Warrant

1.

 

1.1.

"Warrant Shares" means the Shares of Preferred Stock purchasable hereunder or any other securities which, in accordance with the provisions hereof, may be issued by the Company in substitution therefor.

 

1.2.

"Exercise Price" means the price of thirty-four dollars and fifty cents ($34.50) payable hereunder for each Warrant Share, as adjusted in the manner set forth hereinafter.

 

1.3.

"Warrants" means this Warrant and all warrants hereafter issued in exchange or substitution for this Warrant.

2.

 

2.1.

This Warrant may be exercised in whole at any time, or in part from time to time, beginning on the Effective Date until the Expiration Date (the "Warrant Period"), by the surrender of this Warrant (with a duly executed exercise form in the form attached hereto as Exhibit A), at the principal office of the Company, set forth above, together with proper payment of the Exercise Price multiplied by the number of Warrant Shares for which the Warrant is being exercised. Payment for Warrant Shares shall be made by certified or official bank check or checks, payable to the order of the Company or by wire transfer to an account to be designated in writing by the Company. Payments shall be made in United States dollars.

 

2.2.

The Holder of the Warrant, by its acceptance hereof, covenants and agrees that this Warrant is being acquired as an investment and not with a view to the distribution hereof and such Holder further covenants and agrees that it will not sell, transfer, pledge, assign, or hypothecate the Warrant or the Warrant Shares unless there is an effective registration statement under the Securities Act of 1933 covering the Warrant or the Warrant Shares, or the Holder of the Warrant and/or the Warrant Shares receives an opinion of counsel satisfactory to the Company stating that such sale, transfer, pledge, assignment, or hypothecation is exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 and the qualification requirements under applicable law.

 

2.3.

If this Warrant should be exercised in part, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the remainder of the Warrant Shares purchasable hereunder. The Company shall pay any and all expenses, taxes and other charges that may be payable in connection with the issuance of the Warrant Shares and the preparation and delivery of share certificates pursuant to this Section 2 in the name of the Holder (including without limitation, if applicable stamp duty), and to the extent required, the execution and delivery of a new Warrant, provided, however, that the Company shall only be required to pay taxes which are due as a direct result of the issuance of the Warrant Shares or other securities, properties or rights underlying such Warrants (such as the applicable stamp duty), and will not be required to pay any tax which may be (i) due as a result of the specific identity of the Holder or (ii) payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Holder.

 

2.4.

No fractions of Shares of Preferred Stock shall be issued in connection with the exercise of this Warrant, and the number of shares of Preferred Stock issued shall be rounded up or down to the nearest whole number.

 

2.5.

Upon the issuance of the Preferred Stock resulting from the exercise in whole or in part of this Warrant, the Company shall deliver to the Holder an irrevocable letter of instructions to the Company’s transfer agent to issue as soon as is reasonably practicable to the Holder share certificates reflecting the Warrant Shares exercised thereby, together with any and all other documents required for the issuance of such certificates by the transfer agent.

3.

4.

 

4.1.

Subdivision and Combination. In case the Company shall at any time subdivide or combine the outstanding Shares of Preferred Stock, the Exercise Price shall forthwith be proportionately decreased in the case of subdivision or increased in the case of combination.

 

4.2.

Stock Dividends and Distributions. In case the Company shall pay a dividend on, or make a distribution of, Shares of Preferred Stock or of the Company's share capital convertible into Shares of Preferred Stock, the Exercise Price shall forthwith be adjusted, from and after the date of determination of stockholders entitled to receive such dividend or distribution, to that price determined by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (i) the numerator of which shall be the total number of shares of Preferred Stock outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of shares of Preferred Stock outstanding immediately after such dividend or distribution.  An adjustment pursuant to this Section 4.3 shall be made as of the record date for the subject stock dividend or distribution.

 

4.3.

Adjustment in Number of Securities. Upon each adjustment of the Exercise Price pursuant to the provisions of Sections 4.1 and 4.2, the number of Preferred Stock issuable upon the exercise of each Warrant shall be adjusted to the nearest full amount by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of Shares of Preferred Stock issuable upon exercise of the Warrants immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

 

4.4.

No Adjustment of Exercise Price in Certain Cases. No adjustment of the Exercise Price shall be made if the amount of said adjustment shall be less than 2 cents ($0.02) per each Share of Preferred Stock, provided, however, that in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment so carried forward, shall amount to at least 2 cents ($0.02) per each Share of Preferred Stock.

 

4.5.

Merger or Consolidation. In case of any consolidation of the Company with or merger of the Company with, or merger of the Company into (other than a merger which does not result in any reclassification or change of the outstanding Shares of Preferred Stock and Common Stock), the Company shall cause the corporation formed by such consolidation or merger or surviving such merger to execute and deliver to the Holder a new warrant agreement in exchange for this Warrant, providing that the Holder of the Warrant then outstanding or to be outstanding shall have the right thereafter (until the expiration of such Warrant) to receive, upon exercise of such Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or merger, by a holder of the number of Shares of Preferred Stock of the Company for which such Warrant might have been exercised immediately prior to such consolidation or merger. Such supplemental warrant agreement shall provide for adjustments, which shall be identical to the adjustments provided in this Section 4. The provisions of this Section 4.5 shall similarly apply to successive consolidations or mergers.

5.

 

5.1.

the Company shall take a record of the holders of its Shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company;

 

5.2.

the Company shall offer to all the holders of its Shares of Preferred Stock or Common Stock any additional shares of the share capital of the Company or securities convertible into or exchangeable for shares of the share capital of the Company, or any option, right or warrant to subscribe therefor; or

 

5.3.

a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed;

6.

 

6.1.

The Holder may, sell, transfer, assign, encumber, pledge or otherwise dispose or undertake to dispose of the Warrant.

 

6.2.

Unless registered, the Warrant Shares issued upon exercise of the Warrants shall be subject to a stop transfer order and the certificate or certificates evidencing such Warrant Shares shall bear legend substantially similar to the following:

7.

8.

9.

10.

11.

1.

The undersigned hereby irrevocably elects to exercise the attached Warrant No. W-[    ] to the extent of ___________________ shares of Preferred Stock of IXI Mobile, Inc., all in accordance with Section 2.1 of the Warrant.

2.

Payment to the Company of the total Exercise Price for such shares has been made simultaneously with the delivery of this exercise of the Warrant.

3.

The undersigned requests that certificates for such Preferred Stock be registered in the name of ____________________ whose address is ____________________ and that such certificates be delivered to whose address is _____________________________.