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| BluePhoenix Solutions Ltd., Private Company No: 520043068 | (Hereinafter: the “Company”) |
|-----------------------------------------------------------|------------------------------------------|
|                                                      |                                     |
| And:                                                      |
|                                                      |                                     |
| The First International Bank of Israel Ltd                | (Hereinafter: the “Bank”)    |

| Whereas: | The Company signed an irrevocable letter of undertaking on 1.May.2011 in favor of the Bank (hereinafter” the “Letter of Undertaking”); |
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| And Whereas: | The parties are desirous of inserting amendments into Section 3 of the Letter of Undertaking, as set forth hereunder. |
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| 1. | The preamble to this Letter of Amendment constitutes an integral part hereof. |
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| 2. | The amount of $ 13 million will be written instead of the amount of $ 35 million, as it appears in Section 3.1.1 of the Letter of Undertaking. |
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| 3. | The amount of $ 4 million will be written instead of the amount of $ 7 million, as it appears in Section 3.1.2 of the Letter of Undertaking. |
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| 4. | The amount of $ 1 million will be written instead of the amount of $ 3 million, as it appears in Section 3.1.3 of the Letter of Undertaking. |
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| 5. | Section 3.1.4 will be deleted. |
|----|--------------------------------|

| 6. | The rate of 40% will be written instead of the rate of 30%, as it appears in Section 3.15 of the Letter of Undertaking. |
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| 7. | The amount of $ 2 million will be written instead of the amount of $ 6 million, as it appears in Section 3.1.6 of the Letter of Undertaking. |
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| 8. | This Letter of Amendment will enter into force and effect as of the date hereof. |
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| 9. | This Letter of Amendment constitutes an inseparable part of the Letter of Undertaking, the other provisions of which continue to remain in full force and effect without any change. |
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| [Signatures][Stamp:  Abramowitz Yaakov][Stamp:  [illegible]][Stamp:  Andrea Arov] ______________________The First International Bank of Israel Ltd.  |   | [Stamp and signatures: BluePhoenix Solutions Ltd.]   _______________________BluePhoenix Solutions Ltd.  |
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| Represented by: ______________Position: ____________________                                                                                                                                 |   | Represented by: Shimon Bar KamaPosition: CEO                                                                           |
| Represented by: ______________Position: ____________________                                                                                                                                 |   | Represented by: Nir PelesPosition: CFO                                                                                      |

| Date: 14/Dec/2011 |   | Signature and Stamp: [Signature and Stamp:Yael Peretz - Advocate] |
|-------------------|--------|-------------------------------------------------------------------|

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