**EXHIBIT
      4.11**




**STOCK
      PURCHASE AGREEMENT**




**Dated
      May 8, 2007**




The
      parties to this Stock Purchase Agreement (the “Agreement”) are Steven
      Dmiszewicki (“SD”) and Leonid Erlikh (“LE”) (collectively, the “Members”),
      Contrado Partners, LLC (“Contrado”), a North Carolina limited liability company,
      and SeaBreeze Partners, LLC (“SeaBreeze”), a New York limited liability company
      (Contrado and SeaBreeze, collectively, the “Shareholders”), and BluePhoenix
      Solutions Ltd. (the “Purchaser”), an Israeli company.




SD
      is the
      managing member of Contrado, and LE is the managing member of SeaBreeze. The
      Shareholders own, in the aggregate, all the outstanding shares of common stock
      (such shares owned by the Shareholders, the “Company Shares”) of BridgeQuest,
      Inc. (the “Company”), a North Carolina corporation. The Company owns all the
      outstanding shares of common stock (such shares owned by the Company, the “Sub
      Shares”), of BridgeQuest Labs Inc. (“BQ Labs”), a North Carolina corporation. BQ
      Labs manages an operating branch in St. Petersburg, Russia (the “Branch”). As
      used in this Agreement, the term “Companies” means, collectively, the Company,
      BQ Labs, and the Branch.




The
      Branch is experienced in providing specialized outsourced information technology
      consulting and systems from the Russian Federation to United States and other
      foreign customers, and has, or will be able to hire, professional personnel
      in
      the Russian Federation sufficient in number and competence to meet the
      Companies’ reasonably anticipated professional personnel requirements (including
      those of the Purchaser and its affiliates) over the next 12 months.




The
      Purchaser wishes to purchase from the Shareholders, and the Shareholders wish
      to
      sell to the Purchaser, all the Company Shares for the consideration set forth
      in
      this Agreement.




Accordingly,
      the parties agree as follows:




1.  Sale
      and Purchase .  At the
      Closing referred to below, the Shareholders are selling, and the Purchaser
      is
      purchasing, all the Company Shares. The closing of the transactions contemplated
      by this Agreement (the “Closing”) is taking place simultaneously with the
      execution and delivery of this Agreement.





2.  Closing




(a)  Prior
      to
      or **** simultaneously
      with the execution and delivery of this Agreement, the Members and Shareholders
      are delivering or have delivered, or are causing or have caused to be delivered,
      to the Purchaser the following:




(i)  counterparts
      of this Agreement executed by the Members and Shareholders;




(ii)  counterparts
      of the amendment to consulting agreement dated the date of this Agreement
      between Contrado and the Company in the form of exhibit 2(a)(ii)(A) (the
“Contrado Consulting Agreement”), and the amendment to consulting agreement
      dated the date of this agreement between SeaBreeze and the Company in the form
      of exhibit 2(a)(ii)(B) (the “SeaBreeze Consulting Agreement”) (the Contrado
      Consulting Agreement and the SeaBreeze Consulting Agreement, collectively,
      the
“Consulting Agreements”), executed by each party to the respective Consulting
      Agreement;




(iii)  counterparts
      of the non-competition agreement dated the date of this Agreement among the
      Purchaser and the Members in the form of exhibit 2(a)(iii) (the “Non-Competition
      Agreement”) executed by the Members;




(iv)  certificates
      evidencing all the Company Shares, together with stock transfer powers executed
      in blank, and with all required stock transfer tax stamps attached;
      and




(v)  copies
      of
      the resolutions of the board of directors of the Company authorizing the
      execution and delivery of the Consulting Agreements, together with a certificate
      of the Company’s secretary to the effect that (A) attached to such certificate
      are true and complete copies of the Company’s certificate of incorporation and
      bylaws, as in effect on the date of this Agreement, in the forms of exhibit
      2(a)(v)(A)(1) and 2(a)(v)(A)(2), respectively (collectively, the “Company
      Organizational Instruments”), and (B) the resolutions referred to above were
      duly adopted and have not been rescinded or amended.




(b)  Simultaneously
      with the execution and delivery of this Agreement, the Purchaser is:


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(i)
      delivering to the Members and Shareholders a counterpart of each of this
      Agreement and the Non-Competition Agreement executed by the Purchaser;




(ii)
      paying each Shareholder, by wire transfer of immediately available funds to
      accounts designated in writing by the Shareholders, $1,000,000;




(iii)
      causing the Shareholders to be released from all liability in respect of the
      Company’s indebtedness to Wachovia Bank; and




(iv)
      delivering to the Members and Shareholders copies of the resolutions of the
      board of directors of the Purchaser authorizing the execution and delivery
      of
      this Agreement, together with a certificate of the Purchaser’s secretary to the
      effect that (A) attached to such certificate are true and complete copies of
      the
      Purchaser’s organizational instruments as in effect on the date of this
      Agreement, in the form of exhibit 2(b)(iv)(A), and (B) the resolutions referred
      to above were duly adopted and have not been rescinded or amended.




3.  Additional
      Consideration




(a)  If
      the
      Company’s Revenue (as defined and determined in accordance with section
      3(g)(i)(A) below) in the nine months beginning April 1, 2007 and ending December
      31, 2007 exceeds $4,000,000, the Purchaser shall, subject to the fulfillment
      of
      the conditions set forth in section 3(e) below (the “Procedural Provisions”),
      pay each Shareholder, by wire transfer of immediately available funds to an
      account or accounts designated in writing by the Members, an amount equal to
      25%
      of that excess.




(b)  If
      the
      Company’s Operating Profit (as defined and determined in accordance with section
      3(g)(i)(B) below) in the nine months beginning April 1, 2007 and ending December
      31, 2007 exceeds $750,000, the Purchaser shall, subject to the fulfillment
      of
      the conditions set forth in the Procedural Provisions, pay each Shareholder,
      by
      wire transfer of immediately available funds to an account or accounts
      designated in writing by the Members, an amount equal to 50% of that excess.




(c)  (i)  If
      the
      Company’s Operating Profit in the calendar year ending December 31, 2008 is
      greater than zero but equal to or less than $1,500,000, the Purchaser shall,
      subject to the fulfillment of the conditions set forth in the Procedural
      Provisions, pay each Shareholder, on or before March 31, 2009, by wire transfer
      of immediately available funds to an account or accounts designated in writing
      by the Members, an amount equal to 39.2% of that Operating Profit.


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(ii)  If the
      Company’s Operating Profit in the calendar year ending December 31, 2008 is
      greater than $1,500,000 but equal to or less than $2,250,000, the Purchaser
      shall, subject to the fulfillment of the conditions set forth in the Procedural
      Provisions, pay each Shareholder, on or before March 31, 2009, by wire transfer
      of immediately available funds to an account or accounts designated in writing
      by the Members, an amount equal to the sum of (A) $588,000 plus (B) 44.1% of
      the
      amount by which that Operating Profit exceeds $1,500,000.




(iii)  If the
      Company’s Operating Profit in the calendar year ending December 31, 2008 is
      greater than $2,250,000 but equal to or less than $3,000,000, the Purchaser
      shall, subject to the fulfillment of the conditions set forth in the Procedural
      Provisions, pay each Shareholder, on or before March 31, 2009, by wire transfer
      of immediately available funds to an account or accounts designated in writing
      by the Members, an amount equal to the sum of (A) $918,750 plus (B) 49% of
      the
      amount by which that Operating Profit exceeds $2,250,000.




(iv)  If the
      Company’s Operating Profit in the calendar year ending December 31, 2008 is
      greater than $3,000,000, the Purchaser shall, subject to the fulfillment of
      the
      conditions set forth in the Procedural Provisions, pay each Shareholder, on
      or
      before March 31, 2009, by wire transfer of immediately available funds to an
      account or accounts designated in writing by the Members, an amount equal to
      the
      sum of (A) $1,286,250 plus (B) 53.9% of the amount by which that Operating
      Profit exceeds $3,000,000.




(d)  (i)  If
      the
      Company’s Cumulative Operating Profit (as defined and determined in accordance
      with section 3(g)(i)(C) below) for the two calendar years beginning January
      1,
      2008 and ending December 31, 2009 is greater than zero but equal to or less
      than
      $3,000,000, the Purchaser shall, subject to the fulfillment of the conditions
      set forth in the Procedural Provisions, pay each Shareholder, on or before
      March
      31, 2010, by wire transfer of immediately available funds to an account or
      accounts designated in writing by the Members, an amount equal to (A) 49% of
      that Cumulative Operating Profit, reduced (but not to less than zero) by (B)
      the
      amount, if any, of the payment made to that Shareholder pursuant to section
      3(c).




(ii)  If
      the
      Company’s Cumulative Operating Profit for the two calendar years beginning
      January 1, 2008 and ending December 31, 2009 is greater than $3,000,000 but
      equal to or less than $4,500,000, the Purchaser shall, subject to the
      fulfillment of the conditions set forth in the Procedural Provisions, pay each
      Shareholder, on or before March 31, 2010, by wire transfer of immediately
      available funds to an account or accounts designated in writing by the Members,
      an amount equal to (A) the sum of (1) $1,470,000, reduced (but not to less
      than
      zero) plus (2) 55.125% of the amount by which such Cumulative Operating Profit
      exceeds $3,000,000, reduced by (B) the amount, if any, of the payment made
      to
      that Shareholder pursuant to section 3(c).


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(iii)  If
      the
      Company’s Cumulative Operating Profit for the two calendar years beginning
      January 1, 2008 and ending December 31, 2009 is greater than $4,500,000 but
      equal to or less than $6,000,000, the Purchaser shall, subject to the
      fulfillment of the conditions set forth in the Procedural Provisions, pay each
      Shareholder, on or before March 31, 2010, by wire transfer of immediately
      available funds to an account or accounts designated in writing by the Members,
      an amount equal to (A) the sum of (1) $2,296,875 plus (2) 61.25% of the amount
      by which such Cumulative Operating Profit exceeds $4,500,000, reduced (but
      not
      to less than zero) by (B) the amount, if any, of the payment made to that
      Shareholder pursuant to section 3(c).




(iv)  If
      the
      Company’s Cumulative Operating Profit for the two calendar years beginning
      January 1, 2008 and ending December 31, 2009 is greater than $6,000,000, the
      Purchaser shall, subject to the fulfillment of the conditions set forth in
      the
      Procedural Provisions, pay each Shareholder, on or before March 31, 2010, by
      wire transfer of immediately available funds to an account or accounts
      designated in writing by the Members, an amount equal to (A) the sum of (1)
      $3,215,625 plus (2) 67.375% of the amount by which such Cumulative Operating
      Profit exceeds $6,000,000, reduced (but not to less than zero) by (B) the
      amount, if any, of the payment made to that Shareholder pursuant to section
      3(c).




(e)  Each
      payment to a Shareholder referred to in this section 3 is subject to the
      fulfillment of the conditions that:




(i)
      on or
      before the date on which a particular payment would be required, the engagement
      of that Shareholder shall not have been terminated by the Company for Cause
      (as
      defined in the respective Consulting Agreement) or Performance Failure (as
      defined in the respective Consulting Agreement) or voluntarily by that
      Shareholder other than for Good Reason (as defined in the respective Consulting
      Agreement), and




(ii)
      SD
      and LE shall have furnished the Company’s independent accountants and the
      Purchaser a management confirmation letter in substantially the form of exhibit
      3(e); *provided,
      however* ,
      if the
      engagement of the respective Shareholder shall have terminated prior to the
      completion of the applicable audit as a result of the respective Member’s death,
      Permanent Disability (as defined in the respective Consulting Agreement),
      voluntary termination for Good Reason, or termination by the Company without
      Cause, the furnishing of such management confirmation letter by that individual
      shall not constitute a condition to the particular payment.


5


(f)  Notwithstanding
      anything to the contrary in this Agreement, if the engagement of a Shareholder
      shall have terminated prior to December 31, 2009 as a result of a termination
      by
      the Company without Cause (other than as a result of the respective Member’s
      death or Permanent Disability) or as a result of a voluntary termination by
      the
      Shareholder for Good Reason, the Purchaser shall pay that Shareholder, not
      later
      than 10 business days after the determination of the amount so payable becomes
      final, binding, and conclusive on the parties, an amount, in lieu of any amounts
      thereafter payable to that Shareholder otherwise under this section 3, equal
      to
      the Formula Amount. For these purposes, the term “Formula Amount” means: (i) in
      the event the termination of the Shareholder’s engagement occurs during calendar
      year 2007, $2,250,000; (ii) in the event the termination of the Shareholder’s
      engagement occurs during calendar year 2008, an amount equal to the sum of
      (A)
      the amount, if any, payable, but not yet paid, to that Shareholder pursuant
      to
      section 3(b), plus (B) the aggregate amount that would have been payable to
      that
      Shareholder pursuant to sections 3(c) and 3(d), if the Company’s Operating
      Profit in each of calendar years 2008 and 2009 equaled the Company’s Operating
      Profit in the 12 months ended on the last day of the calendar month immediately
      preceding the date of termination; and (iii) in the event the termination of
      the
      Shareholder’s engagement occurs during calendar year 2009, an amount equal to
      the sum of (A) the aggregate amount, if any, payable, but not yet paid, to
      that
      Shareholder pursuant to sections 3(b) and 3(c), plus (B) the amount that would
      have been payable to that Shareholder pursuant to section 3(d), if the Company’s
      Operating Profit in calendar year 2009 equaled the Company’s Operating Profit in
      the 12 months ended on the last day of the calendar month immediately preceding
      the date of termination. It is understood and agreed that the costs and expenses
      of preparing the Company’s consolidated income statement on the basis of which
      the Formula Amount is to be determined, up to a maximum of $5,000 in any
      calendar year, shall be borne by the Shareholder or Shareholders to whom the
      Formula Amount is to be payable, which costs and expenses may be deducted from
      the Formula Amount when paid (it being understood and agreed that, if the
      Companies’ operations increase materially in size, the $5,000 amount referred to
      in this sentence shall be subject to upward adjustment by mutual agreement
      of
      the parties).




(g)  (i)  As
      used
      in this Agreement, the following terms have the following respective
      meanings:




(A)  “Revenue”
      means the consolidated revenue of the Companies for the period in question,
      determined by the Purchaser on the basis of the Company’s consolidated income
      statement for that period (which shall be audited) prepared in accordance with
      generally accepted accounting principles applied in a manner consistent with
      the
      application of those principles by the Purchaser to its business generally
      (“GAAP”);


6


(B)  “Operating
      Profit” and “Operating Loss” for a particular period mean (1) the Companies’
consolidated earnings or loss, respectively, before interest and taxes
      (excluding employment and similar taxes), for that period, determined by the
      Purchaser on the basis of the Company’s consolidated income statement for that
      period (which shall be audited) prepared in accordance with GAAP, reduced by
      (2)
      an amount equal to 75% of the operating profit, if any, attributable to Revenue
      derived from Internally Provided Services (as defined below). Operating Profit
      and Operating Loss also shall reflect (1) the costs and expenses of the
      Companies in performing all the obligations required under section 6(b)(iii)
      in
      accordance with GAAP;




(C)  “Cumulative
      Operating Profit” for a two-year period means (A) the sum of the Operating
      Profit for the year or years in which there was Operating Profit, reduced by
      (B)
      the sum of the Operating Loss for the year or years in which there was Operating
      Loss; and




(D)  “Internally
      Provided Services” means services the Companies provide to the Purchaser or its
      affiliates that do not relate to a specific customer engagement.




(ii)  As
      promptly as practicable, but in no event more than 90 days, after December
      31 of
      each of 2007, 2008, and 2009 (or, in the case of the determination of an amount
      payable pursuant to section 3(f), in no event more than 90 days after the
      termination of the engagement), the Purchaser shall




(A)
      furnish the Shareholder or Shareholders to whom an amount might be payable
      pursuant to this section 3 the Companies’ consolidated income statement for the
      respective year, prepared in accordance with GAAP and audited by the Purchaser’s
      independent accountants, and a statement (the “Statement”) of the Purchaser’s
      chief financial officer setting forth the amount, and, in reasonable detail,
      the
      calculation of the amount, if any, due the Shareholder or Shareholders pursuant
      to this section 3, and




(B)
      pay
      each Shareholder the amount due that Shareholder pursuant to this section 3,
      as
      set forth in the Statement. Unless the Members deliver to the Purchaser a Notice
      of Disagreement pursuant to section 3(g)(iii) within 30 business days after
      they
      receive the consolidated income statement and Statement delivered pursuant
      to
      the immediately preceding clause (A), the consolidated income statement and
      Statement shall be final, binding, and conclusive on all the parties for all
      purposes of this Agreement.


7


(iii)  If
      the
      Members give the Purchaser a written notice of disagreement (a “Notice of
      Disagreement”) pursuant to section 3(g)(ii), the parties shall, during a period
      of 30 business days following delivery to the Purchaser of the Notice of
      Disagreement, attempt to resolve in writing any differences with respect to
      any
      matter specified in the Notice of Disagreement.




If,
      at
      the end of that 30 business day period, the parties have failed to agree in
      writing with respect to all such matters, the matters as to which agreement
      has
      not been reached (the “Disputed Matters”) shall be submitted to an arbitrator
      (the “Arbitrator”), which the parties shall select.




If
      the
      Arbitrator shall not have been selected, and shall not have agreed to serve,
      within 20 business days after the expiration of that 30 business day period,
      the
      Arbitrator shall be selected by the president of the American Arbitration
      Association. Any arbitration under this section 3(g)(iii) shall be held in
      Raleigh, North Carolina pursuant to procedures established by the Arbitrator.
      The Arbitrator shall consider only the Disputed Matters.




The
      Arbitrator shall deliver to the Purchaser and the Members a Statement, adjusted
      to reflect any written agreement between the parties with respect to any matters
      specified in the Notice of Disagreement and the determination of the Arbitrator
      with respect to all Disputed Matters. The Statement, as so adjusted, shall
      be
      final, binding, and conclusive on all parties for all purposes of this
      Agreement. Within 10 days after the Arbitrator delivers the Statement, as so
      adjusted, to the Purchaser, the Purchaser shall pay each Shareholder the excess,
      if any, of the amount set forth in the Statement, as so adjusted, as being
      due
      each Shareholder pursuant to this section 3 over the amount actually paid
      pursuant to section 3(g)(ii). Each party shall bear that party’s own fees and
      expenses in connection with the arbitration, and the Members, on the one hand,
      and the Purchaser, on the other hand, shall each bear 50% of the fees and
      expenses of the Arbitrator and the American Arbitration
      Association.




4.  Representations
      and Warranties of the Members and Shareholders .
      The
      Members and Shareholders jointly and severally represent and warrant to the
      Purchaser as follows:




4.1  Existence,
      Qualification ,
      Etc (a)  Each
      Shareholder is a limited liability company validly existing and in good standing
      under the law of its state of organization set forth above, and has full limited
      liability company power and authority to conduct its business and own and
      operate its properties as now conducted, owned, and operated. The Shareholders
      have delivered to the Purchaser true, correct, and complete copies of each
      Shareholder’s certificate of formation and limited liability company agreement
      (the “Shareholder Organizational Instruments”).




8


(b)  The
      Company is a corporation validly existing and in good standing under the law
      of
      the state of North Carolina, and has full corporate power and authority to
      conduct its business and own and operate its properties as now conducted, owned,
      and operated. The Shareholders have delivered to the Purchaser true, correct,
      and complete copies of the Company’s Organizational Instruments. The Company is
      not required to be licensed or qualified as a foreign corporation in any
      jurisdiction other than North Carolina.




(c)  BQ
      Labs
      is a corporation validly existing and in good standing under the law of the
      state of North Carolina, and has full corporate power and authority to conduct
      its business and own and operate its properties as now conducted, owned, and
      operated. The Shareholders have delivered to the Purchaser true, correct, and
      complete copies of BQ Labs’ certificate of incorporation and bylaws (the “BQ
      Labs Organizational Instruments”). BQ Labs is not required to be licensed or
      qualified as a foreign corporation in any jurisdiction other than North
      Carolina. The Branch is properly and legally registered to conduct business
      in
      the Russian Federation.




4.2  Authorization
      and Enforceability; Shares (a)  Each
      Shareholder has the full power and authority and has taken all required action
      necessary to permit it to execute, deliver, and perform this Agreement, and
      none
      of those actions will violate any provision of the Shareholder Organizational
      Instruments or any applicable law, regulation, order, or judgment, or result
      in
      the breach of, or constitute a default (or an event that, with notice or lapse
      of time or both, would constitute a default) under, any agreement, instrument,
      or understanding to which it is a party or by which it is bound. The Company
      has
      the full power and authority and has taken all required action necessary to
      permit it to execute, deliver, and perform the Consulting Agreements, and none
      of those actions will violate any provision of the Company Organizational
      Instruments or any applicable law, regulation, order, or judgment, or result
      in
      the breach of, or constitute a default (or an event that, with notice or lapse
      of time or both, would constitute a default) under, any agreement, instrument,
      or understanding to which it is a party or by which it is bound. This Agreement
      constitutes a legal, valid, and binding obligation of each Member and
      Shareholder, enforceable against each in accordance with its terms, except
      to
      the extent limited by applicable bankruptcy, insolvency, reorganization,
      moratorium, and similar laws of general application related to the enforcement
      of creditor's rights generally and general principles of equity. Each Consulting
      Agreement constitutes a legal, valid, and binding obligation of Contrado or
      SeaBreeze, as the case may be, enforceable against each such party in accordance
      with its terms, except to the extent limited by applicable bankruptcy,
      insolvency, reorganization, moratorium, and similar laws of general application
      related to the enforcement of creditor's rights generally and general principles
      of equity. The Non-Competition Agreement constitutes a legal, valid, and binding
      obligation of each Member, enforceable against each in accordance with its
      terms, except to the extent limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, and similar laws of general application related
      to
      the enforcement of creditor's rights generally and general principles of
      equity.


9


(b)  The
      Company Shares and the Sub Shares are duly authorized, validly issued and
      outstanding, fully paid, and nonassessable.




(c)  None
      of
      the Company Shares or Sub Shares is subject to any option, right of first
      refusal, right of first offer, voting agreement or trust, preemptive right,
      or
      any other rights in favor of any third party.




(d)  The
      Branch is a division of BQ Labs, not a separate legal entity, and all its assets
      are owned by BQ Labs.




4.3  Capitalization **** As
      of the
      date of this Agreement, the authorized and issued capital stock of the Company
      and BQ Labs are as set forth in schedule 4.3, which sets forth the number of
      Company Shares owned by each Shareholder and the number of shares of each class
      of capital stock of BQ Labs owned by the Company. All the Company's and BQ
      Labs’
outstanding shares of capital stock are validly issued, fully paid, and
      nonassessable, and have been issued in compliance with all applicable laws.
      Neither the Company nor BQ Labs has granted or issued any options, convertible
      securities, warrants, phantom stock, stock appreciation rights, preemptive
      rights, rights of first offer, rights of first refusal, antidilution rights,
      registration rights, or commitments of any kind relating to any issued or
      unissued equity interests of the Company or BQ Labs.




4.4  Financial
      Statements .
      The
      financial statements (together with the notes to the financial statements)
      described in schedule 4.4 (the “Financial Statements”) are in accordance with
      the books and records of the Companies and (a) in the case of the consolidated
      Financial Statements, fairly present the consolidated financial condition and
      consolidated results of operations of the Companies as of the dates and for
      the
      periods indicated, in accordance with generally accepted accounting principles
      consistently applied, and (b) in each other case, fairly present the financial
      condition and results of operations of the Company or BQ Labs (including the
      Branch), as the case may be, as of the dates and for the periods indicated,
      in
      accordance with generally accepted accounting principles consistently applied.
      Schedule 4.4 also contains a true and complete copy of the Companies’ budget for
      the calendar year ending December 31, 2007, as well as a detailed list of
      backlog as of April 1, 2007. All the assets and liabilities of the Branch are
      reflected in the Financial Statements of BQ Labs.


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4.5  Absence
      of Certain Changes




(a)  Except
      as
      set forth in schedule 4.5, from the date of the most recent balance sheet
      included in the Financial Statements (the “Current Balance Sheet Date”) to the
      date of this Agreement, none of the Companies has:




(i)  incurred
      any liabilities, other than current liabilities incurred, or obligations under
      contracts entered into, in the ordinary course of business and consistent with
      past practice;




(ii)  paid,
      discharged, or satisfied any claim, lien, or liability, other than any claim,
      lien, or liability (A) reflected or reserved against on the consolidated balance
      sheet as of the Current Balance Sheet Date described in schedule 4.4 (the
“Current Balance Sheet”) and paid, discharged, or satisfied in the ordinary
      course of business and consistent with past practice since the Current Balance
      Sheet Date, or (B) incurred and paid, discharged, or satisfied since the Current
      Balance Sheet Date in the ordinary course of business and consistent with past
      practice;




(iii)  sold,
      leased, assigned, or otherwise transferred any of its assets, tangible or
      intangible, or sold any of its services (other than sales of assets or services
      in the ordinary course of business and consistent with past
      practice);




(iv)  permitted
      any of its assets, tangible or intangible, to become subject to any lien,
      security interest, or other charge or encumbrance (other than any Permitted
      Lien);




(v)  written
      off as uncollectible any accounts receivable;




(vi)  terminated
      or amended, or suffered the termination or amendment of, or failed to perform
      in
      all material respects, all its obligations, or suffered or permitted any
      material default to exist under, any material agreement, license, or
      permit;




(vii)  suffered
      any damage, destruction, or loss of any fixed assets (whether or not covered
      by
      insurance);




(viii)  made
      any
      loan to any person or entity (including advances to employees);




(ix)  canceled,
      waived, or released any debt, claim, or right;




(x)  paid
      any
      amount to, or entered into any agreement, arrangement, or transaction with,
      any
      affiliate (including its officers, directors, and employees), other than
      payments of salary and benefits to employees in the ordinary course of business
      and consistent with past practice;


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(xi)  declared,
      set aside, or paid any dividend or distribution with respect to its capital
      stock, or redeemed, purchased, or otherwise acquired any of its capital
      stock;




(xii)  granted
      any increase in the compensation of any officer or employee or made any other
      change in employment terms of any officer or employee;




(xiii)  made
      any
      change in accounting or cash management practices;




(xiv)  suffered
      or caused any other occurrence, event, or transaction outside the ordinary
      course of business; or




(xv)  agreed,
      in writing or otherwise, to any of the foregoing.




(b)  Since
      the
      Current Balance Sheet Date, there has been no material adverse change in the
      Companies or their respective businesses.




4.6  Litigation .
      Except
      as set forth in schedule 4.6, as of the date of this Agreement, no claim, suit,
      proceeding, or investigation is pending or, to the knowledge of the any
      individual listed in schedule 4.6 (the “Specified Senior Employees”), threatened
      against or affecting the Companies, and there is no valid basis for any claim,
      suit, or proceeding against the Companies.




4.7  Licenses,
      Compliance with Law, Other Agreements .
      Except
      as set forth in schedule 4.7, each of the Companies has all material franchises,
      permits, licenses, and other rights to allow it to conduct its business and
      is
      not in violation, in any material respect, of any order or decree of any court,
      or of any law, order, or regulation of any Governmental Agency, or of the
      provisions of any material contract or agreement to which it is a party or
      by
      which it is bound, and neither this Agreement nor the transactions contemplated
      by this Agreement will result in any such violation. The Companies’ businesses
      have been conducted in all material respects in compliance with all applicable
      laws, rules, and regulations.




4.8  Third-Party
      Approvals .
      Neither
      the Company nor BQ Labs (including the Branch) is required to obtain any order,
      consent, approval, or authorization of, or to make any declaration or filing
      with, any Governmental Agency or other third party in connection with the
      execution, delivery, or performance of this Agreement or the transactions
      contemplated by this Agreement.


12


4.9  No
      Undisclosed Liabilities .
      None of
      the Companies has any liabilities or obligations, whether or not disclosed
      in
      the Financial Statements or the notes to the Financial Statements, and whether
      actual or contingent, except (a) as disclosed in schedule 4.9 or on the face
      of
      the Financial Statements (excluding any notes to the Financial Statements),
      (b)
      those set forth as such in a schedule to this Agreement, (c) those incurred
      in
      the ordinary course of business and consistent with past practice since the
      Current Balance Sheet Date and that will not have a material adverse effect
      on
      any of the Companies, or (d) those under agreements, written or oral, set forth
      in a schedule to this Agreement or not required to be set forth in a schedule
      to
      this Agreement




4.10  Tangible
      Assets .
      Each of
      the Companies owns or leases all tangible assets used or reasonably necessary
      in
      connection with the conduct of its business. All material tangible assets owned
      or leased by the Companies are free from any liens, security interests, or
      other
      charges or encumbrances (other than Permitted Liens), are free from any material
      defects, have been maintained in accordance with normal industry practice and
      any regulatory standard or procedure to which such assets are subject, are
      in
      good operating condition and repair (subject to normal wear and tear), and
      are
      suitable for the purposes for which such assets are used or proposed to be
      used,
      other than liens, security interests, other charges and encumbrances, defects,
      and wear and tear that, in the aggregate, could not be expected to have a
      material adverse effect on any of the Companies.




4.11  Real
      Property None of
      the Companies owns any real property.




4.12  Intellectual
      Property .  Except
      as set forth in schedule 4.12:




(a)  each
      of
      the Companies has a valid and enforceable license to, or owns and possesses
      all
      right, title, and interest in and to, all Intellectual Property necessary for
      the operation of its business, as presently conducted and as presently proposed
      to be conducted (collectively, the "Company Intellectual Property”);




(b)  the
      Company Intellectual Property is not subject to any liens, security interests,
      or other charges or encumbrances, and is not subject to any restrictions or
      limitations regarding use or disclosure;




(c)  none
      of
      the Companies has infringed, misappropriated, or otherwise conflicted with,
      and
      the operation of its business as currently conducted, or as currently proposed
      to be conducted, will not infringe, misappropriate, or otherwise conflict with,
      any Intellectual Property of any third party;




(d)  no
      Specified Senior Employee is aware of any facts that indicate a likelihood
      of
      any of the foregoing, and no Specified Senior Employee has received any notices
      regarding any of the foregoing;


13


(e)  the
      Companies have taken all commercially reasonable actions to maintain and protect
      all the Company Intellectual Property;




(f)  none
      of
      the Companies licenses any Intellectual Property from any third parties (other
      than commercially available off-the-shelf software), and none requires any
      license from any third party to use any Intellectual Property (other than
      commonly available off-the-shelf software) for the operation of its business,
      as
      presently conducted and as presently proposed to be conducted;




(g)  to
      the
      knowledge of the Specified Senior Employees, as of the date of this Agreement,
      no third party has infringed, misappropriated, or otherwise conflicted with any
      of the Company Intellectual Property, and, as of the date of this Agreement,
      no
      Specified Senior Employee is aware of any facts that indicate a likelihood
      of
      any of the foregoing; and




(h)  as
      of the
      date of this Agreement, none of the Companies has agreed to indemnify any third
      party for or against any interference, infringement, misappropriation, or other
      conflict with respect to any Intellectual Property (except for indemnity
      provisions included in the ordinary course of business in agreements with
      customers and software providers).




4.13  Employees ,
      Etc. Schedule
      4.13 lists each employee (which term, as used in this Agreement, includes
      consultants, unless the context otherwise requires) of each of the Companies
      and
      the respective employee’s gross salary. From the Current Balance Sheet Date to
      the date of this Agreement, no employee has terminated employment with any
      of
      the Companies, except in the ordinary course of business. To the knowledge
      of
      the Specified Senior Employees, and except for terminations of employment that
      may reasonably be expected in the ordinary course of business, no employee
      plans
      to terminate employment with any of the Companies in the reasonably foreseeable
      future. None of the Companies has committed any unfair labor practice or
      violated any applicable law or regulation regulating employers or the terms
      and
      conditions of its employees' employment.




4.14  Employee
      Benefits .
      As of
      the date of this Agreement, except as set forth in schedule 4.14, none of the
      Companies maintains or has ever maintained any employee pension benefit plans
      (as defined in section 3(2) of ERISA), employee welfare benefit plans (as
      defined in section 3(1) of ERISA), or fringe benefit plans or programs. Except
      as set forth in schedule 4.14, the Financial Statements reflect all accruals
      required by generally accepted accounting principles for liabilities for all
      employee pension benefit plans, employee welfare benefit plans, and fringe
      benefit plans and programs, including, without limitation, vacation benefits,
      sick day benefits, bonuses, and deferred compensation. Schedule 4.14 describes
      all salary and benefit changes within the past 12 months. No further changes
      have been agreed or committed to or announced by or on behalf of any of the
      Companies; and, except as set forth in schedule 4.14 or as contemplated by
      the
      budget referred to in section 4.4, no further changes are planned, scheduled,
      or
      contemplated by any of the Companies prior to January 1, 2008.


14


4.15  Related
      Party Agreements .
      As of
      the date of this Agreement, schedule 4.15 sets forth all agreements,
      arrangements, and understandings with each of the Companies’ employees,
      officers, directors, and affiliates. As of the date of this Agreement, except
      as
      set forth in schedule 4.15, none of the Companies is a party to any agreements,
      arrangements, or understandings with, or any liabilities or other obligations
      to, any of its employees, officers, directors, or affiliates.




4.16  Taxes (a)  Schedule
      4.16 sets forth the dates through which all Tax Returns of each of the Companies
      have been audited. The Company operates in the United States and the Russian
      Federation in compliance with all applicable transfer price regulations.




(b)  Except
      as
      set forth in schedule 4.16:




(i)  each
      of
      the Companies has filed all Tax Returns it was required to file, and has paid
      all Taxes shown on those Tax Returns as owing;




(ii)  none
      of
      the Companies (i) has been a member of an affiliated group filing a consolidated
      federal Tax Return and (ii) has no liability for the Taxes of any person or
      entity (other than itself (under Treasury Regulation §1.1502-6 or any similar
      provision of state, local, or foreign law), as a transferee or successor, by
      contract, or otherwise;




(iii)  each
      of
      the Companies has withheld and paid all Taxes required to have been withheld
      and
      paid in connection with amounts paid or owing to any employee, independent
      contractor, creditor, shareholder, or other third party; and




(iv)  as
      of the
      date of this Agreement, there is no dispute or claim concerning any Tax
      Liability of any of the Companies either (i) claimed or raised by any authority
      in writing or (ii) as to which any of the Companies or Specified Senior
      Employees has knowledge.




(c)  Except
      as
      set forth in schedule 4.16 or otherwise in a writing addressed to the Purchaser,
      the Financial Statements contain all appropriate provisions to cover all
      uncertain Tax positions.


15


4.17  Certain
      Fees .
      No fees
      or commissions will be payable by the Companies to any broker, financial
      advisor, finder, investment banker, or bank with respect to the transactions
      contemplated by this Agreement.




4.18  Insurance .
      The
      respective Companies maintain the insurance set forth in schedule 4.19, and
      none
      of the Companies has been denied insurance coverage. The Companies maintain
      all
      insurance required by their customers or by applicable Governmental Agencies.




4.19  Contracts
      and Commitments (a)  As
      of the
      date of this Agreement, except as set forth in schedule 4.19, none of the
      Companies is a party to or bound by any of the following agreements, whether
      such agreements are written or oral:




(i)  contract
      for the employment of any person on a full-time, part-time, or consulting basis
      or any severance agreements, other than at the will of the
      employer;




(ii)  promissory
      note, agreement, or promise to pay, or indenture relating to the borrowing
      of
      money or to mortgaging, pledging, or otherwise placing a lien, security
      interest, or other charge or encumbrance on any of its assets, other than
      Permitted Liens;




(iii)  agreements
      with respect to the lending or investing of funds, other than agreements entered
      into in the ordinary course of business and consistent with past practice
      regarding cash management;




(iv)  license
      or royalty agreements, other than off-the-shelf software and agreements with
      customers in the ordinary course of business and consistent with past
      practice;




(v)  guaranty
      of indebtedness or liability of any other person or entity;




(vi)  lease
      or
      agreement under which it is lessee of, or holds or operates, any personal
      property owned by any other party that involves annual payments of more than
      $5,000;




(vii)  lease
      or
      agreement under which it is lessor of or permits any third party to hold or
      operate any property, real or personal, owned or controlled by it;




(viii)  contract
      or group of related contracts with the same party for the purchase by it of
      supplies, products, or other personal property or for the furnishing or receipt
      of services that involves a sum in excess of $5,000;


16


(ix)  contract
      that prohibits or purports to prohibit it or any of its affiliates from freely
      engaging in business anywhere in the world;




(x)  contract
      relating to the distribution, marketing, or sale of its products or
      services;




(xi)  warranty
      agreement with respect to products or services sold or licensed, other than
      in
      the ordinary course of business and consistent with past practice;




(xii)  franchise
      agreements and license agreements, other than in the ordinary course of business
      and consistent with past practice;




(xiii)  agreements,
      contracts, or understandings pursuant to which it engages independent
      contractors and involves a sum in excess of $5,000; or




(xiv)  other
      agreement material to it, whether or not entered into in the ordinary course
      of
      business and consistent with past practice.




(b)  As
      of the
      date of this Agreement, except as set forth in schedule 4.19, none of the
      Specified Senior Employees has any knowledge of any material breach or
      anticipated material breach by any other party to any agreement required to
      be
      set forth in schedule 4.19.




(c)  The
      Purchaser has been provided with a true and correct copy of all written
      agreements referred to in schedule 4.19, together with all amendments, waivers,
      or other changes to those agreements. Schedule 4.19 contains an accurate and
      complete description of all material terms of all oral contracts and agreements
      referred to in that schedule.




4.20  Disclosure .  Except
      as
      set forth in this Agreement or in a schedule to this Agreement, none of the
      Members, Shareholders, or Specified Senior Employees is aware of any material
      facts regarding the Companies’ businesses necessary to make the facts required
      to be disclosed in this Agreement or in its schedules not
      misleading.




5.  Representations
      and Warranties of the Purchaser **.** The
      Purchaser represents and warrants to the Members and Shareholders as
      follows **:**




5.1  Authorization
      and Enforceability .
      The
      Purchaser has taken all action necessary to permit it to execute, deliver,
      and
      perform this Agreement and the Non-Competition Agreement. Each of this Agreement
      and the Non-Competition Agreement has been duly executed and delivered by the
      Purchaser, and constitutes a valid and binding obligation of the Purchaser,
      enforceable against the Purchaser in accordance with its terms, except to the
      extent limited by applicable bankruptcy, insolvency, reorganization, moratorium,
      and similar laws of general application related to the enforcement of creditor's
      rights generally and general principles of equity.


17


5.2  Governmental
      Approvals .
      The
      Purchaser is not required to obtain any order, consent, approval, or
      authorization of, or to make any declaration or filing with, any Governmental
      Agency in connection with the execution and delivery of this Agreement or the
      consummation of the transactions contemplated by this Agreement, except for
      such
      order, consent, approval, authorization, declaration, or filing that has been
      or
      will be obtained or made.




6.  Covenants .




(a)  Unless
      the Members otherwise agree, prior to January 1, 2010:




(i)  the
      Purchaser shall maintain separate books of account with respect to the Companies
      (whether as subsidiaries, divisions, or branches of the Purchaser or its
      affiliates) in accordance with past custom and practice as used in the
      preparation of the Financial Statements, except to the extent permitted or
      required by GAAP;




(ii)  except
      as
      contemplated by this Agreement or the other agreements being entered into in
      connection with this Agreement, the Purchaser shall not, and shall not permit
      any of its affiliates to, (A) engage in any transactions with the Companies
      that
      materially affects Revenue or Operating Profit on terms less favorable to them
      than could have been obtained in comparable transactions with non-affiliates,
      or
      (B) cause the Companies, or require the Members or Shareholders to cause the
      Companies, to take any action a reasonable man acting in good faith would not
      take in furtherance of the Companies’ best interests;




(iii)  permit
      the Companies to engage in any business other than a business consistent with
      the business in which it is currently engaged;




(iv)  permit
      the Members and their counsel, accountants, and consultants to have reasonable
      access during business hours to the Company’s and BQ Labs’ (including the
      Branch’s) books and records; and




(v)  the
      Purchaser shall use all reasonable efforts to cause the Company to obtain and
      maintain “key personnel” insurance in accordance with the Consulting
      Agreements.


18


(b)  (i)  The
      Members and Shareholders shall use all reasonable efforts to cause the Financial
      Statements to be audited (in the case of the Financial Statements as of, and
      for
      the year ended, December 31, 2006) or reviewed (in the case of the other
      Financial Statements), and reported upon, by a firm of independent accountants
      reasonably acceptable to the Purchaser on or before June 30, 2007, and shall,
      in
      any event, cause the Financial Statements so to be audited or reviewed, as
      the
      case may be, and reported upon, on or before August 31, 2007.




(ii)  The
      Members and Shareholders shall cause [Name of Firm] (the “Firm”) to complete its
      pending transfer pricing study w ithin
      60
      days of the date of this Agreement, and shall pay, or reimburse the Company
      for,
      all costs and expenses of the Firm in excess of $20,000.




(iii)  The
      Members and Shareholders shall use all reasonable efforts to eliminate any
      potential liability or obligation referred to in schedule 4.12 (it being
      understood and agreed that, if any such potential liability or obligation
      remains 90 days after the date of this Agreement, the parties shall promptly
      cause the Companies to take all action necessary to eliminate all such potential
      liabilities and obligations).




7.  Survival
      and Indemnification




7.1  Survival .
      The
      representations and warranties of the parties shall survive the execution and
      delivery of this Agreement and the consummation of the transactions contemplated
      by this Agreement, regardless of any investigation made by the Purchaser or
      on
      its behalf. Notwithstanding the foregoing, and except with respect to the
      representations and warranties in sections 4.1, 4.2, 4.3, 4.15, 4.16, and 4.17
      (the representations and warranties in sections 4.1, 4.2, 4.3, 4.15, 4.16,
      and
      4.17, collectively, the “Specified Representations and Warranties”), neither the
      Members nor the Shareholders shall be liable for a breach of any warranty or
      misrepresentation in respect of any representation or warranty in section 4,
      unless the Purchaser shall have given the Shareholders notice of  a claim
      therefor on of before December 31, 2009.




7.2  Indemnification .
      Subject
      to the limitations of section 7.4 below, the Members and Shareholders (for
      purposes of this section 7, the “Indemnitors”) shall jointly and severally
      indemnify and hold harmless the Purchaser and its affiliates, officers,
      directors, employees, and agents (including, without limitation, those retained
      in connection with the transactions contemplated by this Agreement)
      (collectively, the "Indemnitees") from and against all actual and threatened
      losses, liabilities, damages, and expenses (including attorneys' fees and
      expenses) (the "Indemnified Liabilities") as a result of, or arising out of,
      or
      relating to any breach of warranty or agreement or misrepresentation, by the
      Members and Shareholders under this Agreement. The Members and Shareholders
      shall reimburse the Indemnitees for the Indemnified Liabilities as such
      Indemnified Liabilities are incurred.


19


7.3  Defense
      of Claims .
      The
      Purchaser shall use all reasonable efforts to notify the Members and
      Shareholders as promptly as practicable of any claim of which it has actual
      knowledge that might reasonably be expected to result in an Indemnified
      Liability. Any Indemnitor who wishes to assume the defense of any claim as
      to
      which indemnity is sought shall so notify the Purchaser not later than 60 days
      after it has actual knowledge of the claim, and, after giving such notice,
      shall
      be entitled to control the defense of the claim, with counsel reasonably
      satisfactory to the Purchaser; *provided* ,
      that
      the Purchaser may participate in such defense at its expense. If the Indemnitor
      does not so notify the Purchaser within that 60-day period, the Purchaser shall
      assume the defense of the claim, with counsel reasonably satisfactory to the
      Indemnitor; *provided* ,
      that
      the Indemnitor may participate in such defense at its expense. The Purchaser
      or
      the Indemnitor, in the defense of any such claim, shall not, except with the
      consent of the other (which shall not be unreasonably withheld or delayed),
      consent to entry of any judgment or entry into any settlement agreement. Each
      party shall use reasonable efforts to cooperate with each other party in
      connection with the defense of any claim referred to above.




7.4  Limitations .  As
      used
      in this Agreement, the term “Member Group” means either SD and Contrado, on the
      one hand, or LE and SeaBreeze, on the other hand. The Members and the
      Shareholders shall have no liability or obligation for breaches of warranty
      or
      misrepresentation in respect of any representation or warranty in section 4
      other than the Specified Representations and Warranties, until and unless the
      aggregate amount of liability therefor exceeds $25,000. The Member Groups shall
      be jointly and severally liable for the initial $400,000 of Indemnified
      Liabilities, if any. However, notwithstanding anything to the contrary in this
      section 7, the aggregate liability of each Member Group for all breaches of
      warranty and misrepresentation in respect of all the representations and
      warranties in section 4 other than the Specified Representations and Warranties
      shall not exceed $1,000,000.




8.  General




8.1  Definitions .  For
      purposes of this Agreement, the following terms have the indicated
      meanings:




"Affiliate"
      of a person or entity means any other person or entity that directly, or
      indirectly through one or more intermediaries, controls, is controlled by,
      or is
      under common control with that person or entity.




"Code"
      means the Internal Revenue Code of 1986.




"ERISA"
      means the Employee Retirement Income Security Act of 1974.


20


"Governmental
      Agency" means any federal, state, local, foreign, or other governmental agency,
      instrumentality, commission, authority, board, or body.




"Intellectual
      Property" means all of the following in any jurisdiction throughout the world:
      (a) patents, patent applications, and patent disclosures; (b) trademarks,
      service marks, trade dress, trade names, corporate names, logos, and slogans
      (and all translations, adaptations, derivations, and combinations of the
      foregoing) and Internet domain names, together with all goodwill associated
      with
      each of the foregoing; (c) copyrights and copyrightable works; (d) registrations
      and applications for any of the foregoing; (e) trade secrets, confidential
      information, know-how, and inventions; (f) computer software (including, but
      not
      limited to, source code, executable code, data, databases, and documentation);
      and (g) all other intellectual property.




"Permitted
      Liens" means (a) liens for taxes not yet due and taxes for which adequate
      provision is made in the Current Balance Sheet, (b) purchase money security
      interests in supplies and equipment, (c) statutory landlord liens and
      precautionary liens filed by lessors with respect to leased equipment, (d)
      encumbrances that are not substantial in amount, do not materially detract
      from
      the value of the property subject to the encumbrance, and do not materially
      impair the use of the property subject to the encumbrance or the operation
      of
      the Companies' businesses, and (e) liens imposed by law arising in the ordinary
      course of business, such as materialmen's, mechanics', warehousemen's, and
      other
      similar, immaterial liens.




"Tax"
      means any federal, state, local, or foreign income, gross receipts, license,
      payroll, employment, excise, severance, stamp, occupation, premium, windfall
      profits, environmental, customs duties, capital stock, franchise, profits,
      withholding, social security (or similar), unemployment, disability, real
      property, personal property, sales, use, transfer, registration, value added,
      alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
      including any interest, penalty, or addition thereto, whether disputed or
      not.




"Tax
      Returns" means any return, declaration, report, claim for refund, or information
      return or statement relating to Taxes, including any schedule or attachment
      thereto, and including any amendment thereof.




8.2  Successors
      and Assigns .
      This
      Agreement shall inure to the benefit of the parties and their respective
      successors and assigns.


21


8.3  Notices .
      All
      notices, requests, consents, and other communications provided for in this
      Agreement shall be in writing and shall be (a) delivered in person,
      (b) transmitted by telecopy, (c) sent by first-class, registered or
      certified mail, postage prepaid, or (d) sent by reputable overnight courier
      service, fees prepaid, to the recipient at the address or telecopy number set
      forth below, or such other address or telecopy number as may hereafter be
      designated in writing by such recipient. Notices shall be deemed given upon
      personal delivery, seven days following deposit in the mail as set forth above,
      upon acknowledgment by the receiving telecopier or one day following deposit
      with an overnight courier service.




If
      to a
      Member or Shareholder, to that party at:




his
      or
      its last address reflected in the Companies’ records





If
      to the
      Purchaser, to it at:




8
      Maskit
      Street


P.O.
      Box
      2062


Herzliya
      46120


Israel


Facsimile:
      972-9-9526111


Attention:
      Chief Financial Officer





with
      a
      copy to:




Edward
      W.
      Kerson, Esq.


80
      University Place


Third
      Floor


New
      York,
      NY 10003


Facsimile:
      (212) 675-5794





8.4  Fees
      and Expenses .
      Each
      party shall bear that party’s own fees and expenses in connection with the
      preparation and negotiation of this Agreement and the transactions contemplated
      by this Agreement. In that connection, the Members and Shareholders shall bear
      all the costs and expenses of the Companies in connection with the preparation
      and negotiation of this Agreement and the transactions contemplated by this
      Agreement (including, without limitation, all costs and expenses of accountants
      and others in connection with the fulfillment of the obligations under section
      6(b)).




8.5  Amendment
      and Waiver .
      No
      amendment of any provision of this Agreement shall be effective, unless it
      is in
      writing and signed by the party to be charged. Any failure of a party to comply
      with any provision of this Agreement may only be waived in writing by the
      parties affected. No such waiver shall operate as a waiver of, or estoppel
      with
      respect to, any subsequent or other failure. No failure by any party to take
      any
      action against any breach of this Agreement or default by any other party shall
      constitute a waiver of that party's right to enforce any provision of this
      Agreement or to take any such action.


22


8.6  Counterparts .
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but both of which together shall constitute one
      agreement.




8.7  Headings .
      The
      headings of the various sections of this Agreement have been inserted for
      reference only and shall not be deemed to be a part of this
      Agreement.




8.8  Governing
      Law .  This
      Agreement shall be governed by and construed in accordance with the law of
      the
      state of New York applicable to agreements made and to be performed wholly
      in
      New York.




8.9  Consent
      to Jurisdiction **.**  The
      parties irrevocably submit to the exclusive jurisdiction of the North Carolina
      state courts located in Raleigh, North Carolina and the United States courts
      located in North Carolina for the purposes of any action, suit, or proceeding
      arising out of this Agreement or any transaction contemplated by this Agreement
      (and agree not to commence any such action, suit, or proceeding except in such
      courts). The parties further agree that service of any process, summons, notice,
      or document hand delivered or sent in accordance with section 8.3 shall be
      effective service of process for any action, suit, or proceeding in North
      Carolina with respect to any matters to which it or he has submitted to
      jurisdiction as set forth in the immediately preceding sentence. The parties
      irrevocably and unconditionally waive any objection to the laying of venue
      of
      any action, suit, or proceeding referred to above in any of the courts referred
      to above, and hereby further irrevocably and unconditionally waive and agree
      not
      to plead or claim in any such court that any such action, suit or proceeding
      brought in any such court has been brought in an inconvenient
      forum.




8.10  No
      Third Party Beneficiaries .
      Nothing
      in this Agreement is intended or shall be construed to confer upon any person
      or
      entity other than the Indemnitees referred to in section 7.2 and the parties
      to
      this Agreement and their successors or assigns pursuant any rights or remedies
      under or by reason of this Agreement.




8.11  Severability.
      If any
      provision of this Agreement is held by a court of competent jurisdiction to
      be
      invalid, void, or unenforceable, the remainder of the Agreement shall remain
      in
      full force and effect and shall not be affected, impaired, or
      invalidated.


23


8.12  Entire
      Agreement .
      This
      Agreement and the other agreements executed and delivered in connection with
      this Agreement constitute the entire agreement among the parties with respect
      to
      their subject matter and supersede all prior arrangements or understandings
      among them.




**MEMBERS:****/s/Steven
              Dmiszewicki****Steven
                Dmiszewicki****/s/Leonid
              Erlikh****Leonid
                Erlikh****SHAREHOLDERS:****CONTRADO
                PARTNERS, LLC****By:**
            **/s/Steven
              Dmiszewicki****Name:
                Steven Dmiszewicki****Title:
                Managing Member****SEABREEZE
                PARTNERS, LLC****By:**
            **/s/Leonid
              Erlikh****Name:
                Leonid Erlikh****Title:
                Managing Member**


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**PURCHASER:****BLUEPHOENIX
                SOLUTIONS LTD.****By:**
            **/s/Arik
              Kilman****Name:
                Arik Kilman****Title:
                CEO**


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