD Marketplace Rule
          4310(c)(17)(D) or such timeframe shall have expired without objection and (ii)
          the Nasdaq Stock Market shall have confirmed in writing that shareholder
          approval is not required for the issuance of the Shares pursuant to this
          Agreement; and  







		    (f)        Termination.
This Agreement shall not have been terminated as to such           Investor in accordance
with Section 6.5.  







ARTICLE 6. 

MISCELLANEOUS 



    6.1.        Fees
and Expenses. Each party shall pay the fees and expenses of its           advisers,
counsel, accountants and other experts, if any, and all other expenses           incurred
by such party incident to the negotiation, preparation, execution,           delivery and
performance of the Transaction Documents. The Company shall pay all           stamp and
other taxes and duties levied in connection with the sale of the           Securities.  



15










    6.2.        Entire
Agreement. The Transaction Documents, together with the Exhibits           and
Schedules thereto, contain the entire understanding of the parties with           respect
to the subject matter hereof and supersede all prior agreements,
          understandings, discussions and representations, oral or written, with respect
          to such matters, which the parties acknowledge have been merged into such
          documents, exhibits and schedules.  



    6.3.        Notices.
Any and all notices or other communications or deliveries           required or permitted
to be provided hereunder shall be in writing and shall be           deemed given and
effective on the earliest of (a) the date of transmission, if           such notice or
communication is delivered via facsimile (provided the sender           receives a
machine-generated confirmation of successful transmission) at the           facsimile
number specified in this Section prior to 6:30 p.m. (New York City           time) on a
Trading Day, (b) the next Trading Day after the date of transmission,           if such
notice or communication is delivered via facsimile at the facsimile           number
specified in this Section on a day that is not a Trading Day or later           than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day           following the
date of mailing, if sent by U.S. nationally recognized overnight           courier
service, or (d) upon actual receipt by the party to whom such notice is
          required to be given. The address for such notices and communications shall be
          as follows:  











	 	If to the Company:
	 Ampal-American Israel Corporation

111 Arlozorov Street

Tel Aviv, Israel 62098

Facsimile: 972-3-608-0101

Attn: Yoram Firon













	 	With a copy to:
	 Bryan Cave LLP

1290 Avenue of the Americas

New York, NY 10104

Facsimile: (212) 541-1357

Attn: Kenneth L. Henderson












	 	If to an Investor:
	 To the address set forth under such Investor's name on the signature pages
hereof;








or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 



    6.4.        Amendments;
Waivers; No Additional Consideration. No provision of this           Agreement may be
waived or amended except in a written instrument signed by the           Company and the
Investors holding a majority of the Shares. No waiver of any           default with
respect to any provision, condition or requirement of this           Agreement shall be
deemed to be a continuing waiver in the future or a waiver of           any subsequent
default or a waiver of any other provision, condition or           requirement hereof,
nor shall any delay or omission of either party to exercise           any right hereunder
in any manner impair the exercise of any such right. No           consideration shall be
offered or paid to any Investor to amend or consent to a           waiver or modification
of any provision of any Transaction Document unless the           same consideration is
also offered to all Investors who then hold Shares.  



16










    6.5.        Termination.
This Agreement may be terminated prior to Closing:  



		    (a)        by
written agreement of the Investors and the Company; and  







		    (b)        by
the Company or an Investor (as to itself but no other Investor) upon written
          notice to the other, if the Closing shall not have taken place by 6:30 p.m.
          Eastern time on the Outside Date; provided, that the right to terminate
          this Agreement under this Section 6.5(b) shall not be available to any
          Person whose failure to comply with its obligations under this Agreement has
          been the cause of or resulted in the failure of the Closing to occur on or
          before such time.  







        In
the event of a termination pursuant to this Section, the Company shall promptly notify all
non-terminating Investors. Upon a termination in accordance with this Section 6.5, the
Company and the terminating Investor(s) shall not have any further obligation or liability
(including as arising from such termination) to the other and no Investor will have any
liability to any other Investor under the Transaction Documents as a result therefrom. 



    6.6.        Construction.
The headings herein are for convenience only, do not           constitute a part of this
Agreement and shall not be deemed to limit or affect           any of the provisions
hereof. The language used in this Agreement will be deemed           to be the language
chosen by the parties to express their mutual intent, and no           rules of strict
construction will be applied against any party. This Agreement           shall be
construed as if drafted jointly by the parties, and no presumption or           burden of
proof shall arise favoring or disfavoring any party by virtue of the           authorship
of any provisions of this Agreement or any of the Transaction           Documents.  



    6.7.        Successors
and Assigns. This Agreement shall be binding upon and inure to           the benefit
of the parties and their successors and permitted assigns. The           Company may not
assign this Agreement or any rights or obligations hereunder           without the prior
written consent of the Investors. Any Investor may assign any           or all of its
rights under this Agreement to any Person to whom such Investor           assigns or
transfers any Securities, provided such transferee agrees in writing           to be
bound, with respect to the transferred Securities, by the provisions           hereof
that apply to the “Investors.” 



    6.8.        No
Third-Party Beneficiaries. This Agreement is intended for the benefit           of
the parties hereto and their respective successors and permitted assigns and           is
not for the benefit of, nor may any provision hereof be enforced by, any           other
Person, except as otherwise set forth in Section 4.4 (as to each Investor           Party
or Company Party as the case may be).  



17










    6.9.        Governing
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           agrees that
all Proceedings concerning the interpretations, enforcement and           defense of the
transactions contemplated by this Agreement and any other           Transaction Documents
(whether brought against a party hereto or its respective           Affiliates, employees
or agents) shall be commenced exclusively in the New York           Courts. Each party
hereto hereby irrevocably submits to the exclusive           jurisdiction of the New York
Courts 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 the any of the           Transaction Documents), and hereby
irrevocably waives, and agrees not to assert           in any Proceeding, any claim that
it is not personally subject to the           jurisdiction of any such New York Court, or
that such Proceeding has been           commenced in an improper or inconvenient forum.
Each party hereto hereby           irrevocably waives personal service of process and
consents to process being           served in any such 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. Each party hereto hereby           irrevocably waives, to the fullest
extent permitted by applicable law, any and           all right to trial by jury in any
legal proceeding arising out of or relating to           this Agreement or the
transactions contemplated hereby. If either party shall           commence a Proceeding
to enforce any provisions of a Transaction Document, then           the prevailing party
in such Proceeding shall be reimbursed by the other party           for its reasonable
attorneys’ fees and other costs and expenses incurred           with the
investigation, preparation and prosecution of such Proceeding.  



    6.10.        Survival.
The representations, warranties, agreements and covenants           contained herein
shall survive the Closing and the delivery of the Securities.  



    6.11.        Execution.
This Agreement may be executed in two or more counterparts,           all of which when
taken together shall be considered one and the same agreement           and shall become
effective when counterparts have been signed by each party and           delivered to the
other party, it being understood that both parties need not           sign the same
counterpart. In the event that any signature is delivered by           facsimile
transmission, such signature shall create a valid and binding           obligation of the
party executing (or on whose behalf such signature is           executed) with the same
force and effect as if such facsimile signature page           were an original thereof.  



    6.12.        Severability.
If any provision of this Agreement is held to be invalid or           unenforceable in
any respect, the validity and enforceability of the remaining           terms and
provisions of this Agreement shall not in any way be affected or           impaired
thereby and the parties will attempt to agree upon a valid and           enforceable
provision that is a reasonable substitute therefor, and upon so           agreeing, shall
incorporate such substitute provision in this Agreement.  



    6.13.        Rescission
and Withdrawal Right. Notwithstanding anything to the contrary           contained in
(and without limiting any similar provisions of) the Transaction           Documents,
whenever any Investor exercises a right, election, demand or option           under a
Transaction Document and the Company does not timely perform its related
          obligations within the periods therein provided, then such Investor may rescind
          or withdraw, in its sole discretion from time to time upon written notice to
the           Company, any relevant notice, demand or election in whole or in part
without           prejudice to its future actions and rights.  



18










    6.14.        Replacement
of Securities. If any certificate or instrument evidencing           any Securities
is mutilated, lost, stolen or destroyed, the Company shall issue           or cause to be
issued in exchange and substitution for and upon cancellation           thereof, or in
lieu of and substitution therefor, a new certificate or           instrument, but only
upon receipt of evidence reasonably satisfactory to the           Company of such loss,
theft or destruction and customary and reasonable           indemnity, if requested. The
applicants for a new certificate or instrument           under such circumstances shall
also pay any reasonable third-party costs           associated with the issuance of such
replacement Securities. If a replacement           certificate or instrument evidencing
any Securities is requested due to a           mutilation thereof, the Company may
require delivery of such mutilated           certificate or instrument as a condition
precedent to any issuance of a           replacement.  



    6.15.        Remedies.
In addition to being entitled to exercise all rights provided           herein or granted
by law, including recovery of damages, each of the Investors           and the Company
will be entitled to specific performance under the Transaction           Documents. The
parties agree that monetary damages may not be adequate           compensation for any
loss incurred by reason of any breach of obligations           described in the foregoing
sentence and hereby agrees to waive in any action for           specific performance of
any such obligation the defense that a remedy at law           would be adequate.  



    6.16.        Independent
Nature of Investors’ Obligations and Rights. The           obligations of each
Investor under any Transaction Document are several and not           joint with the
obligations of any other Investor, and no Investor shall be           responsible in any
way for the performance of the obligations of any other           Investor under any
Transaction Document. The decision of each Investor to           purchase Securities
pursuant to the Transaction Documents has been made by such           Investor
independently of any other Investor. Nothing contained herein or in any
          Transaction Document, and no action taken by any Investor pursuant thereto,
          shall be deemed to constitute the Investors as a partnership, an association, a
          joint venture or any other kind of entity, or create a presumption that the
          Investors are in any way acting in concert or as a group with respect to such
          obligations or the transactions contemplated by the Transaction Documents. Each
          Investor acknowledges that no other Investor has acted as agent for such
          Investor in connection with making its investment hereunder and that no
Investor           will be acting as agent of such Investor in connection with monitoring
its           investment in the Securities or enforcing its rights under the Transaction
          Documents. Each Investor shall be entitled to independently protect and enforce
          its rights, including without limitation the rights arising out of this
          Agreement or out of the other Transaction Documents, and it shall not be
          necessary for any other Investor to be joined as an additional party in any
          proceeding for such purpose. The Company acknowledges that each of the
Investors           has been provided with the same Transaction Documents for the purpose
of closing           a transaction with multiple Investors and not because it was
required or           requested to do so by any Investor.  


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES FOLLOW]




19










        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. 











			AMPAL-AMERICAN ISRAEL CORPORATION




——————————————

Name:
Title:






[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES FOR INVESTORS FOLLOW]




20










        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. 


















			NAME OF INVESTOR



——————————————



By: 
——————————————

Name:

Title:

Investment Amount:  $ _____________________


Tax ID No.: ______________________________











                                                     :









			ADDRESS FOR NOTICE


c/o: ___________________________________



Street:  _________________________________     



City/State/Zip ___________________________



Attention: ______________________________    



Tel: ___________________________________



Fax: ___________________________________







			DELIVERY INSTRUCTIONS

   (if different from above)


c/o: ___________________________________



Street:  _________________________________     



City/State/Zip ___________________________



Attention: ______________________________    



Tel: ___________________________________





21










Exhibit A 



Registration Rights
Agreement 



A - 1










Exhibit B 



Warrant 



B - 1










EXHIBIT C-1  



CONFIRMATION OF SALE 



To: ________________ 



        This
notice confirms your purchase of [_________________ shares (the “Shares”) of the
Class A Stock of Ampal (the “Common Stock”), and a warrant (the
“Warrant”) to purchase ____ shares of Common Stock (the “Warrant
Shares”). Capitalized terms used but not defined in this Confirmation of Sale shall
have the respective meanings ascribed to them in that certain Securities Purchase
Agreement, dated as of November 28, 2006, by and among Ampal and the investors identified
on the signature pages thereto, pursuant to which the Shares, Warrant, and Warrant Shares
(collectively, the “Securities”) were issued. Please be advised that the
Securities are subject to the following restrictions: 



    1.        All
offers and resales of the Securities must be made only in accordance with           the
provisions of Regulation S (“Regulation S”) of the           Securities
Act of 1933, as amended (the “Securities Act”),           pursuant to
registration under the Securities Act, or pursuant to another           available
exemption under the Securities Act. All offers and sales shall be made           to
non-U.S. purchasers and shall occur outside the United States, within the
          meaning of Regulation S. Neither you nor any natural person or entity
          (including, but not limited to, any corporation, partnership, limited liability
          company, an association, a joint-stock company, a trust, any unincorporated
          organization, or a government or political subdivision thereof) that directly
or           indirectly controls, is controlled by, or is under common control by you
(such           person or entity being an “Affiliate”) has engaged in, or will
engage           in, any directed selling efforts (as defined in Rule 902 of Regulation
S) in the           United States.  



    2.        All
offering materials and documents (other than press releases) used in           connection
with offers of the Securities by you or any Affiliate and sales of           the
Securities by you or any Affiliate shall include statements to the effect           that
the Securities have not been registered under the Securities Act and may           not be
offered or sold in the United States or to U.S. persons (as defined in           Rule
902(k) of the Securities Act) unless the Securities are registered under           the
Securities Act, or an exemption from the registration requirements of the
          Securities Act is available.  



    3.        Offers
and resales shall not be made to a U.S. person or for the account or           benefit of
a U.S. person.  



    4.        No
Warrant may be exercised by a U.S. person or within the United States.  



    5.        In
the event that you transfer all or a portion of your Securities to a
          third-party, you shall deliver a completed Investor Questionnaire, the form of
          which is attached hereto as Exhibit C-2, together with all other
          documentation necessary to effect a transfer of Securities, including, but not
          limited to, at the request of Ampal, an opinion of counsel, the form and
          substance of which opinion shall be reasonably satisfactory to Ampal, to the
          effect that such transfer does not require registration of such transferred
          securities under the Securities Act.  



C - 1










    6.        Ampal
may refuse to register any transfer of the Securities not made in           accordance
with the provisions of Regulation S, pursuant to registration under           the
Securities Act, or pursuant to another available exemption under the           Securities
Act.  



    7.        All
Shares subject to offers and sales shall bear the following legend:  



	 	
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.  






	 	
THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”),
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY OR THE
WARRANT SHARES, AS THE CASE MAY BE, AND THE LAST DATE ON WHICH AMPAL-AMERICAN ISRAEL
CORPORATION (“AMPAL”) OR ANY AFFILIATE OF AMPAL WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO AMPAL OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO AMPAL’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO AMPAL OR AMPAL’S TRANSFER AGENT.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.  






C - 2










    8.        All
Warrants and Warrant Shares subject to offers and sales shall bear the
          following legend:  



	 	
THIS
SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.  






	 	
THE
HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, BY ITS
ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY AND THE
WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH AMPAL-AMERICAN ISRAEL CORPORATION (“AMPAL”)
OR ANY AFFILIATE OF AMPAL WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) ONLY (A) TO AMPAL OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO AMPAL’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY
TO IT, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR
TO AMPAL OR AMPAL’S TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THIS WARRANT MAY NOT BE
EXERCISED UNTIL SUCH TIME AS THE TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT,
DATED AS OF NOVEMBER 28, 2006, BETWEEN AMPAL AND THE ORIGINAL HOLDER HEREOF HAVE BEEN
APPROVED BY THE SHAREHOLDERS OF AMPAL.  






C - 3










        THE
HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE, BY ITS
ACCEPTANCE HEREOF, AGREES NOT TO ENGAGE IN ANY HEDGING TRANSACTION UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT. THE HOLDER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED
UPON ITS EXERCISE, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THESE LEGENDS. 



        THIS
SECURITY MAY NOT BE EXERCISED BY OR ON BEHALF OF A U.S. PERSON (AS SUCH TERM IS DEFINED IN
RULE 902(K) OF THE SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. 










			[TRANSFEROR]



By:
——————————————

Name:






Dated: ______________ 





By executing this confirmation the
undersigned Transferee hereby agrees to the forgoing, and is hereby deemed to have made
the forgoing representations, warranties and agreement to Ampal for Ampal’s benefit: 









	[TRANSFEREE]



By:
——————————————

Name:		







Dated: _________________________



C - 4










Exhibit C-2  



AMPAL-AMERICAN ISRAEL
CORPORATION 



Selling Securityholder
Notice and Questionnaire 



        The
undersigned beneficial owner of any combination of Class A Common Stock, par value $1.00
per share (the “Common Stock”), of Ampal-American Israel Corporation, a
New York corporation (the “Company”), warrants (the “Warrant”)
to purchase shares of Common Stock, and Common Stock issued pursuant to a Warrant (the
“Warrant Shares”) (collectively, the “Registrable Securities”),
all of which were issued, directly or indirectly, pursuant to that certain Securities
Purchase Agreement, dated as of November 28, 2006, by and among Ampal and the investors
identified on the signature pages thereto, understands that the Company has filed or
intends to file with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (the
“Registration Statement”) for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the “Securities Act”), of the
Registrable Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of November [__], 2006 (the “Registration Rights Agreement”),
among the Company and the purchasers named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement. 



        Certain
legal consequences arise from being named as a selling securityholder in the Registration
Statement and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding
the consequences of being named or not being named as a selling securityholder in the
Registration Statement and the related prospectus. 



NOTICE 



        The
undersigned beneficial owner (the “Selling Securityholder”) of
Registrable Securities hereby elects to include the Registrable Securities owned by it and
listed below in Item 3 (unless otherwise specified under such Item 3) in the Registration
Statement. 



C - 1










The undersigned hereby provides the
following information to the Company and represents and warrants that such information is
accurate: 



QUESTIONNAIRE 



	1.  	Name.  






	 	(a) 	Full
Legal Name of Selling Securityholder






	 	
 







	 	(b) 	Full
Legal Name of Registered Holder (if not the same as (a) above) through
               which Registrable Securities Listed in Item 3 below are held: 







	 	
 








	 	(c) 	Full
Legal Name of Natural Control Person (which means a natural person who
               directly or indirectly alone or with others has power to vote or dispose
of the                securities covered by the questionnaire): 






	 	[      ]
 








	2.  	Address
for Notices to Selling Securityholder:  






	
 







	
 






	
 






Telephone: [      ]

Fax:              [      ]

Contact Person:





	3.  	Beneficial
Ownership of Registrable Securities:  






	 	(a) 	Type
and Number of Registrable Securities beneficially owned: 





	 	
 





	 	
 





	 	
 







C - 2












	4.  	Broker-Dealer
Status:  






	 	(a) 	Are
you a broker-dealer? 






Yes    o
  No o




	 	(b) 	If
“yes” to Section 4(a), did you receive your Registrable Securities
               as compensation for investment banking services to the Company. 






Yes    o
  No o






	 	         Note: 	If
no, the  Commission's  staff has  indicated  that you should be identified  as an
 underwriter  in the                   Registration Statement.






	 	(c) 	Are
you an affiliate of a broker-dealer? 






Yes    o
  No o





	 	(d) 	If
you are an affiliate of a broker-dealer, do you certify that you bought the
               Registrable Securities in the ordinary course of business, and at the time
of                the purchase of the Registrable Securities to be resold, you had no
agreements                or understandings, directly or indirectly, with any person to
distribute the                Registrable Securities? 






Yes    o
  No o





	 	         Note: 	If
no, the  Commission's  staff has  indicated  that you should be identified  as an
 underwriter  in the                   Registration Statement.






	5.  	Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Securityholder. 






	 	
Except
as set forth below in this Item 5, the undersigned is not the beneficial or registered
owner of any  securities of the Company other than the Registrable Securities
listed above in Item 3. 






	 	(a) 	Type
and Amount of Other Securities beneficially owned by the Selling
          Securityholder: 





	 	
 





	 	
 






C - 3















	6.  	Relationships
with the Company:  






	 	
Except
as set forth below, neither the undersigned nor any of its affiliates, officers, directors
or principal  equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office  or has had any other material
relationship with the Company (or its predecessors or affiliates) during the past 
three years. 






	 	
State
any exceptions here:  






	 	
 





	 	
 








        The
undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while
the Registration Statement remains effective. 



        By
signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectus and any amendments or supplements
thereto. The undersigned understands that such information will be relied upon by the
Company in connection with the preparation or amendment of the Registration Statement and
the related prospectus. 



        IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized
agent. 











	Dated: [_________________________________]  	Beneficial Owner:     _________________________                                      



By:      ___________________________________                                                   

     Name:

     Title:







PLEASE FAX A COPY OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 




C - 4