Document:

Exhibit 4.7

                            INKSURE TECHNOLOGIES INC.

             SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

                                  MARCH 4, 2002

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                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE 1.       Purchase and Sale of the Shares...............................1

      1.1    Purchase and Sale of the Shares...................................1

      1.2    Closing...........................................................1

      1.3    Delivery..........................................................2

ARTICLE 2.       Representations and Warranties of the Company and Supercom....2

      2.1    Organization, Good Standing and Qualification.....................2

      2.2    Capitalization, Voting Rights.....................................2

      2.3    Subsidiaries......................................................3

      2.4    Authorization.....................................................3

      2.5    Valid Issuance....................................................4

      2.6    Governmental Consents.............................................4

      2.7    Offering..........................................................4

      2.8    Litigation........................................................4

      2.9    No Violations.....................................................4

      2.10   Financial Statements..............................................5

      2.11   No Material Change................................................5

      2.12   Contracts and Other Commitments...................................6

      2.13   Related-Party Transactions........................................7

      2.14   Patents and Trademarks............................................7

      2.15   Employees.........................................................8

      2.16   Permits..........................................................10

      2.17   Environmental and Safety Laws....................................10

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      2.18   Title to Property and Assets.....................................10

      2.19   Insurance........................................................10

      2.20   Taxes............................................................10

      2.21   Brokers and Finders..............................................10

      2.22   Disclosure.......................................................11

ARTICLE 2A       Representations and Warranties of Supercom...................11

      2A.1   Organization, Good Standing and Qualification....................11

      2A.2   Authorization....................................................11

      2A.3   Good Title to Stockholder Shares.................................11

      2A.4   Litigation.......................................................11

      2A.5   No Violations....................................................11

      2A.6   Brokers and Finders..............................................11

ARTICLE 3.       Representations and Warranties of the Investor...............12

      3.1    Authorization....................................................12

      3.2    No Violations....................................................12

      3.3    Investment Intent................................................12

      3.4    Legends..........................................................13

      3.5    Investment Experience............................................13

      3.6    Accredited Investor..............................................13

      3.7    Brokers and Finders..............................................13

ARTICLE 4.       Conditions To the Investor's Obligations at Closing..........13

      4.1    Representations and Warranties...................................13

      4.2    Performance......................................................14

      4.3    Filing of Certificate of Incorporation...........................14

      4.4    Reservation of Shares............................................14

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      4.5    Board of Directors...............................................14

      4.6    Employment Agreement.............................................14

      4.7    Compliance Certificate...........................................14

      4.8    Secretary's Certificate..........................................14

      4.9    Opinion of Counsel...............................................14

      4.10   Due Diligence....................................................14

      4.11   Proceedings and Documents........................................14

ARTICLE 5.       Conditions To the Company's Obligations at Closing...........14

      5.1    Representations and Warranties...................................15

      5.2    Payment of Purchase Price........................................15

ARTICLE 6.       Covenants of the Company.....................................15

      6.1    Taxes............................................................15

      6.2    Satisfaction of Conditions to Closing............................15

      6.3    Financial Information............................................15

      6.4    Insurance........................................................16

      6.5    Compliance with Laws.............................................16

      6.6    Preservation of Corporate Existence..............................16

      6.7    Conversion Shares................................................16

      6.8    Inspection Rights................................................16

ARTICLE 6A.      Covenants of Supercom........................................16

      6A.1   Guaranty of Redemption Obligations...............................16

ARTICLE 7.       Indemnification..............................................16

      7.1    Indemnification..................................................18

      7.2    Right to Defend; Compromise of Claims; Contribution..............20

      7.3    Remedies.........................................................20

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ARTICLE 8.       Miscellaneous................................................21

      8.1    Survival of Warranties...........................................21

      8.2    Successors and Assigns...........................................21

      8.3    Titles and Subtitles.............................................21

      8.4    Notices..........................................................21

      8.5    Amendments and Waivers...........................................21

      8.6    Severability.....................................................22

      8.7    Independence of Covenants and Representations and Warranties.....22

      8.8    Further Assurances...............................................22

      8.9    Governing Law....................................................22

      8.10   Counterparts.....................................................22

      8.11   Entire Agreement.................................................22

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                            INKSURE TECHNOLOGIES INC.
             SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

       THIS  SERIES A  CONVERTIBLE  PREFERRED  STOCK  PURCHASE  AGREEMENT  (this
"AGREEMENT")  is made as of the 4th day of March,  2002,  by and  among  InkSure
Technologies  Inc., a Delaware  corporation (the  "COMPANY"),  Supercom Ltd., an
Israeli  corporation  ("SUPERCOM"),  and the investor listed on EXHIBIT A hereto
(the "INVESTOR").

                                    RECITALS

       WHEREAS,  the  Company  has  authorized  1,312,785  shares  of  Series  A
Convertible  Preferred Stock, par value $0.01 per share (the "PREFERRED STOCK"),
of the Company,  with the designations,  preferences and rights set forth in the
Amended and Restated  Certificate of Incorporation  attached hereto as EXHIBIT B
(the "CERTIFICATE OF INCORPORATION"); and

       WHEREAS,  the  Company  desires  to issue  and  sell  171,232  shares  of
Preferred  Stock  (the  "COMPANY  SHARES")  to the  Investor  on the  terms  and
conditions set forth herein; and

       WHEREAS,  Supercom is the holder of 1,141,553  shares of Preferred  Stock
(the "STOCKHOLDER SHARES") that it desires to sell to the Investor; and

       WHEREAS,  the  Investor  desires to purchase  the Company  Shares and the
Stockholder Shares (collectively,  the "SHARES") on the terms and conditions set
forth herein; and

       WHEREAS, the parties wish to set out certain representations, warranties,
covenants and understandings with respect to the above matters.

                                   PROVISIONS

       In  consideration  of the  foregoing  recitals  and the mutual  covenants
herein, the undersigned parties agree as set forth herein.

                   ARTICLE 1. PURCHASE AND SALE OF THE SHARES

              1.1    PURCHASE  AND SALE OF THE SHARES.  Subject to the terms and
conditions hereof, at the Closing (as defined below), (a) the Company will sell,
issue and deliver,  and the Investor  agrees to purchase  from the Company,  the
Company  Shares,  as set  forth on  EXHIBIT  A and (b)  Supercom  will  sell and
deliver,  and the Investor will purchase from Supercom,  the Stockholder Shares,
as set forth on EXHIBIT A.

              1.2    CLOSING.  Subject to the terms and conditions  hereof,  the
closing of the  purchase  and sale of the Shares  pursuant  to Section  1.1 (the
"CLOSING")  shall take place on March 4, 2002 , at the  offices of  Fulbright  &
Jaworski L.L.P., 666 Fifth Avenue, New York,

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New York 10103,  or at such other time or place as the Company and the  Investor
may mutually agree (the "CLOSING DATE").

              1.3    DELIVERY.  At  the  Closing,   subject  to  the  terms  and
conditions  hereof,  the Company and  Supercom  will deliver to the Investor the
Shares to be purchased by the Investor, against payment of the purchase price of
an aggregate of $1,150,000  by check or wire transfer to accounts  designated by
the Company and Supercom.

     ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SUPERCOM

       The  Company  and  Supercom  each  hereby  represent  and  warrant to the
Investor, on a joint and several basis, as of the Closing:

              2.1    ORGANIZATION, GOOD STANDING AND QUALIFICATION.  The Company
is duly organized,  validly  existing and in good standing under the laws of the
State of Delaware and the Company has all requisite power and authority to enter
into this Agreement and to carry out the provisions  hereof. The Company is duly
qualified to conduct its business as currently conducted and is in good standing
as a  foreign  corporation  in all  jurisdictions  in which  the  nature  of its
business or location of its properties requires such qualification, except where
the failure to be so qualified  would not have a material  adverse effect on the
business, financial condition, results of operations or prospects of the Company
and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").

              2.2    CAPITALIZATION, VOTING RIGHTS.

              (a)    The authorized capital stock of the Company consists of (i)
13,000,000  shares  of common  stock,  par value  $.01 per  share  (the  "COMMON
STOCK"),  of  which  5,066,796  shares  are  issued  and  outstanding,  and (ii)
2,000,000  shares of Preferred  Stock, of which 1,141,553  shares are issued and
outstanding.  SCHEDULE  2.2(a)  contains  an  accurate  list of the name of each
stockholder of the Company and the number of outstanding shares of each class of
capital stock of the Company held by such  stockholder.  All of the  outstanding
shares of the  capital  stock of the  Company  are duly  authorized  and validly
issued,  fully paid and  nonassessable,  and were issued in accordance  with the
registration  or  qualification  provisions  of the Act, and any relevant  state
securities laws or pursuant to valid exemptions therefrom.

              (b)    Except  as set  forth  herein  or on  SCHEDULE  2.2(b),  no
preemptive rights,  rights of first refusal or similar rights exist with respect
to the shares of capital stock of the Company and no such rights arise or become
exercisable  by virtue of or in connection  with the  transactions  contemplated
herein.  No  antidilution  or similar rights arise by virtue of or in connection
with the  issuance  and  delivery  of the  Company  Shares or the  Common  Stock
issuable upon  conversion of the Shares in accordance  with the  Certificate  of
Incorporation (the "CONVERSION SHARES"). The Company has reserved 600,000 shares
of Common Stock for issuance  under its 2001 Stock Option Plan (the "PLAN"),  of
which  169,350 are covered by option  grants  which are  presently  outstanding.
Except  as set  forth on  SCHEDULE  2.2(b)  or as  otherwise  described  in this
paragraph (b), there are no outstanding or authorized rights, options, warrants,

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convertible securities,  subscription rights, conversion rights, exchange rights
or other  agreements of any kind that could require the Company to issue or sell
any shares of its capital stock (or securities  convertible into or exchangeable
for shares of its capital stock). The Company has granted to Eli Rozen an option
(the  "ROZEN  OPTION")  to purchase  300,480  shares of the Common  Stock of the
Company at an exercise  price of  $150,000,  and has granted to Elie  Housman an
option (the  "HOUSMAN  OPTION")  to purchase up to 478,469  shares of the Common
Stock of the Company at an exercise price of U.S. $0.966 per share.  Neither the
Rozen Option nor the Housman Option were granted pursuant to the Plan. Except as
set forth on SCHEDULE  2.2(B),  the Company has no  obligation  to register  any
shares  of its  capital  stock  under the Act.  Except as set forth on  SCHEDULE
2.2(B),  the Company is not obligated  directly,  indirectly or  contingently to
purchase or redeem any shares of its capital stock.

              (c)    On or prior to the Closing,  the Company and Supercom  will
have  (i)  converted  all   outstanding   principal  and  accrued   interest  on
approximately  $1.42  million  loaned from  Supercom and all other  intercompany
indebtedness  (other than as described in this paragraph (c)) of the Company and
its  Subsidiaries to Supercom into a contribution to the capital of the Company,
(ii) sold all of the issued and  outstanding  common stock of Kromotek Inc. held
by the Company to Supercom in exchange for conversion into a contribution to the
capital of the Company by Supercom of  $930,000  of  principal  and  interest on
Supercom's  loan to the Company,  (iii)  issued and  delivered  the  Stockholder
Shares to Supercom in consideration of the foregoing  contribution of capital of
the  Company  (v) entered  into a  promissory  note in the amount of $250,000 in
favor of  Supercom  (the  "Remaining  Note")  and (vi)  Supercom  will  exchange
1,141,503  shares  of  Common  Stock  (the  "Exchanged  Common  Stock")  for the
Stockholder  Shares to be delivered by Supercom to the Investor  hereunder,  the
Exchanged  Stockholder  Shares  will be canceled on the books of the Company and
Supercom  shall execute  deliver any  instruments  of transfer  requested by the
Company in connection  with the  transactions  described in this subsection (the
"REORGANIZATION").

              2.3    SUBSIDIARIES.   Each   subsidiary   of   the   Company   (a
"SUBSIDIARY")  is listed on SCHEDULE  2.3. Each  Subsidiary is a corporation  or
limited liability company duly organized,  validly existing and in good standing
under the laws of the state of its  incorporation  or formation and is qualified
to do  business  as a  foreign  corporation  in each  jurisdiction  where  it is
required to be so qualified,  except where failure to be so qualified  would not
reasonably be expected to have a Material  Adverse  Effect.  Each  Subsidiary is
wholly owned by the Company.

              2.4    AUTHORIZATION.   The  Company  has  the  right,  power  and
authority to enter into and perform its obligations under this Agreement and the
other agreements  contemplated  hereby.  All corporate action on the part of the
Company,   its   officers,   directors  and   stockholders   necessary  for  the
authorization, execution and delivery of this Agreement and the other agreements
contemplated   hereby,  the  performance  of  all  obligations  of  the  Company
hereunder, the authorization,  issuance (or reservation for issuance),  sale and
delivery of the Company Shares being sold  hereunder and the  Conversion  Shares
has been  taken.  This  Agreement  constitutes  the  valid and  legally  binding
obligation of the Company,  enforceable in accordance with its terms, except (a)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general  application  affecting  enforcement of creditors'  rights
generally,  (b) as limited by laws  relating  to the  availability  of  specific
performance,  injunctive  relief,  or other  equitable  remedies  and (c) to the
extent any non-competition or indemnification

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provisions  of this  Agreement  may be  limited by  applicable  federal or state
securities laws or by public policy.

              2.5    VALID  ISSUANCE.  The Company Shares being purchased by the
Investor hereunder, when issued, sold and delivered in accordance with the terms
of this Agreement,  will be duly  authorized and validly issued,  fully paid and
nonassessable,  with no personal  liability  attaching to the ownership thereof,
free and clear of any liens whatsoever, other than liens arising out of the acts
or omissions of the  Investor,  and with no  restrictions  on the voting  rights
thereof  and other  incidents  of record  and  beneficial  ownership  pertaining
thereto other than as provided for herein.  The Conversion Shares have been duly
authorized  and validly  reserved for issuance  and, upon issuance in accordance
with  the  terms  of  the  Preferred  Stock  set  forth  in the  Certificate  of
Incorporation,  will be duly  authorized  and  validly  issued,  fully  paid and
nonassessable,  with no personal  liability  attaching to the ownership thereof,
free and clear of any liens whatsoever, other than liens arising out of the acts
or omissions of the  Investor,  and with no  restrictions  on the voting  rights
thereof  and other  incidents  of record  and  beneficial  ownership  pertaining
thereto.

              2.6    GOVERNMENTAL  CONSENTS.  No  consent,  approval,  order  or
authorization of, or registration,  qualification,  designation,  declaration or
filing with, any federal,  state or local governmental  authority on the part of
the Company,  Supercom or any Subsidiary  (except such as have been obtained) is
required in connection with the consummation of the transactions contemplated by
this Agreement.

              2.7    OFFERING. Assuming the truth and accuracy of the Investor's
representations  set forth in Article 3 of this Agreement,  the offer,  sale and
issuance of the Company Shares as  contemplated by this Agreement is exempt from
the  registration  requirements of the Act and any applicable  state  securities
laws,  and requires no filing under the Act or any applicable  state  securities
law that has not been  made  (except  for  filings  that may be made  after  the
Closing, which shall be timely made).

              2.8    LITIGATION.  Except as set forth on SCHEDULE 2.8,  there is
no action,  suit,  proceeding  or  investigation  pending  or, to the  Company's
knowledge,  currently  threatened against the Company or any of its Subsidiaries
or their  properties  or assets,  nor is the Company aware that there is a basis
for any of the  foregoing.  The Company is not nor is any of its  Subsidiaries a
party or subject to the provisions of any order, writ,  injunction,  judgment or
decree of any court or  government  agency or  instrumentality  except for those
having  general   applicability.   There  is  no  action,  suit,  proceeding  or
investigation  by the Company or any  Subsidiary  currently  pending or that the
Company or any Subsidiary intends to initiate.

              2.9    NO VIOLATIONS. Neither the Company nor any Subsidiary is in
violation or default of any provision of its  Certificate  of  Incorporation  or
Bylaws as currently in effect,  or in any  material  respect of any  instrument,
contract,  judgment, order, writ or decree to which it is a party or by which it
is  bound,  or of any  provision  of any  federal  or  state  statute,  rule  or
regulation applicable to the Company or such Subsidiary. The execution, delivery
and  performance  of this  Agreement and the  consummation  of the  transactions
contemplated  hereby  will not result in any such  violation  on the part of the
Company or any Subsidiary or be in conflict with, or constitute (with or without
the passage of time and giving of notice) a default on the part of the Company

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or any Subsidiary under any such instrument,  contract, judgment, order, writ or
decree  or an  event  that  results  in the  creation  of any  lien,  charge  or
encumbrance  upon any assets of the Company or any Subsidiary or the suspension,
revocation,  impairment,  forfeiture,  or  nonrenewal  of any  permit,  license,
authorization  or approval  applicable to the Company or any  Subsidiary,  their
respective  business  or  operations  or  any  of  their  respective  assets  or
properties.

              2.10   FINANCIAL STATEMENTS.

              Prior to the  Closing,  the Company  shall have  furnished  to the
Investor  its  balance  sheet as of  September  30, 2001 and its  statements  of
operations  and cash flows for the  nine-month  period ended  September 30, 2001
(the "FINANCIAL STATEMENTS").  A copy of the Financial Statements is attached to
SCHEDULE 2.10 hereto. The Financial Statements,  together with any notes thereto
(if any),  have been  prepared  in  accordance  with the  books and  records  of
Supercom,  the  Company and each  Subsidiary  (which are true and correct in all
material  respects) and fairly present the financial position of the Company and
its Subsidiaries on a pro forma  consolidated  basis as of the dates thereof and
the results of its operations  and cash flows for the period then ended.  Except
as disclosed or provided for in the balance  sheet as of September  30, 2000, as
of the date  hereof,  there are no  material  liabilities  of the Company or its
Subsidiaries,  taken  together  as a  whole,  of any  kind  whatsoever,  whether
accrued,  contingent  or  otherwise,  other  than  liabilities  incurred  in the
ordinary course of business consistent with past practice since the date of such
balance sheet.

              2.11   NO MATERIAL  CHANGE.  Except as set forth on SCHEDULE 2.11,
since September 30, 2001 there has not been:

              (a)    any change in the assets, liabilities, financial condition,
or operating  results of the Company and its  Subsidiaries,  taken together as a
whole,  from that reflected in the Financial  Statements,  except for changes in
the ordinary  course of business that have not been, in the aggregate,  material
and adverse;

              (b)    any damage,  destruction or loss, whether or not covered by
insurance, that would have a Material Adverse Effect;

              (c)    any waiver or compromise  by the Company or any  Subsidiary
of a  valuable  right  or of a  material  debt  owed  to  the  Company  and  the
Subsidiaries, taken together as a whole;

              (d)    any  satisfaction  or  discharge  of any  lien,  claim,  or
encumbrance  or  payment of any  obligation  by the  Company or any  Subsidiary,
except  in the  ordinary  course of  business  and that is not  material  to the
business,  properties,  prospects or financial  condition of the Company and its
Subsidiaries, taken together as a whole;

              (e)    any  change  to a  contract  or  arrangement  by which  the
Company or any  Subsidiary  or any of their  assets is bound or subject  that is
material to the Company and the Subsidiaries, taken together as a whole;

              (f)    any  material  change in any  compensation  arrangement  or
agreement with any employee, officer, director or stockholder;

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              (g)    any  sale,   assignment,   or  transfer  of  any   patents,
trademarks, copyrights, trade secrets, or other intangible assets;

              (h)    any  resignation  or  termination  of employment of any key
officer of the Company or any Subsidiary;

              (i)    receipt  of notice  that there has been a loss of, or order
cancellation  by,  any  customer  of the  Company or any  Subsidiaries,  that is
material to the Company and the Subsidiaries, taken together as a whole;

              (j)    any  material  mortgage,  pledge,  transfer  of a  security
interest in, or lien, created by the Company or any Subsidiary,  with respect to
any of its properties or assets, except liens for taxes not yet due or payable;

              (k)    any material loans or guarantees made by the Company or any
Subsidiary to or for the benefit of their employees, stockholders,  officers, or
directors,  or any  members  of their  immediate  families,  other  than  travel
advances and other advances made in the ordinary course of their business;

              (l)    any declaration,  setting aside, or payment of any dividend
or other distribution of the Company's assets in respect of any of the Company's
capital  stock,  or any  direct  or  indirect  redemption,  purchase,  or  other
acquisition of any of such stock by the Company;

              (m)    to the best of the Company's knowledge,  any other event or
condition of any character that is reasonably  likely to have a Material Adverse
Effect; or

              (n)    any   agreement  or   commitment  by  the  Company  or  any
Subsidiary to do any of the things described in this Section 2.11.

              2.12   CONTRACTS  AND  OTHER  COMMITMENTS.  Except as set forth on
SCHEDULE 2.12, the Company and its Subsidiaries do not have and are not bound by
any contract,  agreement,  lease,  or commitment,  written or oral,  absolute or
contingent,  other than (i)  contracts for the purchase of supplies and services
that  were  entered  into in the  ordinary  course of  business  and that do not
involve more than One Hundred Thousand Dollars ($100,000), and do not extend for
more than one year beyond the date hereof,  (ii) sales contracts entered into in
the  ordinary  course of business,  (iii)  contracts  terminable  at will by the
Company on no more than thirty (30) days'  notice  without  cost or liability to
the Company which neither  involve any employment or consulting  arrangement nor
are material to the conduct of the  Company's or any  Subsidiary's  business and
(iv) confidentiality agreements.  Neither the Company or its Subsidiaries,  nor,
to its knowledge,  any other party to any contract  covered by clauses  (i)-(iv)
above or any contract set forth on SCHEDULE  2.12,  is in default under any such
contract.  Employment and consulting  contracts and contracts with labor unions,
and  license  agreements  and any other  agreements  relating  to the  Company's
acquisition  or  disposition  of  patent,  copyright,   trade  secret  or  other
proprietary   rights  or  technology   (other  than  standard  end-user  license
agreements) shall not be considered to be contracts entered into in the ordinary
course of business.

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              2.13   RELATED-PARTY TRANSACTIONS. Except as set forth on SCHEDULE
2.13 hereto or as contemplated by Section 2.2(c), no holder of 5% or more of any
class of capital stock of the Company at the time such  transaction  was entered
into, or any director,  officer or employee of the Company or any Subsidiary, or
family  member of any such person,  or any  corporation,  partnership,  trust or
other entity in which any such person, or family member of any such person,  has
an interest or is an officer, director, trustee, partner or holder of any equity
interest,  (i) is a party to any transaction with the Company or any Subsidiary,
including,  without  limitation,  any contract,  agreement or other  arrangement
providing for the  employment  of,  furnishing of services by, rental of real or
personal property from, license of Necessary  Intellectual  Property (as defined
below) or otherwise requiring payments or involving other obligations to or from
the Company or any  Subsidiary  or (ii) owns any assets used in the  business of
the Company or any Subsidiary.

              2.14   PATENTS AND TRADEMARKS.

              (a)    "INTELLECTUAL  PROPERTY" means all  intellectual  property,
including, without limitation, (i) patents, patent applications,  patent rights,
trademarks,   trademark   applications,   copyrights,   copyright  applications,
know-how,  franchises,  licenses,  proprietary processes and formulae,  layouts,
processes, inventions, and (ii) all proprietary rights pertaining to any product
or service  manufactured,  sold,  distributed or marketed,  or used, employed or
exploited  in  the  development,   manufacture,   license,  sale,  distribution,
marketing or maintenance  thereof, and all documentation and media constituting,
describing or relating to the foregoing. The Company and its Subsidiaries own or
have a valid and enforceable  license to use any and all  Intellectual  Property
necessary for the operation of the business of the Company and its  Subsidiaries
as now  conducted  or  proposed to be  conducted  (the  "NECESSARY  INTELLECTUAL
PROPERTY"),  which Necessary Intellectual Property is set forth on Schedule 2.14
hereto. The Company has no knowledge of any  misappropriation  of,  infringement
of, alleged  infringement  of or conflict with the rights of others with respect
to the Necessary Intellectual Property.

              (b)    The  Company  has  no  knowledge  that  any  of  its or its
Subsidiaries'  employees is obligated  under any contract  (including  licenses,
covenants or  commitments of any nature) or other  agreement,  or subject to any
judgment,  decree or order of any court or  administrative  agency,  that  would
interfere with such employee's duties to the Company or that would conflict with
the  Company's  and its  Subsidiaries'  business as  proposed  to be  conducted.
Neither the  execution nor delivery of this  Agreement  will, to the best of the
Company's  knowledge,  conflict  with  or  result  in a  breach  of  the  terms,
conditions  or  provisions  of, or  constitute a default  under,  any  contract,
covenant or instrument  under which any employee is now  obligated.  The Company
does  not  believe  it is or  will  be  necessary  to  utilize  any  inventions,
trademarks or  proprietary  information  of any of its  employees  made prior to
their  employment  by the Company,  except for such  inventions,  trademarks  or
proprietary information as have been assigned to the Company.

              (c)    The  Company  and its  Subsidiaries  have the right to use,
sell,  license  and  dispose  of,  and have the right to bring  actions  for the
infringement  of, and, where necessary,  has made timely and proper  application
for the registration of all Necessary  Intellectual  Property and such rights to
use, sell,  license,  dispose of and bring actions are exclusive with respect to
such Intellectual  Property.  There are no royalties,  honoraria,  fees or other
payments payable by the

                                       7
<PAGE>

Company  or its  Subsidiaries  to any  person by reason of the  ownership,  use,
license, sale or disposition of the Necessary Intellectual Property,  other than
in connection with licensed Intellectual Property.

              (d)    The Company  and its  Subsidiaries  have used  commercially
reasonable efforts to safeguard and maintain the secrecy and confidentiality of,
and its proprietary  rights in, all Necessary  Intellectual  Property.  Schedule
2.14 contains a true and complete list of all  applications  and filings made or
taken pursuant to federal,  state, local and foreign laws by the Company and its
Subsidiaries  to perfect or protect its interest in the  Necessary  Intellectual
Property,  including,  without  limitation,  all patents,  patent  applications,
trademarks, trademark applications, service marks and servicemark applications.

              (e)    The Company has not,  nor have any of its  Subsidiaries  or
any  affiliate,  sent to any third party or  otherwise  communicated  to another
person in the past five years any  charge,  complaint,  claim,  demand or notice
asserting  infringement  or  misappropriation  of, or other  conflict  with, any
Necessary  Intellectual  Property right of the Company or any Subsidiary by such
other person or any acts of unfair  competition by such other person, nor to the
best  knowledge  of the  Company,  is any such  infringement,  misappropriation,
conflict or act of unfair competition occurring or threatened.

              2.15   EMPLOYEES.

              (a)    Each  employee,  consultant  and officer of the Company and
its  Subsidiaries  has on or prior to the date  hereof  executed  a  Proprietary
Information  and  Inventions  Agreement  in the form  attached as Exhibit C. The
Company is not aware that any of its or any Subsidiary's employees,  consultants
or officers is in violation thereof.

              (b)    Except as set forth in  Schedule  2.15,  no employee of the
Company  or its  Subsidiaries  has an  employment  agreement  or  understanding,
whether  oral or  written,  with the  Company  or such  Subsidiary  which is not
terminable  on notice by the Company or such  Subsidiary  without  cost or other
liability  to the  Company or such  Subsidiary.  Except as set forth in Schedule
2.15, no employee of the Company or its  Subsidiaries has advised the Company or
its Subsidiaries  (orally or in writing) that he or she intends to terminate his
or her employment.

              (c)    To  the   Company's   knowledge,   the   Company   and  its
Subsidiaries  have  complied  in all  material  respects  with all  foreign  and
domestic laws  relating to the hiring of employees and the  employment of labor,
including  provisions  thereof  relating  to wages,  hours,  equal  opportunity,
collective  bargaining and the payment of social  security and other taxes.  The
Company  and its  Subsidiaries  do not have  knowledge  of any  labor  relations
problems  being  experienced  by it (including,  without  limitation,  any union
organization  activities,  threatened  or actual  strikes or work  stoppages  or
material grievances).

              (d)    Except as set forth on Schedule  2.15,  (i) the Company and
its  Subsidiaries are not delinquent in payments to any employees for any wages,
salaries,  commissions,  bonuses or other direct  compensation  for any services
performed by them to date or amounts required to be reimbursed to such employees
and upon any termination of the employment of any such employees,  (ii) there is
no unfair labor practice complaint against the Company or its

                                       8
<PAGE>

Subsidiaries  pending  before the National  Labor  Relations  Board or any other
governmental entity, (iii) there is no labor strike, material dispute,  slowdown
or stoppage pending or, to the best knowledge of the Company, threatened against
or  involving  the Company or its  Subsidiaries,  (iv) no labor union  currently
represents the employees of the Company or its Subsidiaries, and (v) to the best
knowledge  of the  Company,  no labor union has taken any action with respect to
organizing the employees of the Company or its Subsidiaries. The Company and its
Subsidiaries are not a party to or bound by any collective  bargaining agreement
or union contract.

              (e)    Schedule  2.15 sets forth a true and  complete  list of all
Employee  Benefit  Plans (as used in this  Section  2.15,  the "Plans") (i) that
cover any employees of the Company or its  Subsidiaries (A) that are maintained,
sponsored  or  contributed  to by the  Company or its  Subsidiaries  or (B) with
respect to which the Company or its  Subsidiaries  is obligated to contribute or
has any  liability or potential  liability,  whether  direct or indirect or (ii)
with  respect to which the Company and its  Subsidiaries  has any  liability  or
potential  liability on account of the  maintenance  or  sponsorship  thereof or
contribution  thereto by any present or former ERISA Affiliate of the Company or
its  Subsidiaries.  The Company,  its  Subsidiaries  and their  respective ERISA
Affiliates are not, and have never  maintained or been,  obligated to contribute
to a Multiple Employer Plan, a Multi-Employer  Plan or a Defined Benefit Pension
Plan.

              (f)    For the purposes of this Section 2.15, the following  terms
shall have the following meanings:

       "DEFINED  BENEFIT PENSION PLAN" means shall have the meaning set forth in
       Section 3(35) of ERISA.

       "EMPLOYEE BENEFIT PLAN" means any (a) qualified or non-qualified Employee
       Pension   Benefit  Plan   (including  any  Multiple   Employer  Plans  or
       Multi-Employer Plans), (b) Employee Welfare Benefit Plan, or (c) employee
       benefit, fringe benefit,  compensation,  incentive,  bonus or other plan,
       program or  arrangement,  whether or not  subject to ERISA and whether or
       not funded.

       "EMPLOYEE  WELFARE  BENEFIT  PLAN"  shall have the  meaning  set forth in
       Section 3(1) of ERISA.

       "ERISA"  means the Employee  Retirement  Income  Security Act of 1974, as
       amended, and the rules and regulations promulgated thereunder.

       "ERISA  AFFILIATES"  means, with respect to any person,  any other person
       that is a member of a  "controlled  group of  corporations"  with,  or is
       under  "common  control"  with,  or is a member  of the same  "affiliated
       service group" with such person as defined in Section 414(b),  414(c), or
       414(m) or 414(o) of the Code.

       "MULTI-EMPLOYER  PLAN" shall have the meaning set forth in Section  3(37)
       of ERISA.

       "MULTIPLE  EMPLOYER  PLAN"  means  shall  have the  meaning  set forth in
       Section 413 of the Code.

                                       9
<PAGE>

              2.16   PERMITS.   The   Company  and  each   Subsidiary   has  all
franchises,  permits,  licenses,  and any similar  authority  necessary  for the
conduct of its  business as now being  conducted  by it, the lack of which would
have a Material  Adverse  Effect.  Neither the Company nor any  Subsidiary is in
default in any respect under any of such franchises, permits, licenses, or other
similar authority.

              2.17   ENVIRONMENTAL AND SAFETY LAWS.  Neither the Company nor any
Subsidiary  is in violation of any statute,  law or  regulation  relating to the
environment or occupational health and safety, and no material  expenditures are
or will be required in order to comply with any such statute, law or regulation.
There are no  proceedings  pending  or, to the best  knowledge  of the  Company,
threatened  against the Company or its Subsidiaries  alleging any such violation
or involving any of their past operations or any real property currently used by
the  Company or its  Subsidiaries.  The Company  and its  Subsidiaries  have not
received  any  written  or oral  notice  or  report  with  respect  to it or its
facilities  regarding  any (i) actual or alleged  violation of any such statute,
law or  regulation  or (ii) actual or  potential  liability  arising  under such
statute, law or regulation,  including,  without limitation,  any investigatory,
remedial or corrective obligation.

              2.18   TITLE  TO  PROPERTY   AND  ASSETS.   The  Company  and  the
Subsidiaries  own, or lease  under  valid  leases,  all  facilities,  machinery,
equipment  and other  assets  necessary  for the  conduct of their  business  as
conducted as of the date hereof and as proposed to be conducted. The Company and
each Subsidiary owns its respective  properties and assets free and clear of all
mortgages,  liens,  loans and  encumbrances,  except such encumbrances and liens
that arise in the ordinary  course of business and do not materially  impair the
Company's or such Subsidiary's ownership or use of such property or assets. With
respect to the property and assets it leases, the Company and each Subsidiary is
in compliance with such leases and holds a valid leasehold  interest free of any
liens,  claims or  encumbrances.  Supercom  does not own any assets  used in the
business of the Company or any Subsidiary.

              2.19   INSURANCE. The Company and each Subsidiary has insurance on
its  properties  and business in such  amounts,  of such types and covering such
casualties,  risks and  contingencies  as is  ordinarily  carried  by  companies
engaged in similar  businesses and owning similar properties in the same general
area in which the Company or such Subsidiary operates.

              2.20   TAXES.  The  Company  and each  Subsidiary  has  filed  all
federal,  state,  local and other tax returns and reports  required by law to be
filed (including,  without  limitation,  those due in respect of its properties,
income,  franchises,  licenses, sales and payrolls), and has paid all such taxes
applicable to periods  through the day of the Closing,  and there are no pending
or threatened  claims  against the Company or any Subsidiary for past due taxes.
There are no outstanding  waivers or agreements by the Company or any Subsidiary
for the extension of the time for the payment of any tax.

              2.21   BROKERS AND FINDERS. Neither the Company nor any Subsidiary
has used or retained any broker, investment banker, financial advisor, finder or
agent in connection with this Agreement or the transactions contemplated hereby.

                                       10
<PAGE>

              2.22   DISCLOSURE.  This Agreement and any other written materials
and  financial  projections  which  have  been  provided  by or on behalf of the
Company to the Investor or any of its respective directors,  officers, partners,
employees,  representatives or agents,  taken as a whole, are true and authentic
in all material  respects.  The  representations  and  warranties  made by or on
behalf of the  Company to the  Investor  in this  Agreement  do not  contain any
untrue  statement  of a material  fact and do not omit to state a material  fact
required to be stated therein or necessary to make the  statements  made, in the
context in which made, not false or misleading.

             ARTICLE 2A. REPRESENTATIONS AND WARRANTIES OF SUPERCOM

Supercom hereby represents and warrants to the Investor as of the Closing:

              2A.1   ORGANIZATION, GOOD STANDING AND QUALIFICATION.  Supercom is
duly organized,  validly  existing and in good standing under the laws of Israel
and has all requisite  power and  authority to enter into this  Agreement and to
carry out the provisions hereof.

              2A.2   AUTHORIZATION.  Supercom has the right, power and authority
to enter into and perform its  obligations  under this  Agreement  and the other
agreements  contemplated  hereby to which  Supercom  is a party.  All  corporate
action  on the  part of  Supercom,  its  officers,  directors  and  stockholders
necessary for the  authorization,  execution and delivery of this  Agreement and
the other  agreements  contemplated  hereby  to which  Supercom  is  party,  the
performance of all obligations of Supercom  hereunder,  the sale and delivery of
the  Stockholder  Stock  being sold  hereunder  has been taken.  This  Agreement
constitutes the valid and legally binding obligation of Supercom, enforceable in
accordance  with its terms,  except (a) as  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium,  and other laws of general application
affecting  enforcement of creditors'  rights  generally,  (b) as limited by laws
relating to the  availability of specific  performance,  injunctive  relief,  or
other  equitable  remedies  and  (c)  to  the  extent  any   non-competition  or
indemnification  provisions  of this  Agreements  may be limited  by  applicable
federal or state securities laws or by public policy.

              2A.3   GOOD TITLE TO STOCKHOLDER  SHARES.  The Stockholder  Shares
being purchased by the Investor hereunder, when sold and delivered in accordance
with the terms of this  Agreement,  will be duly  authorized and validly issued,
fully  paid and  nonassessable,  with no  personal  liability  attaching  to the
ownership  thereof,  free and clear of any liens  whatsoever,  other  than liens
arising out of the acts or omissions of the Investor,  and with no  restrictions
on the voting  rights  thereof  and other  incidents  of record  and  beneficial
ownership pertaining thereto other than as provided for herein.

              2A.4   LITIGATION.   There  is  no  action,  suit,  proceeding  or
investigation pending or, to Supercom's knowledge,  currently threatened against
Supercom that questions the validity of this Agreement,  the  Reorganization  or
could  affect  any  of  the   properties  or  assets  of  the  Company  and  its
Subsidiaries.

                                       11
<PAGE>

              2A.5   NO VIOLATIONS.  The execution,  delivery and performance of
this Agreement,  and the  consummation of the transactions  contemplated  hereby
will not result in any violation on the part of Supercom or be in conflict with,
or  constitute  (with or  without  the  passage  of time and giving of notice) a
default on the part of Supercom under any instrument, contract, judgment, order,
writ or decree to which Supercom is a party or by which it is bound.

              2A.6   BROKERS AND FINDERS.  Supercom has not used or retained any
broker, investment banker, financial advisor, finder or agent in connection with
this Agreement or the transactions contemplated hereby.

           ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

       The Investor hereby represents and warrants as of the Closing:

              3.1    AUTHORIZATION.  The  Investor  has  the  right,  power  and
authority to enter into and perform its obligations under this Agreement and the
other agreements  contemplated hereby and thereby. All action on the part of the
Investor  and  its  officers,  directors,  stockholders,  partners,  members  or
managers, as applicable, necessary for the authorization, execution and delivery
of this Agreement and the other agreements  contemplated hereby or thereby,  and
the  performance of all  obligations of such Investor  hereunder and thereunder,
has been taken or will be taken prior to the Closing. This Agreement constitutes
a valid  and  legally  binding  obligation  of  such  Investor,  enforceable  in
accordance  with its terms,  except (a) as  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium,  and other laws of general application
affecting  enforcement of creditors'  rights  generally,  (b) as limited by laws
relating to the  availability of specific  performance,  injunctive  relief,  or
other  equitable  remedies  and  (c)  to  the  extent  any   non-competition  or
indemnification  provisions  of such  agreements  may be limited  by  applicable
federal or state securities laws or by public policy.

              3.2    NO VIOLATIONS.  The execution,  delivery and performance of
this Agreement , and the  consummation of the transactions  contemplated  hereby
will not result in any  violation on the part of such Investor or be in conflict
with or constitute  (with or without the passage of time and giving of notice) a
default on the part of such Investor under any of its  organizational or charter
documents,  as  applicable,  or a default on the part of such Investor under any
instrument,  contract, judgment, order, writ or decree, or an event that results
in the  creation  of any lien,  charge or  encumbrance  upon any  assets of such
Investor or the suspension, revocation, impairment, forfeiture, or nonrenewal of
any material  permit,  license,  authorization,  or approval  applicable to such
Investor, its business or operations or any of its assets or properties.

              3.3    INVESTMENT  INTENT. The Investor will acquire the Preferred
Stock  and,  if  the  Preferred  Stock  is  converted,   the  Conversion  Shares
(collectively,  the  "SECURITIES") for the Investor's own account for investment
and not with a view to, or in connection with, any resale or other  distribution
of any part  thereof,  and the Investor  has no present  intention of selling or
otherwise  distributing the same. The Investor  acknowledges that the Securities
are not registered  under the Act or other  applicable  securities laws and that
they may not be sold,  transferred,  offered for sale, pledged,  hypothecated or
otherwise  disposed of without  registration under such

                                       12
<PAGE>

Act and other applicable  securities laws,  except pursuant to an exemption from
such registration  available under the Act and other applicable securities laws.
In this connection,  the Investor  represents that the Investor is familiar with
Rule  144 of the Act,  as  presently  in  effect,  and  understands  the  resale
limitations imposed thereby and by the Act.

              3.4    LEGENDS. It is understood that the certificates  evidencing
the Securities may bear one or all of the following legends:

                     (i)    "The securities represented by this certificate have
not  been  registered  under  the  Securities  Act of  1933,  as  amended,  and,
accordingly,  may not be offered for sale, sold or otherwise  transferred except
(i)  upon  effective   registration  of  the  securities   represented  by  this
certificate  under  the  Securities  Act of 1933,  as  amended,  or (ii) upon an
exemption from such registration requirements."

                     (ii)   Any  legend  required  by the  Blue  Sky laws of any
other state to the extent such laws are applicable to the shares  represented by
the certificate so legended.

                     (iii)  Any legend required by any of the agreements entered
into by the parties hereto as of the date hereof.

              3.5    INVESTMENT  EXPERIENCE.  The  Investor  is an  investor  in
securities  of  privately  held  companies,  such as the  Company,  can bear the
economic  risk of its  investment,  and has such  knowledge  and  experience  in
financial or business  matters that it is capable of  evaluating  the merits and
risks of the investment in the Securities.

              3.6    ACCREDITED   INVESTOR.   The  Investor  is  an  "accredited
investor"  within the meaning of Rule 501 of Regulation D promulgated  under the
Act, as presently in effect.  The Investor (i) has been afforded the opportunity
to ask questions of, and receive answers from, the officers and/or  directors of
the Company,  acting on its behalf,  concerning  the Company,  and to obtain any
additional   information,   to  the  extent  that  the  Company  possesses  such
information or can acquire it without unreasonable effort or expense,  necessary
to verify the accuracy of the information furnished, and (ii) has availed itself
of such opportunity to the extent such Investor  considers  appropriate in order
to permit such Investor to evaluate the merits and risks of an investment in the
Company.

              3.7    BROKERS AND FINDERS.  The Investor has not used or retained
any broker,  investment banker, financial advisor, finder or agent in connection
with this Agreement or the transactions contemplated hereby.

         ARTICLE 4. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING

       The  obligations  of the Investor under Section 1.1 hereof are subject to
the  fulfillment  on or  before  the  Closing  Date  of  each  of the  following
conditions:

              4.1    REPRESENTATIONS  AND WARRANTIES.  The  representations  and
warranties  of the Company and  Supercom  contained  in Article 2 and Article 2A
shall be true on and as of the

                                       13
<PAGE>

Closing with the same effect as though such  representations  and warranties had
been made on and as of the date of the Closing.

              4.2    PERFORMANCE.  The Company and Supercom shall have performed
and complied with all agreements,  obligations and conditions  contained in this
Agreement  that are required to be performed or complied with by it on or before
the Closing.

              4.3    FILING OF CERTIFICATE OF INCORPORATION.  The Certificate of
Incorporation shall have been filed with the Secretary of State of Delaware.

              4.4    RESERVATION  OF SHARES.  The Company  shall have reserved a
sufficient  number of shares of Common Stock for issuance upon the conversion to
Common Stock of the Shares.

              4.5    BOARD OF DIRECTORS.  Elie Housman shall have been appointed
to the Board of Directors of the Company and named Chairman thereof.

              4.6    EMPLOYMENT  AGREEMENT.  Elie Housman and the Company  shall
have entered into an employment agreement in a form satisfactory to Mr. Housman.

              4.7    COMPLIANCE CERTIFICATE.  The President of the Company shall
have delivered to the Investor,  a  certificate,  dated the date of the Closing,
stating  that the  conditions  specified  in Sections  4.1 through 4.3 have been
fulfilled.

              4.8    SECRETARY'S CERTIFICATE. The Company shall have delivered a
certificate  of the  Secretary  of the  Company,  certifying  (i) the  Company's
Certificate of Incorporation  (including the Certificate of  Incorporation)  and
By-laws, (ii) resolutions of its Board of Directors and stockholders authorizing
the  transaction  and the issuance of the Securities and (iii) the incumbency of
the officers executing the transaction documents.

              4.9    OPINION OF COUNSEL.  The Investor  shall have received from
Fulbright & Jaworski L.L.P. and Israeli counsel to Supercom opinions dated as of
the Closing Date in a form satisfactory to the Investor.

              4.10   DUE DILIGENCE.  The Investor shall be satisfied in its sole
discretion with the results of its due diligence investigation and review of the
Company and its Subsidiaries.

              4.11   PROCEEDINGS   AND   DOCUMENTS.   All  corporate  and  other
proceedings in connection with the transactions  contemplated at or prior to the
Closing,  including,  without limitation, the Reorganization,  and all documents
incident  thereto shall be reasonably  satisfactory in form and substance to the
Investor  at  the  Closing  and  the  Investor  shall  have  received  all  such
counterpart  original and  certified  or other copies of such  documents as such
Investor may reasonably request.

                                       14
<PAGE>

         ARTICLE 5. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING

       The  obligations  of the Company to the Investor under this Agreement are
subject to the fulfillment or the Company's express written waiver, on or before
the Closing, of each of the following conditions by such Investor:

              5.1    REPRESENTATIONS  AND WARRANTIES.  The  representations  and
warranties  of such  Investor  contained in Article 3 shall be true on and as of
the Closing with the same effect as though such  representations  and warranties
had been made on and as of such Closing.

              5.2    PAYMENT  OF  PURCHASE   PRICE.   The  Investor  shall  have
delivered the purchase price for the shares of Preferred Stock purchased by such
Investor in accordance with Section 1.3.

                      ARTICLE 6. COVENANTS OF THE COMPANY

              6.1    TAXES.  All United  States  federal,  state or local sales,
use,  transfer,  stamp  (including  documentary  stamp taxes,  if any),  excise,
recording,   income,   capital  gain,  franchise  and  other  similar  taxes  or
governmental  charges,  but not including  income taxes imposed on any Investor,
with  respect  to the  securities  issued  pursuant  to this  Agreement  or upon
conversion  of the  Preferred  Stock  in  accordance  with  the  Certificate  of
Incorporation shall be borne by the Company.

              6.2    SATISFACTION  OF  CONDITIONS  TO CLOSING.  Supercom and the
Company  shall use their best  efforts to satisfy  the  conditions  set forth in
Article 4, including, without limitation, completing the Reorganization on terms
acceptable to the Investor.

              6.3    FINANCIAL INFORMATION.  For so long as the Investor and its
subsidiaries  hold,  in the  aggregate,  at least 100,000 (as adjusted for stock
splits,  stock  dividends  and the like) or more  shares of  Preferred  Stock or
Common Stock, the Company will deliver the following reports to the Investor:

              (a)    As soon as  practicable  after the end of each fiscal year,
and in any event within 90 days thereafter,  consolidated  balance sheets of the
Company and its  Subsidiaries,  if any, as of the end of such fiscal  year,  and
consolidated statements of income and consolidated statements of changes in cash
flow of the Company and its Subsidiaries, if any, for such fiscal year, prepared
in accordance  with GAAP and setting forth in each case in comparative  form the
figures for the previous  fiscal year,  all in reasonable  detail and audited by
independent  public  accountants  selected  by  the  Company,  together  with  a
certificate of the Company executed by the chief executive  officer or principal
financial or accounting  officer of the Company certifying that all covenants to
be complied  with by the Company  hereunder  have been complied with (or setting
forth in reasonable detail any covenants that have not been so complied with).

              (b)    As soon as practicable  after the end of the first,  second
and third quarterly  accounting periods in each fiscal year of the Company,  and
in any event within 60 days  thereafter,  a  consolidated  balance  sheet of the
Company  and its  Subsidiaries,  if any,  as of the end of each  such  quarterly
period,  and consolidated  statements of income and  consolidated  statements of
change in cash flow of the Company  for such  period and for the current  fiscal
year

                                       15
<PAGE>

to date,  prepared in accordance with GAAP (other than for accompanying  notes),
subject to changes  resulting from normal  year-end audit  adjustments,  for the
same periods of the previous fiscal year, all in reasonable detail and signed by
the principal  financial or accounting  officer of the Company,  together with a
certificate of the Company executed by the chief executive  officer or principal
financial or accounting  officer of the Company certifying that all covenants to
be complied  with by the Company  hereunder  have been complied with (or setting
forth in reasonable detail any covenants that have not been so complied with).

              6.4    INSURANCE.  The Company shall maintain such other insurance
with such  coverages and in such amounts as shall be determined by the Boards of
the Company and its  Subsidiaries,  including such insurance as the Board of the
Company  shall deem  necessary  to protect  the  assets of the  Company  and its
Subsidiaries,  which shall include, at a minimum, director and officer insurance
and error and omission insurance.

              6.5    COMPLIANCE  WITH LAWS. The Company will, and will cause its
Subsidiaries  to, comply in all material  respects with the  requirements of all
laws, rules, regulations and orders.

              6.6    PRESERVATION  OF  CORPORATE  EXISTENCE.  For as long as the
Preferred Stock or any Conversion Shares remains  outstanding,  the Company will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified, as a
foreign  corporation  in  each  jurisdiction  in  which  such  qualification  is
necessary or desirable in view of its business and  operations  or the ownership
of its properties.

              6.7    CONVERSION  SHARES.  The  Company  shall  take  any and all
actions  necessary to ensure that the  issuance  and delivery of the  Conversion
Shares does not and shall not (a) violate any law to which the Company or any of
its  assets  is  subject,  (b)  violate  any  provision  of the  Certificate  of
Incorporation  or Bylaws of the Company,  (c) conflict with,  result in a breach
of,  constitute a default under,  result in the  acceleration  of, create in any
party the right to  accelerate,  terminate,  modify or cancel,  or  require  any
notice under any contract to which the Company is a party or by which any of the
assets of the Company is bound or (d) result in the  imposition of any lien upon
any of the assets of the Company.

              6.8    INSPECTION  RIGHTS.  The Investor  and its  representatives
shall have the right to visit and inspect any of the  properties  of the Company
or any of its Subsidiaries, and to discuss the affairs, finances and accounts of
the Company or any of its  subsidiaries  with its  officers,  and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested.

                        ARTICLE 6A. COVENANTS OF SUPERCOM

              6A.1   GUARANTY  OF   REDEMPTION   OBLIGATION.   Supercom   hereby
absolutely,  unconditionally and irrevocably guarantees to the Investor full and
prompt payment,  without  set-off,  defense,  counterclaim or reduction,  of the
Liquidation  Preference  Amount  (as  defined  in  Article  V,  Section 2 of the
Certificate of Incorporation)(the "Guaranteed Obligations"),  up to a maximum of
US$1.0  million  (the  "Maximum  Obligation")  which may be due and owing to the

                                       16
<PAGE>

Investor from the Company upon the occurrence of a Change of Control of Supercom
(as defined in Article V, Section 2 of the Certificate of  Incorporation)  prior
to July  31,  2002  even if the  funds  of the  Company  legally  available  for
redemption are  insufficient or the Company is otherwise  prohibited from paying
such  amounts.  Subject to the other terms of this  Article  6A,  this  guaranty
constitutes  an absolute and  continuing  guarantee of payment of the Guaranteed
Obligations,  and not merely of  collection  thereof.  The liability of Supercom
hereunder  is direct and,  subject to the other  provisions  of this Article 6A,
unconditional,  and may be  enforced  without  requiring  the  Investor to first
resort to any other right, remedy or security.  Notwithstanding any amendment to
the  Certificate  of  Incorporation  subsequent to the date hereof,  in no event
shall Supercom's  obligation  pursuant to this Section 6A.1 exceed the lesser of
(i) the aggregate amount of Liquidation  Preference Amount, as presently defined
in the Certificate of  Incorporation  in the form attached  hereto,  for all the
Shares  which has not  already  been paid by the  Company,  or (ii) the  Maximum
Obligation.

              6A.2   PRIMARY   OBLIGATION.   No  invalidity,   irregularity   or
unenforceability  of all or any part of the Guaranteed  Obligations  (including,
without limitation,  as a result of the Company's bankruptcy,  or insolvency, or
pursuant  to any  assignment  for the  benefit of  creditors,  receivership,  or
similar  proceeding) will affect,  impair or be a defense to this guaranty,  and
this guaranty will be a primary obligation of Supercom and, subject to the other
terms of this Article 6A, nothing will discharge or satisfy the liability of the
Supercom  hereunder  except the full payment and  performance  of the Guaranteed
Obligations.  Supercom will be jointly and severally liable with the Company for
payment and  performance  of the  Guaranteed  Obligations,  and Supercom  hereby
waives any right to require the exhaustion of any remedy, or to require that the
Investor  first attempt to collect any of the  Guaranteed  Obligations  from the
Company.  No act or  omission  or delay by the  Investor  or course  of  dealing
between the Investor or the Company  will  constitute a waiver of the rights and
remedies  of the  Investor  under  this  Article  6A;  provided,  however,  that
notwithstanding anything to the contrary contained in this Article 6A, any claim
for payment of any of the Guaranteed  Obligation must be made by the Investor no
later than one (1) year from the date of this Agreement or be forever waived.

              6A.3   CLAWBACK.  If any  claim is ever made on the  Investor  for
repayment  or  recovery  of any amount or amounts  received  by the  Investor in
payment,  or on account of any of the Guaranteed  Obligations,  and the Investor
repays  all or part of  such  amount(s),  Supercom  will  be and  remain  liable
hereunder  for the amount so repaid or  recovered  to the same extent as if such
amount had never originally been received by the Investor,  notwithstanding  any
termination hereof or any cancellation of any certificate evidencing the Shares;
provided,  however, in no event will Supercom's obligation under this Article 6A
exceed the Maximum Obligation.

              6A.4   WAIVERS BY SUPERCOM. Supercom, to the fullest extent now or
hereafter not prohibited by applicable  law,  hereby waives:  (a) all suretyship
defenses  and  defenses  in the nature  thereof;  and (b)  notice of  acceptance
hereof.   In  addition,   Supercom  waives  any  right  to  seek   contribution,
indemnification,  subrogation,  reimbursement  or restitution  from the Company,
until all of the Guaranteed Obligations have been indefeasibly paid in full.

              6A.5   REORGANIZATION   TRANSACTIONS.   In   furtherance   of  the
Reorganization  contemplated by Section 2.2(c), Supercom hereby acknowledges and
agrees as follows:

                                       17
<PAGE>

              (a)    in connection with the Reorganization, prior to the Closing
Date (i) Supercom will exchange the Exchanged  Common Stock for the  Stockholder
Shares to be  delivered  by Supercom to the  Investor  hereunder,  (ii) that the
Exchanged  Stockholder  Shares  will be canceled on the books of the Company and
(iii) that Supercom shall execute deliver any instruments of transfer  requested
by the Company in connection with such transactions;

              (b)    Supercom acknowledges receipt of the Remaining Note and the
obligation of the Company represented thereby;

              (c)    subject  to and  upon  the  consummation  of  the  Closing,
Supercom  hereby  converts  into a  contribution  to the  capital of the Company
US$930,000 of  indebtedness of the Company to Supercom in  consideration  of the
delivery to Supercom by the Company of all outstanding  shares of Kromotek Inc.,
and Supercom hereby  acknowledges that it has received such shares from InkSure,
together with any necessary instruments of transfer;

              (d)    subject to and upon the  consummation  of the Closing,  (i)
Supercom  hereby  converts into a contribution to the Capital of the Company all
remaining  indebtedness of the Company and its  Subsidiaries to Supercom,  other
than as contemplated by this Section 6A.5 and Section 2.2(c),  together with any
interest  accrued or payable in respect  thereof,  outstanding as of the Closing
Date,   including,   without   limitation   approximately   US$1.42  million  of
intercompany  indebtedness  and (ii) Supercom and the Company  hereby agree that
the  Extension  of Credit Line  Agreement  made and entered  into the 1st day of
January, 2000 is hereby terminated ; and

              (e)    Supercom  hereby agrees,  from time to time and without
further  consideration,  to execute and deliver such further  documents and take
such further  actions as reasonably  may be required to implement and effectuate
the transactions contemplated in this Section 6A.

                           ARTICLE 7. INDEMNIFICATION

              7.1    INDEMNIFICATION.

              (a)    Indemnification by Company and Supercom. In addition to all
other  rights  and  remedies  available  to the  Investor  at  law or in  equity
(subject, in the case of Supercom, to the limitation contained in Section 7(c)),
the Company and Supercom, on a joint and several basis, shall indemnify,  defend
and hold  harmless  the  Investor and its  affiliates,  stockholders,  officers,
directors,  employees,  agents,  representatives  and permitted assigns from and
against any loss,  liability,  demand,  claim,  action,  cause of action,  cost,
damage,  deficiency,  penalty, fine or expense,  including interest,  penalties,
reasonable  attorneys'  fees and  expenses  and all  reasonable  amounts paid in
investigation,  defense or  settlement  of any of the  foregoing  (collectively,
"LOSSES")  which any such party may suffer,  sustain or become  subject to, as a
result of:

                     (i)    any  misrepresentation or breach of a representation
or warranty  (when viewed  individually  or in the aggregate) on the part of the
Company or Supercom under Article 2 and Article 2A; or

                                       18
<PAGE>

                     (ii)   without  duplication,  any  misrepresentation  in or
omission from any of the  representations or warranties  contained in any of the
certificates  or other  documents  furnished  to the  Investor by the Company or
Supercom.

              (b)    Indemnification  by the Investor.  In addition to all other
rights and remedies  available to the Company at law or in equity,  the Investor
shall  indemnify,  defend and hold  harmless  the  Company  and its  affiliates,
stockholders,   officers,  directors,  employees,  agents,  representatives  and
permitted  assigns  from and against any Losses which any such party may suffer,
sustain or become subject to, as a result of:

                     (i)    any  misrepresentation or breach of a representation
or warranty  (when viewed  individually  or in the aggregate) on the part of the
Investor under Article 3; or

                     (ii)   without  duplication,  any  misrepresentation  in or
omission from any of the  representations or warranties  contained in any of the
certificates or other documents furnished to the Company by the Investor.

              (c)    Limitations.

                     (i)    No  claim  for  indemnification   pursuant  to  this
Article 7 shall be made,  other than  pursuant to Section 2.21 or Section  2A.6,
unless  the  aggregate  Losses  incurred  by the  party to be  indemnified  (the
"INDEMNIFIED PARTY") exceed $25,000, at which time all Losses (without regard to
materiality  qualifiers) shall be subject to indemnification  under this Article
7.

                     (ii)   Supercom  shall  not be  liable  for,  or  otherwise
obligated  for, any losses  pursuant to this  Article 7 or otherwise  under this
Agreement  (other  than  pursuant to Article 6A) for any amount in excess of the
cash  consideration  received by it for the Stockholder  Shares, as set forth on
EXHIBIT A;  provided,  that,  nothing  contained  herein shall limit  Supercom's
liability pursuant to Article 6A.

              (d)    Other  Limitation.   Notwithstanding  the  foregoing,   and
subject to the following sentence, upon judicial  determination,  which is final
and  no  longer  appealable,  that  the  act  or  omission  giving  rise  to the
indemnification  hereinabove  provided  resulted  primarily  out of or was based
primarily  upon the  Indemnified  Party's  gross  negligence,  fraud or  willful
misconduct  (unless such action was based upon the Indemnified  Party's reliance
in good faith upon any of the representations, warranties, covenants or promises
made by the party required to provide  indemnification  under  paragraphs (a) or
(b) above (the "INDEMNIFYING PARTY")) by the Indemnified Party, the Indemnifying
Party  shall not be  responsible  for any  Losses  sought to be  indemnified  in
connection  therewith,  and the Indemnifying  Party shall be entitled to recover
from the  Indemnified  Party  all  amounts  previously  paid in full or  partial
satisfaction  of such  indemnity,  together  with all costs and  expenses of the
Indemnifying Party reasonably  incurred in effecting such recovery,  if any. The
indemnity,   contribution  and  expense   reimbursement   obligations  that  the
Indemnifying  Party has under  this  Section  7.1  shall be in  addition  to any
liability that the Indemnifying Party may otherwise have. The Indemnifying Party
further agrees that the indemnification and reimbursement  commitments set forth
in this Agreement shall apply

                                       19
<PAGE>

whether or not the  Indemnified  Party is a formal  party to any such  lawsuits,
claims or other proceedings.

              (e)    Payment of Claims.  Any  indemnification of any Indemnified
Party by the  Indemnifying  Party pursuant to this Section 7.1 shall be effected
by wire transfer of immediately  available funds from the Indemnifying  Party to
an  account  designated  by the  Indemnified  Party  within  15 days  after  the
determination thereof.

              7.2    RIGHT TO DEFEND; COMPROMISE OF CLAIMS;  CONTRIBUTION.  Each
Indemnifying  Party  shall have the right to  compromise  or defend,  at its own
expense  and by its own  counsel  reasonably  satisfactory  to such  Indemnified
Party,  any matter  involving the asserted  liability of any Indemnified  Party;
PROVIDED,  HOWEVER,  that no  compromise  of any claim shall be made without the
consent of the Indemnified Party unless such compromise  results in the full and
unconditional  release of all claims against the Indemnified  Party by the party
asserting such claim. The opportunity to compromise or defend as herein provided
shall be a condition  precedent to any liability of an Indemnifying  Party under
the provisions of this Section 7.2. If any Indemnifying Party shall undertake to
compromise or defend any such asserted  liability,  it shall promptly notify the
Indemnified Party and any other Indemnifying Party of its intention to do so. An
Indemnified Party shall cooperate with the Indemnifying Party and its counsel at
the  Indemnifying  Party's  expense in the  defense  against  any such  asserted
liability and in any compromise thereof. Such cooperation shall include, but not
be limited to,  furnishing  the  Indemnifying  Party with any books,  records or
information  reasonably  requested  by the  Indemnifying  Party and taking  such
action as the  Indemnifying  Party may reasonably  request to mitigate or reduce
any claim.  After an Indemnifying Party has notified an Indemnified Party of its
intention to  undertake to  compromise  or defend any  asserted  liability,  the
Indemnifying  Party  shall  not be  liable  for any  additional  legal  expenses
incurred  by the  Indemnified  Party  unless  the  Indemnifying  Party  fails to
prosecute the defense of such claim. If the  Indemnifying  Party shall desire to
compromise  any such  asserted  liability by the payment of a liquidated  amount
which the party  asserting  such  liability is willing to accept in exchange for
fully and  unconditionally  releasing all claims against the Indemnified  Party,
and the Indemnified  Party shall refuse to consent to such compromise,  then the
Indemnifying  Party's  liability  under  this  Article  7 with  respect  to such
asserted  liability  shall be limited  to the  amount so offered in  compromise.
Under no  circumstances  shall the  Indemnified  Party  compromise  any asserted
liability  without  the  written  consent  of the  Indemnifying  Party.  Nothing
contained herein shall be deemed to limit any right of contribution Supercom may
have against the Company under applicable law.

              7.3    REMEDIES.

       The  Parties  shall each have and retain  all other  rights and  remedies
existing in their favor at law or equity,  including,  without  limitation,  any
actions for specific  performance  and/or  injunctive or other equitable  relief
(including,  without limitation, the remedy of rescission) to enforce or prevent
any  violations  of the  provisions  of this  Agreement.  Without  limiting  the
generality  of the  foregoing,  the Company  hereby agrees that in the event the
Company  fails to convey  any number of  Conversion  Shares to the  Investor  in
accordance  with the provisions of this Agreement and the Preferred  Stock,  the
Investors'  remedy at law may be inadequate.  In such event,  the Investor shall
have the right,  in addition to all other  rights and  remedies it may

                                       20
<PAGE>

have, to specific  performance of the  obligations of the Company to convey such
number of Conversion Shares.

                            ARTICLE 8. MISCELLANEOUS

              8.1    SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the Company and the Investor  contained in or made pursuant to this
Agreement  shall survive the  execution  and delivery of this  Agreement and the
Closing  and shall in no way be  affected  by any  investigation  of the subject
matter  thereof made by or on behalf of the  Investor or the Company;  PROVIDED,
HOWEVER,  that Supercom shall have no further liability or obligation under this
Agreement  (i)  pursuant  to Article 2 or Article 2A after the date which is two
(2) years after the Closing Date other than with respect to the  representations
and warranties made by it pursuant to Section 2.2,  Section 2.4, Section 2.6 and
Article 2A hereof and (ii)  pursuant to Article 6A in  accordance  with the time
periods set forth therein.

              8.2    SUCCESSORS  AND  ASSIGNS.   Except  as  otherwise  provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding  upon the  respective  successors  and  permitted  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
permitted assigns any rights, remedies,  obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.

              8.3    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.

              8.4    NOTICES.  Any notice,  request,  demand,  waiver,  consent,
approval, or other communication which is required or permitted to be given to a
party  hereunder shall be in writing and shall be deemed given only if delivered
to such party personally or sent to such party by recognized  overnight  courier
or by registered or certified mail (return receipt requested),  with postage and
registration or certification  fees thereon  prepaid,  addressed to the party at
the address  indicated for such party on the signature  page hereof,  or to such
other  address or person as any party may have  specified in a notice duly given
to the other party as provided herein.  Such notice,  request,  demand,  waiver,
consent,  approval or other  communication shall be deemed to have been given as
of the date so delivered.

              8.5    AMENDMENTS  AND WAIVERS.  Any term of this Agreement may be
amended and the  observance of any term of this  Agreement may be waived (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively),  only with the written  consent of the Company and the Investor;
provided,  that,  Supercom's  consent  will be required in  connection  with any
amendment that affects  Supercom's  rights and obligations under this Agreement.
Any amendment or waiver  effected in  accordance  with this  paragraph  shall be
binding upon each holder of any Securities at the time outstanding,  each future
holder of all such Securities, and the Company.

                                       21
<PAGE>

              8.6    SEVERABILITY.  If one or more  provisions of this Agreement
are held to be invalid  and  unenforceable  in any  jurisdiction,  then,  to the
fullest extent permitted by law, (i) the other provisions hereof shall remain in
full force and effect in such  jurisdiction and shall be liberally  construed in
order to carry  out the  intentions  of the  parties  hereto as nearly as may be
possible and (ii) the invalidity or  unenforceability of any provision hereof in
any  jurisdiction  shall not  affect  the  validity  or  enforceability  of such
provision in any other jurisdiction.

              8.7    INDEPENDENCE   OF   COVENANTS   AND   REPRESENTATIONS   AND
WARRANTIES. All covenants hereunder shall be given independent effect so that if
a certain  action or condition  constitutes a default under a certain  covenant,
the fact that such action or condition is  permitted by another  covenant  shall
not affect the occurrence of such default,  unless expressly  permitted under an
exception  to such  initial  covenant.  In  addition,  all  representations  and
warranties  hereunder shall be given independent  effect so that if a particular
representation or warranty proves to be incorrect or is breached,  the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the  incorrectness  of or a breach
of a representation and warranty hereunder.

              8.8    FURTHER  ASSURANCES.  The parties agree,  from time to time
and without further consideration, to execute and deliver such further documents
and take such further  actions as  reasonably  may be required to implement  and
effectuate the transactions contemplated in this Agreement.

              8.9    GOVERNING  LAW.  This  Agreement  shall be  governed by and
construed in accordance with the  substantive  domestic laws of the State of New
York, without application of the conflicts of laws principles thereof.

              8.10   COUNTERPARTS. 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.

              8.11   ENTIRE  AGREEMENT.  This Agreement and the other  documents
referred  to herein  constitute  the entire  agreement  among the  parties  with
respect to the subject matter hereof and thereof and no party shall be liable or
bound to any other party in any manner by any  warranties,  representations,  or
covenants except as specifically set forth herein or therein.

                            [Signature Pages Follow]

                                       22
<PAGE>

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

                                        COMPANY:

                                        INKSURE TECHNOLOGIES INC.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        SUPERCOM:

                                        SUPERCOM LTD.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        INVESTOR:

                                        EL-AD INK LLC

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       23
<PAGE>

                              DISCLOSURE SCHEDULES

<PAGE>

                                    EXHIBIT A

                              Schedule of Investors

                                    Aggregate
                               Number of Shares of                  Aggregate
Investor                        Preferred Stock                   Purchase Price
--------                       -------------------                --------------

EL-AD INK LLC                       1,312,785                       $1,150,000

<PAGE>

                                    EXHIBIT B

                          Certificate of Incorporation

<PAGE>

                                    EXHIBIT C

                Proprietary Information and Inventions AgreementExhibit 4.8

                         COMMON STOCK PURCHASE AGREEMENT

                                 April 29, 2002

<PAGE>

                               TABLE OF CONTENTS

                                                                            PAGE

ARTICLE 1.    Purchase and Sale of the Shares ...............................  1
    1.1    Purchase and Sale of the Shares ..................................  1
    1.2    Closing ..........................................................  1
    1.3    Delivery .........................................................  1

ARTICLE 2.    Representations and Warranties of the Company and Supercom ....  2

    2.1    Organization, Good Standing and Qualification ....................  2
    2.2    Capitalization, Voting Rights ....................................  3
    2.3    Subsidiaries .....................................................  3
    2.4    Authorization ....................................................  3
    2.5    Governmental Consents ............................................  3
    2.6    Litigation .......................................................  3
    2.7    No Violations ....................................................  4
    2.8    Financial Statements .............................................  4
    2.9    No Material Change ...............................................  4
    2.10   Contracts and Other Commitments ..................................  5
    2.11   Related-Party Transactions .......................................  5
    2.12   Patents and Trademarks ...........................................  6
    2.13   Employees ........................................................  7
    2.14   Permits ..........................................................  8
    2.15   Environmental and Safety Laws ....................................  8
    2.16   Title to Property and Assets .....................................  8
    2.17   Insurance ........................................................  9
    2.18   Taxes ............................................................  9
    2.19   Brokers and Finders ..............................................  9
    2.20   Disclosure .......................................................  9

ARTICLE 2A.    Representations and Warranties of Supercom ...................  9

    2A.1   Organization, Good Standing and Qualification ....................  9
    2A.2   Authorization ....................................................  9
    2A.3   Good Title to Stockholder Shares .................................  9
    2A.4   Litigation ....................................................... 10
    2A.5   No Violations .................................................... 10
    2A.6   Brokers and Finders .............................................. 10

ARTICLE 3.    Representations and Warranties of the Investor ................ 10

    3.1    Authorization .................................................... 10
    3.2    No Violations .................................................... 10
    3.3    Investment Intent ................................................ 10
    3.4    Legends .......................................................... 11
    3.5    Investment Experience ............................................ 11
    3.6    Accredited Investor .............................................. 11
    3.7    Brokers and Finders .............................................. 11

<PAGE>

ARTICLE 4.    Conditions To the Investor's Obligations at Closing ........... 11

    4.1    Representations and Warranties ................................... 11
    4.2    Performance ...................................................... 12
    4.3    Compliance Certificate ........................................... 12
    4.4    Secretary's Certificate .......................................... 12
    4.5    Opinion of Counsel ............................................... 12
    4.6    Due Diligence .................................................... 12
    4.7    Proceedings and Documents ........................................ 12

ARTICLE 5.    Conditions To the Company's Obligations at Closing ............ 12

    5.1    Representations and Warranties ................................... 12
    5.2    Payment of Purchase Price ........................................ 12

ARTICLE 6.    Covenants of the Company ...................................... 12

    6.1    Taxes ............................................................ 12
    6.2    Financial Information ............................................ 13
    6.3    Insurance ........................................................ 13
    6.4    Compliance with Laws ............................................. 13
    6.5    Preservation of Corporate Existence .............................. 13
    6.6    Inspection Rights ................................................ 13

ARTICLE 7.    Indemnification ............................................... 14

    7.1    Indemnification .................................................. 14
    7.2    Right to Defend; Compromise of Claims; Contribution .............. 15
    7.3    Remedies ......................................................... 15

ARTICLE 8.    Miscellaneous ................................................. 16

    8.1    Survival of Warranties ........................................... 16
    8.2    Successors and Assigns ........................................... 16
    8.3    Titles and Subtitles ............................................. 16
    8.4    Notices .......................................................... 16
    8.5    Amendments and Waivers ........................................... 16
    8.6    Severability ..................................................... 16
    8.7    Independence of Covenants and Representations and Warranties ..... 16
    8.8    Further Assurances ............................................... 17
    8.9    Governing Law .................................................... 17
    8.10   Counterparts ..................................................... 17
    8.11   Entire Agreement ................................................. 17

<PAGE>

                         COMMON STOCK PURCHASE AGREEMENT

       THIS COMMON STOCK PURCHASE,  AGREEMENT  (this  "Agreement") is made as of
the day of April.  2002,  by and among  InkSure  Technologies  Inc.,  a Delaware
corporation (the "Company"], Supercom Ltd., an Israeli corporation ("Supercom"),
and the investor listed on Exhibit A hereto (the "Investor").

                                    RECITALS

       WHEREAS,  the Company has authorized  13,000,000  shares of common stock,
par value $.01 per share (the  "Common  Stock")  of which  5,066,796  shares are
issued and outstanding.

       WHEREAS.  Supercom is the holder of 3,858,447  shares of Common Stock and
desires to sell to the Investor  782,771 shares of Common Stock (the  "Shares");
and

       WHEREAS,  the  Investor  desires to purchase  the Shares on the terms and
conditions set forth herein; and

       WHEREAS, the parties wish to set out certain representations, warranties,
covenants and understandings with respect to the above matters.

                                   PROVISIONS

       In  consideration  of the  foregoing  recitals  and the mutual  covenants
herein, the undersigned parties agree as set forth herein.

       ARTICLE 1. PURCHASE AND SALE OF THE SHARES

       1.1    PURCHASE  AND  SALE  OF  THE  SHARES.  Subject  to the  terms  and
conditions  hereof,  at the Closing (as defined  below),  Supercom will sell and
deliver, and the Investor will purchase from Supercom,  the Shares, as set forth
on Exhibit A.

       1.2    CLOSING.  Subject to the terms and conditions  hereof, the closing
of the purchase and sale of the Shares  pursuant to Section 1.1 (the  "Closing")
shall take place on April 29, 2002 , at the offices of McLaughlin & Stern,  LLP,
260 Madison Avenue,  18th Floor. New York, New York 10016, or at such other time
or place as the  Company  and the  Investor  may  mutually  agree (the  "Closing
Date").

       1.3    DELIVERY.  At the  Closing,  subject  to the terms and  conditions
hereof,  Supercom will deliver to the Investor the Shares to be purchased by the
Investor, against payment of the purchase price of an aggregate of $1,000,000 by
check or wire transfer to the account designated by Supercom.

<PAGE>

      ARTICLE 2. REPRESENTATIONS AND WARRAISTIES OF THE COMPANY AND SUPERCOM

       The  Company  and  Supercom  each  hereby  represent  and  warrant to the
Investor, on a joint and several basis, as of the Closing:

       2.1    ORGANIZATION. GOOD STANDING AND QUALIFICATION. The Company is duly
organized, validly existing and in good standing under the laws of the State, of
Delaware  and the Company has all  requisite  power and  authority to enter into
this  Agreement  and to carry out the  provisions  hereof.  The  Company is duly
qualified to conduct ID business as currently  conducted  and is in good sending
as a  foreign  corporation  in all  jurisdictions  in which  the  nature  of its
business or location of its properties requires such qualification, except where
the failure m be so qualified would not (have a material  adverse effect on the.
business, financial condition, result* of operations or prospects of the Company
and its Subsidiaries, taken as a whole (a "Material Adverse Effect").

       2.2    Capitalization. Voting Rights.

              (a)    The authorized capital stock of the Company consists of (i)
13,000,000  shares  of common  stock,  par value  $.01 per  share  (the  "Common
Stock"),  of  which  5,066,796  shares  arc  issued  and  outstanding,  and (ii)
2,000.000  shares of Preferred  Stock, of which 1,312,785  shares are issued and
outstanding.  Schedule  2.2(a)  contains an accurate  list of the name,  of each
stockholder of the Company and the number of outstanding shares OF each class of
capital stock of the Company held by such stockholder.  All of the,  outstanding
shares of the  capital  stock of the  Company  are duly  authorized  and validly
issued,  fully paid and  nonassessable.,  and were issued in accordance with the
registration  or  qualification  provisions  of the Act, and any relevant  state
securities laws or pursuant to valid exemptions

              (b)    Except  -A* set forth  herein  or on  Schedule  2.2(b),  no
preemptive rights, rights OF first refusal or similar rights exii.1 with respect
to the shares of capital  stock of the  Company  and.  no such  rights  arise or
become,  exercisable  by  virtue  of  or in  connection  with  the  transactions
contemplated, herein. No antidilution or similar rights arise by virtue of or in
connection  with the delivery of the Shares.  The Company has  reserved  600,000
shares of Common  Stock for  issuance  under  its 2001  Stock  Option  Plan (the
"Plan"),  of which  278.809  me  covered by option  grants  which are  presently
outstanding.  Except as set forth on Schedule Z2(b) or as otherwise  describe in
this paragraph (b),  there are no  outstanding  or authorized  lights,  options,
warrants,  convertible  securities,   subscription  rights,  conversion  rights,
exchange rights or other  agreements at" any kind that could require the Company
to issue or sell any shares of its capital stock (or Securities convertible into
or exchangeable for shares of its capital stock). The Company has granted to Eli
Rozen an option (the "Rozen  Option") to purchase  300,480  shares of the Common
Stock of the Company at an exercise  price of $150,000,  and has granted TO Elie
Housman an Option (the "Housman Option") to purchase up to 478,469 shares of the
Common  Stock of the  Company  at an  exercise  price of U.S.  $0.966 per share.
Neither the Rozen  Option nor the Housman  Option were  granted  pursuant to the
Plan.  Except as set forth on Schedule 2.2(b).  the Company has no obligation in
register any shares of its capital stock, under the Act. Except AS

<PAGE>

set forth on Schedule. 2.2(b). the Company is not obligated directly, indirectly
or contingently 10 purchase or redeem any shares of its capital stock.

              (c)    On or prior LU March 4, 2002, the Company and -Supercom (i)
converted all  outstanding  principal and accrued  interest on  approximately  a
$1.42 million loan then  outstanding  from Supercom and all oilier  intercompany
indebtedness (oilier than as described in this paragraph (c)) of the Company and
its  Subsidiaries to Supercom into a contribution to [he capital of the Company,
(ii) sold all of [he issued and  outstanding  common stock of Kromotek Inc. held
by the Company to Supercom in exchange for conversion  into a contribution m the
capital of the:  Company by Supercom of $930,000 of  principal  and  interest on
Supercom's  then  outstanding  loan to the  Company,  and (iii)  entered  into a
promissory note in the amount of $250,000 in favor of Supercom-

       2.3    SUBSIDIARIES  Each subsidiary of the Company (a  "Subsidiary")  is
hated on Schedule 2.3. Each  Subsidiary  is a corporation  or limited  liability
company duly organized, validly existing and, in good standing under the laws of
the state of its incorporation or; formation. and is qualified to do business as
a  foreign  corporation  in each  jurisdiction  where  it is  required  to be 30
qualified,  except where  failure,  in lie so qualified  would not reasonably be
expected to have a Material  Adverse Effect.  Each Subsidiary is wholly owned by
the Company.

       2.4    AUTHORIZATION,  The Company has the. right, power and authority to
enter  into and  perform  its  obligations  under this  Agreement  and the other
agreements contemplated hereby, All corporate action on the part of the Company,
its  officers,  directors  and  stockholders  necessary  for the  authorization,
execution and delivery of this Agreement and the other  agreements  contemplated
hereby,  the  performance  of all  obligations  of the Company  hereunder.  This
Agreement  constitutes the valid and legally binding  obligation of the Company,
enforceable  in accordance  with its terms,  except (a) as limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium, and other laws of general
applications  affecting  enforcement  of  creditors'  rights  generally,  (h) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable  remedies and (c) to the extent any noncompetition or
Indemnification  provisions  of this  Agreement  may be  limited  by  applicable
federal or state securities laws or by public policy.

       2.5    Governmental.Consents.    No   consent,    approval,    order   or
authorization of, or registration,  qualification,  designation,  declaration or
filing with, any federal,  slate or local governmental  authority on the pan: of
the Company,  Supercom or any Subsidiary  (except such a& have been obtained) is
required in connection with the consummation of the transactions contemplated by
this Agreement.

       2.6    LITIGATION.  Except  as set  forth on  Schedule  2.6,  there is no
action,  suit,   proceeding  or  investigation  pending  or,  to  the  Company's
knowledge,  currently  threatened against the Company or any of its Subsidiaries
or their  properties or assets.  nor is the Company aware that. there is a basis
for any of the  foregoing.  The Company is not nor is any of its  Subsidiaries a
party or subject 10 the provisions of any order, wilt,  injunction,  judgment or
decree of any court or  government  agency or  instrumentality  except for those
having  general'  applicability.   There  is  no  action,  suit,  proceeding  or
investigation  by the Company or any  Subsidiary  currently  pending or that the
Company or any Subsidiary intends to inmate.

                                        3
<PAGE>

       2.7    NO  VIOLATIONS.  Neither  the  Company  nor any  Subsidiary  is in
violation or default of any provision of its  Certificate  of  Incorporation  or
Bylaws as currently in effect,  or in any  material  respect of any  instrument,
contract  judgment,  order, writ or decree to which it is a party or by which it
is  bound,  or of any  provision  of any  federal  or  state  statute,  rule  or
regulation applicable to the Company or such Subsidiary. The execution, delivery
and  performance  of this  Agreement  and the  consummation  of the  transaction
contemplated  hereby  will not result in any such  violation  on the part of the
Company or any Subsidiary or be in conflict with, or constitute (with or without
the  passage of time and giving of notice) a default on the part of the  Company
or any Subsidiary under any such instrument,  contract, judgment, order, writ or
decree  or an  event  that  results  in the  creation  of any  lien,  charge  or
encumbrance, upon any assets of the Company or any Subsidiary or the suspension,
revocation,  impairment,  forfeiture,  or  nonrenewal  of any  permit,  license.
authorization  or approval  applicable to the Company or any  Subsidiary,  their
respective  business  or  operations  or  any  of  their  respective  assets  or
properties.

       2.8    FINANCIAL STATEMENTS. Prior to the Closing, the Company shall have
furnished  to the  Investor,  jts balance  sheet as of December 31, 2001 and its
statements  of  operations  and cash flows for the year ended  December 31, 2001
(the "Financial Statements").  A copy of the Financial Statements is attached to
Schedule 2.S hereto. The Financial  Statements,  together with any notes thereto
{if any),  have been prepared in  accordance  wills the books and records of the
Company  and  each  Subsidiary  (which  are  true and  correct  in all  material
respects)  and fairly  present  the  financial  position  of the Company and its
Subsidiaries on a pro forma  consolidated  basis as of the dates thereof and the
results of its  operations  and cash flows for the period then ended.  Except as
disclosed  or provided for in the balance  sheet as of December 31, 2001,  as of
the date  hereof,  there  are no  material  liabilities  of the  Company  or its
Subsidiaries taken together as a whole, of any kind whatsoever, whether accrued,
contingent or otherwise,  other than liabilities incurred in the ordinary course
of business consistent with past practice since the date of such balance sheet.

       2.9    NO  MATERIAL  CHANGE.  Except as set forth on Schedule  2.9, since
December 31, 2001 there has not been:

       (a)    any change m the  assets,  liabilities,  financial  condition,  or
operating  results of the.  Company and its  Subsidiaries,  taken  together as a
whole,  from that reflected in the Financial  Statements,  except for changes in
the ordinary coarse of business that have not been, in the: aggregate,  material
and adverse:

       (b)    any  damage,  destruction  or  loss,  whether  or not  covered  by
insurance, that would have a Material Adverse Effect ;

       (c)    any waiver or  compromise  by the Company or any  Subsidiary  of a
valuable right or of a. material debt owed to the Company and the  Subsidiaries,
taken together as a whole;

       (d)    any  satisfaction or discharge of any lien,  claim, or encumbrance
or payment.  of any obligation by the Company or any  Subsidiary,  except in the
ordinary  course  of  business  and  that  is  not  material  to  the  business,
properties,   prospects   or   financial   condition  of  die  Company  and  its
Subsidiaries, taken together as a whole;

       (e)    any change to a contract  or  arrangement  by which the Company or
any  Subsidiary  or any of their  assets is bound or subject that is material to
the Company and the Subsidiaries, taken together as a whole;

       (f)    any material change in any  compensation  arrangement or agreement
with any employee, officer, director or stockholder;

<PAGE>

       (g)    any sale,  assignment,  or  transfer of any  patents,  trademarks,
copyrights, trade secrets or other intangible assets;

       (h)    any resignation or termination of employment of any key officer of
the Company OR any Subsidiary;

       (i)    receipt  of  notice  that  there  has  been a loss  of,  or  order
cancellation  by.  any  customer  of the  Company or any  Subsidiaries,  that is
material to the Company and the Subsidiaries, taken together as a whole;

       (j)    any material mortgage, pledge, transfer of a security interest in,
or lien,  created by the Company or any  Subsidiary,  with respect to any of its
properties or assets, except liens taxes not for yet due or payable;

       (k)    any  material  loans  or  guarantees  made by the  Company  or any
Subsidiary to or for the benefit of their employees, stockholders, officers. 01:
directors,  or any  members  of their  immediate  families,  other  than  travel
advances and oilier advances made in the ordinary course of their business;

       (l)    any  declaration,  setting  aside,  or payment of any  dividend or
other  distribution  of the assets in respect  of any of the  Company's  capital
stock, or any direct or indirect or redemption,  purchase, or other, acquisition
of any of such stock by the Company:

       (m)    to the  best  of the  Company's  knowledge,  any  other  event  or
condition of any character that is reasonably  likely to have a Material Adverse
Effect: or

       (n)    any agreement or commitment by the Company or any Subsidiary to do
any of the things described in this Section 2.9.

       2.10   Contracts and Other  Commitments.  Except as set forth on Schedule
2.10,  the  Company  and its  Subsidiaries  do not have and arc not bound by any
contract,  agreement,  lease,  or  commitment,  written  or  oral,  absolute  or
contingent,  other than (i)  contracts for the purchase of supplies and services
that were  entered  into in the  ordinary  course of  business  and that do not.
involve more than One Hunched Thousand Dollars ($I00.000), and do no: extend for
more than one year beyond the date hereof, (ii.) sales contracts entered into in
the  ordinary  course of business,  (iii)  contracts  terminable  at will by the
Company on no more than thirty (30) days' notice  without cost  liability in the
Company which neither  involve any employment or consulting  arrangement nor are
material to the conduct of the Company's or any  Subsidiary's  business and (iv)
confidentiality agreements. Neither the Company or its Subsidiaries, nor, to its
knowledge,  any other party to any contract covered by clauses (i)-(iv) above or
any  contract  set  forth on  Schedule  2.30,  is in  default  nuclei:  any such
contract.  Employment and consulting contracts and commas with labor unions, and
license   agreements  and  any  other  agreements   relating  to  the  Company's
acquisition  01  disposition  of  patent,  copyright,   trade  secret  or  other
proprietary   rights  or  technology   (other  than  standard  end-user  license
agreements) shall not be considered to be contracts entered into in the ordinary
course of business,

       2.11   RELATED-PARTV  TRANSACTIONS.  Except as set forth on Schedule 2.11
hereto, no holder of 5% or more of any class of capital stock, of the Company at
the time such transaction was entered into, or any director, officer or employee
of the Company or any  Subsidiary,  or family member of any such person,  or any
corporation,  partnership  , trust or other entity in which any such person,  or
family  member of any such person,  has an interest or is an officer,  director,
trustee,  partner  or  holder  of any  equity  interest,  (i) is a party  to any
transaction with the Company nr any Subsidiary,  including,  without limitation,
any contract, agreement or other

<PAGE>

arrangement  providing for the employment of,  furnishing of services by, rental
of real or personal property from,  license of Necessary  Intellectual  Property
(as  defined  below)  or  otherwise   requiring   payments  or  involving  other
obligations  to or from the  Company or any  Subsidiary  or (ii) owns any assets
used in the business of the Company or any Subsidiary.

       2.12   PARENTS AND TRADEMARKS.

       (a)    Intellectual Property" means all intellectual property, including,
without limitation,  (i) patents, patent applications patent rights, trademarks,
trademark   applications,    copyrights,   cop>right   applications,   know-how,
franchises.  licenses,  proprietary processes and formulae,  layouts, processes,
inventions, and (ii) all proprietary rights pertaining :o any product or service
manufactured,  sold,  distributed or marketed, or used, employed or exploited in
the  development.   manufacture,  license,  sale,  distribution,   marketing  or
maintenance thereof, and all documentation and media constituting, describing or
relating to the foregoing.  The Company and its Subsidiaries own or have a valid
and enforceable  license 10 use any and all intellectual  Property necessary for
the  operation  of the  business  of the  Company  and its  Subsidiaries  as now
conducted or proposed to be conducted (the "Necessary  Intellectual  Property"),
which Necessary  Intellectual Property is set forth on Schedule 2.12 hereto. The
Company has no knowledge of any  misappropriation  of,  infringement of, alleged
infringement  of or  conflict  with the  rights of others  with  respect  to the
Necessary Intellectual Property .The Company has no knowledge that any of ifs nr
its Subsidiaries' employees is obligated under any contract (including licenses,
covenants or  commitments of any nature) or other  agreement,  or subject to any
judgment,  decree  or order of any court nr  administrative  agency  that  would
interfere with such employee's duties EO the Company or that would conflict with
the  Company's  and its  Subsidiaries'  business as  proposed  to be  conducted.
Neither the  execution nor delivery of this  Agreement  will, to the best of the
Company's  knowledge,  conflict  with  or  result  in a  breach  of  the  terms,
conditions  or  provisions  of, or  constitute a default  under,  any  contract,
covenant or instrument  under which any employee is now  obligated.  The Company
docs  not  believe  it is or  will  be  necessary  to  utilize  any  inventions,
trademarks or  proprietary  information  of any of its employees  matte print to
their  employment  by the Company : except for such  inventions,  trademarks  or
proprietary information as have been assigned to the Company.

       (b)    The  Company  and its  Subsidiaries  have die right to use,  sell,
license and dispose of, and have the right to brine actions for the infringement
of,  and,  where  necessary,  has made  timely  and proper  application  for the
registration  of all  Necessary  Intellectual  Property  and such rights to use,
sell,  license,  dispose of and bring actions arc exclusive with respect to such
Intellectual Property. There are no royalties, honoraria, fees or other payments
payable  by the  Company  or its  Subsidiaries  to any  person  by reason of the
ownership,  use,  license,  sale or  disposition  of the Necessary  Intellectual
Property, other than in connection with licensed Intellectual Property.

       (c)    The Company and its Subsidiaries have used commercially reasonable
efforts to safeguard  and maintain the secrecy and  confidentiality  of, and its
proprietary  rights in,  all  Necessary  Intellectual  Property.  Schedule  2,12
contains a true and complete list of all applications Find filings made or taken
pursuant  to  federal,  state,  local and  foreign  laws by the  Company and its
Subsidiaries  to perfect or protect its interest in the  Necessary  Intellectual
Property , including,  without  limitation,  oil patents,  patent  applications,
trademarks, *, service marks and service mark applications.

       (D)    THE  COMPANY  HAS NOT,  NOR HAVE  ANY OF ITS  SUBSIDIARIES  OR ANY
AFFILIATE,  SENT TO ANY third party or otherwise  communicated to another person
in the past five years any charge complaint,  claim,  demand or notice assorting
infringement or misappropriation of, or other

<PAGE>

conflict with, any Necessary  Intellectual  Property right of the Company or any
or any  Subsidiary'  by such other person or any acts of unfair  competition  by
such  oilier  person,  nor to the best  knowledge  of the  Company,  is any such
infringement,  misappropriation, conflict or act of unfair competition occurring
or threatened.

       2.13   EMPLOYEES,

       (a)    Each  employee,  consultant  and  officer of the  Company  and its
Subsidiaries  has  on or  prior  to  the  date  hereof  executed  a  Proprietary
Information  and  Inventions  Agreement  in the form  attached as Exhibit C. The
Company IS not aware that any of its or any Subsidiary's employees,  consultants
or officers is in violation thereof.

       (b)    Except as set forth in Schedule  2J.3,  NO employee of the Company
or its Subsidiaries has an employment  agreement or understanding.  whether oral
or  written,  with the Company or such  Subsidiary  which is not  terminable  on
notice by the Company or such Subsidiary  without cost or other liability LO the
Company at such  .Subsidiary.  Except as set forth in Schedule 2.13, no employee
of the Company or its  Subsidiaries  Has advised the Company or its Subsidiaries
(orally or m writing) that he or she intends to terminate his or her employment.

       (c)    To the Company's knowledge,  the Company and its Subsidiaries have
complied in all material  respect with all foreign and domestic laws relating to
the  hiring of  employees  and the  employment  of labor,  including  provisions
thereof relating to wages, hours, equal opportunity,  collective  bargaining and
the payment of social security end other taxes. The Company and its Subsidiaries
do not have knowledge of any labor  relations  problems being  experienced by it
(including,  without limitation , any union organization activities,  threatened
or actual strikes or work stoppages or material grievances).

       (d)    EXCEPT as set forth on  Schedule  2.13,  (i) the  Company  and its
Subsidiaries  arc not  delinquent  in payments to any  employees  for any wages,
salaries,  commissions,  bonuses or other direct  compensation  for any services
performed by them 10 dace or amounts  required TO he to such  employees and upon
any  termination  of the  employment  of any such (ii) there is no unfair  labor
practice  complaint against the Company or its pending before the National Labor
Relations  Board or any  other  governmental  entity,  (iii)  there is no unfair
strike, material dispute, slowdown or stoppage pending or, to the best knowledge
of  the  Company  ,   threatened   against  or  involving  the  Company  or  its
Subsidiaries,  (iv) no labor union  currently  represents  the  employees of the
Company or its Subsidiaries;,  and (v) to the best knowledge of the Company,  no
labor union has taken any action with respect to organizing the employees of the
Company or ITS Subsidiaries, The Company and its Subsidiaries are not a parry in
or bound by any collective bargaining agreement or union contract.

       (e)    Schedule  2,13 sets forth a true and complete list of all Employee
BENEFIT  Plans (03 used in This  Section  2.13,  the "Plans") (i) that cover any
employees of the Company or its Subsidiaries (A) that are maintained,  sponsored
or  contributed  it> by the Company or its  Subsidiaries  or (B) with respect to
which the Company or its  Subsidiaries  is  obligated to  contribute  or has any
liability or potential  liability,  whether direct indirect or (ii) with respect
to which  the  Company  and its  Subsidiaries  has any  liability  or  potential
liability on account of the  maintenance or sponsorship  thereof or contribution
thereto  by  any  present  or  former  ERISA  Affiliate  of the  Company  or its
Subsidiaries.   The  Company,   its  Subsidiaries  and  their  respective  ERISA
Affiliates are not, and have never  maintained or been,  obligated to contribute
to a Multiple Employer Plan, a Multi -Employer Plan or a Defined Benefit Pension
Plan.

<PAGE>

       (f)    For the purposes of this Section 2.13.  the following  terms shall
have the following meanings;

       "DEFINED BENEFIT PENSION PLAN " means shall have the meaning set forth in
Section 3(35) of ERISA.

       "EMPLOYEE  BENEFIT  PLAN"  means  any  (a)  qualified  or non  -qualified
Employee  Pension  Benefit  Plan  (including  any  Multiple  Employer  Plans  or
Multi-Employer  Plans),  (b)  Employee  Welfare  Benefit  Plan,  or (c) employee
benefit, fringe. benefit, compensation,  incentive, bonus or other plan, program
or arrangement, whether or not subject to ERISA and whether or not funded.

       "Employee  Welfare  Benefit  Plan"  shall have the  meaning  set forth in
Section 3(1) or FRISA.

       "ERISA"  means Die Employee  Retirement  Income  Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

       "ERISA  Affiliates"  means, with respect to any person,  any other person
that is a member  of a  "controlled  group of  corporations"  with,  or is under
"common  control"  with, or is a member of the same  "affiliated  service group"
with such person us defined in Section  4I4(b),  414(c),  or 414(m) or 414(o) of
the Code,

       "Multi-Employer  Plan" shall have the meaning set forth in Section  3(37)
of ERISA.  "Multiple  Employer  Plan"  means shall have the meaning sec forth in
Section 413 of the Code.

       2.14   PERMITS.  The Company  and each  .Subsidiary  has all  franchises,
permits,  licenses,  and any similar authority  necessary for the conduct of its
business as now being  conducted  by it, the lack of which would have a Material
Adverse  Effect,  Neither the Company  nor any  Subsidiary  is in default in any
respect  under any of such  franchises  , permits,  licenses,  or other  similar
authority.

       2.15   Environmental  and  Safety  Laws.  Neither  the  Company  nor  any
Subsidiary  is in violation of any statute,  law or  regulation  relating to the
environment or occupational health and safety, and no material  expenditures ore
or  will be  required  in  order  to  comply  with  any  such  statute  , law OR
regulation.  There are no  proceedings  pending or, to the best knowledge of the
Company,  threatened  against the Company or its Subsidiaries  alleging any such
violation  01  involving  any of their  past  operations  or any  real  property
currently  used  by the  Company  or  its  Subsidiaries.  The  Company  and  its
Subsidiaries have not received any written or oral notice or report with respect
to it or its  facilities  regarding  any (i) actual or alleged  violation of any
such statute , law or regulation or (ii) actual or potential  liability  arising
under such  statute,  law or  regulation,  including,  without  limitation,  any
investigatory, remedial or corrective obligation,

       2.16   TITLE TO PROPERTY  AND ASSETS . The  Company and the  Subsidiaries
own, or lease under valid leases, all facilities, machinery, equipment and other
assets  necessary for the conduct of their  business as conducted as of the date
hereof and as proposed to be conducted. The Company and each Subsidiary owns its
respective  properties and assets free and clear of all mortgages,  liens, loans
and encumbrances,  except such encumbrances and liens that arise in the ordinary
course  of  business  and  do  not  materially  impair  the  Company's  or  such
Subsidiary's  ownership or use of such  property or assets.  With respect to the
property and assets it leases,  the Company and each Subsidiary Is in compliance
with such leases and holds a valid leasehold interest free of any liens,  claims
or claims or encumbrances. Supercom does not own any assets used in the business
of the Company or any .Subsidiary,

<PAGE>

       2.17   INSURANCE.  The Company and each  Subsidiary  has insurance on its
properties  and  business  in such  amounts,  of such  types and  covering  such
casualties,  risks and  contingencies  as is  ordinarily  carried  by  companies
engaged in similar  businesses and owning similar properties in the same general
area in which the Company or such Subsidiary operates.

       2.18   TAXES.  The Company  and each  Subsidiary  has filed ail  federal,
sure,  local and other  tax  returns  and  reports  required  by law to be filed
(including,  without limitation, those due in respect of its properties, income,
franchises,  licenses,  sales  and  payrolls),  and  has  paid  all  such  taxes
applicable to periods  through the day of the Closing,  and [here are no pending
or threatened  claims  against the Company or any Subsidiary for past due taxes.
There are no outstanding  waiver* or agreements by the Company or any Subsidiary
for the extension of the lime fur (.he payment of any tax.

       2.19   BROKERS AND FINDERS.  Neither the Company nor any  Subsidiary  has
used or retained any broker,  investment banker,  financial  advisor,  finder or
agent in connection with This Agreement or the transactions contemplated hereby.

financial projections which have been provided by or on behalf of the Company to
the Investor or any of its respective directors,  officers, partners, employees,
representatives  or  agents,  taken as a whole,  arc true and  authentic  in all
material respects.  The  representations  and warranties made by or on behalf of
the  Company  to the  investor  in this  Agreement  do not  contain  any  untrue
statement of a material  fact and do not omit to state a material  fact required
to be stated therein or necessary to make the statements made, in the context in
which made, not false or misleading.

             ARTICLE 2A. REPRESENTATIONS AND WARRANTIES OF SUPERCOM

Supercom hereby represents and warrants to the Investor as of the Closing:

       2A.1   ORGANIZATION,  GOOD STANDING AND  QUALIFICATION.  Supercom is duly
organized,  validly  existing and in good standing  under the laws of Israel and
has all requisite  POWER AND AUTHORITY TO ENTER INTO THIS Agreement and to CARRY
out the PROVISIONS HEREOF.

       2A.2   AUTHORIZATION.  Supercom  has the right,  power and  authority  to
enter  into and  perform  its  obligations  under this  Agreement  and the other
agreements  contemplated  hereby to which  Supercom  is a party.  All  corporate
action  on  the  pan of  Supercom,  its  officers,  directors  and  stockholders
necessary for the  authorization,  execution and delivery of this  Agreement and
the other  agreements  contemplated  hereby  to which  Supercom  is  party,  the
performance of all obligations of Supercom  hereunder,  the sale and delivery of
the  Stockholder  Stock  being sold  hereunder  has been taken.  This  Agreement
constitutes the valid and legally binding obligation of Supercom, enforceable in
accordance  with its terms,  except (a) as  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium,  and other laws of general application
affecting  enforcement of creditors'  rights  generally,  (b) as limited by laws
relating to the  availability of specific  performance,  injunctive  relief,  or
other  equitable  remedies  and  (c) to  the  extent  any  non  -competition  or
indemnification  provisions  of this  Agreements  may be limited  by  applicable
federal or state securities laws or by public policy.

       2A.3   GOOD  TITLE TO THE  SHARES.  The  Shares  being  purchased  by the
Investor hereunder, when sold and delivered in accordance with the terms of this
Agreement,   will  be  duly  authorized  and  validly  issued,  fully  paid  and
non-assessable,  with no personal liability  attaching to the ownership thereof,
free and clear of any liens whatsoever, other than liens arising out of the acts

<PAGE>

or  commissions  of the  Investor  and with no  restrictions  the voting  rights
thereof and other incident of record and beneficial ownership pertaining Thereto
other than as provided for herein.

       2A.4   Litigation.  Except  as set  forth on  Schedule  2,6,  there is no
action, suit,  proceeding or investigation  pending or to Supercom's  knowledge,
currently  threatened  against  Supercom  that  questions  the  validity of this
Agreement,  or could affect any of [he  properties  or assets of the Company and
its Subsidiaries.

       2A.5   NO VIOLATIONS . The  execution,  delivery and  performance of this
Agreement, and the consummation of the transactions contemplated hereby will not
result in any  violation  on the part of  Supercom or be in  conflict  with,  or
constitute  (with or without the passage of time and giving of notice) a default
on the part of Supercom under any instrument,  contract,  judgment., order, writ
or decree to which Supercom is a party or by which it is bound.

       2A.6   Brokers and hinders. Supercom has nor used or retained any broker,
investment banker,  financial  advisor,  finder or agent in connection with this
Agreement or the transactions contemplated hereby.

            INVESTOR THE OF WARRANTIES AND REPRESENTATIONS ARTICLES-

       Investor hereby represents and warrants as of the Closing;

       3.1    AUTHORIZATION.  The Investor has the right, power and authority to
enter  into and  perform  its  obligations  under this  Agreement  and the other
agreements  contemplated  hereby  and  thereby.  All  action  on the part of the
Investor  and  its  officers,  directors,  stockholders,  partners.  members  or
managers,  as  applicable,  necessary-  for  the  authorization,  execution  and
delivery of this Agreement and the other agreements contemplated hereby, and the
performance  of all  obligations  of such Investor  hereunder and thereunder has
been taken or will be taken prior to the Closing,  This Agreement constitutes a.
valid and legally binding obligation of such Investor, enforceable in accordance
with its terms,  except (a) as limited  by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  and other  laws of genera]  application  affecting
enforcement of creditors' rights  generally,  (b) as limited by laws relating to
the ^liability of specific  performance,  injunctive  relief, or other equitable
remedies and (c) to the extent any non-competition or indemnification provisions
of such  agreements  may be limited by applicable,  federal or state  securities
laws or by public policy.

       3.2    NO  VIOLATIONS.  The execution,  delivery and  performance of this
Agreement, and the consummation of the transactions contemplated hereby will not
result in any  violation on the part of such  Investor or be in conflict with or
constitute  (with or without the passage of time and giving of notice) a default
on the  part  of  such  Investor  under  any of its  organizational  or  charter
documents,  as  applicable,  or a default on the pan of such Investor  under any
instrument,  contract, judgment, order, writ or decree, or an event that results
in the  creation  of any Hen,  charge  or  encumbrance  upon any  assets of such
investor or the suspension, revocation, impairment, forfeiture, or nonrenewal of
any material  permit,  license,  authorization,  or approval  applicable 10 such
Investor, its business or operations or tiny of its assets or properties.

       3.3    INVESTMENT  INTENT.  The Investor  will acquire the Shares for the
Investor's  own account for  investment and not with a view to, or in connection
with, any resale 01 other-distribution of any part thereof, and the Investor has
no present intention of selling 01 otherwise distributing the same. The Investor
acknowledges that the Shares air not registered undo the Act or other applicable
securities laws and that they may not be sold, transferred, offered for

<PAGE>

sale, pledged,  hypothecated or otherwise disposed of without registration under
such Act and other applicable  securities laws,  except pursuant to mi exemption
from such registration  available under the Act and other applicable  securities
laws. In this connection,  the Investor represents that the investor is familiar
with Rule 144 of the Act, as presently  in effect,  and  understands  the resale
limitations imposed thereby and by the Art,

       3.4    Legends.  It 13 understood  that the  certificates  evidencing the
Shares may hear one or all or the following legends:

              (I')   "THE.  SECURITIES  REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  AND, ACCORDINGLY,
MAY NOT HE  OFFERED  FOR SALE,  SOLD OR  OTHERWISE  TRANSFERRED  EXCEPT (I) UPON
EFFECTIVE  REGISTRATION OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE UNDER
THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR (II) UPON AN EXEMPTION  FROM SUCH
REGISTRATION REQUIREMENTS."

              (ii)   Any  legend  required  by the Blue  Sky laws of any  oilier
stale to the extent such laws are  applicable to the shares  represented  by the
certificate so legended.

              (iii)  Any legend  required by any of the agreements  entered into
by the parries hereto as of the date hereof,

       3.5    Investment  Experience and Counsel. The Investor is an investor in
securities  of  privately  held  companies,  such as the  Company,  can bear the
economic  risk of its  investment,  and has such  knowledge  and  experience  in
financial or bushes,  matters.  that it is capable of evaluating  die merits and
risks of the investment in the Shares. The Investor acknowledges that it has had
the  opportunity to review this Agreement,  the exhibits and schedules  attached
hereto and thereto and the  transactions  contemplated by the Agreements with us
own legal  counsel.  The Investor is relying solely on us own counsel and not on
any statements nr  representation  of the Company or .Supercom or its agents for
legal advice with respect to this investment or the transactions contemplated by
this Agreement.

       3.6    _ACCREDITED  INVESTOR.  The Investor is an "accredited  investor'1
within  the  meaning of Rule 501 of  Regulation  promulgated  under the Act,  as
presently in effect.  The Investor (i) has been afforded the  opportunity to ask
questions of, and receive  answers  from,  the officer  and/or  directors of the
Company,  acting on its  behalf,  concerning  the  Company,  and LO  obtain  any
additional   information,   10  the  extent  that  the  Company  possesses  such
information or can acquire it without unreasonable effort or expense,  necessary
to verify the accuracy of the information  furnished and (ii) has availed itself
of such opportunity to the extent such Investor  considers  appropriate in order
to permit such Investor to evaluate the merits and risks of an investment in the
Company.

       3.7    BROKERS AND  FINDERS.  The  Investor has not 'used or retained any
broker, investment banker, financial advisor, finder or agent in connection with
this Agreement nr the transactions contemplated hereby.

         ARTICLE A. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING

       The  obligations  of the Investor under Section l.1 hereof arc subject to
the  fulfillment  on or  before  the  Closing  Date  of  each  of the  following
conditions:

       4.1    REPRESENTATIONS  AND WARRANTIES The representations and warranties
of the Company and Supercom  contained in Article 2 and Article 2A shall be true
on mid as of the

<PAGE>

Closing with the same effect as though such  representations  and warranties had
been made on and as of the date of the Closing.

       4.2    PERFORMANCE.  The Company and Supercom  shall have  performed  and
complied  with all  agreements,  obligations  and  conditions  contained in this
Agreement  that are required to be performed or complied with by it on or before
the Closing.

       4.3    COMPLIANCE  CERTIFICATE.  The  President of the Company shall have
delivered to the Investor, a certificate, dated the date of the Closing, stating
that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.

       4.4    SECRETARY'S  CERTIFICATE.  The  Company  shall  have  delivered  a
certificate  of the  Secretary  of the  Company,  certifying  (i) the  Company's
Certificate of Incorporation  (including the Certificate of  Incorporation)  and
By-laws,  and (ii) the  incumbency  of the officers  executing  the  transaction
documents.

       4.5    Opinion of Counsel.  The Investor  shall have  received from Yossi
Avrahom & Co.  Advocates,  Israeli  counsel to Supercom  opinion dated as of the
Closing Date in a form satisfactory to the Investor.

       4.6    DUE  DILIGENCE.  The  Investor  shall  be  satisfied  in its  sole
discretion with the results of its due diligence investigation and review of the
Company and its Subsidiaries.

       4.7    PROCEEDINGS AND DOCUMENTS.  All corporate and other proceedings in
connection  with the  transactions  contemplated  at or  prior  to the  Closing,
including,  without limitation,  the Reorganization,  and all documents incident
thereto shall be reasonably  satisfactory  in form and substance to the Investor
at the  Closing  and the  Investor  shall  have  received  all such  counterpart
original and  certified or other copies of such  documents as such  Investor may
reasonably request.

          ARTICLES, CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING

       The  obligations  of the Company to the Investor under this Agreement are
subject to the fulfillment or the Company's express written waiver, on or before
the Closing, of each of the following conditions by such Investor;

       5.1    REPRESENTATIONS,   AND   WARRANTIES,   The   representations   and
warranties  of such  Investor  contained in Article 3 shall be true on and as of
the Closing with the same effect as though such  representations  and warranties
had been made on and as of such Closing.

       5.2    PAYMENT OF PURCHASE  PRICE.  The Investor shall have delivered the
purchase price for the shares of Shares purchased by such Investor in accordance
with Section 1.3.

       ARTICLE 6. COVENANTS OF THE COMPANY

       6-1  TAXES.  All  United  States  federal,  state  or local  sales,  use,
transfer, stamp (including documentary stamp taxes, if any), excise,  recording,
income, capital gain, franchise and other similar taxes or governmental charges,
but not  including  income taxes  imposed on any  Investor,  with respect to the
securities issued pursuant to this Agreement or upon conversion of the Preferred
Stock in accordance with the Certificate of Incorporation  shall be borne by the
Company,

<PAGE>

       6.2    FINANCIAL  INFORMATION.  For so  long  as  the  Investor  and  its
subsidiaries hold, in the aggregate,  at least 78,000 of the Shares (as adjusted
for stock splits, stock dividends and the like) or more shares, the Company will
deliver the following reports to the Investor:

       (a)    As soon as  practicable  after the end of each fiscal year, and in
any event within 90 days thereafter,  consolidated balance sheets of the Company
and  its  Subsidiaries,  if  any,  as of  the  end  of  such  fiscal  year,  and
consolidated statements of income and consolidated statements of changes in cash
flow of the Company and its Subsidiaries, if any, for such fiscal year, prepared
in accordance  with GAAP and setting forth in each case in comparative  form the
figures for the previous  fiscal year,  all in reasonable  detail and audited by
independent  public  accountants  selected  by  the  Company,  together  with  a
certificate of the Company executed by the chief executive  officer or principal
financial or accounting  officer of the Company certifying that all covenants to
be complied  with by the Company  hereunder  have been complied with (or setting
forth in reasonable detail any covenants that have not been so complied with).

       (b)    As soon as  practicable  after the end of the  first,  second  and
third quarterly  accounting  periods in each fiscal year of the Company,  and in
any event  within  60 days  thereafter,  a  consolidated  balance-  sheet of the
Company  and its  Subsidiaries,  if any,  as of the end of each  such  quarterly
period,  and consolidated  statements of income and  consolidated  statements of
change in cash flow of the Company  for such  period and for the current  fiscal
year to date,  prepared in  accordance  with GAAP  (other than for  accompanying
notes), subject to changes resulting from normal year-end audit adjustments, for
the same  periods of the  previous  fiscal year,  all in  reasonable  detail and
signed by the principal financial or accounting officer of the Company, together
with a certificate  of the Company  executed by the chief  executive  officer or
principal  financial or accounting  officer of the Company  certifying  that all
covenants to be complied with by the Company  hereunder  have been complied with
(or  setting  forth in  reasonable  detail any  covenants  that have not been so
complied with).

       6.3    INSURANCE.  The Company shall  maintain such other  insurance with
such  coverages  and in such amounts as shall be determined by the Boards of the
Company  and its  Subsidiaries,  including  such  insurance  as the Board of the
Company  shall deem  necessary  to protect  the  assets of the  Company  and its
Subsidiaries,  which shall include, at a minimum, director and officer insurance
and error and omission insurance.

      6.4    COMPLIANCE  WITH  LAWS.  The  Company  will,  and will  cause  its
Subsidiaries  to, comply in all material  respects with the  requirements of all
laws, rules, regulations and orders.

       6.5    PRESERVATION  OF  CORPORATE  EXISTENCE.  For as long as the Shares
remain  outstanding,  the Company  will  preserve  and  maintain  its  corporate
existence,  rights,  franchises  and  privileges  in  the  jurisdiction  of  its
incorporation,  and qualify and remain  qualified,  as a foreign  corporation in
each jurisdiction in which such  qualification is necessary or desirable in view
of its business and operations or the ownership of its properties.

       6.6    INSPECTION RIGHTS. The Investor and its representatives shall have
the right to visit and  inspect any of the  properties  of the Company or any of
its  Subsidiaries,  and to discuss the  affairs,  finances  and  accounts of the
Company  or any of its  subsidiaries  with  its  officers,  and to  review  such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested.

<PAGE>

       ARTICLE 7. INDEMNIFICATION

       7.1    INDEMNIFICATION..

       (a)    Indemnification by Company and Supercom,  In addition to all other
rights and remedies  available to the Investor at law or in equity (subject,  in
the case of Supercom,  to the limitation contained in Section 7(c)), the Company
and Supercom,  on a joint and several basis,  shall  indemnify,  defend and hold
harmless the Investor and its  affiliates,  stockholders,  officers,  directors,
employees,  agents,  representatives  and permitted assigns from and against any
loss,  liability,   demand,  claim,  action,  cause  of  action,  cost,  damage,
deficiency,  penalty, fine or expense, including interest, penalties, reasonable
attorneys' fees and expenses and all reasonable  amounts paid in  investigation,
defense or settlement of any of the foregoing (collectively, "Losses") which any
such party may suffer, sustain or become subject to, as a result of:

              (i)    any  misrepresentation  or  breach of a  representation  or
warranty  (when  viewed  individually  or in the  aggregate)  on the part of the
Company or Supercom under Article 2 and Article 2A; or

              (ii)   without duplication,  any  misrepresentation in or omission
from  any  of  the  representations  or  warranties  contained  in  any  of  the
certificates  or other  documents  furnished  to the  Investor by the Company or
Supercom.

       (b)    INDEMNIFICATION  BY THE INVESTOR.  In addition to all other rights
and remedies  available to the Company at law or in equity,  the Investor  shall
indemnify,   defend  and  hold   harmless   the  Company  and  its   affiliates,
stockholders,   officers,  directors,  employees,  agents,  representatives  and
permitted  assigns  from and against any Losses which any such party may suffer,
sustain or become subject to, as a result of:

              (i)    any  misrepresentation  or  breach of a  representation  or
warranty  (when  viewed  individually  or in the  aggregate)  on the part of the
Investor under Article 3; or

              (ii)   without duplication,  any  misrepresentation in or omission
from  any  of  the  representations  or  warranties  contained  in  any  of  the
certificates or other documents furnished to the Company by the Investor.

       (c)    LIMITATIONS.

              (i)    No claim for  indemnification  pursuant  to this  Article 7
shall be made,  other than pursuant to Section 2.19 or Section 2A.6,  unless the
aggregate  Losses  incurred  by the party to be  indemnified  (the  "Indemnified
Party") exceed $25,000,  at which time all Losses (without regard to materiality
qualifiers) shall be subject to indemnification under this Article 7.

              (ii)   Supercom  shall not be liable for, or  otherwise  obligated
for, any losses pursuant to this Article 7 or otherwise under this Agreement for
any amount in excess of the cash consideration received by it for the Shares, as
set forth on Exhibit A.

       (d)    OTHER LIMITATION.  Notwithstanding  the foregoing,  and subject to
the  following  sentence,  upon  judicial  determination,  which is final and no
longer appealable,  that the act or omission giving rise to the  indemnification
hereinabove  provided resulted  primarily out of or was based primarily upon the
Indemnified Party's gross negligence,  fraud, or willful misconduct (unless such
action was based upon the Indemnified Party's reliance in good faith upon any of
the  representations,  warranties,  covenants  or  promises  made  by the  party
required  to  provide  indemnification  under  paragraphs  (a) or (b) above (the
"Indemnifying Party") by the Indemnified Party, the Indemnifying Party shall not
be responsible for any Losses sought to be 14

<PAGE>

indemnified  in  connection  therewith,  and the  Indemnifying  Party  shall  be
entitled to recover from the  Indemnified  Party all amounts  previously paid in
full or partial  satisfaction  of such  indemnity,  together  with all costs and
expenses  of the  Indemnifying  Party  reasonably  incurred  in  effecting  such
recovery,  if  any.  The  indemnity,   contribution  and  expense  reimbursement
obligations that the  Indemnifying  Party has under this Section 7.1 shall be in
addition to any liability that the  Indemnifying  Party may otherwise  have. The
Indemnifying  Party further agrees that the  indemnification  and  reimbursement
commitments  set  forth  in  this  Agreement  shall  apply  whether  or not  the
Indemnified  Party is a  formal  party to any  such  lawsuits,  claims  or other
proceedings.

       (e)    PAYMENT OF CLAIMS. Any indemnification of any Indemnified Party by
the  Indemnifying  Party  pursuant to this Section 7.1 shall be effected by wire
transfer  of  immediately  available  funds  from the  Indemnifying  Party to an
account   designated  by  the  Indemnified   Party  within  15  days  after  the
determination thereof.

       7.2    RIGHT  TO  DEFEND:  COMPROMISE  OF  CLAIMS:   CONTRIBUTION.   Each
Indemnifying  Party  shall have the right to  compromise  or defend,  at its own
expense  and by its own  counsel  reasonably  satisfactory  to such  Indemnified
Party,  any matter  involving the asserted  liability of any Indemnified  Party;
provided,  however,  that no  compromise  of any claim shall be made without the
consent of the Indemnified Party unless such compromise  results in the full and
unconditional  release of all claims against the Indemnified  Party by the party
asserting such claim. The opportunity to compromise or defend as herein provided
shall be a condition  precedent to any liability of an Indemnifying  Party under
the provisions of this Section 7.2. If any Indemnifying Party shall undertake to
compromise or defend any such asserted  liability,  it shall promptly notify the
Indemnified Party and any other Indemnifying Party of its intention to do so. An
Indemnified Party shall cooperate with the Indemnifying Party and its counsel at
the  Indemnifying  Party's  expense in the  defense  against  any such  asserted
liability and in any compromise thereof. Such cooperation shall include, but not
be limited to,  furnishing  the  Indemnifying  Party with any books,  records or
information  reasonably  requested  by the  Indemnifying  Party and taking  such
action as the  Indemnifying  Party may reasonably  request to mitigate or reduce
any claim,  After an Indemnifying Party has notified an Indemnified Party of its
intention to  undertake to  compromise  or defend any  asserted  liability,  the
Indemnifying  Party  shall  not be  liable  for any  additional  legal  expenses
incurred  by the  Indemnified  Party  unless  the  Indemnifying  Party  fails to
prosecute the defense of such claim. If the  Indemnifying  Party shall desire to
compromise  any such  asserted  liability by the payment of a liquidated  amount
which the party  asserting  such  liability is willing to accept in exchange for
fully and  unconditionally  releasing all claims against the Indemnified  Party,
and the Indemnified  Party shall refuse to consent to such compromise,  then the
Indemnifying  Party's  liability  under  this  Article  7 with  respect  to such
asserted  liability  shall be limited  to the  amount so offered in  compromise.
Under no  circumstances  shall the  Indemnified  Party  compromise  any asserted
liability  without  the  written  consent  of the  Indemnifying  Party.  Nothing
contained herein shall be deemed to limit any right of contribution Supercom may
have against the Company under applicable law.

       7.3    REMEDIES.  The Parties shall each have and retain all other rights
and  remedies  existing  in their  favor at law or  equity,  including,  without
limitation,  any actions for specific  performance  and/or  injunctive  or other
equitable relief (including,  without  limitation,  the remedy of rescission) to
enforce or prevent any violations of the provisions of this Agreement.

<PAGE>

       ARTICLE 8. MISCELLANEOUS

       8.1    SURVIVAL  OF  WARRANTIES.  The  warranties,   representations  and
covenants of the Company and the Investor  contained in or made pursuant to this
Agreement  shall survive the  execution  and delivery of this  Agreement and the
Closing  and shall in no way be  affected  by any  investigation  of the subject
matter  thereof made by or on behalf of the  Investor or the Company;  provided,
however,  that Supercom shall have no further liability or obligation under this
Agreement  pursuant  to  Article 2 or Article 2A after the date which is two (2)
years after the Closing Date other than with respect to the  representations and
warranties  made by it pursuant to Section  2.2,  Section  2.4,  Section 2.6 and
Article 2A hereof.

       8.2    SUCCESSORS AND ASSIGNS.  Except as otherwise  provided herein, the
terms and  conditions  of this  Agreement  shall  inure to the benefit of and be
binding upon the respective successors and assigns of me panics. 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.

       8.3    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.

       8.4    NOTICES. Any notice, request,  demand, waiver, consent,  approval,
or other  communication  which is required or  permitted  to be given to a party
hereunder  shall be in writing and shall be deemed  given only if  delivered  to
such party personally or sent to such party by recognized  overnight  courier or
by registered or certified  mail (return  receipt  requested),  with postage and
registration or certification  fees thereon  prepaid,  addressed to the party at
the address  indicated for such party on the signature  page hereof,  or to such
other  address or person as any party may have  specified in a notice duly given
to the other party as provided herein.  Such notice,  request,  demand,  waiver,
consent,  approval or other  communication shall be deemed to have been given as
of the date so delivered.

       8.5    AMENDMENTS AND WAIVERS.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular  instance and either  retroactively or  prospectively),  only
with the  written  consent of the  Company  and the  Investor;  provided,  that,
Supercom's  consent  will be  required in  connection  with any  amendment  that
affects Supercom's rights and obligations under this Agreement. Any amendment or
waiver  effected in accordance  with this  paragraph  shall be binding upon each
holder of any Securities at the time outstanding, each future holder of all such
Securities, and the Company.

       8.6    SEVERABILITV. If one or more provisions of this Agreement are held
to be invalid and unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall remain in full force and
effect in such  jurisdiction and shall be liberally  construed in order to carry
out the  intentions of the parties  hereto as nearly as may be possible and (ii)
the invalidity or  unenforceability  of any provision hereof in any jurisdiction
shall not affect the validity or  enforceability  of such provision in any other
jurisdiction.

       8.7    INDEPENDENCE OF COVENANTS AND REPRESENTATIONS AND WARRANTIES.  All
covenants  hereunder  shall be given  independent  effect  so that if a  certain
action or condition  constitutes  a default under a certain  covenant,  the fact
that such action or condition is permitted by another  covenant shall not affect
the occurrence of such default, unless expressly permitted under an

<PAGE>

exception  to such  initial  covenant.  In  addition,  all  representations  and
warranties  hereunder shall be given independent  effect so that if a particular
representation or warranty proves to be incorrect or is breached,  the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the  incorrectness  of or a breach
of a representation and warranty hereunder.

       8.8    FURTHER  ASSURANCES.  The  parties  agree,  from  time to time and
without further consideration, to execute and deliver such further documents and
take such  further  actions as  reasonably  may be  required  to  implement  and
effectuate the transactions contemplated in this Agreement,

       8.9    GOVERNING LAW. This  Agreement  shall be governed by and construed
in  accordance  with the  substantive  domestic  laws of the  State of New York,
without application of the conflicts of laws principles thereof.

       8.10   COUNTERPARTS.  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.

       811    ENTIRE AGREEMENT.  This Agreement and the other documents referred
to herein  constitute the entire agreement among the parties with respect to the
subject  matter  hereof and thereof and no party shall be liable or bound to any
other  party in any  manner by any  warranties,  representations,  or  covenants
except as specifically set forth herein or therein.

                            [Signature Pages Follow]

<PAGE>

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

                                 COMPANY:

                                 INKSURE TECHNOLOGIES INC.

                                 [GRAPHIC OMITTED][GRAPHIC OMITTED]

                                 BY:
                                 Name: Yaron MerfefH"" -- Title: CEO

                                 SUPERCOM:

                                 SUPERCOM LTD.

                                 BY:
                                 Name: Avi Schechter               Title: CEO
                                 Millennium Bldg., 3 Tidhar St.,  P.O.B. 2094
                                 Raanana, 43665, Israel

                                 [GRAPHIC OMITTED][GRAPHIC OMITTED]

                                 INVESTOR:

                                 ICTS INFORMATION SYSTE
                                 BY:
                                 Name; Ezra Harel and Stefan
                                 Vermeulen Holland: Biesbosch
                                 225, 1181 JC Amstelveen

                                 and

                                 One Rockefeller Plaza, Suite 2412, NY, NY 10020

<PAGE>

       IN WITNESS  WHEREOF,  the parrtes have executed this  Agreement as of the
date first set forth above.

                                 COMPANY:

                                 INKSURE TECHNOLOGIES INC.

                                 [GRAPHIC OMITTED][GRAPHIC OMITTED]

                                 SUPERCOM:

                                 SUPERCOM LTD.

<PAGE>

[GRAPHIC OMITTED][GRAPHIC OMITTED]
Name: Avi Schechter               Title; CEO
Millennium BIDG., 3 Tidhar ST.,
P.O.B 2094
Raanana, 43665. Israel

Name;  Ezra Harel and Stefan

and

One ROCKEFELLER Plaza, Suite 2412, NY, NY 10020

INVESTOR:

ICTS INFORMATION SYSTEMS, BV

BY:
Vemneulen Holland; Biesbosch 225,1181 JC Amstelveen

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