Document:

REGISTRATION
      RIGHTS
      AGREEMENT
      

     

    This
      Registration Rights Agreement (the “Agreement”) is made and entered into as of
      this 9th
      day
      of
      December, 2005
      by
      and
      among SuperCom Ltd., an Israeli corporation (the “Company”), and the “Investors”
named in that certain Purchase Agreement by and among the Company and the
      Investors (the “Purchase Agreement”). 

     

    The
      parties hereby agree as follows: 

     

    
      
        1.
          Certain
          Definitions.
          

      

    

     

    As
      used
      in this Agreement, the following terms shall have the following meanings:

     

    “Affiliate”
means,
      with respect to any person, any other person which directly or indirectly
      controls, is controlled by, or is under common control with, such person.

     

    “Business
      Day”
means
      a
      day, other than a Saturday or Sunday, on which banks in New York City are open
      for the general transaction of business. 

     

    “Investors”
shall
      mean the Investors identified in the Purchase Agreement and any Affiliate or
      permitted transferee of any Investor who is a subsequent holder of any Warrants
      or Registrable Securities. 

     

    “Ordinary
      Shares”
shall
      mean the Company’s Ordinary Shares, par value NIS0.01 per share, and any
      securities into which such Ordinary Shares may hereinafter be reclassified.
      

     

    “Other
      Investors”
shall
      mean the investors listed as “Additional Investors” in Schedule 4.3
      to
      the
      Purchase Agreement. 

     

    “Other
      Shares”
shall
      mean up to 1,125,000
      Ordinary
      Shares issued or issuable to
      the
      Other
      Investors pursuant to the several subscription agreements in the form delivered
      to the Investors pursuant to the Purchase Agreement. 

     

    “Prospectus”
shall
      mean (i) any preliminary or final prospectus included in any Registration
      Statement, as amended or supplemented by any prospectus supplement, with respect
      to the terms of the offering of any portion of the Registrable Securities
      covered by such Registration Statement and by all other amendments and
      supplements to the prospectus, including post-effective amendments and all
      material incorporated by reference in such prospectus, and (ii) any “free
      writing prospectus” as defined in Rule 163
      under
      the
1933
      Act.
      

     

    “Registered,”
      “registered”
and
      “registration”
refer
      to a
      registration
      made by preparing and filing a Registration Statement or similar document in
      compliance with the 1933 Act (as defined below), and the declaration or ordering
      of effectiveness of such Registration Statement or document. 

     

    “Registrable
      Securities”
shall
      mean (i) the Shares, (ii)
      the
      Warrant Shares and (iii) any other securities issued or issuable with respect
      to
      or in exchange for Registrable Securities; provided, that, a
      security
      shall cease to be
      a
      Registrable Security upon (A) sale pursuant to a Registration Statement or
      Rule
144
      under
      the
1933
      Act,
      or
      (B) such security becoming eligible for sale by the Investors pursuant to Rule
      144(k).
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Registration
      Statement”
shall
      mean any registration statement of the Company filed under the 1933 Act that
      covers the resale of any of the Registrable Securities pursuant to the
      provisions of this Agreement, amendments and supplements to such Registration
      Statement, including post-effective amendments, all exhibits and all material
      incorporated by reference in such Registration Statement. 

     

    “Required
      Investors”
means
      the Investors holding a majority of the Registrable Securities. 

     

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

     

    “Shares”
means
      the Ordinary Shares issued pursuant to
      the
      Purchase Agreement. ‘
      

     

    “1933
      Act”
means
      the Securities Act of 1933,
      as
      amended, and the rules and regulations promulgated thereunder. 

     

    “1934
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder. 

     

    “Warrants”
means,
      the warrants to purchase Ordinary Shares issued to the Investors pursuant to
      the
      Purchase Agreement, the form of which is attached to the Purchase Agreement
      as
      Exhibit A. 

     

    “Warrant
      Shares”
means
      the Ordinary Shares issuable upon the exercise of the Warrants. 

     

    
      
        2.
          Registration. 

      

    

     

    (a)
      Registration
      Statements.
      

     

    (i)
       Promptly
      following the closing of the purchase and sale of the securities contemplated
      by
      the Purchase Agreement (the “Closing Date”) but no later than thirty (30) days
      after the Closing Date (the “Filing Deadline”), the
      Company
      shall prepare and file with the SEC one Registration Statement on Form F-1
      (or,
      if Form F-1
      is
      not
      then available to the Company, on such form of registration statement as is
      then
      available to effect a registration for resale of
      the
      Registrable Securities, subject to the Required Investors’ consent), covering
      the resale of the Registrable Securities in an amount at least equal to the
      Shares and the Warrant Shares. Such Registration Statement shall include a
      plan
      of distribution substantially in the form attached hereto as Exhibit
      A
      (subject
      to any comments thereon by the SEC). Such Registration Statement also shall
      cover, to the extent allowable under the 1933 Act and the rules promulgated
      thereunder (including Rule 416), such indeterminate number of additional
      Ordinary Shares resulting from stock splits, stock dividends or similar
      transactions with respect to the Registrable Securities. Such Registration
      Statement shall not include any Ordinary Shares or other securities for the
      account of any other holder, other than the Other Shares, without the prior
      written consent of the Required Investors. The Registration Statement (and
      each
      amendment or supplement thereto, and each request for acceleration of
      effectiveness thereof) shall be provided in accordance with Section 3(c) to
      the
      Investors and their counsel prior to its filing or other submission. If a
      Registration Statement covering the Registrable Securities is not filed with
      the
SEC
      on
      or
      prior to the Filing Deadline, the Company will make pro rata payments to each
      Investor, as liquidated damages and not as a penalty, in an amount equal to
      1.5%
      of the aggregate amount invested by such Investor for each 30-day period or
      pro
      rata for any portion thereof following the Filing Deadline for which no
      Registration Statement is filed with respect to the Registrable Securities.
      Such
      payments shall constitute the Investors’ exclusive monetary remedy for such
      events, but shall not affect the right of the Investors to seek injunctive
      relief. Such payments shall be made to each Investor in cash. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (ii)
       Additional
      Registrable Securities.
      Upon
      the written demand of any Investor and upon any
      change
      in
      the Warrant Price (as defined in the Warrant) such that additional Ordinary
      Shares become issuable upon the exercise of the Warrants, the Company shall
      prepare and file with the SEC one or more Registration Statements on Form F-1
      or
      amend the Registration Statement filed pursuant to clause (i) above, if such
      Registration Statement has not previously been declared effective (or, if Form
      F-1 is not then available to the Company, on such form of registration statement
      as is then available to effect a registration for resale of such additional
      Ordinary Shares (the “Additional Shares”), subject to the Required Investors’
consent) covering the resale of the Additional Shares, but only to the extent
      the Additional Shares are not at the time covered by an effective Registration
      Statement. Such Registration Statement also shall cover, to the extent allowable
      under the 1933 Act and the rules promulgated thereunder (including Rule 416),
      such
      indeterminate
      number of additional Ordinary Shares resulting from stock splits, stock
      dividends or similar transactions with respect to the Additional Shares. Such
      Registration Statement shall not include any Ordinary Shares or other securities
      for
      the
      account of any other holder, other than the Other Shares, without the prior
      written consent of the Required Investors. The Registration Statement (and
      each
      amendment or supplement thereto, and each request for acceleration of
      effectiveness thereof) shall be provided in accordance with Section 3(c) to
      the
      Investors and their counsel prior to its filing or other submission. If a
      Registration Statement covering the Additional Shares is required to be filed
      under this Section 2(a)(ii) and is not filed with the SEC within five Business
      Days of the request of
      any
      Investor or upon the occurrence of any of the events specified in this Section
      2(a)(ii), the Company will make pro rata payments to each Investor, as
      liquidated damages and not as a penalty, in an amount equal to 1.5% of
      the
      aggregate amount invested by such Investor for each 30-day period or pro rata
      for any portion thereof following the date by which such Registration Statement
      should have been filed for which no Registration Statement is filed with respect
      to the Additional Shares. Such payments shall constitute the Investors’
exclusive monetary remedy for such events, but shall not affect the right of
      the
      Investors to seek injunctive relief. Such payments shall be made to each
      Investor in cash. 

     

    (iii)
      F-3 Qualification. Promptly following the date (the “Qualification Date”)
      upon which the Company becomes eligible to use a registration statement on
      Form
      F-3 to register the Registrable Securities or Additional Shares, as applicable,
      for resale, but in no event more than thirty (30) days after the Qualification
      Date (the “Qualification Deadline”), the Company shall file a registration
      statement on Form F-3 covering the Registrable Securities or Additional Shares,
      as applicable (or a post-effective amendment on Form F-3 to the registration
      statement on Form F-1) (a “Shelf Registration Statement”) and shall use
      commercially reasonable efforts to cause such Shelf Registration Statement
      to be
      declared effective as promptly as practicable thereafter. If a Shelf
      Registration Statement covering the Registrable Securities is not filed with
      the
      SEC on or prior to the Qualification Deadline, the Company will make pro rata
      payments to each Investor, as liquidated damages and not as a penalty, in an
      amount equal to 1.5% of the aggregate purchase price paid by such Investor
      pursuant to the Purchase Agreement attributable to those Registrable Securities
      that remain unsold at that time for each 30-day period or pro rata for any
      portion thereof following the date by which such Shelf  Registration
      Statement should have been filed for which no such Shelf Registration Statement
      is filed with respect to the Registrable Securities or Additional Shares, as
      applicable. Such payments shall constitute the Investors' exclusive monetary
      remedy for such events, but shall not affect the right of the Investors to
      seek
      injunctive relief. Such payments shall be made to each Investor in cash.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (b)
      Expenses. The Company will pay all expenses associated with each
      registration, including filing and printing fees, the Company's counsel and
      accounting fees and expenses, costs associated with clearing the Registrable
      Securities for sale under applicable state securities laws, listing fees, fees
      and expenses of one counsel to the Investors and the Investors' reasonable
      expenses in connection with the registration, but excluding discounts,
      commissions, fees of underwriters, selling brokers, dealer managers or similar
      securities industry professionals with respect to the Registrable Securities
      being sold. Anything contained in this Section to the contrary notwithstanding,
      the Company's obligation to pay expenses on behalf of Investors with respect
      to
      the registration of the Registrable Securities under the 1933 Act shall not
      exceed an aggregate of $50,000 for any and all registration statements covering
      the Registrable Securities, whether in one or more registration statements
      covering the Registrable Securities. 

     

    (c)
      Effectiveness. 

     

    (i)
       The Company shall use commercially reasonable efforts to have the
      Registration Statement declared effective as soon as practicable. The Company
      shall notify the Investors by facsimile or e-mail as promptly as practicable,
      and in any event, within twenty-four (24) hours, after any Registration
      Statement is declared effective and shall simultaneously provide the Investors
      with copies of any related Prospectus to be used in connection with the sale
      or
      other disposition of the securities covered thereby. If (A)(x) a Registration
      Statement covering the Registrable Securities is not declared effective by
      the
      SEC prior to the earlier of (i) five (5) Business Days after the SEC shall
      have
      informed the Company that no review of the Registration Statement will be made
      or that the SEC has no further comments on the Registration Statement or (ii)
      the 90th  day after the Closing Date,
      (y) a Registration Statement covering Additional Shares is
      not declared effective by the SEC within ninety (90) days following the time
      such Registration Statement was required to be filed pursuant to Section
      2(a)(ii) or (z) a Shelf Registration Statement is not declared effective by
      the
      SEC within ninety (90) days after the Qualification Deadline, or (B) after
      a
      Registration Statement has been declared effective by the SEC, sales cannot
      be
      made pursuant to such Registration Statement for any reason (including without
      limitation by reason of a stop order, or the Company's failure to update the
      Registration Statement), but excluding the inability of any Investor to sell
      the
      Registrable Securities covered thereby due to market conditions and except
      as
      excused pursuant to subparagraph (ii) below, then the Company will make pro
      rata
      payments to each Investor, as liquidated damages and not as a penalty, in an
      amount equal to 1.5% of the aggregate amount invested by such Investor for
      each
      30-day period or pro rata for any portion thereof following the date by which
      such Registration Statement should have been effective (the "Blackout Period").
      Such payments shall constitute the Investors' exclusive monetary remedy for
      such
      events, but shall not affect the right of the Investors to seek injunctive
      relief. The amounts payable as liquidated damages pursuant to this paragraph
      shall be paid monthly within three (3) Business Days of the last day of each
      month following the commencement of the Blackout Period until the termination
      of
      the Blackout Period. Such payments shall be made to each Investor in cash.
      

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (ii)
      For
      not more than twenty (20) consecutive days or for a
      total
      of
      not more than forty-five (45) days in any twelve (12) month period, the Company
      may delay the disclosure of material non-public information concerning the
      Company, by suspending the use of any Prospectus included in any registration
      contemplated by this Section containing such information, the disclosure of
      which at the time is not, in the good faith opinion of the Company, in the
      best
      interests of the Company (an "Allowed Delay"); provided, that the Company shall
      promptly (a) notify the Investors in writing of the existence of (but in no
      event, without the prior written consent of an Investor, shall the Company
      disclose to such Investor any of the facts or circumstances regarding) material
      non-public information giving rise to an Allowed Delay, (b) advise the Investors
      in writing to cease all sales under the Registration Statement until the end
      of
      the Allowed Delay and (c) use commercially reasonable efforts to terminate
      an
      Allowed Delay as promptly as practicable. 

     

    (d)
      Notwithstanding anything herein to the contrary, the Company's obligations
      hereunder shall be suspended with respect to the Registrable Securities of
      an
      Investor in the event that such Investor fails to provide promptly to the
      Company such information as the Company may reasonably request at any time
      to
      enable the Company to comply with any applicable law or regulation or to
      facilitate preparation of a Registration Statement. 

     

    3.
      Company
      Obligations. The Company will use commercially reasonable efforts to effect
      the registration of the Registrable Securities in accordance with the terms
      hereof, and pursuant thereto the Company will, as expeditiously as possible:
      

     

    (a)
      use
      commercially reasonable efforts to cause such Registration Statement to become
      effective and to remain continuously effective for a period that will terminate
      upon the earlier of (i) the date on which all Registrable Securities covered
      by
      such Registration Statement as amended from time to time, have been sold, and
      (ii) the date on which all Registrable Securities covered by such Registration
      Statement may be sold pursuant to Rule 144(k) (the "Effectiveness Period")
      and
      advise the Investors in writing when the Effectiveness Period has expired;
      

     

    (b)
      prepare and file with the SEC such amendments and post-effective amendments
      to
      the Registration Statement and the Prospectus as
      may
      be
      necessary to keep the Registration Statement effective for the Effectiveness
      Period and to comply with the provisions of the 1933
      Act
      and
      the 1934 Act with respect to the distribution of all of the Registrable
      Securities covered thereby; 

     

    (c)
      provide copies to and permit counsel designated by the Investors to review
      each
      Registration Statement and all amendments and supplements thereto no fewer
      than
      seven (7) days prior to their filing with the SEC
      and
      not
      file any document to which such counsel reasonably objects; 

     

    (d)
      furnish to the Investors and their legal counsel (i) promptly after the same
      is
      prepared and publicly distributed, filed with the SEC, or received by the
      Company (but
      not
      later than two (2) Business Days after the filing date, receipt date or sending
      date, as the case may be) one (1)
      copy
      of
      any Registration Statement and any amendment thereto, each preliminary
      prospectus and Prospectus and each amendment or supplement thereto, and each
      letter written by or on behalf of the Company to the SEC or the staff of the
      SEC,
      and
      each
      item of correspondence from the SEC or the staff of the SEC,
      in
      each
      case relating to such Registration Statement (other than any portion of any
      thereof which contains information for which the Company has sought confidential
      treatment), and (ii) such number of copies of a Prospectus, including a
      preliminary prospectus, and all amendments and supplements thereto and such
      other documents as each lnvestor may reasonably request in order to facilitate
      the disposition of the Registrable Securities owned by such Investor that are
      covered by the related Registration Statement; 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (e)
      use
      commercially reasonable efforts to (i) prevent
      the issuance of any stop order or other suspension of effectiveness and, (ii)
      if
      such order is issued, obtain the withdrawal of any such order at the earliest
      possible moment; 

     

    (f)  prior
      to any public offering of Registrable Securities, use commercially reasonable
      efforts to register or qualify or cooperate with the Investors and their counsel
      in connection with the registration or qualification of such Registrable
      Securities for offer and sale under the securities or blue sky laws of such
      jurisdictions requested by the Investors and do any and all other commercially
      reasonable acts or things necessary or advisable to enable the distribution
      in
      such jurisdictions of the Registrable Securities covered by the Registration
      Statement; provided, however, that the Company shall not be required in
      connection therewith or as a condition thereto to (i) qualify to do business
      in
      any jurisdiction where it would not otherwise be required to qualify but for
      this Section 3(f), (ii) subject itself to general taxation in any jurisdiction
      where it would not otherwise be so subject but for this Section 3(f), or (iii)
      file a general consent to service of process in any such jurisdiction;

     

    (g)
      use
      commercially reasonable efforts to cause all Registrable Securities covered
      by a
      Registration Statement to be listed on each securities exchange, interdealer
      quotation system or other market on which similar securities issued by the
      Company are then listed; 

     

    (h)
      immediately notify the Investors, at any time prior to the end of the
      Effectiveness Period, upon discovery that, or upon the happening of any event
      as
      a result of which, the Prospectus includes an untrue statement of a material
      fact or omits to state any material fact required to be stated therein or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing, and promptly prepare, file with the SEC and furnish
      to such holder a reasonable number of copies of a supplement to or an amendment
      of such Prospectus as may be necessary so that such Prospectus shall not include
      an untrue statement of a
      material
      fact or omit to state a material fact required to be stated therein or necessary
      to make the statements therein not misleading in light of the circumstances
      then
      existing; and 

     

    (i)
       otherwise
      use commercially reasonable efforts to comply with all applicable rules and
      regulations of the SEC under the 1933 Act and the 1934
      Act,
      including, without limitation, Rule 172
      under
      the
      1933 Act, file any final Prospectus, including any supplement or amendment
      thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform
      the Investors in writing if, at any time during the Effectiveness Period, the
      Company does not satisfy the conditions specified in Rule 172 and, as a result
      thereof, the Investors are required to deliver a Prospectus in connection with
      any disposition of Registrable Securities and take such other actions as may
      be
      reasonably necessary to facilitate the registration of the Registrable
      Securities hereunder; and make available to its security holders, as soon as
      reasonably practicable, but not later than the Availability Date (as defined
      below), an earnings statement covering a period of at least twelve (12) months,
      beginning after the effective date of each Registration Statement, which
      earnings statement shall satisfy the provisions of Section 11(a) of the 1933
      Act, including Rule 158 promulgated thereunder (for the purpose of this
      subsection 3(i), "Availability Date" means the 45th day following the end of
      the
      fourth fiscal quarter that includes the effective date of such Registration
      Statement, except that, if such fourth fiscal quarter is the last quarter of
      the
      Company's fiscal year, "Availability Date" means the 90th day after the end
      of
      such fourth fiscal quarter). 

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (j)
      With
      a view to making available to the Investors the benefits of Rule 144 (or its
      successor rule) and any other rule or regulation of the SEC that may at any
      time
      permit the Investors to sell Ordinary Shares to the public without registration,
      the Company covenants and agrees to: (i) make and keep public information
      available, as those terms are understood and defined in Rule 144, until the
      earlier of (A) six months after such date as all of the Registrable Securities
      may be resold pursuant to Rule 144(k) or any other rule of similar effect or
      (B)
      such date as all of the Registrable Securities shall have been resold; (ii)
      file
      with the SEC in a timely manner all reports and other documents required of
      the
      Company under the 1934 Act; and (iii) furnish to each Investor upon request,
      as
      long as such Investor owns any Registrable Securities, (A) a written statement
      by the Company that it has complied with the reporting requirements of the
      1934
      Act, (B) a copy of the Company's most recent Annual Report on Form 20-F or
      Statement of a Foreign Private Issuer on Form 6-K, and (C) such other
      information as may be reasonably requested in order to avail such Investor
      of
      any rule or regulation of the SEC that permits the selling of any such
      Registrable Securities without registration. 

     

    4.
      Due
      Diligence Review; Information.
      Upon
      reasonable notice and without undue interference of the Company's business
      or
      operations, the Company shall make available, during normal business hours,
      for
      inspection and review by the Investors, advisors to and representatives of
      the
      Investors (who may or may not be affiliated with the Investors and who are
      reasonably acceptable to the Company), all financial and other records, all
      SEC
      Filings (as defined in the Purchase Agreement) and other filings with the SEC,
      and all other corporate documents and properties of the Company as may be
      reasonably necessary for the purpose of such review, and cause the Company's
      officers, directors and employees, within a reasonable time period, to supply
      all such information reasonably requested by the Investors or any such
      representative, advisor or underwriter in connection with such Registration
      Statement (including, without limitation, in response to all questions and
      other
      inquiries reasonably made or submitted by any of them), prior to and from time
      to time after the filing and effectiveness of the Registration Statement for
      the
      sole purpose of enabling the Investors and such representatives, advisors and
      underwriters and their respective accountants and attorneys to conduct initial
      and ongoing due diligence with respect to the Company and the accuracy of such
      Registration Statement. 

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    The
      Company shall not disclose material nonpublic information to the Investors,
      or
      to advisors to or representatives of the Investors, unless prior to disclosure
      of such information the Company identifies such information as being material
      nonpublic information and provides the Investors, such advisors and
      representatives with the opportunity to accept or refuse to accept such material
      nonpublic information for review and any Investor wishing to obtain such
      information enters into an appropriate confidentiality agreement with the
      Company with respect thereto. 

     

    5.
      Obligations
      of the Investors.
      

     

    (a)
      Each
      Investor shall furnish in writing to the Company such information regarding
      itself, the Registrable Securities held by it and the intended method of
      disposition of the Registrable Securities held by it, as shall be reasonably
      required to effect the registration of such Registrable Securities and shall
      execute such documents in connection with such registration as the Company
      may
      reasonably request. At least five (5) Business Days prior to the first
      anticipated filing date of any Registration Statement, the Company shall notify
      each Investor of the information the Company requires from such Investor if
      such
      Investor elects to have any of the Registrable Securities included in the
      Registration Statement. An Investor shall provide such information to the
      Company at least two (2) Business Days prior to the first anticipated filing
      date of such Registration Statement if such Investor elects to have any of
      the
      Registrable Securities included in the Registration Statement. 

     

    (b)
      Each
      Investor, by its acceptance of the Registrable Securities agrees to cooperate
      with the Company as reasonably requested by the Company in connection with
      the
      preparation and filing of a Registration Statement hereunder, unless such
      Investor has notified the Company in writing of its election to exclude all
      of
      its Registrable Securities from such Registration Statement. 

     

    (c)
      Each
      Investor agrees that, upon receipt of any notice from the Company of either
      (i)
      the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
      happening of an event pursuant to Section 3(h) hereof, such Investor will
      immediately discontinue disposition of Registrable Securities pursuant to the
      Registration Statement covering such Registrable Securities, until the Investor
      is advised by the Company that such dispositions may again be made.

     

    6.
      Indemnification.
      

     

    (a)
      Indemnification
      by the Company.
      The
      Company will indemnify and hold harmless each Investor and its officers,
      directors, members, employees and agents, successors and assigns, and each
      other
      person, if any, who controls such Investor within the meaning of the 1933 Act,
      against any losses, claims, damages or liabilities, joint or several, to which
      they may become subject under the 1933 Act or otherwise, insofar as such losses,
      claims, damages or liabilities (or actions in respect thereof) arise out of
      or
      are based upon: (i) any untrue statement or alleged untrue statement of any
      material fact contained in any Registration Statement, any preliminary
      Prospectus or final Prospectus, or any amendment or supplement thereof; (ii)
      any
      blue sky application or other document executed by the Company specifically
      for
      that purpose or based upon written information furnished by the Company filed
      in
      any state or other jurisdiction in order to qualify any or all of the
      Registrable Securities under the securities laws thereof (any such application,
      document or information herein called a "Blue Sky Application"); (iii) the
      omission or alleged omission to state therein a material fact required to be
      stated therein or necessary to make the statements therein not misleading;
      (iv)
      any violation by the Company or its agents of any rule or regulation promulgated
      under the 1933 Act applicable to the Company or its agents and relating to
      action or inaction required of the Company in connection with such registration;
      or (v) any failure to register or qualify the Registrable Securities included
      in
      any such Registration in any state where the Company or its agents has
      affirmatively undertaken or agreed in writing that the Company will undertake
      such registration or qualification on an Investor's behalf and will reimburse
      such Investor, and each such officer, director or member and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action: provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability 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 by such Investor or any such controlling
      person in writing specifically for use in such Registration Statement or
      Prospectus. 

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

    (b)
      Indemnification
      by the Investors.
      Each
      Investor agrees, severally but not jointly, to indemnify and hold harmless,
      to
      the fullest extent permitted by law, the Company, its directors, officers,
      employees, stockholders and each person who controls the Company (within the
      meaning of the 1933 Act) against any losses, claims, damages, liabilities and
      expense (including reasonable attorney fees) resulting from any untrue statement
      of a material fact or any omission of a material fact required to be stated
      in
      the Registration Statement or Prospectus or preliminary Prospectus or amendment
      or supplement thereto or necessary to make the statements therein not
      misleading, to the extent, but only to the extent that such untrue statement
      or
      omission is contained in any information furnished in writing by such Investor
      to the Company specifically for inclusion in such Registration Statement or
      Prospectus or amendment or supplement thereto. In no event shall the liability
      of an Investor be greater in amount than the dollar amount of the proceeds
      (net
      of all expense paid by such Investor in connection with any claim relating
      to
      this Section 6 and the amount of any damages such Investor has otherwise been
      required to pay by reason of such untrue statement or omission) received by
      such
      Investor upon the sale of the Registrable Securities included in the
      Registration Statement giving rise to such indemnification obligation.

     

    (c)
      Conduct
      of Indemnification Proceedings.
      Any
      person entitled to indemnification hereunder shall (i) give prompt notice to
      the
      indemnifying party of any claim with respect to which it seeks indemnification
      and (ii) permit such indemnifying party to assume the defense of such claim
      with
      counsel reasonably satisfactory to the indemnified party; provided
      that any
      person entitled to indemnification hereunder shall have the right to employ
      separate counsel and to participate in the defense of such claim, but the fees
      and expenses of such counsel shall be at the expense of such person unless
      (a)
      the indemnifying party has agreed to pay such fees or expenses, or (b) the
      indemnifying party shall have failed to assume the defense of such claim and
      employ counsel reasonably satisfactory to such person or (c) in the reasonable
      judgment of any such person, based upon written advice of its counsel, a
      conflict of interest exists between such person and the indemnifying party
      with
      respect to such claims (in which case, if the person notifies the indemnifying
      party in writing that such person elects to employ separate counsel at the
      expense of the indemnifying party, the indemnifying party shall not have the
      right to assume the defense of such claim on behalf of such person); and
provided,
      further,
      that
      the failure of any indemnified party to give notice as provided herein shall
      not
      relieve the indemnifying party of its obligations hereunder, except to the
      extent that such failure to give notice shall materially adversely affect the
      indemnifying party in the defense of any such claim or litigation. It is
      understood that the indemnifying party shall not, in connection with any
      proceeding in the same jurisdiction, be liable for fees or expenses of more
      than
      one separate firm of attorneys at any time for all such indemnified parties.
      No
      indemnifying party will, except with the consent of the indemnified party,
      consent to entry of any judgment or enter into any settlement that 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 of such
      claim or litigation. 

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    

    (d)
      Contribution.
      If for
      any reason the indemnification provided for in the preceding paragraphs (a)
      and
      (b) is unavailable to an indemnified party or insufficient to hold it harmless,
      other than as expressly specified therein, then the indemnifying party shall
      contribute to the amount paid or payable by the indemnified party as a result
      of
      such loss, claim, damage or liability in such proportion as is appropriate
      to
      reflect the relative fault of the indemnified party and the indemnifying party,
      as well as any other relevant equitable considerations. No person guilty of
      fraudulent misrepresentation within the meaning of Section 11(f) of the 1933
      Act
      shall be entitled to contribution from any person not guilty of such fraudulent
      misrepresentation. In no event shall the contribution obligation of a holder
      of
      Registrable Securities be greater in amount than the dollar amount of the
      proceeds (net of all expenses paid by such holder in connection with any claim
      relating to this Section 6 and the amount of any damages such holder has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission) received by it upon the sale of
      the
      Registrable Securities giving rise to such contribution obligation.

     

    7.
      Miscellaneous.
      

     

    (a)
      Amendments
      and Waivers.
      This
      Agreement may be amended only by a writing signed by the Company and the
      Required Investors. The Company may take any action herein prohibited, or omit
      to perform any act herein required to be performed by it, only if the Company
      shall have obtained the written consent to such amendment, action or omission
      to
      act, of the Required Investors. 

     

    (b)
      Notices.
      All
      notices and other communications provided for or permitted hereunder shall
      be
      made as set forth in Section 9.4 of the Purchase Agreement. 

     

    (c)
      Assignments
      and Transfers by Investors.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the Investors and their respective successors and assigns. An Investor may
      transfer or assign, in whole or from time to time in part, to one or more
      persons its rights hereunder in connection with the transfer of Registrable
      Securities by such Investor to such person, provided that such Investor complies
      with all laws applicable thereto and provides written notice of assignment
      to
      the Company promptly after such assignment is effected. 

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (d)
      Assignments
      and Transfers by the Company.
      This
      Agreement may not be assigned by the Company (whether by operation of law or
      otherwise) without the prior written consent of the Required Investors,
      provided, however, that the Company may assign its rights and delegate its
      duties hereunder to any surviving or successor corporation in connection with
      a
      merger or consolidation of the Company with another corporation, or a sale,
      transfer or other disposition of all or substantially all of the Company's
      assets to another corporation, without the prior written consent of the Required
      Investors, after notice duly given by the Company to each Investor.

     

    (e)
      Benefits
      of the Agreement.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the respective permitted successors and assigns of the parties.
      Nothing in this Agreement, express or implied, is intended to confer upon any
      party other than the parties hereto or their respective successors and assigns
      any rights, remedies, obligations, or liabilities under or by reason of this
      Agreement, except as expressly provided in this Agreement. 

     

    (f)
      Counterparts;
      Faxes.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. This Agreement may also be executed via facsimile, which shall
      be
      deemed an original. 

     

    (g)
      Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement.

     

    (h)
      Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof but shall be interpreted as if it were written so as to be
      enforceable to the maximum extent permitted by applicable law, and any such
      prohibition or unenforceability in any jurisdiction shall not invalidate or
      render unenforceable such provision in any other jurisdiction. To the extent
      permitted by applicable law, the parties hereby waive any provision of law
      which
      renders any provisions hereof prohibited or unenforceable in any respect.

     

    (i)
      Further
      Assurances.
      The
      parties shall execute and deliver all such further instruments and documents
      and
      take all such other actions as may reasonably be required to carry out the
      transactions contemplated hereby and to evidence the fulfillment of the
      agreements herein contained. 

     

    (j)
      Entire
      Agreement.
      This
      Agreement is intended by the parties as a final expression of their agreement
      and intended to be a complete and exclusive statement of the agreement and
      understanding of the parties hereto in respect of the subject matter contained
      herein. This Agreement supersedes all prior agreements and understandings
      between the parties with respect to such subject matter. 

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      (k)
        Governing
        Law; Consent to Jurisdiction; Waiver of Jury Trial.
        This
        Agreement shall be governed by, and construed in accordance with, the internal
        laws of the State of New York without regard to the choice of law
        principles thereof. Each of the parties hereto irrevocably submits to the
        exclusive jurisdiction of the courts of the State of New York located in
        New
        York County and the United States District Court for the Southern District
        of
        New York for the purpose of any suit, action, proceeding or judgment relating
        to
        or arising out of this Agreement and the transactions contemplated hereby.
        Service of process in connection with any such suit, action or
        proceeding
        may be served on each party hereto anywhere in the world by the same methods
        as
        are specified for the giving of notices under this Agreement. Each of
        the
        parties hereto irrevocably consents to the jurisdiction of any such court
        in any
        such suit, action or proceeding and to the laying of venue in
        such
        court. Each party
        hereto
        irrevocably waives any objection to the laying of
        venue
        of
        any such suit, action or proceeding brought in such courts and irrevocably
        waives any claim that any such suit, action or proceeding brought in any
        such
        court has been brought in
        an
        inconvenient forum.
        EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A
        TRIAL
        BY JURY IN ANY
        LITIGATION
        WITH RESPECT TO THIS AGREEMENT AND
        REPRESENTS
        THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS
      WHEREOF,
      the
      parties have
      executed this Agreement or caused their duly authorized officers to execute
      this
      Agreement as of the date first above written.

     

    
      	
              The
                Company:

            	 	 	
              SUPERCOM
                LTD.

            
	 	 	 	 
	 	 	 	 
	By: 	 	 	By:

	
              
                

              

              Name:
                Avi Schechter

            	 	 	
              
                

              

              Name:
                Eyal Tuchman

            
	
              Title:
                C.E.O

            	 	 	
              Title:
                C.F.O

            

    

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	
              The
                Investors:

            	
              SPECIAL
                SITUATIONS FUND III, L.P.

            
	 
 	 
 	 
 
	
            	By:  	
	 	
              

              Name:
                David M Greenhouse

            
	 	
              Title:
                General Partner

            

    

    
      	 	 	 
	 	
              SPECIAL
                SITUATIONS CAYMAN FUND, L.P.

            
	 
 	 
 	 
 
	
            	By:  	
	 	
              

              Name:
                David M Greenhouse

            
	 	
              Title:
                General Partner

            

    

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A 

     

    Plan
      of Distribution 

     

    The
      selling stockholders, which as used herein includes donees, pledgees,
      transferees or other successors-in-interest selling Ordinary Shares or interests
      in Ordinary Shares received after the date of this prospectus from a selling
      stockholder as a gift, pledge, partnership distribution or other transfer,
      may,
      from time to time, sell, transfer or otherwise dispose of any or all of their
      Ordinary Shares or interests in Ordinary Shares on any stock exchange, market
      or
      trading facility on which the Ordinary Shares are traded or in private
      transactions. These dispositions may be at fixed prices, at prevailing market
      prices at the time of sale, at prices related to the prevailing market price,
      at
      varying prices determined at the time of sale, or at negotiated prices.

     

    The
      selling stockholders may use any one or more of the following methods when
      disposing of Ordinary Shares or interests therein: 

     

    -
      ordinary brokerage transactions and transactions in which the broker-dealer
      solicits purchasers; 

     

    -
      block
      trades in which the broker-dealer will attempt to sell the Ordinary Shares
      as
      agent, but may position and resell a portion of the block as principal to
      facilitate the transaction; 

     

    -
      purchases by a broker-dealer as principal and resale by the broker-dealer for
      its account; 

     

    -
      an
      exchange distribution in accordance with the rules of the applicable exchange;
      

     

    -
      privately negotiated transactions; 

     

    -
      short
      sales effected after the date the registration statement of which this
      Prospectus is a part is declared effective by the SEC; 

     

    -
      through
      the writing or settlement of options or other hedging transactions, whether
      through an options exchange or otherwise; 

     

    -
      broker-dealers may agree with the selling stockholders to sell a specified
      number of such Ordinary Shares at a stipulated price per share; and

     

    -
      a
      combination of any such methods of sale. 

     

    The
      selling stockholders may, from time to time, pledge or grant a security interest
      in some or all of the Ordinary Shares owned by them and, if they default in
      the
      performance of their secured obligations, the pledgees or secured parties may
      offer and sell the Ordinary Shares, from time to time, under this prospectus,
      or
      under an amendment to this prospectus under Rule 424(b)(3) or other applicable
      provision of the Securities Act amending the list of selling stockholders to
      include the pledgee, transferee or other successors in interest as selling
      stockholders under this prospectus. The selling stockholders also may transfer
      the Ordinary Shares in other circumstances, in which case the transferees,
      pledgees or other successors in interest will be the selling beneficial owners
      for purposes of this prospectus. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
      connection with the sale of our Ordinary Shares or interests therein, the
      selling stockholders may enter into hedging transactions with broker-dealers
      or
      other financial institutions, which may in turn engage in short sales of the
      Ordinary Shares in the course of hedging the positions they assume. The selling
      stockholders may also sell Ordinary Shares short and deliver these securities
      to
      close out their short positions, or loan or pledge the Ordinary Shares to
      broker-dealers that in turn may sell these securities. The selling stockholders
      may also enter into option or other transactions with broker-dealers or other
      financial institutions or the creation of one or more derivative securities
      which require the delivery to such broker-dealer or other financial institution
      of Ordinary Shares offered by this prospectus, which Ordinary Shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such transaction).

     

    The
      aggregate proceeds to the selling stockholders from the sale of the Ordinary
      Shares offered by them will be the purchase price of the Ordinary Shares less
      discounts or commissions, if any. Each of the selling stockholders reserves
      the
      right to accept and, together with their agents from time to time, to reject,
      in
      whole or in part, any proposed purchase of Ordinary Shares to be made directly
      or through agents. We will not receive any of the proceeds from this offering.
      Upon any exercise of the warrants by payment of cash, however, we will receive
      the exercise price of the warrants. 

     

    The
      selling stockholders also may resell all or a portion of the Ordinary Shares
      in
      open market transactions in reliance upon Rule 144 under the Securities Act
      of
      1933, provided that they meet the criteria and conform to the requirements
      of
      that rule. 

     

    The
      selling stockholders and any underwriters, broker-dealers or agents that
      participate in the sale of the Ordinary Shares or interests therein may be
      "underwriters" within the meaning of Section 2(11) of the Securities Act. Any
      discounts, commissions, concessions or profit they earn on any resale of the
      Ordinary Shares may be underwriting discounts and commissions under the
      Securities Act. Selling stockholders who are "underwriters" within the meaning
      of Section 2(11) of the Securities Act will be subject to the prospectus
      delivery requirements of the Securities Act. 

     

    To
      the
      extent required, the Ordinary Shares to be sold, the names of the selling
      stockholders, the respective purchase prices and public offering prices, the
      names of any agents, dealer or underwriter, any applicable commissions or
      discounts with respect to a particular offer will be set forth in an
      accompanying prospectus supplement or, if appropriate, a post-effective
      amendment to the registration statement that includes this prospectus.

     

    In
      order
      to comply with the securities laws of some states, if applicable, the Ordinary
      Shares may be sold in these jurisdictions only through registered or licensed
      brokers or dealers. In addition, in some states the Ordinary Shares may not
      be
      sold unless they have been registered or qualified for sale or an exemption
      from
      registration or qualification requirements is available and is complied with.
      

     

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

    

     

    We
      have
      advised the selling stockholders that the anti-manipulation rules of Regulation
      M under the Exchange Act may apply to sales of Ordinary Shares in the market
      and
      to the activities of the selling stockholders and their affiliates. In addition,
      to the extent applicable, we will make copies of this prospectus (as it may
      be
      supplemented or amended from time to time) available to the selling stockholders
      for the purpose of satisfying the prospectus delivery requirements of the
      Securities Act. The selling stockholders may indemnify any broker-dealer that
      participates in transactions involving the sale of the Ordinary Shares against
      certain liabilities, including liabilities arising under the Securities
      Act. 

     

    We
      have
      agreed to indemnify the selling stockholders against liabilities, including
      liabilities under the Securities Act and state securities laws, relating to
      the
      registration of the Ordinary Shares offered by this prospectus. 

     

    We
      have
      agreed with the selling stockholders to keep the registration statement of
      which
      this prospectus constitutes a part effective until the earlier of (1) such
      time
      as all of the Ordinary Shares covered by this prospectus have been disposed
      of
      pursuant to and in accordance with the registration statement or (2) the date
      on
      which the Ordinary Shares may be sold pursuant to Rule 144(k) of the Securities
      Act. 

    
      
        
        

      

      
        -
          17
          -THE
      SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
      HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
      AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
      THE
      COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
      SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
      ACT
      OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS. 

     

    SUBJECT
      TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00
      P.M. EASTERN TIME ON DECEMBER 9, 2010 (THE “EXPIRATION DATE”). 

     

    No.
      ____________

     

    SUPERCOM
      LTD. 

     

    WARRANT
      TO PURCHASE 1,129,032 ORDINARY SHARES, 
PAR VALUE NIS0.01 PER
      SHARE

     

    For
      VALUE
      RECEIVED, Special Situations Fund III, L.P. (“Warrantholder”), is entitled to
      purchase, subject to the provisions of this Warrant, from SuperCom Ltd., an
      Israeli corporation (“Company”), at any time not later than 5:00 P.M., Eastern
      time, on the Expiration Date (as defined above), at an exercise price per share
      equal to US$0.60 (the exercise price in effect being herein called the “Warrant
      Price”), 1,129,032 shares (“Warrant Shares”) of the Company’s Ordinary Shares,
      par value NIS0.01 per share (“Ordinary Shares”). The number of Warrant Shares
      purchasable upon exercise of this Warrant and the Warrant Price shall be subject
      to adjustment from time to time as described herein. 

     

    Section
      1.  Registration.
      The
      Company shall maintain books for the transfer and registration of the Warrant.
      Upon the initial issuance of this Warrant, the Company shall issue and register
      the Warrant in the name of the Warrantholder. 

     

    Section
      2.  Transfers.
      As
      provided herein, this Warrant may be transferred only pursuant to a registration
      statement filed under the Securities Act of 1933, as amended (the “Securities
      Act”), or an exemption from such registration. Subject to such restrictions, the
      Company shall transfer this Warrant from time to time upon the books to be
      maintained by the Company for that purpose, upon surrender hereof for transfer,
      properly endorsed or accompanied by appropriate instructions for transfer and
      such other documents as may be reasonably required by the Company, including,
      if
      required by the Company, an opinion of its counsel to the effect that such
      transfer is exempt from the registration requirements of the Securities Act,
      to
      establish that such transfer is being made in accordance with the terms hereof,
      and a new Warrant shall be issued to the transferee and the surrendered Warrant
      shall be canceled by the Company. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      3.  Exercise
      of Warrant.
      Subject
      to the provisions hereof, the Warrantholder may exercise this Warrant, in whole
      or in part, at any time prior to its expiration upon surrender of the Warrant,
      together with delivery of a duly executed Warrant exercise form, in the form
      attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash,
      certified check or wire transfer of funds (or, in certain circumstances, by
      cashless exercise as provided below) of the aggregate Warrant Price for that
      number of Warrant Shares then being purchased, to the Company during normal
      business hours on any business day at the Company’s principal executive offices
      (or such other office or agency of the Company as it may designate by notice
      to
      the Warrantholder). The Warrant Shares so purchased shall be deemed to be issued
      to the Warrantholder or the Warrantholder’s designee, as the record owner of
      such shares, as of the close of business on the date on which this Warrant
      shall
      have been surrendered (or the date evidence of loss, theft or destruction
      thereof and security or indemnity satisfactory to the Company has been provided
      to the Company), the Warrant Price shall have been paid and the completed
      Exercise Agreement shall have been delivered. Certificates for the Warrant
      Shares so purchased shall be delivered to the Warrantholder within a reasonable
      time, not exceeding three (3) business days, after this Warrant shall have
      been
      so exercised. The certificates so delivered shall be in such denominations
      as
      may be requested by the Warrantholder and shall be registered in the name of
      the
      Warrantholder or such other name as shall be designated by the Warrantholder,
      as
      specified in the Exercise Agreement. If this Warrant shall have been exercised
      only in part, then, unless this Warrant has expired, the Company shall, at
      its
      expense, at the time of delivery of such certificates, deliver to the
      Warrantholder a new Warrant representing the right to purchase the number of
      shares with respect to which this Warrant shall not then have been exercised.
      As
      used herein, “business day” means a day, other than a Saturday or Sunday, on
      which banks in New York City are open for the general transaction of business.
      Each exercise hereof shall constitute the re-affirmation by the Warrantholder
      that (i) the representations and warranties contained in Sections 5.3, 5.4,
      5.5,
      5.6, 5.7, 5.8 and 5.9 of the Purchase Agreement (as defined below) are true
      and
      correct in all respects with respect to the Warrantholder as of the time of
      such
      exercise, and (ii) the remaining representations and warranties (other than
      those noted in (i) above) contained in Section 5 of the Purchase Agreement
      (as
      defined below) are true and correct in all material respects with respect to
      the
      Warrantholder as of the time of such exercise. 

     

    Section
      4.  Compliance
      with the Securities Act of 1933.
      Except
      as provided in the Purchase Agreement (as defined below), the Company may cause
      the legend set forth on the first page of this Warrant to be set forth on each
      Warrant, and a similar legend on any security issued or issuable upon exercise
      of this Warrant, unless counsel for the Company is of the opinion as to any
      such
      security that such legend is unnecessary. 

     

    Section
      5.  Payment
      of Taxes.
      The
      Company will pay any documentary stamp taxes attributable to the initial
      issuance of Warrant Shares issuable upon the exercise of the Warrant; provided,
      however, that the Company shall not be required to pay any tax or taxes which
      may be payable in respect of any transfer involved in the issuance or delivery
      of any certificates for Warrant Shares in a name other than that of the
      Warrantholder in respect of which such shares are issued, and in such case,
      the
      Company shall not be required to issue or deliver any certificate for Warrant
      Shares or any Warrant until the person requesting the same has paid to the
      Company the amount of such tax or has established to the Company’s reasonable
      satisfaction that such tax has been paid. The Warrantholder shall be responsible
      for all income taxes due under federal, state or other law, if any such tax
      is
      due. 

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Section
      6.  Mutilated
      or Missing Warrants.
      In case
      this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall
      issue in exchange and substitution of and upon surrender and cancellation of
      the
      mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen
      or destroyed, a new Warrant of like tenor and for the purchase of a like number
      of Warrant Shares, but only upon receipt of evidence reasonably satisfactory
      to
      the Company of such loss, theft or destruction of the Warrant, and with respect
      to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with
      respect thereto (if requested by the Company) in an amount reasonably
      satisfactory to the Company. 

     

    Section
      7.  Reservation
      of Ordinary Shares.
      The
      Company hereby represents and warrants that there have been reserved, and the
      Company shall at all applicable times keep reserved until issued (if necessary)
      as contemplated by this Section 7, out of the authorized and unissued Ordinary
      Shares, sufficient Ordinary Shares to provide for the exercise of the rights
      of
      purchase represented by this Warrant. The Company agrees that all Warrant Shares
      issued upon due exercise of the Warrant shall be, at the time of delivery of
      the
      certificates for such Warrant Shares, duly authorized, validly issued, fully
      paid and non-assessable Ordinary Shares of the Company. 

     

    Section
      8.  Adjustments.
      Subject
      and pursuant to the provisions of this Section 8, the Warrant Price and number
      of Warrant Shares subject to this Warrant shall be subject to adjustment from
      time to time as set forth hereinafter. 

     

    (a)
       If
      the
      Company shall, at any time or from time to time while this Warrant is
      outstanding, pay a dividend or make a distribution on its Ordinary Shares in
      Ordinary Shares, subdivide its outstanding Ordinary Shares into a greater number
      of shares or combine its outstanding Ordinary Shares into a smaller number
      of
      shares or issue by reclassification of its outstanding Ordinary Shares any
      shares of its capital stock (including any such reclassification in connection
      with a consolidation or merger in which the Company is the continuing
      corporation), then the number of Warrant Shares purchasable upon exercise of
      the
      Warrant and the Warrant Price in effect immediately prior to the date upon
      which
      such change shall become effective, shall be adjusted by the Company so that
      the
      Warrantholder thereafter exercising the Warrant shall be entitled to receive
      the
      number of Ordinary Shares or other capital stock which the Warrantholder would
      have received if the Warrant had been exercised immediately prior to such event
      upon payment of a Warrant Price that has been adjusted to reflect a fair
      allocation of the economics of such event to the Warrantholder. Such adjustments
      shall be made successively whenever any event listed above shall occur.

     

    (b)
       If
      any
      capital reorganization, reclassification of the capital stock of the Company,
      consolidation or merger of the Company with another corporation in which the
      Company is not the survivor, or sale, transfer or other disposition of all
      or
      substantially all of the Company’s assets to another corporation shall be
      effected, then, as a condition of such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition,
      lawful and adequate provision shall be made whereby each Warrantholder shall
      thereafter have the right to purchase and receive upon the basis and upon the
      terms and conditions herein specified and in lieu of the Warrant Shares
      immediately theretofore issuable upon exercise of the Warrant, such shares
      of
      stock, securities or assets as would have been issuable or payable with respect
      to or in exchange for a number of Warrant Shares equal to the number of Warrant
      Shares immediately theretofore issuable upon exercise of the Warrant, had such
      reorganization, reclassification, consolidation, merger, sale, transfer or
      other
      disposition not taken place, and in any such case appropriate provision shall
      be
      made with respect to the rights and interests of each Warrantholder to the
      end
      that the provisions hereof (including, without limitation, provision for
      adjustment of the Warrant Price) shall thereafter be applicable, as nearly
      equivalent as may be practicable in relation to any shares of stock, securities
      or assets thereafter deliverable upon the exercise hereof. The Company shall
      not
      effect any such consolidation, merger, sale, transfer or other disposition
      unless prior to or simultaneously with the consummation thereof the successor
      corporation (if other than the Company) resulting from such consolidation or
      merger, or the corporation purchasing or otherwise acquiring such assets or
      other appropriate corporation or entity shall assume the obligation to deliver
      to the Warrantholder, at the last address of the Warrantholder appearing on
      the
      books of the Company, such shares of stock, securities or assets as, in
      accordance with the foregoing provisions, the Warrantholder may be entitled
      to
      purchase, and the other obligations under this Warrant. The provisions of this
      paragraph (b) shall similarly apply to successive reorganizations,
      reclassifications, consolidations, mergers, sales, transfers or other
      dispositions. 

    

      
        
          
          

        

        
          -3-

          
            

          

        

         

      

    

     

    (c)
       In
      case
      the Company shall fix a payment date for the making of a distribution (including
      any such distribution made in connection with a consolidation or merger in
      which
      the Company is the continuing corporation) of evidences of indebtedness or
      assets (other than cash dividends or cash distributions payable out of
      consolidated earnings or earned surplus or dividends or distributions referred
      to in Section 8(a)), or subscription rights or warrants to all holders of
      Ordinary Shares, the Warrant Price to be in effect after such payment date
      shall
      be determined by multiplying the Warrant Price in effect immediately prior
      to
      such payment date by a fraction, the numerator of which shall be the total
      number of Ordinary Shares outstanding multiplied by the Market Price (as defined
      below) per share of Ordinary Shares immediately prior to such payment date,
      less
      the fair market value (as determined by the Company's Board of Directors in
      good
      faith) of said assets or evidences of indebtedness so distributed, or of such
      subscription rights or warrants, and the denominator of which shall be the
      total
      number of Ordinary Shares outstanding multiplied by such Market Price per share
      of Ordinary Shares immediately prior to such payment date. “Market Price” as of
      a particular date (the “Valuation Date”) shall mean the following: (a) if the
      Ordinary Shares are then listed on a U.S. national stock exchange, the closing
      sale price of one share of Ordinary Shares on such exchange on the last trading
      day prior to the Valuation Date; (b) if the Ordinary Shares are then quoted
      on
      The Nasdaq Stock Market, Inc. (“Nasdaq”), the National Association of Securities
      Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar
      quotation system or association, the closing sale price of one share of Ordinary
      Shares on Nasdaq, the Bulletin Board or such other quotation system or
      association on the last trading day prior to the Valuation Date or, if no such
      closing sale price is available, the average of the high bid and the low asked
      price quoted thereon on the last trading day prior to the Valuation Date; or
      (c)
      if the Ordinary Shares are not then listed on a national stock exchange or
      quoted on Nasdaq, the Bulletin Board or such other quotation system or
      association, the fair market value of one share of Ordinary Shares as of the
      Valuation Date, as determined in good faith by the Board of Directors of the
      Company and the Warrantholder. If the Ordinary Shares are not then listed on
      a
      national securities exchange, the Bulletin Board or such other quotation system
      or association, the Board of Directors of the Company shall respond promptly,
      in
      writing, to an inquiry by the Warrantholder prior to the exercise hereunder
      as
      to the fair market value of an Ordinary Shares as determined by the Board of
      Directors of the Company. In the event that the Board of Directors of the
      Company and the Warranthotder are unable to agree upon the fair market value
      in
      respect of subpart (c) of this paragraph, the Company and the Warrantholder
      shall jointly select an appraiser, who is experienced in such matters. The
      decision of such appraiser shall be final and conclusive, and the cost of such
      appraiser shall be borne equally by the Company and the Warrantholder. Such
      adjustment shall be made successively whenever such a payment date is fixed.
      

    
      
        
        

      

      
        -4-

        
          

        

      

       

    

     

    (d)
       An
      adjustment to the Warrant Price shall become effective immediately after the
      payment date in the case of each dividend or distribution and immediately after
      the effective date of each other event which requires an adjustment.

     

    (e)
       In
      the
      event that, as a result of an adjustment made pursuant to this Section 8, the
      Warrantholder shall become entitled to receive any shares of capital stock
      of
      the Company other than Ordinary Shares, the number of such other shares so
      receivable upon exercise of this Warrant shall be subject thereafter to
      adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the Warrant Shares contained
      in
      this Warrant. 

     

    (f)
       Except
      as
      provided in subsection (g) hereof, if and whenever the Company shall issue
      or
      sell, or is, in accordance with any of subsections (f)(l) through (f)(7) hereof,
      deemed to have issued or sold, any Ordinary Shares for no consideration or
      for a
      consideration per share less than the Warrant Price in effect immediately prior
      to the time of such issue or sale, then and in each such case (a “Trigger
      Issuance”)
      the
      then-existing Warrant Price, shall be reduced, as of the close of business
      on
      the effective date of the Trigger Issuance, to the lowest price per share at
      which any Ordinary Share was issued or sold or deemed to be issued or sold;
      provided, however, that in no event shall the Warrant Price after giving effect
      to such Trigger Issuance be greater than the Warrant Price in effect prior
      to
      such Trigger Issuance. 

     

    For
      purposes of this subsection (f), the following subsections (f)(1) to (f)(7)
      shall also be applicable: 

     

    (f)(1)
      Issuance of Rights or Options. In case at any time the Company shall in any
      manner grant (directly and not by assumption in a merger or otherwise) any
      warrants or other rights to subscribe for or to purchase, or any options for
      the
      purchase of, Ordinary Shares or any stock or security convertible into or
      exchangeable for Ordinary Shares (such warrants, rights or options being called
      “Options” and such convertible or exchangeable stock or securities being called
      “Convertible Securities”) whether or not such Options or the right to convert or
      exchange any such Convertible Securities are immediately exercisable, and the
      price per share for which Ordinary Shares are issuable upon the exercise of
      such
      Options or upon the conversion or exchange of such Convertible Securities
      (determined by dividing (i) the sum (which sum shall constitute the applicable
      consideration) of (x) the total amount, if any, received or receivable by the
      Company as consideration for the granting of such Options, plus (y) the
      aggregate amount of additional consideration payable to the Company upon the
      exercise of all such Options, plus (z), in the case of such Options which relate
      to Convertible Securities, the aggregate amount of additional consideration,
      if
      any, payable upon the issue or sale of such Convertible Securities and upon
      the
      conversion or exchange thereof, by (ii) the total maximum number of Ordinary
      Shares issuable upon the exercise of such Options or upon the conversion or
      exchange of all such Convertible Securities issuable upon the exercise of such
      Options) shall be less than the Warrant Price in effect immediately prior to
      the
      time of the granting of such Options, then the total number of Ordinary Shares
      issuable upon the exercise of such Options or upon conversion or exchange of
      the
      total amount of such Convertible Securities issuable upon the exercise of such
      Options shall be deemed to have been issued for such price per share as of
      the
      date of granting of such Options or the issuance of such Convertible Securities
      and thereafter shall be deemed to be outstanding for purposes of adjusting
      the
      Warrant Price. Except as otherwise provided in subsection 8(f)(3), no adjustment
      of the Warrant Price shall be made upon the actual issue of such Ordinary Shares
      or of such Convertible Securities upon exercise of such Options or upon the
      actual issue of such Ordinary Shares upon conversion or exchange of such
      Convertible Securities. 

    
      
        
        

      

      
        -5-

        
          

        

      

       

    

     

    (f)(2)
      Issuance of Convertible Securities. In case the Company shall in any manner
      issue (directly and not by assumption in a merger or otherwise) or sell any
      Convertible Securities, whether or not the rights to exchange or convert any
      such Convertible Securities are immediately exercisable, and the price per
      share
      for which Ordinary Shares are issuable upon such conversion or exchange
      (determined by dividing (i) the sum (which sum shall constitute the applicable
      consideration) of (x) the total amount received or receivable by the Company
      as
      consideration for the issue or sale of such Convertible Securities, plus (y)
      the
      aggregate amount of additional consideration, if any, payable to the Company
      upon the conversion or exchange thereof, by (ii) the total number of Ordinary
      Shares issuable upon the conversion or exchange of all such Convertible
      Securities) shall be less than the Warrant Price in effect immediately prior
      to
      the time of such issue or sale, then the total maximum number of Ordinary Shares
      issuable upon conversion or exchange of all such Convertible Securities shall
      be
      deemed to have been issued for such price per share as of the date of the issue
      or sale of such Convertible Securities and thereafter shall be deemed to be
      outstanding for purposes of adjusting the Warrant Price, provided that (a)
      except as otherwise provided in subsection 8(f)(3), no adjustment of the Warrant
      Price shall be made upon the actual issuance of such Ordinary Shares upon
      conversion or exchange of such Convertible Securities and (b) no further
      adjustment of the Warrant Price shall be made by reason of the issue or sale
      of
      Convertible Securities upon exercise of any Options to purchase any such
      Convertible Securities for which adjustments of the Warrant Price have been
      made
      pursuant to the other provisions of subsection 8(f).

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (f)(3)
      Change in Option Price or Conversion Rate. Upon the happening of any of the
      following events, namely, if the purchase price provided for in any Option
      referred to in subsection 8(f)(l) hereof, the additional consideration, if
      any,
      payable upon the conversion or exchange of any Convertible Securities referred
      to in subsections 8(f)(l) or 8(f)(2), or the rate at which Convertible
      Securities referred to in subsections 8(f)(I) or 8(f)(2) are convertible into
      or
      exchangeable for Ordinary Shares shall change at any time (including, but not
      limited to, changes under or by reason of provisions designed to protect against
      dilution), the Warrant Price in effect at the time of such event shall forthwith
      be readjusted to the Warrant Price which would have been in effect at such
      time
      had such Options or Convertible Securities still outstanding provided for such
      changed purchase price, additional consideration or conversion rate, as the
      case
      may be, at the time initially granted, issued or sold. On the termination of
      any
      Option for which any adjustment was made pursuant to this subsection 8(f) or
      any
      right to convert or exchange Convertible Securities for which any adjustment
      was
      made pursuant to this subsection 8(f) (including without limitation upon the
      redemption or purchase for consideration of such Convertible Securities by
      the
      Company), the Warrant Price then in effect hereunder shall forthwith be changed
      to the Warrant Price which would have been in effect at the time of such
      termination had such Option or Convertible Securities, to the extent outstanding
      immediately prior to such termination, never been issued. 

     

    (f)(4)
      Stock Dividends. Subject to the provisions of this Section 8(f), in case the
      Company shall declare a dividend or make any other distribution upon any stock
      of the Company (other than the Ordinary Shares) payable in Ordinary Shares,
      Options or Convertible Securities, then any Ordinary Shares, Options or
      Convertible Securities, as the case may be, issuable in payment of such dividend
      or distribution shall be deemed to have been issued or sold without
      consideration. 

     

    (f)(5)
      Consideration for Stock. In case any Ordinary Shares, Options or Convertible
      Securities shall be issued or sold for cash, the consideration received therefor
      shall be deemed to be the net amount received by the Company therefor, after
      deduction therefrom of any expenses incurred or any underwriting commissions
      or
      concessions paid or allowed by the Company in connection therewith. In case
      any
      Ordinary Shares, Options or Convertible Securities shall be issued or sold
      for a
      consideration other than cash, the amount of the consideration other than cash
      received by the Company shall be deemed to be the fair value of such
      consideration as determined in good faith by the Board of Directors of the
      Company, after deduction of any expenses incurred or any underwriting
      commissions or concessions paid or allowed by the Company in connection
      therewith. In case any Options shall be issued in connection with the issue
      and
      sale of other securities of the Company, together comprising one integral
      transaction in which no specific consideration is allocated to such Options
      by
      the parties thereto, such Options shall be deemed to have been issued for such
      consideration as determined in good faith by the Board of Directors of the
      Company. If Ordinary Shares, Options or Convertible Securities shall be issued
      or sold by the Company and, in connection therewith, other Options or
      Convertible Securities (the "Additional Rights") are issued, then the
      consideration received or deemed to be received by the Company shall be reduced
      by the fair market value of the Additional Rights (as determined using the
      Black-Scholes option pricing model or another method mutually agreed to by
      the
      Company and the Warrantholder). The Board of Directors of the Company shall
      respond promptly, in writing, to an inquiry by the Warrantholder as to the
      fair
      market value of the Additional Rights. In the event that the Board of Directors
      of the Company and the Warrantholder are unable to agree upon the fair market
      value of the Additional Rights, the Company and the Warrantholder shall jointly
      select an appraiser, who is experienced in such matters. The decision of such
      appraiser shall be final and conclusive, and the cost of such appraiser shall
      be
      borne evenly by the Company and the Warrantholder. 

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (f)(6)
      Record Date. In case the Company shall take a record of the holders of its
      Ordinary Shares for the purpose of entitling them (i) to receive a dividend
      or
      other distribution payable in Ordinary Shares, Options or Convertible Securities
      or (ii) to subscribe for or purchase Ordinary Shares, Options or Convertible
      Securities, then such record date shall be deemed to be the date of the issue
      or
      sale of the Ordinary Shares deemed to have been issued or sold upon the
      declaration of such dividend or the making of such other distribution or the
      date of the granting of such right of subscription or purchase, as the case
      may
      be. 

     

    (f)(7)
      Treasury Shares. The number of Ordinary Shares outstanding at any given time
      shall not include shares owned or held by or for the account of the Company
      or
      any of its wholly-owned subsidiaries, and the disposition of any such shares
      (other than the cancellation or retirement thereof) shall be considered an
      issue
      or sale of Ordinary Shares for the purpose of this subsection (f). 

     

    (g)
       Anything
      herein to the contrary notwithstanding, the Company shall not be required to
      make any adjustment of the Warrant Price in the case of the issuance of (A)
      capital stock, Options or Convertible Securities issued to directors, officers,
      employees or consultants of the Company in connection with their service as
      directors of the Company, their employment by the Company or their retention
      as
      consultants by the Company pursuant to an equity compensation program approved
      by the Board of Directors of the Company or the compensation committee of the
      Board of Directors of the Company, (B) capital stock, Options or Convertible
      Securities in connection with strategic alliances, acquisitions and as equity
      kickers in lease and financing transactions, the primary purpose of which is
      not
      to raise equity capital, (C) Ordinary Shares
      issued upon the conversion or exercise of Options or Convertible Securities
      issued prior to the date hereof, provided such securities are not amended after
      the date hereof to increase the number of Ordinary Shares issuable thereunder
      or
      to lower the exercise or conversion price thereof, (D) securities issued
      pursuant to that certain Purchase Agreement dated December 9, 2005, among the
      Company and the Investors named therein (the "Purchase Agreement") and
      securities issued upon the exercise or conversion of those securities, and
      (E)
      Ordinary Shares issued or issuable by reason of a dividend, stock split or
      other
      distribution on Ordinary Shares (but only to the extent that such a dividend,
      split or distribution results in an adjustment in the Warrant Price pursuant
      to
      the other provisions of this Warrant) (colfectively, "Excluded Issuances").
      

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (h)
       Upon
      any
      adjustment to the Warrant Price pursuant to Section 8(f) above, the total number
      of Warrant Shares purchasable hereunder shall be increased as follows:

     

    Adjusted
      Warrant Shares = W(O
      +
      N) 

    O 

     

    where
      

     

    "W"
      equals the number of Warrant Shares for which this Warrant is exercisable
      immediately prior to the Trigger Issuance; 

     

    "N"
      equals the number of Additional Shares of Common Stock issued or deemed issued
      hereunder as a result of the Trigger Issuance; and 

     

    "0"
      equals the number of shares outstanding on a fully diluted basis immediately
      prior to the Trigger Issuance. 

     

    Section
      9.  Fractional
      Interest.
      The
      Company shall not be required to issue fractions of Warrant Shares upon the
      exercise of this Warrant. If any fractional Ordinary Share would, except for
      the
      provisions of the first sentence of this Section 9, be deliverable upon such
      exercise, the Company, in lieu of delivering such fractional share, shall pay
      to
      the exercising Warrantholder an amount in cash equal to the Market Price of
      such
      fractional Ordinary Share on the date of exercise. 

     

    Section
      10. Extension
      of Expiration Date.
      If the
      Company fails to cause any Registration Statement covering Registrable
      Securities (unless otherwise defined herein, capitalized terms are as defined
      in
      the Registration Rights Agreement relating to the Warrant Shares (the
      "Registration Rights Agreement")) to be declared effective prior to the
      applicable dates set forth therein, or if any of the events specified in Section
      2(c)(ii) of the Registration Rights Agreement occurs, and the Blackout Period
      (whether alone, or in combination with any other Blackout Period) continues
      for
      more than 60 days in any 12 month period, or for more than a total of 90 days,
      then the Expiration Date of this Warrant shall be extended one day for each
      day
      beyond the 60-day or 90-day limits, as the case may be, that the Blackout Period
      continues. 

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    Section
      11. Benefits.
      Nothing
      in this Warrant shall be construed to give any person, firm or corporation
      (other than the Company and the Warrantholder) any legal or equitable right,
      remedy or claim, it being agreed that this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrantholder. 

     

    Section
      12. Notices
      to Warrantholder.
      Upon
      the happening of any event requiring an adjustment of the Warrant Price, the
      Company shall promptly give written notice thereof to the Warrantholder at
      the
      address appearing in the records of the Company, stating the adjusted Warrant
      Price and the adjusted number of Warrant Shares resulting from such event and
      setting forth in reasonable detail the method of calculation and the facts
      upon
      which such calculation is based. Delivery of such written notice shall be deemed
      a final and binding determination with respect to such adjustment, absent
      manifest error, unless challenged by the Warrantholder within ten (10) days
      of
      receipt thereof. Failure to give such notice to the Warrantholder or any defect
      therein shall not affect the legality or validity of the subject adjustment.
      

     

    Section
      13. Identity
      of Transfer Agent.
      The
      Transfer Agent for the Ordinary Shares is American Stock Transfer & Trust
      Company. Upon the appointment of any subsequent transfer agent for the Ordinary
      Shares or other shares of the Company's capital stock issuable upon the exercise
      of the rights of purchase represented by the Warrant, the Company will mail
      to
      the Warrantholder a statement setting forth the name and address of such
      transfer agent. 

     

    Section
      14. Notices.
      Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given as hereinafter described
      (i) if given by personal delivery, then such notice shall be deemed given upon
      such delivery, (ii) if given by telex or facsimile, then such notice shall
      be
      deemed given upon receipt of confirmation of complete transmittal, (iii) if
      given by mail, then such notice shall be deemed given upon the earlier of (A)
      receipt of such notice by the recipient or (B) three days after such notice
      is
      deposited in first class mail, postage prepaid, and (iv) if given by an
      internationally recognized overnight air courier, then such notice shall be
      deemed given one business day after delivery to such carrier. All notices shall
      be addressed as follows: if to the Warrantholder, at its address as set forth
      in
      the Company's books and records and, if to the Company, at the address as
      follows, or at such other address as the Warrantholder or the Company may
      designate by ten days' advance written notice to the other: 

     

    If
      to the
      Company: 

     

    SuperCom
      Ltd. 
Millennium Building 

    3
      Tidhar
      Street, P.O.B. 2094 
Raanana 43665 Israel 

    Attention:
      

    Fax:
      

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    With
      a
      copy to: 

     

    Mintz,
      Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 

    Chrysler
      Center 

    666
      Third
      Avenue 

    New
      York,
      New York 10017 

    Attention:
      Kenneth Koch 

    Fax:
      (212) 983-3115 

     

    Section
      15. Registration
      Rights.
      The
      initial Warrantholder is entitled to the benefit of certain registration rights
      with respect to the Ordinary Shares issuable upon the exercise of this Warrant
      as provided in the Registration Rights Agreement, and any subsequent
      Warrantholder may be entitled to such rights. 

     

    Section
      16. Successors.
      All the
      covenants and provisions hereof by or for the benefit of the Warrantholder
      shall
      bind and inure to the benefit of its respective successors and assigns
      hereunder. 

     

    Section
      17. Governing
      Law; Consent to Jurisdiction: Waiver of Jury Trial.
      This
      Warrant shall be governed by, and construed in accordance with, the internal
      laws of the State of New York, without reference to the choice of law provisions
      thereof. The Company and, by accepting this Warrant, the Warrantholder, each
      irrevocably submits to the exclusive jurisdiction of the courts of the State
      of
      New York located in New York County and the United States District Court for
      the
      Southern District of New York for the purpose of any suit, action, proceeding
      or
      judgment relating to or arising out of this Warrant and the transactions
      contemplated hereby. Service of process in connection with any such suit, action
      or proceeding may be served on each party hereto anywhere in the world by the
      same methods as are specified for the giving of notices under this Warrant.
      The
      Company and, by accepting this Warrant, the Warrantholder, each irrevocably
      consents to the jurisdiction of any such court in any such suit, action or
      proceeding and to the laying of venue in such court. The Company and, by
      accepting this Warrant, the Warrantholder, each irrevocably waives any objection
      to the laying of venue of any such suit, action or proceeding brought in such
      courts and irrevocably waives any claim that any such suit, action or proceeding
      brought in any such court has been brought in an inconvenient forum.
EACH
      OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES
      ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
      WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
      WAIVER. 

     

    Section
      18. Call
      Provision.
      Subject
      to the provisions of clauses (b) and (c) below, in the event that the closing
      bid price per Ordinary Share as traded on the Bulletin Board (or such other
      U.S.
      exchange or stock market on which the Ordinary Shares may then be listed or
      quoted) equals or exceeds US$1.20 (appropriately adjusted for any stock split,
      reverse stock split, stock dividend or other reclassification or combination
      of
      the Ordinary Shares occurring after the date hereof) for at least twenty (20)
      trading days during which the Registration Statement (as defined in the
      Registration Rights Agreement) has been effective (the "Trading Condition"),
      the
      Company, upon thirty (30) days prior written notice (the "Notice Period") given
      to the Warrantholder within one business day immediately following the end
      of
      such twenty (20) trading day period, may call this Warrant at a redemption
      price
      equal to US$0.01 per Ordinary Share then purchasable pursuant to this Warrant;
      provided that (i) the Company simultaneously calls all Company Warrants (as
      defined below) on the same terms, (ii) all of the Ordinary Shares issuable
      hereunder either (A) are registered pursuant to an effective Registration
      Statement (as defined in the Registration Rights Agreement) which has not been
      suspended and for which no stop order is in effect, and pursuant to which the
      Warrantholder is able to sell such Ordinary Shares at all times during the
      Notice Period or (B) no longer constitute Registrable Securities (as defined
      in
      the Registration Rights Agreement) and (iii) this Warrant is fully exercisable
      for the full amount of Warrant Shares covered hereby. Notwithstanding any such
      notice by the Company, the Warrantholder shall have the right to exercise this
      Warrant prior to the end of the Notice Period. 

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    

    (b)
      In
      any three-month period, no more than the lesser of (i) 20% of the aggregate
      amount of Warrants initially issued to a Warrantholder or (ii) the number of
      Warrants held by the Warrantholder, may be called by the Company and the Company
      may not call additional Warrants in any subsequent three-month period unless
      all
      the conditions specified in Section 18(a) are again met (including without
      limitation, the Trading Condition) at the time that any subsequent call notice
      is given. 

     

    (c)
      In
      connection with any transfer or exchange of less than all of this Warrant,
      the
      transferring Warrantholder shall deliver to the Company an agreement or
      instrument executed by the transferring Warrantholder and the new Warrantholder
      allocating between them on whatever basis they may determine in their sole
      discretion any subsequent call of this Warrant by the Company, such that after
      giving effect to such transfer the Company shall have the right to call the
      same
      number of Warrants that it would have had if the transfer or exchange had not
      occurred. 

     

    Section
      19. Cashless
      Exercise.
      Notwithstanding any other provision contained herein to the contrary, from
      and
      after the first anniversary of the Closing Date (as defined in the Purchase
      Agreement) and so long as the Company is required under the Registration Rights
      Agreement to have effected the registration of the Warrant Shares for resale
      to
      the public pursuant to a Registration Statement (as such term is defined in
      the
      Registration Rights Agreement), if the Warrant Shares may not be freely sold
      to
      the public for any reason (including, but not limited to, the failure of the
      Company to have effected the registration of the Warrant Shares or to have
      a
      current prospectus available for delivery or otherwise, but excluding the period
      of any Allowed Delay (as defined in the Registration Rights Agreement), the
      Warrantholder may elect to receive, without the payment by the Warrantholder
      of
      the aggregate Warrant Price in respect of the Ordinary Shares to be acquired,
      Ordinary Shares of equal value to the value of this Warrant, or any specified
      portion hereof, by the surrender of this Warrant (or such portion of this
      Warrant being so exercised) together with a Net Issue Election Notice, in the
      form annexed hereto as Appendix B, duly executed, to the Company. Thereupon,
      the
      Company shall
      issue to the Warrantholder such number of fully paid, validiy issued and
      nonassessable Ordinary Shares as is computed using the following formula:

    

    
      	
              X

            	
              =

            	
              Y(A-B)

            	 
	 	 	
              A

            	 

    

    

      
        
          
          

        

        
          -12-

          
            

          

        

         

      

    where
      

     

    X
      = the
      number of Ordinary Shares to which the Warrantholder is entitled upon such
      cashless exercise; 

     

    Y
      = the
      total number of Ordinary Shares covered by this Warrant for which the
      Warrantholder has surrendered purchase rights at such time for cashless exercise
      (including both shares to be issued to the Warrantholder and shares as to which
      the purchase rights are to be canceled as payment therefor); 

     

    A
      = the
“Market Price” of one Ordinary Share as at the date the net issue election is
      made; and 

     

    B
      = the
      Warrant Price in effect under this Warrant at the time the net issue election
      is
      made. 

     

    Section
      20.   No
      Rights as Stockholder.
      Prior
      to the exercise of this Warrant, the Warrantholder shall not have or exercise
      any rights as a stockholder of the Company by virtue of its ownership of this
      Warrant. 

     

    Section
      21. Amendment;
      Waiver.
      This
      Warrant is one of a series of Warrants of like tenor issued by the Company
      pursuant to the Purchase Agreement and initially covering an aggregate of
      1,129,032 Ordinary Shares (collectively, the “Company
      Warrants”).
      Any
      term of this Warrant may be amended or waived (including the adjustment
      provisions included in Section 8 of this Warrant) upon the written consent
      of
      the Company and the holders of Company Warrants representing at least 50% of
      the
      number of Ordinary Shares then subject to all outstanding Company Warrants
      (the
“Majority
      Holders”);
      provided,
      that
      (x) any such amendment or waiver must apply to all Company Warrants; and (y)
      the
      number of Warrant Shares subject to this Warrant, the Warrant Price and the
      Expiration Date may not be amended, and the right to exercise this Warrant
      may
      not be altered or waived, without the written consent of the Warrantholder.
      

     

    Section
      22.   Section
      Headings.
      The
      section headings in this Warrant are for the convenience of the Company and
      the
      Warrantholder and in no way alter, modify, amend, limit or restrict the
      provisions hereof. 

    
      
        
        

      

      
        -13-

        
          

        

      

       

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as
      of
      the ______ day of December, 2005. 

    

    
      	
              SUPERCOM
                LTD.   

            
	 	 	 	 
	 	 	 	 
	
              By: 

            	 	 	
              By: 

            
	
              
                

              

              Name:
                Avi Schechter

            	 	 	
              
                

              

              Name:
                Eyal Tuchman

            
	
              Title:
                C.E.O.

            	 	 	
              Title:
                C.F.O

            

    

    
      
        
        

      

      
        -14-

        
          

        

      

       

    

    

    APPENDlX
      A 

    SUPERCOM
      LTD. 

    WARRANT
      EXERCISE FORM 

     

    To
      SuperCom Ltd.: 

     

    The
      undersigned hereby irrevocably elects to exercise the right of purchase
      represented by the within Warrant (“Warrant”) for, and to purchase thereunder by
      the payment of the Warrant Price and surrender of the Warrant, _________________
      Ordinary Shares (“Warrant Shares”) provided for therein, and requests that
      certificates for the Warrant Shares be issued as follows: 

    

    
      	 	 	 
	 	 	
              Name

            
	 	 	 
	 	 	
              Address

            
	 	 	 
	 	 	 
	 	 	 
	 	 	
              Federal
                Tax ID or Social Security No.

            

    

    

    and
      delivered by (certified mail to the above address, or (electronically (provide
      DWAC Instructions: ______________), or (other (specify):
      ________________________). 

    

    and,
      if
      the number of Warrant Shares shall not be all the Warrant Shares purchasable
      upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
      Shares purchasable upon exercise of this Warrant be registered in the name
      of
      the undersigned Warrantholder or the undersigned’s Assignee as below indicated
      and delivered to the address stated below. 

     

    
      	
              Dated
                : _________, ___

            	 	 	 
	 	 	 	 
	
              Note:
                The signature must correspond with 

            	 	 	 
	
              Signature:
                _____________________________

            	 	 	
            

    

     

    
      	
              the
                name of the Warrantholder as written on the first page of the Warrant
                in
                every particular, without alteration or enlargement or any change
                whatever, unless the Warrant has been assigned.

            	 	
               

            	 
	 	 	 	 
	 	 	 	
              Name
                (please print)

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
              Address

            
	 	 	 	 
	 	 	 	 
	 	 	 	
              Federal
                Identification or 

              Social
                Security No.

            

    

     

    
      	 	 	 	
              Assignee:

            
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

    
      
        
        

      

      
        -15-

        
          

        

      

       

    

    APPENDIX
      B

    SUPERCOM
      LTD.

    NET
      ISSUE
      ELECTION NOTICE

    

    To:
      SuperCom Ltd. 

    

    Date
      :
      [____________]

    

    The
      undersigned hereby elects under Section
      19
      of this
      Warrant to surrender the right to purchase [________]
      Ordinary Shares pursuant to this Warrant and hereby requests the issuance of
      [________] Ordinary
      Shares. The certificate(s) for the shares issuable upon such net issue election
      shall be issued in the name of the undersigned or as otherwise indicated below.
      

     

    
      	 	 	
               

            	 
	
              Signature

            	 	 	 
	 	 	 	 
	 	 	 	 
	
              Name
                for Registration

            	 	 	 
	 	 	 	 
	 	 	 	 
	
              Mailing
                Address

            	 	 	 

    

     

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

     

    

      THE
        SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
        HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
        AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
        THE
        COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
        THAT
        SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
        ACT
        OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

      

      SUBJECT
        TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER
        5:00
        P.M. EASTERN TIME ON DECEMBER 9, 2010 (THE “EXPIRATION DATE”).

      

      No.
        ________

      

      SUPERCOM
        LTD.

      

      WARRANT
        TO PURCHASE 282,258 ORDINARY SHARES,

      PAR
        VALUE NIS0.01 PER SHARE

      

      For
        VALUE
        RECEIVED, Special Situations Cayman Fund, L.P. (“Warrantholder”), is entitled to
        purchase, subject to the provisions of this Warrant, from SuperCom Ltd.,
        an
        Israeli corporation (“Company”), at any time not later than 5:00 P.M., Eastern
        time, on the Expiration Date (as defined above), at an exercise price per
        share
        equal to US$0.60 (the exercise price in effect being herein called the “Warrant
        Price”), 282,258 shares (“Warrant Shares”) of the Company’s Ordinary Shares, par
        value NIS0.01 per share (“Ordinary Shares”). The number of Warrant Shares
        purchasable upon exercise of this Warrant and the Warrant Price shall be
        subject
        to adjustment from time to time as described herein. 

      

      Section
        1. Registration.
        The
        Company shall maintain books for the transfer and registration of the Warrant.
        Upon the initial issuance of this Warrant, the Company shall issue and register
        the Warrant in the name of the Warrantholder.

      

      Section
        2. Transfers.
        As
        provided herein, this Warrant may be transferred only pursuant to a registration
        statement filed under the Securities Act of 1933, as amended (the “Securities
        Act”), or an exemption from such registration. Subject to such restrictions,
        the
        Company shall transfer this Warrant from time to time upon the books to be
        maintained by the Company for that purpose, upon surrender hereof for transfer,
        properly endorsed or accompanied by appropriate instructions for transfer
        and
        such other documents as may be reasonably required by the Company, including,
        if
        required by the Company, an opinion of its counsel to the effect that such
        transfer is exempt from the registration requirements of the Securities Act,
        to
        establish that such transfer is being made in accordance with the terms hereof,
        and a new Warrant shall be issued to the transferee and the surrendered Warrant
        shall be canceled by the Company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Section
        3. Exercise
        of Warrant.
        Subject
        to the provisions hereof, the Warrantholder may exercise this Warrant, in
        whole
        or in part, at any time prior to its expiration upon surrender of the Warrant,
        together with delivery of a duly executed Warrant exercise form, in the form
        attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash,
        certified check or wire transfer of funds (or, in certain circumstances,
        by
        cashless exercise as provided below) of the aggregate Warrant Price for that
        number of Warrant Shares then being purchased, to the Company during normal
        business hours on any business day at the Company’s principal executive offices
        (or such other office or agency of the Company as it may designate by notice
        to
        the Warrantholder). The Warrant Shares so purchased shall be deemed to be
        issued
        to the Warrantholder or the Warrantholder's designee, as the record owner
        of
        such shares, as of the close of business on the date on which this Warrant
        shall
        have been surrendered (or the date evidence of loss, theft or destruction
        thereof and security or indemnity satisfactory to the Company has been provided
        to the Company), the Warrant Price shall have been paid and the completed
        Exercise Agreement shall have been delivered. Certificates for the Warrant
        Shares so purchased shall be delivered to the Warrantholder within a reasonable
        time, not exceeding three (3) business days, after this Warrant shall have
        been
        so exercised. The certificates so delivered shall be in such denominations
        as
        may be requested by the Warrantholder and shall be registered in the name
        of the
        Warrantholder or such other name as shall be designated by the Warrantholder,
        as
        specified in the Exercise Agreement. If this Warrant shall have been exercised
        only in part, then, unless this Warrant has expired, the Company shall, at
        its
        expense, at the time of delivery of such certificates, deliver to the
        Warrantholder a new Warrant representing the right to purchase the number
        of
        shares with respect to which this Warrant shall not then have been exercised.
        As
        used herein, “business day” means a day, other than a Saturday or Sunday, on
        which banks in New York City are open for the general transaction of business.
        Each exercise hereof shall constitute the re-affirmation by the Warrantholder
        that (i) the representations and warranties contained in Sections 5.3, 5.4,
        5.5,
        5.6, 5.7, 5.8 and 5.9 of the Purchase Agreement (as defined below) are true
        and
        correct in all respects with respect to the Warrantholder as of the time
        of such
        exercise, and (ii) the remaining representations and warranties (other than
        those noted in (i) above) contained in Section 5 of the Purchase Agreement
        (as
        defined below) are true and correct in all material respects with respect
        to the
        Warrantholder as of the time of such exercise.

      

      Section
        4. Compliance
        with the Securities Act of 1933.
        Except
        as provided in the Purchase Agreement (as defined below), the Company may
        cause
        the legend set forth on the first page of this Warrant to be set forth on
        each
        Warrant, and a similar legend on any security issued or issuable upon exercise
        of this Warrant, unless counsel for the Company is of the opinion as to any
        such
        security that such legend is unnecessary.

      

      Section
        5. Payment
        of Taxes.
        The
        Company will pay any documentary stamp taxes attributable to the initial
        issuance of Warrant Shares issuable upon the exercise of the Warrant; provided,
        however, that the Company shall not be required to pay any tax or taxes which
        may be payable in respect of any transfer involved in the issuance or delivery
        of any certificates for Warrant Shares in a name other than that of the
        Warrantholder in respect of which such shares are issued, and in such case,
        the
        Company shall not be required to issue or deliver any certificate for Warrant
        Shares or any Warrant until the person requesting the same has paid to the
        Company the amount of such tax or has established to the Company’s reasonable
        satisfaction that such tax has been paid. The Warrantholder shall be responsible
        for all income taxes due under federal, state or other law, if any such tax
        is
        due. 

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      

      Section
        6. Mutilated
        or Missing Warrants.
        In case
        this Warrant shall be mutilated, lost, stolen, or destroyed, the Company
        shall
        issue in exchange and substitution of and upon surrender and cancellation
        of the
        mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen
        or destroyed, a new Warrant of like tenor and for the purchase of a like
        number
        of Warrant Shares, but only upon receipt of evidence reasonably satisfactory
        to
        the Company of such loss, theft or destruction of the Warrant, and with respect
        to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with
        respect thereto (if requested by the Company) in an amount reasonably
        satisfactory to the Company.

      

      Section
        7. Reservation
        of Ordinary Shares.
        The
        Company hereby represents and warrants that there have been reserved, and
        the
        Company shall at all applicable times keep reserved until issued (if necessary)
        as contemplated by this Section 7, out of the authorized and unissued Ordinary
        Shares, sufficient Ordinary Shares to provide for the exercise of the rights
        of
        purchase represented by this Warrant. The Company agrees that all Warrant
        Shares
        issued upon due exercise of the Warrant shall be, at the time of delivery
        of the
        certificates for such Warrant Shares, duly authorized, validly issued, fully
        paid and non-assessable Ordinary Shares of the Company.

      

      Section
        8. Adjustments.
        Subject
        and pursuant to the provisions of this Section 8, the Warrant Price and number
        of Warrant Shares subject to this Warrant shall be subject to adjustment
        from
        time to time as set forth hereinafter.

      

      (a)
        If
        the Company shall, at any time or from time to time while this Warrant is
        outstanding, pay a dividend or make a distribution on its Ordinary Shares
        in
        Ordinary Shares, subdivide its outstanding Ordinary Shares into a greater
        number
        of shares or combine its outstanding Ordinary Shares into a smaller number
        of
        shares or issue by reclassification of its outstanding Ordinary Shares any
        shares of its capital stock (including any such reclassification in connection
        with a consolidation or merger in which the Company is the continuing
        corporation), then the number of Warrant Shares purchasable upon exercise
        of the
        Warrant and the Warrant Price in effect immediately prior to the date upon
        which
        such change shall become effective, shall be adjusted by the Company so that
        the
        Warrantholder thereafter exercising the Warrant shall be entitled to receive
        the
        number of Ordinary Shares or other capital stock which the Warrantholder
        would
        have received if the Warrant had been exercised immediately prior to such
        event
        upon payment of a Warrant Price that has been adjusted to reflect a fair
        allocation of the economics of such event to the Warrantholder. Such adjustments
        shall be made successively whenever any event listed above shall
        occur.

      

      (b)
        If
        any capital reorganization, reclassification of the capital stock of the
        Company, consolidation or merger of the Company with another corporation
        in
        which the Company is not the survivor, or sale, transfer or other disposition
        of
        all or substantially all of the Company's assets to another corporation shall
        be
        effected, then, as a condition of suchreorganization, reclassification,
        consolidation, merger, sale, transfer or other disposition, lawful and adequate
        provision shall be made whereby each Warrantholder shall thereafter have
        the
        right to purchase and receive upon the basis and upon the terms and conditions
        herein specified and in lieu of the Warrant Shares immediately theretofore
        issuable upon exercise of the Warrant, such shares of stock, securities or
        assets as would have been issuable or payable with respect to or in exchange
        for
        a number of Warrant Shares equal to the number of Warrant Shares immediately
        theretofore issuable upon exercise of the Warrant, had such reorganization,
        reclassification, consolidation, merger, sale, transfer or other disposition
        not
        taken place, and in any such case appropriate provision shall be made with
        respect to the rights and interests of each Warrantholder to the end that
        the
        provisions hereof (including, without limitation, provision for adjustment
        of
        the Warrant Price) shall thereafter be applicable, as nearly equivalent as
        may
        be practicable in relation to any shares of stock, securities or assets
        thereafter deliverable upon the exercise hereof. The Company shall not effect
        any such consolidation, merger, sale, transfer or other disposition unless
        prior
        to or simultaneously with the consummation thereof the successor corporation
        (if
        other than the Company) resulting from such consolidation or merger, or the
        corporation purchasing or otherwise acquiring such assets or other appropriate
        corporation or entity shall assume the obligation to deliver to the
        Warrantholder, at the last address of the Warrantholder appearing on the
        books
        of the Company, such shares of stock, securities or assets as, in accordance
        with the foregoing provisions, the Warrantholder may be entitled to purchase,
        and the other obligations under this Warrant. The provisions of this paragraph
        (b) shall similarly apply to successive reorganizations, reclassifications,
        consolidations, mergers, sales, transfers or other dispositions.

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

       

      (c)
        In
        case the Company shall fix a payment date for the making of a distribution
        (including any such distribution made in connection with a consolidation
        or
        merger in which the Company is the continuing corporation) of evidences of
        indebtedness or assets (other than cash dividends or cash distributions payable
        out of consolidated earnings or earned surplus or dividends or distributions
        referred to in Section 8(a)), or subscription rights or warrants to all holders
        of Ordinary Shares, the Warrant Price to be in effect after such payment
        date
        shall be determined by multiplying the Warrant Price in effect immediately
        prior
        to such payment date by a fraction, the numerator of which shall be the total
        number of Ordinary Shares outstanding multiplied by the Market Price (as
        defined
        below) per share of Ordinary Shares immediately prior to such payment date,
        less
        the fair market value (as determined by the Company's Board of Directors
        in good
        faith) of said assets or evidences of indebtedness so distributed, or of
        such
        subscription rights or warrants, and the denominator of which shall be the
        total
        number of Ordinary Shares outstanding multiplied by such Market Price per
        share
        of Ordinary Shares immediately prior to such payment date. "Market Price"
        as of
        a particular date (the "Valuation Date") shall mean the following: (a) if
        the
        Ordinary Shares are then listed on a U.S. national stock exchange, the closing
        sale price of one share of Ordinary Shares on such exchange on the last trading
        day prior to the Valuation Date; (b) if the Ordinary Shares are then quoted
        on
        The Nasdaq Stock Market, Inc. ("Nasdaq"), the National Association of Securities
        Dealers, Inc. OTC Bulletin Board (the "Bulletin Board") or such similar
        quotation system or association, the closing sale price of one share of Ordinary
        Shares on Nasdaq, the Bulletin Board or such other quotation system or
        association on the last trading day prior to the Valuation Date or, if no
        such
        closing sale price is available, the average of the high bid and the low
        asked
        price quoted thereon on the last trading day prior to the Valuation Date;
        or (c)
        if the Ordinary Shares are not then listed on a national stock exchange or
        quoted on Nasdaq, the Bulletin Board or such other quotation system or
        association, the fair market value of one share of Ordinary Shares as of
        the
        Valuation Date, as determined in good faith by the Board of Directors of
        the
        Company and the Warrantholder. If the Ordinary Shares are not then listed
        on a
        national securities exchange, the Bulletin Board or such other quotation
        system
        or association, the Board of Directors of the Company shall respond promptly,
        in
        writing, to an inquiry by the Warrantholder prior to the exercise hereunder
        as
        to the fair market value of an Ordinary Shares as determined by the Board
        of
        Directors of the Company. In the event that the Board of Directors of the
        Company and the Warrantholder are unable to agree upon the fair market value
        in
        respect of subpart (c) of this paragraph, the Company and the Warrantholder
        shall jointly select an appraiser, who is experienced in such matters. The
        decision of such appraiser shall be final and conclusive, and the cost of
        such
        appraiser shall be borne equally by the Company and the Warrantholder. Such
        adjustment shall be made successively whenever such a payment date is
        fixed.

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      (d)
        An
        adjustment to the Warrant Price shall become effective immediately after
        the
        payment date in the case of each dividend or distribution and immediately
        after
        the effective date of each other event which requires an
        adjustment.

       

      (e)
        In
        the event that, as a result of an adjustment made pursuant to this Section
        8,
        the Warrantholder shall become entitled to receive any shares of capital
        stock
        of the Company other than Ordinary Shares, the number of such other shares
        so
        receivable upon exercise of this Warrant shall be subject thereafter to
        adjustment from time to time in a manner and on terms as nearly equivalent
        as
        practicable to the provisions with respect to the Warrant Shares contained
        in
        this Warrant.

       

      (f)
        Except as provided in subsection (g) hereof, if and whenever the Company
        shall
        issue or sell, or is, in accordance with any of subsections (f)(l) through
        (f)(7) hereof, deemed to have issued or sold, any Ordinary Shares for no
        consideration or for a consideration per share less than the Warrant Price
        in
        effect immediately prior to the time of such issue or sale, then and in each
        such case (a ''Trigger
        Issuance")
        the
        then-existing Warrant Price, shall be reduced, as of the close of business
        on
        the effective date of the Trigger Issuance, to the lowest price per share
        at
        which any Ordinary Share was issued or sold or deemed to be issued or sold;
        provided, however, that in no event shall the Warrant Price after giving
        effect
        to such Trigger Issuance be greater than the Warrant Price in effect prior
        to
        such Trigger Issuance.

       

      For
        purposes of this subsection (f), the following subsections (f)(l) to (Q(7)
        shall
        also be applicable: 

       

      (f)(l)
        Issuance of Rights or Options. In case at any time the Company shall in any
        manner grant (directly and not by assumption in a merger or otherwise) any
        warrants or other rights to subscribe for or to purchase, or any options
        for the
        purchase of, Ordinary Shares or any stock or security convertible into or
        exchangeable for Ordinary Shares (such warrants, rights or options being
        called
        "Options" and such convertible or exchangeable stock or securities being
        called
        "Convertible Securities") whether or not such Options or the right to convert
        or
        exchange any such Convertible Securities are immediately exercisable, and
        the
        price per share for which Ordinary Shares are issuable upon the exercise
        of such
        Options or upon the conversion or exchange of such Convertible Securities
        (determined by dividing (i) the sum (which sum shall constitute the applicable
        consideration) of (x) the total amount, if any, received or receivable by
        the
        Company as consideration for the granting of such Options, plus (y) the
        aggregate amount of additional consideration payable to the Company upon
        the
        exercise of all such Options, plus (z), in the case of such Options which
        relate
        to Convertible Securities, the aggregate amount of additional consideration,
        if
        any, payable upon the issue or sale of such Convertible Securities and upon
        the
        conversion or exchange thereof, by (ii) the total maximum number of Ordinary
        Shares issuable upon the exercise of such Options or upon the conversion
        or
        exchange of all such Convertible Securities issuable upon the exercise of
        such
        Options) shall be less than the Warrant Price in effect immediately prior
        to the
        time of the granting of such Options, then the total number of Ordinary Shares
        issuable upon the exercise of such Options or upon conversion or exchange
        of the
        total amount of such Convertible Securities issuable upon the exercise of
        such
        Options shall be deemed to have been issued for such price per share as of
        the
        date of granting of such Options or the issuance of such Convertible Securities
        and thereafter shall be deemed to be outstanding for purposes of adjusting
        the
        Warrant Price. Except as otherwise provided in subsection 8(f)(3), no adjustment
        of the Warrant Price shall be made upon the actual issue of such Ordinary
        Shares
        or of such Convertible Securities upon exercise of such Options or upon the
        actual issue of such Ordinary Shares upon conversion or exchange of such
        Convertible Securities.

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (f)(2)
        Issuance of Convertible Securities. In case the Company shall in any manner
        issue (directly and not by assumption in a merger or otherwise) or sell any
        Convertible Securities, whether or not the rights to exchange or convert
        any
        such Convertible Securities are immediately exercisable, and the price per
        share
        for which Ordinary Shares are issuable upon such conversion or exchange
        (determined by dividing (i) the sum (which sum shall constitute the applicable
        consideration) of (x) the total amount received or receivable by the Company
        as
        consideration for the issue or sale of such Convertible Securities, plus
        (y) the
        aggregate amount of additional consideration, if any, payable to the Company
        upon the conversion or exchange thereof, by (ii) the total number of Ordinary
        Shares issuable upon the conversion or exchange of all such Convertible
        Securities) shall be less than the Warrant Price in effect immediately prior
        to
        the time of such issue or sale, then the total maximum number of Ordinary
        Shares
        issuable upon conversion or exchange of all such Convertible Securities shall
        be
        deemed to have been issued for such price per share as of the date of the
        issue
        or sale of such Convertible Securities and thereafter shall be deemed to
        be
        outstanding for purposes of adjusting the Warrant Price, provided that (a)
        except as otherwise provided in subsection 8(f)(3), no adjustment of the
        Warrant
        Price shall be made upon the actual issuance of such Ordinary Shares upon
        conversion or exchange of such Convertible Securities and (b) no further
        adjustment of the Warrant Price shall be made by reason of
        the
        issue
        or sale of Convertible Securities upon exercise of any Options to purchase
        any
        such Convertible Securities for which adjustments of the Warrant Price have
        been
        made pursuant to the other provisions of subsection 8(f). 

      

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      (f)(3)
        Change in Option Price or Conversion Rate. Upon the happening of any of the
        following events, namely, if the purchase price provided for in any Option
        referred to in subsection 8(f)(l) hereof, the additional consideration, if
        any,
        payable upon the conversion or exchange of any Convertible Securities referred
        to in subsections 8(f)(l) or 8(f)(2), or the rate at which Convertible
        Securities referred to in subsections 8(f)(l) or 8(f)(2) are convertible
        into or
        exchangeable for Ordinary Shares shall change at any time (including, but
        not
        limited to, changes under or by reason of provisions designed to protect
        against
        dilution), the Warrant Price in effect at the time of such event shall forthwith
        be readjusted to the Warrant Price which would have been in effect at such
        time
        had such Options or Convertible Securities still outstanding provided for
        such
        changed purchase price, additional consideration or conversion rate, as the
        case
        may be, at the time initially granted, issued or sold. On the termination
        of any
        Option for which any adjustment was made pursuant to this subsection 8(f)
        or any
        right to convert or exchange Convertible Securities for which any adjustment
        was
        made pursuant to this subsection 8(f) (including without
        limitation upon the redemption or purchase for consideration of such Convertible
        Securities by the Company), the Warrant Price then in effect hereunder shall
        forthwith be changed to the Warrant Price which would have been in effect
        at the
        time of such termination had such Option or Convertible Securities, to the
        extent outstanding immediately prior to such termination, never been issued.
        

       

      (f)(4)
        Stock
        Dividends. Subject to the provisions of this Section 8(f), in case the Company
        shall declare a dividend or make any other distribution upon any stock of
        the
        Company (other than the Ordinary Shares) payable in Ordinary Shares, Options
        or
        Convertible Securities, then any Ordinary Shares, Options or Convertible
        Securities, as the case may be, issuable in payment of such dividend or
        distribution shall be deemed to have been issued or sold without consideration.
        

      

        (f)(5)
          Consideration for Stock. In case any Ordinary Shares, Options or Convertible
          Securities shall be issued or sold for cash, the consideration received
          therefor
          shall be deemed to be the net amount received by the Company therefor,
          after
          deduction therefrom of any expenses incurred or any underwriting commissions
          or
          concessions paid or allowed by the Company in connection therewith. In
          case any
          Ordinary Shares, Options or Convertible Securities shall be issued or sold
          for a
          consideration other than cash, the amount of the consideration other than
          cash
          received by the Company shall be deemed to be the fair value of such
          consideration as determined in good faith by the Board of Directors of
          the
          Company, after deduction of any expenses incurred or any underwriting
          commissions or concessions paid or allowed by the Company in connection
          therewith. In case any Options shall be issued in connection with the issue
          and
          sale of other securities of the Company, together comprising one integral
          transaction in which no specific consideration is allocated to such Options
          by
          the parties thereto, such Options shall be deemed to have been issued for
          such
          consideration as determined in good faith by the Board of Directors of
          the
          Company. If Ordinary Shares, Options or Convertible Securities shall be
          issued
          or sold by the Company and, in connection therewith, other Options or
          Convertible Securities (the "Additional Rights") are issued, then the
          consideration received or deemed to be received by the Company shall be
          reduced
          by the fair market value of the Additional Rights (as determined using
          the
          Black-Scholes option pricing model or another method mutually agreed to
          by the
          Company and the Warrantholder). The Board of Directors of the Company shall
          respond promptly, in writing, to an inquiry by the Warrantholder as to
          the fair
          market value of the Additional Rights. In the event that the Board of Directors
          of the Company and the Warrantholder are unable to agree upon the fair
          market
          value of the Additional Rights, the Company and the Warrantholder shall
          jointly
          select an appraiser, who is experienced in such matters. The decision of
          such
          appraiser shall be final and conclusive, and the cost of such appraiser
          shall be
          borne evenly by the Company and the Warrantholder. 

      

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      (f)(6) Record
        Date. In case the Company shall take a record of the holders of its Ordinary
        Shares for the purpose of entitling them (i) to receive a dividend or other
        distribution payable in Ordinary Shares, Options or Convertible Securities
        or
        (ii) to subscribe for or purchase Ordinary shares, Options or Convertible
        Securities, then such record date shall be deemed to be the date of the issue
        or
        sale of the Ordinary Shares deemed to have been issued or sold upon the
        declaration of such dividend or the making of such other distribution or
        the
        date of the granting of such right of subscription or purchase, as the case
        may
        be. 

       

      (f)(7)
        Treasury Shares. The number of Ordinary Shares outstanding at any given time
        shall not include shares owned or held by or for the account of the Company
        or
        any of its wholly-owned subsidiaries, and the disposition of any such shares
        (other than the cancellation or retirement thereof) shall be considered an
        issue
        or sale of Ordinary Shares for the purpose of this subsection (f). 

       

      (g)  Anything
        herein to the contrary notwithstanding, the Company shall not be required
        to
        make any adjustment of the Warrant Price in the case of the issuance of (A)
        capital stock, Options or Convertible Securities issued to directors, officers,
        employees or consultants of the Company in connection with their service
        as
        directors of the Company, their employment by the Company or their retention
        as
        consultants by the Company pursuant to an equity compensation program approved
        by the Board of Directors of the Company or the compensation committee of
        the
        Board of Directors of the Company, (B) capital stock, Options or Convertible
        Securities in connection with strategic alliances, acquisitions and as equity
        kickers in lease and financing transactions, the primary purpose of which
        is not
        to raise equity capital, (C) Ordinary Shares issued upon the conversion or
        exercise of Options or Convertible Securities issued prior to the date hereof,
        provided such securities are not amended after the date hereof to increase
        the
        number of Ordinary Shares issuable thereunder or to lower the exercise or
        conversion price thereof, (D) securities issued pursuant to that certain
        Purchase Agreement dated December 9, 2005, among the Company and the Investors
        named therein (the "Purchase Agreement") and securities issued upon the exercise
        or conversion of those securities, and (E) Ordinary Shares issued or issuable
        by
        reason of a dividend, stock split or other distribution on Ordinary Shares
        (but
        only to the extent that such a dividend, split or distribution results in
        an
        adjustment in the Warrant Price pursuant to the other provisions of this
        Warrant) (collectively, "Excluded Issuances"). 

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      (h)
         Upon
        any
        adjustment to the Warrant Price pursuant to Section 8(f)above,
        the total number of Warrant Shares purchasable hereunder shall be increased
        as
        follows: 

       

      Adjusted
        Warrant Shares =
        W(O
        +
        N)

      O 

       

      where
        

       

      "W"
        equals the number of Warrant Shares for which this Warrant is exercisable
        immediately prior to the Trigger Issuance; 

       

      "N"
        equals
        the number of Additional Shares of Common Stock issued or deemed issued
        hereunder as a result of the Trigger Issuance; and 

       

      "O"
        equals the number of shares outstanding on a fully diluted basis immediately
        prior to the Trigger Issuance. 

       

      Section
        9.  Fractional
        Interest. The Company shall not be required to issue fractions of Warrant
        Shares upon the exercise of this Warrant. If any fractional Ordinary Share
        would, except for the provisions of the first sentence of this Section 9,
        be
        deliverable upon such exercise, the Company, in lieu of delivering such
        fractional share, shall pay to the exercising Warrantholder an amount in
        cash
        equal to the Market Price of such fractional Ordinary Share on the date of
        exercise. 

       

      Section
        10. Extension of Expiration Date. If the Company fails to cause any
        Registration Statement covering Registrable Securities (unless otherwise
        defined
        herein, capitalized terms are as defined in the Registration Rights Agreement
        relating to the Warrant Shares (the "Registration Rights Agreement")) to
        be
        declared effective prior to the applicable dates set forth therein, or if
        any of
        the events specified in Section 2(c)(ii) of the Registration Rights Agreement
        occurs, and the Blackout Period (whether alone, or in combination with any
        other
        Blackout Period) continues for more than 60 days in any 12 month period,
        or for
        more than a total of 90 days, then the Expiration Date of this Warrant shall
        be
        extended one day for each day beyond the 60-day or 90-day limits, as the
        case
        may be, that the Blackout Period continues. 

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      Section
        11. Benefits.
        Nothing
        in this Warrant shall be construed to give any person, firm or corporation
        (other than the Company and the Warrantholder) any legal or equitable right,
        remedy or claim, it being agreed that this Warrant shall be for the sole
        and
        exclusive benefit of the Company and the Warrantholder. 

       

      Section
        12. Notices
        to Warrantholder.
        Upon
        the happening of any event requiring an adjustment of the Warrant Price,
        the
        Company shall promptly give written notice thereof to the Warrantholder at
        the
        address appearing in the records of the Company, stating the adjusted Warrant
        Price and the adjusted number of Warrant Shares resulting from such event
        and
        setting forth in reasonable detail the method of calculation and the facts
        upon
        which such calculation is based. Delivery of such written notice shall be
        deemed
        a final and binding determination with respect to such adjustment, absent
        manifest error, unless challenged by the Warrantholder within ten (10) days
        of
        receipt thereof. Failure to give such notice to the Warrantholder or any
        defect
        therein shall not affect the legality or validity of the subject adjustment.
        

       

      Section
        13. Identity
        of Transfer Anent.
        The
        Transfer Agent for the Ordinary Shares is American Stock Transfer & Trust
        Company. Upon the appointment of any subsequent transfer agent for the Ordinary
        Shares or other shares of the Company's capital stock issuable upon the exercise
        of the rights of purchase represented by the Warrant, the Company will mail
        to
        the Warrantholder a statement setting forth the name and address of such
        transfer agent. 

       

      Section
        14. Notices.
        Unless
        otherwise provided, any notice required or permitted under this Warrant shall
        be
        given in writing and shall be deemed effectively given as hereinafter described
        (i) if given by personal delivery, then such notice shall be deemed given
        upon
        such delivery, (ii) if given by telex or facsimile, then such notice shall
        be
        deemed given upon receipt of confirmation of complete transmittal, (iii)
        if
        given by mail, then such notice shall be deemed given upon the earlier of
        (A)
        receipt of such notice by the recipient or (B) three days after such notice
        is
        deposited in first class mail. postage prepaid, and (iv) if given by an
        internationally recognized overnight air courier, then such notice shall
        be
        deemed given one business day after delivery to such carrier. All notices
        shall
        be addressed as follows: if to the Warrantholder, at its address as set forth
        in
        the Company's books and records and, if to the Company, at the address as
        follows, or at such other address as the Warrantholder or the Company may
        designate by ten days' advance written notice to the other: 

       

      If
        to the
        Company: 

       

      SuperCom
        Ltd. 

      Millennium
        Building 

      3
        Tidhar
        Street, P.O.B. 2094 

      Raanana
        43665 Israel 

      Attention:
        

      Fax:
        

       

      
        
          
          

        

        
          -10-

          
            

          

        

         

      

      

      With
        a
        copy to: 

       

      Mintz,
        Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 

      Chrysler
        Center 

      666
        Third
        Avenue 

      New
        York,
        New York 1 00 17 

      Attention:
        Kenneth Koch 

      Fax:
        (212) 983-31 15 

       

      Section
        15. Registration
        Rights.
        The
        initial Warrantholder is entitled to the benefit of certain registration
        rights
        with respect to the Ordinary Shares issuable upon the exercise of this Warrant
        as provided in the Registration Rights Agreement, and any subsequent
        Warrantholder may be entitled to such rights. 

       

      Section
        16. Successors.
        All the
        covenants and provisions hereof by or for the benefit of the Warrantholder
        shall
        bind and inure to the benefit of its respective successors and assigns
        hereunder. 

       

      Section
        17. Governing
        Law; Consent to Jurisdiction; Waiver of Jury Trial.
        This
        Warrant shall be governed by, and construed in accordance with, the internal
        laws of the State of New York, without reference to the choice of law provisions
        thereof. The Company and, by accepting this Warrant, the Warrantholder, each
        irrevocably submits to the exclusive jurisdiction of the courts of the State
        of
        New York located in New York County and the United States District Court
        for the
        Southern District of New York for the purpose of any suit, action, proceeding
        or
        judgment relating to or arising out of this Warrant and the transactions
        contemplated hereby. Service of process in connection with any such suit,
        action
        or proceeding may be served on each party hereto anywhere in the world by
        the
        same methods as are specified for the giving of notices under this warrant.
        The
        Company and, by accepting this warrant, the Warrantholder, each irrevocably
        consents to the jurisdiction of any such court in any such suit, action or
        proceeding and to the laying of venue in such court. The Company and, by
        accepting this Warrant, the Warrantholder, each irrevocably waives any objection
        to the laying of venue of any such suit, action or proceeding brought in
        such
        courts and irrevocably waives any claim that any such suit, action or proceeding
        brought in any such court has been brought in an inconvenient forum.
EACH
        OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES
        ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
        WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO
        THIS
        WAIVER. 

       

      Section
        18. Call
        Provision.
        Subject
        to the provisions of clauses (b) and (c) below, in the event that the closing
        bid price per Ordinary Share as traded on the Bulletin Board (or such other
        U.S.
        exchange or stock market on which the Ordinary Shares may then be listed
        or
        quoted) equals or exceeds US$1.20 (appropriately adjusted for any stock split,
        reverse stock split, stock dividend or other reclassification or combination
        of
        the Ordinary Shares occurring after the date hereof) for at least twenty
        (20)
        trading days during which the Registration Statement (as defined in the
        Registration Rights Agreement) has been effective (the "Trading Condition"),
        the
        Company, upon thirty (30) days prior written notice (the "Notice Period")
        given
        to the Warrantholder within one business day immediately following the end
        of
        such twenty (20) trading day period, may call this Warrant at a redemption
        price
        equal to US$0.01 per Ordinary Share then purchasable pursuant to this Warrant;
        provided that (i) the Company simultaneously calls all Company Warrants (as
        defined below) on the same terms, (ii) all of the Ordinary Shares issuable
        hereunder either (A) are registered pursuant to an effective Registration
        Statement (as defined in the Registration Rights Agreement) which has not
        been
        suspended and for which no stop order is in effect, and pursuant to which
        the
        Warrantholder is able to sell such Ordinary Shares at all times during the
        Notice Period or (B) no longer constitute Registrable Securities (as defined
        in
        the Registration Rights Agreement) and (iii) this Warrant is fully exercisable
        for the full amount of Warrant Shares covered hereby. Notwithstanding any
        such
        notice by the Company, the Warrantholder shall have the right to exercise
        this
        Warrant prior to the end of the Notice Period. 

      
        
          
          

        

        
          -11-

          
            

          

        

         

      

      

      (b)
        In
        any three-month period, no more than the lesser of (i) 20% of the aggregate
        amount of Warrants initially issued to a Warrantholder or (ii) the number
        of
        Warrants held by the Warrantholder, may be called by the Company and the
        Company
        may not call additional Warrants in any subsequent three-month period unless
        all
        the conditions specified in Section 18(a) are again met (including without
        limitation, the Trading Condition) at the time that any subsequent call notice
        is given. 

       

      (c)
        In
        connection with any transfer or exchange of less than all of this Warrant,
        the
        transferring Warrantholder shall deliver to the Company an agreement or
        instrument executed by the transferring Warrantholder and the new Warrantholder
        allocating between them on whatever basis they may determine in their sole
        discretion any subsequent call of this Warrant by the Company, such that
        after
        giving effect to such transfer the Company shall have the right to call the
        same
        number of Warrants that it would have had if the transfer or exchange had
        not
        occurred. 

       

      Section
        19. Cashless
        Exercise.
        Notwithstanding any other provision contained herein to the contrary, from
        and
        after the first anniversary of the Closing Date (as defined in the Purchase
        Agreement) and so long as the Company is required under the Registration
        Rights
        Agreement to have effected the registration of the Warrant Shares for resale
        to
        the public pursuant to a Registration Statement (as such term is defined
        in the
        Registration Rights Agreement), if the Warrant Shares may not be freely sold
        to
        the public for any reason (including, but not limited to, the failure of
        the
        Company to have effected the registration of the Warrant Shares or to have
        a
        current prospectus available for delivery or otherwise, but excluding the
        period
        of any Allowed Delay (as defined in the Registration Rights Agreement), the
        Warrantholder may elect to receive, without the payment by the Warrantholder
        of
        the aggregate Warrant Price in respect of the Ordinary Shares to be acquired,
        Ordinary Shares of equal value to the value of this Warrant, or any specified
        portion hereof, by the surrender of this Warrant (or such portion of this
        Warrant being so exercised) together with a Net Issue Election Notice, in
        the
        form annexed hereto as Appendix B, duly executed, to the Company. Thereupon,
        the
        Company shall
        issue to the Warrantholder such number of fully paid, validly issued and
        nonassessable Ordinary Shares as is computed using the following
        formula:
         

        
          X
            = Y
            (A-B)

                 
            A

        

      

       

      
        
          
          

        

        
          -12-

          
            

          

        

         

      

       

      where

       

      X
        = the
        number of Ordinary Shares to which the Warrantholder is entitled upon such
        cashless exercise;

       

      Y
        = the
        total number of Ordinary Shares covered by this Warrant for which the
        Warrantholder has surrendered purchase rights at such time for cashless exercise
        (including both shares to be issued to the Warrantholder and shares as to
        which
        the purchase rights are to be canceled as payment therefor);

       

      A
        = the
        "Market Price" of one Ordinary Share as at the date the net issue election
        is
        made; and

       

      B
        = the
        Warrant Price in effect under this Warrant at the time the net issue election
        is
        made.

       

      Section
        20. No Rights as Stockholder. Prior to the exercise of this Warrant, the
        Warrantholder shall not have or exercise any rights as a stockholder of the
        Company by virtue of its ownership of this Warrant.

       

      Section
        21. Amendment; Waiver. This Warrant is one of a series of Warrants
        of like tenor issued by the Company pursuant to the Purchase Agreement and
        initially covering an aggregate of 282,258 Ordinary Shares
        (collectively, the "Company Warrants"). Any term of this Warrant may be
        amended or waived (including the adjustment provisions included in Section
        8 of
        this Warrant) upon the written consent of the Company and the holders of
        Company
        Warrants representing at least 50% of the number of Ordinary Shares then
        subject
        to all outstanding Company Warrants (the "Majority Holders");
provided, that (x) any such amendment or waiver must apply to all
        Company
        Warrants; and (y) the number of Warrant Shares subject to this Warrant, the
        Warrant Price and the Expiration Date may not be amended, and the right to
        exercise this Warrant may not be altered or waived, without the written consent
        of the Warrantholder.

       

      Section
        22. Section Headings. The section headings in this Warrant are for the
        convenience of the Company and the Warrantholder and in no way alter, modify,
        amend, limit or restrict the provisions hereof.

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly executed,
        as
o
        f the
        day of December, 2005.

       

      
        	
                SUPERCOM
                  LTD   

              
	 	 	 	 
	 	 	 	 
	
                By:
                  

              	 	 	
                By:
                  

              
	
                
                  

                

                Name:
                  Avi Schechter

              	 	 	
                
                  

                

                Name:
                  Eyal Tuchman

              
	
                Title:
                  C.E.O

              	 	 	
                Title:
                  C.F.O

              

      

       

      
        
          
          

        

        
          -14-

          
            

          

        

         

      

       

      APPENDIX
        A

      SUPERCOM
        LTD.

      WARRANT
        EXERCISE FORM

       

      To
        SuperCom Ltd.:

       

      The
        undersigned hereby irrevocably elects to exercise the right of purchase
        represented by the within Warrant ("Warrant") for, and to purchase thereunder
        by
        the payment of the Warrant Price and surrender of the Warrant, ________ Ordinary
        Shares ("Warrant Shares") provided for therein, and requests that certificates
        for the Warrant Shares be issued as follows:

       

      
        	 	____________________________________ 
	 	
                Name

              
	 	 
	 	____________________________________ 
	 	
                Address

              
	 	 
	 	____________________________________ 
	 	____________________________________ 
	 	
                Federal
                  Tax ID or Social Security No.

              
	 	 

      

       

      and
        delivered by (certified mail to the above address, or (electronically (provide
        Instructions: _____________ ), or (other DWAC (specify _______________________):
        

       

      and,
        if
        the number of Warrant Shares shall not be all the Warrant Shares purchasable
        upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
        Shares purchasable upon exercise of this Warrant be registered in the name
        of
        the undersigned Warrantholder or the undersigned's Assignee as below indicated
        and delivered to the address stated below.

       

      Dated
        :
__________________________ 

       

      Note:
        The
        signature must correspond with 

       

      Signature:
        ________________________

       

      
        	 	 
	
                the
                  name of the Warrantholder as written on the first page of the Warrant
                  in
                  every particular, without alteration or enlargement or any change
                  whatever, unless the Warrant has been assigned.

              	
                ____________________________________ 

                Name
                  (please print)

              
	 	____________________________________ 
	 	____________________________________ 
	 	
                Address

              
	 	 
	 	____________________________________ 
	 	
                Federal
                  Identification or 

                Social
                  Security No.

              
	 	 
	 	 
	 	
                Assignee:

              
	 	____________________________________ 
	 	____________________________________ 
	 	____________________________________ 

      

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

       

      APPENDIX
        B

      SUPERCOM
        LTD.

      NET
        ISSUE
        ELECTION NOTICE

      

      To:
        SuperCom Ltd.

      

      Date:
        [___________________]

       

      The
        undersigned hereby elects under Section 19 of this Warrant to surrender the
        right to purchase [_______] Ordinary Shares pursuant to this Warrant and
        hereby
        requests the issuance of [_______] Ordinary Shares. The certificate(s) for
        the
        shares issuable upon such net issue election shall be issued in the name
        of the
        undersigned or as otherwise indicated below.

      

      ________________________________________________

      Signature

       

      ________________________________________________

      Name
        for
        Registration

       

      ________________________________________________

      Mailing
        Address

      

      
        
          
          

        

        
          -16-

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