Document:

Exhibit 10.1

 

AMENDMENT NO. 1

TO 

EMPLOYMENT AGREEMENT

 

This Amendment No. 1 to Employment Agreement is made as of
the 21st day of February 2005, by and between Conrad Industries, Inc., a
Delaware corporation (the "Company"), and Cecil A. Hernandez (the "Executive").

 

WHEREAS, the Company has entered into an Employment Agreement
with the Executive dated as of August 16, 2004 (the "Agreement"); 

 

WHEREAS, under the terms of the Agreement, the Company
employed the Executive to serve as the Executive Vice President and Chief
Operating Officer of the Company, and as the interim Chief Financial Officer of
the Company; and

 

WHEREAS, the Company and the Executive have mutually agreed
that it is in the Company's best interest that, effective on or about February
21, 2005, the Company retain a new Chief Operating Officer and Executive devote
his attention full-time to the duties of Chief Financial Officer;

 

NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:

 

Section 1.   Except as expressly amended herein, all of
the terms and provisions of the Employment Agreement shall remain in full force
and effect.

 

Section 2.   The Executive hereby agrees that his
appointment to the position of the Company's Chief Financial Officer as provided
herein shall not constitute Good Reason, as this term is defined in Section 4(d)
of the Agreement, to terminate his employment.

 

Section 3.   Section 1(a) of the Agreement is hereby
amended and restated to read in its entirety as follows:

	
	(a)    Effective on August 16, 2004 (the "Start Date"), the Company shall
      employ Executive as the Executive Vice President and Chief Operating
      Officer of the Company. As such, Executive shall have responsibilities,
      duties and authority reasonably accorded to, expected of and consistent
      with Executive's positions as the Executive Vice President and Chief
      Operating Officer of the Company. If requested by the Company's Board of
      Directors or President, Executive shall also serve as interim Chief
      Financial Officer of the Company for a reasonable period of time while the
      Company conducts a search for a Chief Financial Officer. Effective upon
      the Company's hiring a new Chief Operating Officer on or about February
      21, 2005, and conditioned thereon, the Company shall employ Executive as
      the Executive Vice President and Chief Financial Officer of the Company,
      and Executive shall no longer serve as the Company's Chief Operating
      Officer. As such, Executive shall have responsibilities, duties and
      authority reasonably accorded to, expected of and consistent with
      Executive's positions as the Executive Vice President and Chief Financial
      Officer of the Company. Executive hereby accepts this employment upon the
      terms and conditions herein contained and, subject to paragraph 1(c),
      agrees to devote substantially all of his time, attention and efforts
      during normal business hours to promote and further the business and
      interests of the Company and its affiliates.

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and signed as of the date indicated above.

 

	
 

    	
CONRAD INDUSTRIES, INC.

    
	 	 	 
	 	 	 
	 	 	 
	

 
	

By:
	

/s/ Michael J. Harris

	
     

    	
     

    	
    Michael J. Harris, Chairman, 

	Compensation
	Committee of the Board of 

	Directors of Conrad Industries, Inc.

	
     	
     	
     
	
     	
    EXECUTIVE
	
     	
     
	
     	
     
	
     	
     
	
     	
    Cecil A. HernandezEXHIBIT 4.15

                                                             EXECUTION VERSION

================================================================================

                          SECURITIES PURCHASE AGREEMENT

                                  by and among

                                  ATTUNITY LTD.

                                       and

             THE PURCHASERS IDENTIFIED ON THE SIGNATURE PAGES HERETO

                                January 24, 2005

================================================================================

<PAGE>

                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

     This  Securities  Purchase  Agreement  (this  "Agreement")  is  dated as of
January  24,  2005,  by  and  among  Attunity  Ltd.,  an  Israeli  company  (the
"Company"), and each purchaser identified on the signature pages hereto (each, a
"Purchaser" and collectively the "Purchasers").

     WHEREAS,  subject to the terms and  conditions  set forth in this Agreement
and pursuant to Section 4(2) of the  Securities  Act (as defined below) and Rule
506  promulgated  thereunder,  the  Company  desires  to  issue  and sell to the
Purchasers,  and the Purchasers,  severally and not jointly,  desire to purchase
from the Company,  in the aggregate,  727,273 Ordinary Shares (as defined below)
and Warrants (as defined below) on the Closing Date (as defined below).

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for  other  good and  valuable  consideration  the  receipt  and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

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

     "Action" shall have the meaning ascribed to such term in Section 3.1(j).

     "Affiliate"  means any Person that,  directly or indirectly  through one or
more  intermediaries,  controls or is controlled  by or is under common  control
with a Person  as such  terms are used in and  construed  under  Rule 144.  With
respect to a Purchaser,  any investment  fund or managed account that is managed
on a discretionary  basis by the same investment  manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.

     "Closing" shall have the meaning ascribed to such term in Section 2.1.

     "Closing Date" shall have the meaning ascribed to such term in Section 2.1.

     "Closing Price" means on any particular date (a) the last reported  closing
price  per share of  Ordinary  Shares on such  date on the  Trading  Market  (as
reported by Bloomberg L.P.), or (b) if there is no such price on such date, then
the closing price on the Trading Market on the date nearest  preceding such date
(as reported by  Bloomberg  L.P.),  or (c) if the  Ordinary  Shares are not then
listed or quoted on a Trading  Market and if prices for the Ordinary  Shares are
then quoted on the OTCBB, the closing price of the Ordinary Shares for such date
(or the nearest preceding date) on the OTCBB (as reported by Bloomberg L.P.), or
(d) if the Ordinary  Shares are not then listed or quoted on the Trading  Market
and if prices for the  Ordinary  Shares are then  reported in the "pink  sheets"
published  by the Pink  Sheets  LLC  (formerly  the  National  Quotation  Bureau
Incorporated (or a similar organization or agency succeeding to its functions of
reporting prices)), the most recent bid price per Ordinary Share so reported, or
(e) if the Ordinary Shares are not then publicly  traded,  the fair market value
of an Ordinary Share as determined by a qualified independent appraiser selected
by the Company and the Majority Purchasers.

<PAGE>

     "Commission" means the United States Securities and Exchange Commission.

     "Company  Counsel"  means  Goldfarb,  Levy,  Eran & Co.,  with  offices  at
Europe-Israel Tower, 2 Weizmann Street, Tel Aviv 64239, Israel.

     "Disclosure  Schedules"  means  the  Disclosure  Schedules  of the  Company
attached hereto and incorporated herein.

     "Effective  Date"  means the date that a  Registration  Statement  is first
declared effective by the Commission.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Intellectual Property Rights" shall have the meaning ascribed to such term
in Section 3.1(o).

     "Liens" means a lien,  charge,  security  interest,  encumbrance,  right of
first refusal, preemptive right or other similar restriction.

     "Material  Adverse Effect" shall have the meaning  ascribed to such term in
Section 3.1(b).

     "Material  Permits" shall have the meaning ascribed to such term in Section
3.1(m).

     "Ordinary  Shares"  means the ordinary  shares of the Company,  NIS 0.1 par
value each.

     "Ordinary  Shares  Equivalents"  means any  securities of the Company which
would  entitle  the holder  thereof to  acquire at any time  shares of  Ordinary
Shares,  including  without  limitation,  any  debt,  preferred  stock,  rights,
options,  warrants or other  instrument that is at any time  convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, shares of
Ordinary Shares.

     "OTCBB" means the Over-The-Counter Bulletin Board.

     "Per Share Purchase Price" equals $2.75,  subject to adjustment for reverse
and forward stock splits, stock dividends,  stock combinations and other similar
transactions of the Ordinary Shares that occur after the date of this Agreement.

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

     "Proceeding"  means an action,  claim,  suit,  investigation  or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition).

     "Registration   Statement"  means  a  registration  statement  meeting  the
requirements  set forth in the  Registration  Rights  Agreement and covering the
resale by the  Purchasers  of the  Shares  and the  Warrant  Shares or a portion
thereof (as provided for in the Registration Rights Agreement).

                                       3
<PAGE>

     "Registration  Rights  Agreement" means the Registration  Rights Agreement,
dated  as of the date of this  Agreement,  by and  among  the  Company  and each
Purchaser, in the form of Exhibit A hereto.

     "Required  Approvals"  shall  have the  meaning  ascribed  to such  term in
Section 3.1(e).

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

     "SEC  Reports"  shall  have the  meaning  ascribed  to such term in Section
3.1(h).

     "Securities" means the Shares, the Warrants and the Warrant Shares.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Shares"  means the Ordinary  Shares  issued or issuable to each  Purchaser
pursuant to this Agreement.

     "Subscription  Amount" means, as to each  Purchaser,  the amounts set forth
below such Purchaser's  signature block on the signature page hereto,  in United
States dollars and in immediately available funds.

     "Subsidiary" shall mean the subsidiaries of the Company,  if any, set forth
on Schedule 3.1(a).

     "TRP" shall mean Thelen Reid & Priest LLP with offices located at 875 Third
Avenue, New York, New York 10022.

     "Trading  Day" means a day on which the  Ordinary  Shares are traded on the
Nasdaq National Market.

     "Trading Market" means each of the following  markets or exchanges on which
the  Ordinary  Shares is listed or quoted for  trading on the date in  question:
OTCBB,  the American Stock  Exchange,  the New York Stock  Exchange,  the Nasdaq
National Market or the Nasdaq SmallCap Market.

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

     "Warrants"  means the  Warrants,  in the form of Exhibit B, issuable to the
Purchasers.

     "Warrant  Shares" means the Ordinary  Shares  issuable upon exercise of the
Warrants.

                                       4
<PAGE>

                                  ARTICLE II.
                                PURCHASE AND SALE

     2.1 Closing.  On the Closing Date,  each and every Purchaser shall purchase
from the Company,  severally and not jointly with the other Purchasers,  and the
Company shall issue and sell to each Purchaser,  (a) a number of Shares equal to
such Purchaser's Subscription Amount divided by the Per Share Purchase Price and
(b) the  Warrants  as  determined  pursuant  to Section  2.2(b).  The  aggregate
Subscription  Amounts  for Shares sold  hereunder  shall be  $2,000,000.70  (the
"Aggregate  Purchase  Price").  The  closing  of such  sale  and  purchase  (the
"Closing")  shall  take  place  at  10:00  a.m.,  NY time,  on the  Trading  Day
immediately  following the  satisfaction or waiver (by the applicable  party) of
all the conditions set forth in Sections  2.3(a) and 2.3(b),  or such other date
as the  Company and the  Purchasers  representing  a majority  of the  Aggregate
Purchase  Price  (the  "Majority  Purchasers")  agree in writing  (the  "Closing
Date"),  at the  offices of TRP or such other  location  as the  Company and the
Majority Purchasers shall mutually agree.

     2.2 Deliveries.

          (a) On the  Closing  Date,  the Company  shall  deliver or cause to be
     delivered to each Purchaser the following:

               (i) a copy of duly executed irrevocable instructions, in the form
          of  Exhibit  C  attached  hereto,  to  the  Company's  transfer  agent
          instructing  the transfer agent to deliver,  on an expedited  basis, a
          certificate  evidencing a number of Shares  equal to such  Purchaser's
          Subscription   Amount  divided  by  the  Per  Share  Purchase   Price,
          registered in the name of such Purchaser;

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

               (iii) a legal opinion of Company Counsel,  in the form of Exhibit
          D attached hereto.

          (b) Within  three (3) Trading  Days of the Closing  Date,  the Company
     shall  deliver  or cause  to be  delivered  to each  Purchaser  a  Warrant,
     registered in the name of such Purchaser,  pursuant to which such Purchaser
     shall have the right to acquire up to the number of Ordinary  Shares  equal
     to 40% of the Shares issued to such Purchaser on the Closing Date.

          (c) On the Closing Date,  each Purchaser  shall deliver or cause to be
     delivered to the Company the following:

               (i) such Purchaser's  Subscription Amount by wire transfer to the
          account as specified in writing by the Company; and

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

                                       5

<PAGE>

          (d) On the  date  hereof,  each of the  non-Israeli  Purchasers  shall
     deliver to the  Company an executed  undertaking  towards the Office of the
     Chief  Scientist of the Israeli  Ministry of  Industry,  Trade & Labor (the
     "OCS") in the form of Exhibit E attached hereto.

     2.3 Closing Conditions.

          (a) Purchasers' Closing  Conditions.  The obligation of each Purchaser
     to  consummate  the  transactions  contemplated  by this  Agreement  at the
     Closing,  as  provided in Section  2.1  hereof,  shall be  subject,  in the
     absence  of  a  written   waiver  by  the  Majority   Purchasers,   to  the
     satisfaction, prior or at the Closing, of the following conditions:

               (i) the  representations  and warranties of the Company contained
          in this Agreement shall be true in all material  respects on and as of
          the Closing Date as though such  warranties and  representations  were
          made at and as of such date;

               (ii)  the  Company  shall  have  performed  and  complied  in all
          material  respects  with  all  agreements,  covenants  and  conditions
          contained  in this  Agreement  which are  required to be  performed or
          complied with by the Company prior to or on the Closing Date;

               (iii) there shall be no effective injunction,  writ,  preliminary
          restraining  order or any  order of any  nature  issued  by a court of
          competent  jurisdiction  directing that the transactions  provided for
          herein or any of them not be consummated as herein provided;

               (iv)  the  approvals  of the  Investment  Center  of the  Israeli
          Ministry of Industry,  Trade & Labor (the "Investment  Center") and of
          the OCS shall have been obtained;

               (v) from the date  hereof to the  Closing  Date,  trading  in the
          Ordinary  Shares  shall  not have  been  suspended  by the  Commission
          (except for any suspension of trading of limited duration agreed to by
          the  Company,  which  suspension  shall  be  terminated  prior  to the
          Closing),  and,  at any time  prior to the  Closing  Date,  trading in
          securities  generally  shall not have been suspended or limited on any
          Trading Market, nor shall a general commercial banking moratorium have
          been  declared   either  by  the  United  States  or  New  York  State
          authorities nor shall there have occurred any material and substantial
          outbreak  or  escalation   of   hostilities   or  other   national  or
          international  calamity  of such  magnitude  in its  effect on, or any
          material  adverse change in, any financial market which, in each case,
          in the  reasonable  judgment  of the  Majority  Purchasers,  makes  it
          impracticable  or  inadvisable  to purchase the Shares at the Closing;
          and

               (vi) the Closing  Date shall have not  occurred  within seven (7)
          Trading Days following the date hereof.

     (b)  Company's  Closing  Conditions.  The  obligation  of  the  Company  to
consummate the  transactions  contemplated by this Agreement at the Closing,  as
provided in Section 2.1  hereof,  shall be subject,  in the absence of a written
waiver by the Company,  to the  satisfaction,  prior or at the  Closing,  of the
following conditions:

               (i) the  representations and warranties of each of the Purchasers
          contained  in this  Agreement  shall be true on and as of the  Closing
          Date  in  all  material   respects  as  though  such   warranties  and
          representations were made at and as of such date;

                                       6
<PAGE>

               (ii) each  Purchaser  shall have  performed  and  complied in all
          material  respects  with  all  agreements,  covenants  and  conditions
          contained  in this  Agreement  which are  required to be  performed or
          complied with by it prior to or on the Closing Date;

               (iii) there shall be no effective injunction,  writ,  preliminary
          restraining  order or any  order of any  nature  issued  by a court of
          competent  jurisdiction  directing that the transactions  provided for
          herein or any of them not be consummated as herein provided;

               (iv) the approvals of the Investment  Center and of the OCS shall
          have been obtained;

               (v)  receipt  by the  Company of the  entire  Aggregate  Purchase
          Price; and

               (vi) the Closing  Date shall have not  occurred  within seven (7)
          Trading Days following the date hereof.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company.  Except as otherwise set
forth in the Disclosure  Schedules attached hereto,  which Disclosure  Schedules
shall be deemed a part hereof,  the Company hereby represents and warrants as of
the date hereof and as of the Closing Date to each Purchaser as follows:

          (a) Subsidiaries.  All of the direct and indirect  subsidiaries of the
     Company are set forth on Schedule 3.1(a) (the "Subsidiaries").  The Company
     owns,  directly or  indirectly,  all of the capital  stock or other  equity
     interests  of each  Subsidiary  free and  clear of any  Liens,  and all the
     issued and  outstanding  shares of  capital  stock of each  Subsidiary  are
     validly  issued and are fully paid,  non-assessable  and free of preemptive
     and similar rights to subscribe for or purchase such securities.

          (b)  Organization  and  Qualification.  Each  of the  Company  and the
     Subsidiaries is an entity duly incorporated or otherwise organized, validly
     existing and, where  applicable,  in good  standing,  under the laws of the
     jurisdiction of its incorporation or organization (as applicable), with the
     requisite  power and authority to own and use its properties and assets and
     to carry on its business as currently  conducted except where failure to be
     so  qualified,  organized  or have  such  power  and  authority  would  not
     reasonably  be  expected  to have a Material  Adverse  Effect  (as  defined
     below).  Neither the Company nor any  Subsidiary is in violation or default
     of any of the  provisions  of its  respective  certificate  or  articles of
     incorporation, bylaws or other organizational or charter documents. Each of
     the Company and the Subsidiaries is duly qualified to conduct business and,
     where  applicable,  is in good standing as a foreign  corporation  or other
     entity in each  jurisdiction in which the nature of the business  conducted
     or property owned by it makes such  qualification  necessary,  except where
     the failure to be so  qualified  or in good  standing,  as the case may be,
     would not have or  reasonably  be  expected  to  result  in (x) a  material
     adverse  effect  on  the  legality,   validity  or  enforceability  of  any
     Transaction  Document,  or (y) a material  adverse effect on the results of
     operations, assets, business or financial

                                       7

<PAGE>

     condition of the Company and the Subsidiaries,  taken as a whole, provided,
     however,  that  in no  event  shall  any  of  the  following,  alone  or in
     combination,  be deemed to  constitute,  nor shall any of the  following be
     taken into  account  in  determining  whether  there has been or will be, a
     Material  Adverse  Effect:  (i) any change in the Company's  stock price or
     trading volume in and of itself (but not excluding the underlying  cause of
     any such  change  pursuant  to this clause  (i));  (ii) any change,  event,
     violation,  inaccuracy,  circumstance  or effect that results from changes,
     events  or  circumstances  affecting  general  economic  conditions  (which
     changes,  events or  circumstances  do not  disproportionately  affect such
     entity); (iii) any change, event,  violation,  inaccuracy,  circumstance or
     effect resulting from acts of war or terrorism or any escalation thereof in
     and of itself (but excluding any changes or effect  uniquely on or uniquely
     with  respect to the Company  resulting  from any such act pursuant to this
     clause  (iii);   or  (iv)  any  change,   event,   violation,   inaccuracy,
     circumstance  or effect that results  from any action or inaction  taken by
     the Purchasers (any of (x) or (y), a "Material Adverse Effect"), and to the
     knowledge of the Company,  no  Proceeding  has been  instituted in any such
     jurisdiction  revoking,  limiting or curtailing or seeking to revoke, limit
     or curtail such power and authority or qualification.

          (c)  Authorization;   Enforcement.   The  Company  has  the  requisite
     corporate  power and authority to execute and deliver this Agreement and to
     consummate  the  transactions  contemplated  by  each  of  the  Transaction
     Documents to which it is a party and otherwise to carry out its obligations
     thereunder. The execution,  delivery and performance by the Company of each
     of the Transaction Documents to which it is a party and the consummation by
     it of the  transactions  contemplated  thereby have been duly authorized by
     all  necessary  action on the part of the Company and no further  action is
     required by the Company in  connection  therewith  other than in connection
     with the Required  Approvals.  Each  Transaction  Document to which it is a
     party has been (or upon  delivery  will have  been)  duly  executed  by the
     Company and,  when  delivered in  accordance  with the terms  hereof,  will
     constitute  the  valid  and  legally  binding  obligation  of  the  Company
     enforceable  against the Company in accordance with its terms except (i) as
     limited by applicable bankruptcy,  insolvency,  reorganization,  moratorium
     and other laws of general application  affecting  enforcement of creditors'
     rights  generally,  (ii) as limited by laws relating to the availability of
     specific  performance,  injunctive  relief or other equitable  remedies and
     (iii) as the  rights  to  indemnification  or  contribution  hereunder  and
     thereunder may be limited by applicable law.

          (d) No  Conflicts.  The  execution,  delivery and  performance  by the
     Company of the Transaction  Documents to which it is a party,  the issuance
     and sale of the Shares  and the  consummation  by the  Company of the other
     transactions  contemplated thereby do not and will not (i) conflict with or
     violate any  provision of the Company's or any  Subsidiary's  memorandum or
     articles of association or other  organizational or charter  documents,  or
     (ii)  subject to  obtaining  the  Required  Approvals,  conflict  with,  or
     constitute a default (or an event that with notice or lapse of time or both
     would become a default) under,  result in the creation of any Lien upon any
     of the  properties or assets of the Company or any  Subsidiary,  or give to
     others any rights of termination,  amendment,  acceleration or cancellation
     (with or without notice,  lapse of time or both) of, any agreement,  credit
     facility,  debt or other instrument evidencing a Company or Subsidiary debt
     or other understanding to which the Company or any Subsidiary is a party or
     by which any property or material asset of the

                                       8
<PAGE>

     Company or any  Subsidiary  is bound,  or (iii)  subject to  obtaining  the
     Required  Approvals,  conflict  with or result in a  violation  of any law,
     rule, regulation, order, judgment,  injunction, decree or other restriction
     of any court or governmental authority to which the Company or a Subsidiary
     is subject  (including  federal and state securities laws and regulations),
     or by which any property or asset of the Company or a Subsidiary  is bound,
     or (iv)  violate  the terms of any  agreement  by which the  Company or any
     Subsidiary is bound or to which any property or asset of the Company or any
     Subsidiary is bound;  except in the case of each of clauses (ii), (iii) and
     (iv),  such as would  not have or  reasonably  be  expected  to result in a
     Material Adverse Effect.

          (e) Filings,  Consents and  Approvals.  The Company is not required to
     obtain any consent, waiver,  authorization or order of, give any notice to,
     or make any filing or registration with, any court or other federal, state,
     local or other  governmental  authority or other Person in connection  with
     the execution,  delivery and  performance by the Company of the Transaction
     Documents,  other than (i) filings required pursuant to Section 4.4 of this
     Agreement,  (ii)  the  filing  with  the  Commission  of  the  Registration
     Statement,  (iii) application(s) to the Nasdaq Stock Market for the listing
     of the Shares and Warrant Shares for trading thereon in the time and manner
     required  thereby,  (iv) the filing of Form D with the  Commission and such
     filings as are required to be made under  applicable state securities laws,
     (v) any other  filings  required  to be made  pursuant  to the terms of the
     Registration Rights Agreement, and (vi) the approvals and notices set forth
     on Section 3.1(e) of the Disclosure Schedules (collectively,  the "Required
     Approvals").

          (f) Issuance of the Securities. The Shares and Warrants have been duly
     authorized  and, when issued and paid for in  accordance  with the terms of
     the Transaction Documents,  will be duly and validly issued, fully paid and
     nonassessable,  free and clear of all Liens  imposed by the  Company  other
     than restrictions on transfer provided for in the Transaction Documents and
     under  applicable  laws.  The Warrant  Shares,  when issued and paid for in
     accordance  with the terms of the  Transaction  Documents,  will be validly
     issued,  fully paid and nonassessable,  free and clear of all Liens imposed
     by the Company  other than  restrictions  on transfer  provided  for in the
     Transaction  Documents and under  applicable laws. The Company has reserved
     from its duly  authorized  capital  stock the  maximum  number of  Ordinary
     Shares issuable pursuant to this Agreement and the Warrants.

          (g)  Capitalization.  Since  September  30, 2004,  the Company has not
     issued any capital  stock other than  pursuant to the  exercise of employee
     stock  options  under the  Company's  stock option  plans,  the issuance of
     shares of Ordinary Shares to employees  pursuant to the Company's  employee
     stock  purchase  plan  and  pursuant  to  the  conversion  or  exercise  of
     outstanding  Ordinary  Shares  Equivalents  outstanding.  No Person has any
     right of first refusal,  preemptive right,  right of participation,  or any
     similar  right  to  participate  in the  transactions  contemplated  by the
     Transaction  Documents.  Except (i) as a result of the purchase and sale of
     the Securities and (ii) the outstanding Ordinary Shares and Ordinary Shares
     Equivalents set forth in Section 3.1(g) of the Disclosure Schedules,  there
     are no outstanding options,  warrants, script rights to subscribe to, calls
     or  commitments  of any character  whatsoever  relating to, or  securities,
     rights or obligations  convertible into or exchangeable  for, or giving any
     Person any right to  subscribe  for or acquire,  any  Ordinary

                                       9
<PAGE>

     Shares, or contracts, commitments,  understandings or arrangements by which
     the Company or any  Subsidiary  is or may become bound to issue  additional
     Ordinary Shares,  or securities or rights  convertible or exchangeable into
     Ordinary Shares. The issue and sale of the Securities will not obligate the
     Company to issue Ordinary  Shares or other  securities to any Person (other
     than the  Purchasers)  and  will not  result  in a right of any  holder  of
     Company  securities to adjust the exercise,  conversion,  exchange or reset
     price under such securities. All of the outstanding shares of capital stock
     of the Company are validly issued, fully paid and nonassessable,  have been
     issued in compliance with all federal and state  securities  laws, and none
     of such  outstanding  shares were  issued in  violation  of any  preemptive
     rights or  similar  rights to  subscribe  for or  purchase  securities.  No
     further  approval  or  authorization  of  any  shareholder,  the  Board  of
     Directors of the Company or others is required for the issuance and sale of
     the  Shares.  Except  as  disclosed  in  the  SEC  Reports,  there  are  no
     shareholders agreements, voting agreements or other similar agreements with
     respect to the Company's  capital stock to which the Company is a party or,
     to the  knowledge  of the  Company,  between or among any of the  Company's
     shareholders.

          (h) SEC  Reports;  Financial  Statements.  The  Company  has filed all
     reports  required  to be filed  by it under  the  Exchange  Act,  including
     without limitation, those filed pursuant to Section 13(a) or 15(d) thereof,
     for the two years  preceding  the date  hereof  (the  foregoing  materials,
     including the exhibits thereto,  being  collectively  referred to herein as
     the "SEC  Reports") on a timely basis or has received a valid  extension of
     such  time of  filing  and has  filed  any  such SEC  Reports  prior to the
     expiration of any such extension.  As of their  respective  dates,  the SEC
     Reports  complied in all material  respects  with the  requirements  of the
     Exchange Act and the rules and  regulations of the  Commission  promulgated
     thereunder,  and none of the SEC Reports, when filed,  contained any untrue
     statement of a material  fact or omitted to state a material  fact required
     to be stated therein or necessary in order to make the statements  therein,
     in light of the  circumstances  under which they were made, not misleading.
     The financial  statements of the Company included in the SEC Reports comply
     as to form in all material respects with applicable accounting requirements
     and the rules and  regulations of the Commission with respect thereto as in
     effect at the time of filing. Such financial  statements have been prepared
     in accordance with United States generally accepted  accounting  principles
     applied on a consistent basis during the periods covered therein  ("GAAP"),
     except as may be otherwise  specified in such  financial  statements or the
     notes  thereto  and except  that  unaudited  financial  statements  may not
     contain all footnotes  required by GAAP, and fairly present in all material
     respects  the  financial  position  of the  Company  and  its  consolidated
     subsidiaries  as of and for the dates thereof and the results of operations
     and  cash  flows  for the  periods  then  ended,  subject,  in the  case of
     unaudited statements, to normal, immaterial, year-end audit adjustments.

          (i) Material Changes. Since September 30, 2004, except as disclosed in
     the SEC Reports,  (i) there has been no event,  occurrence  or  development
     that has had or that would  reasonably  be expected to result in a Material
     Adverse Effect,  (ii) the Company has not altered its method of accounting,
     (iii) the Company has not incurred any material liabilities  (contingent or
     otherwise)  other than (A)  liabilities  incurred in the ordinary course of
     business  consistent with past practice and (B) liabilities not required to
     be  reflected in the  Company's  financial  statements  pursuant to GAAP or
     required to be  disclosed  in filings

                                      10
<PAGE>

     made with the  Commission,  (iv) the Company  has not  declared or made any
     dividend or distribution  of cash or other property to its  shareholders or
     purchased, redeemed or made any agreements to purchase or redeem any shares
     of its  capital  stock  and  (v) the  Company  has not  issued  any  equity
     securities  to any  officer,  director  or  Affiliate,  except  pursuant to
     existing  Company  stock  option  plans.  The Company does not have pending
     before  the   Commission   any  request  for   confidential   treatment  of
     information.

          (j) Litigation. There is no action, suit, inquiry, notice of violation
     or proceeding pending or, to the knowledge of the Company, threatened, nor,
     to  the  knowledge  of  the  Company,  is  any  investigation   pending  or
     threatened,  against the Company, any Subsidiary or any of their respective
     properties   before  or  by  any   court,   arbitrator,   governmental   or
     administrative  agency or regulatory  authority  (federal,  state,  county,
     local or foreign)  (collectively,  an "Action")  which (i)  challenges  the
     legality, validity or enforceability of any of the Transaction Documents or
     the Securities or (ii) would, if there were an unfavorable  decision,  have
     or reasonably be expected to result in a Material  Adverse Effect.  Neither
     the Company nor any  Subsidiary,  nor to the knowledge of the Company,  any
     director or officer  thereof (in his  capacity as such),  is or has been in
     the  past  five  years  the  subject  of any  Action  involving  a claim of
     violation of or liability under federal or state securities laws or a claim
     of breach of fiduciary duty. There has not been in the past five years, and
     to the knowledge of the Company, there is not pending, any investigation by
     the Commission  involving the Company or any current or former  director or
     officer  of the  Company.  The  Commission  has not issued in the past five
     years any stop order or other order  suspending  the  effectiveness  of any
     registration  statement  filed by the Company or any  Subsidiary  under the
     Exchange Act or the Securities Act.

          (k) Labor  Relations.  No  material  labor  dispute  exists or, to the
     knowledge of the Company,  is imminent with respect to any of the employees
     of the  Company or any  Subsidiary  which would  reasonably  be expected to
     result in a Material Adverse Effect.

          (l)  Compliance.  Neither  the Company  nor any  Subsidiary  (i) is in
     default  under or in violation  of (and no event has occurred  that has not
     been waived that,  with notice or lapse of time or both,  would result in a
     default by the Company or any Subsidiary under), nor has the Company or any
     Subsidiary  received written notice of a claim that it is in default under,
     any  indenture,  loan  or  credit  agreement  or  any  other  agreement  or
     instrument  to which it is a party or by which it or any of its  properties
     is bound  (whether or not such default or violation has been waived),  (ii)
     is in violation of any order of any court, arbitrator or governmental body,
     or  (iii)  is in  violation  of any  statute,  rule  or  regulation  of any
     governmental authority,  including without limitation all foreign, federal,
     state and local laws  applicable  to its  business,  except in each case as
     would not have a Material Adverse Effect.

          (m) Regulatory Permits.  The Company and the Subsidiaries  possess all
     certificates, authorizations and permits issued by the appropriate federal,
     state, local or foreign regulatory  authorities  necessary to conduct their
     respective  businesses  as described  in the SEC Reports,  except where the
     failure to possess such permits would not have or reasonably be expected to
     result in a Material Adverse Effect ("Material  Permits"),  and

                                       11
<PAGE>

     neither the Company nor any  Subsidiary  has received any written notice of
     proceedings  relating to the  revocation  or  modification  of any Material
     Permit.

          (n) Title to Assets.  The Company and the  Subsidiaries  have good and
     marketable title to all real property owned by them that is material to the
     business  of the  Company  and the  Subsidiaries  and  valid  title  in all
     personal  property  owned by them that is material  to the  business of the
     Company  and the  Subsidiaries,  in each case free and clear of all  Liens,
     except for Liens as do not materially affect the value of such property and
     do not  materially  interfere  with the use made and proposed to be made of
     such property by the Company and the Subsidiaries and Liens for the payment
     of  federal,  state or  other  taxes,  the  payment  of  which  is  neither
     delinquent nor subject to penalties or that are otherwise would not have or
     reasonably  be expected to result in a Material  Adverse  Effect.  Any real
     property  and   facilities   held  under  lease  by  the  Company  and  the
     Subsidiaries  are held by them  under  valid,  subsisting  and  enforceable
     leases and no landlord for any such real  property or facility has notified
     the Company or any such  Subsidiary  that any of them are in default  under
     any such lease.

          (o) Patents and Trademarks.  The Company and the Subsidiaries have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications,  service marks, trade names,  copyrights,  licenses and other
     similar  rights  necessary  or material  for use in  connection  with their
     respective businesses as described in the SEC Reports and which the failure
     to so  have  would  have  a  Material  Adverse  Effect  (collectively,  the
     "Intellectual Property Rights"). Neither the Company nor any Subsidiary has
     received a written notice that the Intellectual Property Rights used by the
     Company or any  Subsidiary  violates  or  infringes  upon the rights of any
     Person.  To the knowledge of the Company,  all such  Intellectual  Property
     Rights  are  enforceable  and there is no known  existing  infringement  by
     another Person of any of the Intellectual  Property Rights which would have
     a Material Adverse Effect.

          (p)  Insurance.  The  Company  and the  Subsidiaries  are  insured  by
     insurers of  recognized  financial  responsibility  against such losses and
     risks and in such amounts as the Company  believes are,  given the size and
     financial condition of the Company, prudent and customary in the businesses
     in which the Company and the Subsidiaries are engaged.  Neither the Company
     nor any  Subsidiary  has any reason to believe  that it will not be able to
     renew its existing  insurance coverage as and when such coverage expires or
     to obtain  similar  coverage  from similar  insurers as may be necessary to
     continue its business without a significant increase in cost.

          (q) Transactions With Affiliates and Employees. Except as set forth in
     the SEC  Reports,  none of the officers or directors of the Company and, to
     the  knowledge  of the  Company,  none of the  employees  of the Company is
     presently a party to any  transaction  with the  Company or any  Subsidiary
     (other than for services as employees,  officers and directors),  including
     any contract,  agreement or other arrangement  providing for the furnishing
     of services to or by, providing for rental of real or personal  property to
     or from, or otherwise  requiring payments to or from any officer,  director
     or such employee or, to the  knowledge of the Company,  any entity in which
     any officer,  director,  or any such employee has a substantial interest or
     is an  officer,  director,  trustee or  partner,  in each case in excess

                                       12
<PAGE>

     of $60,000  other than (i) for  payment  of salary or  consulting  fees for
     services  rendered,  (ii)  reimbursement for expenses incurred on behalf of
     the Company and (iii) for other  benefits  under  benefit or pension  plans
     sponsored  by  the  Company,  including  without  limitation  stock  option
     agreements under any stock option plan of the Company.

          (r) Sarbanes-Oxley Matters. The Company is in material compliance with
     all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it
     as of the Closing Date. The Company has established disclosure controls and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
     the Company and designed such disclosure  controls and procedures to ensure
     that  material   information   relating  to  the  Company,   including  its
     consolidated  Subsidiaries,  is made known to the  certifying  officers  by
     others  within those  entities.  The  Company's  certifying  officers  have
     evaluated  the  effectiveness  of the  Company's  disclosure  controls  and
     procedures as of the end of the period  covered by its most recently  filed
     annual  report  under the Exchange  Act (the date of such  evaluation,  the
     "Evaluation Date"). The Company presented in its most recently filed annual
     report under the Exchange Act the  conclusions of the  certifying  officers
     about the effectiveness of the disclosure  controls and procedures based on
     their  evaluations as of the Evaluation  Date.  Since the Evaluation  Date,
     there have been no significant  changes in the Company's  internal  control
     over  financial  reporting (as defined in Exchange Act Rules  13a-15(f) and
     15d-15(f))  or, to the best of the  Company's  knowledge,  in other factors
     that could significantly affect the Company's internal controls.

          (s) Certain Fees. No brokerage or finder's fees or commissions  are or
     will be payable by the Company or any  Subsidiary to any broker,  financial
     advisor or consultant,  finder, placement agent, investment banker, bank or
     other  Person  with  respect  to  the  transactions  contemplated  by  this
     Agreement.  To the knowledge of the Company,  the Purchasers  shall have no
     obligation  with  respect to any fees or with respect to any claims made by
     or on  behalf  of other  Persons  for fees of a type  contemplated  in this
     Section that may be due in connection with the transactions contemplated by
     this Agreement.

          (t)  Private  Placement.  Assuming  the  accuracy  of  the  Purchasers
     representations  and  warranties  set forth in Section  3.2,  and except as
     contemplated by the Registration  Rights Agreement,  no registration  under
     the  Securities Act is required for the offer and sale of the Securities by
     the Company to the Purchasers as contemplated hereby. The issuance and sale
     of the Securities  hereunder does not contravene the rules and  regulations
     of the Nasdaq Stock Market.

          (u)  Investment  Company.  The Company is not, and is not an Affiliate
     of, and immediately after receipt of payment for the Shares, will not be or
     be an  Affiliate  of, an  "investment  company"  within the  meaning of the
     Investment Company Act of 1940, as amended.

          (v) Registration  Rights.  Except as disclosed in the SEC Reports,  no
     Person has any right to cause the Company to effect the registration  under
     the Securities Act of any securities of the Company.

                                       13
<PAGE>

          (w) Listing  and  Maintenance  Requirements.  The  Ordinary  Shares is
     registered  pursuant to Section  12(g) of the Exchange Act, and the Company
     has taken no action  designed  to, or which to its  knowledge  is likely to
     have the effect of,  terminating  the  registration  of the Ordinary Shares
     under  the  Exchange   Act  nor  has  the  Company   received  any  written
     notification   that  the  Commission  is  contemplating   terminating  such
     registration.  The  Company has not,  in the 12 months  preceding  the date
     hereof,  received  written  notice  from any  Trading  Market  on which the
     Ordinary  Shares is or has been  listed or  quoted to the  effect  that the
     Company is not in compliance  with the listing or maintenance  requirements
     of such  market.  The  Company is  currently  in  compliance  with all such
     listing and maintenance requirements.

          (x) Application of Takeover Protections.  The Company and its Board of
     Directors  have  taken all  necessary  action,  if any,  in order to render
     inapplicable any control share acquisition,  business  combination,  poison
     pill (including any distribution under a rights agreement) or other similar
     anti takeover  provision  under the Company's  Articles of Association  (or
     similar charter  documents) or the laws of its state of incorporation  that
     is or could  reasonably be expected to become  applicable to the Purchasers
     as a result of the Purchasers and the Company  fulfilling their obligations
     or  exercising  their rights  under the  Transaction  Documents,  including
     without  limitation  the  Company's  issuance  of the  Securities  and  the
     Purchasers' ownership of the Securities.

          (y)  Disclosure.  Except as set forth in the  Disclosure  Schedule and
     except for terms of the Transaction Documents and the fact that the Company
     is considering  consummating the  transactions  contemplated  therein,  the
     Company  confirms  that neither the Company nor any other Person  acting on
     its behalf has  provided any of the  Purchasers  or their agents or counsel
     with  any  information  that  constitutes  or  might  constitute  material,
     non-public  information.  The Company  understands  and  confirms  that the
     Purchasers  will  rely  on  the  foregoing   representations  in  effecting
     transactions  in  securities of the Company.  To the  Company's  knowledge,
     neither this  Agreement,  nor the Disclosure  Schedules to this  Agreement,
     contain  any  untrue  statement  of a  material  fact or omit to state  any
     material fact  necessary in order to make the statements  made therein,  in
     light of the circumstances under which they were made, not misleading.  The
     Company  acknowledges  and agrees that no  Purchaser  makes or has made any
     representations or warranties with respect to the transactions contemplated
     hereby other than those specifically set forth in Section 3.2 hereof.

          (x)  (z)  No  Integrated  Offering.   Assuming  the  accuracy  of  the
     Purchasers'  representations  and  warranties  set  forth in  Section  3.2,
     neither the Company,  nor any of its  affiliates,  nor any Person acting on
     its or their behalf has,  directly or indirectly,  made any offers or sales
     of any  security  or  solicited  any  offers  to buy  any  security,  under
     circumstances  that  would  cause this  offering  of the  Securities  to be
     integrated  with  prior  offerings  by  the  Company  for  purposes  of the
     Securities  Act  or  any  applicable   shareholder   approval   provisions,
     including,  without  limitation,  under the rules  and  regulations  of the
     Trading Market.

          (aa) Solvency.  Based on the financial  condition of the Company as of
     the Closing Date after  giving  effect to the receipt by the Company of the
     proceeds from the sale of the Securities hereunder, the Company's assets do
     not constitute  unreasonably small capital to carry on its business for the
     current  fiscal  year as now  conducted  and as  proposed

                                       14
<PAGE>

     to be  conducted  including  its  capital  needs  taking  into  account the
     particular  capital  requirements of the business conducted by the Company,
     and projected capital requirements and capital availability thereof.

          (bb) Form F-3  Eligibility.  The Company is  eligible to register  the
     resale of its Ordinary Shares by the Purchasers  under Form F-3 promulgated
     under the Securities Act.

          (cc) Taxes. Except for matters that would not,  individually or in the
     aggregate,  have or reasonably be expected to result in a Material  Adverse
     Effect,  (i) the  Company  and each  Subsidiary  has  filed  all  necessary
     federal, state and foreign income and franchise tax returns and has paid or
     accrued  all  taxes  shown as due  thereon,  and (ii)  the  Company  has no
     knowledge of a tax deficiency which has been asserted or threatened against
     the Company or any Subsidiary.

          (dd) General  Solicitation.  Neither the Company nor any person acting
     on behalf of the  Company has offered or sold any of the Shares by any form
     of general solicitation or general advertising. The Company has offered the
     Shares  for sale  only to the  Purchasers  and  certain  other  "accredited
     investors" within the meaning of Rule 501 under the Securities Act.

          (ee)  Foreign  Corrupt  Practices.  Neither  the  Company,  nor to the
     knowledge of the Company, any agent or other person acting on behalf of the
     Company,  has (i)  directly  or  indirectly,  used any  corrupt  funds  for
     unlawful  contributions,  gifts,  entertainment or other unlawful  expenses
     related to foreign or domestic political  activity,  (ii) made any unlawful
     payment to foreign or domestic government  officials or employees or to any
     foreign or domestic  political  parties or campaigns from corporate  funds,
     (iii)  failed to disclose  fully any  contribution  made by the Company (or
     made by any  person  acting on its  behalf of which the  Company  is aware)
     which is in violation of law, or (iv) violated in any material  respect any
     provision of the Foreign Corrupt Practices Act of 1977, as amended.

          (ff) Auditor. The Company's auditors are set forth on Schedule 3.1(ff)
     of the Disclosure Schedule.  To the Company's knowledge,  such auditors are
     independent auditors as required by the Securities Act.

          (gg)  Acknowledgment  Regarding  Purchasers'  Purchase of Shares.  The
     Company  acknowledges  and  agrees  that each of the  Purchasers  is acting
     solely in the  capacity of an arm's  length  purchaser  with respect to the
     Transaction Documents and the transactions contemplated hereby. The Company
     further  acknowledges that no Purchaser is acting as a financial advisor or
     fiduciary of the Company (or in any similar  capacity) with respect to this
     Agreement and the transactions contemplated hereby.

     3.2  Representations  and  Warranties  of the  Purchasers.  Each  Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

          (a)  Organization;   Authority.  Such  Purchaser  is  an  entity  duly
     organized,  validly  existing  and in good  standing  under the laws of the
     jurisdiction of its organization with full right,  corporate or partnership
     power  and  authority  to enter  into and to

                                       15
<PAGE>

     consummate the transactions  contemplated by the Transaction  Documents and
     otherwise to carry out its obligations thereunder. The execution,  delivery
     and performance by such Purchaser of the transactions  contemplated by this
     Agreement have been duly  authorized by all necessary  corporate or similar
     action on the part of such Purchaser. Each Transaction Document to which it
     is party has been duly executed by such  Purchaser,  and when  delivered by
     such  Purchaser in accordance  with the terms hereof,  will  constitute the
     valid and legally binding obligation of such Purchaser, enforceable against
     it in accordance with its terms, except (i) as limited by general equitable
     principles   and   applicable   bankruptcy,   insolvency,   reorganization,
     moratorium and other laws of general application  affecting  enforcement of
     creditors'  rights  generally,  (ii) as  limited  by laws  relating  to the
     availability of specific performance,  injunctive relief or other equitable
     remedies and (iii) insofar as indemnification  and contribution  provisions
     may be limited by applicable law.

          (b) Investment Intent. Such Purchaser  understands that the Securities
     are  "restricted  securities"  and  have  not  been  registered  under  the
     Securities Act or any applicable  state securities law and is acquiring the
     Securities  as principal for its own account for  investment  purposes only
     and not with a view to or for  distributing or reselling such Securities or
     any part  thereof,  has no present  intention of  distributing  any of such
     Securities and has no arrangement or  understanding  with any other persons
     regarding the  distribution of such  Securities  (this  representation  and
     warranty  not  limiting  such  Purchaser's  right  to sell  the  Securities
     pursuant to the  Registration  Statement or otherwise  in  compliance  with
     applicable  securities  laws).  Such  Purchaser is acquiring the Securities
     hereunder in the ordinary  course of its business.  Such Purchaser does not
     have any  agreement  or  understanding,  directly or  indirectly,  with any
     Person to distribute any of the Securities.

          (c)  Purchaser  Status.  At the time such  Purchaser  was  offered the
     Securities,  it was, at the date hereof it is, and on the Closing  Date and
     on each date on which it exercises any Warrants, it will be, an "accredited
     investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3),  (a)(7) or (a)(8)
     under the  Securities  Act.  Such  Purchaser  is not,  and at the time such
     Purchaser was offered the Securities,  it was not,  located in or organized
     under the laws of the State of Israel.  Such  Purchaser  does not currently
     hold or beneficially own more than 5% of the outstanding Ordinary Shares.

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

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

                                       16
<PAGE>

          (f) Purchaser Acting Individually.  Such Purchaser is acting severally
     as an individual and is not acting  together with any other Person or other
     Purchaser as a group.

          (g) Certain Fees. No brokerage or finder's fees or commissions  are or
     will be payable  by such  Purchaser  to any  broker,  financial  advisor or
     consultant,  finder,  placement  agent,  investment  banker,  bank or other
     Person with respect to the transactions  contemplated by this Agreement. To
     the knowledge of such Purchaser,  the Company shall have no obligation with
     respect to any fees or with  respect to any claims  made by or on behalf of
     other Persons for fees of a type  contemplated  in this Section that may be
     due in connection with the transactions contemplated by this Agreement.

          (h)  Disclosure.  Such  Purchaser  acknowledges  and  agrees  that the
     Company does not make nor has made any  representations  or warranties with
     respect  to  the   transactions   contemplated   hereby  other  than  those
     specifically set forth in Section 3.1.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

          (a) Each of the Purchasers hereby acknowledges that the Securities may
     only be disposed of in compliance with state and federal  securities  laws.
     In  connection  with any transfer of  Securities  other than pursuant to an
     effective  registration  statement  or Rule 144,  to the  Company  or to an
     Affiliate of a Purchaser or in connection  with a pledge as contemplated in
     Section 4.1(b),  the Company may require the transferor  thereof to provide
     to the  Company  an  opinion  of counsel  selected  by the  transferor  and
     reasonably  acceptable  to the  Company,  the  form and  substance  of such
     opinion shall be reasonably satisfactory to the Company, to the effect that
     such transfer does not require registration of such transferred  Securities
     under the  Securities  Act. As a condition of any such  transfer,  any such
     transferee  shall  agree  in  writing  to be  bound  by the  terms  of this
     Agreement and shall have the rights of a Purchaser under this Agreement and
     the  Registration  Rights  Agreement  and/or a Holder  (as  defined  in the
     Warrants) under the Warrants, as applicable..

          (b) The Purchasers agree to the imprinting,  so long as is required by
     this Section 4.1, of a legend on any of the  Securities in the following or
     a substantially similar form:

               THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED
               WITH  THE   SECURITIES   AND  EXCHANGE   COMMISSION  OR  THE
               SECURITIES  COMMISSION  OF ANY  STATE  IN  RELIANCE  UPON AN
               EXEMPTION  FROM  REGISTRATION  UNDER THE  SECURITIES  ACT OF
               1933, AS AMENDED (THE "SECURITIES  ACT"), AND,  ACCORDINGLY,
               MAY NOT BE OFFERED OR SOLD OR OTHERWISE  TRANSFERRED  EXCEPT
               (1) PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER
               THE  SECURITIES   ACT,  OR  (2)  PURSUANT  TO  AN  AVAILABLE
               EXEMPTION FROM, OR IN A TRANSACTION NOT

                                       17
<PAGE>

               SUBJECT TO, THE REGISTRATION  REQUIREMENTS OF THE SECURITIES
               ACT AND IN ACCORDANCE WITH APPLICABLE  STATE SECURITIES LAWS
               AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
               TO SUCH EFFECT,  THE  SUBSTANCE OF WHICH SHALL BE REASONABLY
               ACCEPTABLE TO THE COMPANY.  THESE  SECURITIES MAY BE PLEDGED
               IN  CONNECTION  WITH  A  BONA  FIDE  MARGIN  ACCOUNT  WITH A
               REGISTERED  BROKER-DEALER  OR OTHER  LOAN  WITH A  FINANCIAL
               INSTITUTION  THAT IS AN "ACCREDITED  INVESTOR" AS DEFINED IN
               RULE 501(a) UNDER THE SECURITIES ACT.

               .

          (c) The Company acknowledges and agrees that a Purchaser may from time
     to time pledge  pursuant to a bona fide margin  agreement with a registered
     broker-dealer or grant a security interest in some or all of the Securities
     to a financial  institution that is an "accredited  investor" as defined in
     Rule  501(a)  under the  Securities  Act and who  agrees to be bound by the
     provisions of this Agreement and the Registration  Rights Agreement and, if
     required under the terms of such  arrangement,  such Purchaser may transfer
     pledged or secured  Securities to the pledgees or secured  parties.  Such a
     pledge or  transfer  would not be subject to approval of the Company and no
     legal  opinion of legal  counsel of the pledgee,  secured  party or pledgor
     shall be required in  connection  therewith.  Further,  no notice  shall be
     required  of such  pledge.  At the  appropriate  Purchaser's  expense,  the
     Company will execute and deliver such reasonable documentation as a pledgee
     or secured party of Securities may reasonably  request in connection with a
     pledge or transfer of the  Securities,  including,  if the  Securities  are
     subject to registration pursuant to the Registration Rights Agreement,  the
     preparation  and filing of any required  prospectus  supplement  under Rule
     424(b)(3)  under the  Securities Act or other  applicable  provision of the
     Securities  Act to  appropriately  amend the list of  Selling  Stockholders
     thereunder.

          (d)  Certificates  evidencing  the Shares and Warrant Shares shall not
     contain any legend (including the legend set forth in Section 4.1(b)),  (i)
     while a  registration  statement  (including  the  Registration  Statement)
     covering the resale of such security is effective under the Securities Act,
     or (ii) if such Shares or Warrant  Shares are  eligible for sale under Rule
     144(k),   or  (iii)  if  such  legend  is  not  required  under  applicable
     requirements of the Securities Act (including judicial  interpretations and
     pronouncements  issued by the Staff of the  Commission).  The Company shall
     cause its counsel to issue a legal opinion to the Company's  transfer agent
     promptly  after the Effective  Date if required by the  Company's  transfer
     agent to effect the removal of the legend hereunder.  If all or any portion
     of a Warrant is exercised at a time when there is an effective registration
     statement to cover the resale of the Warrant  Shares,  such Warrant  Shares
     shall be issued free of all legends.  The Company agrees that following the
     Effective  Date or at such time as such legend is no longer  required under
     this  Section  4.1(d),  it will,  no later  than  seven  (7)  Trading  Days
     following  the  delivery  by a Purchaser  to the  Company or the  Company's
     transfer agent of a certificate  representing  Shares or Warrant Shares, as
     the case may be, issued with a restrictive  legend (such date,  the "Legend
     Removal  Date"),  deliver  or cause to be  delivered  to such  Purchaser  a
     certificate  representing such Securities that is free from all restrictive
     and other  legends;  provided the  provisions of either clause (i), (ii) or
     clause (iii)  above,  as

                                       18
<PAGE>

     applicable,  are satisfied with respect to such Securities. The Company may
     not make any notation on its records or give  instructions  to any transfer
     agent of the Company that enlarge the restrictions on transfer set forth in
     this Section.

          (e) In addition to such  Purchaser's  other  available  remedies,  the
     Company  shall  pay to a  Purchaser,  as  liquidated  damages  and not as a
     penalty,  for each $1,000 of Shares or Warrant Shares (based on the Closing
     Price of the Ordinary Shares on the date  certificate(s)  representing such
     Securities  are  submitted  to the  Company's  transfer  agent)  subject to
     Section  4.1(d),  $5 per Trading Day (increasing to $10 per Trading Day ten
     (10) Trading Days after such damages have begun to accrue) for each Trading
     Day after the Legend  Removal Date until such  certificate  is delivered to
     such Purchaser;  provided that such Purchaser shall have first notified the
     Company in writing of such failure to comply (which notification may be, in
     addition to the methods of delivery set forth in Section 5.3 hereof, by way
     of sending an electronic mail to the Company:  ofer.segev@attunity.com  and
     dror.elkayam@attunity.com).  Nothing  herein  shall limit such  Purchaser's
     right to  pursue  actual  damages  for the  Company's  failure  to  deliver
     certificates  representing  any  Securities as required by the  Transaction
     Documents,  and such Purchaser  shall have the right to pursue all remedies
     available to it at law or in equity including, without limitation, a decree
     of  specific  performance  and/or  injunctive  relief.  For any  liquidated
     damages to be paid  pursuant  to this  Section,  the  Company  may pay such
     damages solely in the form of Ordinary Shares, the number of which shall be
     determined by dividing (x) the amount of damages  payable  pursuant to this
     Section by (y) the Closing Price of an Ordinary Share on the payment date.

          (f)  Each  Purchaser,   severally  and  not  jointly  with  the  other
     Purchasers,  agrees  that  the  removal  of  the  restrictive  legend  from
     certificates  representing  Securities  as set forth in this Section 4.1 is
     predicated  upon the Company's  reliance  that the Purchaser  will sell any
     Securities  pursuant  to  either  the  registration   requirements  of  the
     Securities Act, including any applicable prospectus delivery  requirements,
     or an exemption therefrom.

     4.2 Furnishing of  Information.  As long as any Purchaser owns  Securities,
the Company  covenants to timely file (or obtain  extensions in respect  thereof
and file within the applicable grace period) all reports required to be filed by
the Company  after the date hereof  pursuant to the Exchange Act. As long as any
Purchaser owns Securities,  if the Company is no longer required to file reports
pursuant to the  Exchange Act (or if such  filings are not  otherwise  generally
available  on the Internet  free of charge),  it will prepare and furnish to the
Purchasers  (upon receipt of a written  request) and make publicly  available in
accordance  with Rule 144(c) such  information as is required for the Purchasers
to sell the  Securities  under Rule 144. The Company  further  covenants that it
will take  such  further  action as any  holder  of  Securities  may  reasonably
request,  all to the extent  required from time to time to enable such Person to
sell such Securities  without  registration  under the Securities Act within the
limitation of the exemptions provided by Rule 144.

     4.3  Integration.  The  Company  shall not sell,  offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the  Securities  in a manner that would  require the  registration  under the
Securities  Act of the sale of the Securities to the Purchasers or that would be
integrated  with the offer or sale of the  Securities  for purposes of the rules
and  regulations  of  the

                                       19
<PAGE>

Nasdaq Stock Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.

     4.4 Securities Laws  Disclosure;  Publicity.  Provided that the Company has
received each item required to be delivered by each Purchaser pursuant to any of
the Transaction  Documents,  the Company shall, by 9:00 a.m. Eastern time on the
Trading Day following the Closing Date,  issue a press release or file a Current
Report on Form 6-K in each case  reasonably  acceptable  to Weiss,  Peck & Greer
Investments,  a division of Robeco USA,  LLC  ("WPG"),  disclosing  the material
terms of the  transactions  contemplated  hereby.  Neither  the  Company nor any
Purchaser  shall  issue  any  press  release  with  respect  to the  transaction
contemplated  hereby or  otherwise  make any such public  statement  without the
prior  consent  of the  Company,  with  respect  to  any  press  release  of any
Purchaser,  or  without  the prior  consent  of WPG,  with  respect to any press
release of the Company, which consent shall not unreasonably be withheld, except
if such disclosure is required by law, in which case the disclosing  party shall
promptly  provide the other party with prior notice of such public  statement or
communication;  provided,  however, that only such portions of any press release
to be  issued  by the  Company  that  specifically  reference  the  transactions
contemplated  by the  Transaction  Documents  shall  be  provided  to WPG and be
subject to their prior consultation and approval. Notwithstanding the foregoing,
the Company shall not publicly  disclose the name of any  Purchaser,  or include
the name of any Purchaser in any filing with the  Commission  or any  regulatory
agency or Trading  Market,  without the prior written consent of WPG, except (i)
as  required  by federal  securities  law in  connection  with the  registration
statement  contemplated  by the  Registration  Rights  Agreement and (ii) to the
extent such  disclosure  is required by law or Trading  Market  regulations,  in
which case the Company  shall  provide WPG with prior notice of such  disclosure
permitted under subclause (i) or (ii).

     4.5  Shareholders  Rights  Plan.  No claim will be made or  enforced by the
company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring  Person" under any shareholders  rights plan or similar plan or
arrangement in effect on the date hereof,  or that any Purchaser could be deemed
to  trigger  the  provisions  of any such  plan or  arrangement,  by  virtue  of
receiving Securities under the Transaction Documents.

     4.6 Use of Proceeds.  The Company  shall use the net proceeds from the sale
of the  Securities  hereunder  for general  corporate  and  strategic  purposes,
including,  but not limited to, in connection with acquisitions,  joint ventures
and other similar  transactions,  and not for the satisfaction of any portion of
the Company's debt (other than payment of trade payables in the ordinary  course
of the Company's business and prior practices),  to redeem any Company equity or
equity equivalent securities or to settle any outstanding litigation.

     4.7 Indemnification of Purchasers.

          (a)  Subject to the  provisions  of this  Section,  the  Company  will
     indemnify  and  hold  the   Purchasers  and  their   directors,   officers,
     shareholders,  partners,  employees and agents (each, a "Purchaser  Party")
     harmless  from  any  and  all  losses,  liabilities,  obligations,  claims,
     contingencies,  damages,  costs and expenses,  including without limitation
     all  judgments,  amounts paid in  settlements,  court costs and  reasonable
     attorneys'  fees  and  costs  of  investigation  ("Damages")  that any such
     Purchaser  Party may suffer or incur as a

                                       20
<PAGE>

     result of or  relating  to (A) any  breach  of any of the  representations,
     warranties,  covenants or agreements  made by the Company in this Agreement
     or in the other Transaction  Documents or (B) any action instituted against
     (i) a Purchaser,  or any of them or their  respective  Affiliates or (ii) a
     Purchaser  Party, by any shareholder of the Company who is not an Affiliate
     of  such  Purchaser  or  Purchaser  Party,  with  respect  to  any  of  the
     transactions  contemplated by the Transaction Documents (unless such action
     is based  upon a breach  of such  Purchaser's  representation,  warranties,
     covenants or agreements  under the Transaction  Documents or any agreements
     or  understandings  such  Purchaser or a Purchaser  Party may have with any
     such shareholder or any violations by the Purchaser or a Purchaser Party of
     state or federal  securities  laws or any  conduct by such  Purchaser  or a
     Purchaser  Party  which  constitutes  fraud,   gross  negligence,   willful
     misconduct or  malfeasance)  (clauses (A) and (B) together,  "Indemnifiable
     Claims").

          (b) If any action  shall be brought  against  any  Purchaser  Party in
     respect of which  indemnity may be sought  pursuant to this  Section,  such
     Purchaser  Party shall  promptly  notify the  Company in  writing,  and the
     Company shall have the right to assume the defense  thereof with counsel of
     its own  choosing.  Any  Purchaser  Party  shall  have the  right to employ
     separate counsel in any such action and participate in the defense thereof,
     but the fees and expenses of such  counsel  shall be at the expense of such
     Purchaser  Party except to the extent that (i) the  employment  thereof has
     been specifically authorized by the Company in writing, or (ii) the Company
     has failed after a reasonable  period of time to assume such defense and to
     employ counsel.

          (c) The Company will not be liable to any  Purchaser  Party under this
     Agreement (i) for any settlement by an Purchaser Party effected without the
     Company's prior written consent,  which shall not be unreasonably  withheld
     or  delayed;  or (ii) to the  extent,  but only to the extent  that a loss,
     claim,  damage or liability is attributable to any Purchaser Party's breach
     of any of the representations,  warranties, covenants or agreements made by
     the Purchasers in this Agreement or in the other Transaction Documents.

          (d) From and after the  Closing,  the rights of the  Purchasers  under
     this  Section  shall be the  exclusive  remedy  thereof with respect to any
     breach  of  the  Transaction   Documents  and  any  Indemnifiable   Claims.
     Notwithstanding the above, the Purchasers shall be (a) entitled to seek any
     available  remedy of law or equity  (including  rescission or  restitution)
     with  respect to fraud  and/or  willful  misconduct,  (b)  entitled to seek
     injunctive  relief to enjoin  the  breach,  or  threatened  breach,  of any
     provision of this Agreement,  and (c) entitled to seek the equitable remedy
     of specific performance in connection with this Agreement.

     4.8 Reservation of Ordinary Shares. As of the date hereof,  the Company has
reserved  and the Company  shall  continue to reserve and keep  available at all
times,  free of  preemptive  rights,  a sufficient  number of shares of Ordinary
Shares for the purpose of enabling the Company to issue Shares  pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

     4.9  Listing  of  Ordinary  Shares.   The  Company  hereby  agrees  to  use
commercially  reasonable  efforts to maintain the listing of the Ordinary Shares
on a Trading Market, and as soon as

                                       21
<PAGE>

reasonably  practicable following the Closing (but not later than the earlier of
the Effective Date and the first anniversary of the Closing Date) to list all of
the Shares and  Warrant  Shares on such  Trading  Market.  The  Company  further
agrees,  if the Company  applies to have the Ordinary Shares traded on any other
Trading  Market,  it will  include  in such  application  all of the  Shares and
Warrant Shares,  and will take such other action as is necessary to cause all of
the  Shares and  Warrant  Shares to be listed on such  other  Trading  Market as
promptly as possible.  The Company will take all action commercially  reasonable
and necessary to (a) continue the listing and trading of its Ordinary  Shares on
a Trading  Market and (b) comply in all respects with the  Company's  reporting,
filing and other obligations under the bylaws or rules of such Trading Market.

     4.10 Equal Treatment of Purchasers.  No  consideration  shall be offered or
paid to any  Person  to amend or  consent  to a waiver  or  modification  of any
provision of any of the Transaction  Documents unless the same  consideration is
also  offered  to  all  of  the  parties  to  the  Transaction  Documents.   For
clarification  purposes,  this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated  separately by each Purchaser,  and
is  intended  to treat  the  Purchasers  as a class  and shall not in any way be
construed as the Purchasers  acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or otherwise.

     4.11  Participation  in Future  Financing.  From the date hereof  until the
earlier of (i) the 1st  anniversary  after the Closing  Date,  (ii) the date the
first  Subsequent  Financing (as defined  below)  closes,  and (iii) the date at
which  the  Purchasers  hold  less  than  50% of the  Shares  acquired  by  them
hereunder,  if the Company  desires to effect an offering of its Ordinary Shares
or Ordinary  Shares  Equivalents  for an aggregate  offering  price of more than
$1,500,000 (a "Subsequent  Financing"),  the Purchasers  shall have the right to
participate  in (A) no less  than  the  lesser  of (x)  5.0% of such  Subsequent
Financing  or (y) an amount  equal to  $1,000,000  and (B) no more than 20.0% of
such Subsequent  Financing,  as allocated  between the Purchasers  based on each
Purchaser's proportionate amount of the Ordinary Shares issued to all Purchasers
at the Closing, as follows:

          (a) At least  ten (10)  calendar  days  prior  to the  closing  of the
     Subsequent Financing, the Company shall deliver to each Purchaser a written
     notice of its intention to effect a Subsequent  Financing  (such notice,  a
     "Subsequent  Financing  Notice").  The  Subsequent  Financing  Notice shall
     describe  in  reasonable  detail  the  proposed  terms  of such  Subsequent
     Financing,  the amount of proceeds  intended to be raised  thereunder,  the
     Person with whom such Subsequent Financing is proposed to be effected,  and
     attached  to which  shall  be a term  sheet or  similar  document  relating
     thereto.  If by 5:00 p.m. (New York City time) on the tenth (10th) calendar
     day after the Purchasers have received the Subsequent  Financing Notice (i)
     a Purchaser has notified the Company that it (or its  affiliated  designee)
     does not elect to  participate  in the  Subsequent  Financing,  or (ii) the
     Purchasers  who have  notified the Company that their (or their  affiliated
     designee's) willingness to participate in the Subsequent Financing is less,
     in the  aggregate,  than the  lesser of (A) 5% of the  total  amount of the
     Subsequent Financing or (B) an amount equal to $1,000,000, then the Company
     may effect  such  Subsequent  Financing  or the  remaining  portion of such
     Subsequent  Financing,  as applicable,  on the terms and to the Persons set
     forth in the Subsequent Financing Notice. If the Company receives no notice
     from a Purchaser as of such tenth (10th)  calendar day after the Purchasers
     have received the Subsequent  Financing  Notice,  such  Purchaser  shall be
     deemed to have notified the Company that it does not elect to participate.

                                       22
<PAGE>

          (b) Subject to the terms of this Section,  each  Purchaser  will again
     have the  right of  participation  set  forth  above in this  Section  4.10
     (including receipt of a new Subsequent Financing Notice), if the Subsequent
     Financing  subject  to  the  initial  Subsequent  Financing  Notice  is not
     consummated  for any  reason  on the  terms  set  forth in such  Subsequent
     Financing  Notice  within  ninety  (90) days after the date of the  initial
     Subsequent Financing Notice.

          (c) Notwithstanding  the foregoing,  this Section 4.10 shall not apply
     to Subsequent Financing that is a transaction involving (a) the issuance of
     Ordinary Shares or options to consultants, employees, officers or directors
     of the Company  pursuant  to any stock or option  plan duly  adopted by the
     Company or to the issuance of Ordinary Shares upon exercise of such options
     or any Ordinary Shares  Equivalents  outstanding as of the date hereof, (b)
     any equity securities issued pursuant to any equipment leasing  arrangement
     or  debt  financing  from a bank or  similar  financial  institution  whose
     primary business is lending money and not investing in securities,  (c) any
     equity  securities   issued  in  connection  with  strategic   transactions
     involving the Company and other  entities,  the primary purpose of which is
     not  to  raise  capital,  including  (A)  joint  ventures,   manufacturing,
     marketing,  license or distribution arrangements or (B) technology transfer
     or  development  arrangements  (provided  that the primary  purpose of such
     transaction is not the raising of capital),  (d) any securities  issued for
     consideration  other  than  cash  pursuant  to  a  merger,   consolidation,
     acquisition, consolidation, sale or disposition of all or substantially all
     of the Company's assets or similar business combination, (e) any securities
     issued  in  connection   with  the  settlement  of  pending  or  threatened
     litigation or similar proceeding, (f) Ordinary Shares issued in conjunction
     with any stock split,  stock dividend or  recapitalization  of the Company,
     (g) any securities issuable upon the exercise or conversion of, or pursuant
     to the anti-dilution  provisions  contained within, any agreement,  option,
     restricted  stock awards,  preferred stock,  promissory  note,  convertible
     promissory note or warrants  outstanding on the date hereof (but not to the
     extent  amended  hereafter),  (h) any Ordinary  Shares  issuable  under the
     Transaction Documents (including those issued pursuant to the anti-dilution
     provisions  contained  therein),  (i) Ordinary  Shares issued to vendors in
     exchange  for  services  rendered  to the  Company,  and  (j)  issuance  of
     securities  in  connection  with  underwritten   public  offerings  of  the
     Company's securities.

     4.12 Delivery of Securities  After Closing.  The Company shall deliver,  or
cause to be  delivered,  the  respective  Shares and Warrants  purchased by each
Purchaser to such Purchaser within three (3) Trading Days of the Closing Date.

     4.13 Non-Public Information.  Subject to Closing, except as may be required
to comply with the terms and conditions of this Agreement, the Company covenants
and agrees that, to its knowledge, neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any  information
that the Company believes  constitutes material non-public  information,  unless
prior thereto such Purchaser shall have executed a written  agreement  regarding
the  confidentiality  and use of such information.  The Company  understands and
confirms  that each  Purchaser  shall be relying on the  foregoing  covenant  in
effecting transactions in securities of the Company.

                                       23
<PAGE>

                                   ARTICLE V.
                                  MISCELLANEOUS

     5.1 Fees and  Expenses.  Each party shall pay the fees and  expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party  incident  to the  negotiation,  preparation,  execution,
delivery and performance of the Transaction  Documents,  except that the Company
shall pay,  against  invoice,  up to an  aggregate  of $20,000  for the fees and
expenses  of  TRP  actually   incurred  in  connection  with  the   transactions
contemplated  hereby. The Company shall pay all stamp and other taxes and duties
lawfully imposed on the sale of the Securities.

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

     5.3  Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
with  confirmation of receipt at the facsimile number set forth on the signature
pages attached  hereto prior to 5:00 p.m. (New York City time) on a Trading Day,
(b) two  Trading  Days  after  the  date of  transmission,  if  such  notice  or
communication  is delivered via facsimile  with  confirmation  of receipt at the
facsimile  number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:00 p.m. (New York City time) on any Trading
Day, (c) the second Trading Day following the date of mailing (fifth Trading Day
if sent  internationally),  if sent by a nationally recognized overnight courier
service in the United  States,  or (d) upon actual  receipt by the party to whom
such  notice  is  required  to be  given.  The  address  for  such  notices  and
communications  shall be as set forth on the signature  pages attached hereto or
at such other  address  as such  party may  designate  by seven  calendar  days'
advance written notice to the other party.

     5.4  Amendments;  Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument  signed, in the case of an amendment,  by
the Company and the Majority  Purchasers.  No waiver of any default with respect
to any provision,  condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent  default or a
waiver of any other provision,  condition or requirement  hereof,  nor shall any
delay or omission of either party to exercise any right  hereunder in any manner
impair the exercise of any such right.

     5.5  Construction.  The headings  herein are for  convenience  only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict construction will be applied against any party.

     5.6 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their successors and permitted assigns.
The Company may not

                                       24
<PAGE>

assign this Agreement or any rights or obligations  hereunder  without the prior
written  consent of each  Purchaser.  Any Purchaser may assign any or all of its
rights under this  Agreement,  subject to the applicable  securities law, to any
Person to whom such Purchaser assigns or transfers any Securities, provided such
transferee  agrees in  writing  to be bound,  with  respect  to the  transferred
Securities, by the provisions hereof that apply to the "Purchasers."

     5.7 No  Third-Party  Beneficiaries.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.6.

     5.8 Governing  Law. All questions  concerning the  construction,  validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal  courts  sitting in the City of New York,  borough of Manhattan  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed herein (including with respect to
the enforcement of any of the  Transaction  Documents),  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit,  action or  proceeding  is  improper or  inconvenient  venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof via  registered or certified  mail or overnight  delivery
(with  evidence of  delivery) to such party at the address in effect for notices
to it under this  Agreement and agrees that such service shall  constitute  good
and sufficient  service of process and notice thereof.  Nothing contained herein
shall be  deemed to limit in any way any right to serve  process  in any  manner
permitted  by law. The parties  hereby  waive all rights to a trial by jury.  If
either party shall commence an action or proceeding to enforce any provisions of
this Agreement,  then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys fees and expenses and
other  costs and  expenses  incurred  with the  investigation,  preparation  and
prosecution of such action or proceeding.

     5.9 Survival.  The  representations and warranties herein shall survive the
Closing and  delivery of the Shares and Warrant  Shares until the earlier of (i)
the tenth anniversary of the Closing Date and (ii) the date on which each of the
Purchasers no longer holds any of the Shares or the Warrant Shares, if any.

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

     5.11 Severability. If any provision of this Agreement is held to be invalid
or  unenforceable  in  any  respect,  the  validity  and  enforceability  of the
remaining  terms  and  provisions

                                       25
<PAGE>

of this Agreement  shall not in any way be affected or impaired  thereby and the
parties will attempt to agree upon a valid and  enforceable  provision that is a
reasonable  substitute  therefor,  and upon so agreeing,  shall incorporate such
substitute provision in this Agreement.

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

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

     5.14 Payment Set Aside.  To the extent that the Company  makes a payment or
payments to any Purchaser  pursuant to any  Transaction  Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     5.15  Independent  Nature  of  Purchasers'   Obligations  and  Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions contemplated by the Transaction Document. Except
as otherwise set forth herein, each Purchaser shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of this Agreement or out of the other  Transaction  Documents,  and it shall
not be necessary for any other Purchaser to be joined as an additional  party in
any proceeding for such purpose.

     5.16  Liquidated  Damages.  The  Company's  obligations  to pay any partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts

                                       26
<PAGE>

have been paid notwithstanding the fact that the instrument or security pursuant
to which such partial  liquidated  damages or other  amounts are due and payable
shall have been canceled.

     5.17 Further  Assurances.  From and after the date of this Agreement,  upon
the  request  of any  Purchaser  or the  Company,  each of the  Company  and the
Purchasers  shall  execute  and deliver  such  instrument,  documents  and other
writings as may be  reasonably  necessary  or desirable to confirm and carry out
and to  effectuate  fully  the  intent  and  purposes  of  this  Agreement,  the
Securities and the Registration Rights Agreement.

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

                            (Signature Pages Follow)

                                       27

<PAGE>

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

 ATTUNITY LTD.

 By:   /s/Aki Ratner  /s/Ofer Segev
    -------------------------------
    Name: Aki Ratner     Ofer Segev
    Title:   CEO           CFO

Address for Notice:
-------------------

Attunity Ltd.
Einstein Building
Tirat Hacarmel, Israel
Attention: CEO
Facsimile: [(972 4) 857-6745]

With a copy to (which shall not constitute notice):

       Attunity Inc.
       40 Audubon Road
       Wakefield, Massachusetts 01880
       Attention: CFO
       Facsimile: [(781) 213-5240]

       Goldfarb, Levy, Eran & Co.
       Europe-Israel Tower
       2 Weizmann Street
       Tel Aviv 64239, Israel
       Attention: Oded Eran, Adv.
       Facsimile: 03-608-9908

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]

                                       28
<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

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

Name of Investing Entity: WPG Select Technology QP

Signature of Authorized Signatory of
  Investing entity:                     /s/George Boyd  /s/Benjamin James Taylor
                                        ----------------------------------------

Name of Authorized Signatory: George Boyd/Ben Taylor
                              ----------------------
Title of Authorized Signatory: Head of Equity/Managing Director
                               --------------------------------
Address for Notice of Investing Entity:

909 Third Avenue
New York, NY 10022
Tel: 212-908-9500
Fax: 212-908-0130
Attention: Mr. Adam Rothstein

Address for Delivery of Securities for Investing Entity (if not same as above):

Subscription Amount: US$705,476.75

Shares: 256,537

Warrant Shares: 102,615

EIN Number:  33-1056610
             ----------

                           [SIGNATURE PAGES CONTINUE]

                                       29
<PAGE>

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

Name of Investing Entity: WPG Select Technology Overseas

Signature of Authorized Signatory of
  Investing entity:                     /s/George Boyd  /s/Benjamin James Taylor
                                        ----------------------------------------

Name of Authorized Signatory: George Boyd/Ben Taylor
                              ----------------------
Title of Authorized Signatory: Head of Equity/Managing Director
                               --------------------------------
Address for Notice of Investing Entity:

909 Third Avenue
New York, NY 10022
Tel: 212-908-9500
Fax: 212-908-0130
Attention: Mr. Adam Rothstein

Address for Delivery of Securities for Investing Entity (if not same as above):

Subscription Amount: US$417,051.25

Shares: 151,655

Warrant Shares: 60,662

EIN Number: 20-0201795
            ----------

                           [SIGNATURE PAGES CONTINUE]

                                       30
<PAGE>

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

Signature of Authorized Signatory of
  Investing entity:                     /s/George Boyd  /s/Benjamin James Taylor
                                        ----------------------------------------

Name of Authorized Signatory: George Boyd/Ben Taylor
                              ----------------------
Title of Authorized Signatory: Head of Equity/Managing Director
                               --------------------------------
Address for Notice of Investing Entity:

909 Third Avenue
New York, NY 10022
Tel: 212-908-9500
Fax: 212-908-0130
Attention: Mr. Adam Rothstein

Address for Delivery of Securities for Investing Entity (if not same as above):

Subscription Amount: US$736,692

Shares: 267,888

Warrant Shares: 107,155

EIN Number:  13-3963628
             ----------

                           [SIGNATURE PAGES CONTINUE]

                                       31
<PAGE>

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

Name of Investing Entity: WPG Select Technology Fund LP

Signature of Authorized Signatory of
  Investing entity:                     /s/George Boyd  /s/Benjamin James Taylor
                                        ----------------------------------------

Name of Authorized Signatory: George Boyd/Ben Taylor
                              ----------------------
Title of Authorized Signatory: Head of Equity/Managing Director
                               --------------------------------
Address for Notice of Investing Entity:

909 Third Avenue
New York, NY 10022
Tel: 212-908-9500
Fax: 212-908-0130
Attention: Mr. Adam Rothstein

Address for Delivery of Securities for Investing Entity (if not same as above):

Subscription Amount: US$140,780.75

Shares: 51,193

Warrant Shares: 20,477

EIN Number: 30-0098141
            ----------

                                       32

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