October __, 2007
![xmobile logo](https://www.sec.gov/Archives/edgar/data/1319644/000114420407056865/xmobile.jpg)
October
__, 2007
Southpoint
Master Fund, LP.
000
Xxxxx
Xxxxxx;
Suite
2503; New York,
NY
10022, USA
Ladies
and Gentelmen,
The
purpose of this Letter Agreement is to set forth the terms and conditions of
our
understanding and agreement relating to the conversion of a certain loan (the
"Loan")
provided by you to IXI Mobile (R&D) Ltd. ("Borrower")
pursuant to a certain Loan Agreement dated June 19, 2006, as amended (the
"June
'06 Loan Agreement").
Unless
otherwise defined below, all capitalized terms herein shall have the meanings
assigned to such terms in the June '06 Loan Agreement.
1. |
Conversion.
|
1.1. |
Conversion
Amount. Notwithstanding
anything to the contrary in the June '06 Loan Agreement, Southpoint
Master
Fund L.P. hereby elects to convert the Conversion Amount, specified
in
Section 4 below into that number of fully paid and non-assessable
shares
of IXI Mobile, Inc.’s ("Company")
Common Stock, par value $0.0001 per share (“IXI
Stock”)
as determined by dividing (A) the Conversion Amount by (B) $3.60,
and as
set forth on Schedule
1
hereto.
|
1.2.
|
Warrant
Coverage.
In addition to the IXI Stock issued to you under this Letter Agreement,
the Company will also issue to you a warrant (the "IXI
Warrant")
to purchase that number of IXI Stock set forth on Schedule
1
hereto (equal to 60% percent of the number of IXI Stock issued to
you upon
conversion of the Conversion Amount hereunder). The warrant shall
be
substantially in the form attached hereto as Exhibit
A. By
your signature below you hereby agree that the IXI Warrant issued
to you
pursuant to the terms and conditions hereof, is in
lieu of, and replaces, substitutes and terminates any rights you
may
posses to receive any ITAC Warrants (as defined in the June '06 Loan
Agreement) pursuant to the provisions the June '06 Loan Agreement
and any
such rights are hereby forever terminated and dismissed in their
entirety.
You further agree that this Letter Agreement constitutes an amendment
of
the June '06 Loan Agreement with respect your right to receive ITAC
Warrants as described above.
|
![xmobile logo](https://www.sec.gov/Archives/edgar/data/1319644/000114420407056865/xmobile.jpg)
1.3.
|
you
hereby agree that the foregoing conversion of the
Conversion Amount
and the issuance of the IXI Warrant are in lieu of, and replace,
substitute and terminate any conversion rights you may have pursuant
to
Section 3.2(a) of the June '06 Loan Agreement with respect to the
Conversion Amount and that this Letter Agreement constitutes an amendment
of the June '06 Loan Agreement with respect to the Conversion Amount
hereunder converted.
|
2. |
You
hereby represent and warrant as
follows:
|
(a) You
acknowledge that the IXI Stock and IXI Warrant (collectively, the "Securities")
you
receive are not registered under the United States Securities Act of 1933,
as
amended (the "1933
Act"),
or in
any state and that you must hold such Securities for an indefinite period unless
the Securities are subsequently registered or a Federal and state exemption
from
such registration is available.
(b) You
are
acquiring the Securities for your own account, as a profit-motivated investment,
and without the participation of any person in any part of such acquisition.
You
do not intend to divide your participation with others or to resell or otherwise
dispose of all or any part of the Securities in violation of the Securities
laws
of the United States.
(c) You
have
ad full access to any and all information with regard to the transaction
contemplated hereunder and the Company, including financial statements and
other
documents, that you deem relevant to the acquisition, and you have had full
access to management of the Company to obtain whatever information you deemed
relevant to your acquisition of the Securities. You acknowledge that you have
received all information requested from the Company and are satisfied with
all
such information, and no additional information is needed or required for
execution of this Letter Agreement.
(d) You
understand that the purchase of the Securities involve substantial risk. You
confirm that you have experience as an investor in securities of companies
in
the development stage and acknowledges that you re able to fend for yourself,
can bear the economic risk of your investment in the Securities and have such
knowledge and experience in financial or business matters that you are capable
of evaluating the merits and risks of this investment in the Securities and
protecting your own interests in connection with this investment.
(e) You
understand that the Securities are characterized as "restricted securities"
under the 1933 Act and Rule 144 promulgated thereunder inasmuch as they are
being acquired from the Company in a transaction not involving a public
offering, and that under the 1933 Act and applicable regulations thereunder
such
securities may be resold without registration under the 1933 Act only in certain
limited circumstances. In this connection, you represent that you are familiar
with Rule 144 of the U.S. Securities and Exchange Commission, as presently
in
effect, and understand the resale limitations imposed thereby and by the 1933
Act. You understand that the Company is under no obligation to register any
of
the Securities.
![xmobile logo](https://www.sec.gov/Archives/edgar/data/1319644/000114420407056865/xmobile.jpg)
(f) You
are
an “accredited investor,” as such term is defined in Rule 501 (the provisions of
which are known to such Lender) promulgated under the 1933 Act.
(g) At
no
time were you presented with or solicited by any publicly issued or circulated
newspaper, mail, radio, television or other form of general advertising or
solicitation in connection with the offer, sale and purchase of the
Securities.
3. We
further note your consent to us providing copies of this Letter Agreement to
potential PIPE investors as well as to NASDAQ and/or any other US governmental
authority.
4. By
your
signature below, you hereby agree to convert the amount set forth in Schedule
1
(the "Conversion
Amount")
of the
Loan provided under the June '06 Loan Agreement into IXI Stock pursuant to
this
Letter Agreement. It being understood that the provisions of this Letter
Agreement shall only apply to the Conversion Amount as specified in this Section
4.
5. This
Letter Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and
the same instrument. The parties agree that facsimile signatures shall be
binding.
6.
This
Letter Agreement constitutes an amendment of the June '06 Loan Agreement
only
with respect to the Conversion Amount specified in Section 4
above.
7. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed facsimile if sent during normal business hours
of the recipient, if not, then on the next business day of the recipient,
(c) three (3) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent the
party's address set forth in the header of this Letter Agreement or at such
other address as any party may designate by ten (10) days advance written notice
to the other parties hereto.
8. Any
term
of this Letter Agreement may be amended and the observance of any term of this
Letter Agreement may be waived (either generally or in a particular instance
and
either retroactively or prospectively), only with the written consent of all
the
parties hereto.
9. This
Letter Agreement shall be governed by and construed under the laws of the State
of Delaware, exclusive of the provisions thereof governing conflicts of
laws.
[IXI
Signature Page to Conversion Letter Agreement]
![xmobile logo](https://www.sec.gov/Archives/edgar/data/1319644/000114420407056865/xmobile.jpg)
IN
WITNESS WHEREOF, the parties have executed this Letter Agreement as of the
date
first written above.
SOUTHPOINT
MASTER FUND, LP
|
||
By: Southpoint
GP, LP, its general partner
|
||
By: Southpoint GP, LLC | ||
|
|
|
By: | ||
Name: Xxxx X. Xxxxx, XX |
||
Title: Manager |
[Southpoint
Signature Page to Conversion Letter Agreement]
![xmobile logo](https://www.sec.gov/Archives/edgar/data/1319644/000114420407056865/xmobile.jpg)
Schedule
1
Allocation
of IXI Stock
Name
of Entity
|
Amount
of Assumed Debt
|
|
Number
of shares of IXI Stock
|
|
Number
of Shares into which IXI Warrant is Exercisable
|
|||||
SOUTHPOINT
MASTER FUND, LP
|
$
|
15,840,000
|
4,400,000
|
2,640,000
|
||||||
Total
|
$
|
15,840,000
|
4,400,000
|
2,640,000
|
![xmobile logo](https://www.sec.gov/Archives/edgar/data/1319644/000114420407056865/xmobile.jpg)
Exhibit
A
Form
of
Warrant