Israel Technology Acquisition Corp. Givaat Shmuel Israel 54030
0
Xxxx Xxxxxx, 0xx Xxxxx
Givaat
Xxxxxx
Israel
54030
To:
Southpoint
Master Fund LP
c/o
Southpoint Capital Advisors
000
Xxxxx
Xxxxxx; Xxxxx 0000
Xxx
Xxxx,
XX, 00000
June
19,
2006
CERTIFICATION
1. The
merger agreement (“Merger
Agreement”),
by and
among Israel Technology Acquisition Corp. (“ITAC”),
IXI
Mobile, Inc. (“IXI”)
and
ITAC Acquisition Subsidiary Corp., a wholly owned Subsidiary of ITAC, dated
as
of February 28, 2006, has been duly and validly executed by ITAC and is a
binding obligation of ITAC as of the date hereof.
2. Pursuant
to Section 5.1 of the Merger Agreement, IXI is required to obtain ITAC's prior
approval to certain transactions, including, without limitation, the
transactions contemplated by that certain Loan Agreement between IXI Israel
Ltd.
(“IXI
Israel”),
a
wholly owned subsidiary of IXI, duly incorporated under the laws of the State
of
Israel, Southpoint Master Fund LP ("Southpoint")
and
IXI, in its capacity as guarantor thereunder, attached hereto as Exhibit
A
(collectively with all exhibits, schedules and ancillary documents thereto,
the
"Loan
Agreement").
Consequently, ITAC hereby certifies that its Board of Directors (including
any
required committee or subgroup of the Board of Directors of ITAC) has, as of
the
date of this Certification, unanimously granted its approval to IXI to enter
into the Loan Agreement. ITAC further certifies that its Board of Directors
(including any required committee or subgroup of the Board of Directors of
ITAC)
has, as of the date of this Certification, unanimously approved the execution
by
ITAC of this Certification.
3. Subject
to and conditioned upon the consummation of the ITAC/IXI Merger, ITAC hereby
certifies and agrees that: (i) all of IXI's and IXI Israel’s obligations,
agreements, undertakings, representations and warranties pursuant to the Loan
Agreement, including, without limitation, the obligations undertakings,
representations and warranties pursuant to Sections 3.2, 3.3, 3.4 and 7.1(a),
(b) and (g) (collectively, the "Assumed
Obligations"),
will
be assumed by ITAC in their entirety as of the Effective Time (as such term
is
defined in the Merger Agreement); (ii) as a result of ITAC's agreement in the
immediately preceding Section, Southpoint shall be entitled to, among other
things: (x) convert its Conversion Amount into shares of ITAC Stock pursuant
to
Section 3.2(a) and Sections 3.2(c) through (e) of the Loan Agreement, and (y)
receive a total amount of Six Hundred Thousand (600,000) shares of ITAC Stock
pursuant to Section 3.3(a) of the Loan Agreement and, subject to Southpoint
meeting the Conversion Inducement Threshold, ITAC Warrants pursuant to Section
3.3(b) of the Loan Agreement; (iii) prior to an Optional Conversion pursuant
to
Section 3.2(a) of the Loan Agreement and prior to the issuance of ITAC Stock
and/or ITAC Warrants pursuant to Section 3.3 of the Loan Agreement, ITAC shall
take any and all actions necessary to authorize and reserve a sufficient number
of shares of ITAC Stock to effect such Optional Conversion and such issuance
of
equity securities; (iv) any shares of ITAC Stock or ITAC Warrants issuable
to
Southpoint following the consummation of the ITAC/IXI Merger and the assumption
by ITAC of the Assumed Obligations, will be issued to Southpoint as soon as
practicable following the Effective Time of the ITAC/IXI Merger; (v) upon
delivery to Southpoint of any shares of ITAC Stock pursuant to the Loan
Agreement, such shares of ITAC Stock shall be duly authorized, validly issued,
fully paid and non-assessable; (vi) ITAC shall provide Southpoint with
representations and warranties substantially similar to the representations
and
warranties provided by ITAC to IXI in Article IV of the Merger Agreement; and
(vii) subject to Southpoint’s execution of a lock-up letter in substantially the
same form as those executed by IXI shareholders in connection with the Merger
Agreement, ITAC shall grant to Southpoint registration rights with respect
to
all shares of ITAC Stock which Southpoint may receive pursuant to the Loan
Agreement and this Certification; such registration rights being equivalent
to
those registration rights granted to significant shareholders of IXI in
connection with the Merger Agreement.
4. ITAC
hereby represents and warrants to Southpoint as of the date hereof as
follows:
4.1 Authorization;
Binding Obligations.
ITAC has
all requisite corporate power and authority to execute and deliver this
Certification. Subject to the consummation of the ITAC/IXI Merger, ITAC will
have the corporate power and authority to perform its obligations pursuant
to
this Certification, including, but not limited to, the issuance to Southpoint
of
the ITAC Stock and the ITAC Warrants pursuant to the Loan Agreement and
paragraph 3 hereof. All corporate action on the part of ITAC, its officers,
directors and stockholders necessary for the authorization of this Certification
have been taken. Subject to the consummation of the ITAC/IXI Merger, all
corporate action on the part of ITAC, its officers, directors and stockholders
necessary for the performance of ITAC’s obligations hereunder, including, but
not limited to, the issuance to Southpoint of the ITAC Stock and the ITAC
Warrants will be taken in a timely manner.
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4.2
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Conflict;
Required Filings and
Consents.
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(a) The
Loan
Agreement, after giving effect to this Certification and the grant of approval
by the Board of Directors of ITAC to IXI to enter into the Loan Agreement,
does
not conflict with or give rise to any right of termination under the Merger
Agreement.
(b) The
execution and delivery of this Certification by ITAC do not, and, subject to
the
consummation of the ITAC/IXI Merger, the performance of ITAC's obligations
pursuant to this Certification shall not: (i) conflict with or violate ITAC’s
charter documents, or (ii) result in any breach of or constitute a default
(or
an event that with notice or lapse of time or both would become a default)
under, or materially impair ITAC’s rights or alter the rights or obligations of
any third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of ITAC pursuant to, any ITAC
contracts (as defined below), except, with respect to clause (ii), for any
such
conflicts, violations, breaches, defaults or other occurrences that would not,
individually and in the aggregate, have a Material Adverse Effect on
ITAC.
(c) No
consent, approval or authorization of, or declaration to or filing with, any
Person is required, or will be required, for the valid authorization, execution
and delivery by ITAC of this Certification or, subject to the consummation
of
the ITAC/IXI Merger, for the valid authorization, issuance and delivery to
Southpoint of the ITAC Stock and the ITAC Warrants, other than those consents,
approvals, authorizations, declarations or filings which have been obtained
or
made, as the case may be or which will be obtained and made in a timely
manner.
4.3 Representations
and Warranties in Connection with the ITAC/IXI Merger.
(a) ITAC
hereby confirms that (i) each representation and warranty of ITAC contained
in
the Merger Agreement that is qualified as to materiality was true and correct
as
of the date of the Merger Agreement and (ii) each representation and warranty
of
ITAC contained in the Merger Agreement that is not qualified as to materiality
was true and correct in all material respects as of the date of the Merger
Agreement.
(b) ITAC
hereby confirms that as of the date hereof, no event has occurred since the
date
of the Merger Agreement which, individually or in the aggregate, would cause
any
representation and warranty of ITAC contained in the Merger Agreement to be
incorrect in any material respect.
(c) Prior
to
the consummation of the ITAC/IX Merger, IXI is required to receive an opinion
of
Xxxxxxxx Xxxxxx, counsel for ITAC, containing opinions customary for similarly
structured transactions, including the authority of ITAC to enter into the
transactions called for by the Merger Agreement and the issuance of the
securities provided for in the Merger Agreement.
5. Capitalized
terms not otherwise defined herein shall have the meanings assigned them in
the
Loan Agreement.
6. Southpoint
has read ITAC's final prospectus, dated July 12, 2005, and understands that
ITAC
has established a trust fund ("Trust
Fund"),
in an
amount of $33,812,870 as of March 31, 2006, for the benefit of ITAC's public
stockholders and that ITAC may disburse monies from the Trust Fund only (i)
to
its public stockholders in the event they elect to convert their shares or
upon
ITAC's liquidation or (ii) to ITAC after it consummates a business combination.
For and in consideration of ITAC providing the foregoing Certification to
Southpoint, Southpoint, by accepting this Certification, hereby agrees that
it
does not have any right, title, interest or claim of any kind in or to any
monies in the Trust Fund ("Claim")
and
waives any Claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with ITAC and will not seek recourse
against the Trust Fund for any reason whatsoever. For the avoidance of doubt,
this paragraph 7 shall not in any event be construed to constitute a waiver
of
any claim by Southpoint against ITAC in the event that the ITAC/IXI Merger
is
consummated. This provision shall survive termination of this Certification
for
any reason whatsoever.
7. This
Certification is provided as an inducement for the Lenders to enter into the
Loan Agreement.
8. This
Certification shall be governed by and construed in accordance with the laws
of
Delaware without regard to the conflicts of laws provisions
thereof.
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By:
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/s/
Xxxxxx Xxxxxxx
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Name:
Xxxxxx Xxxxxxx
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Title:
Chairman and Chief Executive Officer
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Accepted
as of the date hereof:
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SOUTHPOINT
MASTER FUND, LP
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By:
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Southpoint
GP, LP, its general partner
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By:
Southpoint GP, LLC
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By:
/s/
Xxxxxx X. Xxxxx
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Name:
Xxxxxx X. Xxxxx
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Title:
Manager
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By:
/s/
Xxxx X. Xxxxx, XX
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Name:
Xxxx X. Xxxxx, XX
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Title:
Manager
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