Document:

20-F

Exhibit 4.6

SHARE PURCHASE
AGREEMENT  

        THIS
SHARE PURCHASE AGREEMENT (this “Agreement”) is made as of February 16,
2005 (the “Effective Date”), by and between (i) Formula Systems (1985)
Ltd. (“Formula” or the “Company”), an Israeli company,
whose shares are traded on Nasdaq and on the Tel-Aviv Stock Exchange (the
“TASE”), and (ii) FIMGold, Limited Partnership (the
“Investor”), an Israeli limited partnership. 

        WHEREAS,
the Investor is an Israeli limited partnership owned by (a) FIMGold
Ltd. (the “General Partner”), an Israeli private company owned in equal
parts by (i) FIMI Opportunity Fund, L.P., a limited partnership formed under the laws of
the State of Delaware, and (ii) Ildani Holdings Ltd. (“Iladani”), an
Israeli private company wholly owned by Mr. Dan Goldstein (“Goldstein”),
the Company’s Chief Executive Office and Chairman of the Board of Directors (the
“Board”), and (b) the following limited partners:
(i) FIMI Israel Opportunity Fund, Limited Partnership, a limited partnership, formed under
the laws of the State of Israel, (ii) Ildani, and (iii) the entities listed in
Exhibit A attached hereto. 

        WHEREAS,
the Investor desires to invest in the share capital of the Company, by purchasing the
Purchased Shares (as defined below), upon the terms and subject to the conditions set
forth in this Agreement. 

        WHEREAS,
concurrently with the Closing (as defined below) of the share purchase transaction
contemplated herein, the Investor shall purchase from Goldstein (i) 2,000,000 Ordinary
Shares of the Company, nominal value NIS 1.00 per share (the “Ordinary
Shares”), constituting Goldstein’s entire holdings in the Company (the
“Additional Formula Share Purchase”), and (ii) 15,500,000 Ordinary Shares
of Formula Vision Technologies (F.V.T.) Ltd. (“FVT”), constituting
Goldstein’s entire holdings in FVT (collectively with the Additional Formula Share
Purchase, the “Concurrent Purchase Transactions”). 

        WHEREAS,
the Board has decided to issue to the Investor 2,400,000 Ordinary Shares (the
“Purchased Shares”), upon the terms and subject to the conditions set
forth in this Agreement. 

        NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
parties hereto agree as follows: 

     1.    
          Purchase and Sale of Purchased Shares. Upon the terms and subject
          to the conditions set forth in this Agreement, the Investor agrees to purchase,
          and the Company agrees to sell and issue to the Investor at the Closing the
          Purchased Shares, at a price per share of US$15.00 (the “PPS”)
          and an aggregate purchase price of $36,000,000 (the “Purchase
          Price”) payable in the United States Dollars. 

2.    Closing of Issue and
Purchase of Purchased Shares  

    2.1        The
Closing. The parties shall hold the closing (the “Closing”) at the
offices of Naschitz, Brandes & Co., 5 Tuval Street, Tel Aviv, Israel, on the 10th business
day following the date on which all the conditions to Closing shall have been satisfied
and the General Meeting of Shareholders of the Company approves the transactions
contemplated herein (such approval shall be referred to herein as the “Term
Precedent”), or at such other date as the Company and the Investor shall agree
(the “Closing Date”).  

    2.2        Transactions
at the Closing. At the Closing, the following transactions shall occur, which
transactions shall be deemed to take place simultaneously and no transaction shall be
deemed to have been completed or any required document delivered until all such
transactions have been completed and all required documents delivered:  

		    (1)        The
Investor shall have received from the Company the following documents:  

		    (a)        True
and correct copies of the resolutions of the Company’s General Meeting           of
Shareholders, substantially in the form attached hereto as Schedule
          2.2(1)(a), approving the transactions contemplated
herein,           which transactions shall include, without limitation;  

		    (b)        opinion
of counsel to the Company, substantially in the form attached hereto           as
Schedule 2.2 (1)(b); 

		    (c)        A
certificate duly executed on behalf the Company by an officer of the Company
          dated as of the Closing Date (the “Compliance Certificate”),
in           the form attached hereto as Schedule 2.2 (1)(c); 

		    (d)        Copies
of the Required Approvals and Notices (as defined below); and  

		    (e)        A
copy of the Registration Rights Agreement (the “Registration Rights
          Agreement”) in the form attached hereto as Schedule 2.2
          (1)(e), executed by the Company.  

		    (2)        The
Investor shall pay the Purchase Price to the Company by SWIFT wire transfer           of
immediately available funds to the following Company bank account: Account           No.
300845 at Israel Discount Bank Ltd., Branch No. 11 and the issuance of the
          Purchased Shares in the name of the Investor shall come into effect.  

3.     Representations and
Warranties of the Company  

        The
Company hereby represents and warrants to the Investor, and acknowledges that the Investor
is entering into this Agreement in reliance thereon, as follows: 

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    3.1        Organization.
The Company is a corporation duly organized and validly existing under the laws of the
State of Israel. The Company is duly qualified to conduct its business, and (with respect
to those jurisdictions in which the concept of good standing is relevant) is in good
standing, in each jurisdiction where the character of its properties owned, operated or
leased or the nature of its activities makes such qualification necessary, except for
such failures which would not reasonably be likely to have a Material Adverse Effect (as
defined below). The Company has the requisite corporate power and authority and the
necessary governmental authority, franchise, license or permit to own, operate, lease and
otherwise to hold and operate its assets and properties and to carry on its businesses as
now being conducted.  

The Company’s principal direct
and indirect subsidiaries are Matrix IT Ltd., Magic Software Enterprises Ltd., BluePhoenix
Solutions Ltd., Sapiens International Corporation N.V., Formula Vision Technologies
(F.V.T.) Ltd., nextSource Inc. (“nextSource”) and F.T.S. — Formula Telecom
Solutions Ltd. (“FTS”) (each of the aforesaid, a
“Subsidiary” and, collectively, the “Subsidiaries”). 

    3.2        Organizational
Documents. Set forth in Schedule 3.2 is a complete and correct
copy of the Memorandum of Association and the Articles of Association of the Company and
the organizational documents of each of its Subsidiaries, FIS Software Ltd. (“FIS”)
and Transtech Control Ltd. (“Transtech”), as amended to date. All of
such organizational documents are in full force and effect.  

    3.3        Capitalization. 

		    (a)        The
registered share capital of the Company immediately prior to the Closing           shall
be NIS 25,000,000, which registered share capital is divided into           25,000,000
Ordinary Shares, of which 10,824,780 were issued and outstanding as           of December
31, 2004. The capitalization table as of December 31, 2004 of each           of the
Subsidiaries and FIS, on a fully diluted basis, is attached hereto as Schedule
3.3(a)(1). Except as set forth in the Company’s annual report on Form
20-F for the fiscal period ended December 31, 2003 (the “2003 20-F”) or
in Schedule 3.3(a)(2) attached hereto, as of December 31, 2004,
there are no other shares, convertible or other securities, outstanding warrants,
options, or other rights to subscribe for, purchase, or acquire from the Company or any
Subsidiary any securities of the Company or any Subsidiary, and there are not any
contracts or binding commitments providing for the issuance of, or the granting of rights
to acquire from the Company or any Subsidiary, any securities of the Company or any
Subsidiary or under which the Company or any Subsidiary is, or may become, obligated to
issue any of its securities.  

		    (b)        Except
as set forth in the 2003 20-F or Schedule 3.3(b)(1),          as of
December 31, 2004, there are no bonds, debentures, notes or other           indebtedness
issued by the Company or any of the Subsidiaries and FIS or, to the           Company’s
knowledge, granted by third parties that have the right to vote           on any matters
on which the Company’s shareholders may vote. Except for           agreements or
other documents set forth in the 2003 20-F or in Schedule 3.3(b)(2),
there are no outstanding           contractual obligations of the Company or any of the
Subsidiaries and FIS to           repurchase, redeem or otherwise acquire any of the
Company’s or any           Subsidiary’s or FIS’s share capital. All of the
issued and outstanding           share capital of the Company has been duly authorized
and validly issued and is           fully paid and non-assessable.  

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		    (c)        All
of the Purchased Shares issuable in accordance with this Agreement shall be,
          when paid for and issued at the Closing as provided in this Agreement, duly
          authorized, validly issued, fully paid and non-assessable, shall not be subject
          to call, forfeiture or preemptive rights, and shall be delivered free and clear
          of all Encumbrances.  

For purposes of this Agreement, the
term “Encumbrance” means and includes any interest or equity of any
person (including any right to acquire, option, or right of preemption) or any mortgage,
charge, pledge, lien, or assignment, or any other encumbrance or security interest over or
in the relevant property. 

With respect to any representation
and warranty made in this Section 3.3, as of December 31, 2004, there have not been any
material changes from such date through the date hereof. 

		    3.4        Authority.
The Company has the necessary corporate power and authority to enter into this Agreement
and each of the other agreements, certificates or other instruments required to be
delivered hereunder by the Company at or prior to Closing (the “Formula
Transaction Documents”) and, subject to the fulfillment of the Term Precedent,
to perform its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement and each of
the other Formula Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby shall have been, at the
Closing Date, duly and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of the Company shall be necessary to authorize this
Agreement and each of the other Formula Transaction Documents or to consummate the
transactions contemplated hereby and thereby. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and delivery by
the Investor, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditors’rights
generally and by the application of general principles of equity. Each of the other
Formula Transaction Documents, when executed and delivered by the Company, shall have
been duly executed and delivered by the Company and, assuming the due authorization,
execution and delivery by each of the other parties thereto, shall constitute a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights generally and by the application of
general principles of equity.  

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    3.5        No
Conflict; Required Filings and Consents. 

		    (a)        The
execution and delivery of this Agreement by the Company do not, and the
          execution and delivery by the Company of each of the other Formula Transaction
          Documents and the performance by the Company of its obligations under this
          Agreement and each of the other Formula Transaction Documents, will not, with
or           without the giving of notice or the lapse of time or both, (i) conflict
          with or violate the organizational documents of the Company, (ii) subject
          to obtaining the Required Approvals and Notices (as defined below), conflict
          with or violate any law, statute, ordinance, rule, regulation, order, judgment
          or decree applicable to the Company or by which any of its properties or assets
          is bound or affected, or (iii)  result in any breach of or constitute a
          default under, or give to others any rights of termination, amendment,
          acceleration or cancellation of any material agreement to which the Company is
a           party, or result in the creation of any Encumbrance on the material
properties           or assets of the Company pursuant to, any note, bond, mortgage,
indenture,           contract, agreement, lease, license, permit, franchise or other
instrument or           obligation to which the Company is a party or by which the
Company is bound.  

		    (b)        The
execution and delivery of this Agreement by the Company do not, and the
          execution and delivery of each of the other Formula Transaction Documents and
          the performance of this Agreement and each of the other Formula Transaction
          Documents by the Company, will not, require any consent, approval,
authorization           or permit of or filing with or notification to, any Governmental
Entity (as           defined below), by or with respect to the Company, except
          (i) for applicable requirements, if any, of the consents, approvals,
          authorizations, permits or notification described in Schedule 3.5 (the
“Required Approvals and           Notices”), and (ii) where failure
to obtain the required consents,           approvals, authorizations or permits, or to
make such filings or notifications,           (A) would not prevent or delay consummation
of any of the transactions           contemplated by this Agreement or any other Formula
Transaction Document in any           material respect, or otherwise prevent the Company
from performing its           obligations under this Agreement or any other Formula
Transaction Document in           any material respect, and (B) would not reasonably be
likely to have a Material           Adverse Effect. As used herein the term “Governmental
Entity”          means any Israeli or U.S. entity exercising executive,
legislative, judicial,           regulatory or administrative function of or pertaining
to government.  

     3.6        SEC
Filings; Financial Statements; Israeli Filings.  

		    (a)        During
the two-year period immediately prior to the date hereof, the Company has           filed
all forms, reports, statements and other documents required to be filed           with
the Securities and Exchange Commission (“SEC”). The           Investor
has had access, in the form filed with the SEC, together with any           amendments
thereto, to all of the Company’s (i) Annual Reports on Form           20-F and
(ii) proxy statements relating to meetings of shareholders           (whether annual
or special) (collectively, the “Formula SEC           Reports”). In
addition, the Company has published as a press release           the unaudited and
unreviewed financial statements for the first three quarters           of 2004, which
have been previously delivered to counsel for the Investor (the           “2004
Financials”). As of their respective filing or           publication dates, the
Formula SEC Reports complied as to form in all material           respects with the
requirements of the United States Securities Exchange Act of           1934 (the “Exchange
Act”) applicable to the Company. The           Formula SEC Reports did not at
the time they were filed or published, as the           case may be, contain any untrue
statement of a material fact or omit to state a           material fact required to be
stated therein or necessary to make the statements           therein, in the light of the
circumstances under which they were made, not           misleading.  

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		    (b)        The
audited consolidated financial statements of the Company included in the
          Formula SEC Reports comply as to form in all material respects with applicable
          accounting requirements and with the published rules and regulations of the SEC
          with respect thereto as in effect at the time of filing. The financial
          statements, including all related notes and schedules, contained in the Formula
          SEC Reports (or incorporated by reference therein), the 2004 Financials, the
          financial statements of nextSource as of and for the year ended December 31,
          2003, the financial statements of FTS as of and for the periods ended December
          31, 2003 and September 30, 2004, the financial statements of FIS as of and for
          the period ended September 30, 2004, and the financial statements of Transtech
          as of and for the period ended September 30, 2004, present fairly in all
          material respects the consolidated financial position of the entity or entities
          covered therein as at the respective dates thereof and the consolidated results
          of operations and cash flows thereof for the periods indicated, in accordance
          with United States generally accepted accounting principles (GAAP), except that
          quarterly financial statements, which are unaudited, may not contain statements
          of cash flows or comprehensive footnotes and are subject to year-end audit
          adjustments and as otherwise set forth on Schedule 3.6(b),
          which adjustments will not be material in amount or significance.  

		    (c)        Compliance
with Israeli securities rules and regulations. During the           two-year period
immediately prior to the date hereof, the Company has been, in           all material
respects, in compliance with all applicable regulatory           requirements, including
without limitation, all filing requirements stipulated           by the Securities Act,
1968 and the regulations promulgated thereunder in           respect of “dual-listed” companies
(the “Israeli           Filings”).  

    3.7        Operations
in the Ordinary Course. Except as set forth in Schedule 3.7 attached
hereto or otherwise disclosed in the Formula SEC Reports, Israeli Filings or the 2004
Financials, between September 30, 2004 and the date of this Agreement, the Company has
operated its business in the usual and ordinary course consistent with past practices and there
has been no event which resulted or is likely to result in a Material Adverse Effect.  

For purposes of this Agreement, the
term “Material Adverse Effect” means any material adverse effect on the
business, as now conducted by, the assets, condition (financial or otherwise), liabilities
or operations of, the Company and its Subsidiaries taken as a whole. 

    3.8        Litigation.
Except as set forth in the 2003 20-F or Schedule 3.8 attached
hereto, there are no claims, actions or proceedings pending or, to the Company’s
knowledge, threatened against the Company or any of its Subsidiaries, FIS or Transtech,
any of their respective properties (or any of their respective officers or directors, in
such capacity) before any court, arbitral, mediation or regulatory authority or body,
domestic or foreign, that individually or in the aggregate (i) would reasonably be
likely to have a Material Adverse Effect, or (ii) challenge or seek to prevent,
enjoin, alter or materially delay the transactions contemplated by this Agreement.  

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    3.9        Licenses
and Permits; Compliance with Laws. Without derogating from the above, the Company,
and to the Company’s knowledge, its Subsidiaries, do not lack any permits, licenses,
authorizations or approvals necessary to conduct their business, and are not in material
violation of Applicable Law or any permits, licenses, authorizations and approvals that
have been obtained by them, which the failure to obtain or such violation, as applicable,
would reasonably be likely to have a Material Adverse Effect. 

As used herein, the term
“Applicable Law” means any provision of any statute, law, ordinance,
rule, regulation, governmental decree, order, concession, grant, permit or license, or
other governmental authorization or approval applicable to the Company.  

    3.10        Intellectual
Property. For purposes of this Section 3.10, the term “Company” shall refer
to the Company, its Subsidiaries, FIS and Transtech. Except as set forth in Schedule
3.10:  

		    (a)        The
Company owns, free and clear of claims or rights or any other Person, with           full
right to use, or, to the knowledge of the Company, has acquired licenses or
          other rights to use, all Intellectual Property necessary for the conduct of its
          business as presently conducted (other than with respect to software which is
          generally commercially available and not used or incorporated into the
          Company’s products and open source software which may be subject to one or
          more “general public” licenses), except as would not be reasonably
          expected to have a Material Adverse Effect. All works that are used or
          incorporated into the Company’s services, products or services or products
          actively under development and which are proprietary to the Company were
          developed by or for the Company by its current or former employees, consultants
          or independent contractors or those of its predecessors in interest or
purchased           or licensed by the Company or its predecessors in interest.  

		    (b)        The
business of the Company as presently conducted and the production,           marketing,
licensing, use and servicing of any products or services of the           Company do not,
to the knowledge of the Company, infringe or conflict with any           patent,
trademark, copyright, or trade secret rights of any third parties or any           other
Intellectual Property of any third parties in any material respect. The           Company
has not received written notice from any third party asserting that any
          Intellectual Property owned or licensed by the Company, or which the Company
          otherwise has the right to use, is invalid or unenforceable by the Company and,
          to the Company’s knowledge, there is no valid basis for any such claim
          (whether or not pending or threatened).  

		    (c)        No
claim is pending or, to the Company’s knowledge, threatened against the
          Company nor has the Company received any written notice or other written claim
          from any Person asserting that any of the Company’s present or
contemplated           activities infringe or may infringe in any material respect any
Intellectual           Property of such Person and the Company is not aware of any
infringement by any           other Person of any material rights of the Company under
any Intellectual           Property Rights.  

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		    (d)        All
licenses or other agreements under which the Company is granted Intellectual
          Property (excluding licenses to use software utilized in the Company’s
          internal operations and which is generally commercially available) are in full
          force and effect and, to the Company’s knowledge, there is no material
          default by any party thereto. The Company has no reason to believe that the
          licensors under such licenses and other agreements do not have and did not have
          all requisite power and authority to grant the rights to the Intellectual
          Property purported to be granted thereby. The Company has complied in all
          material respects with its obligations pursuant to all agreements relating to
          Intellectual Property rights that are the subject of licenses granted by third
          parties, except for any non-compliance that has not had or would not
          reasonably be expected to have a Material Adverse Effect.  

		    (e)        All
licenses or other agreements under which the Company has granted rights to
          Intellectual Property to others (including all end-user agreements) are in full
          force and effect, unless otherwise terminated in accordance with the terms of
          such licenses or arrangements, there has been no material default by the
Company           thereunder and, to the Company’s knowledge, there is no material
default by           any other party thereto.  

		    (f)        The
Company has taken all steps required in accordance with commercially           reasonable
business practice to establish and preserve its ownership in its           owned
Intellectual Property and to keep confidential all material technical
          information developed by or belonging to the Company which has not been
patented           or copyrighted. To the Company’s knowledge, the Company is not
making any           material unlawful use of any Intellectual Property of any other
Person,           including, without limitation, any former employer of any past or
present           employees of the Company. To the Company’s knowledge, neither the
Company           nor any of its employees has any agreements or arrangements with former
          employers of such employees relating to any Intellectual Property of such
          employers, which materially interfere or conflict with the performance of such
          employee’s duties for the Company or result in any former employers of
such           employees having any rights in, or claims on, the Company’s
Intellectual           Property. Each senior key employee of the Company who the Company
believes ought           to execute an agreement regarding confidentiality, proprietary
information and           assignment of inventions and copyrights to the Company has done
so, each           independent contractor or consultant of the Company who the Company
believes           ought to execute an agreement regarding confidentiality and
proprietary           information has done so, and the Company has not received written
notice that           any employee, consultant or independent contractor is in violation
of any           agreement or in breach of any agreement or arrangement relating to
proprietary           information or assignment of inventions. Without limiting the
foregoing: (i) the           Company has taken reasonable security measures to guard
against unauthorized           disclosure or use of any of its Intellectual Property; and
(ii) the Company has           no reason to believe that any Person (including, without
limitation, any former           employee or consultant of the Company) has unauthorized
possession of any of its           Intellectual Property, or any part thereof, or that
any Person has obtained           unauthorized access to any of its Intellectual
Property.  

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For purposes of this Agreement,
“Person” means any individual, corporation, trust, association, company,
partnership, joint venture, limited liability company, joint stock company, Governmental
Authority or other entity, and “Intellectual Property” means patents,
patent rights, patent applications, trademarks, trade names, service marks, brand names,
logos and other trade designations (including unregistered names and marks), trademark and
service mark registrations and applications, copyrights and copyright registrations and
applications, inventions, invention disclosures, protected formulae, formulations,
processes, methods, trade secrets, computer software, computer programs and source codes,
manufacturing research and similar technical information, engineering know-how, customer
and supplier information, assembly and test data drawings or royalty rights. 

    3.11        Material
Agreements. All material agreements that are required to be disclosed by the Company
in its Form 20-F (collectively, the “Material Agreements”), are
described in the 2003 20-F or in Schedule 3.11 attached hereto. Such
Material Agreements are valid and in full force and effect on the date hereof, and,
except as set forth in Schedule 3.11 attached hereto, neither the Company nor, to the
Company’s knowledge, any other party, has violated any provision thereof, or
committed or failed to perform any act which with or without notice, lapse of time or
both would constitute a default under the provisions of, any Material Agreement except
for violations or defaults which would not reasonably be likely to have a Material
Adverse Effect.  

    3.12        Employees. 

		    (a)        The
Company has disclosed to the Investor the principal employment terms of each           of
the two most highly paid individuals employed or hired by the Company.  

		    (b)        The
Company confirms that the senior key employees of the Company and, to its
          knowledge, its Subsidiaries, who the Company or such Subsidiaries believe ought
          to execute agreements relating to non-disclosure and non-competition have done
          so. The Company has delivered to the Investor the employment agreement of
          Goldstein with FVT and the minutes of the General Meeting of Shareholders of
the           Company approving the terms of engagement of each of Goldstein and Gad
          Goldstein. Except as set forth therein, neither Goldstein nor Gad Goldstein is
          employed or otherwise engaged by the Company or any of its direct or indirect
          subsidiaries or is otherwise entitled to or receiving any benefits therefrom.  

    3.13        Labor
Relations. There is not now or has been threatened any material labor dispute,
strike, slow-down, picketing, work-stoppage, or other similar labor activity with respect
to the employees of the Company.  

    3.14        Taxation.
In the Company’s judgment, the financial statements contained in the Formula SEC
Reports make adequate provisions for taxation for which the Company was then liable or
accountable, to the extent required under United States GAAP, and the Company has
promptly paid or provided in its books of account for all such taxation liability. In the
Company’s judgment, the Company (on a stand alone basis) has accrued net operating
losses, which, for tax purposes, may be used to offset gains and other income of the
Company that otherwise would have been taxable in Israel, in excess of US$50 million.  

9

    3.15        Insurance.
The Company has acquired the insurance policies as set forth in Schedule 3.15 hereto,
which, based on the opinion of the Company, are adequate to cover the Company’s
risks.  

    3.16        No
Finders Fee. No person or firm has, or will have, as a result of any act or omission
by the Company or anyone acting on behalf of the Company, any right, interest or valid
claim against the Company or the Investor for any commission, fee or other compensation
as a finder or broker or in any similar capacity with respect to the transactions
contemplated under this Agreement.  

    3.17        Debt. A
complete list of the Company’s and its Subsidiaries’ credit line facilities
(including the name of the banking institution which provided the facility the aggregate
credit amount made available by such banking institution and the actual amounts drawn on
account of each such credit line as of February 10, 2005) and all other financial
indebtedness is set forth in Schedule 3.17 attached hereto. The
Company and its Subsidiaries are not in default under any of the financial or other
covenants applicable to such credit lines or other financial indebtedness.  

    3.18        Related
Party Transactions. Except as set forth in Schedule 3.18:(a) no Related
Party (as defined below) has any direct or indirect interest in any material asset used
in or otherwise relating to the business of the Company or its Subsidiaries; (b) no
Related Party is indebted to the Company or its Subsidiaries; (c) no Related Party has
entered into, or has had any direct or indirect financial interest in, any Material
Agreement, material transaction or material business dealing with or involving the
Company or any of its Subsidiaries; (d) no Related Party is competing, directly or
indirectly, with the Company or any of its Subsidiaries; and (e) no Related Party has any
material claim or right against the Company or any of its Subsidiaries (other than rights
to receive amounts not yet due with respect to compensation for services performed as an
employee or director of the Board of Directors of the Company or any of its
Subsidiaries).  

For purposes of this Section 3.18,
“Related Party” shall mean Goldstein and Gad Goldstein. 

    3.19        Representations
Complete. None of the representations or warranties made by the Company herein or in
any Schedule or Exhibit hereto or any of Formula Transaction Documents furnished by the
Company pursuant to this Agreement contain or will contain at the Closing Date any untrue
statement of a material fact, or omit or will omit at the Closing Date to state any
material fact necessary in order to make the statements contained herein or therein, in
the light of the circumstances under which they were made, not misleading.  

4.     Representations
and Warranties of the Investor  

        The
Investor hereby represents and warrants to the Company, and acknowledges that the Company
is entering into this Agreement in reliance thereon, as follows: 

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    4.1        This
Agreement, when executed and delivered by the Investor, constitutes a valid, binding, and
enforceable obligation of the Investor.  

    4.2        The
Investor is an entity duly organized, and validly existing under the laws of the State of
Israel, and has all requisite power and authority to carry out the transactions
contemplated hereby, and the execution, delivery, and performance of the obligations of
the Investor hereunder have been duly authorized by all necessary corporate action.  

    4.3        The
Investor is a special purpose vehicle formed by the FIMI Opportunity Fund, Ildani and the
additional investors listed in Exhibit A attached hereto, for the purpose of effecting
the transactions contemplated herein and the Concurrent Purchase Transactions. FIMGold
Ltd., the general partner of the Investor has full and exclusive power to take any and
all actions on behalf of the Investor and to exercise all rights of the Investor with
respect to its interests in the Company. Each shareholder of FIMGold Ltd. is an
experienced investor and has the capacity to protect its own interests in connection with
the purchase of the Purchased Shares hereunder and has the ability to bear the economic
risk of its investment. The Investor is acquiring the Purchased Shares for its own
account for investment purposes only and not with a view to or for distributing or
reselling the Purchased Shares. The Investor has had an adequate opportunity to obtain
information regarding the Company and ask questions and receive answers from the Company’s
management.  

    4.4        The
Investor understands, acknowledges and agrees that the Purchased Shares have not been
registered under the securities laws of any jurisdiction, and may not be transferred
without such registration or an exemption therefrom. Until registered under the
Securities Act or otherwise permitted under the Securities Act, all certificates
evidencing any of the Purchased Shares shall bear a legend, prominently stamped or
printed thereon, reading substantially as follows:  

	 	
“The
securities represented by this certificate have not been registered under the Securities
 Act of 1933, as amended (the “Securities Act”) or applicable
State securities laws. These  securities have been acquired for investment and not
with a view to distribution or resale, and  may not be sold or otherwise
transferred without an effective registration statement for such  securities under
the Securities Act and applicable State securities laws, or the availability of  an
exemption from the registration provisions of the Securities Act and applicable State 
securities laws”. 

    4.5        The
execution and delivery of this Agreement and the consummation of the transactions herein
contemplated will not (i) result in any conflict with, breach of, or default (or give
rise to any right of termination, cancellation or acceleration or the loss of any
benefit) under any of the terms, conditions or provisions of the Investor’s
organizational documents or of any material agreement, permit or other instrument or
obligation to which the Investor is a party or is bound, or (ii) violate any law or
regulation, or any order, injunction, or judgment of any court or any governmental bureau
or agency, domestic or foreign applicable to the Investor. No consent or approval by any
governmental authority or any third party is required in connection with the execution by
the Investor of this Agreement or the consummation by the Investor of the transactions
contemplated hereby except for such actions, consents or approvals as have been obtained
prior to the execution of this Agreement.  

11

    4.6        No
Finders Fee. No person or firm has, or will have, as a result of any act or omission
by the Investor or anyone acting on its behalf, any right, interest or valid claim
against the Company for any commission, fee or other compensation as a finder or broker
or in any similar capacity, with respect to any of the transactions contemplated under
this Agreement.  

    4.7        Nothing
set forth in this Section 4 shall be deemed to detract from or otherwise prejudice the
Investor’s reliance on the Company’s representations and warranties set forth
in Section 3 above.  

     5.    
          Other Agreements. 

    5.1        The
Investor agrees that any Confidential Information (defined below) obtained pursuant to
this Agreement, or provided to the Investor prior to the Closing, will not be disclosed
or used by the Investor or any of its parents or representatives without the prior
written consent of the Company.  

For the purposes of this Section 5.1,
Confidential Information shall mean all information, including, but not limited to,
financial information, business plans, budgets, customer lists, computer software, source
codes, plans, drawings, technical specifications, patents, copyrights, and other
intellectual property rights, in any form (paper, disk, or other), relating to the Company
or its business. However, Confidential Information shall not include information which, as
demonstrated by documentary evidence: (a) was in the Investor’s possession prior to
its disclosure; (b) is or becomes available to the public through no fault of the
Investor; (c) was disclosed to the public by operation of law; or (d) is rightfully
received by the Investor from a third party without a duty of confidentiality. 

    5.2        Limitation
of Liability. The representations and warranties made herein by the Company shall
survive the Closing and shall expire on the 18-month anniversary thereof. In no event
shall the Company be liable (i) unless and to the extent that the damages sought by
the Investor hereunder exceed US$750,000 in the aggregate, (iii) for damages in excess of
US$36,000,000 in the aggregate, or (iii) for any indirect or consequential damages.  

6.     Conditions to Closing  

		    6.1        Conditions
Precedent to the Obligation of the Investor to Close. The obligation hereunder of the
Investor to purchase the Purchased Shares and pay the Purchase Price is subject to the
Term Precedent being complied with within 90 days following the date hereof, and the
fulfillment at or before the Closing of the following conditions precedent, any one or
more of which may be waived in writing, in whole or in part, by the Investor, which
waiver shall be at the sole discretion of the Investor.  

12

		    (a)        Accuracy
of the Company’s Representations and Warranties. Each of           the
representations and warranties of the Company contained in this Agreement           shall
be true and correct in all material respects as of the date when made and,
          except for such changes as are attributable to the Company’s ordinary
          course of business and do not, in the aggregate, have a Material Adverse Effect
          on its business or prospects, as of the Closing, as though made at that time.  

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

		    (c)        All
Deliverables Ready. All documents and other items to be delivered to           the
Investor at the Closing as specified in Section 2.2 above, shall be duly
          executed, ready for delivery to the Investor.  

		    (d)        Concurrent
Consummation of the Additional Purchase Transactions. The           conditions to the
closing (the “Concurrent Closing”) of           the Additional
Purchase Transactions shall have been satisfied and these           transactions shall
have been consummated concurrently with the Closing.  

		    (e)        No
Material Adverse Effect. The Company and its Subsidiaries, taken as a
          whole, shall not have suffered a Material Adverse Effect with respect to the
          Company’s business and prospects as of the date hereof.  

		    (f)        Board
of Directors: The Board shall be comprised of the following           persons: Dan
Goldstein (Chairman), Ishay Davidi, Yarom Oren, Gil Weizer, Dafna           Sharir, Gad
Goldstein and one independent director, and the Company’s           shareholders
shall have approved the payment, to each of the Company’s           non-employee
directors, of the same remuneration as shall be paid by the Company           to each of
the External Directors.  

		    (g)        The
Company shall have amended, and shall have caused its Subsidiaries to amend           the
applicable covenants and undertakings made by           them to various banking
institutions, such that neither this           Agreement nor the agreement relating to the Concurrent
Purchase           Transactions will cause the Company or any of its Subsidiaries to
be           in default under the agreements with such banking institutions relating
to           the receipt of credit.    

    6.2        Conditions
Precedent to the Obligation of the Company to Close. The obligation hereunder of the
Company to issue and sell the Shares to the Investor is subject to the Term Precedent
having been complied with within 90 days following the date hereof, and the fulfillment
at or before the Closing of the following conditions precedent, any one or more of which
may be waived in writing, in whole or in part, by the Company, which waiver shall be at
the sole discretion of the Company.  

13

		    (a)        Accuracy
of the Investor Representations and Warranties. Each of the           representations
and warranties of the Investor shall be true and correct in all           material
respects as of the date when made and as of the Closing, as though made           at that
time.  

		    (b)        Performance
by the Investor. The Investor shall have performed, satisfied           and complied
in all material respects with all covenants, agreements and           conditions required
by this Agreement to be performed, satisfied or complied           with by the Investor
at or prior to the Closing.  

         6.3.       
          For the avoidance of doubt, in the event that the Term Precedent is not complied
          with within 90 days, this Agreement shall become null and void and the parties
          will not have any claims against each other. 

7.     Miscellaneous  

    7.1        Further
Assurances. Each of the parties hereto shall perform such further acts and execute
such further documents as may reasonably be necessary to carry out and give full effect
to the provisions of this Agreement and the intentions of the parties as reflected
thereby.  

    7.2        Governing
Law; Dispute Resolution. This Agreement shall be governed by and construed according
to the laws of the State of Israel, without regard to the conflict of laws provision
thereof. Any claim arising under or in connection with this Agreement shall be resolved
exclusively in the appropriate court in Tel-Aviv, Israel. Each of the parties hereby
irrevocably consents to the exclusive jurisdiction of such courts and waives and agrees
not to assert any objection to the jurisdiction or convenience thereof.  

    7.3        Successors
and Assigns; Assignment. Except as otherwise expressly stated to the contrary herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the successors,
assigns under law (“Ha’avara Al Pi Din”), heirs, executors, and
administrators of the parties. Except as otherwise expressly stated to the contrary
herein, each of the parties hereto shall not assign or transfer any of its rights or
obligations hereunder absent the consent of the other party, which consent shall not be
unreasonably withheld.  

14

    7.4        Entire
Agreement; Amendment and Waiver. This Agreement and the Exhibits and Schedules hereto
constitute the full and entire understanding and agreement between the parties with
regard to the subject matters hereof and thereof. All prior understandings and agreements
among the parties (or anyone on their behalf) are void and of no further effect. Any term
of this Agreement may be amended, waived, or discharged (either prospectively or
retroactively, and either generally or in a particular instance), by a written instrument
signed by all the parties to this Agreement.  

    7.5        Notices,
etc. All notices and other communications required or permitted hereunder to be given
to a party to this Agreement shall be in writing and shall be telecopied or mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed to such party’s address as set forth below or at such other
address in Israel as the party shall have furnished to each other party in writing in
accordance with this provision:  

If to the Investor:

c/o FIMI 2001 Ltd.

"Rubinstein House"

37 Petach Tikva Road

Tel Aviv, Israel

Fax: +972-3-5652245

With a copy to:

Sharon Amir, Adv.

Naschitz, Brandes & Co.

5 Tuval Street

Tel-Aviv 67897, Israel

Facsimile:  +972-3-623-5021

If to the Company:

Formula Systems (1985) Ltd.

3 Aba Eban Blvd.

Herzlia, Israel

Facsimile: +972-9-959-8877

Attn: General Counsel

With a copy to:

Oded Eran, Adv.

Goldfarb, Levy, Eran & Co.

2 Weizmann Street

Tel-Aviv, Israel

Facsimile: 972-3-608-9837

All such notices shall be deemed to
have been duly given to the addressee thereof (i) if hand delivered, on the day of
delivery, (ii) if given by facsimile transmission, on the business day on which such
transmission is sent and confirmed, (iii) if mailed by registered mail, return receipt
requested, five business days following the date it was mailed, to such party’s
address. 

15

    7.6        Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing
to any party upon any breach or default under this Agreement, shall be deemed a waiver of
any other breach or default therefore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this Agreement,
or by law, or otherwise afforded to any of the parties, shall be cumulative and not
alternative.  

    7.7        Severability. If
any provision of this Agreement is held by a court of competent jurisdiction to be
unenforceable under applicable law, then such provision shall be excluded from this
Agreement and the remainder of this Agreement shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms; provided,
however, that in such event this Agreement shall be interpreted so as to give effect, to
the greatest extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction.  

    7.8        Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be deemed an
original and enforceable against the parties actually executing such counterpart, and all
of which together shall constitute one and the same instrument.  

    7.9        Heading,
Preamble, and Exhibits. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement. The Preamble, Schedules and Exhibits are an integral and inseparable part of
this Agreement.  

    7.10        Expenses.
Each party hereto shall pay its own expenses in connection with the negotiation and
preparation of this Agreement and the related agreements and the consummation of the
transactions contemplated hereby and thereby, except that if the Closing is effected, the
Company shall pay the Investor’s fees of professional advisors for performing legal
due diligence and preparing this Agreement in an amount not to exceed $100,000, plus
applicable Value Added Tax. Any stamp duty payable with respect to this Agreement
(including in connection with the issue of the Purchased Shares) will be borne by the
Company.  

    7.11        Limitations
on Rights of Third Parties. Nothing expressed or implied in this Agreement is
intended or shall be construed to confer upon or give any person, other than the Company
and the Investor, any rights or remedies under this Agreement.  

        [the
remainder of this page intentionally left blank] 

16

IN WITNESS WHEREOF the parties have
signed this Agreement as of the date first hereinabove set forth. 

		
		
		
		
		
	Formula Systems (1985) Ltd.	FIMGOLD, Limited Partnership
	 
	By: __________________________	By:________________
	Name:	Name______________
	Title:	Title_______________20-F

Exhibit 4.7

REGISTRATION RIGHTS
AGREEMENT 

by and between 

Formula Systems (1985)
Ltd. 

and 

FIMGold, Limited
Partnership 

March 3, 2005 

REGISTRATION RIGHTS
AGREEMENT 

This Registration Rights Agreement
(this “Agreement”) is made as of the _________, 2005, by and between:
(i) Formula Systems (1985) Ltd. (the “Company”), a company organized
under the laws of the State of Israel whose shares are listed for trading on Nasdaq; and
(ii) FIMGold, Limited Partnership (“FIMGold” or the
“Shareholder”). 

WITNESSETH: 

WHEREAS, the Shareholder is an
Israeli limited partnership managed by FIMGold Ltd., an Israeli private company limited by
shares and owned in equal parts by FIMI Opportunity Fund, L.P., a limited partnership
organized under the laws of the State of Delaware and Ildani Ltd., an Israeli private
company wholly owned by Mr. Dan Goldstein (“Goldstein”), the
Company’s Chief Executive Officer and Chairman of the Board of Directors; and 

WHEREAS, on even date
herewith, FIMGold is entering into (i) a share purchase agreement (the “PIPE
Agreement”) with the Company, pursuant to which FIMGold shall purchase 2,400,000
Ordinary Shares of the Company in a private placement, and (ii) a share purchase agreement
with Goldstein (the “Goldstein Agreement”), pursuant to which Goldstein
shall sell to FIMGold all of his shareholdings in the Company (namely, 2,000,000 Ordinary
Shares of the Company); and 

WHEREAS, following the
consummation of the foregoing purchase transactions, FIMGold shall hold 4,400,000 Ordinary
Shares of the Company, constituting approximately 33% of the Company’s issued and
outstanding share capital; and 

WHEREAS, effective as of the
Closing (as defined in the PIPE Transaction) the Shareholder and the Company desire to set
forth certain matters regarding the registration rights of the shares of the Company held
by the Shareholder. 

NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein, the parties hereby
agree as follows: 

	1.  	DEFINITIONS;
EFFECT OF AGREEMENT  

	 	
Definitions.
          As used herein, the following terms have the following meanings:  

	 	
“Commission”
means the United States Securities and Exchange Commission, or any other federal agency at
the time administering the Securities Act. 

	 	
“Control”
means direct or indirect ownership of more than 50% of the equity or voting capital of an
entity, or possession of the right and power to direct the policy and management of such
entity. 

	 	
“Form
F-3” means Form F-2 or Form F-3 under the Securities Act, as in effect on the
date hereof or any registration form under the Securities Act subsequently adopted by the
Securities and Exchange Commission (the “SEC”) which permits inclusion or
incorporation of substantial information by reference to other documents filed by the
Company with the SEC. 

	 	
“Holder”means
any holder of outstanding Registrable Shares.  

	 	
“Ordinary
Shares” means the Ordinary Shares of the Company, par value NIS 0.01, subject to
a Reclassification Event. 

	 	
“Permitted
Transferee” shall mean a person or entity which receives shares pursuant to the
transfer of all or any of the shares held by the Shareholder (the
“Transferor”) to: (i) an entity Controlled by the Transferor; (ii) an
entity that Controls the Transferor; (iii) an entity under common Control with the
Transferor, (iv)  any partners or members of the Transferor and its Permitted
Transferees; or (v) in the case that a Permitted Transferee of the Transferor is a
trustee, the beneficiary or beneficiaries for whom the trustee is holding shares. 

	 	
“Person”
means an individual, fund, company, unincorporated association, trust, joint venture,
governmental agency, or other entity, whether domestic or foreign. 

	 	
“Reclassification
Event” means any share combination or subdivision (split), bonus shares or any
other recapitalization of the Company’s shares. 

	 	
“Register”,
“registered” and “registration” refer to a registration
effected by filing a registration statement in compliance with the Securities Act and the
declaration or ordering by the SEC of effectiveness of such registration statement. 

	 	
“Registrable
Shares” means Ordinary Shares purchased by the Shareholder pursuant to the PIPE
Agreement and the Goldstein Purchase Agreement, including bonus shares and share dividends
payable with respect to such shares, and Ordinary Shares of the Company which hereafter
may be purchased or acquired by the Shareholder. Notwithstanding the foregoing,
Registrable Shares shall not include otherwise Registrable Shares (i) sold or transferred
to anyone other than a Permitted Transferee, or (ii) which could be disposed of, under
applicable law, within six (6) months without registration, pursuant to Rule 144. 

	 	
“Rule
144” shall mean Rule 144 under the Securities Act or any successor or similar
rule as may be enacted by the Commission from time to time. 

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

2

     	2. 	
          INCIDENTAL REGISTRATION 

          

	 	2.1. 	If
the Company proposes to register any of its securities for its own account           (the
“Company’s Securities”) or for the account of           any
other person, other than (a) in a registration under Section 3 of           this
Agreement or (b) a registration on Form S-8 or Form F-4, the Company shall           give
notice to the Holder of such intention, at least 30 days prior to the           filing of
the registration statement in connection with such registration. Upon           the
written request of the Holder given within twenty (20) days after receipt of
          any such notice, the Company shall include in such registration (subject to
          Section 2.2 below) all of the Registrable Shares indicated in such request of
          the Holder so as to permit the disposition of the shares so requested. 

	 	2.2. 	Notwithstanding
any other provision of this Section 2, if the managing           underwriter
advises the Company in writing that in its opinion the number of           securities
requested to be included in such registration exceeds the number that           can be
sold in such offering without adversely affecting such underwriter’s
          ability to effect an orderly distribution of such securities, the Company will
          include in such registration: (i) first, the Company’s Securities;
and           (ii) second, the number of Registrable Shares requested to be included
by           the Holder which in the opinion of such underwriter can be sold. 

     	3. 	
          DEMAND REGISTRATION 

          

	 	3.1. 	The
Holder (the “Initiating Holder”) may request in writing           that
all or part of its Registrable Shares shall be registered under the           Securities
Act. Upon the receipt of such request, the Company shall, as promptly           as
practicable, and in any event within 3 (three) months of the written request           of
the Holder, make best reasonable efforts to file a registration statement           with
the Commission with respect to all Registrable Shares indicated in the           written
request by the Holder and any related qualification or compliance (a           “Demand”). 

	 	3.2. 	The
Holder shall be entitled to an aggregate of two (2) Demands. 

	 	3.3. 	Notwithstanding
any other provision of this Section 3, no Demand shall be           binding on the
Company if: (i) the Company has filed any registration statement           for the
registration of its equity securities (other than on a form S-8 or           similar
registration for employee shares) within the previous one hundred eighty           days
(180) days, or (ii) the anticipated proceeds from the sale of the shares to           be
included in the Registration is less than Five Million United States Dollars
          ($5,000,000), or (iii) the Company has theretofore decided to file a Company
          initiated registration and, in its good faith estimate, will file it within the
          next sixty (60) days. In addition, if the Company shall furnish to the Holder a
          certificate signed by the Chief Financial Officer of the Company stating that,
          in the good faith judgment of the Board of Directors, it would be detrimental
to           the Company for such registration statement to be filed and it is therefore
          essential to defer the filing of such registration statement, the Company shall
          have the right to defer such filing for a period of not more than one hundred
          and eighty (180) days after receipt of the request of the Holder (the
          “DelayPeriod”). The Company agrees that it shall not
          file any other registration statement on behalf of itself or any other party
          during such Delay Period. 

3

	 	3.4. 	Any
registration proceeding begun pursuant to Section 3.1 that is
          subsequently withdrawn prior to the filing thereof at the request of the Holder
          shall not count toward the number of Demands, if such withdrawal is based upon
          material adverse information relating to the Company or its condition, business
          and prospects which is different from that generally known to the Holder at the
          time of its request. If a registration begun pursuant to this Section 3 is
          subsequently withdrawn at the request of the Holder subsequent to the filing
          thereof or for any other reason, it shall count towards the number of Demands. 

	 	3.5. 	Notwithstanding
any other provision of this Section 3, if the managing           underwriter
advises the Holder, in writing, that in the managing           underwriter’s opinion
the number of securities requested to be included in           such registration exceeds
the number that can be sold in such offering without           adversely affecting such
underwriter’s ability to effect an orderly           distribution of such
securities, the Company will include in such registration           the number of
Registrable Shares requested to be included that, in the opinion           of such
underwriters, can be sold, in the registration. 

	 	3.6. 	F-3
Registration. If the Company shall be qualified to register           securities on
Form F-3 and shall receive from the Holder a written request or           requests that
the Company effect a registration on Form F-3 and any related           qualification or
compliance with respect to Registrable Shares where the           aggregate net proceeds
from the sale of the Holder’s Registrable Shares           equal to at least two
million United States Dollars ($2,000,000), the Company           shall include in such
registration (subject to the provision more fully set           forth in this Section
3.6) all of the Registrable Shares indicated in the           request of the Holder. The
Company shall then effect such registration and all           such qualifications and
compliances as may be so requested and as would permit           or facilitate the sale
and distribution of all or such Registrable Shares as are           specified in the
requests; provided, however, that the Company shall not           be obligated to
effect any such registration, qualification, or compliance,           pursuant to this
Section 3.6 if the Company has, within the eighteen (18) month           period preceding
the date of such request, already effected one (1) registration           for the Holder.
Notwithstanding any other provision of this Section 3, no Demand           shall be
binding on the Company if: (i) the Company has filed any registration           statement
for the registration of its equity securities (other than on a form           S-8 or
similar registration for employee shares) within the previous one hundred
          eighty days (180) days, or (ii) the Company has theretofore decided to file a
          Company initiated registration and, in its good faith estimate, will file it
          within the next sixty (60) days. In addition, if the Company shall furnish to
          the Holder a certificate signed by the Chief Financial Officer of the Company
          stating that, in the good faith judgment of the Board of Directors, it would be
          detrimental to the Company for such registration statement to be filed and it
is           therefore essential to defer the filing of such registration statement, the
          Company shall have the right to defer such filing for a period of not more than
          one hundred and eighty (180) days after receipt of the request of the Holder
          (the “DelayPeriod”). The Company agrees that it shall
          not file any other registration statement on behalf of itself or any other
party           during such Delay Period. In addition, Section 3.5 hereof shall apply to
any           applicable registration under this Section 3.6 

4

	 	3.7. 	Black
Out Periods. At any time when a registration statement effected           hereunder
relating to Registrable Securities is effective, upon written notice           from the
Company to the Holder that either: (i) the Board of Directors of the           Company,
in its reasonable judgment, resolves that such Holder’s sale of
          Registrable Securities pursuant to the registration statement would adversely
          interfere with any major acquisition, corporate reorganization or other similar
          transaction involving the Company (a “Transaction Blackout”);
          or (ii) the Company determines, in the good faith judgment of the general
          counsel of the Company, that the Holder’s sale of Registrable Securities
          pursuant to the registration statement would require disclosure of material
          information that the Company has a bona fide business purpose for preserving as
          confidential or the Company is unable to comply with Commission requirements
and           that such disclosure will be detrimental to the Company (an “Information
          Blackout”); then the Holder shall suspend sales of Registrable
          Securities pursuant to such registration statement until the earlier of: (A)
(1)           in the case of a Transaction Blackout, the earliest of (a) one month after
the           completion of such acquisition, corporate reorganization or other similar
          transaction; (b) promptly after abandonment of such acquisition, corporate
          reorganization or other similar transaction; and (c) 120 days after the date of
          the Company’s written notice of such Transaction Blackout; or (2) in the
          case of an Information Blackout, the earlier of (a) the date upon which such
          material information is disclosed to the public or ceases to be material; and
          (b) 90 days after the Company’s notice of an Information Blackout, and (B)
          such time as the Company notifies the Holder that sales pursuant to such
          registration statement may be resumed. 

5

     	4. 	
          DESIGNATION OF UNDERWRITER 

          

	 	4.1. 	In
the case of any registration effected pursuant to Section 3, should           the
offering be underwritten, the Company and the Holder shall confer as to the
          selection of a managing underwriter. Should they fail to reach agreement, the
          selection shall be made by the Holder. 

	 	4.2. 	In
the case of any registration initiated by the Company under Section           2,
the Company shall have the right to designate the managing           underwriter in any
underwritten offering. 

     	5. 	
          EXPENSES 

          

	 	
All
expenses incurred in connection with any registration under Sections 2 or
3 shall be borne by the Company; provided, however, that the Holder shall pay its
pro rata portion of the discounts or commissions payable to any underwriter and shall bear
its own attorney’s fees and disbursements. 

	6.  	INDEMNIFICATION
AND CONTRIBUTION  

	 	
In
the event of any registered offering of Ordinary Shares pursuant to this Agreement:  

	 	6.1	
The Company will indemnify and hold harmless, to the fullest extent permitted by law, the
Holder participating in such registration and any underwriter who participates as an
underwriter in such registered offering, and each person, if any, who controls the Holder
or such underwriter, from and against any and all losses, damages, claims, liabilities,
joint or several, costs and expenses (including any amounts paid in any settlement
effected with the Company’s prior written consent) to which the Holder or any such
underwriter or controlling person may become subject under applicable law or otherwise,
insofar as such losses, damages, claims, liabilities (or actions or proceedings in respect
thereof), costs or expenses arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the registration statement
or included in the prospectus, as amended or supplemented, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in which they
are made, not misleading, and the Company will reimburse the Holder, any underwriter and
each such controlling person of the Holder or the underwriter, promptly upon demand, for
any reasonable legal or any other expenses incurred by them in connection with
investigating, preparing to defend or defending against or appearing as a third-party
witness in connection with such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company will not be liable towards the Holder, the underwriter
or controlling person to the extent that any such loss, damage, liability, cost or expense
arises out of or is based upon an untrue statement or omission in such registration
statement or prospectus so made in conformity with information furnished to the Company in
writing by the Holder, such underwriter or such controlling persons specifically for use
in such registration statement; provided, further, that this indemnity shall not be deemed
to relieve any underwriter of any of its due diligence obligations; provided, further,
that the indemnity agreement contained in this Section 6.1 shall not apply to amounts
paid in settlement of any such claim, loss, damage, liability or action if such settlement
is effected without the consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Holder, the underwriter or any controlling
person of the Holder or the underwriter, and regardless of any sale in connection with
such offering by the Holder. Such indemnity shall survive the transfer of securities by
the Holder but in no event shall the Company pay more than once in respect of any loss,
damage, claim or liability. The foregoing indemnity is subject to the condition that,
insofar as it relates to any such untrue statement (or alleged untrue statement) or
omission (or alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus at the time the registration statement becomes
effective or in the final prospectus, such indemnity shall not inure to the benefit of (i)
the Holder and (ii) any underwriter, if a copy of such amended or final prospectus was not
furnished to the person or entity asserting the loss, liability, claim or damage at or
prior to the time such furnishing is required by the Securities Act.

6

	 	6.2 	The
Holder participating in a registration will indemnify and hold harmless the Company, any
underwriter for the Company, and each person, if any, who controls the Company or such
underwriter, from and against any and all losses, damages, claims, liabilities, costs or
expenses (including any amounts paid in any settlement effected with such selling Holder’s
consent) to which the Company or any such controlling person and/or any such underwriter
may become subject under applicable law or otherwise, insofar as such losses, damages,
claims, liabilities (or actions or proceedings in respect thereof), costs or expenses
arise out of or are based on (i) any untrue statement or alleged untrue statement of
any material fact contained in the registration statement or included in the prospectus,
as amended or supplemented, or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not misleading, and
the Holder will reimburse the Company, any underwriter and each such controlling person
of the Company or any underwriter, promptly upon demand, for any reasonable legal or
other expenses incurred by them in connection with investigating, preparing to defend or
defending against or appearing as a third-party witness in connection with such loss,
claim, damage, liability, action or proceeding; in each case to the extent; provided,
however, that the Holder shall be liable in any such case only to the extent that any
such loss, damage, liability, cost or expense arises out of or is based upon an untrue
statement or omission in such registration or prospectus made in strict conformity with
written information furnished to the Company by the Holder specifically for use in such
registration statement; and provided, further, that this indemnity shall not be deemed to
relieve any underwriter of any of its due diligence obligations; and provided, further,
that the indemnity agreement contained in this Section 6.2 shall not apply to amounts
paid in settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder, as the case may be, which
consent shall not be unreasonably withheld. In any event, the indemnification obligations
under this Section 6.2 shall not exceed the net proceeds received by the Holder pursuant
to the public offering. 

7

	 	6.3 	Promptly
after receipt by an indemnified party pursuant to the provisions of Sections 6.1 or 6.2
of notice of the commencement of any action involving the subject matter of the foregoing
indemnity provisions, but in any event no fewer than ten (10) days before the date
designated in such notice as the date by which an answer must be served (or such
extension thereof, provided that the extension has been granted in writing by the
plaintiff and that no admission or consent to jurisdiction or other waiver has been
granted or implied by the request for such an extension), such indemnified party will, if
a claim thereof is to be made against the indemnifying party pursuant to the provisions
of said Sections 6.1 or 6.2, promptly notify the indemnifying party of the commencement
thereof. In case such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall have the
right to participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, that if the
defendants in any action include both the indemnified party and the indemnifying party
and there is a conflict of interests which would prevent counsel for the indemnifying
party from also representing the indemnified party, the indemnified party or parties
shall have the right to select one separate counsel to participate in the defense of such
action on behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said Sections 6.1 or 6.2 for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed counsel in accordance with the provision of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after the notice of the commencement of the action and within 15
days after written notice of the indemnified party’s intention to employ separate
counsel pursuant to the previous sentence, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party will consent to entry of any judgment or enter
into any settlement, which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all liability in
respect to such claim or litigation. 

8

	 	6.4	
Contribution. If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of such
losses, claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other from the registration or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, or provides a
lesser sum to the indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but also the
relative fault of the indemnifying party and the indemnified party as well as any other
relevant equitable considerations. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.

	7.  	OBLIGATIONS
OF THE COMPANY  

	 	
Whenever
required under this Agreement to effect the registration of any Registrable Shares, the
Company shall, as expeditiously as possible: 

	 	7.1. 	(i) prepare
and file with the SEC a registration statement with respect to           such Registrable
Shares and use its best reasonable efforts to cause such           registration statement
to become effective, (ii) upon the request of the           Holder of the
Registrable Shares registered thereunder, keep a registration           statement filed
pursuant to Section 2 effective until the earlier to           occur of (i) the
completion of the distribution contemplated in the Registration           Statement and
(ii) one year following the effective date thereof, provided that           the Company,
in its sole discretion, shall be entitled to reduce such one-year           period to any
period of at least 180 days plus the number of days of any           Transaction
Blackout or Information Blackout. 

9

	 	7.2. 	prepare
and file with the SEC such amendments and supplements to such           registration
statement and the prospectus used in connection with such           registration
statement as may be reasonably necessary to comply with the           provisions of the
Securities Act with respect to the disposition of all           Registrable Shares
covered by such registration statement. 

	 	7.3. 	furnish
to the Holder a copy of the prospectus, including a preliminary           prospectus, in
conformity with the requirements of the Securities Act, and such           other
documents as it may reasonably request in order to facilitate the           disposition
of Registrable Shares owned by it. 

	 	7.4. 	in
the event of any underwritten public offering, enter into and perform its
          obligations under an underwriting agreement, in usual and customary form, with
          the managing underwriter of such offering. The Holder participating in such
          underwriting shall also enter into and perform its obligations under such an
          agreement. 

	 	7.5. 	notify
the Holder of Registrable Shares covered by such registration statement           at any
time when a prospectus relating thereto is required to be delivered under           the
Securities Act of the happening of any event as a result of which the
          prospectus included in such registration statement, as then in effect, includes
          an untrue statement of a material fact or omits to state a material fact
          required to be stated therein or necessary to make the statements therein not
          misleading in the light of the circumstances then existing. 

	 	7.6. 	cause
all Registrable Shares registered pursuant hereunder to be listed on           Nasdaq on
any other stock exchange on which similar securities issued by the           Company are
then listed. 

	 	7.7. 	provide
a transfer agent and registrar for all Registrable Shares registered           pursuant
hereunder and a CUSIP number for all such Registrable Shares, in each           case not
later than the effective date of such registration. 

	 	7.8. 	take
such action as is required under the securities laws of such states of the
          United States as the Holder shall reasonably request; provided, however, that
          the Company shall not be required to qualify to do business as a foreign
          corporation, or to file any general consent to service of process, in any
state. 

10

	 	7.9. 	furnish,
at the request of the Holder requesting registration of Registrable           Shares
pursuant to this Agreement, on the date that such Registrable Shares are
          delivered to the underwriters for sale in connection with a registration
          pursuant to this Agreement, if such securities are being sold through
          underwriters, or, if such securities are not being sold through underwriters,
on           the date that the registration statement with respect to such securities
becomes           effective, (i) an opinion, dated such date, of the counsel
representing the           Company for the purposes of such registration, in form and
substance as is           customarily given to underwriters in an underwritten public
offering, addressed           to the underwriters, if any, and (ii) a letter dated
such date, from the           independent certified public accountants of the Company, in
form and substance           as is customarily given by independent certified public
accountants to           underwriters in an underwritten public offering, addressed to
the underwriters,           if any. 

     	8. 	
          CONDITIONS TO REGISTRATION OBLIGATIONS 

          

	 	
The
Company shall not be obligated to effect the registration of Registrable Shares pursuant
to this Agreement unless the Holder of such Registrable Shares consents to the following
conditions: 

	 	8.1. 	conditions
requiring the Holder to comply with all applicable provisions of the           Securities
Act and the Securities and Exchange Act including, but not limited           to, the
prospectus delivery requirements of the Securities Act, and to furnish           to the
Company information about itself, its holdings in the Company and sales           made in
such public offering; 

	 	8.2. 	conditions
prohibiting the Holder upon receipt of telegraphic or written notice           from the
Company that it is required by law to correct or update the           registration
statement or prospectus from effecting sales of the Registrable           Shares until
the Company has completed the necessary correction or updating; and 

	 	8.3. 	conditions
prohibiting the sale of Registrable Shares by the Holder during the           process of
the registration until the Registration Statement is effective. 

11

     	9.  	
ASSIGNMENT OF REGISTRATION RIGHTS  

          

	 	
The
Holder may assign its rights to cause the Company to register pursuant to this Agreement
all or part of its Registrable Shares to a purchaser of at least 20% of the Ordinary
Shares held by the Holder or to a Permitted Transferee who would not be able to dispose of
such shares under Rule 144 within six months from the date of such sale. The transferor
shall, within twenty (20) days after such transfer, furnish the Company with written
notice of the name and address of such transferee and the securities with respect to which
such registration rights are being assigned, and the transferee’s written agreement
to be bound by this Agreement. 

	10.  	LOCK-UP
AND OTHER REQUIREMENTS OF THE HOLDER  

	 	
In
any registration of the Company’s shares, the Holder agrees that any sales of
Registrable Shares may be subject to a “lock-up” period restricting such sales
for up to one hundred and eighty (180) days, and the Holder will agree to abide by such
customary “lock-up” period of up to one hundred and eighty (180) days as is
required by the underwriter in such a registration and further agree to execute such
further documents as may be required by the underwriters to effectuate such
“lock-up”. In addition, the Holder may not participate in any underwritten
registration hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any customary underwriting arrangements and
(ii) provides any relevant information and completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, and other documents required
under the terms of such underwriting arrangements. 

	11.  	RULE
144  

	 	
Unless
and until the Company shall have terminated its registration under Section 12 of the
United States Securities Exchange Act of 1934, as amended, or any federal statute or code
which is a successor thereto (the “Exchange Act”), which it shall
be entitled to do in its sole discretion, the Company shall: 

	 	11.1. 	Make
and keep available adequate current public information with respect to the
          Company within the meaning of Rule 144(c) under the Securities Act (or similar
          rule then in effect); 

	 	11.2. 	Furnish
to the Holder of Registrable Shares forthwith upon request (i) a           written
statement by the Company as to its compliance with the informational
          requirements of Rule 144(c) (or similar rule then in effect) or (ii) a
copy           of the most recent annual or quarterly report of the Company; and 

	 	11.3. 	Use
its best efforts to comply with all other necessary filings and other
          requirements so as to enable the Holder and any transferee thereof to sell
          Registrable Shares under Rule 144 under the Securities Act (or similar rule
then           in effect). 

12

     	12. 	
          OTHER REGISTRATION RIGHTS 

          

	 	
The
Company shall not grant registration rights with respect to any securities of the Company
to any Person that are superior to the registration rights granted to the Holder pursuant
to this Agreement, except with the written consent of the Holder. 

     	13. 	
          MISCELLANEOUS 

          

	 	13.1. 	Further
Assurances. Each of the parties hereto shall perform such further           acts and
execute such further documents as may reasonably be necessary to carry           out and
give full effect to the provisions of this Agreement and the intentions           of the
parties as reflected thereby. 

	 	13.2. 	Governing
Law; Jurisdiction. This Agreement shall be governed by, and           construed in
accordance with, the laws of the State of Israel; provided,           however, that with
respect to maters specifically related to the federal           securities laws of the
United States, such laws shall govern. All disputes           arising under this
Agreement or in connection with the transactions hereunder           shall be resolved
between the parties in good faith. If the parties hereto fail           to agree within
twenty (20) days after a party shall have requested Arbitration,           they shall
select one arbitrator by mutual agreement. The proceedings will take           place in
Tel-Aviv, Israel. The arbitrator shall not be bound by any judicial           rules of
evidence or procedure but shall be bound by the substantive law of the           State of
Israel and will have to elaborate the grounds of his/her decision. The           arbitral
award shall be final and binding upon the parties, and judgment upon           the award
may be entered in any court having jurisdiction, or application may be           made to
such Court for a judicial acceptance of the award or for an order of
          enforcement, as the case may be. 

	 	13.3. 	Successors
and Assigns. Except as otherwise expressly limited herein, the           provisions
hereof shall inure to the benefit of, and be binding upon, the           successors,
assigns, heirs, executors, and administrators of the parties hereto.           None of
the rights, privileges, or obligations set forth in, arising under, or           created
by this Agreement may be assigned or transferred without the prior           consent in
writing of each party to this Agreement except that, upon the           consummation of a
transfer of Registrable Shares to a Permitted Transferee or           the sale of at
least 20% of the Registrable Shares held by the Holder to a           person that would
hold such shares as restricted securities and who would not be           able to dispose
of such shares under Rule 144 within six months from the date of           such sale,
such Permitted Transferee or purchaser, as the case may be, shall           succeed to
(or share in) all rights and privileges of the transferor (as a           Shareholder)
under this Agreement as if it were an original party hereto. 

13

	 	
Without
derogating from the provisions of the previous paragraph, no assignment or transfer under
this Section 13.3 shall be made unless the transferee agrees to be bound by all
agreements binding upon the transferor immediately prior to such transfer.  

	 	13.4. 	Entire
Agreement. This Agreement constitutes the full and entire           understanding and
agreement between the parties with regard to the subject           matter hereof. 

	 	13.5. 	Amendments.
Any term of this Agreement may be amended with the written           consent of the
Holder and the Company. 

	 	13.6. 	Section
Headings; Preamble. All article and section headings are inserted           for
convenience only and shall not modify or affect the construction or
          interpretation of any provision of this Agreement. The preamble to this
          Agreement is incorporated herein and forms an integral part of this Agreement. 

	 	13.7. 	Communications.
All notices or other communications hereunder shall be in           writing and shall
either be given in person, sent by registered mail (registered           international
air mail if mailed internationally), sent by an overnight courier           service which
obtains a receipt to evidence delivery, or transmitted by           facsimile
transmission (provided that written confirmation of receipt is           provided), to
the addresses of the parties set forth in the PIPE Agreement, or           such other
address as any party may designate to the other in accordance with           the
aforesaid procedure. All notices and other communications delivered in           person
or by courier service shall be deemed to have been given as of three           business
days after sending thereof, those given by facsimile transmission shall           be
deemed given twenty-four hours following transmission, and all notices and
          other communications sent by registered mail (or air mail if the posting is
          international) shall be deemed given ten (10) days after posting. 

	 	13.8. 	Delays
or Omissions. No delay or omission to exercise any right, power,           or remedy
accruing to any party upon any breach or default under this Agreement,           shall be
deemed a waiver of any such breach or default. Any waiver, permit,           consent, or
approval of any kind or character on the part of any party of any           breach or
default under this Agreement, or any waiver on the part of any party           of any
provisions or conditions of this Agreement, must be in writing and shall           be
effective only to the extent specifically set forth in such writing. All
          remedies, either under this Agreement or by law or otherwise afforded to any of
          the parties, shall be cumulative and not alternative. 

14

	 	13.9. 	Severability.
If any provision of this Agreement is held by a court of           competent jurisdiction
to be unenforceable under applicable law, then such           provision shall be excluded
from this Agreement and the remainder of this           Agreement shall be interpreted as
if such provision were so excluded and shall           be enforceable in accordance with
its terms; provided, however, that in such           event this Agreement shall be
interpreted so as to give effect, to the greatest           extent consistent with and
permitted by applicable law, to the meaning and           intention of the excluded
provision as determined by such court of competent           jurisdiction. 

	 	13.10. 	Counterparts.
This Agreement may be executed in any number of           counterparts, each of which
shall be deemed an original and enforceable against           the parties actually
executing such counterpart, and all of which together shall           constitute one and
the same instrument. 

[the remainder of this
page intentionally left blank] 

15

IN WITNESS WHEREOF, the
parties have signed this Agreement as of the date first hereinabove set forth. 

Formula Systems (1985) Ltd.

By____________________

Name

Title

FIMGold, Limited Partnership

By: FIMGold Ltd., the General Partner

_______________________________

Name: Ishay Davidi and Dan Goldstein

Title: directors:

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