SECONDAMENDMENT TO LETTER AGREEMENT

This Second Amendment to the Letter Agreement (this “Amendment”), is made and entered into as of December 24, 2008, by and among IXI MOBILE (R&D) LTD., an Israeli limited liability company, (the “Company”) IXI MOBILE, INC., a Delaware corporation (the “Parent Guarantor”), and SOUTHPOINT MASTER FUND LP (the “Lender").  The parties hereby agree as follows:

WHEREAS, the Company, the Parent Guarantor and the Lender have previously entered into that certain Letter Agreement dated as of March 28, 2007, and a First Amendment thereto dated as of March 28, 2008 (collectively the “Letter Agreement”); and

WHEREAS, The parties acknowledge that as of November 30, 2008, the principal plus accrued interest owed to the Lender totals $2,489,568 (“Loan Amount”).

WHEREAS, the parties now wish to further amend the Letter Agreement 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 Letter Agreement.

1.           Amendment of the Letter Agreement.

 

1.1            The following section shall be inserted into the Letter Agreement after section 1.4:

 

"1.5. Conversion.

(a)           Lender shall have the option to convert its respective outstanding Loan Amount and accrued and unpaid interest (the "Conversion Amount") pursuant to this Agreement, into such number of fully paid and non-assessable shares of the Parent Guarantor's Preferred Stock, par value $0.0001 per share (“IXI Stock”) as determined by dividing (A) Lender's Conversion Amount by (B) $34.50, appropriately adjusted for stock dividends, stock splits and other recapitalizations subsequent to the date of the Parent Guarantor's most recent publicly available securities law filing prior to the execution of this Agreement.

 

(b)           No fractional shares of Conversion Stock shall be issued upon an Optional Conversion.  If, upon an Optional Conversion, a fraction of a share would otherwise result, then in lieu of such fractional share the Parent Guarantor will pay the cash value of that fractional share.

 

(c)           An Optional Conversion shall be effectuated by Lender by furnishing the Parent Guarantor at any time, a notice indicating Lender’s Conversion Amount and otherwise evidencing Lender's intention to convert its respective Conversion Amount (the “Conversion Notice”).

 

(d)           The date on which the Conversion Participant delivers the Conversion Notice, duly executed, to the Parent Guarantor shall be deemed to be the date of Optional Conversion (the “Optional Conversion Date”) for the purposes of determining the Conversion Amount.  Facsimile delivery of the Conversion Notice shall be accepted by the Parent Guarantor.  Certificates representing the shares of Conversion Stock issuable upon an Optional Conversion, containing the restrictive legend then in effect, will be delivered to the Conversion Participant as soon as practicable after the Optional Conversion Date.

 

(e)           Any Conversion Amount converted into Conversion Stock will be deemed fully paid and all Obligations relating thereto will be deemed fully satisfied.  Upon issuance of the conversion stock, such shares shall be duly and validly issued."

 

2.           Consent to Transaction with Subscriber.  The Parent Guarantor and Runcom Technologies Ltd. (the "Subscriber") contemplate an investment whereby the Subscriber is investing in the Parent Guarantor in exchange for shares and warrants in the Parent Guarantor (the "Transaction"). Lender hereby consents to the Transaction pursuant to section 1.2 of the Letter Agreement.

 

3.           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.

 

4.           Miscellaneous.

 

4.1           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 Company, the Parent Guarantor, or the Lender is a party.

 

4.2           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.

 

4.3           Entire Agreement.  This Amendment, together with the Letter Agreement 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.

 

4.4           Governing Law; Forum.  This Amendment shall be governed in all respects by Section 8 of the Letter Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Second Amendment to Letter Agreement as of the date first written above.

 

IN WITNESS WHEREOF, the parties have executed this Second Amendment to Letter Agreement as of the date first written above.