Purchase Agreement between Inksure Technologies, Inc. and Note Holders Dated January 19, 2010

Summary

This agreement is between Inksure Technologies, Inc. and several note holders, including Smithfield Fiduciary LLC and others. The company agrees to buy back outstanding senior secured convertible notes and related warrants from the holders for $3,000,000. In exchange, the holders will return the notes marked as paid, terminate certain warrants, and provide general releases. The agreement also includes assignments of security interests and amendments to remaining warrants. The transaction is intended to retire the notes using proceeds from a planned private stock placement.

EX-10.1 3 exhibit_10-1.htm 8-K

EXHIBIT 10.1 PURCHASE AGREEMENT AGREEMENT dated as of January 19, 2010 by and among Inksure Technologies, Inc., a Delaware corporation (the "Company"), on the one hand, and Smithfield Fiduciary LLC ("Smithfield") and the Irrevocable Trust of James E. Lineberger U/A dated December 17, 1998, Rockmore Investment Master Fund LTD, Iroquois Master Fund, LTD, and Portside Growth and Opportunity Fund (all such entities being collectively referred to as "Other Holders"; Other Holders and Smithfield being collectively referred to as "Holders"), on the other hand. WHEREAS: A. The Company issued to Holders as of September 30, 2005, Senior Convertible Promissory Notes totaling $6,000,000 ("Original Notes") issued to each Holder in the principal amounts listed on Schedule A annexed hereto. B. As of April 8, 2008, the Original Notes were all converted into Amended and Restated Senior Secured Convertible Notes ("A&R Notes") issued to each of the Holders in the amounts shown on Schedule A annexed hereto and an additional Senior Secured Convertible Notes in the amount of $3,000,000 ("2008 Note") was issued to Smithfield. The A&R Notes and 2008 Note are herein referred to collectively as "Existing Notes". C. The Holders are also the holders of Warrants ("Warrants") to acquire the number of shares of common stock of the Company listed on Schedule A annexed hereto, which are separated into Series A Warrants, Series B-1 Warrants and Series B-2 Warrants, all as shown on Schedule A. D. On April 8, 2008, the Company, its wholly-owned subsidiaries, Inksure Inc., 1st Operating, Inc. and Inksure R.F., Inc. (collectively, "Subsidiaries"; Subsidiaries, together with the Company being collectively referred to herein as "Grantors") granted to Smithfield, as collateral agent ("Collateral Agent"), a security interest in assets of Grantors. E. The Company and Holders have agreed that the Company shall purchase and/or cause others to purchase the Existing Notes, including all accrued and unpaid interest thereon, for an aggregate purchase price of $3,000,000, with the intention that the Company will retire the balance of the Existing Notes from the proceeds of a currently contemplated private placement of Company common stock. NOW, THEREFORE, it is agreed as follows: 1. PURCHASE OF NOTES. The Company shall pay and/or cause others to pay to Holders collectively the sum of $3,000,000 ("Purchase Price") which will be wire transferred to the account of Smithfield set forth on Schedule B hereto. The Holders agree that such payment to Smithfield will be deemed, for all purposes hereunder, to be payment to Holders.

 2. At Closing hereunder: A) Holders shall perform or cause to be performed the following: (i) Other Holders will execute and deliver to the Company: (a) the originals of their A&R Notes marked "Paid in Full"; (b) the Termination of Warrants in the form annexed hereto as Exhibit 1 ("Warrant Termination") terminating all Warrants of Other Holders with the original Warrant; (c) a general release ("General Release") in favor of the Company in the form of Exhibit 2(a) attached hereto; and (d) termination of the rights of Other Holders under the guarantee dated April 8, 2009 by Grantors in the form of Exhibit 3 attached hereto. (ii) Smithfield will execute and deliver to the Company: (a) the original of the A&R Note marked "Paid in Full"; (b) an Assignment, in the form of Exhibit 4 annexed hereto, of its 2008 Note with the original 2008 Note attached thereto, assigning the 2008 Note to the assignees designated by the Company; (c) a Warrant Termination for all its Series B-1 and Series B-2 Warrants with the original warrants attached; (d) an Amendment to Series A Warrant ("Warrant Amendment") in the form annexed hereto as Exhibit 5, with the Series A Warrant affixed thereto, reducing the maximum number of shares of Company stock issuable thereunder to 2,183,000 shares, amending the exercise price to $0.15 per share and making certain other modifications thereto; (e) an Assignment, as Collateral Agent thereunder, in the form of Exhibit 6 attached hereto of all its rights in and under the Security Agreement to Company's designee together with Forms UCC-3s assigning its rights as Collateral Agent under existing filed Forms UCC-1 to such designee; 2

 (f) an Assignment, in the form of Exhibit 7 attached hereto, of the Guaranty by Grantors in favor of Smithfield to the assignees of the 2008 Note; and (g) a General Release, exclusive of the Series A Warrant, as amended by the Warrant Amendment in the form of Exhibit 2(b). B) The Company shall take or cause the following actions to be taken: (i) Delivery, by wire transfer to Smithfield, as agent for all Holders, the sum of $3,000,000. (ii) Execute and deliver: (a) the Warrant Amendment to Smithfield; and (b) a General Release in the form of Exhibit 2(c) in favor of Other Holders and in the form of Exhibit 2(d) in favor of Smithfield. 3. HOLDERS REPRESENT AND WARRANT. Holders each represent and warrant to the Company and its designees, severally and not jointly, as of the date hereof and as of the Closing Date (as defined below) as follows: (a) all documents delivered by such Holder under Section 2A hereof are complete and accurate originals thereof and have not been modified or amended in any manner; and (b) such Holder is duly organized and validly existing, owns the Existing Notes and Warrants listed next to its name on Schedule A free and clear of all liens and encumbrances and has the absolute right and authority to execute and deliver the documents being delivered by it hereunder pursuant to Section 2.A. above. All corporate, governmental and other approvals necessary for the execution and delivery thereof have been obtained by such Holder and are in full force and effect and unmodified. 4. COMPANY REPRESENTS AND WARRANTS. The Company represents and warrants to the Holders, as of the date hereof and as of the Closing Date, that (a) the Company is duly organized and qualified to do business in the State of Delaware and has the absolute right and authority to execute all documents being delivered by it hereunder pursuant to Section 2B above. All corporate, governmental and other approvals necessary for the execution and delivery thereof and payment of funds hereunder have been obtained and are in full force and unmodified; 3

 (b) Since December 31, 2008, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934 (the "1934 Act") (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the "SEC Documents"). As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective filing dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments); and (c) There is no material non-public information of or concerning the Company that has not been disclosed to the Holders. 5. CLOSING. The Closing hereunder shall take place on January 19, 2010 (the "Closing Date") through an escrow with Lichter Gliedman Offenkrantz PC, acting Company counsel and as escrow agent therefor. 6. NOTICES. (a) Any notice, demand, consent, election, offer, approval, request or other communication (collectively, a "notice") required or permitted under this Agreement must be in writing and either delivered personally or sent by nationally recognized overnight courier or by facsimile transmission, provided that the sender of such transmission can produce evidence of electronic confirmation that such notice was received by the party to whom it was transmitted. A notice delivered personally will be deemed given only when receipt is acknowledged in writing by the person to whom it is delivered. A notice that is given by facsimile transmission shall be deemed given only when the sender receives electronic confirmation such notice was received to by the party to whom it was transmitted. 4

(b) Notices shall be addressed as follows: If to Holders At the address set forth on Schedule A If to Company: c/o Lichter Gliedman Offenkrantz PC 551 Fifth Avenue - 24th Fl. New York, NY 10176 Attention: Kenneth Gliedman, Esq. Facsimile: 212 ###-###-#### (c) Any party may designate, by notice to all of the others, substitute addresses or addressees for notices; and, thereafter, notices are to be directed to those substitute addresses or addressees. Notice by an attorney for any party shall constitute valid notice hereunder. 7. MISCELLANEOUS. 7.1 COMPLETE AGREEMENT. This Agreement constitutes the complete and exclusive statement of the agreement among the parties with respect to the subject matter thereof. It supersedes all prior written and oral statements, including any prior representation, statement, condition or warranty and may not be changes orally but only in writing executed by the parties hereto. 7.2 APPLICABLE LAW. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the laws of the State of New York. 7.3 ARTICLE AND SECTION TITLES. The headings herein are inserted as a matter of convenience only and do not define, limit or describe the scope of this Agreement or the intent of the provisions hereof. 7.4 BINDING PROVISIONS. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal and legal representatives, successors and permitted assigns. 7.5 EXCLUSIVE JURISDICTION AND VENUE; JURY TRIAL WAIVER. Any suit involving any dispute or matter arising under this Agreement may only be brought in the United States District Court for the Southern District of New York or any New York State Court located in New York County having jurisdiction over the subject matter of the dispute or matter. All parties hereby consent to the exercise of personal jurisdiction by any such court with respect to any such proceeding. The parties hereby waive any right they may have to a trial by jury in any action or proceeding arising under this Agreement. 5

 7.6 TERMS. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the Person may in the context require. 7.7 SEPARABILITY OF PROVISIONS. Each provision of this Agreement shall be considered separable; and if, for any reason, any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid. 7.8 COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which, when taken together, constitute one and the same document. The signature of any party, whether original, facsimile or via email, to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. [SIGNATURES ON FOLLOWING PAGE] 6

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. NKSURE TECHNOLOGIES, INC., A DELAWARE CORPORATION By: /s/ Gadi Peleg ------------------ Gadi Peleg Chairman of the Board HOLDERS: SMITHFIELD FIDUCIARY LLC By: Highbridge Capital Management, LLC, its Trading Manager By:/s/ Mark J. Vanacore ----------------------- Mark J. Vanacore IRREVOCABLE TRUST OF JAMES E. LINEBERGER U/A DATED DECEMBER 17, 1998 By:/s/ James Lineberger ----------------------- Trustee ROCKMORE INVESTMENT MASTER FUND LTD By:/s/ Michael Clateman ----------------------- Michael Clateman IROQUOIS MASTER FUND, LTD By: /s/ Richard Abbe -------------------- Richard K. Abbe, Authorized Signatory PORTSIDE GROWTH AND OPPORTUNITY FUND By: /s/ Owen Littman -------------------- Owen Littman Authorized Signatory 7

 SCHEDULE A SECURITIES SCHEDULE (1) (2) (3) (4) (5) (6) (7) (8) - ---------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ AGGREGATE AGGREGATE PRINCIPAL AMOUNT PRINCIPAL AMOUNT NUMBER OF SERIES ALLOCATION OF OF AMENDED AND OF NUMBER OF SERIES B-1 WARRANT NUMBER OF SERIES $3,000,000 INVESTOR ADDRESS AND FACSIMILE NUMBER RESTATED NOTES NEW NOTES A WARRANT SHARES SHARES B-2 WARRANT SHARES PURCHASE PRICE - --------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ Smithfield Fiduciary c/o Highbridge Capital $4,700,000 $3,000,000 3,570,337 7,833,333 5,000,000 $2,601,035 LLC Management, LLC 9 West 57th Street, 27th Fl. New York, NY 10019 Attn: Eric Colandrea Fax: 212 ###-###-#### Tel: 212 ###-###-#### Residence: Cayman Islands - --------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ The Irrevocable c/o Lineberger & Co., LLC $ 300,000 0 0 500,000 0 $ 101,339 Trust of James E. 1120 Boston Post Rd. Lineberger u/a Darien, CT 06820 12/17/98 Attn: Jamie Lineberger Fax: 203 ###-###-#### Tel: 203 ###-###-#### - --------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ Rockmore Investment c/o Rockmore Capital, LLC, $ 178,655 0 0 395,958 0 $ 60,349 Master Fund Ltd. East 58th Street, 28th Fl. New York, NY 10155 - --------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ Iroquois Master Fund Iroquois Master Fund, Ltd. $ 250,000 0 0 416,667 0 $ 84,449 Ltd. 641 Lexington Ave., 26th Fl. New York, NY 10022 Attn: Joshua Silverman Fax: 646 ###-###-#### Tel: 212 ###-###-#### - --------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ Portside Growth and c/o Ramius LLC $ 452,425 0 0 854,042 0 $ 152,828 Opportunity Fund 599 Lexington Ave., 20th Fl. New York, NY 10022 Attn: Jeff Smith Fax: 212 ###-###-#### Tel: 212 ###-###-#### Residence: Cayman Islands - ---------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ TOTALS $5,881,080 $3,000,000 $3,000,000 - ---------------------- -------------------------------- ------------------ ------------------- ------------------ ------------------ ------------------- ------------------ 8

 SCHEDULE B WIRE TRANSFER INSTRUCTION SMITHFIELD FIDUCIARY LLC- WIRE TRANSFER INSTRUCTIONS Citibank ABA#021000089 A/c: Bear Stearns Securities Group A/c # 09253186 FBO: Smithfield Fiduciary LLC A/c # 102-25642 9

 EXHIBIT 1 TERMINATION OF WARRANT The undersigned holder of a Series B-1 and B-2 Warrants to purchase 7,833,333 and 5,000,000 shares of Common Stock of Inksure Technologies, Inc. hereby terminates the Warrants effective immediately, not having exercised any rights thereunder. Dated: January 14, 2010 Smithfield Fiduciary LLC By: Highbridge Capital Management, LLC, Its Trading Manager By:/s/ Mark J. Vanacore ----------------------- Mark J. Vanacore 10

 EXHIBIT 1 TERMINATION OF WARRANT The undersigned holder of a Series B-1 Warrant to purchase 500,000 shares of Common Stock of Inksure Technologies, Inc. hereby terminates the Warrant effective immediately, not having exercised any rights thereunder. Dated: 1/19/10 Irrevocable Trust of James E. Lineberger U/A dated December 17, 1998 By:/s/ James Lineberger ----------------------- Trustee 11

 EXHIBIT 1 TERMINATION OF WARRANT The undersigned holder of a Series B-1 Warrant to purchase 395,958 shares of Common Stock of Inksure Technologies, Inc. hereby terminates the Warrant effective immediately, not having exercised any rights thereunder. Dated: January 13, 2010 Rockmore Investment Master Fund Ltd. By:/s/ Michael Clateman ----------------------- Michael Clateman 12

 EXHIBIT 1 TERMINATION OF WARRANT The undersigned holder of a Series B-1 Warrant to purchase 416,667 shares of Common Stock of Inksure Technologies, Inc. hereby terminates the Warrant effective immediately, not having exercised any rights thereunder. Dated: 1/14/10 /s/ Richard Abbe ---------------- Richard K. Abbe, Authorized Signatory Iroquois Master Fund, Ltd. 13

 EXHIBIT 1 TERMINATION OF WARRANT The undersigned holder of a Series B-1 Warrant to purchase 854,042 shares of Common Stock of Inksure Technologies, Inc. hereby terminates the Warrant effective immediately, not having exercised any rights thereunder. Dated: January 13, 2010 PORTSIDE GROWTH AND OPPORTUNITY FUND /s/ Owen Littman ---------------- Owen Littman Authorized Signatory 14

 EXHIBIT 2(A) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT IRREVOCABLE TRUST OF JAMES E. LINEBERGER U/A DATED DECEMBER 17, 1998 as RELEASOR, in consideration of the sum of ONE HUNDRED-ONE THOUSAND THREE HUNDRED THIRTY-NINE and No/100 ($101,339.00) Dollars, received from Inksure Technologies, Inc., as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasee and any documents or instruments executed and/or delivered by Releasee and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10________. IN PRESENCE OF: IRREVOCABLE TRUST OF JAMES E. LINEBERGER U/A DATED DECEMBER 17, 1998 By:/s/ James Lineberger ----------------------- Trustee 15

 EXHIBIT 2(A) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT ROCKMORE INVESTMENT MASTER FUND LTD. as RELEASOR, in consideration of the sum of SIXTY THOUSAND THREE HUNDRED AND FORTY-NINE and No/100 ($60,349.00) Dollars, received from Inksure Technologies, Inc., as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasee and any documents or instruments executed and/or delivered by Releasee and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10________. IN PRESENCE OF: ROCKMORE INVESTMENT MASTER FUND LTD. By:/s/ Michael Clateman ----------------------- Michael Clateman 16

 EXHIBIT 2(A) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT IROQUOIS MASTER FUND, LTD. as RELEASOR, in consideration of the sum of EIGHTY FOUR THOUSAND FOUR HUNDRED FORTY NINE and No/100 ($84,449.00) Dollars, received from Inksure Technologies, Inc., as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasee and any documents or instruments executed and/or delivered by Releasee and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10________. IN PRESENCE OF: By: /s/ Richard Abbe -------------------- Richard K. Abbe, Authorized Signatory 17

 EXHIBIT 2(A) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT PORTSIDE GROWTH AND OPPORTUNITY FUND as RELEASOR, in consideration of the sum of ONE HUNDRED FIFTY-TWO THOUSAND EIGHT HUNDRED TWENTY-EIGHT and No/100 ($152,828.00) Dollars, received from Inksure Technologies, Inc., as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasee and any documents or instruments executed and/or delivered by Releasee and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON JANUARY 13, 2010. IN PRESENCE OF: PORTSIDE GROWTH AND OPPORTUNITY FUND By: /s/ Owen Littman -------------------- Owen Littman Authorized Signatory 18

 EXHIBIT 2(B) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT Smithfield Fiduciary LLC as RELEASOR, in consideration of the sum of Two Million Six Hundred One Thousand Thirty-Five Dollars and No/100 ($2,601,035.00) Dollars, received from Inksure Technologies, Inc., as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasee and any documents or instruments executed and/or delivered by Releasee and/or its subsidiaries in connection therewith, except for any liabilities or obligations under the certain Series A Warrant dated April 8, 2008, as amended by First Amendment dated of even date herewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON JANUARY 19, 2010____. IN PRESENCE OF: SMITHFIELD FIDUCIARY LLC BY: HIGHBRIDGE CAPITAL MANAGEMENT, LLC, ITS TRADING MANAGER By: /s/ Mark J. Vanacore ------------------------ Mark J. Vanacore 19

 EXHIBIT 2(C) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT INKSURE TECHNOLOGIES, INC., as RELEASOR, in consideration of the sum of TEN and No/100 ($ 10.00) Dollars, received from the PORTSIDE GROWTH AND OPPORTUNITY FUND as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasor to Releasee and any documents or instruments executed and/or delivered by Releasor and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10___________. IN PRESENCE OF: INKSURE TECHNOLOGIES, INC. By:/s/ Gadi Peleg ----------------- Gadi Peleg Chairman of the Board 20

 EXHIBIT 2(C) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT INKSURE TECHNOLOGIES, INC., as RELEASOR, in consideration of the sum of TEN and No/100 ($ 10.00) Dollars, received from the IROQUOIS MASTER FUND, LTD. as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasor to Releasee and any documents or instruments executed and/or delivered by Releasor and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10___________. IN PRESENCE OF: INKSURE TECHNOLOGIES, INC. By: /s/ Gadi Peleg ------------------ Gadi Peleg Chairman of the Board 21

 EXHIBIT 2(C) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT INKSURE TECHNOLOGIES, INC., as RELEASOR, in consideration of the sum of TEN and No/100 ($ 10.00) Dollars, received from the IRREVOCABLE TRUST OF JAMES E. LINEBERGER U/A DATED DECEMBER 17, 1998 as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasor to Releasee and any documents or instruments executed and/or delivered by Releasor and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10___________. IN PRESENCE OF: INKSURE TECHNOLOGIES, INC. By: /s/ Gadi Peleg ------------------ Gadi Peleg Chairman of the Board 22

 EXHIBIT 2(C) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT INKSURE TECHNOLOGIES, INC., as RELEASOR, in consideration of the sum of TEN and No/100 ($ 10.00) Dollars, received from the ROCKMORE INVESTMENT MASTER FUND LTD. as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasor to Releasee and any documents or instruments executed and/or delivered by Releasor and/or its subsidiaries in connection therewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10___________. IN PRESENCE OF: INKSURE TECHNOLOGIES, INC. By: /s/ Gadi Peleg ------------------ Gadi Peleg Chairman of the Board 23

 EXHIBIT 2(D) GENERAL RELEASE TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT INKSURE TECHNOLOGIES, INC., as RELEASOR, in consideration of the sum of TEN and No/100 ($10.00) Dollars, received from SMITHFIELD FIDUCIARY LLC as RELEASEE, receipt whereof is hereby acknowledged, releases and discharges the RELEASEES and RELEASEES' respective current and former general partners, limited partners, shareholders, directors, officers, employees, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity (collectively "Claims") which against the RELEASEE, the RELEASOR, RELEASOR'S successors and assigns ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE relating to any promissory notes, warrants or options issued by the Releasor to Releasee and any documents or instruments executed and/or delivered by Releasor and/or its subsidiaries in connection therewith, except for any liabilities or obligations under the certain Series A Warrant dated April 8, 2008, as amended by First Amendment dated of even date herewith. The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE. This RELEASE may not be changed orally. IN WITNESS WHEREOF, THE RELEASOR HAS CAUSED THIS RELEASE TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED ON 1/19/10____________. IN PRESENCE OF: INKSURE TECHNOLOGIES, INC. By: /s/ Gadi Peleg ------------------ Gadi Peleg Chairman of the Board 24

 EXHIBIT 3 The undersigned, hereby terminates all its rights under that certain guarantee dated April 8, 2008 by Inksure, Inc., Inksure RF, Inc. and 1st Operating, Inc. in favor of the undersigned and certain other parties. Dated: 1/19/10 IRREVOCABLE TRUST OF JAMES E. LINEBERGER U/A DATED DECEMBER 17, 1998 By:/s/ James Lineberger ----------------------- Trustee 25

 EXHIBIT 3 The undersigned, hereby terminates all its rights under that certain guarantee dated April 8, 2008 by Inksure, Inc., Inksure RF, Inc. and 1st Operating, Inc. in favor of the undersigned and certain other parties. Dated: 1/19/10 ROCKMORE INVESTMENT MASTER FUND LTD. By: /s/ Michael Clateman ------------------------ Michael Clateman Managing Director 26

 EXHIBIT 3 The undersigned, hereby terminates all its rights under that certain guarantee dated April 8, 2008 by Inksure, Inc., Inksure RF, Inc. and 1st Operating, Inc. in favor of the undersigned and certain other parties. Dated: 1/14/10 /s/ Richard Abbe ---------------- Richard K. Abbe, Authorized Signatory Iroquois Master Fund Ltd. 27

 EXHIBIT 3 The undersigned, hereby terminates all its rights under that certain guarantee dated April 8, 2008 by Inksure, Inc., Inksure RF, Inc. and 1st Operating, Inc. in favor of the undersigned and certain other parties. Dated: January 13, 2010 PORTSIDE GROWTH AND OPPORTUNITY FUND /s/ Owen Littman ---------------- Owen Littman Authorized Signatory 28

 EXHIBIT 4 ASSIGNMENT OF SENIOR SECURED CONVERTIBLE NOTE For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned, Smithfield Fiduciary LLC, hereby assigns to the parties listed on Exhibit A annexed hereto all its rights, title and interest in and to that certain Senior Secured Convertible Note attached hereto in the principal amount of $3,000,000 issued by Inksure Technologies, Inc., in favor of the undersigned, the full principal amount of which remains outstanding and unpaid. Dated: January 12, 2010 SMITHFIELD FIDUCIARY LLC By: Highbridge Capital Management, LLC, its Trading Manager By:/s/ Mark J. Vanacore ----------------------- Mark J. Vanacore 29

 EXHIBIT A TO ASSIGNMENT OF $3,000,000 SENIOR SECURED CONVERTIBLE BY SMITHFIELD FINANCIAL LLC - ------------------------------------------------------- ------------------------ ASSIGNEE AMOUNT - ------------------------------------------------------- ------------------------ Inksure Technologies, Inc. $1,000,000.00 Sinfo Holding BVI 500,000.00 Peleg Investment Management LLC 500,000.00 Pierre L. Schoenheimer 500,000.00 Yaron Meerfeld 175,000.00 T&M Trusteeship and Management Services 200,000.00 Yusuf Taragano 100,000.00 Leonard Lichter 25,000.00 - ------------------------------------------------------- ------------------------ TOTAL $3,000,000.00 - ------------------------------------------------------- ------------------------ 30

 EXHIBIT 5 FIRST AMENDMENT TO SERIES A WARRANT FIRST AMENDMENT dated JANUARY 19, 2010__ to Series A Warrant ("Series A Warrant") dated April 8, 2008 issued by Inksure Technologies, Inc. ("Issuer") to Smithfield Fiduciary LLC ("Holder") for 3,570,337 shares of Common Stock of Issuer. FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, Issuer and Holder agree to modify the Series A Warrant as follows: 1. The number of shares of Common Stock as to which the Series A Warrant is exercisable is hereby reduced from 3,570,337 to 2,183,000 shares. 2. The Exercise Price, as defined in Section 1(b) of the Series A Warrant is hereby decreased from $0.60 to $0.15, subject to adjustment for events occurring hereinafter as provided in the Series A Warrant. 3. Section 2(a) of the Series A Warrant is hereby amended by inserting after the words "equal to" the word "83(1/3)% of". 4. Section 4 is deleted in its entirety. 5. Except as expressly modified hereby, the Series A Warrant remains in full force and effect and unmodified. INKSURE TECHNOLOGIES, INC. By:/s/ Gadi Peleg ----------------- Gadi Peleg Chairman of the Board SMITHFIELD FIDUCIARY LLC By: Highbridge Capital Management, LLC, its Trading Manager By:/s/ Mark J. Vanacore ----------------------- Mark J. Vanacore 31

 EXHIBIT 6 ASSIGNMENT OF SECURITY AGREEMENT The undersigned, being the Collateral Agent under that certain Security Agreement among Inksure Technologies, Inc., Inksure RF Inc., Inksure, Inc. and 1st Operating, Inc., as grantors, and the undersigned as Collateral Agent to the secured parties thereunder hereto hereby assigns to Lichter Gliedman Offenkrantz PC, as Collateral Agent, all its rights, title and interest thereunder Dated: January 12, 2010 SMITHFIELD FIDUCIARY LLC By: Highbridge Capital Management, LLC, its Trading Manager By:/s/ Mark J. Vanacore ----------------------- Mark J. Vanacore 32

 EXHIBIT 7 The undersigned, Smithfield Fiduciary LLC, hereby assigns to the parties listed on Exhibit A annexed hereto all its rights, title and interest under that certain guarantee dated April 8, 2008 by Inksure, Inc., Inksure RF, Inc. and 1st Operating, Inc. in favor of the undersigned and certain other parties. Dated: January 19, 2010 SMITHFIELD FIDUCIARY LLC By: Highbridge Capital Management, LLC, its Trading Manager By:/s/ Mark J. Vanacore ----------------------- Mark J. Vanacore 33

 EXHIBIT A TO ASSIGNMENT OF $3,000,000 SENIOR SECURED CONVERTIBLE BY SMITHFIELD FINANCIAL LLC - ------------------------------------------------------- ------------------------ ASSIGNEE AMOUNT - ------------------------------------------------------- ------------------------ Inksure Technologies, Inc. $1,000,000.00 Sinfo Holding BVI 500,000.00 Peleg Investment Management LLC 500,000.00 Pierre L. Schoenheimer 500,000.00 Yaron Meerfeld 175,000.00 T&M Trusteeship and Management Services 200,000.00 Yusuf Taragano 100,000.00 Leonard Lichter 25,000.00 - ------------------------------------------------------- ------------------------ TOTAL $3,000,000.00 - ------------------------------------------------------- ------------------------ 34