FIRST AMENDMENT TO LETTER AGREEMENT
FIRST
AMENDMENT TO LETTER AGREEMENT
This
First Amendment to Letter Agreement (this “Amendment”),
is
made and entered into as of December 21, 2006, by and among IXI
MOBILE (R&D) LTD.,
an
Israeli limited liability company, (the “Subsidiary”),
IXI MOBILE,
INC.,
a
Delaware corporation (the “Parent”),
GEMINI
ISRAEL III LIMITED PARTNERSHIP, GEMINI ISRAEL III PARALLEL FUND LIMITED
PARTNERSHIP, GEMINI ISRAEL III OVERFLOW FUND LIMITED PARTNERSHIP, GEMINI PARTNER
INVESTORS LIMITED PARTNERSHIP
(collectively, "Gemini")
and
XXXXX
VENTURES LTD.
(“Xxxxx").
The
parties hereby agree as follows:
RECITALS
WHEREAS,
the
parties have previously entered into that certain Letter Agreement dated as
of
June 19, 2006 (the "Letter
Agreement")
in
relation to a Loan Agreement by and among the Parent, the Subsidiary and
Southpoint Master Fund LP ("Southpoint")
dated
of even date therewith (the "Loan
Agreement");
and
WHEREAS,
the
parties to the Loan Agreement have recently entered into a Second Amendment
to
Loan Agreement (the "Second
Amendment to Loan Agreement")
attached hereto as Exhibit
A,
pursuant to which, among other things, the parties to the Loan Agreement amended
the repayment and conversion terms of the loan provided to the Subsidiary by
Southpoint under the Loan Agreement and, as a result of such amendment to the
Loan Agreement, the parties now wish to amend the Letter Agreement so as to
align certain terms of the Letter Agreement with the amended terms of the Loan
Agreement, all as set forth in this Amendment.
NOW,
THEREFORE,
in
consideration of the foregoing and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereby
agree as follows:
Unless
otherwise defined below, all capitalized terms herein shall have the meanings
assigned to such terms in the Loan Agreement as amended by the Second Amendment
to Loan Agreement.
1. Acknowledgement
and Amendment of the Letter Agreement.
1.1 Gemini
and Xxxxx hereby acknowledge and agree as follows:
(a) the
terms
of the Second Amendment to Loan Agreement are known and acceptable to Gemini
and
Xxxxx.
(b) all
references to terms and conditions of the Loan Agreement in the Letter
Agreement, including, without limitation, all references to Sections 2.3, 2.4,
3.2, 3.3 and 4.22 of the Loan Agreement, shall be deemed references to such
terms as amended by the Second Amendment to Loan Agreement.
(c) all
references in the Letter Agreement to the term "Repayment Date" shall be deemed
references to the term "Repayment Date" as defined in the Second Amendment
to
Loan Agreement.
(d) all
references in the Letter Agreement to the term "Basic Interest Rate" shall
be
deemed references to the term "Basic Interest Rate" as amended by the Second
Amendment to Loan Agreement.
(e) Section
5
of the Letter Agreement is hereby amended and restated in its entirety to read
as follows:
“5 In
consideration of our undertakings pursuant to this Letter Agreement, by your
signature below, you hereby acknowledge and agree as follows: (A) in the event
the ITAC/IXI Merger becomes effective and subject to and conditioned upon the
ITAC/IXI Merger becoming effective, ITAC shall issue, pursuant to the combined
provisions of this Section 5 and the ITAC Certification (as defined below),
a
total amount of Four Hundred Thousand (400,000) shares of ITAC's Common Stock
("ITAC Stock"), par value $0.0001 per share, with each of us receiving the
amount of ITAC Stock set forth apposite its respective name on Schedule I
attached hereto, and, (B) the Subsidiary shall pay each one of us an amount
equal to each our respective pro rata share in the balance between the Basic
Interest Rate and the interest rate owed under the LOC and the Loan calculated
on $8,000,000 for any period during which the Loan and/or LOC were outstanding
during the period commencing on March 1, 2006 (the date on which the Guaranty
was initially activated) and ending on the Repayment Date (if the ITAC/IXI
Merger closes) or on the First Interest Payment Date and any subsequent interest
payment under the Loan Agreement (if the ITAC/IXI Merger does not
close).”
(f)
Schedule I to the Loan Agreement is hereby amended and restated in its entirety
to read as follows:
“SCHEDULE
I
Allocation
of ITAC Stock
|
Name
of Entity
|
%
|
Amount
Guaranteed
|
Number
of ITAC Stock
|
|
Gemini
Israel III LP
|
45.00%
|
3,600,377
|
180,019
|
|
Gemini
Partners Investors LP
|
0.54%
|
43,042
|
2,152
|
|
Gemini
Israel III Parallel Fund LP
|
8.20%
|
656,381
|
32,819
|
|
Gemini
Israel III Overflow Fund LP
|
9.25%
|
740,200
|
37,010
|
|
Xxxxx
Ventures Ltd.
|
37.00%
|
2,960,000
|
148,000
|
|
Total
|
100%
|
8,000,000
|
400,000
|
“
2. New
Section 10A shall be added to the Letter Agreement as follows:
“10A ITAC,
Parent, Subsidiary and Gemini and Xxxxx agree that (i) neither Gemini, Xxxxx
nor
any of their respective partners have rendered or agreed to render any services
to ITAC (or Parent or Subsidiary) in connection with this Letter Agreement;
(ii)
the Securities are not being issued as compensation for services; and (iii)
upon
issuance, the Securities shall be deemed to have prices as if they were issued
independently.”
3. ITAC
Certification.
The
Parent and the Subsidiary shall use their best efforts to cause ITAC to execute
and deliver to Gemini and Xxxxx the Certification attached hereto as
Exhibit
B.
4. No
Other Modifications.
Except
as expressly set forth herein, all other terms and conditions of the Letter
Agreement shall remain in full force and effect.
5. Miscellaneous.
5.1 Counterparts;
Fax Signatures.
This
Amendment may be executed in counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the same Amendment.
Originally executed counterparts may be delivered by facsimile and any such
delivery shall be valid for all purposes as delivery of a manual signature
and
equally admissible in any legal proceedings to which any of the Subsidiary,
the
Parent, or the Lender is a party.
5.2 Severability.
If any
provision of this Amendment or the application thereof, shall for any reason
and
to any extent be determined by a court of competent jurisdiction to be invalid
or unenforceable under applicable law, the remaining provisions of this
Amendment shall be interpreted so as best to reasonably effect the intent of
the
parties hereto.
5.3 Entire
Agreement.
This
Amendment, together with the Loan Documents and all exhibits hereto and thereto,
constitute the entire understanding and agreement of the parties with respect
to
the transactions contemplated herein and supersede all prior and contemporaneous
understandings and agreements, whether written or oral, with respect to such
transactions.
5.4 Governing
Law.
This
Amendment shall be governed in all respects by Section 15 of the Letter
Agreement.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties have executed this First Amendment to Letter
Agreement as of the date first written above.
IXI
MOBILE (R&D), LTD.
By:
/s/
Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
CFO
IXI
MOBILE, INC.
By:
/s/
Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
CFO
[Signature
Page to First Amendment to Letter Agreement]
IN
WITNESS WHEREOF, the parties have executed this First Amendment to Letter
Agreement as of the date first written above.
GEMINI
ISRAEL III LIMITED PARTNERSHIP
by
its
general partner Gemini Capital Associates III L.P.,
by
its
general partner Gemini Israel Funds Ltd.
By:
/s/
Xxxxx Xxxxx /s/ Xxxx Xxxx
Name:
Xxxxx Xxxxx Xxxx Xxxx
Title:
CFO, GP Managing Partner
GEMINI
ISRAEL III PARALLEL FUND LIMITED PARTNERSHIP
by
its
general partner Gemini Capital Associates III, L.P.
by
its
general partner Gemini Israel Funds Ltd.
By:
/s/
Xxxxx Xxxxx /s/ Xxxx Xxxx
Name:
Xxxxx Xxxxx Xxxx Xxxx
Title:
CFO, GP Managing Partner
GEMINI
ISRAEL III OVERFLOW FUND LIMITED PARTNERSHIP
by
its
general partner Gemini Capital Associates III L.P.,
by
its
general partner Gemini Israel Funds Ltd.
By:
/s/
Xxxxx Xxxxx /s/ Xxxx Xxxx
Name:
Xxxxx Xxxxx Xxxx Xxxx
Title:
CFO, GP Managing Partner
GEMINI
PARTNER INVESTORS LIMITED PARTNERSHIP
by
its
general partner Gemini Israel Funds Ltd.
By:
/s/
Xxxxx Xxxxx /s/ Xxxx Xxxx
Name:
Xxxxx Xxxxx Xxxx Xxxx
Title:
CFO, GP Managing Partner
[Signature
Page to First Amendment to Letter Agreement]
IN
WITNESS WHEREOF, the parties have executed this First Amendment to Letter
Agreement as of the date first written above.
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XXXXX
VENTURES LTD.
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By:
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/s/ | |
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Name:
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Title:
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[Signature
Page to First Amendment to Letter Agreement]
