Document:

Unassociated Document

    THIS
      WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE
      SET
      FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST 31, 2005,
      NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED
      IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
      SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY
      FOR
      OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
      REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S
      UNDER SUCH ACT.

    

      
        	 	
                Right
                  to 

              
	 	
                Purchase
                  

              
	 	
                769,230
                  

              
	 	
                Shares
                  of 

              
	 	
                Common
                  

              
	 	
                Stock,
                  par 

              
	 	
                value
                  $.001 

              
	 	
                per
                  share

              

      

    

     

     

    STOCK
      PURCHASE WARRANT

     

    THIS
      CERTIFIES THAT,
      for
      value received, JAMES
      AND
      LISA GOODELL
      or their
      registered assigns, is entitled to purchase from Innofone.com.
      Inc.,
      a Nevada
      corporation (the “Company”), at any time or from time to time during the period
      specified in Paragraph 2 hereof, Seven Hundred Sixty Nine Thousand Two
      Hundred Thirty (769,230) fully paid and nonassessable shares of the Company’s
      Common Stock, par value $.001 per share (the “Common Stock”), at an exercise
      price per share equal to $0.13 (the “Exercise Price”). The term “Warrant
      Shares,” as used herein, refers to the shares of Common Stock purchasable
      hereunder. The Warrant Shares and the Exercise Price are subject to adjustment
      as provided in Paragraph 4 hereof. The term “Warrants” means this Warrant and
      the other warrants issued pursuant to that certain Securities Purchase
      Agreement, dated August 13, 2007, by and among the Company and the Buyers listed
      on the execution page thereof (the “Securities Purchase Agreement”), including
      any additional warrants issuable pursuant to Section 4(l) thereof.

     

    This
      Warrant is subject to the following terms, provisions, and conditions:

     

    1.  Manner
      of Exercise; Issuance of Certificates; Payment for Shares.  
Subject
      to the provisions hereof, this Warrant may be exercised by the holder hereof,
      in
      whole or in part, by the surrender of this Warrant, together with a completed
      exercise agreement in the form attached hereto (the “Exercise Agreement”), to
      the Company during normal business hours on any business day at the Company’s
      principal executive offices (or such other office or agency of the Company
      as it
      may designate by notice to the holder hereof), and upon (i) payment to the
      Company in cash, by certified or official bank check or by wire transfer for
      the
      account of the Company of the Exercise Price for the Warrant Shares specified
      in
      the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder
      is not then registered pursuant to an effective registration statement under
      the
      Securities Act of 1933, as amended (the “Securities Act”), delivery to the
      Company of a written notice of an election to effect a “Cashless Exercise” (as
      defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
      Agreement. The Warrant Shares so purchased shall be deemed to be issued to
      the
      holder hereof or such holder’s designee, as the record owner of such shares, as
      of the close of business on the date on which this Warrant shall have been
      surrendered, the completed Exercise Agreement shall have been delivered, and
      payment shall have been made for such shares as set forth above. Certificates
      for the Warrant Shares so purchased, representing the aggregate number of shares
      specified in the Exercise Agreement, shall be delivered to the holder hereof
      within a reasonable time, not exceeding five (5) business days, after this
      Warrant shall have been so exercised. The certificates so delivered shall be
      in
      such denominations as may be requested by the holder hereof and shall be
      registered in the name of such holder or such other name as shall be designated
      by such holder. If this Warrant shall have been exercised only in part, then,
      unless this Warrant has expired, the Company shall, at its expense, at the
      time
      of delivery of such certificates, deliver to the holder a new Warrant
      representing the number of shares with respect to which this Warrant shall
      not
      then have been exercised. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    Notwithstanding
      anything in this Warrant to the contrary, in no event shall the holder of this
      Warrant be entitled to exercise a number of Warrants (or portions thereof)
      in
      excess of the number of Warrants (or portions thereof) upon exercise of which
      the sum of (i) the number of shares of Common Stock beneficially owned by the
      holder and its affiliates (other than shares of Common Stock which may be deemed
      beneficially owned through the ownership of the unexercised Warrants and the
      unexercised or unconverted portion of any other securities of the Company
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein) and (ii) the number of shares of Common Stock issuable upon
      exercise of the Warrants (or portions thereof) with respect to which the
      determination described herein is being made, would result in beneficial
      ownership by the holder and its affiliates of more than 4.9% of the outstanding
      shares of Common Stock. For purposes of the immediately preceding sentence,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder,
      except as otherwise provided in clause (i) of the preceding sentence.
      Notwithstanding anything to the contrary contained herein, the limitation on
      exercise of this Warrant set forth herein may not be amended without (i) the
      written consent of the holder hereof and the Company and (ii) the approval
      of a
      majority of shareholders of the Company.

     

    2.  Period
      of Exercise. 
       This
      Warrant is exercisable at any time or from time to time on or after the date
      on
      which this Warrant is issued and delivered pursuant to the terms of the
      Securities Purchase Agreement and before 5:00 p.m., Pacific Standard Time on
      the
      fifth (5th)
      anniversary of the date of issuance (the “Exercise Period”).

     

    3.  Certain
      Agreements of the Company. 
      The
      Company hereby covenants and agrees as follows:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (a)  Shares
      to be Fully Paid.
      All
      Warrant Shares will, upon issuance in accordance with the terms of this Warrant,
      be validly issued, fully paid, and nonassessable and free from all taxes, liens,
      and charges with respect to the issue thereof.

     

    (b)  Reservation
      of Shares.
      During
      the Exercise Period, the Company shall at all times have authorized, and
      reserved for the purpose of issuance upon exercise of this Warrant, a sufficient
      number of shares of Common Stock to provide for the exercise of this
      Warrant.

     

    (c)  Certain
      Actions Prohibited.
      The
      Company will not, by amendment of its charter or through any reorganization,
      transfer of assets, consolidation, merger, dissolution, issue 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 by it hereunder,
      but will at all times in good faith assist in the carrying out of all the
      provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilution or other
      impairment, consistent with the tenor and purpose of this Warrant. Without
      limiting the generality of the foregoing, the Company (i) will not increase
      the
      par value of any shares of Common Stock receivable upon the exercise of this
      Warrant above the Exercise Price then in effect, and (ii) will take all such
      actions as may be necessary or appropriate in order that the Company may validly
      and legally issue fully paid and nonassessable shares of Common Stock upon
      the
      exercise of this Warrant.

     

    (d)  Successors
      and Assigns.
      This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation, or acquisition of all or substantially all the Company’s
      assets.

     

    4.  Antidilution
      Provisions.
      During
      the Exercise Period, the Exercise Price and the number of Warrant Shares shall
      be subject to adjustment from time to time as provided in this Paragraph
      4.

     

    In
      the
      event that any adjustment of the Exercise Price as required herein results
      in a
      fraction of a cent, such Exercise Price shall be rounded up to the nearest
      cent.

     

    (a)  Adjustment
      of Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      Except
      as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever on
      or
      after the date of issuance of this Warrant, the Company issues or sells, or
      in
      accordance with Paragraph 4(b) hereof is deemed to have issued or sold, any
      shares of Common Stock for no consideration or for a consideration per share
      (before deduction of reasonable expenses or commissions or underwriting
      discounts or allowances in connection therewith) less than the Exercise Price
      on
      the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
      Issuance, the Exercise Price will be reduced to a price equal to the amount
      of
      the consideration per share received by the Borrower in such Dilutive Issuance;
      provided
      that
      only one adjustment will be made for each Dilutive Issuance. 

     

    (b)  Effect
      on Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Exercise Price under Paragraph 4(a) hereof,
      the following will be applicable:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (i)  Issuance
      of Rights or Options.
      If the
      Company in any manner issues or grants any warrants, rights or options, whether
      or not immediately exercisable, to subscribe for or to purchase Common Stock
      or
      other securities convertible into or exchangeable for Common Stock (“Convertible
      Securities”) (such warrants, rights and options to purchase Common Stock or
      Convertible Securities are hereinafter referred to as “Options”) and the price
      per share for which Common Stock is issuable upon the exercise of such Options
      is less than the Market Price on the date of issuance or grant of such Options,
      then the maximum total number of shares of Common Stock issuable upon the
      exercise of all such Options will, as of the date of the issuance or grant
      of
      such Options, be deemed to be outstanding and to have been issued and sold
      by
      the Company for such price per share. For purposes of the preceding sentence,
      the “price per share for which Common Stock is issuable upon the exercise of
      such Options” is determined by dividing (i) the total amount, if any, received
      or receivable by the Company as consideration for the issuance or granting
      of
      all such Options, plus the minimum aggregate amount of additional consideration,
      if any, payable to the Company upon the exercise of all such Options, plus,
      in
      the case of Convertible Securities issuable upon the exercise of such Options,
      the minimum aggregate amount of additional consideration payable upon the
      conversion or exchange thereof at the time such Convertible Securities first
      become convertible or exchangeable, by (ii) the maximum total number of shares
      of Common Stock issuable upon the exercise of all such Options (assuming full
      conversion of Convertible Securities, if applicable). No further adjustment
      to
      the Exercise Price will be made upon the actual issuance of such Common Stock
      upon the exercise of such Options or upon the conversion or exchange of
      Convertible Securities issuable upon exercise of such Options.

     

    (ii)  Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities, whether or
      not
      immediately convertible (other than where the same are issuable upon the
      exercise of Options) and the price per share for which Common Stock is issuable
      upon such conversion or exchange is less than the Market Price on the date
      of
      issuance, then the maximum total number of shares of Common Stock issuable
      upon
      the conversion or exchange of all such Convertible Securities will, as of the
      date of the issuance of such Convertible Securities, be deemed to be outstanding
      and to have been issued and sold by the Company for such price per share. For
      the purposes of the preceding sentence, the “price per share for which Common
      Stock is issuable upon such conversion or exchange” is determined by dividing
      (i) the total amount, if any, received or receivable by the Company as
      consideration for the issuance or sale of all such Convertible Securities,
      plus
      the minimum aggregate amount of additional consideration, if any, payable to
      the
      Company upon the conversion or exchange thereof at the time such Convertible
      Securities first become convertible or exchangeable, by (ii) the maximum total
      number of shares of Common Stock issuable upon the conversion or exchange of
      all
      such Convertible Securities. No further adjustment to the Exercise Price will
      be
      made upon the actual issuance of such Common Stock upon conversion or exchange
      of such Convertible Securities.

     

    (iii)  Change
      in Option Price or Conversion Rate.
      If there
      is a change at any time in (i) the amount of additional consideration payable
      to
      the Company upon the exercise of any Options; (ii) the amount of additional
      consideration, if any, payable to the Company upon the conversion or exchange
      of
      any Convertible Securities; or (iii) the rate at which any Convertible
      Securities are convertible into or exchangeable for Common Stock (other than
      under or by reason of provisions designed to protect against dilution), the
      Exercise Price in effect at the time of such change will be readjusted to the
      Exercise Price which would have been in effect at such time had such Options
      or
      Convertible Securities still outstanding provided for such changed additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (iv)  Treatment
      of Expired Options and Unexercised Convertible
      Securities.
      If, in
      any case, the total number of shares of Common Stock issuable upon exercise
      of
      any Option or upon conversion or exchange of any Convertible Securities is
      not,
      in fact, issued and the rights to exercise such Option or to convert or exchange
      such Convertible Securities shall have expired or terminated, the Exercise
      Price
      then in effect will be readjusted to the Exercise Price which would have been
      in
      effect at the time of such expiration or termination had such Option or
      Convertible Securities, to the extent outstanding immediately prior to such
      expiration or termination (other than in respect of the actual number of shares
      of Common Stock issued upon exercise or conversion thereof), never been
      issued.

     

    (v)  Calculation
      of Consideration Received.
      If any
      Common Stock, Options or Convertible Securities are issued, granted or sold
      for
      cash, the consideration received therefor for purposes of this Warrant will
      be
      the amount received by the Company therefor, before deduction of reasonable
      commissions, underwriting discounts or allowances or other reasonable expenses
      paid or incurred by the Company in connection with such issuance, grant or
      sale.
      In case any Common Stock, Options or Convertible Securities are issued or sold
      for a consideration part or all of which shall be other than cash, the amount
      of
      the consideration other than cash received by the Company will be the fair
      value
      of such consideration, except where such consideration consists of securities,
      in which case the amount of consideration received by the Company will be the
      Market Price thereof as of the date of receipt. In case any Common Stock,
      Options or Convertible Securities are issued in connection with any acquisition,
      merger or consolidation in which the Company is the surviving corporation,
      the
      amount of consideration therefor will be deemed to be the fair value of such
      portion of the net assets and business of the non-surviving corporation as
      is
      attributable to such Common Stock, Options or Convertible Securities, as the
      case may be. The fair value of any consideration other than cash or securities
      will be determined in good faith by the Board of Directors of the
      Company.

     

    (vi)  Exceptions
      to Adjustment of Exercise Price.
      No
      adjustment to the Exercise Price will be made (i) upon the exercise of any
      warrants, options or convertible securities granted, issued and outstanding
      on
      the date of issuance of this Warrant; (ii) upon the grant or exercise of any
      stock or options which may hereafter be granted or exercised under any employee
      benefit plan, stock option plan or restricted stock plan of the Company now
      existing or to be implemented in the future, so long as the issuance of such
      stock or options is approved by a majority of the independent members of the
      Board of Directors of the Company or a majority of the members of a committee
      of
      independent directors established for such purpose; (iii) upon the issuance
      of
      any securities in connection with an acquisition by the Company, so long as
      such
      acquisition is approved by a majority of the independent members of the Board
      of
      Directors of the Company or a majority of the members of a committee of
      independent directors established for such purpose; (iv) upon the issuance
      of
      any securities pursuant to a commitment by the Company that has been previously
      disclosed to the holder prior to the date hereof; or (v) upon the exercise
      of
      the Warrants.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (c)  Subdivision
      or Combination of Common Stock.
      If the
      Company at any time subdivides (by any stock split, stock dividend,
      recapitalization, reorganization, reclassification or otherwise) the shares
      of
      Common Stock acquirable hereunder into a greater number of shares, then, after
      the date of record for effecting such subdivision, the Exercise Price in effect
      immediately prior to such subdivision will be proportionately reduced. If the
      Company at any time combines (by reverse stock split, recapitalization,
      reorganization, reclassification or otherwise) the shares of Common Stock
      acquirable hereunder into a smaller number of shares, then, after the date
      of
      record for effecting such combination, the Exercise Price in effect immediately
      prior to such combination will be proportionately increased.

     

    (d)  Adjustment
      in Number of Shares.
      Upon
      each adjustment of the Exercise Price pursuant to the provisions of this
      Paragraph 4, the number of shares of Common Stock issuable upon exercise of
      this
      Warrant shall be adjusted by multiplying a number equal to the Exercise Price
      in
      effect immediately prior to such adjustment by the number of shares of Common
      Stock issuable upon exercise of this Warrant immediately prior to such
      adjustment and dividing the product so obtained by the adjusted Exercise
      Price.

     

    (e)  Consolidation,
      Merger or Sale.
      In case
      of any consolidation of the Company with, or merger of the Company into any
      other corporation, or in case of any sale or conveyance of all or substantially
      all of the assets of the Company other than in connection with a plan of
      complete liquidation of the Company, then as a condition of such consolidation,
      merger or sale or conveyance, adequate provision will be made whereby the holder
      of this Warrant will have the right to acquire and receive upon exercise of
      this
      Warrant in lieu of the shares of Common Stock immediately theretofore acquirable
      upon the exercise of this Warrant, such shares of stock, securities or assets
      as
      may be issued or payable with respect to or in exchange for the number of shares
      of Common Stock immediately theretofore acquirable and receivable upon exercise
      of this Warrant had such consolidation, merger or sale or conveyance not taken
      place. In any such case, the Company will make appropriate provision to insure
      that the provisions of this Paragraph 4 hereof will thereafter be applicable
      as
      nearly as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Warrant. The Company will not effect
      any
      consolidation, merger or sale or conveyance unless prior to the consummation
      thereof, the successor corporation (if other than the Company) assumes by
      written instrument the obligations under this Paragraph 4 and the obligations
      to
      deliver to the holder of this Warrant such shares of stock, securities or assets
      as, in accordance with the foregoing provisions, the holder may be entitled
      to
      acquire.

     

    (f)  Distribution
      of Assets.
      In case
      the Company shall declare or make any distribution of its assets (including
      cash) to holders of Common Stock as a partial liquidating dividend, by way
      of
      return of capital or otherwise, then, after the date of record for determining
      shareholders entitled to such distribution, but prior to the date of
      distribution, the holder of this Warrant shall be entitled upon exercise of
      this
      Warrant for the purchase of any or all of the shares of Common Stock subject
      hereto, to receive the amount of such assets which would have been payable
      to
      the holder had such holder been the holder of such shares of Common Stock on
      the
      record date for the determination of shareholders entitled to such
      distribution.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (g)  Notice
      of Adjustment.
      Upon the
      occurrence of any event which requires any adjustment of the Exercise Price,
      then, and in each such case, the Company shall give notice thereof to the holder
      of this Warrant, which notice shall state the Exercise Price resulting from
      such
      adjustment and the increase or decrease in the number of Warrant Shares
      purchasable at such price upon exercise, setting forth in reasonable detail
      the
      method of calculation and the facts upon which such calculation is based. Such
      calculation shall be certified by the Chief Financial Officer of the
      Company.

     

    (h)  Minimum
      Adjustment of Exercise Price.
      No
      adjustment of the Exercise Price shall be made in an amount of less than 1%
      of
      the Exercise Price in effect at the time such adjustment is otherwise required
      to be made, but any such lesser adjustment shall be carried forward and shall
      be
      made at the time and together with the next subsequent adjustment which,
      together with any adjustments so carried forward, shall amount to not less
      than
      1% of such Exercise Price.

     

    (i)  No
      Fractional Shares.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but the Company shall pay a cash adjustment in respect of any
      fractional share which would otherwise be issuable in an amount equal to the
      same fraction of the Market Price of a share of Common Stock on the date of
      such
      exercise.

     

    (j)  Other
      Notices.
      In case
      at any time:

     

    (i)  the
      Company shall declare any dividend upon the Common Stock payable in shares
      of
      stock of any class or make any other distribution (including dividends or
      distributions payable in cash out of retained earnings) to the holders of the
      Common Stock;

     

    (ii)  the
      Company shall offer for subscription pro rata to the holders of the Common
      Stock
      any additional shares of stock of any class or other rights;

     

    (iii)  there
      shall be any capital reorganization of the Company, or reclassification of
      the
      Common Stock, or consolidation or merger of the Company with or into, or sale
      of
      all or substantially all its assets to, another corporation or entity;
      or

     

    (iv)  there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;

     

    then,
      in
      each such case, the Company shall give to the holder of this Warrant (a) notice
      of the date on which the books of the Company shall close or a record shall
      be
      taken for determining the holders of Common Stock entitled to receive any such
      dividend, distribution, or subscription rights or for determining the holders
      of
      Common Stock entitled to vote in respect of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding-up and (b) in the case of any such reorganization, reclassification,
      consolidation, merger, sale, dissolution, liquidation or winding-up, notice
      of
      the date (or, if not then known, a reasonable approximation thereof by the
      Company) when the same shall take place. Such notice shall also specify the
      date
      on which the holders of Common Stock shall be entitled to receive such dividend,
      distribution, or subscription rights or to exchange their Common Stock for
      stock
      or other securities or property deliverable upon such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation, or
      winding-up, as the case may be. Such notice shall be given at least thirty
      (30)
      days prior to the record date or the date on which the Company’s books are
      closed in respect thereto. Failure to give any such notice or any defect therein
      shall not affect the validity of the proceedings referred to in clauses (i),
      (ii), (iii) and (iv) above.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (k)  Certain
      Events.
      If any
      event occurs of the type contemplated by the adjustment provisions of this
      Paragraph 4 but not expressly provided for by such provisions, the Company
      will
      give notice of such event as provided in Paragraph 4(g) hereof, and the
      Company’s Board of Directors will make an appropriate adjustment in the Exercise
      Price and the number of shares of Common Stock acquirable upon exercise of
      this
      Warrant so that the rights of the holder shall be neither enhanced nor
      diminished by such event.

     

    (l)  Certain
      Definitions. 

     

    (i)  “Market
      Price,”
      as of
      any date, (i) means the average of the last reported sale prices for the shares
      of Common Stock on the OTCBB for the five (5) Trading Days immediately preceding
      such date as reported by Bloomberg, or (ii) if the OTCBB is not the principal
      trading market for the shares of Common Stock, the average of the last reported
      sale prices on the principal trading market for the Common Stock during the
      same
      period as reported by Bloomberg, or (iii) if market value cannot be calculated
      as of such date on any of the foregoing bases, the Market Price shall be the
      fair market value as reasonably determined in good faith by (a) the Board of
      Directors of the Company or, at the option of the holder of the Warrant by
      (b)
      an independent investment bank of nationally recognized standing in the
      valuation of businesses similar to the business of the corporation. The manner
      of determining the Market Price of the Common Stock set forth in the foregoing
      definition shall apply with respect to any other security in respect of which
      a
      determination as to market value must be made hereunder.

     

    (ii)  “Common
      Stock,”
      for
      purposes of this Paragraph 4, includes the Common Stock, par value $.001 per
      share, and any additional class of stock of the Company having no preference
      as
      to dividends or distributions on liquidation, provided that the shares
      purchasable pursuant to this Warrant shall include only shares of Common Stock,
      par value $.001 per share, in respect of which this Warrant is exercisable,
      or
      shares resulting from any subdivision or combination of such Common Stock,
      or in
      the case of any reorganization, reclassification, consolidation, merger, or
      sale
      of the character referred to in Paragraph 4(e) hereof, the stock or other
      securities or property provided for in such Paragraph.

     

    5.  Issue
      Tax. 
      The
      issuance of certificates for Warrant Shares upon the exercise of this Warrant
      shall be made without charge to the holder of this Warrant or such shares for
      any issuance tax or other costs in respect thereof, provided that the Company
      shall not be required to pay any tax which may be payable in respect of any
      transfer involved in the issuance and delivery of any certificate in a name
      other than the holder of this Warrant.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    6.  No
      Rights or Liabilities as a Shareholder. 
      This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a shareholder of the Company. No provision of this Warrant, in the absence
      of
      affirmative action by the holder hereof to purchase Warrant Shares, and no
      mere
      enumeration herein of the rights or privileges of the holder hereof, shall
      give
      rise to any liability of such holder for the Exercise Price or as a shareholder
      of the Company, whether such liability is asserted by the Company or by
      creditors of the Company.

     

    7.  Transfer,
      Exchange, and Replacement of Warrant.

     

    (a)  Restriction
      on Transfer.
      This
      Warrant and the rights granted to the holder hereof are transferable, in whole
      or in part, upon surrender of this Warrant, together with a properly executed
      assignment in the form attached hereto, at the office or agency of the Company
      referred to in Paragraph 7(e) below, provided, however, that any transfer
      or assignment shall be subject to the conditions set forth in Paragraph 7(f)
      hereof and to the applicable provisions of the Securities Purchase Agreement.
      Until due presentment for registration of transfer on the books of the Company,
      the Company may treat the registered holder hereof as the owner and holder
      hereof for all purposes, and the Company shall not be affected by any notice
      to
      the contrary. 

     

    (b)  Warrant
      Exchangeable for Different Denominations.
      This
      Warrant is exchangeable, upon the surrender hereof by the holder hereof at
      the
      office or agency of the Company referred to in Paragraph 7(e) below, for new
      Warrants of like tenor representing in the aggregate the right to purchase
      the
      number of shares of Common Stock which may be purchased hereunder, each of
      such
      new Warrants to represent the right to purchase such number of shares as shall
      be designated by the holder hereof at the time of such surrender.

     

    (c)  Replacement
      of Warrant.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction, or mutilation of this Warrant and, in the case of any such loss,
      theft, or destruction, upon delivery of an indemnity agreement reasonably
      satisfactory in form and amount to the Company, or, in the case of any such
      mutilation, upon surrender and cancellation of this Warrant, the Company, at
      its
      expense, will execute and deliver, in lieu thereof, a new Warrant of like
      tenor.

     

    (d)  Cancellation;
      Payment of Expenses.
      Upon the
      surrender of this Warrant in connection with any transfer, exchange, or
      replacement as provided in this Paragraph 7, this Warrant shall be promptly
      canceled by the Company. The Company shall pay all taxes (other than securities
      transfer taxes) and all other expenses (other than legal expenses, if any,
      incurred by the holder or transferees) and charges payable in connection with
      the preparation, execution, and delivery of Warrants pursuant to this Paragraph
      7.

     

    (e)  Register.
      The
      Company shall maintain, at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee and each prior owner of this
      Warrant.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (f)  Exercise
      or Transfer Without Registration.
      If, at
      the time of the surrender of this Warrant in connection with any exercise,
      transfer, or exchange of this Warrant, this Warrant (or, in the case of any
      exercise, the Warrant Shares issuable hereunder), shall not be registered under
      the Securities Act of 1933, as amended (the “Securities Act”) and under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such exercise, transfer, or exchange, (i) that the holder
      or transferee of this Warrant, as the case may be, furnish to the Company a
      written opinion of counsel, which opinion and counsel are acceptable to the
      Company, to the effect that such exercise, transfer, or exchange may be made
      without registration under said Act and under applicable state securities or
      blue sky laws, (ii) that the holder or transferee execute and deliver to the
      Company an investment letter in form and substance acceptable to the Company
      and
      (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)
      promulgated under the Securities Act; provided that no such opinion, letter
      or
      status as an “accredited investor” shall be required in connection with a
      transfer pursuant to Rule 144 under the Securities Act. The first holder of
      this
      Warrant, by taking and holding the same, represents to the Company that such
      holder is acquiring this Warrant for investment and not with a view to the
      distribution thereof. 

     

    8.  Notices. 
      All
      notices, requests, and other communications required or permitted to be given
      or
      delivered hereunder to the holder of this Warrant shall be in writing, and
      shall
      be personally delivered, or shall be sent by certified or registered mail or
      by
      recognized overnight mail courier, postage prepaid and addressed, to such holder
      at the address shown for such holder on the books of the Company, or at such
      other address as shall have been furnished to the Company by notice from such
      holder. All notices, requests, and other communications required or permitted
      to
      be given or delivered hereunder to the Company shall be in writing, and shall
      be
      personally delivered, or shall be sent by certified or registered mail or by
      recognized overnight mail courier, postage prepaid and addressed, to the office
      of the Company at 1431 Ocean Ave. Suite 1100, Santa Monica, California, 90401,
      Attention: Chief Executive Officer, or at such other address as shall have
      been
      furnished to the holder of this Warrant by notice from the Company. Any such
      notice, request, or other communication may be sent by facsimile, but shall
      in
      such case be subsequently confirmed by a writing personally delivered or sent
      by
      certified or registered mail or by recognized overnight mail courier as provided
      above. All notices, requests, and other communications shall be deemed to have
      been given either at the time of the receipt thereof by the person entitled
      to
      receive such notice at the address of such person for purposes of this Paragraph
      8, or, if mailed by registered or certified mail or with a recognized overnight
      mail courier upon deposit with the United States Post Office or such overnight
      mail courier, if postage is prepaid and the mailing is properly addressed,
      as
      the case may be.

     

    9.  Governing
      Law.  THIS
      WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS
      OF THE STATE OF NEVADA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED IN LOS ANGELES COUNTY, CALIFORNIA WITH
      RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO
      IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
      BOTH
      PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
      MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
      OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
      RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
      PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN
      ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
      NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE
      AND
      MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
      LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
      THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
      ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
      DISPUTE.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    10.  Miscellaneous.

     

    (a)  Amendments.
      This
      Warrant and any provision hereof may only be amended by an instrument in writing
      signed by the Company and the holder hereof.

     

    (b)  Descriptive
      Headings.
      The
      descriptive headings of the several paragraphs of this Warrant are inserted
      for
      purposes of reference only, and shall not affect the meaning or construction
      of
      any of the provisions hereof.

     

    (c)  Cashless
      Exercise.
      Notwithstanding anything to the contrary contained in this Warrant, if the
      resale of the Warrant Shares by the holder is not then registered pursuant
      to an
      effective registration statement under the Securities Act, this Warrant may
      be
      exercised, at any time after the 90th
      day
      following the Closing Date (as defined in the Securities Purchase Agreement),
      by
      presentation and surrender of this Warrant to the Company at its principal
      executive offices with a written notice of the holder’s intention to effect a
      cashless exercise, including a calculation of the number of shares of Common
      Stock to be issued upon such exercise in accordance with the terms hereof (a
      “Cashless Exercise”). In the event of a Cashless Exercise, in lieu of paying the
      Exercise Price in cash, the holder shall surrender this Warrant for that number
      of shares of Common Stock determined by multiplying the number of Warrant Shares
      to which it would otherwise be entitled by a fraction, the numerator of which
      shall be the difference between the then current Market Price per share of
      the
      Common Stock and the Exercise Price, and the denominator of which shall be
      the
      then current Market Price per share of Common Stock. For example, if the holder
      is exercising 100,000 Warrants with a per Warrant exercise price of $0.75 per
      share through a cashless exercise when the Common Stock’s current Market Price
      per share is $2.00 per share, then upon such Cashless Exercise the holder will
      receive 62,500 shares of Common Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (d)  Remedies.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the holder, by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Warrant will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Warrant, that the holder shall be entitled,
      in
      addition to all other available remedies at law or in equity, and in addition
      to
      the penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Warrant and to enforce specifically
      the
      terms and provisions thereof, without the necessity of showing economic loss
      and
      without any bond or other security being required.

     

    

     

    

     

    

     

    

     

    

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed by its duly authorized
      officer.

     

    
      	 	
              INNOFONE.COM,
                INC.

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	
              
                /s/
                  Alex Lightman  

              

            
	 	 	
              Alex
                Lightman

            
	
               

            	 	
              Chief
                Executive Officer 

            

    

    

     

    Dated
      as
      of August 13, 2007

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    FORM
      OF EXERCISE AGREEMENT

     

    

     

    Dated:
      ________ __, 200_

     

    

     

    To: ______________________

     

    

     

    

     

    The
      undersigned, pursuant to the provisions set forth in the within Warrant, hereby
      agrees to purchase ________ shares of Common Stock covered by such Warrant,
      and
      makes payment herewith in full therefor at the price per share provided by
      such
      Warrant in cash or by certified or official bank check in the amount of, or,
      if
      the resale of such Common Stock by the undersigned is not currently registered
      pursuant to an effective registration statement under the Securities Act of
      1933, as amended, by surrender of securities issued by the Company (including
      a
      portion of the Warrant) having a market value (in the case of a portion of
      this
      Warrant, determined in accordance with Section 11(c) of the Warrant) equal
      to
      $_________. Please issue a certificate or certificates for such shares of Common
      Stock in the name of and pay any cash for any fractional share to:

     

    

     

    
      	 	
              Name:
                

            	
               
                

            
	 	 	 
	 	 	 
	 	
              Signature:

            	 
	 	
              Address:

            	
               
                

            
	 	 	
               
                

            
	 	 	 
	 	 	 
	 	
              Note:

            	
              The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant, if applicable.

            

    

    

     

    and,
      if
      said number of shares of Common Stock shall not be all the shares purchasable
      under the within Warrant, a new Warrant is to be issued in the name of said
      undersigned covering the balance of the shares purchasable thereunder less
      any
      fraction of a share paid in cash.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FORM
      OF ASSIGNMENT

     

    

     

    

     

    FOR
      VALUE RECEIVED,
      the
      undersigned hereby sells, assigns, and transfers all the rights of the
      undersigned under the within Warrant, with respect to the number of shares
      of
      Common Stock covered thereby set forth hereinbelow, to:

    

     

    
      	
              Name
                of Assignee

            	
              Address

            	
              No
                of Shares

            

    

    

     

    

     

    

     

    ,
      and
      hereby irrevocably constitutes and appoints ___________________________________
      as agent and attorney-in-fact to transfer said Warrant on the books of the
      within-named corporation, with full power of substitution in the
      premises.

     

    

     

    Dated: ________
      __, 200_

     

    

     

    
      	
              In
                the presence of:

            	 	
                 
                

            
	 	
              Name:

            	
                
                

            
	 	 	 
	 	
              Signature:

            	 
	 	
              Title
                of Signing Officer or Agent (if any):

            
	 	 	
               
                

            
	 	
              Address:

            	
               
                

            
	 	 	
               
                

            
	 	 	 
	 	 	 
	 	
              Note:

            	
              The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant, if applicable.PURCHASE
      AGREEMENT 

     

    THIS
      PURCHASE AGREEMENT ("Agreement") is made as of the 9th day of
      December, 2005 by and among SuperCom Ltd., an Israeli corporation (the
      "Company"), and the Investors set forth on the signature pages affixed hereto
      (each an "Investor" and collectively the "Investors"). 

     

    Recitals
      

     

    A.
       The
      Company and the Investors are executing and delivering this Agreement in
      reliance upon the exemption from securities registration afforded by the
      provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
      Securities and Exchange Commission (the "SEC") under the Securities Act of
      1933,
      as amended; and 

     

    B.
       The
      Investors wish to purchase from the Company, and the Company wishes to sell
      and
      issue to the Investors, upon the terms and conditions stated in this Agreement,
      (i) an aggregate of 4,032,258 Ordinary Shares of the Company, par value NIS0.01
      per share (together with any securities into which such shares may be
      reclassified the "Ordinary Shares"), at purchase price of US$0.62 per Ordinary
      Share, and (ii) warrants to purchase an aggregate of 1,411,290 Ordinary Shares
      (subject to adjustment) at an exercise price of US$0.60 per Ordinary Share
      (subject to adjustment) in the form attached hereto as Exhibit A (the
      "Warrants") with C.E. Unterberg, Towbin acting as placement agent; and

     

    C.
       Contemporaneous
      with the sale of the Ordinary Shares and Warrants, the parties hereto will
      execute and deliver a Registration Rights Agreement, in the form attached hereto
      as Exhibit B (the "Registration Rights Agreement"), pursuant to which the
      Company will agree to provide certain registration rights under the Securities
      Act of 1933, as amended, and the rules and regulations promulgated thereunder,
      and applicable state securities laws. 

     

    In
      consideration of the mutual promises made herein and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows: 

     

    
      
        1.
          Definitions.
          In
          addition to those terms defined above and elsewhere in this Agreement,
          for the purposes of this Agreement, the following terms shall have the
          meanings
          set forth below: 

      

    

     

    "Affiliate"
      means,
      with respect to any Person, any other Person which directly or indirectly
      through one or more intermediaries Controls, is controlled by, or is under
      common control with, such Person. 

     

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

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    "Company’s
      Knowledge"
      means
      the actual knowledge of the executive officers (as defined in Rule 405 under
      the
      1933 Act) of the Company, after due inquiry. 

     

    "Confidential
      Information"
      means
      trade secrets, confidential information and know-how (including but not limited
      to ideas, formulae, compositions, processes, procedures and techniques, research
      and development information, computer program code, performance specifications,
      support documentation, drawings, specifications, designs, business and marketing
      plans, and customer and supplier lists and related information). 

     

    "Control"
      (including the terms "controlling", "controlled by" or "under common control
      with") means the possession, direct or indirect, of the power to direct or
      cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract or otherwise. 

     

    "Effective
      Date"
      means
      the date on which the initial Registration Statement is declared effective
      by
      the SEC. 

     

    "Effectiveness
      Deadline"
      means
      the date on which the initial Registration Statement is required to be declared
      effective by the SEC under the terms of the Registration Rights Agreement.
      

     

    "Intellectual
      Property"
      means
      all of the following: (i) patents, patent applications, patent disclosures
      and
      inventions (whether or not patentable and whether or not reduced to practice);
      (ii) trademarks, service marks, trade dress, trade names, corporate names,
      logos, slogans and Internet domain names, together with all goodwill associated
      with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
      registrations, applications and renewals for any of the foregoing; and (v)
      proprietary computer software (including but not limited to data, data bases
      and
      documentation). 

     

    "Material
      Adverse Effect"
      means a
      material adverse effect on (i) the assets, liabilities, results of operations,
      condition (financial or otherwise), business, or prospects of the Company and
      its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
      its obligations under the Transaction Documents. 

     

    "Person"
      means
      an individual, corporation, partnership, limited liability company, trust,
      business trust, association, joint stock company, joint venture, sole
      proprietorship, unincorporated organization, governmental authority or any
      other
      form of entity not specifically listed herein. 

     

    "Purchase
      Price"
      means
      Two Million Four Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine and
      96/100th United States Dollars (US$2,499,999.96). 

     

    "Registration
      Statement"
      has the
      meaning set forth in the Registration Rights Agreement. 

     

    "SEC
      Filings"
      has the
      meaning set forth in Section 4.6. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

       

    

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

     

    "Shares"
      means
      the Ordinary Shares being purchased by the Investors hereunder. 

     

    "Subsidiary"
      of any
      Person means another Person, an amount of the voting securities, other voting
      ownership or voting partnership interests of which is sufficient to elect at
      least a majority of its Board of Directors or other governing body (or, if
      there
      are no such voting interests, 50% or more of the equity interests of which)
      is
      owned directly or indirectly by such first Person. 

     

    "Transaction
      Documents"
      means
      this Agreement, the Warrants and the Registration Rights Agreement.

     

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

     

    "1933
      Act"
      means
      the Securities Act of 1933, as amended, or any successor statute, and the rules
      and regulations promulgated thereunder. 

     

    "1934
      Act"
      means
      the Securities Exchange Act of 1934, as amended, or any successor statute,
      and
      the rules and regulations promulgated thereunder. 

     

    2. Purchase
      and Sale of the Shares and Warrants.
      Subject
      to the terms and conditions of this Agreement, on the Closing Date, each of
      the
      Investors shall severally, and not jointly, purchase, and the Company shall
      sell
      and issue to the Investors, the Shares and Warrants in the respective amounts
      set forth opposite the Investors' names on the signature pages attached hereto
      in exchange for the Purchase Price as specified in Section 3 below.

     

    3. Closing.
      Upon
      confirmation that the other conditions to closing specified herein have been
      satisfied or duly waived by the Investors, the Company shall deliver to
      Lowenstein Sandler PC, in trust, a certificate or certificates, registered
      in
      such name or names as the Investors may designate, representing the Shares
      and
      Warrants, with instructions that such certificates are to be held for release
      to
      the Investors only upon payment in full of the Purchase Price to the Company
      by
      all of the Investors. Upon such receipt by Lowenstein Sandler PC of the
      certificates, each Investor shall promptly, but no more than one Business Day
      thereafter, cause a wire transfer in same day funds to be sent to the account
      of
      the Company as instructed in writing by the Company, in an amount representing
      such Investor's pro rata portion of the Purchase Price as set forth on the
      signature pages to this Agreement. On the date (the "Closing Date") the Company
      receives the Purchase Price in full, the certificates evidencing the Shares
      and
      Warrants shall be released to the Investors (the "Closing"). The Closing of
      the
      purchase and sale of the Shares and Warrants shall take place at the offices
      of
      Lowenstein Sandler PC, 125 1 Avenue of the Americas, 18th Floor, New York,
      New
      York 10020, or at such other location and on such other date as the Company
      and
      the Investors shall mutually agree. 

    
      
        
        

      

      
        -3-

        
          

        

      

       

    

     

    4. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Investors that, except as set
      forth in the schedules delivered herewith (collectively, the “Disclosure
      Schedules”): 

     

    4.1
      Organization,
      Good Standing and Qualification.
      Each of
      the Company and its Subsidiaries is a corporation duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation and has all requisite corporate power and authority to carry
      on
      its business as now conducted and to own its properties. Each of the Company
      and
      its Subsidiaries is duly qualified to do business as a foreign corporation
      and
      is in good standing in each jurisdiction in which the conduct of its business
      or
      its ownership or leasing of property makes such qualification or leasing
      necessary unless the failure to so qualify has not had and could not reasonably
      be expected to have a Material Adverse Effect. The Company's Subsidiaries are
      listed on Schedule
      4.1
      hereto.

     

    4.2
      Authorization.
      The
      Company has full power and authority and has taken all requisite action on
      the
      part of the Company, its officers, directors and stockholders necessary for
      (i)
      the authorization, execution and delivery of the Transaction Documents, (ii)
      the
      authorization of the performance of all obligations of the Company hereunder
      or
      thereunder, and (iii) the authorization, issuance (or reservation for issuance)
      and delivery of the Securities. The Transaction Documents constitute the legal,
      valid and binding obligations of the Company, enforceable against the Company
      in
      accordance with their terms, subject to bankruptcy, insolvency, fraudulent
      transfer, reorganization, moratorium and similar laws of general applicability,
      relating to or affecting creditors' rights generally. 

     

    4.3
       Capitalization. Schedule 4.3 sets forth (a) the authorized
      capital stock of the Company on the date hereof; (b) the number of shares of
      capital stock issued and outstanding; (c) the number of shares of capital stock
      issuable pursuant to the Company's stock plans; and (d) the number of shares
      of
      capital stock issuable and reserved for issuance pursuant to securities (other
      than the Shares and the Warrants) exercisable for, or convertible into or
      exchangeable for any shares of capital stock of the Company. All of the issued
      and outstanding shares of the Company's capital stock have been duly authorized
      and validly issued and are fully paid, nonassessable and free of pre-emptive
      rights and were issued in full compliance with applicable securities law and
      any
      rights of third parties. Except as described on Schedule 4.3, all of the
      issued and outstanding shares of capital stock of each Subsidiary have been
      duly
      authorized and validly issued and are fully paid, nonassessable and free of
      pre-emptive rights, were issued in full compliance with applicable securities
      law and any rights of third parties and are owned by the Company, beneficially
      and of record, subject to no lien, encumbrance or other adverse claim. Except
      as
      described on Schedule 4.3, no Person is entitled to pre-emptive or
      similar statutory or contractual rights with respect to any securities of the
      Company. Except as described on Schedule 4.3, there are no outstanding
      warrants, options, convertible securities or other rights, agreements or
      arrangements of any character under which the Company or any of its Subsidiaries
      is or may be obligated to issue any equity securities of any kind and except
      as
      contemplated by this Agreement, neither the Company nor any of its Subsidiaries
      is currently in negotiations for the issuance of any equity securities of any
      kind. Except as described on Schedule 4.3
      and except for the Registration Rights Agreement, there are no voting
      agreements, buy-sell agreements, option or right of first purchase agreements
      or
      other agreements of any kind among the Company and any of the securityholders
      of
      the Company relating to the securities of the Company held by them. Except
      as
      described on Schedule 4.3 and except as provided in the
      Registration Rights Agreement, no Person has the right to require the Company
      to
      register any securities of the Company under the 1933
      Act, whether on a demand basis or in connection with the registration of
      securities of the Company for its own account or for the account of any other
      Person.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    Except
      as
      described on Schedule
      4.3,
      the
      issuance and sale of the Securities hereunder will not obligate the Company
      to
      issue Ordinary Shares or other securities to any other Person (other than the
      Investors) and will not result in the adjustment of the exercise, conversion,
      exchange or reset price of any outstanding security. 

     

    Except
      as
      described on Schedule
      4.3,
      the
      Company does not have outstanding stockholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase
      any
      equity interest in the Company upon the occurrence of certain events.

     

    The
      Company has delivered to the Investors a true and complete copy of the Other
      Agreements (as defined below), which Other Agreements are in full force and
      effect. 

     

    4.4
       Valid
      Issuance.
      The
      Shares have been duly and validly authorized and, when issued and paid for
      pursuant to this Agreement, will be validly issued, fully paid and
      nonassessable, and shall be free and clear of all encumbrances and restrictions
      (other than those created by the Investors), except for restrictions on transfer
      set forth in the Transaction Documents or imposed by applicable securities
      laws.
      The Warrants have been duly and validly authorized. Upon the due exercise of
      the
      Warrants, the Warrant Shares will be validly issued, fully paid and
      non-assessable free and clear of all encumbrances and restrictions, except
      for
      restrictions on transfer set forth in the Transaction Documents or imposed
      by
      applicable securities laws and except for those created by the Investors. The
      Company has reserved a sufficient number of Ordinary Shares for issuance upon
      the exercise of the Warrants, free and clear of all encumbrances and
      restrictions, except for restrictions on transfer set forth in the Transaction
      Documents or imposed by applicable securities laws and except for those created
      by the Investors. 

     

    4.5
       Consents.
      The
      execution, delivery and performance by the Company of the Transaction Documents
      and the offer, issuance and sale of the Securities require no consent of, action
      by or in respect of, or filing with, any Person, governmental body, agency,
      or
      official other than filings that have been made pursuant to applicable state
      securities laws and post-sale filings pursuant to applicable state and federal
      securities laws which the Company undertakes to file within the applicable
      time
      periods. Subject to the accuracy of the representations and warranties of each
      Investor set forth in Section 5 hereof, the Company has taken all action
      necessary to exempt (i) the issuance and sale of the Securities, (ii) the
      issuance of the Warrant Shares upon due exercise of the Warrants, and
(iii)
      the
      other
      transactions contemplated by
      the
      Transaction Documents from the provisions of any stockholder rights plan or
      other “poison pill” arrangement, any anti-takeover, business combination or
      control share law or statute binding on the Company or to which the Company
      or
      any of its assets and properties may be subject and any provision
      of the Company's Memorandum and Articles of Association that is or could
      reasonably be expected to become applicable to the Investors as a result of
      the
      transactions contemplated hereby, including without limitation, the issuance
      of
      the Securities and the ownership, disposition or voting of the Securities by
      the
      Investors or the exercise of any right granted to the Investors pursuant to
      this
      Agreement or the other Transaction Documents. 

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    4.6
      Delivery
      of SEC Filings; Business.
      The
      Company has made available to the Investors through the EDGAR system, true
      and
      complete copies of the Company's most recent Annual Report on Form 20-F for
      the
      fiscal year ended December 31,
      2004
      (the “20-F”), and all other reports filed by the Company pursuant to the 1934
      Act since the filing of the 20-F and prior to the date hereof (collectively,
      the
“SEC Filings”). The SEC Filings are the only filings required of the Company
      pursuant to the 1934 Act for such period. The Company and its Subsidiaries
      are
      engaged in all material respects only in the business described in the SEC
      Filings and the SEC Filings contain a complete and accurate description in
      all
      material respects of the business of the Company and its Subsidiaries, taken
      as
      a whole. 

     

    4.7 Use
      of
      Proceeds.
      The net
      proceeds of the sale of the Shares and the Warrants hereunder shall be used
      by
      the Company for working capital and general corporate purposes. 

     

    4.8 
      No
      Material Adverse Change.
      Since
      December 31, 2004, except as identified and described in the SEC Filings or
      as
      described on Schedule
      4.8,
      there
      has not been: 

     

    (i)
       any
      change in the consolidated assets, liabilities, financial condition or operating
      results of the Company from that reflected in the financial statements included
      in the 20-F, except for changes in the ordinary course of business which have
      not had and could not reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate; 

     

    (ii)
      any
      declaration or payment of any dividend, or any authorization or payment of
      any
      distribution, on any of the capital stock of the Company, or any redemption
      or
      repurchase of any securities of the Company; 

     

    (iii)
      any
      material damage, destruction or loss, whether or not covered by insurance to
      any
      assets or properties of the Company or its Subsidiaries; 

     

    (iv)
      any
      waiver, not in the ordinary course of business, by the Company or any Subsidiary
      of a material right or of a material debt owed to it; 

     

    (v)
      any
      satisfaction or discharge of any lien, claim or encumbrance or payment of any
      obligation by the Company or a Subsidiary, except in the ordinary course of
      business and which is not material to the assets, properties, financial
      condition, operating results or business of the Company and its Subsidiaries
      taken as a whole (as such business is presently conducted and as it is proposed
      to be conducted); 

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (vi)
      any
      change or amendment to the Company's Memorandum or Articles of Association,
      or
      material change to any material contract or arrangement by which the Company
      or
      any Subsidiary is bound or to which any of their respective assets or properties
      is subject; 

     

    (vii)
      any
      material labor difficulties or labor union organizing activities with respect
      to
      employees of the Company or any Subsidiary; 

     

    (viii)
      any material transaction entered into by the Company or a Subsidiary other
      than
      in the ordinary course of business; 

     

    (ix)
      the
      loss of the services of any key employee, or material change in the composition
      or duties of the senior management of the Company or any Subsidiary;

     

    (x)
      the
      loss or threatened loss of any customer which has had or could reasonably be
      expected to have a Material Adverse Effect; or 

     

    (xi)
      any
      other event or condition of any character that has had or could reasonably
      be
      expected to have a Material Adverse Effect. 

     

    4.9
       SEC
      Filings.
      

     

    (a)
       At
      the
      time of filing thereof, the SEC Filings complied as to form in all material
      respects with the requirements of the 1934 Act and did not contain any untrue
      statement of a material fact or omit to state any material fact necessary in
      order to make the statements made therein, in the light of the circumstances
      under which they were made, not misleading. 

     

    (b)
       Each
      registration statement and any amendment thereto filed by the Company since
      January 1, 2002 pursuant to the 1933 Act and the rules and regulations
      thereunder, as of the date such statement or amendment became effective,
      complied as to form in all material respects with the 1933 Act and did not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary in order to make the statements
      made therein not misleading; and each prospectus filed pursuant to Rule 424(b)
      under the 1933 Act, as of its issue date and as of the closing of any sale
      of
      securities pursuant thereto did not contain any untrue statement of a material
      fact or omit to state any material fact required to be stated therein or
      necessary in order to make the statements made therein, in the light of the
      circumstances under which they were made, not misleading. 

     

    4.10
      No
      Conflict, Breach, Violation or Default.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the issuance and sale of the Securities will not conflict with or result
      in
      a breach or violation of any of the terms and provisions of, or constitute
      a
      default under (i) the Company's Articles or Memorandum of Association, both
      as
      in effect on the date hereof (true and complete copies of which have been made
      available to the Investors through the EDGAR system), or (ii) (a) any statute,
      rule, regulation or order of any governmental agency or body or any court,
      domestic or foreign, having jurisdiction over the Company, any Subsidiary or
      any
      of their respective assets or properties, or (b) any agreement or instrument
      to
      which the Company or any Subsidiary is a party or by which the Company or a
      Subsidiary is bound or to which any of their respective assets or properties
      is
      subject. 

    
      
        
        

      

      
        -7-

        
          

        

      

       

    

    

    4.11
      Tax
      Matters.
      The
      Company and each Subsidiary has timely prepared and filed all tax returns
      required to have been filed by the Company or such Subsidiary with all
      appropriate governmental agencies and timely paid all taxes shown thereon or
      otherwise owed by it. The charges, accruals and reserves on the books of the
      Company in respect of taxes for all fiscal periods are adequate in all material
      respects, and there are no material unpaid assessments against the Company
      or
      any Subsidiary nor, to the Company's Knowledge, any basis for the assessment
      of
      any additional taxes, penalties or interest for any fiscal period or audits
      by
      any federal, state or local taxing authority except for any assessment which
      is
      not material to the Company and its Subsidiaries, taken as a whole. All taxes
      and other assessments and levies that the Company or any Subsidiary is required
      to withhold or to collect for payment have been duly withheld and collected
      and
      paid to the proper governmental entity or third party when due. There are no
      tax
      liens or claims pending or, to the Company's Knowledge, threatened against
      the
      Company or any Subsidiary or any of their respective assets or property. Except
      as described on Schedule 4.11, there are no outstanding tax sharing
      agreements or other such arrangements between the Company and any Subsidiary
      or
      other corporation or entity. 

     

    4.12
      Title
      to Properties.
      Except
      as disclosed in the SEC Filings, the Company and each Subsidiary has good and
      marketable title to all real properties and all other properties and assets
      owned by it, in each case free from liens, encumbrances and defects that would
      materially affect the value thereof or materially interfere with the use made
      or
      currently planned to be made thereof by them; and except as disclosed in the
      SEC
      Filings, the Company and each Subsidiary holds any leased real or personal
      property under valid and enforceable leases with no exceptions that would
      materially interfere with the use made or currently planned to be made thereof
      by them. 

     

    4.13
      Certificates,
      Authorities and Permits.
      The
      Company and each Subsidiary possess adequate certificates, authorities or
      permits issued by appropriate governmental agencies or bodies necessary to
      conduct the business now operated by it, and neither the Company nor any
      Subsidiary has received any notice of proceedings relating to the revocation
      or
      modification of any such certificate, authority or permit that, if determined
      adversely to the Company or such Subsidiary, could reasonably be expected to
      have a Material Adverse Effect, individually or in the aggregate. 

     

    4.14
      Labor
      Matters.
      

     

    (a)
       Except
      as
      set forth on Schedule
      4.14,
      the
      Company is not a party to or bound by any collective bargaining agreements
      or
      other agreements with labor organizations. The Company has not violated in
      any
      material respect any laws, regulations, orders or contract terms, affecting
      the
      collective bargaining rights of employees, labor organizations or any laws,
      regulations or orders affecting employment discrimination, equal opportunity
      employment, or employees' health, safety, welfare, wages and hours.

     

    
      
        
        

      

      
        -8-

        
          

        

      

       

    

    (b)
       (i)
      There
      are no labor disputes existing, or to the Company's Knowledge, threatened,
      involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
      or any other disruptions of or by the Company's employees, (ii) there are no
      unfair labor practices or petitions for election pending or, to the Company's
      Knowledge, threatened before the National Labor Relations Board or any other
      federal, state or local labor commission relating to the Company's employees,
      (iii) no demand for recognition or certification heretofore made by any labor
      organization or group of employees is pending with respect to the Company and
      (iv) to the Company's Knowledge, the Company enjoys good labor and employee
      relations with its employees and labor organizations. 

     

    (c)
       The
      Company is, and at all times has been, in compliance in all material respects
      with all applicable laws respecting employment (including laws relating to
      classification of employees and independent contractors) and employment
      practices, terms and conditions of employment, wages and hours, and immigration
      and naturalization. There are no claims pending against the Company before
      the
      Equal Employment Opportunity Commission or any other administrative body or
      in
      any court asserting any violation of Title VII of the Civil Rights Act of 1964,
      the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981
      or
      1983 or any other federal, state or local Law, statute or ordinance barring
      discrimination in employment. 

     

    (d)
       Except
      as
      disclosed in the SEC Filings or as described on Schedule
      4.14,
      the
      Company is not a party to, or bound by, any employment or other contract or
      agreement that contains any severance, termination pay or change of control
      liability or obligation, including, without limitation, any "excess parachute
      payment," as defined in Section 2806(b) of the Internal Revenue Code.

     

    4.15
      Intellectual
      Property.
      

     

    (a)
       All
      Intellectual Property of the Company and its Subsidiaries is currently in
      compliance with all legal requirements (including timely filings, proofs and
      payments of fees) and is valid and enforceable. No Intellectual Property of
      the
      Company or its Subsidiaries which is necessary for the conduct of Company's
      and
      each of its Subsidiaries' respective businesses as currently conducted or as
      currently proposed to be conducted has been or is now involved in any
      cancellation, dispute or litigation, and, to the Company's Knowledge, no such
      action is threatened. No patent of the Company or its Subsidiaries has been
      or
      is now involved in any interference, reissue, re-examination or opposition
      proceeding. 

     

    (b)
       All
      of
      the licenses and sublicenses and consent, royalty or other agreements concerning
      Intellectual Property which are necessary for the conduct of the Company's
      and
      each of its Subsidiaries' respective businesses as currently conducted or as
      currently proposed to be conducted to which the Company or any Subsidiary is
      a
      party or by which any of their assets are bound (other than generally
      commercially available, non-custom, off-the-shelf software application programs
      having a retail acquisition price of less than US$10,000 per license)
      (collectively, "License Agreements") are valid and binding obligations of the
      Company or its Subsidiaries that are parties thereto and, to the Company's
      Knowledge, the other parties thereto, enforceable in accordance with their
      terms, except to the extent that enforcement
      thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
      fraudulent conveyance or other similar laws affecting the enforcement of
      creditors' rights generally, and there exists no event or condition which will
      result in a material violation or breach of or constitute (with or without
      due
      notice or lapse of time or both) a default by the Company or any of its
      Subsidiaries under any such License Agreement. 

    
      
        
        

      

      
        -9-

        
          

        

      

       

    

    

    (c)
       The
      Company and its Subsidiaries own or have the valid right to use all of the
      Intellectual Property that is necessary for the conduct of the Company's and
      each of its Subsidiaries' respective businesses as currently conducted or as
      currently proposed to be conducted and for the ownership, maintenance and
      operation of the Company's and its Subsidiaries' properties and assets, free
      and
      clear of all liens, encumbrances, adverse claims or obligations to license
      all
      such owned Intellectual Property and Confidential Information, other than
      licenses entered into in the ordinary course of the Company's and its
      Subsidiaries' businesses. The Company and its Subsidiaries have a valid and
      enforceable right to use all third party Intellectual Property and Confidential
      Information used or held for use in the respective businesses of the Company
      and
      its Subsidiaries. 

     

    (d)
       The
      conduct of the Company's and its Subsidiaries' businesses as currently conducted
      does not infringe or otherwise impair or conflict with (collectively,
“Infringe”) any Intellectual Property rights of any third party or any
      confidentiality obligation owed to a third party, and, to the Company's
      Knowledge, the Intellectual Property and Confidential Information of the Company
      and its Subsidiaries which are necessary for the conduct of Company's and each
      of its Subsidiaries' respective businesses as currently conducted or as
      currently proposed to be conducted are not being Infringed by any third party.
      There is no litigation or order pending or outstanding or, to the Company's
      Knowledge, threatened or imminent, that seeks to limit or challenge or that
      concerns the ownership, use, validity or enforceability of any Intellectual
      Property or Confidential Information of the Company and its Subsidiaries and
      the
      Company's and its Subsidiaries' use of any Intellectual Property or Confidential
      Information owned by a third party, and, to the Company's Knowledge, there
      is no
      valid basis for the same. 

     

    (e)
       The
      consummation of the transactions contemplated hereby and by the other
      Transaction Documents will not result in the alteration, loss, impairment of
      or
      restriction on the Company's or any of its Subsidiaries' ownership or right
      to
      use any of the Intellectual Property or Confidential Information which is
      necessary for the conduct of Company's and each of its Subsidiaries' respective
      businesses as currently conducted or as currently proposed to be conducted.
      

     

    (f) The
      Company and its Subsidiaries have taken reasonable steps to protect the
      Company's and its Subsidiaries' rights in their Intellectual Property and
      Confidential Information. Each employee, consultant and contractor who has
      had
      access to Confidential Information which is necessary for the conduct of
      Company's and each of its Subsidiaries' respective businesses as currently
      conducted or as currently proposed to be conducted has executed an agreement
      to
      maintain the confidentiality of such Confidential Information and has executed
      appropriate agreements that are substantially consistent with the Company's
      standard forms thereof. Except under confidentiality obligations, there has
      been
      no material disclosure of any of the Company's or its Subsidiaries' Confidential
      Information to any third party.

    
      
        
        

      

      
        -10-

        
          

        

      

       

    

    

    4.16
      Environmental
      Matters.
      Neither
      the Company nor any Subsidiary is in violation of any statute, rule, regulation,
      decision or order of any governmental agency or body or any court, domestic
      or
      foreign, relating to the use, disposal or release of hazardous or toxic
      substances or relating to the protection or restoration of the environment
      or
      human exposure to hazardous or toxic substances (collectively, "Environmental
      Laws"), owns or operates any real property contaminated with any substance
      that
      is subject to any Environmental Laws, is liable for any off-site disposal or
      contamination pursuant to any Environmental Laws, or is subject to any claim
      relating to any Environmental Laws, which violation, contamination, liability
      or
      claim has had or could reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate; and there is no pending or, to the Company's
      Knowledge, threatened investigation that might lead to such a claim.

     

    4.17
      Litigation.
      Except
      as described on Schedule
      4.17,
      there
      are no pending actions, suits or proceedings against or affecting the Company,
      its Subsidiaries or any of its or their properties; and to the Company's
      Knowledge, no such actions, suits or proceedings are threatened or contemplated.
      

     

    4.18
      Financial
      Statements.
      The
      financial statements included in each SEC Filing present fairly, in all material
      respects, the consolidated financial position of the Company as of the dates
      shown and its consolidated results of operations and cash flows for the periods
      shown, and such financial statements have been prepared in conformity with
      United States generally accepted accounting principles applied on a consistent
      basis ("GAAP") (except as may be disclosed therein or in the notes thereto).
      Except as set forth in the financial statements of the Company included in
      the
      SEC Filings filed prior to the date hereof or as described on Schedule
      4.18,
      neither
      the Company nor any of its Subsidiaries has incurred any liabilities, contingent
      or otherwise, except those incurred in the ordinary course of business,
      consistent (as to amount and nature) with past practices since the date of
      such
      financial statements, none of which, individually or in the aggregate, have
      had
      or could reasonably be expected to have a Material Adverse Effect. 

     

    4.19
      Insurance
      Coverage.
      The
      Company and each Subsidiary maintains in full force and effect insurance
      coverage that is customary for comparably situated companies for the business
      being conducted and properties owned or leased by the Company and each
      Subsidiary, and the Company reasonably believes such insurance coverage to
      be
      adequate against all liabilities, claims and risks against which it is customary
      for comparably situated companies to insure. 

     

    4.20
      Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of the Company, other than as described in Schedule
      4.20.
      

     

    
      
        
        

      

      
        -11-

        
          

        

      

       

    

    

    4.21
      No
      Directed Selling Efforts or General Solicitation.
      Neither
      the Company nor any Person acting on its behalf has conducted any general
      solicitation or general advertising (as those terms are used in Regulation
      D) in
      connection with the offer or sale of any of the Securities. 

     

    4.22
      No
      Integrated Offering.
      Neither
      the Company nor any of its Affiliates, nor any Person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any Company
      security or solicited any offers to buy any security, under circumstances that
      would adversely affect reliance by the Company on Section 4(2) for the exemption
      from registration for the transactions contemplated hereby or would require
      registration of the Securities under the 1933 Act. 

     

    4.23
      Private
      Placement.
      The
      offer and sale of the Securities to the Investors as contemplated hereby is
      exempt from the registration requirements of the 1933 Act. 

     

    4.24
      Questionable
      Payments.
      Neither
      the Company nor any of its Subsidiaries nor, to the Company's Knowledge, any
      of
      their respective current or former stockholders, directors, officers, employees,
      agents or other Persons acting on behalf of the Company or any Subsidiary,
      has
      on behalf of the Company or any Subsidiary or in connection with their
      respective businesses: (a) used any corporate funds for unlawful contributions,
      gifts, entertainment or other unlawful expenses relating to political activity;
      (b) made any direct or indirect unlawful payments to any governmental officials
      or employees from corporate funds; (c) established or maintained any unlawful
      or
      unrecorded fund of corporate monies or other assets; (d) made any false or
      fictitious entries on the books and records of the Company or any Subsidiary;
      or
      (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
      other unlawful payment of any nature. 

     

    4.25
      Transactions
      with Affiliates.
      Except
      as disclosed in the SEC Filings or as disclosed on Schedule
      4.25,
      none of
      the officers or directors of the Company and, to the Company's Knowledge, none
      of the employees of the Company is presently a party to any transaction with
      the
      Company or any Subsidiary (other than as holders of stock options and/or
      warrants, and for services as employees, officers and directors), including
      any
      contract, agreement or other arrangement providing for the furnishing of
      services to or by, providing for rental of real or personal property to or
      from,
      or otherwise requiring payments to or from any officer, director or such
      employee or, to the Company's Knowledge, any entity in which any officer,
      director, or any such employee has a substantial interest or is an officer,
      director, trustee or partner. 

     

    4.26
      Sarbanes-Oxley
      Act.
      The
      Company is in material compliance with the provisions of the Sarbanes-Oxley
      Act
      of 2002 currently applicable to the Company. 

     

    4.27
      Disclosures.
      Neither
      the Company nor any Person acting on its behalf has provided the Investors
      or
      their agents or counsel with any information that constitutes or might
      constitute material, non-public information. The written materials delivered
      to
      the Investors in connection with the transactions contemplated by the
      Transaction Documents do not contain any untrue statement of a material fact
      or
      omit to state a material fact necessary in order to make the statements
      contained therein, in light of the circumstances under which they were made,
      not
      misleading. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    5.
      Representations
      and Warranties of the Investors.
      Each of
      the Investors hereby severally, and not jointly, represents and warrants to
      the
      Company that: 

     

    5.1
       Organization
      and Existence.
      Such
      Investor is a validly existing corporation, limited partnership or limited
      liability company and has all requisite corporate, partnership or limited
      liability company power and authority to invest in the Securities pursuant
      to
      this Agreement. 

     

    5.2 
      Authorization.
      The
      execution, delivery and performance by such Investor of the Transaction
      Documents to which such Investor is a party have been duly authorized and will
      each constitute the valid and legally binding obligation of such Investor,
      enforceable against such Investor in accordance with their respective terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability, relating to or affecting
      creditors' rights generally. 

     

    5.3  
      Purchase
      Entirely for Own Account.
      The
      Securities to be received by such Investor hereunder will be acquired for such
      Investor's own account, not as nominee or agent, and not with a view to the
      resale or distribution of any part thereof in violation of the 1933 Act, and
      such Investor has no present intention of selling, granting any participation
      in, or otherwise distributing the same in violation of the 1933 Act without
      prejudice, however, to such Investor's right at all times to sell or otherwise
      dispose of all or any part of such Securities in compliance with applicable
      federal and state securities laws. Nothing contained herein shall be deemed
      a
      representation or warranty by such Investor to hold the Securities for any
      period of time. Such Investor is not a broker-dealer registered with the SEC
      under the 1934 Act or an entity engaged in a business that would require it
      to
      be so registered. 

     

    5.4 
       Investment
      Experience.
      Such
      Investor acknowledges that it can bear the economic risk and complete loss
      of
      its investment in the Securities and has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of the investment contemplated hereby. 

     

    5.5  
      Disclosure
      of Information.
      Such
      Investor has had an opportunity to receive all information related to the
      Company requested by it and to ask questions of and receive answers from the
      Company regarding the Company, its business and the terms and conditions of
      the
      offering of the Securities. Such Investor acknowledges receipt of copies of
      the
      SEC Filings. Neither such inquiries nor any other due diligence investigation
      conducted by such Investor shall modify, amend or affect such Investor's right
      to rely on the Company's representations and warranties contained in this
      Agreement. 

     

    5.6  
      Restricted
      Securities.
      Such
      Investor understands that the Securities are characterized as "restricted
      securities" under the U.S. federal securities laws inasmuch as they are being
      acquired from the Company in a transaction not involving a public offering
      and
      that under such laws and applicable regulations such securities may be resold
      without registration under the 1933 Act only in certain limited circumstances.
      

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    

    5.7  
      Legends.
      It is
      understood that, except as provided below, certificates evidencing the
      Securities may bear the following or any similar legend: 

     

    (a)
      "The
      securities represented hereby may not be transferred unless (i) such securities
      have been registered for sale pursuant to the Securities Act of 1933, as
      amended, (ii) such securities may be sold pursuant to Rule 144(k), or (iii)
      the
      Company has received an opinion of counsel reasonably satisfactory to it that
      such transfer may lawfully be made without registration under the Securities
      Act
      of 1933 or qualification under applicable state securities laws." 

     

    (b)
      If
      required by the authorities of any state in connection with the issuance of
      sale
      of the Securities, the legend required by such state authority. 

     

    5.8  
      Accredited
      Investor.
      Such
      Investor is an accredited investor as defined in Rule 501(a) of Regulation
      D, as
      amended, under the 1933 Act. 

     

    5.9  
      No
      General Solicitation.
      Such
      Investor did not learn of the investment in the Securities as a result of any
      public advertising or general solicitation. 

     

    5.10
      Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of such Investor. 

     

    5.11
      Prohibited
      Transactions.
      During
      the last thirty (30) days prior to the date hereof, neither such Investor nor
      any Affiliate of such Investor which (x) had knowledge of the transactions
      contemplated hereby, (y) has or shares discretion relating to such Investor's
      investments or trading or information concerning such Investor's investments,
      including in respect of the Securities, or (z) is subject to such Investor's
      review or input concerning such Affiliate's investments or trading
      (collectively, "Trading Affiliates") has, directly or indirectly, effected
      or
      agreed to effect any short sale, whether or not against the box, established
      any
      "put equivalent position" (as defined in Rule 16a-l(h) under the 1934 Act)
      with
      respect to the Ordinary Shares, granted any other right (including, without
      limitation, any put or call option) with respect to the Ordinary Shares or
      with
      respect to any security that includes, relates to or derived any significant
      part of its value from the Ordinary Shares or otherwise sought to hedge its
      position in the Securities (each, a "Prohibited Transaction"). Prior to the
      earliest to occur of (i) the termination of this Agreement, (ii) the Effective
      Date or (iii) the Effectiveness Deadline, such Investor shall not, and shall
      cause its Trading Affiliates not to, engage, directly or indirectly, in a
      Prohibited Transaction. Such Investor acknowledges that the representations,
      warranties and covenants contained in this Section 5.11 are being made for
      the
      benefit of the Investors as well as the Company and that each of the other
      Investors shall have an independent right to assert any claims against such
      Investor arising out of any breach or violation of the provisions of this
      Section 5.11. 

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

    6.
      Conditions
      to Closing.
      

     

    6.1
      Conditions
      to the Investors’ Obligations.
      The
      obligation of each Investor to purchase the Shares and the Warrants at the
      Closing is subject to the fulfillment to such Investor's satisfaction, on or
      prior to the Closing Date, of the following conditions, any of which may be
      waived by such Investor (as to itself only): 

     

    (a)
      The
      representations and warranties made by the Company in Section 4 hereof qualified
      as to materiality shall be true and correct at all times prior to and on the
      Closing Date, except to the extent any such representation or warranty expressly
      speaks as of an earlier date, in which case such representation or warranty
      shall be true and correct as of such earlier date, and, the representations
      and
      warranties made by the Company in Section 4 hereof not qualified as to
      materiality shall be true and correct in all material respects at all times
      prior to and on the Closing Date, except to the extent any such representation
      or warranty expressly speaks as of an earlier date, in which case such
      representation or warranty shall be true and correct in all material respects
      as
      of such earlier date. The Company shall have performed in all material respects
      all obligations and covenants herein required to be performed by it on or prior
      to the Closing Date. 

     

    (b)
      The
      Company shall have obtained any and all consents, permits, approvals,
      registrations and waivers necessary or appropriate for consummation of the
      purchase and sale of the Securities and the consummation of the other
      transactions contemplated by the Transaction Documents, all of which shall
      be in
      full force and effect. 

     

    (c)
      The
      Company shall have executed and delivered the Registration Rights Agreement.
      

     

    (d)
      The
      Company shall have entered into one or more subscription agreements with one
      or
      more accredited investors reasonably satisfactory to the Investors that contain
      terms no more favorable to the subscriber than the terms of this Agreement
      (the
      "Other Agreements"). 

     

    (e)
      The
      Company shall have received gross proceeds from the sale of Ordinary Shares
      and
      Warrants as contemplated hereby and under the Other Agreements of at least
      Three
      Million United States Dollars (US$3,000,000). 

     

    (f)
      No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or by any governmental authority, shall have been issued, and no action or
      proceeding shall have been instituted by any governmental authority, enjoining
      or preventing the consummation of the transactions contemplated hereby or in
      the
      other Transaction Documents. 

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (g)
      The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Chief Executive Officer or its Chief Financial Officer, dated as of the
      Closing Date, certifying to the fulfillment of the conditions specified in
      subsections (a), (b), (e), (f) and (j) of this Section 6.1. 

     

    (h)
      The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Secretary, dated as of the Closing Date, certifying the resolutions adopted
      by the Board of Directors of the Company approving the transactions contemplated
      by this Agreement and the other Transaction Documents and the issuance of the
      Securities, certifying the current versions of the Memorandum and Articles
      of
      Association of the Company and certifying as to the signatures and authority
      of
      persons signing the Transaction Documents and related documents on behalf of
      the
      Company. 

     

    (i)
      The
      Investors shall have received an opinion from Yossi Avraham, Arad & Co., the
      Company's Israeli counsel, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
      P.C., the Company's US counsel, each dated as of the Closing Date, in form
      and
      substance reasonably acceptable to the Investors and addressing such legal
      matters as the Investors may reasonably request. 

     

    (j)
      No
      stop order or suspension of trading shall have been imposed by the SEC or any
      other governmental or regulatory body with respect to public trading in the
      Ordinary Shares. 

     

    6.2  
      Conditions
      to Obligations of the Company.
      The
      Company's obligation to sell and issue the Shares and the Warrants at the
      Closing is subject to the fulfillment to the satisfaction of the Company on
      or
      prior to the Closing Date of the following conditions, any of which may be
      waived by the Company: 

     

    (a)
      The
      representations and warranties made by the Investors in Section 5 hereof, other
      than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
      5.6, 5.7, 5.8 and 5.9 (the "Investment Representations"), shall be true and
      correct in all material respects when made, and shall be true and correct in
      all
      material respects on the Closing Date with the same force and effect as if
      they
      had been made on and as of said date. The Investment Representations shall
      be
      true and correct in all respects when made, and shall be true and correct in
      all
      respects on the Closing Date with the same force and effect as if they had
      been
      made on and as of said date. The Investors shall have performed in all material
      respects all obligations and covenants herein required to be performed by them
      on or prior to the Closing Date.

     

    (b)
      The
      Investors shall have executed and delivered the Registration Rights Agreement.
      

     

    (c)
      The
      Investors shall have delivered the Purchase Price in full to the Company.

     

    6.3  
      Termination
      of Obligations to Effect Closing; Effects.
      

    

    
      (a)
        The
        obligations of the Company, on the one hand, and the Investors, on the other
        hand, to effect the Closing shall terminate as follows: 

       

      (i)
        Upon
        the mutual written consent of the Company and the Investors;

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    
    

     

    (ii)
      By
      the Company if any of the conditions set forth in Section 6.2 shall have become
      incapable of fulfillment, and shall not have been waived by the Company;

     

    (iii)
      By
      an Investor (with respect to itself only) if any of the conditions set forth
      in
      Section 6.1 shall have become incapable of fulfillment, and shall not have
      been
      waived by the Investor; or 

     

    (iv)
      By
      either the Company or any Investor (with respect to itself only) if the Closing
      has not occurred on or prior to December 15, 2005; 

     

    provided,
      however, that, except in the case of clause (i) above, the party seeking to
      terminate its obligation to effect the Closing shall not then be in breach
      of
      any of its representations, warranties, covenants or agreements contained in
      this Agreement or the other Transaction Documents if such breach has resulted
      in
      the circumstances giving rise to such party's seeking to terminate its
      obligation to effect the Closing. 

     

    (b)
      In
      the event of termination by the Company or any Investor of its obligations
      to
      effect the Closing pursuant to this Section 6.3, written notice thereof shall
      forthwith be given to the other Investors and the other Investors shall have
      the
      right to terminate their obligations to effect the Closing upon written notice
      to the Company and the other Investors. Nothing in this Section 6.3 shall be
      deemed to release any party from any liability for any breach by such party
      of
      the terms and provisions of this Agreement or the other Transaction Documents
      or
      to impair the right of any party to compel specific performance by any other
      party of its obligations under this Agreement or the other Transaction
      Documents. 

     

    7.
      Covenants
      and Agreements of the Company.
      

     

    7.1 
       Reservation
      of Ordinary Shares.
      The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued Ordinary Shares, solely for the purpose of providing for the exercise
      of the Warrants, such number of Ordinary Shares as shall from time to time
      equal
      the number of shares sufficient to permit the exercise of the Warrants issued
      pursuant to this Agreement in accordance with their respective terms.

     

    7.2  
      Reports.
      The
      Company will furnish to the Investors and/or their assignees such information
      relating to the Company and its Subsidiaries as from time to time may reasonably
      be requested by the Investors and/or their assignees; provided, however, that
      the Company shall not disclose material nonpublic information to the Investors,
      or to advisors to or representatives of the Investors, unless prior to
      disclosure of such information the Company identifies such information as being
      material nonpublic information and provides the Investors, such advisors and
      representatives with the opportunity to accept or refuse to accept such material
      nonpublic information for review and any Investor wishing to obtain such
      information enters into an appropriate confidentiality agreement with the
      Company with respect thereto. 

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    

    7.3 
       No
      Conflicting Agreements.
      The
      Company will not take any action, enter into any agreement or make any
      commitment that would conflict or interfere in any material respect with the
      Company's obligations to the Investors under the Transaction Documents.

     

    7.4  
      Insurance.
      The
      Company shall not materially reduce the insurance coverages described in Section
      4.19. 

     

    7.5 
       Compliance
      with Laws.
      The
      Company will comply in all material respects with all applicable laws, rules,
      regulations, orders and decrees of all governmental authorities. 

     

    7.6  
      Listing
      of Underlying Shares and Related Matters.
      If the
      Company applies to have its Ordinary Shares or other securities traded on any
      other principal stock exchange or market, it shall include in such application
      the Shares and the Warrant Shares and will take such other action as is
      necessary to cause such Ordinary Shares to be so listed. The Company will use
      commercially reasonable efforts to continue the listing and trading of its
      Ordinary Shares on such exchange or market and, in accordance, therewith, will
      use commercially reasonable efforts to comply in all respects with the Company's
      reporting, filing and other obligations under the bylaws or rules of such market
      or exchange, as applicable. 

     

    7.7 
       Termination
      of Covenants.
      The
      provisions of Sections 7.2 through 7.5 shall terminate and be of no further
      force and effect on the date on which the Company's obligations under the
      Registration Rights Agreement to register or maintain the effectiveness of
      any
      registration covering the Registrable Securities (as such term is defined in
      the
      Registration Rights Agreement) shall terminate. 

     

    7.8  
      Removal
      of Legends.
      Upon
      the earlier of (i) registration for resale pursuant to the Registration Rights
      Agreement or (ii) Rule 144(k) becoming available the Company shall (A) deliver
      to the transfer agent for the Ordinary Shares (the "Transfer Agent") irrevocable
      instructions that the Transfer Agent shall reissue a certificate representing
      Ordinary Shares without legends upon receipt by such Transfer Agent of the
      legended certificates for such Ordinary Shares, together with either (1) a
      customary representation by the Investor that Rule 144(k) applies to the
      Ordinary Shares represented thereby or (2) a statement by the Investor that
      such
      Investor has sold the Ordinary Shares represented thereby in accordance with
      the
      Plan of Distribution contained in the Registration Statement, and (B) cause
      its
      counsel to deliver to the Transfer Agent one or more blanket opinions to the
      effect that the removal of such legends in such circumstances may be effected
      under the 1933 Act. From and after the earlier of such dates, upon an Investor's
      written request, the Company shall promptly cause certificates evidencing the
      Investor's Securities to be replaced with certificates which do not bear such
      restrictive legends, and Warrant Shares subsequently issued upon due exercise
      of
      the Warrants shall not bear such restrictive legends provided the provisions
      of
      either clause (i) or clause (ii) above,
      as
      applicable, are satisfied with respect to such Warrant Shares. When the Company
      is required to cause unlegended certificates to replace previously issued
      legended certificates, if unlegended certificates are not delivered to an
      Investor within three (3) Business Days of submission by that Investor of
      legended certificate(s) to the Transfer Agent as provided above (or to the
      Company, in the case of the Warrants), the Company shall be liable to the
      Investor for liquidated damages in an amount equal to 1.5% of the aggregate
      purchase price of the Securities evidenced by such certificate(s) for each
      thirty (30) day period (or portion thereof) beyond such three (3) Business
      Day
      that the unlegended certificates have not been so delivered.

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    7.9 
       Participation Rights. From the date hereof until one year after the
      Closing Date, upon any proposed issuance (a “Subsequent Financing”) by the
      Company of its capital stock or any securities of the Company or any Subsidiary
      which would entitle the holder thereof to acquire at any time capital stock
      of
      the Company, including without limitation, any debt, preferred stock, rights,
      options, warrants or other instrument that is at any time convertible into
      or
      exchangeable for, or otherwise entitles the holder thereof to receive, capital
      stock of the Company (collectively, “Equivalents”), each Investor shall have the
      right to participate in such Subsequent Financing as provided herein. Prior
      to
      commencement of the Offer Period (as defined below), the Company shall deliver
      to each Investor a written notice of its intention to effect a Subsequent
      Financing (“Pre-Notice”), which Pre-Notice shall ask such Investor if it wants
      to review the details of such financing (such additional notice, a “Subsequent
      Financing Notice”). Upon the request of an Investor, and only upon a request by
      such Investor, for a Subsequent Financing Notice, the Company shall within
      one
      hour after receiving such request, deliver a Subsequent Financing Notice to
      such
      Investor. The Subsequent Financing Notice shall describe in reasonable detail
      the proposed terms of such Subsequent Financing, the amount of proceeds intended
      to be raised thereunder, the Person with whom such Subsequent Financing is
      proposed to be effected, and attached to which shall be a term sheet or similar
      document relating thereto. Each Investor shall, during such Offer Period, have
      the right, but not the obligation, to purchase up to such Investor’s pro rata
      share of the securities offered in the Subsequent Financing necessary to
      maintain its fully-diluted percentage equity ownership in the Company at the
      level existing prior to the completion of the Subsequent Financing, at the
      price
      and upon the terms specified in the Subsequent Financing Notice. Each Investor
      shall notify the Company on or prior to 5:00 p.m. (New York City time) on the
      last day of the Offering Period of its willingness to participate in the
      Subsequent Financing. If one or more Investors fail to notify the Company of
      their willingness to participate in the Subsequent Financing on or prior to
      5:00
      p.m. (New York City time) on the last day of the Offering Period, the Company
      may effect the portion of such Subsequent Financing not committed to by the
      Investors on the terms and to the Persons set forth in the Subsequent Financing
      Notice; provided that if the Subsequent Financing subject to the initial
      Subsequent Financing Notice is not consummated for any reason on the terms
      set
      forth in such Subsequent Financing Notice within five Business Days after the
      end of the Offer Period with the Person identified in the Subsequent Financing
      Notice, the Company must provide the Investors with a second Subsequent
      Financing Notice, and the Investors will again have the participation right
      set
      forth above in this Section 7.9. Notwithstanding the foregoing, this Section
      7.9
      shall not apply in respect of the issuance of (A) capital stock or Equivalents
      issued to directors, officers, employees or consultants of the Company in
      connection with their service as directors of the Company, their employment
      by
      the Company or their retention as consultants by the Company pursuant to an
      equity compensation program approved by the Board of Directors of the Company
      or
      the compensation committee of the Board of Directors of the Company, (B) capital
      stock or Equivalents in connection with strategic alliances, acquisitions and
      as
      equity kickers in lease and financing transactions, the primary purpose of
      which
      is not to raise equity capital, (C) Ordinary Shares issued upon the conversion
      or exercise of options or convertible securities issued prior to the date
      hereof, provided that such securities have not been amended since the date
      of
      this Agreement to increase the number of shares of Common Stock issuable
      thereunder or to lower the exercise or conversion price thereof, (D) Ordinary
      Shares issued or issuable by reason of a dividend, stock split or other
      distribution on Ordinary Shares or (E) capital stock or Equivalents sold in
      a
      firm commitment underwriting registered pursuant to the 1933 Act. For purposes
      of this Agreement, “Offer Period” shall mean (i) a period of at least two (2)
      Business Days prior to the expected closing date of a Subsequent Financing,
      other than a Registered Direct Offering (as defined below) and (ii) a period
      of
      at least one (1) Business Day prior to the expected closing date of a Subsequent
      Financing which is a best-efforts placement of registered securities pursuant
      to
      Rule 415 under the 1933 Act (a “Registered Direct Offering”). 

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    

    
      
        8.
          Survival
          and Indemnification.
          

      

    

     

    8.1 
       Survival.
      The
      representations, warranties, covenants and agreements contained in this
      Agreement shall survive the Closing of the transactions contemplated by this
      Agreement. 

     

    8.2 
       Indemnification.
      The
      Company agrees to indemnify and hold harmless each Investor and its Affiliates
      and their respective directors, officers, employees and agents from and against
      any and all losses, claims, damages, liabilities and expenses (including without
      limitation reasonable attorney fees and disbursements and other expenses
      incurred in connection with investigating, preparing or defending any action,
      claim or proceeding, pending or threatened and the costs of enforcement thereof)
      (collectively, “Losses”) to which such Person may become subject as a result of
      any breach of representation, warranty, covenant or agreement made by or to
      be
      performed on the part of the Company under the Transaction Documents, and will
      reimburse any such Person for all such amounts as they are incurred by such
      Person. 

     

    8.3  
      Conduct
      of Indemnification Proceedings.
      Promptly after receipt by any Person (the “Indemnified Person”) of notice of any
      demand, claim or circumstances which would or might give rise to a claim or
      the
      commencement of any action, proceeding or investigation in respect of which
      indemnity may be sought pursuant to Section 8.2, such Indemnified Person shall
      promptly notify the Company in writing and the Company shall assume the defense
      thereof, including the employment of counsel reasonably satisfactory to such
      Indemnified Person, and shall assume the payment of all fees and
      expenses;
      provided, however,
      that
      the failure of any Indemnified Person so to notify the Company shall not relieve
      the Company of its obligations hereunder except to the extent that the Company
      is materially prejudiced by such failure to notify. In any such proceeding,
      any
      Indemnified Person shall have the right to retain its own counsel, but the
      fees
      and expenses of such counsel shall be at the expense of such Indemnified Person
      unless: (i)
      the
      Company and the Indemnified Person shall
      have
      mutually agreed to the retention of such counsel; or (ii) in the reasonable
      judgment of counsel to such Indemnified Person representation of both parties
      by
      the same counsel would be inappropriate due to actual or potential differing
      interests between them. The Company shall not be
      liable
      for any settlement of any proceeding effected without its written consent,
      which
      consent shall not be unreasonably withheld, but if
      settled
      with such consent, or if there be a
      final
      judgment for the plaintiff, the Company shall indemnify and hold harmless such
      Indemnified Person from and against any loss or liability (to the extent stated
      above) by reason of such settlement or judgment. Without the prior written
      consent of the Indemnified Person, which consent shall not be unreasonably
      withheld, the Company shall not effect any settlement of any pending or
      threatened proceeding in respect of which any Indemnified Person is or could
      have been a party and indemnity could have been sought hereunder by such
      Indemnified Party, unless such settlement includes an unconditional release
      of
      such Indemnified Person from all liability arising out of such proceeding.
      

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    
      
        9.
          Miscellaneous.
          

      

    

     

    9.1
       Successors
      and Assigns.
      This
      Agreement may not be assigned by a party hereto without the prior written
      consent of the Company or the Investors, as applicable, provided, however,
      that
      an Investor may assign its rights and delegate its duties hereunder in whole
      or
      in part to an Affiliate or to a third party acquiring some or all of its
      Securities in a private transaction without the prior written consent of the
      Company or the other Investors, after notice duly given by such Investor to
      the
      Company provided, that no such assignment or obligation shall affect the
      obligations of such Investor hereunder. The provisions 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. 

     

    9.2  
      Counterparts;
      Faxes.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. This Agreement may also be executed via facsimile, which shall
      be
      deemed an original. 

     

    9.3  
      Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement.

     

    9.4
       Notices.
      Unless
      otherwise provided, any notice required or permitted under this Agreement shall
      be given in writing and shall be deemed effectively given as hereinafter
      described (i) if given by personal delivery, then such notice shall be deemed
      given upon such delivery, (ii) if given by telex or telecopier, then such notice
      shall be deemed given upon receipt of confirmation of complete transmittal,
      (iii) if given by mail, then such notice shall be deemed given upon the earlier
      of (A) receipt of such notice by the recipient or (B) three days after such
      notice is deposited in first class mail, postage prepaid, and (iv) if
      given
      by
      an internationally recognized overnight air courier, then such notice shall
      be
      deemed given one Business Day after delivery to such carrier. All notices shall
      be addressed to the party to be notified at the address as follows, or at such
      other address as such party may designate by ten days’ advance written notice to
      the other party: 

     

    
      If
        to the
        Company: 

       

      SuperCom
        Ltd.

      Millennium
        Building

      3
        Tidhar
        Street, P.O.B. 2094

      Raanana
        43665 Israel

      Attention:

      Fax:
        

    

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

     

    With
      a
      copy to: 

     

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

    Chrysler
      Center

    666
      Third
      Avenue

    New
      York,
      New York 10017

    Attention:
      Kenneth Koch

    Fax:
      (212) 983-3115 

     

    If
      to the
      Investors: 

     

    to
      the
      addresses set forth on the signature pages hereto. 

     

    9.5 
       Expenses.
      The
      parties hereto shall pay their own costs and expenses in connection herewith,
      except that the Company shall pay the reasonable fees and expenses of Lowenstein
      Sandler PC not to exceed US$35,000. Such expenses shall be paid not later than
      the Closing. The Company shall reimburse the Investors upon demand for all
      reasonable out-of- pocket expenses incurred by the Investors, including without
      limitation reimbursement of attorneys’ fees and disbursements, in connection
      with any amendment, modification or waiver of this Agreement or the other
      Transaction Documents. In the event that legal proceedings are commenced by
      any
      party to this Agreement against another party to this Agreement in connection
      with this Agreement or the other Transaction Documents, the party or parties
      which do not prevail in such proceedings shall severally, but not jointly,
      pay
      their pro rata share of the reasonable attorneys’ fees and other reasonable
      out-of-pocket costs and expenses incurred by the prevailing party in such
      proceedings. 

     

    9.6  
      Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively), only with the written consent of the Company
      and the Investors. Any amendment or waiver effected in accordance with this
      paragraph shall be binding upon each holder of any Securities purchased under
      this Agreement at the time outstanding, each future holder of all such
      Securities, and the Company. 

    
      
        
        

      

      
        -22-

        
          

        

      

       

    

    
      9.7 
         Publicity.
        Except
        as set forth below, no public release or announcement concerning the
        transactions contemplated hereby shall be issued by the Company or the Investors
        without the prior consent of the Company (in the case of a release or
        announcement by the Investors) or the Investors (in the case of a release
        or announcement by the Company) (which consents shall not be unreasonably
        withheld), except as such release or announcement may be required by law
        or the
        applicable rules or regulations of any securities exchange or securities
        market,
        in which case the Company or the Investors, as the case may be, shall allow
        the
        Investors or the Company, as applicable, to the extent reasonably practicable
        in
        the circumstances, reasonable time to comment on such release or announcement
        in
        advance of such issuance. By 8:30 a.m. (New York City time) on the trading
        day
        immediately following the Closing Date, the Company shall issue a press release
        disclosing the consummation of the transactions contemplated by this Agreement.
        No later than the third trading day following the Closing Date, the Company
        will
        file a Report of Foreign Private Issuer on Form 6-K attaching the press release
        described in the foregoing sentence as well as copies of the Transaction
        Documents. In addition, the Company will make such other filings and notices
        in
        the manner and time required by the SEC. Notwithstanding the foregoing, the
        Company shall not publicly disclose the name of any Investor, or include
        the
        name of any Investor in any filing with the SEC (other than the Registration
        Statement and any exhibits to filings made in respect of this transaction
        in
        accordance with periodic filing requirements under the 1934 Act) or any
        regulatory agency, without the prior written consent of such Investor, except
        to
        the extent such disclosure is required by law or trading market regulations,
        in
        which case the Company shall provide the Investors with prior notice of such
        disclosure. 

    

     

    9.8
       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 provision hereof prohibited or unenforceable in any respect.

     

    9.9  
      Entire
      Agreement.
      This
      Agreement, including the Exhibits and the Disclosure Schedules, and the other
      Transaction Documents constitute the entire agreement among the parties hereof
      with respect to the subject matter hereof and thereof and supersede all prior
      agreements and understandings, both oral and written, between the parties with
      respect to the subject matter hereof and thereof. 

     

    9.10
      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. 

     

    
      
        
        

      

      
        -23-

        
          

        

      

       

    

     

    9.11
      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. 

     

    9.12
      Independent
      Nature of Investors’ Obligations and Rights.
      The
      obligations of each Investor under any Transaction Document are several and
      not
      joint with the obligations of any other Investor, and no Investor shall be
      responsible in any way for the performance of the obligations of any other
      Investor under any Transaction Document. The decision of each Investor to
      purchase Securities pursuant to the Transaction Documents has been made by
      such
      Investor independently of any other Investor. Nothing contained herein or in
      any
      Transaction Document, and no action taken by any Investor pursuant thereto,
      shall be deemed to constitute the Investors as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Investors are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Documents.
      Each
      Investor acknowledges that no other Investor has acted as agent for such
      Investor in connection with making its investment hereunder and that no Investor
      will be acting as agent of such Investor in connection with monitoring its
      investment in the Securities or enforcing its rights under the Transaction
      Documents. Each Investor shall be entitled to independently protect and enforce
      its rights, including, without limitation, the rights arising out of this
      Agreement or out of the other Transaction Documents, and it shall not be
      necessary for any other Investor to be joined as an additional party in any
      proceeding for such purpose. The Company acknowledges that each of the Investors
      has been provided with the same Transaction Documents for the purpose of closing
      a transaction with multiple Investors and not because it was required or
      requested to do so by any Investor.

    

    [signature
      page follows]

     

    
      
        
        

      

      
        -24-

        
          

        

      

       

    

    1N
      WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
      authorized officers to execute this Agreement as of the date first above
      written. 

     

    The
      Company: 

    
      	 	 	 	 
	
              SUPERCOM
                LTD.

            	 	 	 
	 	 	 	 
	
              By:
                

            	 	 	By:

	
              
                

              

              Name:
                Avi Schechter 

              Title:
                C.E.O.

            	 	 	
              
                

              

              Name:
                Eyal Tuchman

              Title:
                C.F.O.

            

    

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	
              The
                Investors:

            	
              SPECIAL
                SITUATIONS FUND III, L.P.

            
	 
 	 
 	 
 
	
            	By:  	
	 	
              

              Name:
                David M. Greenhouse 
                Title:
                  General Partner

              

            

    

     

    Aggregate
      Purchase Price: US$1,999,999.72 

    Number
      of
      Ordinary Shares: 3,225,806 

    Number
      of
      Warrants: 1,129,032 

    

    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 CAYMAN FUND, L.P.

            
	 
 	 
 	 
 
	
            	By:  	
	 	
              

              Name:
                David M. Greenhouse 
                Title:
                  General Partner

              

            

    

     

    Aggregate
      Purchase Price: US$500,000.24 

    Number
      of
      Ordinary Shares: 806,452 

    Number
      of
      Warrants: 282,258 

     

    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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]