Document:

SUPERCOM
      LTD.

    

    SUBSCRIPTION
      AGREEMENT

    

    SUBSCRIPTION
      AGREEMENT (“Subscription
      Agreement”)
      made
      as of this 20th
      day of
      November, 2006 between SuperCom Ltd., a company organized under the laws of
      the
      State of Israel (the “Company”), and the subscribers set forth on the signature
      pages affixed hereto (collectively the “Subscriber”).

    

    WHEREAS,
      the Company desires to issue an aggregate of $656,566.00 of units (“Units”)
      in a
      private placement (the “Offering”)
      on the
      terms and conditions set forth herein, and the Subscriber desires to acquire
      the
      number of Units set forth on the signature page hereof; and 

    

    WHEREAS,
      the Units are being sold at an aggregate purchase price of $656,566.00 (the
      "Purchase
      Price")
      and
      shall consist of: (i) convertible bonds (each, the "Convertible
      Bond"
      and
      collectively, the "Convertible
      Bonds")
      currently convertible into a total of 772,431 (the “Convertible
      Bond Shares”)
      of the
      Company's ordinary shares, NIS 0.01 nominal value each (the "Ordinary
      Shares"),
      in
      the form attached hereto as Exhibit
      A,
      and
      (ii) 5-year warrants (each, the “Warrant”,
      and
      collectively, the "Warrants")
      to
      purchase a total of 164,141 Ordinary Shares (the “Warrant
      Shares”)
      at a
      current exercise price of $0.85 per Warrant Share, in the form of Exhibit
      B
      attached
      hereto; and

    

    NOW,
      THEREFORE, for and in consideration of the premises and the mutual covenants
      hereinafter set forth, the parties hereto do hereby agree as
      follows:

    

    
      	 	
              I.

            	
              SUBSCRIPTION
                FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
                SUBSCRIBER

            

    

    

    1.1 Subscription
      for Units.
      Subject
      to the terms and conditions hereinafter set forth, the Subscriber hereby
      subscribes for and agrees to purchase from the Company such whole dollar amount
      of Units as is set forth upon the signature page hereof, at a total price of
      $656,566.00, and the Company agrees to sell such Units to the Subscriber for
      said purchase price, subject to the Company’s right, in its sole discretion, to
      reject this subscription, in whole or in part, at any time prior to the Closing
      (as defined below) with respect to this subscription. The purchase price is
      payable at the Closing by wire transfer of funds to the following
      account:

    

    ABA#
      021000089

    Credit
      Bank: Citibank N.A.

    Credit
      Account: 30604518

    Credit
      Account Name: Citigroup Global Markets Inc.

    For
      Further Credit to: Supercom Ltd.

    Account
      062-09431-18-447

    

    The
      consummation of the sale of Units contemplated hereby and the delivery of the
      Convertible Bonds and the Warrants to the Subscriber (the “Closing”),
      shall
      occur on November 20, 2006, unless such date is extended by mutual agreement
      of
      the Company and the Subscriber (the “Closing
      Date”).
      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.2 Reliance
      on Exemptions.
      The
      Subscriber acknowledges that the Offering has not been reviewed by the United
      States Securities and Exchange Commission (the “SEC”)
      or any
      state agency because it is intended to be a nonpublic offering exempt from
      the
      registration requirements of the Securities Act of 1933, as amended (the
“1933
      Act”),
      and
      state securities laws. The Subscriber understands that the Company is relying
      in
      part upon the truth and accuracy of, and the Subscriber’s compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      the Subscriber set forth herein in order to determine the availability of such
      exemptions and the eligibility of the Subscriber to acquire the
      Units.

    

    1.3 Investment
      Purpose.
      The
      Subscriber represents that the Convertible bonds and the Warrants comprising
      the
      Units are being purchased for its own account and for its own benefit, for
      investment purposes only and not for distribution or resale to others in
      contravention of the registration requirements of the 1933 Act. The Subscriber
      agrees that it will not sell or otherwise transfer the Units, the Convertible
      Bonds, the Convertible Bond Shares, the Warrants or the Warrant Shares
      (collectively, the “Securities”)
      unless
      they are registered under the 1933 Act or unless an exemption from such
      registration is available.

    

    1.4 Accredited
      Investor.
      The
      Subscriber represents and warrants that it is an “accredited investor” as such
      term is defined in Rule 501 of Regulation D promulgated under the 1933 Act,
      and
      that it is able to bear the economic risk of any investment in the
      Units.

    

    1.5 Risk
      of Investment.
      The
      Subscriber recognizes that the purchase of Units involves a high degree of
      risk
      in that: (a) an investment in the Company is highly speculative and only
      investors who can afford the loss of their entire investment should consider
      investing in the Company and the Securities; (b) transferability of the
      Securities is limited; and (c) the Company may require substantial additional
      funds to operate its business and there can be no assurance that any other
      funds
      will be available to the Company.

    

    1.6 Prior
      Investment Experience.
      The
      Subscriber acknowledges that it has prior investment experience, including
      investment in non-registered securities, and that it recognizes the highly
      speculative nature of this investment.

    

    1.7 Information.
      The
      Subscriber acknowledges careful review of: (a) this Subscription Agreement,
      (b)
      the Company’s Registration Statement on Form 20-F filed with the SEC on July
      24th,
      2006,
      as amended and the Company’s Registration Statement on Form F-1 filed with the
      SEC on September 26th,
      2006,
      as amended (the “SEC
      Documents”),
      including the section entitled “Risk Factors” contained therein, which has been
      delivered to Subscriber as Exhibit
      C
      to this
      Agreement and which can be also accessed at http://www.sec.gov,
      and (c)
      all exhibits, schedules and appendices which are part of the Subscription
      Agreement (collectively, the “Offering
      Documents”),
      and
      hereby represents that: (i) the Subscriber has been furnished by the Company
      during the course of this transaction with all information regarding the Company
      which it has requested, (ii) that the Subscriber has been afforded the
      opportunity to ask questions of, and receive answers from, duly authorized
      officers of the Company concerning the terms and conditions of the Offering,
      and
      any additional information which it has requested, and (iii) that the Subscriber
      has agreed that the information that the Company has furnished or will furnish
      to the Subscriber in connection with this Agreement and the transactions
      contemplated hereby shall be limited and confined to public information and
      that
      in no event shall any information furnished by the Company to the Subscriber
      include material insider or material nonpublic information. 

    

    
      
         

      

      
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    1.8 No
      Representations.
      The
      Subscriber hereby represents that, except as expressly set forth in the Offering
      Documents, no representations or warranties have been made to the Subscriber
      by
      the Company or any agent, employee or affiliate of the Company, and in entering
      into this transaction the Subscriber is not relying on any information other
      than that contained in the Offering Documents and the results of independent
      investigation by the Subscriber.

    

    1.9 Tax
      Consequences.
      The
      Subscriber acknowledges that the Offering may involve tax consequences and
      that
      the contents of the Offering Documents do not contain tax advice or information.
      The Subscriber acknowledges that it must retain his own professional advisors
      to
      evaluate the tax and other consequences of an investment in the
      Units.

    

    1.10 Transfer
      or Resale.
      Subject
      to Section 3.3 hereof, the Subscriber acknowledges that there is, and will
      be, a
      limited public market for the Ordinary Shares and there can be no assurance
      that
      a more active public market for the Ordinary Shares will ever develop. The
      Subscriber understands that Rule 144 (the “Rule”)
      promulgated under the 1933 Act requires, among other conditions, a one-year
      holding period for non-affiliates (and a longer holding period for affiliates)
      prior to the resale (in limited amounts) of securities acquired in a non-public
      offering without having to satisfy the registration requirements under the
      1933
      Act. The Subscriber consents that the Company may, if it desires, permit the
      transfer of the Securities out of the Subscriber’s name only when the
      Subscriber’s request for transfer is accompanied by an opinion of counsel
      reasonably satisfactory to the Company that neither the sale nor the proposed
      transfer results in a violation of the 1933 Act or any applicable state “blue
      sky” laws. 

    

    1.11 No
      Hedging Transactions.
      The
      Subscriber hereby agrees not to engage in any Hedging Transaction for such
      period as in which such hedging activity would constitute a violation or default
      under any applicable provision of federal, state, or local statute, rule, or
      regulation including, without limitation, any rule, regulation or instruction
      of
      any stock exchange or other public market on which the Company's shares are
      listed for trading and of any authority governing such stock exchange or public
      market. “Hedging Transaction” means any short sale (whether or not against the
      box) or any purchase, sale or grant of any right (including, without limitation,
      any put or call option) with respect to any security (other than a broad-based
      market basket or index) that includes, relates to or derives any significant
      part of its value from the Company’s Ordinary Shares or any rights, warrants,
      options or other securities that are convertible into, or exercisable or
      exchangeable for, Ordinary Shares.

    

    1.12 Legends.
      The
      Subscriber understands that the certificates representing the Shares, until
      such
      time as they have been registered under the 1933 Act, shall bear a restrictive
      legend in substantially the following form (and a stop-transfer order may be
      placed against transfer of such certificates or other instruments):

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
      THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
      (B)
      AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS
      NOT
      REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS, OR (II) UNLESS
      SOLD
      PURSUANT TO RULE 144 UNDER SAID ACT.

    

    
      
         

      

      
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    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of the Shares upon which such
      legend is stamped, if (a) such Shares are being sold pursuant to a registration
      statement under the 1933 Act, (b) such holder delivers to the Company an opinion
      of counsel, in a reasonably acceptable form, to the Company that a disposition
      of the Shares is being made pursuant to an exemption from such registration,
      or
      (c) such holder provides the Company with reasonable assurance (to be determined
      in the sole discretion of the Company) that a disposition of the Shares may
      be
      made pursuant to the Rule without any restriction as to the number of securities
      acquired as of a particular date that can then be immediately sold.

    

    1.13 No
      General Solicitation.
      The
      Subscriber represents that the Subscriber was not induced to invest by any
      form
      of general solicitation or general advertising including, but not limited to,
      the following: (a) any advertisement, article, notice or other communication
      published in any newspaper, magazine or similar media or broadcast over the
      news
      or radio; and (b) any seminar or meeting whose attendees were invited by any
      general solicitation or advertising.

    

    1.14 Validity;
      Enforcement.
      If the
      Subscriber is a corporation, partnership, trust or other entity, the Subscriber
      represents and warrants that: (a) it is authorized and otherwise duly qualified
      to purchase and hold the Units, and (b) that this Subscription Agreement has
      been duly and validly authorized, executed and delivered and constitutes the
      legal, binding and enforceable obligation of the undersigned. If the Subscriber
      is an individual, the Subscriber represents and warrants that this Subscription
      Agreement has been duly and validly executed and delivered and constitutes
      the
      legal, binding and enforceable obligation of the undersigned.

    

    1.15 Address.
      The
      Subscriber hereby represents that the address of the Subscriber furnished by
      the
      Subscriber at the end of this Subscription Agreement, is the undersigned’s
      principal residence, if the Subscriber is an individual, or its principal
      business address, if it is a corporation or other entity.

    

    1.16 Foreign
      Subscriber.
      If the
      Subscriber is not a United States person, as that term is defined in Regulation
      S under the 1933 Act, such Subscriber hereby represents that it has satisfied
      itself as to the full observance of the laws of its jurisdiction in connection
      with any invitation to subscribe for the Securities comprising the Units or
      any
      use of this Subscription Agreement, including: (a) the legal requirements within
      its jurisdiction for the purchase of the Units; (b) any foreign exchange
      restrictions applicable to such purchase; (c) any governmental or other consents
      that may need to be obtained; and (d) the income tax and other tax consequences,
      if any, that may be relevant to the purchase, holding, redemption, sale or
      transfer of the Securities comprising the Units. Such Subscriber’s subscription
      and payment for, and its continued beneficial ownership of the Securities,
      will
      not violate any applicable securities or other laws of the Subscriber’s
      jurisdiction.

    

    
      
         

      

      
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    1.17 NASD
      Member.
      The
      Subscriber acknowledges that if it is a Registered Representative of a NASD
      member firm, the Subscriber must give such firm notice required by the NASD’s
      Rules of Fair Practice, receipt of which must be acknowledged by such firm
      on
      the signature page hereof.

    

    1.18 Entity
      Representation.
      If the
      undersigned Subscriber is a partnership, corporation, trust or other entity,
      such partnership, corporation, trust or other entity further represents and
      warrants that it was not formed for the purpose of investing in the
      Company.

    

     

    

    
      	
            	II.	
              REPRESENTATIONS
                AND WARRANTIES OF THE
                COMPANY

            

    

    

    2.1 Representations
      and Warranties.
      The
      Company represents and warrants to the Subscriber as follows:

    

    (a) The
      Company is a corporation duly organized and validly existing under the laws
      of
      the State of Israel, and has all requisite corporate power and authority to
      (i)
      carry on its business as now conducted and (ii) accept and deliver this
      Subscription Agreement and to consummate the transactions contemplated hereby.
      The Company does not presently own or control, directly or indirectly, any
      interest in any other corporation, association, or other business entity except
      as disclosed in the SEC Documents (each, a “Subsidiary”
and
      collectively, the “Subsidiaries”).
      Unless the context requires otherwise, all references herein to the “Company”
shall refer to the Company and its Subsidiaries. The Company and the
      Subsidiaries are duly qualified to transact business in each jurisdiction in
      which the failure so to qualify would have a material adverse effect (financial
      or otherwise) on the business, property, prospects, assets or liabilities of
      the
      Company and its Subsidiaries taken as a whole (“Material
      Adverse Effect”).

    

    (b)
      All
      corporate action on the part of the Company necessary for the authorization,
      execution, and delivery of this Subscription Agreement, the Convertible Bond
      and
      the Warrant (collectively, the “Transaction
      Documents”),
      the
      performance of all obligations of the Company hereunder and thereunder and
      the
      authorization, issuance (or reservation for issuance) and delivery of the
      Securities, has been taken or will be taken prior to the Closing, and the
      Transaction Documents constitute valid and legally binding obligations of the
      Company, enforceable in accordance with their respective terms, except
      (i) as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium, and other laws of general application affecting enforcement of
      creditors’ rights generally, (ii) as limited by laws relating to the
      availability of specific performance, injunctive relief, or other equitable
      remedies, and (iii) to the extent the indemnification provisions contained
      in the Transaction Documents may be limited by applicable federal or state
      laws.
      There is no legal requirement, or any requirement pursuant to the Company's
      Memorandum of Association or Articles of Association or any other corporate
      document or agreement to which the Company is a party or by which it is bound,
      that this Agreement or the transactions contemplated hereby (including, without
      limitation, the issuance of the Convertible Bond Shares and the Warrant Shares)
      shall be brought before or be approved by the Company's general meeting of
      shareholders. 

    

    
      
         

      

      
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    (c)
      The
      Company is not in violation or default of any provisions of its Memorandum
      of
      Association or Articles of Association, or, to its knowledge, of any instrument,
      judgment, order, writ, decree, mortgage, indenture, lease, license or contract
      to which it is a party or by which it is bound or, to its knowledge, of any
      provision of federal, state, or local statute, rule, or regulation applicable
      to
      the Company, including, without limitation, any rule, regulation or instruction
      of any stock exchange or other public market on which the Company's shares
      are
      listed for trading and of any authority governing such stock exchange or public
      market, except as would not reasonably be expected, singly or in the aggregate,
      to have a Material Adverse Effect. The negotiation, execution, delivery, and
      performance of the Transaction Documents and the consummation of the
      transactions contemplated thereby will not result in any such violation or
      be in
      conflict with or constitute, with or without the passage of time and giving
      of
      notice, either a default under any such provision, instrument, judgment, order,
      writ, decree or contract, or an event which results in the creation of any
      lien,
      charge, or encumbrance upon any assets of the Company or the suspension,
      revocation, impairment, forfeiture, or non-renewal of any material permit,
      license, authorization, or approval applicable to the Company, its business
      or
      operations, or any of its assets or properties, except as would not reasonably
      be expected, singly or in the aggregate, to have a Material Adverse Effect.
      

    

    (d)
      Neither the Company nor any Subsidiary is required to obtain any consent,
      waiver, authorization or order of, give any notice to, or make any filing or
      registration with, any court or other federal, state, local or other
      govern-mental authority or other Person in connection with the execution,
      delivery and performance by the Company of the Transaction Documents, other
      than
      (i) a
      proper
      Form D in accordance with Regulation D
      promulgated under the 1933 Act, and applicable Blue Sky filings and (ii) in
      all
      other cases where the failure to obtain such consent, waiver, authorization
      or
      order, or to give such notice or make such filing or registration could not
      have
      or result in, individually or in the aggregate, a Material Adverse Effect.
      

    

    (e)
      The
      Convertible Bonds and Warrants, when issued and delivered in accordance with
      the
      terms hereof, will be duly and validly issued, fully paid and non-assessable,
      and, based in part upon the representations of the Subscriber in this
      Subscription Agreement, will be issued in compliance with all applicable federal
      and state securities laws. The Convertible Bond Shares issuable upon conversion
      of the Convertible Bonds have been duly and validly reserved for issuance and,
      upon issuance in accordance with the terms of the Convertible Bonds, shall
      be
      duly and validly issued, fully paid and non-assessable, and issued in compliance
      with all applicable securities laws, as presently in effect, of the United
      States and each of the states whose securities laws govern the issuance of
      the
      Ordinary Shares hereunder. The Warrant Shares issuable upon exercise of the
      Warrants have been duly and validly reserved for issuance and, upon issuance
      in
      accordance with the terms of the Warrants and upon payment of the exercise
      price
      as required by the Warrants, shall be duly and validly issued, fully paid and
      non-assessable, and issued in compliance with all applicable securities laws,
      as
      presently in effect, of the United States and each of the states whose
      securities laws govern the issuance of the Ordinary Shares hereunder.

    

    
      
         

      

      
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    (f) 
      Except
      as set forth in the Capitalization Table attached hereto as Exhibit
      D,
      there
      are no outstanding shares of share capital, preemptive rights, convertible
      securities, outstanding warrants, options or other rights to subscribe for
      any
      securities of the Company, and there are not any agreements or commitments
      providing for the issuance of, or the granting of the same. Except
      as
      disclosed in Exhibit E, the Company has not granted or agreed to grant any
      registration rights, including piggyback rights, to any person or entity.

    

    (g) Except
      as
      set forth in the SEC Documents, there is no action, suit, proceeding, claim
      or
      investigation pending or, to the knowledge of the Company, currently threatened
      against the Company which questions the validity of the Transaction Documents,
      or the right of the Company to enter into any of them, or to consummate the
      transactions contemplated thereby, or which might result, either individually
      or
      in the aggregate, in any Material Adverse Effect, nor is the Company aware
      that
      there is any basis for the foregoing.

    

    (h) The
      Company has all material franchises, permits, licenses, and any similar
      authority necessary for the conduct of its business as now being conducted
      by
      it, the lack of which could have a Material Adverse Effect and believes it
      can
      obtain, without undue burden or expense, any similar authority for the conduct
      of its business as planned to be conducted. The Company is not in default in
      any
      material respect under any of such franchises, permits, licenses, or other
      similar authority. 

    

    (i)
      Except as set forth in the SEC Documents, the Company has sufficient title
      and
      ownership of, or has otherwise acquired rights with respect to, all patents,
      trademarks, service marks, trade names, copyrights, trade secrets, information,
      inventions, proprietary rights, and processes necessary for its business as
      now
      conducted without, to the Company’s knowledge, any conflict with or infringement
      of the rights of others. The Company is not aware that any of its employees
      or
      officers are 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 the use of such employee’s or officer’s commercially reasonable efforts to
      promote the interests of the Company or that would conflict with the Company’s
      business as conducted. Neither the carrying on of the Company’s business by the
      employees of the Company, nor the conduct of the Company’s business, will, to
      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 of such employees or officers are now
      obligated.

    

    (j) To
      the
      Company’s knowledge, the financial statements of the Company included in the SEC
      Documents comply in all material respects with applicable accounting
      requirements and the rules and regulations of the SEC with respect thereto
      as in
      effect at the time of filing. Such financial statements have been prepared
      in
      accordance with generally accepted accounting principles applied on a consistent
      basis during the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto, and fairly present in all material respects the financial position
      of
      the Company and its consolidated subsidiaries as of and for the dates thereof
      and the results of operations and cash flows for the periods then ended,
      subject, in the case of unaudited statements, to normal, immaterial, year-end
      audit adjustments. Except as set forth in the SEC Documents, since December
      31,
      2005 (a) there has been no event, occurrence or development that has had or
      that could reasonably be expected to have or result in a Material Adverse
      Effect, (b) the Company has not incurred any liabilities (contingent or
      otherwise) other than (x) liabilities incurred in the ordinary course of
      business consistent with past practice and (y) liabilities not required to
      be
      reflected in the Company’s financial statements pursuant to GAAP or required to
      be disclosed in filings made with the SEC, (c) the Company has not altered
      its
      method of accounting or the identity of its auditors and (d) the Company has
      not
      declared or made any payment or distribution of cash or other property to its
      shareholders or officers or directors (other than in compliance with existing
      Company stock or stock option plans) with respect to its share capital, or
      purchased, redeemed (or made any agreements to purchase or redeem) any shares
      of
      its share capital. 

    

    
      
         

      

      
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    (k) Except
      as
      disclosed in the SEC Documents, the Company is not indebted in excess of
      $50,000, directly or indirectly, to any of its employees, officers or directors
      or to their respective spouses or children, in any amount whatsoever other
      than
      in connection with expenses or advances of expenses incurred in the ordinary
      course of business or relocation expenses of employees, officers and directors,
      nor is the Company contemplating such indebtedness as of the date of this
      Agreement. Except as otherwise disclosed in the SEC Documents, none of said
      employees, officers or directors, or any member of their immediate families,
      is
      directly or indirectly indebted to the Company or have any direct or indirect
      ownership interest in any firm or corporation with which the Company is
      affiliated or with which the Company has a business relationship or any firm
      or
      corporation which competes with the Company, nor is the Company contemplating
      such indebtedness as of the date of this Agreement, except that employees,
      officers, directors and/or shareholders of the Company may own stock in publicly
      traded companies (not in excess of 1% of the outstanding capital stock thereof)
      which may compete with the Company. 

    

    (l) The
      Company shall use the proceeds received from the Subscriber in good faith and
      in
      accordance with purposes set forth in the Company’s Business Plan and budget as
      shall be approved by the Company's board of directors from time to time.

    

    (m) The
      Company has no, and shall not allow create without the prior written consent
      of
      the Subscriber, indebtedness that is superior to the indebtedness towards the
      Subscriber pursuant to the Convertible Bonds (“Senior Indebtedness”). For
      avoidance of doubt, the parties hereto agree and acknowledge that any loan
      or
      financing obtained by the Company which is secured primarily by the ordinary
      shares of On Track Innovations Ltd. (the "OTI Shares") received by the Company
      pursuant to that certain asset purchase agreement dated November 7, 2006 (the
      "OTI Transaction")
      shall not be deemed to be Senior Indebtedness for purposes of this
      Agreement.

    

    (n) To
      the
      best of the Company's knowledge as of the date of this Subscription Agreement,
      other than any announcement relating to the transactions contemplated herein
      or
      previously disclosed or contemplated in the SEC Documents, there are currently
      no planned announcements to be released within the 30 days following the date
      hereof, which may reasonably be expected to materially effect the market price
      of the Company's registered shares.

    

    (o) The
      Company has not provided the Subscriber with any material insider or material
      nonpublic information.

    

    
      
         

      

      
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              III.

            	
              TERMS
                OF SUBSCRIPTION

            

    

    

    3.1 Certificates.
      The
      Subscriber hereby authorizes and directs the Company, at the Closing, to deliver
      the Convertible Bonds and the Warrants to be issued to such Subscriber pursuant
      to this Subscription Agreement to the Subscriber’s address indicated on the
      signature page of this Agreement.

    

    3.2 Return
      of Funds.
      The
      Subscriber hereby authorizes and directs the Company to return any funds for
      unaccepted subscriptions to the same account from which the funds were
      drawn.

    

    3.3 Registration
      of Securities.
      On the
      Closing Date, the Company and the Subscriber shall enter into a registration
      rights agreement, substantially in the form attached hereto as Annex
      I.

    

    3.4 Preemptive
      Rights.
      

    

    (a) Except
      to
      the extent the right to receive such offer has been waived in writing by the
      Subscriber, and except for the issuance of (i) shares of the Company issuable
      upon exercise of options, warrants or convertible securities outstanding on
      the
      date hereof (including, without limitation, the Units); (ii) securities issued
      to employees, consultants or directors of the Company pursuant to any share
      option plan or share purchases or share bonus arrangement approved by the Board
      of Directors of the Company; and (iii) securities issued pursuant to share
      split, recapitalization, reclassification or payment of any dividend or
      distribution with respect to the Company’s issued and outstanding share capital;
      if the Company proposes at any time before the fifteen-month anniversary of
      the
      Closing Date any issuance of share capital of the Company, whether or not now
      authorized, and rights, options or warrants to purchase shares, or securities
      of
      any type whatsoever that are, or may become, convertible into share capital
      ("New
      Securities"),
      it
      shall
      enable the Subscriber to purchase its proportionate share of such New
      Securities, based on its proportionate share holdings in the share capital
      of
      the Company resulting solely from this offering, on an as if converted and
      exercised basis, prior to the issuance of the New Securities, in accordance
      with
      the provisions of subsection (b) below.

    

    (b) In
      the
      event the Company undertakes an issuance of New Securities, it shall give the
      Subscriber written notice thereof, no less than two (2) business days prior
      to
      such issuance. Such notice of offer shall state the price and other terms of
      the
      proposed allotment, and offer to the Subscriber such number of New Securities,
      at such price and on such other terms, as is necessary for the Subscriber to
      retain the proportion of the Company's share capital resulting solely from
      this
      offering which it held immediately prior to such issuance (on an as if converted
      and if exercised basis), and the Subscriber may accept such offer, as to all
      or
      any part of the shares so offered to it, by giving the Company written notice
      of
      acceptance within fourteen (14) days after being served with such notice of
      offer (the “Offer Period”). For avoidance of doubt, the Company and the
      Subscriber agree and acknowledge that the closing of the issuance of New
      Securities to the proposed purchaser may take place prior to the end of the
      Offer Period. In the event the Subscriber accepts the offer to participate
      in
      accordance with this Section 3.4(b), the closing of the additional issuance
      to
      the Subscriber shall take place within seven (7) days after the end of the
      Offer
      Period.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    3.5 Subscriber’s
      Obligation to Close.
      The
      Subscriber’s obligation to purchase the Units and to take the other actions
      required to be taken by the Subscriber at the Closing shall be subject
      to:

    

    (a) the
      prior
      receipt by the Company of funds in the amount of $2,500,000 from
      __________;

    

    (b) the
      receipt by the Subscriber of an opinion of Yossi Avraham, Arad & Co.,
      Advocates,
      Israeli
      counsel to the Company, in form and substance satisfactory to the Subscriber;
      and

    

    (c) the
      receipt by the Subscriber of an opinion of Mintz, Levin, Cohn, Ferris, Glovsky
      and Popeo, P.C.,
      U.S.
      counsel to the Company, in form and substance satisfactory to the
      Subscriber.

    

    
      	 	
              IV.

            	
              MISCELLANEOUS

            

    

    

    4.1 Notices.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Subscription Agreement must be in writing and
      will
      be deemed to have been delivered: (a) upon receipt, when delivered personally,
      (b) upon receipt, when sent by email or facsimile (provided confirmation of
      transmission is mechanically or electronically generated and kept on file by
      the
      sending party), or (c) one (1) business day after deposit with an overnight
      courier service, or (d) three (3) business days after sent by registered mail,
      in each case properly addressed to the party to receive the same. The addresses
      and facsimile numbers for such communications shall be:

    

    If
      to the
      Company:

    

    SuperCom
      Ltd.

    1
      Ha'Maalit St., P.O.B. 5093

    Ha'Sharon
      Industrial Park

    Qadima
      60920, Israel

    Telephone:
      +972-9-8890800

    Facsimile:
      +972-9-8890820

    Attention:
      Chief Financial Officer

    

    With
      copies to:

    

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

    Chrysler
      Center

    666
      Third
      Avenue

    New
      York,
      New York 10017

    U.S.A.

    Telephone:
      212-935-3000

    Facsimile:
      212-983-3115

    Attention:
      Kenneth Koch, Esq. 

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    Yossi
      Avraham, Arad & Co., Advocates

    3
      Daniel
      Frisch Street

    Tel
      Aviv
      64731

    Israel

    Telephone:
      03-608-6888

    Facsimile:
      03-696-3801

    Attention:
      Joseph Mayer, Adv. 

    

    If
      to the Subscriber:
      

    

    to
      its
      address and facsimile number set forth at the end of this Subscription
      Agreement, or to such other address and/or facsimile number and/or to the
      attention of such other person as specified by written notice given to the
      Company five (5) days prior to the effectiveness of such change.

    

    With
      copies to:

    

    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      New Jersey 07068

    Telephone:
      973-597-2500

    Facsimile:
      973-597-2400

    Attention:
      John D. Hogoboom

    

    Written
      confirmation of receipt (a) given by the recipient of such notice, consent,
      waiver or other communication, (b) mechanically or electronically generated
      by
      the sender’s facsimile machine containing the time, date, recipient facsimile
      number and an image of the first page of such transmission, or (c) provided
      by
      an overnight courier service, shall be rebuttable evidence of personal service,
      receipt by facsimile or receipt from an overnight courier service in accordance
      with clause (a), (b) or (c) above, respectively.

    

    4.2 Entire
      Agreement; Amendment.
      This
      Subscription Agreement supersedes all other prior oral or written agreements
      between the Subscriber, the Company, their affiliates and persons acting on
      their behalf with respect to the matters discussed herein, and this Subscription
      Agreement and the instruments referenced herein contain the entire understanding
      of the parties with respect to the matters covered herein and therein and,
      except as specifically set forth herein or therein, neither the Company nor
      the
      Subscriber makes any representation, warranty, covenant or undertaking with
      respect to such matters. No provision of this Subscription Agreement may be
      amended or waived other than by an instrument in writing signed by the Company
      and the holders of at least a majority of the Units then outstanding (or if
      prior to the Closing, the Subscribers purchasing at least a majority of the
      Units to be purchased at the Closing). No such amendment shall be effective
      to
      the extent that it applies to less than all of the holders of the Units then
      outstanding.

    

    4.3 Severability.
      If any
      provision of this Subscription Agreement shall be invalid or unenforceable
      in
      any jurisdiction, such invalidity or unenforceability shall not affect the
      validity or enforceability of the remainder of this Subscription Agreement
      in
      that jurisdiction or the validity or enforceability of any provision of this
      Subscription Agreement in any other jurisdiction.

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

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

    

    4.5 Headings.
      The
      headings of this Subscription Agreement are for convenience of reference and
      shall not form part of, or affect the interpretation of, this Subscription
      Agreement.

    

    4.6 Successors
      and Assigns.
      This
      Subscription Agreement shall be binding upon and inure to the benefit of the
      parties and their respective successors and assigns. The Company shall not
      assign this Subscription Agreement or any rights or obligations hereunder
      without the prior written consent of the holders of at least a majority of
      the
      Securities then outstanding, except by merger or consolidation. The Subscriber
      shall not assign its rights or obligations hereunder without the consent of
      the
      Company, which consent shall not be unreasonably withheld. Nothing in the
      aforementioned shall restrict the Subscriber's right to transfer any of the
      Securities, in accordance with their terms.

    

    4.7 No
      Third Party Beneficiaries.
      This
      Subscription Agreement is intended for the benefit of the parties hereto and
      their respective permitted successors and assigns, and is not for the benefit
      of, nor may any provision hereof be enforced by, any other person.

    

    4.8 Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Subscription Agreement and the consummation of the transactions contemplated
      hereby.

    

    4.9 No
      Strict Construction.
      The
      language used in this Subscription Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

    

    4.10 Legal
      Representation.
      The
      Subscriber acknowledges that: (a) it has read this Subscription Agreement and
      the exhibits and attachments hereto; (b) it understands that the Company has
      been represented in the preparation, negotiation, and execution of this
      Subscription Agreement by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. P.C.
      and by Yossi Avraham, Arad & Co., counsel to the Company; (c) it has either
      been represented in the preparation, negotiation and execution of this
      Subscription Agreement by legal counsel of its own choice, or has chosen to
      forego such representation by legal counsel after being advised to seek such
      legal representation; and (d) it understands the terms and consequences of
      this
      Subscription Agreement and is fully aware of its legal and binding
      effect.

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    4.11 Expenses.
      The
      Company and the Holder shall each bear its own respective costs and expenses,
      including any legal or other fees, in connection with the negotiation and
      preparation of this Subscription Agreement and related exhibits, annexes and
      schedules (including, without limitation, the Convertible Bond, the Warrant
      and
      the Registration Rights Agreement), except that the Company shall pay the legal
      fees and expenses of counsel to the Subscriber, up to a maximum of
      $15,000.

    

    4.12 Counterparts.
      This
      Subscription Agreement may be executed in two or more identical counterparts,
      all of which shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party; provided
      that a
      facsimile signature shall be considered due execution and shall be binding
      upon
      the signatory thereto with the same force and effect as if the signature were
      an
      original, not a facsimile signature.

    

    4.13 Currency.
      The
      term "dollars" or the symbol "$" appearing in this Subscription Agreement shall
      mean the legal currency of the United States of America.

    

    [Signature
      Page Follows]

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

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

     

    
      	The Company:	
              SUPERCOM LTD.

               

               

              
                By:                                                           
                   

                Name:
                  

                Title:
                  

              

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	The Subscriber:	
              SPECIAL SITUATIONS FUND III QP, L.P.

               

               

               

              By:                                                             

              Name:
                David M. Greenhouse

              Title:
                General Partner

            

    

    

    Aggregate
      Purchase Price: US$490,000.00

    To
      purchase Units consisting of: (i) Convertible Bonds currently convertible into
      a
      total of 576,471 of the Company's Ordinary Shares, and (ii) Warrants to purchase
      a total of 122,500 Ordinary Shares

    

    

    Address
      for Notice:

    527
      Madison Avenue

    Suite
      2600

    New
      York,
      NY 10022

    

    with
      a
      copy to:

    

    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      NJ 07068

    Attn:
      John D. Hogoboom, Esq.

    Telephone: 973.597.2500

    Facsimile: 973.597.2400

    

    
      	 	
              SPECIAL
                SITUATIONS FUND III, L.P.

              

              

              

              By:                                                             

              Name:
                David M. Greenhouse

              Title:
                General Partner

            

    

    Aggregate
      Purchase Price: US$33,000.00

    To
      purchase Units consisting of: (i) Convertible Bonds currently convertible into
      a
      total of 38,824 of the Company's Ordinary Shares, and (ii) Warrants to purchase
      a total of 8,250 Ordinary Shares

    

    

    Address
      for Notice:

    527
      Madison Avenue

    Suite
      2600

    New
      York,
      NY 10022

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    with
      a
      copy to:

    

    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      NJ 07068

    Attn:
      John D. Hogoboom, Esq.

    Telephone: 973.597.2500

    Facsimile: 973.597.2400

    

    
      	 	
              SPECIAL
                SITUATIONS CAYMAN FUND, L.P.

              

              

              

              By:                                                             

              Name:
                David M. Greenhouse

              Title:
                General Partner

            

    

    

    Aggregate
      Purchase Price: US$133,565.64

    To
      purchase Units consisting of: (i) Convertible Bonds currently convertible into
      a
      total of 157,136 of the Company's Ordinary Shares, and (ii) Warrants to purchase
      a total of 33,391 Ordinary Shares

    

    

    Address
      for Notice:

    527
      Madison Avenue

    Suite
      2600

    New
      York,
      NY 10022

    

    with
      a
      copy to:

    

    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      NJ 07068

    Attn:
      John D. Hogoboom, Esq.

    Telephone: 973.597.2500

    Facsimile: 973.597.2400

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    ANNEX
      I

    

    

    [Registration
      Rights Agreement]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    Form
      of Convertible Bond

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
      THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR
      (B)
      AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS
      NOT
      REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS, OR (II) UNLESS
      SOLD
      PURSUANT TO RULE 144 UNDER SAID ACT.

    

    SUPERCOM
      LTD.

    

    Convertible
      Bond 

    

    
      	
              No.
                _________________

            	
              $_____________

            

    

    Date:
      November 20, 2006

    

    SuperCom
      Ltd., a company duly organized and existing under the laws of Israel (the
      "Company),
      for
      value received, hereby promises to pay to _______________, or his permitted
      transferee (the "Holder"),
      the
      principal sum of $________________ (the "Principal
      Amount"),
      and
      to pay interest on the outstanding Principal Amount at the net annual rate
      of
      8%, pursuant to the terms and conditions hereinafter set forth.

    

    1. Payment
      of Principal Amount.
      The
      Company shall pay to the Holder on the outstanding Principal Amount on November
      19, 2009 (the "Maturity
      Date").

    

    2. Interest.
      The
      outstanding Principal Amount of this Bond shall bear interest from the date
      hereof at an annual rate of eight percent (8%) (the "Interest"),
      computed on the basis of a 365-day year and actual days elapsed. Interest
      accrued shall be paid semi-annualy, in arrears, on the last day of the
      applicable calendar quarter, with the first such payment becoming due and
      payable on March 31, 2007. Notwithstanding the aforementioned, all remaining
      accrued Interest which is payable on the Maturity Date, shall be paid together
      with the outstanding Principal Amount at same date.

    

    Any
      withholding and other taxes payable with respect to the Interest shall be
      grossed up and be payable by the Company, and the payment of the full rate
      of
      the Interest shall be net of any tax. The
      parties acknowledge that this provision was intended to cover only withholding
      taxes (and possibly VAT) assessed or implied on interest payments made from
      Israel. This provision is not intended to cover capital gains, income or other
      taxes.

    

    3. Manner
      of Payment.
      All
      payments hereunder shall be made by the Company in US dollars. All such payments
      shall be made by wire transfer, in accordance with details for wire transfer
      to
      be provided by the Holder post Closing. The Company shall bear all costs and
      fees relating to the performance of such payments. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4. Conversion
      to Shares.
      At the
      option of the Holder, this Bond, or any portion of the outstanding Principal
      Amount which equals $100,000 or any integral multiple thereof, may be converted
      at any time from the date hereof until the full repayment of the outstanding
      Principal Amount, into a number of fully paid Ordinary Shares of the Company,
      of
      NIS 0.01 nominal value each (the "Convertible
      Bond Shares"),
      that
      is equal to the quotient obtained by dividing such Principal Amount by the
      Conversion Price, as defined below, in effect at the time of
      conversion.

    

    The
      price
      at which each Convertible Bond Share shall be issued upon conversion (the
      "Conversion
      Price") shall
      be
      $0.85. 

    

    The
      Conversion Price shall be subject to proportionate adjustment in the event
      that
      issuance of bonus shares, stock dividends, stock splits, combinations,
      reclassifications, or similar capitalization events are affected by the Company
      after the date hereof and before the conversion, by multiplying the Conversion
      Price by
      a
      fraction, of which the numerator shall be the number of Convertible
      Bond Shares
      receivable upon the conversion of this
      Bond
      immediately prior to such adjustment, and of which the denominator shall be
      the
      number of Convertible
      Bond Shares
      so
      receivable immediately thereafter.

    Whenever
      the Conversion Price shall be adjusted pursuant to the provisions hereof, the
      Company shall provide written notice to the Holder setting forth, in reasonable
      detail, the event requiring the adjustment, the method by which such adjustment
      was calculated, and the new Conversion Price after giving effect to such
      adjustment (the "Adjustment Certificate"). The Adjustment Certificate shall
      be
      signed, and the accuracy of the adjustment of the Conversion Price confirmed,
      by
      the Company's Chief Executive Officer and an independent firm of certified
      public accountants of recognized international standing the Company selects
      at
      its own expense.

    

    In
      order
      to exercise the conversion right, the Holder shall surrender this Convertible
      Bond, duly endorsed in blank, at the Company's office, accompanied by a written
      notice to the Company, in the form attached hereto as Attachment
      A,
      of his
      election to convert this Convertible Bond or, if less than the entire Principal
      Amount hereof then outstanding is to be converted, the portion thereof to be
      converted. 

    

    As
      promptly as practicable after surrendering this Convertible Bond as aforesaid,
      but in any event within five (5) business days, the Company shall issue to
      the
      Holder the Convertible Bond Shares issuable upon such conversion, together
      with
      payment in lieu of any fraction of a share which shall not be issued. In the
      case this Convertible Bond is converted in part only, the Company shall also
      issue to the Holder a new convertible bond, identical in all respects to the
      surrendered Convertible Bond, except for the Principal Amount thereof which
      shall be equal to the unconverted portion of the Principal Amount of the
      surrendered Convertible Bond. The certificate underlying the Convertible Bond
      Shares or the proof of their issuance (as the case may be), payment and new
      convertible bond, as the case may be, shall be sent by registered mail to the
      address of the Holder as designated by him, from time to time, in a written
      notice to the Company. Subject to the provisions of Section 5 below, in the
      event that the Convertible Bond Shares shall be registered for trade upon their
      issuance, unless otherwise requested by the Holder, the Convertible Bond Shares
      will be issued in the name of the Holder. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Holder, as such, shall not be entitled to any rights of a shareholder of the
      Company by virtue of this Convertible Bond, including, without limitation,
      the
      right to vote at general meeting or to receive dividends or other
      distributions.

    

    5. Registration
      of Convertible Bond Shares.
      The
      Company's issued Ordinary Shares are publicly traded on Euronext Brussels Stock
      Exchange and the OTC Bulletin Board in the United States, and the Company may
      not register its shares for trading on any other public markets without prior
      written consent of the Holder, which consent shall not be unreasonably delayed
      or withheld. The Company's obligations with respect of registration of the
      Convertible Bond Shares are as set forth in Section 3.3 of the Subscription
      Agreement. 

    

    6. General
      Protection.
      The
      Company will not by amendment of its Articles or through any reorganization,
      transfer of assets, consolidation, merger, dissolution, issuance or sale of
      securities or any other voluntary action, avoid, or seek to avoid, the
      observance or performance of any of the terms to be observed or performed
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      provisions hereof and in taking of all such actions and making all such
      adjustments as may be necessary or appropriate in order to protect the rights
      of
      the Holder against any impairment.

    

    7. Information
      Rights.
      So long
      as this Convertible Bond is outstanding: 

    

    7.1 The
      Holder shall be entitled to receive from the Company: (1) audited financial
      statements within ninety (90) days after the end of each fiscal year, and (2)
      un-audited, but reviewed, quarterly financial statements within sixty (60)
      days
      after the end of each financial quarter; and

    

    7.2 Without
      derogation from Section 5 above, and to the extent that the information stated
      hereunder was publicly published prior to the time scheduled hereunder, the
      Company shall inform the Holder in writing: (1) at least twenty one (21) days
      prior to the consummation of any secondary offering of the Company’s securities;
      (2) at least ten (10) days prior to a merger of the Company with or into another
      entity; (3) at least ten (10) days prior to any transaction involving the sale
      of all or substantially all of the Company’s shares or assets; (4) within five
      (5) days after it receives any indication of an intention to suspend or strike
      the Company’s shares from trade on stock exchange or other public market on
      which the Company's shares are then listed for trading.

    

    8. Representations
      and Warranties of the Company.
      The
      Company represents and warrants to the Holder as follows:

    

    (a) The
      Company is a public company, duly organized and validly existing under the
      laws
      of the State of Israel, with full power and authority to execute and deliver
      this Convertible Bond and to consummate the transactions contemplated
      hereby.

    

    (b)
      All
      corporate actions on the part of the Company necessary for the issuance of
      this
      Convertible Bond and the Convertible Bond Shares issuable hereunder and the
      performance of the Company's obligations pursuant hereto have been taken and
      are
      effective as of the date hereof. The Company undertakes that all additional
      corporate actions on the part of the Company as may be required in connection
      with an adjustment pursuant hereto will be taken as promptly as
      practicable.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)
      No
      provisions of the Company's Memorandum of Association or Articles, nor of any
      agreement to which the Company is a party or by which it is bound, nor of any
      applicable law, regulation, decree, or judgment of any court or any governmental
      authority, have been or will be violated by the execution and delivery of this
      Convertible Bond or by the consummation of the transactions contemplated hereby,
      other than any violation which shall not have a material adverse effect on
      the
      Company or its business.

    

    (d)
      No
      authorization, approval or consent of, or filing with, any governmental body,
      official authority or any other third party, other than as specified herein,
      is
      required of the Company in connection with the execution and delivery of this
      Convertible Bond or the consummation of the transactions contemplated
      hereby.

    

    (e)
      All
      of the Convertible Bond Shares issuable upon the conversion of this Convertible
      Bond will, upon issuance, be fully paid and free from all liens, charges and
      third party rights. At all times when this Convertible Bond may be converted,
      the Company shall have authorized and reserved for issuance sufficient Ordinary
      Shares, free from pre-emptive rights, to provide for the exercise of the
      conversion rights represented by this Convertible Bond, so that this Convertible
      Bond may be exercised without additional authorization of share capital, after
      giving effect to all other convertible securities.

    

    (f) Except
      as
      set forth in the Capitalization Table attached hereto as Attachment
      B,
      there
      are no outstanding shares or share capital, preemptive rights, convertible
      securities, outstanding warrants, options or other rights to subscribe for
      any
      securities of the Company, and there are not any agreements or commitments
      providing for the issuance of, or the granting of the same (together,
“Securities”). If the conversion and the exercise were made on the date hereof,
      the number of Convertible Bond Shares issuable upon conversion of the Principal
      Amount would constitute [       ]% of the
      Company’s issued share capital, assuming the issuance, conversion and exercise
      of all Securities outstanding on the date hereof. 

     

    9. Acceleration.
      Notwithstanding the above, to the extent permitted by applicable law, the
      outstanding Principal Amount and all accrued Interest that would have been
      due
      up to the Maturity Date will immediately become due and payable in cash, (i)
      at
      the Holder’s sole discretion as shall be indicated in a written notice provided
      by it to the Company, upon the occurrence of any of the events mentioned in
      subsections 9.3, 9.4, 9.5 9.6 9.7, 9.8, 9.9, 9.10, 9.11 or 9.12 herein prior
      to
      the conversion or repayment of the Principal Amount, and (ii) automatically
      upon
      the occurrence of any of the events mentioned in subsections 9.1 or 9.2 herein
      prior to the conversion or full repayment of the Principal Amount, without
      presentment, protest or notice of any kind, all of which are hereby expressly
      waived by the Company. The Company shall provide immediate notice to the Holder
      upon occurrence of any of the events mentioned in subsections 9.1 through 9.12
      herein.

    

    9.1 The
      commencement by the Company or third party of any liquidation proceedings,
      the
      adoption of a winding up resolution, the appointment of a receiver or trustee
      over all, or substantially all, of Company's assets, the filing of a request
      for
      freezing proceedings by creditors against the Company or the calling by the
      Company of a meeting of creditors in order to enter into a scheme of
      arrangement, if such liquidation proceedings or appointment of a receiver or
      trustee have not been cancelled, stayed or removed within thirty (30)
      days.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.2 The
      levy
      of an attachment or the institution of execution proceedings against all or
      substantially all, of Company's assets, if such attachment or proceedings have
      not been cancelled, stayed or removed within thirty (30) days.

    

    9.3 Failure
      by the Company to pay any Principal Amount when and as the same shall become
      due
      and payable, whether at its stated maturity, by acceleration or
      otherwise.

    

    9.4 Failure
      by the Company to pay any payment of Interest when and as the same shall become
      due and payable, whether at its stated maturity, by acceleration or
      otherwise.

    

    9.5 Any
      other
      material breach by the Company of any of its material undertakings or
      obligations herein, provided that the Company was afforded in writing fourteen
      (14) days to cure such breach (only to the extent such breach is reasonably
      curable) and failed to cure.

    

    9.6 Upon
      or
      after the occurrence of a default with respect to any other outstanding
      indebtedness of the Company for borrowed money the holder thereof declares
      all
      obligations with respect to such indebtedness to be due and payable prior to
      the
      stated maturity at regularly scheduled dates of payment with respect to such
      indebtedness. 

    

    9.7 The
      cessation or suspension for a period of more than forty five (45) consecutive
      days of trade in the Company’s securities on any stock exchange or other public
      market in which the Company’s securities were registered for trade.

    

    9.8 The
      Company shall cease to operate all, or substantially all, of its business for
      a
      period of more than ten (10) consecutive business days, other than in
      consequence of merger, acquisition and the like. 

    

    9.9 the
      consummation of a transaction or a series of transactions, including, without
      limitation, merger, consolidation or issuance of shares, whereby, or as a result
      thereof, the Company's shareholders prior thereto hold 50% or less of the voting
      power of the Company, the surviving entity or the new entity (as the case may
      be) or no longer have the power or the right to elect or appoint more than
      fifty
      (50%) percent of the members of the board of directors of the Company or such
      entity.

    

    9.10 Other
      than the sale of certain assets to On Track Innovations Ltd. pursuant to the
      Asset Purchase Agreement dated November 7, 2006, the sale or disposition by
      the
      Company in a single transaction, or a series of related transactions, of assets
      for consideration that is greater than $1,500,000 (“Qualified Sale”);
provided,
      however,
      that
      notwithstanding the first sentence of this Section 9, upon the occurrence of
      a
      Qualified Sale, this Bond shall be accelerated only up to two-thirds (2/3)
      of
      the consideration received from such Qualified Sale. In case such consideration
      shall be in any form other than cash, the valuation of such consideration shall
      be as determined by an appraiser to be appointed upon mutual consent of the
      Holder and the Company (or, in lack of such consent, by the President of the
      Institute of Certified Public Accountants in Israel). 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.11 The
      failure by the Company to meet, according to its audited financial statements,
      any of the following EBITDA in any of the following fiscal periods:

    

    2007:
      ($1M)

    2008:
      $1M

    2009
      (1st
      half):
      $1M

    

    9.12 
      A tender
      offer or other broad solicitation by the Company or a third party to purchase
      100% of the Company’s publicly held Ordinary Shares, or to otherwise obtain a
      controlling interest in the Company.

    

    9.13 The
      occurrence of an Event as such term is used in Section 2(a) of the Registration
      Rights Agreement, dated as of the date hereof, by and between the Holder and
      the
      Company (the “Rights Agreement”); provided,
      however,
      that
      notwithstanding the first sentence of this Section 9, this Bond shall be
      accelerated in accordance with Section 2(a) of the Rights
      Agreement.

    

    10. Negative
      Covenant. So
      long
      as the Holder is the holder of convertible bonds of the Company in the aggregate
      principal amount of $1,250,000 or more, the Company shall not create a floating
      charge, a fixed charge or any other charges on its assets without the prior
      written consent of the Subscriber. Notwithstanding the abovementioned, the
      Holder hereby agrees that a charge on the OTI Shares received by the Company
      pursuant to the OTI Transaction as the primary security for a loan or financing
      obtained by the Company as part of the OTI Transaction, shall not constitute
      a
      breach of the provisions of this Section 10, provided,
      that,
      upon 7 days after the registration of the OTI Shares and as long as the Holder
      is the holder of convertible bonds of the Company in the aggregate principal
      amount of $1,250,000 or more, OTI shares of market value $3,000,000 shall be
      free of any charge or encumbrance.

    

    11. Optional
      Redemption.
      

     

    (a) Beginning
      on February 10, 2008 and ending on February 16, 2008, which is the 15-month
      anniversary of the Closing Date (the “Redemption Period”), the Company may call
      and redeem 100% of this Bond at a price equal to (i) the Principal Amount plus
      (ii) a redemption premium equal to fifteen percent (15%) of the Principal Amount
      plus (iii) any accrued but unpaid interest on the Principal Amount, calculated
      through the date of the redemption in accordance with Section 2 above
      (“Redemption
      Price”),
      upon
      notice to the Holder at any time (the “Redemption
      Notice”).
      

    

    (b) Within
      seven (7) days after the Redemption Notice shall have been given by the Company
      pursuant to Section
      11(a)
      above,
      the Holder may convert up to 50% of the remaining principal amount of this
      Bond
      pursuant to the terms hereof. After the Redemption Period, the Holder shall
      have
      no further rights under this Bond, except to receive, upon surrender of this
      Bond, the Redemption Price and any Convertible Bond Shares due upon conversion
      of up to 50% of the remaining principal amount of this Bond.

    

    12. Notices.
      All
      notices and other communications required or permitted hereunder shall be in
      writing
      and
      shall be telecopied (faxed) or mailed by registered mail, postage prepaid,
      or
      delivered by hand
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Convertible Bond must be in writing and will
      be
      deemed to have been delivered: (a) upon receipt, when delivered personally,
      (b)
      upon receipt, when sent by facsimile (provided confirmation of transmission
      is
      mechanically or electronically generated and kept on file by the sending party),
      (c) one (1) business day after deposit with an overnight courier service, or
      (d)
      five (5) business days after sent by registered mail, in each case properly
      addressed to the party to receive the same.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
      to the
      Company:

    

    SuperCom
      Ltd.

    1
      Ha'Maalit St., P.O.B. 5093

    Ha'Sharon
      Industrial Park

    Qadima
      60920, Israel

    Telephone:
      +972-9-8890800

    Facsimile:
      +972-9-8890820

    Attention:
      Chief Financial Officer

    

    With
      copies to:

    

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

    Chrysler
      Center

    666
      Third
      Avenue

    New
      York,
      New York 10017

    U.S.A.

    Telephone:
      212-935-3000

    Facsimile:
      212-983-3115

    Attention:
      Kenneth Koch, Esq. 

    

    Yossi
      Avraham, Arad & Co., Advocates

    3
      Daniel
      Frisch Street

    Tel
      Aviv
      64731

    Israel

    Telephone:
      03-608-6888

    Facsimile:
      03-696-3801

    Attention:
      Joseph Mayer, Adv. 

    

    

    If
      to the Subscriber:
      

    

    to
      its
      address and facsimile number set forth at the end of this Subscription
      Agreement, or to such other address and/or facsimile number and/or to the
      attention of such other person as specified by written notice given to the
      Company five (5) days prior to the effectiveness of such change.

    

    With
      copies to:

    

    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      New Jersey 07068

    Telephone:
      973-597-2500

    Facsimile:
      973-597-2400

    Attention:
      John D. Hogoboom

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Written
      confirmation of receipt (a) given by the recipient of such notice, consent,
      waiver or other communication, (b) mechanically or electronically generated
      by
      the sender’s facsimile machine containing the time, date, recipient facsimile
      number and an image of the first page of such transmission, or (c) provided
      by
      an overnight courier service, shall be rebuttable evidence of personal service,
      receipt by facsimile or receipt from an overnight courier service in accordance
      with clause (a), (b) or (c) above, respectively.

    

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

    

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

    

    15. Currency.
      The
      term "dollars" or the symbol "$" appearing in this Convertible Bond shall mean
      the legal currency of the United States of America.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    16. Transferability.
      The
      Holder shall be entitled to freely transfer this Convertible Bond, in its
      entirety, without requiring the consent of the Company, provided
      that
      (i)
      any transfer by the Holder hereunder shall be subject to, and comply with,
      the
      restrictions on transfers set forth in the legend appearing at the top of this
      Convertible Bond, and (ii) a copy of duly signed instrument of transfer, in
      the
      form attached hereto as Attachment
      C,
      shall
      be promptly delivered to the Company. No partial transfer or assignment by
      the
      Holder may be affected without the prior written consent of the Company, which
      shall not be unreasonably withheld. 

    

    17. Third
      Party Rights.
      This
      Convertible Bond confers no right on any person other than the Holder or the
      transferee thereof to enforce any of the rights conferred hereby or any other
      term of this Convertible Bond.

    

    18. Entire
      Agreement.
      This
      Convertible Bond, including all attachments hereto and documents incorporated
      herein, constitutes the entire agreement between the Company and the Holder
      pertaining to the transactions contemplated hereby and embodies all terms
      binding upon such parties in respect thereof and supersedes all prior
      agreements, understandings and negotiations whether written or oral. The Company
      shall not be liable or bound in any manner by prior or contemporaneous, express
      or implied, representation, warranty, statement, promise, covenant or agreement
      pertaining to said transactions made by, or on behalf of, the Company unless
      same is expressly and specifically set forth or referred to herein.

    

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this instrument to be duly executed as of the date first
      above appearing.

    

    SuperCom
      Ltd.

    

    

    

    By: ______________

    Title:
      ____________

    
       

      
         

      

      
         

        
          

        

      

      
         

      

    

    ATTACHMENT
      A

    Form
      of
      Conversion Notice

    

    SuperCom
      Ltd.

    ____________

    

    Gentlemen,

    

    CONVERSION
      NOTICE

    

    Reference
      is made to the Convertible Bond, issued on November ____, 2006, by you (the
      "Company"),
      and
      surrendered herewith (the "Bond").
      In
      accordance with the terms of the Bond, the undersigned hereby elects to exercise
      the rights to convert [the entire] [$_________ out of the] outstanding principal
      amount of the Bond to Ordinary Shares of the Company. 

    By
      executing and delivering this notice, the undersigned acknowledges that it
      is
      aware that the underlying Ordinary Shares for which the Bond may be converted
      (the “Bond
      Shares”)
      have
      not been and will not be registered under the Securities Act of 1933, as amended
      (the “Securities
      Act”)
      or any
      state securities laws. The undersigned understands that reliance by the Company
      on exemptions under the Securities Act is predicated in part upon the truth
      and
      accuracy of the statements made by the undersigned in this notice. 

    

    The
      undersigned represents and warrants that (1) it has been furnished with all
      information which it deems necessary to evaluate the merits and risks of the
      purchase of the Bond Shares, (2) it has had the opportunity to ask questions
      concerning the Bond Shares and the Company and all questions posed have been
      answered to its satisfaction, (3) it has been given the opportunity to obtain
      any additional information it deems necessary to verify the accuracy of any
      information obtained concerning the Bond Shares and the Company and (4) it
      has
      such knowledge and experience in financial and business matters that it is
      able
      to evaluate the merits and risks of purchasing the Bond Shares and to make
      an
      informed investment decision relating thereto.

    

    The
      undersigned hereby represents and warrants that it is purchasing the Bond Shares
      for its own account for investment and not with a view to the sale or
      distribution of all or any part of the Bond Shares.

    

    The
      undersigned understands that because the Bond Shares have not been registered
      under the Securities Act, it must continue to bear the economic risk of the
      investment for an indefinite period of time and the Bond Shares cannot be sold
      unless it is subsequently registered under applicable federal and state
      securities laws or an exemption from such registration is
      available.

    

    The
      undersigned agrees that it will in no event sell or distribute or otherwise
      dispose of all or any part of the Bond Shares unless (1) there is an effective
      registration statement under the Securities Act and applicable state securities
      laws covering any such transaction involving the Bond Shares, or (2) the Company
      receives an opinion satisfactory in all material respects to the Company of
      the
      undersigned’s legal counsel stating that such transaction is exempt from
      registration. The undersigned consents to the placing of a legend on its
      certificate for the Bond Shares stating that the Bond Shares have not been
      registered and setting forth the restriction on transfer contemplated hereby
      and
      to the placing of a stop transfer order on the books of the Company and with
      any
      transfer agents against the Bond Shares until the Bond Shares may be legally
      resold or distributed without restriction.

    

    Name
      of
      Holder: ___________________

    Signature
      of Holder: ________________

    Date:
      ___________

    
       

      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ATTACHMENT
      B

    Capitalization
      Table

    
       

       

      
         

      

      
         

        
          

        

      

      
         

      

    

    ATTACHMENT
      C

    Form
      of
      Instrument of Transfer

    

    FOR
      VALUE
      RECEIVED the undersigned sell(s), assign(s) and transfer(s) to:

    
      
        

      

    

    
      

      

    

    

    (Please
      print or type name and address (including postal code) of
      transferee)

    

    the
      enclosed Convertible Bond (the "Bond")
      and
      all rights under the Bond, irrevocably authorizing SuperCom Ltd. (the
      "Company")
      to
      record the transfer of the Bond in the register maintained by the
      Company.

    

    By
      signing this form of transfer, the transferee represents and warrants to the
      Company that the transferee is not a U.S. Person, as that term is defined in
      Regulation S under the United States Securities Act of 1933, as amended and
      that
      it has read and is aware of the legend appearing at the top of the
      Bond.

    

    

    Signature
      of transferor: __________________

    Date:
      _____________

    

    Signature
      of transferee: __________________

    Date:
      _____________

    

    

    NOTE:

    This
      form
      of transfer must be accompanied by such documents, evidence and information
      as
      may be required by the Company.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    Form
      of Warrant

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
      THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR
      (B)
      AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS
      NOT
      REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS, OR (II) UNLESS
      SOLD
      PURSUANT TO RULE 144 UNDER SAID ACT.

    

    SUPERCOM
      LTD. (the "Company")

    

    Date:
      November 20, 2006

    VOID
      AFTER November 19, 2011

    

    WARRANT

    

    THIS
      CERTIFIES THAT,
      ________________ or any of its transferees (the "Holder")
      is
      entitled to purchase shares of the Company of such class, at such price, in
      such
      number and subject to such provisions and upon such terms and conditions as
      set
      forth in this Warrant.

    

    1. Number
      and Class of Warrant Shares; Exercise Price.

     

    (a) Number
      and class of Warrant Shares.
      The
      Holder shall be entitled to purchase up to _____________ Ordinary Shares of
      the
      Company, of NIS 0.01 each (the "Warrant
      Shares") at
      any
      time and from time to time from and after the date hereof and through and
      including November 19, 2011. 

    

    (b) Exercise
      Price.
      The
      price at which each Warrant Share shall be issued upon exercise of this
      Warrant
      (the "Exercise
      Price")
      shall
      be
      $ 0.85.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2. Adjustments
      to the shares.

    

    (a)
      Stock Dividends, Splits, Etc.
      If the
      Company (i) distributes bonus shares on its Ordinary Shares, (ii) subdivides
      the
      outstanding Ordinary Shares into a greater amount of Ordinary Shares or (iii)
      combines or consolidates its outstanding Ordinary Shares into a smaller number
      of Ordinary Shares, then upon each exercise of this Warrant, for each Warrant
      Share acquired, the Holder shall be entitled to, without additional cost to
      the
      Holder, the total number and kind of securities to which the Holder would have
      been entitled had the Holder owned the Warrant Shares of record as of the date
      on which the dividend, subdivision or combination occurred. 

    

    (b)
      Reclassification, Exchange or Substitution.
      In the
      event of any capital reorganization of the Company, any reclassification of
      the
      shares of the Company (other than a change in par value or from par value to
      no
      par value or from no par value to par value or as a result of a stock dividend
      or subdivision, split-up or combination of shares), any consolidation or merger
      of the Company with or into another corporation (where the Company is not the
      surviving corporation or where there is a change in or distribution with respect
      to the Ordinary Shares) or any sale of all or substantially all of the property,
      assets or business of the Company, this Warrant shall after such reorganization,
      reclassification, consolidation, or merger be exercisable for the kind and
      number of shares or other securities or money or property of the Company or
      of
      the successor corporation resulting from such consolidation or surviving such
      merger, if any, to which the holder of the number of Ordinary Shares deliverable
      (immediately prior to the time of such reorganization, reclassification,
      consolidation or merger) upon exercise of this Warrant would have been entitled
      upon such reorganization, reclassification, consolidation or merger. The
      provisions of this Section
      2(b)
      shall
      similarly apply to successive reorganizations, reclassifications, consolidations
      or mergers. The
      Company shall not effect any such reorganization, reclassification,
      consolidation or merger unless, prior to the consummation thereof, the successor
      corporation (if other than the Company) resulting from such reorganization,
      reclassification, consolidation or merger, shall assume, by written instrument,
      the obligation to deliver to the Holder such shares, securities or assets,
      which, in accordance with the foregoing provisions, such Holder shall be
      entitled to receive upon such conversion.

    

    (c)
      Price Adjustment.
      Whenever
      the number of the Warrant Shares purchasable upon the exercise of this Warrant
      is adjusted as herein provided, the Exercise Price per Warrant Share payable
      upon exercise of this Warrant shall be appropriately adjusted by multiplying
      such Exercise Price immediately prior to such adjustment by a fraction, of
      which
      the numerator shall be the number of Warrant Shares purchasable upon the
      exercise of this Warrant immediately prior to such adjustment, and of which
      the
      denominator shall be the number of Warrant Shares so purchasable immediately
      thereafter.

    

    (d)
      Notice of Adjustments.
      Whenever the Exercise Price shall be adjusted pursuant hereto, the Company
      shall
      provide written notice to the Holder setting forth, in reasonable detail, the
      event requiring the adjustment, the method by which such adjustment was
      calculated, and the new Exercise Price after giving effect to such adjustment
      (the "Adjustment
      Certificate").
      The
      Adjustment Certificate shall be signed, and the accuracy of the adjustment
      of
      the Conversion Price confirmed, by the Company's Chief Executive Officer and
      an
      independent firm of certified public accountants of recognized international
      standing the Company selects at its own expense. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. Method
      of Exercise; Payment.

     

    (a) Exercise.
      The
      purchase rights represented by this Warrant may be exercised by the Holder,
      in
      whole or in part, by the surrender of this Warrant (with the Notice of Exercise
      form attached hereto as Attachment A duly
      executed) at the offices of the Company, and by the payment to the Company,
      by
      cash, bank check or other method acceptable to the Company, of an amount equal
      to the applicable Exercise Price multiplied by the number of the Warrant Shares
      being purchased.

     

    (b) Share
      Certificates.
      In the
      event of any exercise of the rights represented by this Warrant, certificates
      for the Warrant Shares so purchased shall be delivered to the Holder promptly
      but in any event within 5 business days after the surrender of Warrant as
      aforesaid and, if applicable, payment and a new Warrant representing the balance
      of the Warrant Shares with respect to which this Warrant shall not have been
      exercised shall also be issued to the Holder within such time. Subject to the
      provisions of Section
      7
      below,
      in the event that the Warrant Shares shall be registered for trade upon their
      issuance, unless otherwise requested by the Holder, the Warrant Shares will
      be
      issued in the name of the Holder. 

     

    4. Share
      Fully Paid; Reservation of Shares.
      All of
      the Warrant Shares issuable upon the exercise of the rights represented by
      this
      Warrant will, upon issuance and receipt of the Exercise Price therefor, be
      fully
      paid and free from all liens and charges. At all times when this Warrant may
      be
      exercised, the Company shall have authorized and reserved for issuance
      sufficient shares, free from pre-emptive rights, of its Warrant Shares to
      provide for the exercise of the rights represented by this Warrant, so that
      this
      Warrant may be exercised without additional authorization of share capital,
      after giving effect to all other convertible securities.

    

    5. General
      Protection.
      The
      Company will not by amendment of its Articles or through any reorganization,
      transfer of assets, consolidation, merger, dissolution, issuance or sale of
      its
      securities or any other voluntary action, avoid, or seek to avoid, the
      observance or performance of any of the terms to be observed or performed
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      provisions hereof and in taking of all such actions and making all such
      adjustments as may be necessary or appropriate in order to protect the rights
      of
      the Holder against any impairment.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6. Partial
      Exercise; Fractional Shares.
      

     

    (a) This
      Warrant may be partially exercised, provided that the amount payable upon each
      such exercise is not less than $50,000.

     

    (b) This
      Warrant may not be exercised for fractional shares. In the event of fractional
      shares, the Company shall round the number of Warrant Shares issuable upon
      such
      exercise down to the nearest whole share and shall pay an amount in cash to
      the
      Holder equal to any such fractional share. 

    

    7. Representations
      and Warranties of the Company.
      The
      Company represents and warrants to the Holder as follows:

     

    (a) The
      Company is a public company, duly organized and validly existing under the
      laws
      of the State of Israel, with full power and authority to execute and deliver
      this Warrant and to consummate the transactions contemplated
      hereby.

     

    (b)
      All
      corporate actions on the part of the Company necessary for the issuance of
      the
      Warrant and the Warrant Shares issuable hereunder and the performance of the
      Company's obligations pursuant hereto have been taken and are effective as
      of
      the date hereof. The Company undertakes that all additional corporate actions
      on
      the part of the Company as may be required in connection with an adjustment
      pursuant hereto will be taken as promptly as practicable.

     

    (c)
      No
      provisions of the Company's Memorandum of Association or Articles, nor of any
      agreement to which the Company is a party or by which it is bound, nor of any
      applicable laws, regulation, decree, or judgment of any court or any govenmental
      authorithy, have been or will be violated by the execution and delivery of
      this
      Warrant or by the consummation of the transactions contemplated hereby other
      than any violation which shall not have an adverse effect on the Company and
      its
      business.

     

    (d)
      No
      authorization, approval or consent of, or filing with, any governmental body,
      official authority or any other third party, other than as specified herein,
      is
      required of the Company in connection with the execution and delivery of this
      Warrant or the consummation of the transactions contemplated
      hereby.

     

    (e)
      All
      of the Warrant Shares issuable upon the exercise of this Warrant will, upon
      issuance, be fully paid and free from all liens, charges and third party rights.
      At all times when this Warrant may be exercised, the Company shall have
      authorized and reserved for issuance sufficient Ordinary Shares, free from
      pre-emptive rights, to provide for the exercise of the rights represented by
      this Warrant, so that this Warrant may be exercised without additional
      authorization of share capital, after giving effect to all other convertible
      securities.

     

    (f) Except
      as
      set forth in the Capitalization Table attached hereto as Attachment
      B,
      there
      are no outstanding shares of share capital, preemptive rights, convertible
      securities, outstanding warrants, options or other rights to subscribe for
      any
      securities of the Company, and there are not any agreements or commitments
      providing for the issuance of, or the granting of the same. 

    

    8. Registration
      of Warrant Shares.
      The
      holder of the Warrant Shares shall have registration rights with respect to
      such
      shares as set forth in Section 3.3 of the Subscription Agreement between the
      Company and subscribers, dated November 20, 2006.

    

    9. Information
      Rights.
      So long
      as this Warrant is outstanding, the Holder shall be entitled to receive from
      the
      Company such documents and information as shall be provided to the shareholders
      of the Company, in accordance with their rights pursuant to any agreement,
      undertaking or applicable law. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    10. Notices.
      All
      notices and other communications required or permitted hereunder shall be in
      writing
      and
      shall be telecopied (faxed) or mailed by registered mail, postage prepaid,
      or
      delivered by hand. Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered: (a) upon receipt, when delivered personally, (b) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party),
      (c) one (1) business day after deposit with an overnight courier service, or
      (d)
      five (5) business days after sent by registered mail, in each case properly
      addressed to the party to receive the same. 

    

    If
      to the
      Company:

    

    SuperCom
      Ltd.

    1
      Ha'Maalit St., P.O.B. 5093

    Ha'Sharon
      Industrial Park

    Qadima
      60920, Israel

    Telephone:
      +972-9-8890800

    Facsimile:
      +972-9-8890820

    Attention:
      Chief Financial Officer

    

    With
      copies to:

    

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

    Chrysler
      Center

    666
      Third
      Avenue

    New
      York,
      New York 10017

    U.S.A.

    Telephone:
      212-935-3000

    Facsimile:
      212-983-3115

    Attention:
      Kenneth Koch, Esq. 

    

    Yossi
      Avraham, Arad & Co., Advocates

    3
      Daniel
      Frisch Street

    Tel
      Aviv
      64731

    Israel

    Telephone:
      03-608-6888

    Facsimile:
      03-696-3801

    Attention:
      Joseph Mayer, Adv. 

    

    If
      to the Subscriber:
      

    

    to
      its
      address and facsimile number set forth at the end of this Subscription
      Agreement, or to such other address and/or facsimile number and/or to the
      attention of such other person as specified by written notice given to the
      Company five (5) days prior to the effectiveness of such change.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    With
      copies to:

    

    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      New Jersey 07068

    Telephone:
      973-597-2500

    Facsimile:
      973-597-2400

    Attention:
      John D. Hogoboom

    

    Written
      confirmation of receipt (a) given by the recipient of such notice, consent,
      waiver or other communication, (b) mechanically or electronically generated
      by
      the sender’s facsimile machine containing the time, date, recipient facsimile
      number and an image of the first page of such transmission, or (c) provided
      by
      an overnight courier service, shall be rebuttable evidence of personal service,
      receipt by facsimile or receipt from an overnight courier service in accordance
      with clause (a), (b) or (c) above, respectively.

    

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

    

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

    

    13. Currency.
      The
      term "dollars" or the symbol "$" appearing in this Warrant shall mean the legal
      currency of the United States of America.

    

    14. Unregistered
      Securities.
      The
      Holder acknowledges that this Warrant and the Warrant Shares have not been
      registered under the Act and agrees not to sell, offer for sale, pledge or
      hypothecate this Warrant or any Warrant Shares in the absence of (i) an
      effective registration statement under the Act covering this Warrant or such
      Warrant Shares and registration or qualification of this Warrant or such Warrant
      Shares under any applicable “blue sky” or state securities law then in effect,
      or (ii) an opinion of counsel, satisfactory to the Company, that such
      registration and qualification are not required. The Company may delay issuance
      of the Warrant Shares until completion of any action or obtaining of any
      consent, which the Company deems necessary under any applicable law (including
      without limitation state securities or “blue sky” laws).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    15. Transferability.
      The
      Holder shall be entitled to freely transfer this Warrant, in its entirety,
      without requiring the consent of the Company, provided
      that
      (i) any transfer by a Holder hereunder shall be subject to, and comply with,
      the
      restrictions on transfers set forth in the legend appearing at the top of this
      Warrant, and (ii) a copy of duly signed instrument of transfer, in the form
      attached hereto as Attachment
      C,
      shall
      be promptly delivered to the Company. No partial transfer or assignment by
      the
      Holder may be affected without the prior written consent of the Company, which
      shall not be unreasonably withheld. 

    

    16. Third
      Party Rights.
      This
      Warrant confers no right on any person other than the Holder to enforce any
      of
      the rights conferred hereby or any other term of this Warrant.

    

    17. Entire
      Agreement.
      This
      Warrant, including all exhibits hereto and documents incorporated herein,
      constitutes the entire agreement between the Company and the Holder pertaining
      to the transactions contemplated hereby and embodies all terms binding upon
      such
      parties in respect thereof and supersedes all prior agreements, understandings
      and negotiations whether written or oral. The Company shall not be liable or
      bound in any manner by prior or contemporaneous, express or implied,
      representation, warranty, statement, promise, covenant or agreement pertaining
      to said transactions made by, or on behalf of, the Company unless same is
      expressly and specifically set forth or referred to herein. 

    

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this instrument to be duly executed as of the date first
      above appearing.

    

    

    SuperCom
      Ltd.

    

    By: _____________

    Title:
      ___________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ATTACHMENT
      A

    Form
      of
      Exercise Notice

    

    SuperCom
      Ltd.

    Gentlemen,

    

    EXERCISE
      NOTICE

    

    Reference
      is made to the Warrant, issued on November 20, 2006, by you (the "Company"),
      and
      surrendered herewith (the "Warrant").
      In
      accordance with the terms of the Warrant, the undersigned hereby elects to
      exercise the rights to purchase [insert
      number of Warrant
      Shares]
      Ordinary Shares of the Company for [insert
      total amount of purchase price].
      

     

    By
      executing and delivering this notice, the undersigned acknowledges that it
      is
      aware that the underlying Ordinary Shares for which the Warrant may be exercised
      (the “Warrant
      Shares”)
      have
      not been and will not be registered under the Securities Act of 1933, as amended
      (the “Securities
      Act”)
      or any
      state securities laws. The undersigned understands that reliance by the Company
      on exemptions under the Securities Act is predicated in part upon the truth
      and
      accuracy of the statements made by the undersigned in this notice. 

     

    The
      undersigned represents and warrants that (1) it has been furnished with all
      information which it deems necessary to evaluate the merits and risks of the
      purchase of the Warrant Shares, (2) it has had the opportunity to ask questions
      concerning the Warrant Shares and the Company and all questions posed have
      been
      answered to its satisfaction, (3) it has been given the opportunity to obtain
      any additional information it deems necessary to verify the accuracy of any
      information obtained concerning the Warrant Shares and the Company and (4)
      it
      has such knowledge and experience in financial and business matters that it
      is
      able to evaluate the merits and risks of purchasing the Warrant Shares and
      to
      make an informed investment decision relating thereto.

     

    The
      undersigned hereby represents and warrants that it is purchasing the Warrant
      Shares for its own account for investment and not with a view to the sale or
      distribution of all or any part of the Warrant Shares.

     

    The
      undersigned understands that because the Warrant Shares have not been registered
      under the Securities Act, it must continue to bear the economic risk of the
      investment for an indefinite period of time and the Warrant Shares cannot be
      sold unless it is subsequently registered under applicable federal and state
      securities laws or an exemption from such registration is
      available.

     

    The
      undersigned agrees that it will in no event sell or distribute or otherwise
      dispose of all or any part of the Warrant Shares unless (1) there is an
      effective registration statement under the Securities Act and applicable state
      securities laws covering any such transaction involving the Warrant Shares,
      or
      (2) the Company receives an opinion satisfactory in all material respects to
      the
      Company of the undersigned’s legal counsel stating that such transaction is
      exempt from registration. The undersigned consents to the placing of a legend
      on
      its certificate for the Warrant Shares stating that the Warrant Shares have
      not
      been registered and setting forth the restriction on transfer contemplated
      hereby and to the placing of a stop transfer order on the books of the Company
      and with any transfer agents against the Warrant Shares until the Warrant Shares
      may be legally resold or distributed without restriction.

    

    Name
      of
      Holder: ___________________

    Signature
      of Holder: ________________

    Date:
      _________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ATTACHMENT
      B

    Capitalization

    
       

       

      
         

      

      
         

        
          

        

      

      
         

      

    

    ATTACHMENT
      C

     

    Form
      of
      Instrument of Transfer

    

    FOR
      VALUE
      RECEIVED the undersigned sell(s), assign(s) and transfer(s) to:

    
      

    

    
      

    

    
      

    

     

    (Please
      print or type name and address (including postal code) of
      transferee)

    

    the
      enclosed Warrant and all rights under the enclosed Warrant, irrevocably
      authorizing SuperCom Ltd. (the "Company")
      to
      record the transfer of the enclosed Warrant in the register maintained by the
      Company

    By
      signing this form of transfer, the transferee represents and warrants to the
      Company that the transferee is not a U.S. Person, as that term is defined in
      Regulation S under the United States Securities Act of 1933, as amended and
      that
      it has read and is aware of the legend appearing at the top of the enclosed
      Warrant.

    

    Signature
      of transferor: __________________

    Date:
      _____________

    

    Signature
      of transferee: __________________

    Date:
      _____________

    

    NOTE:

    This
      form
      of transfer must be accompanied by such documents, evidence and information
      as
      may be required by the Company.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      C

    

    SEC
      Documents

    
       

       

      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      D

    

    CapitalizationREGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of November 20, 2006 by and between SuperCom Ltd.,
      an
      Israeli corporation (the “Company”),
      and
      the investors set forth on the signature pages affixed hereto (collectively
      “SSF”).

    

    This
      Agreement is made pursuant to the Subscription Agreement, dated as of the date
      hereof, between the Company and SSF (the “Subscription
      Agreement”).
      All
      capitalized terms used but not defined herein shall bear the meaning ascribed
      to
      them in the Subscription Agreement.

    

    The
      parties hereby agree as follows:

    

    1. Certain
      Definitions.

    

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

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

    

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

    

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

    

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

    

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

    

    “Registrable
      Securities”
shall
      mean (i) the Convertible Bond Shares, (ii) the Warrant Shares, and (iii) any
      other securities issued or issuable with respect to any of the securities
      referenced in (i) or (ii) above, whether issued or issuable.

    

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

    

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

    

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

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

    2. Registration.

    

    (a)  Demand
      Registration.

    

    (i) From
      the
      date of this Agreement until the earlier of (i)
      the
      four (4) year anniversary of the Closing Date, or (ii) such date that all
      Registrable Securities held or entitled to be held upon exercise by SSF may
      be
      sold under Rule 144(k) (or any successor rule) (the “Registration Period”), SSF
      may make up to two (2) requests for registration of its Registrable Securities
      (“Demand Request”); provided,
      however,
      that
      the Company shall not be obligated to file any Registration Statement pursuant
      to a Demand Request in which the anticipated aggregate offering amount of such
      registration does not exceed $750,000. Upon receipt of a Demand Request, the
      Company shall prepare and file with the SEC as soon as commercially reasonable,
      but in any event within ninety (90) calendar days of the Demand Request) (the
      “Filing Deadline”) a registration statement on Form F-1 (or, if Form F-1 is not
      then available to the Company, on such form of registration statement as is
      then
      available to effect a registration for resale of the Registrable Securities)
      covering the resale of the Registrable Securities. Subject to any SEC comments,
      such Registration Statement shall include the plan of distribution attached
      hereto as Exhibit
      A.
      Such
      Registration Statement also shall cover, to the extent allowable under the
      1933
      Act and the rules promulgated thereunder (including Rule 416), such
      indeterminate number of additional shares of Common Stock resulting from stock
      splits, stock dividends or similar transactions with respect to the Registrable
      Securities. The Registration Statement (and each amendment or supplement
      thereto, and each request for acceleration of effectiveness thereof) shall
      be
      provided to SSF and its counsel prior to its filing or other submission.

    

    (ii)
       The
      Company shall use commercially reasonable efforts to have the Registration
      Statement declared effective as soon as practicable. The Company shall notify
      SSF by facsimile or e-mail as promptly as practicable, and in any event, within
      twenty-four (24) hours, after any Registration Statement is declared effective
      and shall simultaneously provide SSF with copies of any related Prospectus
      to be
      used in connection with the sale or other disposition of the securities covered
      thereby. The Company shall maintain the effectiveness of the Registration
      Statement until the earlier of (i) the sale of all of the Registrable Securities
      by SSF or (ii) such time as all of the Registrable Securities may be sold by
      SSF
      pursuant to Rule 144(k) (the “Effectiveness Period”).

    

    (iii) If
      (A) a
      Registration Statement covering the Registrable Securities is not filed by
      the
      Filing Deadline, (B) such Registration Statement is not declared effective
      by
      the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall
      have informed the Company that no review of the Registration Statement will
      be
      made or that the SEC has no further comments on the Registration Statement
      or
      (ii) the 120th day after the Demand Request or (C) after a Registration
      Statement has been declared effective by the SEC, sales cannot be made pursuant
      to such Registration Statement for any reason (including without limitation
      by
      reason of a stop order, or the Company’s failure to update the Registration
      Statement), but excluding the inability of SSF to sell the Registrable
      Securities covered thereby due to market conditions and except for an Allowed
      Delay or an Allowed Suspension (each, an “Event” and the date on which such
      Event occurs, the “Event Date”), then SSF shall be permitted to accelerate 15%
      of the then outstanding principal amount of its Convertible Bonds and the
      accrued, but unpaid, interest on such principal amount. For each additional
      30-day period following the Event Date until the Event is cured, SSF shall
      be
      permitted to accelerate an additional 15% of the outstanding principal amount
      of
      its Convertible Bonds and the accrued, but unpaid, interest on such principal
      amount. Such right of acceleration shall constitute SSF’s exclusive remedy for
      such events, but shall not affect the right of SSF to seek injunctive
      relief.

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    (iv) Notwithstanding
      the foregoing obligations, if the Company furnishes to SSF a certificate signed
      by the Company’s chief executive officer stating that in the good faith judgment
      of the Company’s Board of Directors it would be materially detrimental to the
      Company and its stockholders for such registration statement to either become
      effective or remain effective for as long as such registration statement
      otherwise would be required to remain effective, because such action would
      (i)
      materially interfere with a significant acquisition, corporate reorganization,
      or other similar transaction involving the Company; or (ii) require premature
      disclosure of material information that the Company has a bona fide business
      purpose for preserving as confidential; then the Company shall have the right
      to
      defer taking action with respect to such filing
      for a
      period of not more than 30 consecutive days or 45 days in any 365-day period
      (an
“Allowed Delay”); provided,
      further,
      that
      the Company shall not register or maintain the effectiveness of any registration
      statement relating to other shares during such deferral period; and provided,
      further,
      that if
      SSF disapproves of the deferral of the registration, it may elect to withdraw
      its request by written notice to the Company, in which case such registration,
      if effected, shall not be counted for the purposes of this Section
      2(a).

    

    (b) Piggyback
      Registration.
      

    

    (i) During
      the Registration Period, if the Company proposes, at any time after the lapse
      of
      a ninety (90)-day period following the Closing Date, to register any of its
      securities (other than a registration statement on Form S-8 or any equivalent
      or
      successor form), for its own account or for the account of any other
      person,
      it
      shall give notice to SSF of such intention. Upon the written request of SSF,
      given within twenty (20) days after receipt of any such notice, the Company
      shall include in such registration all of the Registrable Securities (as defined
      below) indicated in such request, so as to permit the disposition of the shares
      so registered in the manner requested by SSF. 

    

    (ii) Notwithstanding
      any other provision of this Section 2(b), with respect to an
      underwritten
      public
      offering by the Company, if the managing underwriter advises the Company in
      writing that marketing or other factors require a limitation of the number
      of
      shares to be underwritten, then there shall be excluded from such registration
      and underwriting to the extent necessary to satisfy such limitation, Registrable
      Securities held by SSF and by other shareholders of the Company who are entitled
      to have their shares included in such registration, pro rata among them to
      the
      extent necessary to satisfy such limitation. SSF shall agree not to sell any
      Registrable Securities included in the underwritten public offering for such
      period as may be required by the managing underwriter. Notwithstanding the
      provisions of this Section 2(b)(ii), the Company shall have the right at any
      time after it shall have given notice to SSF, to elect not to file any such
      proposed registration statement.

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (c) Expenses.
      The
      Company will pay all expenses associated with each registration, including
      filing and printing fees, the Company’s counsel and accounting fees and
      expenses, costs associated with clearing the Registrable Securities for sale
      under applicable state securities laws and listing fees, but excluding
      discounts, commissions, fees of underwriters, selling brokers, dealer managers
      or similar securities industry professionals with respect to the Registrable
      Securities being sold. 

    

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

    

    (e)  Suspension

     

    (i) Subject
      to Section 2(e)(ii) below, in the event of: (1) any request by the SEC or any
      other U.S. federal or state governmental authority during the Effectiveness
      Period for amendments or supplements to a Registration Statement or related
      prospectus or for additional information, (2) the issuance by the SEC or any
      other U.S. federal or state governmental authority of any stop order suspending
      the effectiveness of a Registration Statement or the initiation of any
      proceedings for that purpose, (3) the receipt by the Company of any notification
      with respect to the suspension of the qualification or exemption from
      qualification of any of the Registrable Securities for sale in any jurisdiction
      or the initiation of any proceeding for such purpose, or (4) any event or
      circumstance which necessitates the making of any changes in the Registration
      Statement or Prospectus, or any document incorporated or deemed to be
      incorporated therein by reference, so that, in the case of the Registration
      Statement, it will not contain any untrue statement of a material fact or any
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, and that in the case of the
      Prospectus, it will not contain any untrue statement of a material fact or
      any
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein, in the light of the circumstances under which
      they
      were made, not misleading, then the Company shall deliver a certificate in
      writing to SSF (“Suspension Notice”) to the effect of the foregoing (which
      notice will not disclose the content of any material non-public information
      and
      will indicate the date of the beginning and end of the intended period of
      suspension, if known), and, upon receipt of such Suspension Notice, SSF will
      discontinue disposition of Registrable Securities covered by the Registration
      Statement or Prospectus (“Suspension”) until SSF's receipt of copies of a
      supplemented or amended Prospectus prepared and filed by the Company, or until
      SSF is advised in writing by the Company that the current Prospectus may be
      used, and have received copies of any additional or supplemental filings that
      are incorporated or deemed incorporated by reference in any such prospectus.
      In
      the event of any Suspension, the Company will use its commercially reasonable
      efforts to cause the use of the Prospectus so suspended to be resumed as soon
      as
      possible after delivery of a Suspension Notice to SSF. The Suspension and
      Suspension Notice described in this Section 2(e)(ii) shall be held by SSF in
      strictest confidence and shall not be disclosed by SSF. The Company shall not
      have the right to impose any Suspension for more than 20 consecutive days or
      more than 45 days in any 365-day period (an “Allowed Suspension”).

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

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

    

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

    

    (b)  furnish
      to SSF (i) promptly after the same is prepared and publicly distributed, filed
      with the SEC, or received by the Company (but not later than four (4) Business
      Days after the filing date, receipt date or sending date, as the case may be)
      one (1) copy of any Registration Statement and any amendment thereto, each
      preliminary prospectus and Prospectus and each amendment or supplement thereto,
      and each letter written by or on behalf of the Company to the SEC or the staff
      of the SEC, and each item of correspondence from the SEC or the staff of the
      SEC, in each case relating to such Registration Statement if and to the extent
      the Company deems such information to be applicable to SSF (other than any
      portion of any thereof which contains information for which the Company has
      sought confidential treatment), and (ii) such number of copies of a Prospectus,
      including a preliminary prospectus, and all amendments and supplements thereto
      and such other documents as SSF may reasonably request in order to facilitate
      the disposition of the Registrable Securities owned by SSF that are covered
      by
      the related Registration Statement;

    

    (c) furnish,
      at the request of SSF upon requesting registration of Registrable Securities
      pursuant to this Agreement, on the date that such Registrable Securities are
      delivered to the underwriters for sale in connection with a registration
      pursuant to this Agreement, if such securities are being sold through
      underwriters, or, if such securities are not being sold through underwriters,
      on
      the date that the registration statement with respect to such securities becomes
      effective, a copy of an opinion, dated such date, of the counsel representing
      the Company for the purposes of such registration, in form and substance as
      is
      customarily given to underwriters in an underwritten public offering, addressed
      to the underwriters, if any, and to SSF requesting registration of Registrable
      Securities;

    

    (d) In
      the
      event of any underwritten public offering, enter into and perform its
      obligations under an underwriting agreement, in usual and customary form, with
      the managing underwriter of such offering. SSF shall also enter into and perform
      its obligations under such an agreement;

    

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

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

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

    

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

    

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

    

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

    

    (j)  With
      a
      view to making available to SSF the benefits of Rule 144 (or its successor
      rule)
      and any other rule or regulation of the SEC that may at any time permit SSF
      to
      sell Ordinary Shares to the public without registration, the Company covenants
      and agrees to use its commercially reasonable efforts to: (i) make and keep
      public information available, as those terms are understood and defined in
      Rule
      144, until the earlier of (A) such date as all of the Registrable Securities
      may
      be resold pursuant to Rule 144(k) or any other rule of similar effect or (B)
      such date as all of the Registrable Securities shall have been resold; and
      (ii)
      file with the SEC in a timely manner all reports and other documents required
      of
      the Company under the 1934 Act; and (iii) furnish to SSF, so long as SSF owns
      Registrable Securities, forthwith upon request (A) a written statement by the
      Company that it has complied with the reporting requirements of SEC Rule 144
      (at
      any time after one hundred and twenty (120) days after the effective date of
      the
      first registration statement filed by the Company), the 1933 Act and the 1934
      Act (at any time after it has become subject to such reporting requirements)
      and
      (B) such other information as may be reasonably requested in order to avail
      SSF
      of any rule or regulation of the SEC that permits the selling of any such
      Registrable Securities without registration.

    

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

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

    

    5. Obligations
      of SSF.
      

    

    (a)  SSF
      shall
      furnish in writing to the Company such information regarding itself, the
      Registrable Securities held by it and the intended method of disposition of
      the
      Registrable Securities held by it, as shall be reasonably required to effect
      the
      registration of such Registrable Securities and shall execute such documents
      in
      connection with such registration as the Company may reasonably request. At
      least ten (10) Business Days prior to the first anticipated filing date of
      any
      Registration Statement, the Company shall notify SSF of the information the
      Company requires from SSF to have any of the Registrable Securities included
      in
      the Registration Statement. SSF shall provide such information to the Company
      at
      least three (3) Business Days prior to the first anticipated filing date of
      such
      Registration Statement to have any of the Registrable Securities included in
      the
      Registration Statement.

    

    (b)  SSF,
      by
      its acceptance of the Registrable Securities, agrees to cooperate with the
      Company as reasonably requested by the Company in connection with the
      preparation and filing of a Registration Statement hereunder.

    

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

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    6. Indemnification.

    

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

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

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

    

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

    

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

    

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    7. Miscellaneous.

    

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

    

    (b)  Notices.
      All
      notices and other communications provided for or permitted hereunder shall
      be
      made as set forth in Section 4.1 of the Subscription Agreement.

    

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

    

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

    

    (e)  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.

    

    (f)  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.

    

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

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

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

    

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

    

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

    

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

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

    

    
      	 	
              SUPERCOM
                LTD.

              

              

              By:                                                                     
                

              Name:
                

              Title:
                

              

              

              

              SPECIAL
                SITUATIONS FUND III QP, L.P.

              

              

              By:                                                                     

              Name:
                David M. Greenhouse

              Title:
                General Partner

              

              

              SPECIAL
                SITUATIONS FUND III, L.P.

              

              

              By:                                                                     

              Name:
                David M. Greenhouse

              Title:
                General Partner

              

              

              SPECIAL
                SITUATIONS CAYMAN FUND, L.P. 

              

              

              By:                                                                     

              Name:
                David M. Greenhouse

              Title:
                General Partner

            

    

    

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    Exhibit
      A

    

    Plan
      of
      Distribution

    

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

    

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

    

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

    

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

    

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

    

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

    

    -
      privately negotiated transactions;

    

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

    

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

    

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

    

    -
      a
      combination of any such methods of sale.

    

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

    

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

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

    

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

    

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

    

    
       

      
        
           

        

        
          -15-

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