Document:

v071123_ex10-1

    SCHEDULE
      3.1(s)

     

    FEES

     

    In
      consideration for the services rendered and/or to be rendered by BC and/or
      SKB,
      upon the initial closing and each subsequent closing of the sale of Debentures,
      SKB shall receive the following:

     

    1. The
      right
      to receive shares of Common Stock equal to 12% of the number of shares into
      which the Debentures sold at such closing are then convertible at the conversion
      price thereof (which shall include the same right to registration/price
      protection/full ratchet anti-dilution, and other protective terms as are
      provided the Debentures) at a purchase price of 1/10th
      of one
      cent per share of Common Stock, which shall be issued to BC (or its designee)
      at
      such closing, and which right to purchase shall be exercisable for a period
      of
      two years from the initial closing.

     

    2. Upon
      the
      exercise of any warrants issued in connection with the Debentures, 5% of the
      warrant exercise price of al warrants exercised, in cash. All BC shares shall
      have piggy-back registration rights in all subsequent registrations of the
      Company until registration for resale shall no longer be required. All cash
      payments hereunder shall be made at Closing by wire transfer to BC (or its
      designee) within 15 days of the date upon which such amount becomes
      due.

     

    To
      illustrate, each $4,000,000 of Debentures sold, BC, or its designee shall have
      the right to:

     

    (a) purchase
      27,428,571 shares of the Company’s Common Stock ($4,000,000/$0.0175) amultiplied
      by 0.12 - at an aggregate cost of $27,429 ($0.001 per share); and

     

    (b) receive
      a
      cash fee, upon exercise of all of the warrants issued in connection with the
      sale of $4,000,000 Debentures, $142,857.

     

    2.
      Upon
      the initial closing, SKB and RS shall each receive the folowing:

     

    (a) economy
      class round trip plane tickets for SKB and RS to fly to and from New York,
      USA
      and Abuja, Nigeria; and 

     

    (b)
       prepaid
      4-day hotel accommodations at the Hilton Hotel in Abuja, NigeriaExhibit
      4.(b)4

    

    Registration
      RightsAgreement, 

    dated
      March 22, 2007,

    by
      and
      among 

    ECI
      Telecom Ltd. 

    and
      

    M.A.G.M.
      Chemistry Holdings Ltd.

    and
      

    Clal
      Electronic Industries Ltd.

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    THIS
      REGISTRATION RIGHTS AGREEMENT (this "Agreement") made this of March 2007, by
      and
      among ECI Telecom Ltd., an Israeli company listed on the NASDAQ Stock Market
      (the "Company"), and the shareholders set forth in Schedule I hereto
      (collectively, the Shareholders”).

     

    
      WITNESSETH:

       

    

    WHEREAS,
      the Shareholders are “controlling shareholders” of the Company as defined in
      Section 268 of the Israeli Companies Law, 5759-1999 (the “Companies
      Law”);

     

    WHEREAS,
      each of the Shareholders currently holds registration rights with respect to
      a
      portion of the Ordinary Shares held by it pursuant separate registration rights
      agreements;

     

    WHEREAS,
      under the Companies Law, the registration by the Company of Ordinary Shares
      held
      by any Shareholder, except as contemplated by its existing registration rights,
      requires the approval of the Company’s shareholders by special majority;
      and

     

    WHEREAS,
      in order to enable both the Company and the Shareholders to respond rapidly
      to
      opportunities that may arise, the Company desires to grant at this time to
      the
      Shareholders, and the Shareholders desire to obtain, the rights set forth below,
      subject to the approval of the Company’s shareholders.

     

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

     

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

     

    “Effective
      Date”
means
      the date on which this Agreement shall be approved by the Company’s shareholders
      in accordance with Section 275 of the Companies Law.

     

    “Demanding
      Holder”
means
      a
      holder of Ordinary Shares (other than a Holder) whose exercise of a demand
      registration right is the cause of the relevant registration.

     

    "Holder"
      means
      any holder of outstanding Registrable Shares.

     

    "Initiating
      Holders"
      means
      Holders holding at least twenty-five (25%) of the Registrable Shares then
      outstanding.

     

    “Ordinary
      Shares”
means
      Ordinary Shares, nominal value NIS 0.12 per share, of the Company.

     

    "Register",
      "registered"
      and
      "registration"
      refer
      to a registration effected by filing a registration statement in compliance
      with
      the Securities Act, or the equivalent actions under the laws of another
      jurisdiction.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    "Registrable
      Shares"
      means
      (i) all Ordinary Shares held by any Shareholder on the date hereof and set
      forth on Schedule I
      hereto
      and (ii) any Ordinary Shares issued as (or issuable upon the conversion or
      exercise of any warrant, right or other security which is issued as) a dividend
      or other distribution with respect to, or in exchange for or in replacement
      of,
      the Ordinary Shares described in clause (i) above; excluding in all cases,
      however, any Registrable Shares (A) transferred to a third party and as to
      which registration rights under this Agreement are not assigned in accordance
      with this Agreement or (B) sold to or through a broker or dealer or
      underwriter in a public distribution or a public securities
      transaction.

     

    “SEC”
means
      the U.S. Securities and Exchange Commission.

     

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

     

    2. Incidental
      Registration.

     

    2.1 If
      (but
      without any obligation to do so) the Company at any time proposes to register
      any of its securities (other than (i) in a demand registration under
      Section 3 of this Agreement, (ii) a registration relating solely to
      the sale of securities to participants in a Company benefit plan, (iii) a
      registration relating to a corporate reorganization or other transaction
      described under Rule 145 of the Act, or (iv) a registration on any
      form that does not include substantially the same information as would be
      required to be included in a registration statement covering the sale of the
      Registrable Shares), it shall give notice to the Holders of such intention.
      Upon
      the written request of any Holder given within fourteen (14) days after receipt
      of any such notice, the Company shall include in such registration all of the
      Registrable Shares indicated in such request, so as to permit the disposition
      of
      the shares so registered. 

     

    2.2 In
      connection with any offering involving an underwriting of shares of the
      Company’s share capital, the Company shall not be required under this
      Section 2 to include any of the Holders’ securities in such underwriting
      unless they accept the terms of the underwriting as agreed upon between the
      Company and the underwriters selected by it (or by other persons entitled to
      select the underwriters) and enter into an underwriting agreement in customary
      form with an underwriter or underwriters selected by the Company and such other
      agreements as the underwriter(s) may reasonably request. Notwithstanding any
      other provision of this Section 2, if the managing underwriter advises the
      Company in writing that marketing factors require a limitation of the number
      of
      shares to be underwritten, then there shall be excluded from such registration
      and underwriting to the extent necessary to satisfy such limitation,
first,
      shares
      held by shareholders other than (i) the Demanding Holders, if any, and (ii)
      shareholders with incidental registration rights (on a pro rata basis to their
      respective holdings); second,
      to the
      extent necessary, shares held by shareholders with incidental registration
      rights (including the Holders) (on a pro rata basis to their respective
      holdings); third,
      shares
      offered by the Company; and lastly,
      shares
      registered by the Demanding Holders, if any (on a pro rata basis).

     

    2.3
       The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 2 prior to the effectiveness of such registration
      whether or not any Holder has elected to include securities in such
      registration. The expenses of such withdrawn registration shall be borne by
      the
      Company in accordance with Section 5 hereof. 

     

    
      
         

      

      
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        3.
          Demand
          Registration.

      

    

     

    3.1 At
      any
      time following the Effective Date, the Initiating Holders may request in writing
      that all or part of the Registrable Shares shall be registered under the
      Securities Act. Any such demand must request the registration of shares with
      an
      anticipated aggregate offering price of at least twenty million United States
      dollars ($20,000,000). Within ten (10) days after receipt of any such request,
      the Company shall give written notice of such request to any other Holders,
      if
      any, and shall include in such registration all Registrable Shares held by
      all
      such Holders who wish to participate in such demand registration and provide
      the
      Company with written requests for inclusion therein within fourteen (14) days
      after the receipt of the Company's notice. As promptly as practicable
      thereafter, subject to section 7.1 hereof, the Company shall effect the
      registration of all Registrable Shares as to which it has received requests
      for
      registration under the Securities Act in the request for registration;
provided,
      however, that the Company shall not be required to effect any registration
      under
      this Section 3 within a period of ninety (90) days following the effective
      date of a previous registration. 

     

    3.2 If
      the
      Initiating Holders intend to distribute the Registrable Shares covered by their
      request by means of an underwriting, they shall so advise the Company as part
      of
      their request made pursuant to Section 3.1 above and the Company shall
      include such information in the written notice referred to in Section 3.1.
      In such event the right of any Holder to include its Registrable Shares in
      such
      registration shall be conditioned upon such Holder’s participation in such
      underwriting and the inclusion of such Holder’s Registrable Shares in the
      underwriting (unless otherwise mutually agreed by a majority in interest of
      the
      Initiating Holders and such Holder) and such other agreements as such
      underwriter(s) shall reasonably request. All Holders proposing to distribute
      their securities through such underwriting shall enter into an underwriting
      agreement in customary form with the underwriter. Notwithstanding any other
      provision of this Section 3, if the managing underwriter advises the Company
      that marketing factors require a limitation of the number of shares to be
      underwritten, then the Company shall so advise all Holders of Registrable Shares
      that would otherwise be underwritten pursuant hereto, and there shall be
      excluded from such registration and underwriting, to the extent necessary to
      satisfy such limitation, first
      shares
      held by shareholders other than the Holders (on a pro rata basis to their
      respective holdings), then,
      to the
      extent necessary, shares which the Company may wish to register for its own
      account, and
      thereafter,
      to the
      extent necessary, Registrable Shares held by the Holders (pro rata to the
      respective number of Registrable Shares held by the Holders participating in
      the
      registration). Any Registrable Shares excluded or withdrawn from such
      underwriting shall be withdrawn from the registration. 

     

    3.3 The
      Company shall not be required to effect a registration pursuant to this
      Section 3:

     

    (a) in
      any
      particular jurisdiction in which the Company would be required to execute a
      general consent to service of process in effecting such registration, unless
      the
      Company is already subject to service in such jurisdiction; or

     

    (b) during
      the period starting with the date sixty (60) days prior to the Company’s good
      faith estimate of the date of the filing of a Company-initiated registration
      statement subject to Section 2 above and ending on the date ninety (90)
      days after the effective date of such registration statement, provided that
      the
      Company is actively employing in good faith all reasonable efforts to cause
      such
      registration statement to become effective; or

     

    
      
         

      

      
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    (c) if
      the
      Company shall furnish to Holders requesting a registration statement pursuant
      to
      this Section 3, a certificate signed by the Company’s Chief Executive
      Officer or Chairman of the Board stating that in the good faith judgment of
      the
      Board of Directors of the Company, it would be detrimental to the Company and
      its shareholders for such registration statement to be effected at such time,
      in
      which event the Company shall have the right to defer such filing for a period
      of not more than ninety (90) days after receipt of the request of the Initiating
      Holders; provided, however, that the Company may only defer the filing of a
      registration statement pursuant to this Section 3.3(c) only once during any
      twelve-month period.

     

    3.4 Notwithstanding
      anything to the contrary herein, the Company shall not be required to effect
      more than four (4) registrations pursuant to this Section 3, including a request
      that is subsequently withdrawn at the request of the Initiating Holders unless
      such withdrawal is based upon a material adverse change in the condition of
      the
      Company which was not known to the Initiating Holders at the time of their
      request or based on a material deterioration in prevailing stock market
      conditions; provided, however, that a registration shall not count as one of
      the
      four (4) permitted registrations pursuant to this Section 3 (i) if the
      Initiating Holders requesting such registration are not able to register and
      sell at least 50% of the Registrable Shares requested by such Initiating Holders
      to be included in such registration or (ii) in the case of a registration that
      would be the last permitted registration requested pursuant to this
      Section 3, if the Initiating Holders requesting such registration is not
      able to register all of the Registrable Shares requested to be included by
      such
      Initiating Holders in such registration. 

     

    4. Designation
      of Underwriter.
      If any
      of the Registrable Shares covered by a registration requested pursuant to
      Section 3 is to be sold in an underwritten offering, the Initiating Holders
      shall have the right to select the managing underwriter(s) to administer the
      offering subject to the approval of the Company, which will not be unreasonably
      withheld. In the case of any registration of the Company’s shares pursuant to
      Section 2, the Company shall have the right to designate the managing
      underwriter(s) in any underwritten offering.

     

    5. Expenses.
      All
      expenses incurred in connection with any registration under Section 2 shall
      be
      borne by the Company, excluding
      underwriter’s discounts or commissions attributable to the sale of Registrable
      Shares and excluding expenses of the selling Holders. All expenses incurred
      in
      connection with any registration under Section 3 in which the Company does
      not
      register any primary shares shall be borne by the selling Holders (pro rata
      based on the number of Registrable Shares being registered). With respect to
      registrations under Section 3 in which the Company registers any primary shares:
      (i) with respect to the first two demand registrations thereunder, all expenses
      incurred shall be borne by the Company, excluding
      underwriter’s discounts or commissions attributable to the sale of Registrable
      Shares and excluding expenses of the selling Holders; and (ii) with respect
      to
      the third and fourth demand registrations thereunder, all expenses incurred
      by
      the Company shall be shared by the Company and the selling Holders (pro rata
      based on the number of shares being registered) and all expenses of the selling
      Holders shall be borne by the selling Holders (pro rata based on the number
      of
      Registrable Shares being registered). Notwithstanding the foregoing, the Company
      shall be reimbursed by the selling Holders (pro rata based on the number of
      Registrable Shares being registered) for any fees and expenses incurred by
      the
      Company in connection with a registration process that commenced pursuant to
      Section 3 if the request to effect the registration is subsequently withdrawn
      at
      the request of the Holders that requested the registration. 

     

    
      
         

      

      
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    6. Indemnities.
      In the
      event of any registered offering of Registrable Shares pursuant to this
      Agreement:

     

    6.1 The
      Company will indemnify and hold harmless, to the fullest extent permitted by
      law, any Holder, its officers and directors, and any underwriter for such
      Holder, and each person, if any, who controls the Holder or such underwriter,
      from and against any and all losses, damages, claims, liabilities, joint or
      several, and reasonable costs and expenses (including any amounts paid in any
      settlement effected with the Company's consent and including, for the avoidance
      of doubt, any amounts relating to Ordinary Shares sold that are not Registrable
      Shares) to which the Holder, its officers or directors, or any such controlling
      person and/or any such underwriter may become subject under applicable law
      or
      otherwise, insofar as such losses, damages, claims, liabilities (or actions
      or
      proceedings in respect thereof), costs or expenses arise out of or are based
      upon (i) any untrue statement or alleged untrue statement of any material fact
      contained in the registration statement or included in the prospectus, as
      amended or supplemented, or (ii) the omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein, in the light of the circumstances in which they are made,
      not misleading; provided,
      however,
      that
      the Company will not be liable in any such case to the extent that any such
      loss, damage, liability, cost or expense arises out of or is based upon an
      untrue statement or alleged untrue statement or omission or alleged omission
      so
      made in conformity with information furnished in writing by a Holder, such
      underwriter or such controlling persons in writing specifically for inclusion
      therein; provided,
      further,
      that
      this indemnity shall not be deemed to relieve any underwriter of any of its
      due
      diligence obligations; provided,
      further,
      that
      the indemnity agreement contained in this subsection 6.1 shall not apply to
      amounts paid in settlement of any such claim, loss, damage, liability or action
      if such settlement is effected without the consent of the Company. 

     

    6.2 Each
      Holder participating in a registration hereunder will indemnify and hold
      harmless the Company, its officers and directors, any underwriter for the
      Company, and each person, if any, who controls the Company or such underwriter,
      from and against any and all losses, damages, claims, liabilities, and
      reasonable costs or expenses (including any amounts paid in any settlement
      effected with the Holder's consent) to which the Company, its officers or
      directors, or any such controlling person and/or any such underwriter may become
      subject under applicable law or otherwise, insofar as such losses, damages,
      claims, liabilities (or actions or proceedings in respect thereof), costs or
      expenses arise out of or are based on (i) any untrue or alleged untrue
      statement of any material fact contained in the registration statement or
      included in the prospectus, as amended or supplemented, or (ii) the
      omission or the alleged omission to state therein a material fact required
      to be
      stated therein or necessary to make the statements therein, in the light of
      the
      circumstances in which they were made, not misleading; in each case to the
      extent, but only to the extent, that such untrue statement or alleged untrue
      statement or omission or alleged omission was based on information furnished
      in
      writing by such Holder specifically for inclusion therein. The foregoing
      indemnity agreement is subject to the condition that, insofar as it relates
      to
      any such untrue statement (or alleged untrue statement) or omission (or alleged
      omission) made in the preliminary prospectus but eliminated or remedied in
      the
      amended prospectus at the time the registration statement becomes effective
      or
      in the final prospectus, such indemnity agreement shall not inure to the benefit
      of (i) the Company and (ii) any underwriter, if a copy of the final
      prospectus was not furnished to the person or entity asserting the loss,
      liability, claim or damage at or prior to the time such furnishing is required
      by the Securities Act; provided,
      further,
      that
      this indemnity shall not be deemed to relieve any underwriter of any of its
      due
      diligence obligations; provided,
      further,
      that
      the indemnity agreement contained in this subsection 6.2 shall not apply to
      amounts paid in settlement of any such claim, loss, damage, liability or action
      if such settlement is effected without the consent of a majority in interest
      of
      the Holders, as the case may be, which consent shall not be unreasonably
      withheld. In no event shall the liability of a Holder exceed the net proceeds
      from the offering received by such Holder.

     

    
      
         

      

      
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    6.3 Promptly
      after receipt by an indemnified party pursuant to the provisions of Sections
      6.1
      or 6.2 of notice of the commencement of any action involving the subject matter
      of the foregoing indemnity provisions, such indemnified party will, if a claim
      thereof is to be made against the indemnifying party pursuant to the provisions
      of said Section 6.1 or 6.2, promptly notify the indemnifying party of the
      commencement thereof. The failure to deliver written notice to the indemnifying
      party within a reasonable time of the commencement of any such action, if
      prejudicial to its ability to defend such action, shall relieve such
      indemnifying party of any liability to the indemnified party under this
      Section 6. In case such action is brought against any indemnified party and
      it notifies the indemnifying party of the commencement thereof, the indemnifying
      party shall have the right to participate in, and, to the extent that it may
      wish, jointly with any other indemnifying party similarly notified, to assume
      the defense thereof with counsel reasonably satisfactory to such indemnified
      party; provided,
      however,
      that if
      the defendants in any action include both the indemnified party and the
      indemnifying party and there is a conflict of interests which would prevent
      counsel for the indemnifying party from also representing the indemnified party,
      the indemnified party or parties shall have the right to select one separate
      counsel to participate in the defense of such action on behalf of such
      indemnified party or parties. After notice from the indemnifying party to such
      indemnified party of its election so to assume the defense thereof, the
      indemnifying party will not be liable to such indemnified party pursuant to
      the
      provisions of said Sections 6.1 or 6.2 for any legal or other expense
      subsequently incurred by such indemnified party in connection with the defense
      thereof, unless (i) the indemnified party shall have employed counsel in
      accordance with the proviso of the preceding sentence or (ii) the indemnifying
      party has authorized the employment of counsel for the indemnified party at
      the
      expense of the indemnifying party. No indemnifying party will consent to entry
      of any judgment or enter into any settlement which does not include as an
      unconditional term thereof the giving by the claimant or plaintiff to such
      indemnified party of a release from all liability in respect to such claim
      or
      litigation.

     

    6.4 If
      recovery is not available under the foregoing indemnification provisions, for
      any reason other than as specified therein, the parties entitled to
      indemnification by the terms thereof shall be entitled to contribution to
      liabilities and expenses as more fully set forth in an underwriting agreement
      to
      be executed in connection with such registration. In determining the amount
      of
      contribution to which the respective parties are entitled, there shall be
      considered the parties' relative knowledge and access to information concerning
      the matter with respect to which the claim was asserted, the opportunity to
      correct and prevent any statement or omission, and any other equitable
      considerations appropriate under the circumstances.

     

    6.5 Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      contribution contained in the underwriting agreement entered into in connection
      with the underwritten public offering are in conflict with the foregoing
      provisions, the provisions in the underwriting agreement shall control.

     

    
      
         

      

      
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    7. Obligations
      of the Company.
      Whenever required under this Agreement to effect the registration of any
      Registrable Shares, the Company shall, as promptly as reasonably possible:
      

     

    7.1 prepare
      and file with the SEC a registration statement with respect to such Registrable
      Shares and use its reasonable best efforts to cause such registration statement
      to become effective as soon as practicable thereafter; and before filing a
      Registration Statement or Prospectus or any amendments or supplements thereto,
      furnish to the Holders of Registrable Shares covered by such Registration
      Statement and the underwriter or underwriters, if any, copies of all such
      documents proposed to be filed, including documents incorporated by reference
      in
      the Prospectus and, if requested by such Holders, the exhibits incorporated
      by
      reference, and such Holders shall have the opportunity to object to any
      information pertaining to such Holders that is contained therein and the Company
      will make the corrections reasonably requested by such Holders with respect
      to
      such information prior to filing any Registration Statement or amendment thereto
      or any Prospectus or any supplement thereto;

     

    7.2 prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection with such registration statement
      as may be necessary to keep such registration statement effective for a period
      of not less than 180 days or such shorter period as is necessary to complete
      the
      distribution of the securities covered by such Registration Statement and comply
      with the provisions of the Securities Act with respect to the disposition of
      all
      securities covered by such registration statement during such period in
      accordance with the intended methods of disposition by the sellers thereof
      set
      forth in such registration statement;

     

    7.3 furnish
      to the Holders such numbers of copies of a prospectus, including a preliminary
      prospectus, in conformity with the requirements of the Securities Act, and
      such
      other documents as they may reasonably request in order to facilitate the
      disposition of Registrable Shares owned by them;

     

    7.4 use
      its
      reasonable best efforts to register or qualify such Registrable Shares under
      such other securities or blue sky laws of such jurisdictions as any seller
      reasonably requests and do any and all other acts and things which may be
      reasonably necessary or advisable to enable such seller to consummate the
      disposition in such jurisdictions of the Registrable Shares owned by such seller
      (provided, that the Company will not be required to (i) qualify generally
      to do business in any jurisdiction where it would not otherwise be required
      to
      qualify but for this Section 7.4, (ii) subject itself to taxation in any
      such jurisdiction or (iii) consent to general service of process in any
      such jurisdiction);

     

    7.5 in
      the
      event of any underwritten public offering, enter into an underwriting agreement
      with the managing underwriter(s) of such offering, in usual and customary form,
      provided that each Holder participating in such underwriting shall also enter
      into such an agreement, and take all such other actions as the Holders of a
      majority of number of shares of the Registrable Shares being sold or the
      underwriters, if any, reasonably request in order to expedite or facilitate
      the
      disposition of such Registrable Shares (including, without limitation, making
      members of senior management of the Company available to participate in, and
      cause them to cooperate with the underwriters in connection with, "road-show"
      and other customary marketing activities (including one-on-one meetings with
      prospective purchasers of the Registrable Shares) and cause to be delivered
      to
      the underwriters and the sellers, if any, opinions of counsel to the Company
      in
      customary form, covering such matters as are customarily covered by opinions
      for
      an underwritten public offering as the underwriters may request and addressed
      to
      the underwriters and the sellers;

     

    
      
         

      

      
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    7.6 notify
      each holder of Registrable Shares covered by such registration statement at
      any
      time when a prospectus relating thereto is required to be delivered under the
      Act of the happening of any event as a result of which the prospectus included
      in such registration statement, as then in effect, includes an untrue statement
      of a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in the light
      of the circumstances then existing, upon which notice and until the prospectus
      is amended or supplemented, the Holder shall not be entitled to offer or sell
      any shares pursuant to such prospectus;

     

    7.7 make
      available, for inspection by any seller of Registrable Shares, any underwriter
      participating in any disposition pursuant to such registration statement, and
      any attorney, accountant or other agent retained by any such seller or
      underwriter, all financial and other records, pertinent corporate documents
      and
      other information of the Company reasonably requested by any such seller,
      underwriter, attorney, accountant or agent in connection with such registration
      statement;

     

    7.8 cause
      all
      such Registrable Shares to be listed on each securities exchange on which
      similar securities issued by the Company are then listed; 

     

    7.9 provide
      a
      transfer agent and registrar for all such Registrable Shares and a CUSIP number
      for all such Registrable Shares, in each case not later than the effective
      date
      of such registration;

     

    7.10 if
      requested, cause to be delivered, immediately prior to the effectiveness of
      the
      registration statement (and, in the case of an underwritten offering, at the
      time of delivery of any Registrable Shares sold pursuant thereto), letters
      from
      the Company's independent certified public accountants addressed to each selling
      Holder (unless such selling Holder does not provide to such accountants the
      appropriate representation letter required by rules governing the accounting
      profession) and each underwriter, if any, stating that such accountants are
      independent public accountants within the meaning of the Securities Act and
      the
      applicable rules and regulations adopted by the SEC thereunder, and otherwise
      in
      customary form and covering such financial and accounting matters as are
      customarily covered by letters of the independent certified public accountants
      delivered in connection with primary or secondary underwritten public offerings,
      as the case may be; and

     

    7.11 promptly
      notify each seller of Registrable Shares and the underwriter or underwriters,
      if
      any:

     

    (a) when
      the
      registration statement, any pre-effective amendment, the prospectus or any
      prospectus supplement or post-effective amendment to the registration statement
      has been filed and, with respect to the registration statement or any
      post-effective amendment, when the same has become effective; 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (b) of
      any
      comments of the SEC or of any written request by the SEC for amendments or
      supplements to the registration statement or prospectus; 

     

    (c) of
      the
      notification to the Company by the SEC of its initiation of any proceeding
      with
      respect to the issuance by the SEC of any stop order suspending the
      effectiveness of the registration statement; and

     

    (d) of
      the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification of any Registrable Shares for sale under the applicable securities
      or blue sky laws of any jurisdiction.

     

    8. Information
      from Holder.
      It
      shall be a condition precedent to the obligations of the Company to take any
      action pursuant to this Agreement with respect to the Registrable Shares of
      any
      selling Holder that such Holder shall furnish to the Company such information
      regarding itself, the Registrable Shares held by it, and the intended method
      of
      disposition of such securities as shall be required to effect the registration
      of such Holder’s Registrable Shares.

     

     

    9. Assignment
      of Registration Rights.
      Any
      Holder may assign its rights to cause the Company to register Registrable Shares
      pursuant to this Agreement only to (a) a transferee (or group of affiliated
      transferees) that, after such assignment or transfer, holds at least 3,000,000
      Registrable Shares (subject to appropriate adjustment for stock splits, stock
      dividends, combinations and other recapitalizations), or (b) any party who
      acquires ownership or control of such Holder through a merger, consolidation,
      sale of all or substantial assets or similar business combination; provided
      that (i)
      no such rights may be assigned until the Company is given written notice by
      the
      transferor at the time of such assignment stating the name and address of such
      transferee, and the securities with respect to which such registration rights
      are being assigned, and that any such transferee shall receive such assigned
      rights subject to all the terms and conditions of this Agreement, including
      without limitation, the provisions of this Section 9 and (ii) the transferee
      shall, as promptly as practicable and within 14 days after such transfer,
      furnish the Company with the transferee's written agreement to be bound by
      this
      Agreement. 

     

    10. Existing
      Registration Rights.
      Any and
      all registration rights currently held by any Shareholder with respect to any
      Ordinary Shares are hereby canceled. 

     

    11. Lock-Up.
      

     

    11.1 In
      the
      event of an underwritten public offering by the Company of any securities of
      the
      Company, and upon the request of the managing underwriter of such offering
      from
      security holders of the Company who hold securities of the Company in the amount
      that is equal or exceed the threshold set by such managing underwriter, and
      who
      include a Holder (or group of affiliated Holders), such Holder hereby agrees
      that it will not sell any of the Registrable Shares for a period commencing
      on
      the date requested by such managing underwriter and ending 90 days after the
      effective date of the offering and undertakes to (and cause any transferee
      to)
      execute a “lock-up” agreement in the form provided by such
      underwriter.

     

    11.2 In
      order
      to enforce the foregoing covenant, the Company may impose stopȭtransfer
      instructions with respect to the Registrable Shares of each Holder (and the
      shares or securities of every other person subject to the foregoing restriction)
      until the end of the applicable period. For the avoidance of doubt, the
      underwriters, if any, in connection with a registration hereunder, are intended
      third party beneficiaries of this Section 11 and shall have the right, power
      and
      authority to enforce the provisions hereof as though they were a party
      hereto.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    12. Public
      Information.
      The
      Company undertakes to comply with the current public information requirements
      of
      Rule 144 and shall furnish thereafter to any Holder, upon request, a
      written statement executed by the Company as to the steps it has taken to so
      comply.

     

    13. Effectiveness
      and Termination of Registration Rights.
      This
      Agreement shall become effective on the Effective Date. Notwithstanding anything
      to the contrary in this Agreement, no Holder shall be entitled to exercise
      any
      right provided for in this Agreement (i) before the Effective Date, (ii)
      after ten (10) years following the date hereof, or (iii) as to any Holder,
      at
      any time at which all Registrable Shares held by such Holder (and any person
      with whom such Holder must aggregate its sales under Rule 144) can be sold
      in any three (3)-month period without registration in compliance with
      Rule 144 of the Act.

     

    14. Miscellaneous

     

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

     

    14.2 Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed according to the laws of the State
      of Israel, without regard to the conflict of laws provisions thereof. Any
      dispute arising under or in relation to this Agreement shall be resolved in
      the
      competent court for Tel Aviv-Jaffa district, and each of the parties hereby
      submits irrevocably to the jurisdiction of such court. 

     

    14.3 Successors
      and Assigns; Assignment.
      Except
      as otherwise expressly limited herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, the successors, assigns, heirs, executors,
      and
      administrators of the parties hereto. None of the rights, privileges, or
      obligations set forth in, arising under, or created by this Agreement may be
      assigned or transferred without the prior consent in writing of each party
      to
      this Agreement, except as set forth in Section 9 hereof.

     

    14.4 Entire
      Agreement; Amendment and Waiver.
      This
      Agreement and the Schedules hereto constitute the full and entire understanding
      and agreement between the parties with regard to the subject matters hereof
      and
      thereof. Any term of this Agreement may be amended and the observance of any
      term hereof may be waived (either prospectively or retroactively and either
      generally or in a particular instance) only with the written consent of the
      Company and the Holders of at least 2/3 of the Registrable Shares.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    14.5 Notices,
      etc.
      Any
      notice or other communication required or permitted to be delivered to any
      party
      under this Agreement shall be in writing and shall be deemed properly
delivered,
      given and received when delivered (by hand, by registered mail, by courier
      or
      express delivery service or by facsimile) to the address or facsimile telephone
      number set forth beneath the name of such party below (or to such other address
      or facsimile telephone number as such party shall have specified in a written
      notice given to the other parties hereto):

     

    
      
        	 	
                if
                  to a Shareholder, to the address set forth under its name on Schedule
                  I
                  hereto; and

              
	 	 	 
	 	
                if
                  to the Company:

              	
                ECI
                  Telecom Ltd.

              
	 	 	
                30
                  Hasivim Street

              
	 	 	
                Petach
                  Tikva 49517, Israel

              
	 	 	
                Fax:
                  972-3-926-6884

              
	 	 	
                Attention:
                  General Counsel

              

      

       

    

    or
      such
      other address with respect to a party as such party shall notify each other
      party in writing as above provided. Any notice sent in accordance with this
      Section 14.5 shall be effective (i) if mailed, five (5) business days after
      mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via
      telecopier, upon transmission and electronic confirmation of receipt or (if
      transmitted and received on a non-business day) on the first business day
      following transmission and electronic confirmation of receipt.

     

    14.6 Delays
      or Omissions.
      No
      delay or omission to exercise any right, power, or remedy accruing to any party
      upon any breach or default under this Agreement, shall be deemed a waiver of
      any
      other breach or default theretofore or thereafter occurring. Any waiver, permit,
      consent, or approval of any kind or character on the part of any party of any
      breach or default under this Agreement, or any waiver on the part of any party
      of any provisions or conditions of this Agreement, must be in writing and shall
      be effective only to the extent specifically set forth in such writing.

     

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

     

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

    
      
        7

         

      

      
        11

        
          

        

      

      
         

      

    

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

     

    
      	 	 	 
	 	ECI
              TELECOM
              LTD.
	 
 	 
 	 
 
	 	By:  	/s/ R.
              Maor
	 	
              

              Name:
                Rafi Maor

              Title:
                President & CEO

            

       

      
        
          	 	 	 
	 	M.A.G.M.
                  CHEMISTRY
                  HOLDINGS LTD.
	 
 	 
 	 
 
	 	By:  	/s/ S.
                  Heller
	 	 	
                  

                  Name: S.
                    Heller 

                  Title:
                    Director

                
	 	 	 
	 	By:	/s/ M.Yageel
	 	
                  

                  Name:
                    M. Yageel

                  Title:
                    Director

                

        

         

      

      
        
          	 	 	 
	 	CLAL
                  ELECTRONICS
                  INDUSTRIES LTD.
	 
 	 
 	 
 
	 	By:  	/s/ G.
                  Rosen
	 	 	
                  

                  Name: G.
                    Rosen

                  Title:
                    VP

                
	 	 	 
	 	By:	/s/ G.
                  Bieber
	 	
                  

                  Name:
                    G. Biebewr

                  Title:
                    VP Finance

                

        
          
             

          

          
            12

            
              

            

          

          
             

          

        

      

    

    Schedule
      I

    

    Shareholders

    

    

    
      	
              Name
                and Address 

            	
              Number
                of Shares

            
	
              M.A.G.M.
                Chemistry Holdings Ltd.

              (a
                wholly owned subsidiary of Koor Industries Ltd.) 

              3
                Azrieli Center, Triangular Tower, 43rd Floor

              67023
                Tel Aviv, Israel

              Fax:
                03 607 5110

              Attention:
                Shlomo Heller

            	
              33,049,433

            
	
              Clal
                Electronics Industries Ltd.

              (a
                wholly owned subsidiary of Clal Industries & Investments
                Ltd.)

              3
                Azrieli Center, Triangular Tower, 45th Floor

              67023
                Tel Aviv, Israel

              Fax:
                03 607 5131

              Attention:
                General Counsel

            	
              15,218,194

            

    

    

    

     

    
      
         

      

      
        13

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