8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) March 28, 2007

VYYO INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	000-30189	94-3241270
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
6625 The Corners Parkway, Suite 100, Norcross, Georgia		30092
(Address of principal executive offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code  (678) 282-8000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01               Entry into a Material Definitive Agreement.

On March 28, 2007, Vyyo Inc. (the “Company”) announced it entered into a Securities Purchase Agreement (the “Purchase Agreement”) for the private placement of $35.0 million of the Company’s 5% unsecured Convertible Notes due 2012 (the “2007 Convertible Note”), initially convertible into 3.5 million shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) to Goldman, Sachs & Co., of which $17.5 million will be used to redeem in full the Company’s outstanding 10% Convertible Subordinated Notes due March 20, 2011 (the “2006 Convertible Note”) and 9.5% Senior Secured Notes due March 20, 2011 (the “2006 Senior Note”).  The transaction is expected to close on or before March 31, 2007, subject to customary closing conditions.

The 2007 Convertible Note is convertible at the holder’s option into shares of the Company’s Common Stock at an conversion price of $10.00 per share, provided, that in no event may the holder own of record more than 14.8% of the outstanding shares of Common Stock.  In the event of a Fundamental Change (as defined in the 2007 Convertible Note), the holder may, at its option, require the Company to redeem all or any portion of the 2007 Convertible Note at a price equal to 101% of the principal amount, plus all accrued and unpaid interest, if any, and subject to specified conditions, may be entitled to a cash “make-whole” premium, calculated in accordance with the terms of the Convertible Note.

Under the Amended and Restated Registration Rights Agreement executed in connection with the 2007 Convertible Note, the Company is obligated to file a registration statement on Form S-3 registering the resale of the shares issuable upon conversion of the Convertible Note for an initial two-year period, subject to extension under specified circumstances.

On March 28, 2007, the Company issued a press release announcing the transaction, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K.

The foregoing description is qualified in its entirety by the Purchase Agreement, the 2007 Convertible Note, the Amended and Restated Registration Rights Agreement, the Amended and Restated 2006 Senior Secured Note and the Amended and Restated 2006 Convertible Note, each of which is filed as an exhibit to this Current Report on Form 8-K and incorporated herein by reference.

THE CONVERTIBLE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On March 28, 2007, the Company announced it had entered into a Securities Purchase Agreement for the private placement of $35.0 million of 2007 Convertible Notes.  A detailed description of the private placement appears under Item 1.01 of this Current Report on Form 8-K and is incorporated herein by reference.

Item 3.02.Unregistered Sales of Equity Securities.

On March 28, 2007, the Company announced it had entered into a Securities Purchase Agreement for the private placement of $35.0 million of 2007 Convertible Notes.  The issuance and sale of the securities, to be sold to a single investor, is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(2) of the Securities Act, and/or the “safe harbor” provisions of Regulation D promulgated thereunder.  A detailed description of the private placement appears under Item 1.01 of this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01.              Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit Number	Description
10.1	Securities Purchase Agreement, dated March 28, 2007
10.2	Form of $35,000,000 5% Convertible Note
10.3	Amended and Restated Registration Rights Agreement
10.4	Form of Amended and Restated Senior Secured Note
10.5	Form of Amended and Restated Convertible Note
99.1	Press Release, dated March 28, 2007

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VYYO INC.
Date: March 28, 2007	By:	/s/ Tashia L. Rivard
		Tashia L. Rivard
		General Counsel and Corporate Secretary

EXHIBIT INDEX

Exhibit Number	Description
10.1	Securities Purchase Agreement, dated March 28, 2007
10.2	Form of $35,000,000 5% Convertible Note
10.3	Amended and Restated Registration Rights Agreement
10.4	Form of Amended and Restated Senior Secured Note
10.5	Form of Amended and Restated Convertible Note
99.1	Press Release, dated March 28, 2007

EX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), is dated as of March 28, 2007, by and among Vyyo Inc., a Delaware corporation (the “Company”), and the investors listed on the Schedule of Investors attached hereto as Exhibit A (individually, an “Investor” and collectively, the “Investors”).

WHEREAS:

A.            The Company and each Investor is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act.

B.            Each Investor, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement that aggregate principal amount of Convertible Notes, in substantially the form attached hereto as Exhibit B (the “Convertible Notes”), set forth opposite such Investor’s name on the Schedule of Investors (as converted, collectively, the “Conversion Shares”).

C.            The holder of all of the Company’s outstanding Senior Secured Note, dated March 23, 2006, in the aggregate principal amount of $7,500,000 (the “2006 Senior Secured Note”) wishes to amend and restate such 2006 Senior Secured Note in the form attached hereto as Exhibit C hereto.

D.            The Convertible Notes and the Conversion Shares issued pursuant to this Agreement are collectively referred to herein as the “Securities.”

E.             Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering an Amended and Restated Registration Rights Agreement, substantially in the form attached hereto as Exhibit D (collectively with the Registration Rights Agreement dated March 23, 2006 by and among the Company and the party thereto, the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration rights with respect to the Conversion Shares under the Securities Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows:

ARTICLE I
DEFINITIONS

1.1 Definitions.  In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act.

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

“Closing Date” means the date and time of the Closing and shall be 10:00 a.m., New York City time, on March 28, 2007 (or such other date and time as is mutually agreed to by the Company and each Investor).

“Common Stock” means shares of the Company’s common stock, par value $0.0001 per share.

“Convertible Notes” has the meaning set forth in the Preamble.

“Conversion Shares” has the meaning set forth in the Preamble.

“Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or Nasdaq Capital Market.

“Insignificant Subsidiaries” means Vyyo Brasil Ltd. and SHDIP Ltd.

“Intellectual Property Rights” has the meaning set forth in Section 3.1(j).

“Investor Counsel” means Thelen Reid Brown Raysman & Steiner LLP, counsel to the Investors.

“Knowledge,” including the phrase “to the Company’s knowledge,” and words of similar import shall mean that which Davidi Gilo, Arik Levi, Avner Kol, and Tashia Rivard know or should have known using the exercise of reasonable due diligence.

“Lien” means any lien, charge, claim, security interest, encumbrance, right of first refusal or other restriction.

“Material Adverse Effect” has the meaning set forth in Section 3.1(a).

“Material Permits” has the meaning set forth in Section 3.1(z).

“Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, or joint stock company.

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“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened in writing.

“Registration Rights Agreement” has the meaning set forth in the Preamble.

“Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424, respectively, promulgated by the SEC pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

“SEC” has the meaning set forth in the Preamble.

“SEC Reports” has the meaning set forth in Section 3.1(h).

“Securities” has the meaning set forth in the Preamble.

“Significant Subsidiary” has the meaning assigned thereto in Rule 1-02(w) of Regulation S-X, including, but not limited to Vyyo Ltd., a corporation duly incorporated and existing under the laws of the state of Israel,  Xtend Networks Ltd., a corporation duly incorporated and existing under the laws of the state of Israel and Xtend Networks, Inc., a Delaware corporation.

“Subsidiary” means any Person in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest.

“Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, (b) if the Common Stock is not then listed or quoted and traded on any Eligible Market, then a day on which trading occurs on the Nasdaq Global Market (or any successor thereto), or (c) if trading ceases to occur on the Nasdaq Global Market (or any successor thereto), any Business Day.

“Trading Market” means the Nasdaq Global Market or any other Eligible Market, or any national securities exchange, market or trading or quotation facility on which the Common Stock is then listed or quoted.

“Transaction” means the transaction contemplated by the Transaction Documents.

“Transaction Documents” means this Agreement, the schedules and exhibits attached hereto,  the Convertible Notes and the Registration Rights Agreement.

ARTICLE II
PURCHASE AND SALE

2.1 Closing.

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(a)   Subject to the terms and conditions set forth in Sections 5.1(a) and 5.2 herein, at the Closing the Company shall issue and sell to each Investor, and each Investor shall, severally and not jointly, purchase from the Company, such number of Convertible Notes set forth opposite such Investor’s name on Exhibit A hereto under the heading “Convertible Notes.”  The date and time of the Closing and shall be 10:00 a.m., New York City time, on the Closing Date.  The Closing shall take place at the offices of Investor Counsel.

(b)   At the Closing, each Investor shall deliver or cause to be delivered to the Company the purchase price set forth opposite such Investor’s name on Exhibit A hereto under the heading “Purchase Price” in United States dollars and in immediately available funds, by wire transfer to an account designated in writing to such Investor by the Company for such purpose.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1   Representations and Warranties of the Company.  The Company hereby represents and warrants to each Investor that, except as set forth in the SEC Reports (as hereinafter defined) or in the Schedule of Exceptions attached as Exhibit G to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date hereof.  The Schedule of Exceptions shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 3, and the disclosures in any section or subsection of the Schedule of Exceptions shall qualify other sections and subsections in this Section 2 only to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections:

(a)   Organization and Qualification.  Each of the Company and the Significant Subsidiaries is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite legal authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Significant Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Significant Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to individually or in the aggregate, (i) materially and adversely affect the legality, validity or enforceability of any Transaction Document, (ii) have or result in a material adverse effect on the results of operations, assets, business or financial condition of the Company and the Significant Subsidiaries, taken as a whole on a consolidated basis or (iii) materially and adversely impair the Company’s ability to perform fully on a timely basis its obligations under any of the Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”).

(b)   Subsidiaries.  The Company has no direct or indirect Subsidiaries.  The Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary

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free and clear of any Lien and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights.  None of the Insignificant Subsidiaries (i) carries on any substantive business operations or activities or (ii) has assets or liabilities in excess of $50,000.

(c)   Authorization; Enforcement.  The Company has the requisite corporate authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents to which it is a party by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the Company, its Board of Directors or its stockholders.  Each of the Transaction Documents to which it is a party has been (or upon delivery will be) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors rights generally, and (ii) the effect of rules of law governing the availability of specific performance and other equitable remedies.

(d)   No Conflicts.  The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby do not, and will not, (i) conflict with or violate any provision of the Company’s or any Significant Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Significant Subsidiary debt or otherwise) or other understanding to which the Company or any Significant Subsidiary is a party or by which any property or asset of the Company or any Significant Subsidiary is bound, or affected, except to the extent that such conflict, default, termination, amendment, acceleration or cancellation right would not reasonably be expected to have a Material Adverse Effect or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Significant Subsidiary is subject (including federal and state securities laws and regulations and the rules and regulations of any self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company or a Significant Subsidiary is bound or affected, except to the extent that such violation would not reasonably be expected to have a Material Adverse Effect.

(e)   Authorization of Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens and shall not be subject to preemptive or similar rights of stockholders.  Upon issuance or conversion in accordance with the Convertible Notes, the Conversion Shares will be validly issued, fully paid and nonassessable and free from all preemptive

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or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Conversion Shares.  As of the Closing, the Company shall have reserved from its duly authorized capital stock the number of Conversion Shares issuable upon conversion of the Convertible Notes (without taking into account any limitations on the conversion, or redemption of the Convertible Notes set forth in the Convertible Notes).

(f)    Capitalization.  The aggregate number of shares and type of all authorized, issued and outstanding classes of capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) is set forth in Schedule 3.1(f) hereto.  All outstanding shares of capital stock are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance with Section 5 of the Securities Act.  The Company has not issued any other options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or entered into any agreement giving any Person any right to subscribe for or acquire, any shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock.  Except for customary adjustments as a result of stock dividends, stock splits, combinations of shares, reorganizations, recapitalizations, reclassifications or other similar events, there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) and the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of securities to adjust the exercise, conversion, exchange or reset price under such securities.  To the knowledge of the Company, no Person or group of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by agreement with or by obligation binding upon the Company, beneficial ownership of in excess of 5% of the outstanding Common Stock, ignoring for such purposes any limitation on the number of shares of Common Stock that may be owned at any single time.

(g)   Consents.  None of the Company nor any of its Significant Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof.  All consents, authorizations, orders, filings and registrations (which the Company is required to obtain pursuant to the preceding sentence) have been obtained or effected, or will have been obtained or effected, on or prior to the Closing Date, except to the extent that failure to obtain such consent would not be expected to result in a Material Adverse Effect, and the Company and its Significant Subsidiaries are unaware of any facts or circumstances that might prevent the Company from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence.  The Company is not in violation of the listing requirements of the Trading Market.

(h)   SEC Reports; Financial Statements.  The Company has filed all reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials (together with any materials filed by the Company under the Exchange Act, whether or not required) being collectively referred to

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herein as the “SEC Reports” and, together with this Agreement and the Schedules to this Agreement, the “Disclosure Materials”) on a timely basis.  As of the date hereof, the Company is not aware of any event occurring on or prior to the Closing Date (other than the transactions contemplated by the Transaction Documents) that requires the filing of a Form 8-K after the Closing.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended except as may be indicated in the notes thereto and except, in the case of interim statements, for the absence of footnotes and as permitted by Form 10-Q, subject, in the case of unaudited statements, to normal, year-end audit adjustments.  To the Company’s knowledge, the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, shall be prepared assuming the Company will continue as a going concern and shall not include a “going concern” qualification in the opinion issued by the Company’s accountants.

(i)    No Adverse Changes.  Since the date of the latest unaudited financial statements for the quarter ended September 30, 2006, (i) there has been no event, occurrence or development that, individually or in the aggregate, has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders, in their capacities as such, or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (except for repurchases by the Company of shares of capital stock held by employees, officers, directors, or consultants pursuant to an option of the Company to repurchase such shares upon the termination of employment or services) and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock-based plans.

(j)    Intellectual Property.  To the Company’s knowledge, the Company and the Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, reexams, reissues, divisional continuations, or any patent or application claiming priority therefrom, including any patent that may be issued as a result of an interference action, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses,

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inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property Rights”) necessary for the conduct of their respective businesses described in the SEC Reports, except where such violations or infringements would not reasonably be expected to result in a Material Adverse Effect, (a) there are no rights of third parties to any such Intellectual Property Rights; (b) to the Company’s knowledge, there is no infringement by third parties of any such Intellectual Property Rights; (c) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s and its Significant Subsidiaries’ rights in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (d) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights and (e) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company and its subsidiaries infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable basis for any such claim.  All of the licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property Rights which are necessary for the conduct of the Company’s business as currently conducted to which the Company or the Significant Subsidiary is a party or by which any of their respective assets are bound (other than generally commercially available, non-custom, off the shelf software application programs having a retail acquisition price of less than $25,000 per license) (collectively, “License Agreements”) are valid and binding obligations of the Company or the Significant Subsidiaries, as the case may be and, to the Company’s knowledge, the other parties thereto, enforceable in accordance with their respective terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and there exists no event or condition which will result in a material violation or breach of or constitute (with or without due notice or lapse of time or both) a default by the Company under such License Agreements.

(k)   Tax Matters.  The Company and each Significant Subsidiary (i) has timely prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  To the Company’s knowledge, there are no unpaid taxes in any material amount claimed to be past due by the taxing authority of any jurisdiction, and the Company knows of no basis for such claim.  The Company has not waived or extended any statute of limitations at the request of any taxing authority.  There are no outstanding tax sharing agreements or other such arrangements between the Company and any other corporation or entity and the Company is not presently undergoing any audit by a taxing authority.

(l)    Absence of Litigation.  Except as disclosed in the Company’s SEC Reports, there is no action, suit, claim, or proceeding, or, to the Company’s knowledge, inquiry or investigation, before or by any court, public board, government agency, self-regulatory organization or body

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pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Significant Subsidiaries that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(m)  Environmental Matters.  To the Company’s knowledge, the Company and each Significant Subsidiary (i) is not in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) does not own or operate any real property contaminated with any substance in violation of any Environmental Laws, (iii) is not liable for any off-site disposal or contamination pursuant to any Environmental Laws and (iv) is not subject to any claim relating to any Environmental Laws; which violation, contamination, liability or claim has had or would reasonably be expected to have a Material Adverse Effect, individually or in the aggregate; and there is no pending or, to the Company’s knowledge, threatened investigation that might lead to such a claim.

(n)   Compliance.  None of the Company nor any Significant Subsidiary, except in each case as would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect, (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Significant Subsidiary under), nor has the Company or any Significant Subsidiary received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority.

(o)   Title to Assets.  The Company and the Significant Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Significant Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Significant Subsidiaries, in each case free and clear of all Liens, except for Liens that do not, individually or in the aggregate, have or would reasonably be expected to result in a Material Adverse Effect.  Any real property and facilities held under lease by the Company and the Significant Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Significant Subsidiaries are in material compliance.

(p)   No General Solicitation; Placement Agent’s Fees.  Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.  The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by any Investor or its investment advisor) relating to or arising out of the issuance of the Securities pursuant to this Agreement.  The Company shall pay, and hold each Investor harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any such claim for fees arising out of the issuance of the Securities pursuant to this Agreement.

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(q)   Private Placement.  None of the Company, its Subsidiaries, any of their Affiliates, or any Person acting on their behalf has, directly or indirectly, at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market.  The Company is not required to be registered as, a United States real property holding corporation within the meaning of the Foreign Investment in Real Property Tax Act of 1980.

(r)    Form S-3 Eligibility.  The Company is eligible to register the Conversion Shares for resale by the Investors using Form S-3 promulgated under the Securities Act.

(s)   Listing and Maintenance Requirements.  The Company has not, in the twelve months preceding the date hereof, received notice (written or oral) from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.  The Company is in compliance with all such listing and maintenance requirements.

(t)    Registration Rights.  The Company has not granted or agreed to grant to any Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the SEC or any other governmental authority that have not been satisfied or waived.

(u)   Application of Takeover Protections.  There is no control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s charter documents or the laws of its state of incorporation that is or would become applicable to any of the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, as a result of the Company’s issuance of the Securities and the Investors’ ownership of the Securities.

(v)   Disclosure.  Neither this Agreement, nor any of the Transaction Documents, certificates or other documents made or delivered at the Closing, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading.

(w)  Acknowledgment Regarding Investors’ Purchase of Securities.  Based upon the assumption that the transactions contemplated by this Agreement are consummated in all material respects in conformity with the Transaction Documents, the Company acknowledges and agrees that each of the Investors is acting solely in the capacity of an arm’s length purchaser with respect to the

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Transaction Documents and the transactions contemplated hereby and thereby.  The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investors’ purchase of the Securities.  The Company further represents to each Investor that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

(x)    Insurance.  The Company and the Significant Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses and location in which the Company and the Significant Subsidiaries are engaged.  Neither the Company nor any Significant Subsidiary has any knowledge that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(y)   ERISA.  As of the Closing Date, neither the Company nor any of its Significant Subsidiaries has any obligation or any liability in respect of any employee pension benefit plan subject to the provisions of Title IV of ERISA or Section 412 of the Internal Revenue Code of 1986 or Section 302 of ERISA, and in respect of which the Company or any Significant Subsidiary (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA or any multiemployer plan as defined in Section 4001(a)(3) of ERISA.

(z)    Regulatory Permits.  The Company and the Significant Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits does not, individually or in the aggregate, have or result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Significant Subsidiary has received any written notice of proceedings relating to the revocation or modification of any Material Permit.

(aa) Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports made on or prior to the date hereof, none of the officers or directors of the Company and, to the Company’s knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Significant Subsidiary or to a presently contemplated transaction (other than for ordinary course services as employees, officers and directors) that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.

(bb) Questionable Payments.  Neither the Company nor any Significant Subsidiary, nor, to the Company’s knowledge, directors, officers, employees, agents or other Persons acting on behalf of the Company or any Significant Subsidiary has, in the course of its actions for, or on behalf

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of, the Company:  (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity; (ii) made any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees from corporate funds; (iii) violated in any respect any provision of the Foreign Corrupt Practices Act of 1977, as amended or (iv) made any other unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee which, in the aggregate of clauses (i) through (iv) would have a Material Adverse Effect.

(cc) Internal Accounting Controls.  The Company and the Significant Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(dd) Sarbanes-Oxley Act.  The Company is in compliance with applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by the SEC thereunder, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect.

(ee) Investment Company.  Neither the Company nor any of its Significant Subsidiaries is (i) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (ii) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

(ff)           Margin Stock.  Neither the Company nor any of the Significant Subsidiaries is engaged principally, or as one of their important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock (as such term is defined in Regulation U).  Immediately before and after giving effect to the sale of the Convertible Notes, Margin Stock will constitute less than 25% of the Company’s assets as determined in accordance with Regulation U.  No part of the proceeds of the Convertible Notes will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase, acquire or carry any Margin Stock or for any purpose that entails a violation of, or that is inconsistent with, the provisions of the regulations of the Board of Governors of the Federal Reserve System of the United States of America, including Regulation T, U or X.

3.2   Representations and Warranties of the Investors.  Each Investor hereby, as to itself only and for no other Investor, represents and warrants to the Company as follows:

(a)   Organization; Authority.  Such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and

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thereunder.  The purchase by such Investor of the Securities hereunder has been duly authorized by all necessary action on the part of such Investor.  This Agreement has been duly executed and delivered by such Investor and constitutes the valid and binding obligation of such Investor, enforceable against it in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors rights generally and (ii) the effect of rules of law governing the availability of specific performance and other equitable remedies.

(b)   No Public Sale or Distribution; Investment Intent.  Such Investor is acquiring the Securities in the ordinary course of business for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, and such Investor does not have a present arrangement to effect any distribution of the Securities to or through any person or entity.

(c)   Investor Status.  At the time such Investor was offered the Securities, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

4.1   Transfer Restrictions.

(a)   The Investors covenant that the Securities will only be disposed of pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act, and in compliance with any applicable state securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or to the Company, the Company may require the transferor to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration under the Securities Act.  Notwithstanding the foregoing, the Company hereby consents to and agrees to register on the books of the Company and with its transfer agent, without any such legal opinion, except to the extent that the transfer agent requests such legal opinion, any transfer of Securities by an Investor to an Affiliate of such Investor, provided that the transferee makes customary representations to Company and certifies to the Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act and provided that such Affiliate does not request any removal of any existing legends on any certificate evidencing the Securities.

(b)   Such Investor understands that the instruments representing the Convertible Notes and the stock certificates representing the Conversion Shares until such time as the resale of the Conversion Shares have been registered and sold under the Securities Act, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE

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CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR (B) IF REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Securities have been registered and sold pursuant to an effective registration statement under the Securities Act or (ii) in connection with a sale, assignment or other transfer, the Company reasonably requests that such holder provide the Company with opinion of counsel reasonably acceptable to the Company that the sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the Securities Act.

4.2   Furnishing of Information.  So long as any Investor owns any Securities, the Company covenants to use commercially reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act.  Upon the reasonable request of any Investor, the Company shall deliver to such Investor a written certification of a duly authorized officer as to whether it has complied with the preceding sentence.  The Company further covenants that it will take such further action as any holder of Securities may reasonably request to satisfy the provisions of this Section 4.2.

4.3   Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate thereof shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Investors or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market.

4.4   Reservation of Securities.  The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents.  In the event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy its obligations in full under the Transaction Documents, the Company shall promptly take such actions as may be required to increase the number of authorized shares.

4.5   Securities Laws Disclosure; Publicity.  The Company shall, on or before 8:30 a.m., New York time, on the first Trading Day following execution of this Agreement, issue a press release acceptable to the Investors disclosing all material terms of the transactions contemplated hereby.  The Company shall file a Current Report on Form 8-K with the SEC (the “8-K Filing”) within four (4) Business Days of execution of this Agreement describing the terms of the transactions

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contemplated by the Transaction Documents and including as exhibits to such Current Report on Form 8-K this Agreement in the form required by the Exchange Act.  Thereafter, the Company shall timely file any filings and notices required by the SEC or applicable law with respect to the transactions contemplated hereby and provide copies thereof to the Investors promptly after filing.  Investors Company shall, at least two Trading Days prior to the filing or dissemination of any disclosure required by this paragraph, provide a copy thereof to the Investors for their review.  The Company and the Investors shall consult with each other in issuing any press releases or otherwise making public statements or filings and other communications with the SEC or any regulatory agency or Trading Market with respect to the transactions contemplated hereby, and neither party shall issue any such press release or otherwise make any such public statement, filing or other communication without the prior consent of the other, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement, filing or other communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Investor, or include the name of any Investor in any press release without the prior written consent of such Investor.  Except as required under the Transaction Documents, the Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents not to, provide any Investor with any material nonpublic information regarding the Company or any of its Subsidiaries from and after the issuance of the above referenced press release without the express written consent of such Investor.

4.6   Use of Proceeds.  Within two Business Days of the Closing, the Company shall use the net proceeds from the sale of the Securities to redeem the outstanding principal amount, plus all accrued and unpaid interest on such principal amount (the “Redemption”), under (A) the 2006 Senior Secured Note and (B) that certain Promissory Note, dated March 23, 2006, as amended on March 27, 2007 and attached hereto as Exhibit E (the “2006 Promissory Note”, and together with the 2006 Senior Secured Note, the “2006 Notes”).  The Company shall use the remaining net proceeds from the sale of the Securities for working capital and general corporate purposes.  Pending use for working capital and general corporate purposes, the Company intends to invest the net proceeds from this offering in short-term, interest-bearing, investment-grade securities, or as otherwise pursuant to the Company’s customary investment policies.

4.7   .  Short Sales.  The Investor represents, warrants and agrees that, since the date on which any of the Company or first contacted the Investor about the potential sale of the Securities, it has not engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities).  Such Investor covenants that it will not engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed.  Such Investor further covenants that it will not engage in any Short Sales in the Company’s securities for a period of 180 days from the Closing Date.  For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in Rule 3b-3 of the Exchange Act and Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.

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4.8   . Waiver; Termination of Liens.  Upon Redemption, each holder of the 2006 Notes irrevocably waives any default or breach arising from or related to the 2006 Notes and the transactions contemplated thereby, including, without exception, the Registration Rights Agreement dated March 23, 2006, the Warrant and the 2006 Notes.  Upon Redemption, each Investor previously holding 2006 Notes shall take all action reasonably necessary to terminate any Liens arising from or relating to the 2006 Notes.

ARTICLE V
CONDITIONS

5.1   Conditions Precedent to each Investor’s Obligation to Purchase.  The obligation of each Investor to purchase the Securities at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each of the following conditions:

(a)           The Company shall have duly executed and delivered to each Investor:

(i)    one or more Convertible Notes with an aggregate principal amount as is set forth opposite such Investor’s name on the Schedule of Investors; and

(ii)   the Registration Rights Agreement.

(b)           Such Investor shall have received the opinion from the Company’s General Counsel, dated as of the Closing Date, in substantially the form of Exhibit F attached hereto.

(c)           The Company shall have delivered a certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by the Transaction Documents and the issuance of the Securities, certifying the current versions of the Certificate and Bylaws of the Company and certifying as to the signatures and authority of persons signing this Agreement and related documents on behalf of the Company.

(d)           The representations and warranties of the Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date.  Such Investor shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Investor.

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(e)   The Common Stock (i) shall be authorized for quotation on the Nasdaq Global Market (ii) shall not have been suspended, as of the Closing Date, by the SEC or the Nasdaq Global Market from trading on the Nasdaq Global Market nor shall suspension by the SEC or the Nasdaq Global Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Nasdaq Global Market or (B) by falling below the minimum listing maintenance requirements of the Nasdaq Global Market.

(f)    The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Securities, except for those consents and approvals set forth in Sections 3.1(d), 3.1(g) and 3.1(i) to the Schedule of Exceptions.

(g)   The Investors shall have received all fees and other amounts due and payable on or prior to the Closing Date pursuant to Section 6.2 hereof.

(h)   The Company shall have delivered to such Investor such other documents relating to the transactions contemplated by this Agreement as such Investor or its counsel may reasonably request.

5.2   Conditions Precedent to the Obligations of the Company.  The Company’s obligation to sell and issue the Securities at the Closing is, at the option of the Company, subject to the fulfillment or waiver of the following conditions:

(a)   The Investors shall have delivered payment of the purchase price to the Company for the Securities.

(b)   Any authorization, approval, or permit of any governmental authority or regulatory body  required to be obtained by the Company or any of the Investors in connection with the issuance of and sale of the Securities and the performance of the obligations in this Agreement shall have been obtained and effective as of the Closing Date.

(c)   The representations and warranties made by the Investors in Section 3.2 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date as if made on and as of the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date; and the representations and warranties made by the Investors in Section 3.2 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date as if made on and as of the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date.

(d)   All covenants, agreements and conditions contained in this Agreement to be performed, satisfied or complied with by the Investors on or prior to the Closing Date shall have been performed, satisfied or complied with in all material respects.

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ARTICLE VI
MISCELLANEOUS

6.1   Termination.  This Agreement may be terminated by the Company or any Investor, by written notice to the other parties, if the Closing has not been consummated by the third Business Day following the date of this Agreement; provided that no such termination will affect the right of any party to sue for any breach by the other party (or parties).

6.2   Fees and Expenses.  At the Closing, the Company shall pay to the Investor Counsel an aggregate of up to $25,000 for the legal fees and expenses incurred or to be incurred in connection with its due diligence and the preparation and negotiation of the Transaction Documents.  The Company further agrees it shall pay to the Investor Counsel an aggregate of up to $50,000 for the legal fees and expenses incurred or to be incurred in connection and the registration of the Securities under the Registration Rights Agreement upon the effectiveness of such registration statement.  In lieu of the foregoing payment, the Investor may retain such amount at the Closing or require the Company to pay such amount directly to Investor Counsel.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the initial sale and issuance of their applicable Securities to the Investors, including the conversion of the Convertible Notes.

6.3   Entire Agreement.  The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.  At or after the Closing, and without further consideration, the Company and the Investors will execute and deliver such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

6.4   Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section  prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of deposit with a nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The addresses and facsimile numbers for such notices and communications are those set forth on the signature pages hereof, or such other address or facsimile number as may be designated in writing hereafter, in the same manner, by any such Person.

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6.5   Amendments; Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Investors holding a majority of the principal amount of the Convertible Notes.  Subject to the preceding sentence, any amendment or waiver effected in accordance with this Section shall be binding upon all parties to this Agreement, including, without limitation, any Investors who may not have executed such amendment or waiver.

6.6   Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

6.7   Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investors.  Any Investor may assign its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Investors.”

6.8   Governing Law; Venue; Waiver of Jury Trial.  THE CORPORATE LAWS OF THE STATE OF NEW YORK SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS.  ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.  THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

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6.9   Survival.  The representations and warranties, agreements and covenants contained herein shall survive the Closing.

6.10 Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

6.11 Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

6.12 Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Investor exercises a right, election, demand or option owed to such Investor by the Company under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then, prior to the performance by the Company of the Company’s related obligation, such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

6.13 Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company for any losses in connection therewith.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.

6.14 Other Engagements and Activities.  The investment in the Company made by Goldman, Sachs & Co. (“Goldman Sachs” and, together with any other affiliate of Goldman Sachs, the “GS Entities” or the “GS Entity”) pursuant to this Agreement, and any subsequent investments in the Company by any GS Entity after the date hereof, is made notwithstanding any engagement, prior to or subsequent to the date hereof, by the Company, of any GS Entity as financial advisor, agent or underwriter to the Company.  Notwithstanding anything in the Transaction Documents to

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the contrary, no GS Entity shall be restricted in any way from engaging in any brokerage, investment advisory, financial advisory, financing, asset management, trading, market making, arbitrage and other similar activities conducted in the ordinary course of Goldman Sachs’ business.  Further, neither the Company nor any Subsidiary shall have any right, by virtue of any of the Transaction Documents to, in or to such other ventures or activities of any GS Entity, or to the income or proceeds derived therefrom, and the pursuit of such ventures, even if competitive with the business of the Company, shall not be deemed wrongful or improper.  Any GS Entity shall have the right to take for its own account or to recommend to others, any investment opportunity including investment opportunities that may be competitive with or involve the same line of business as that conducted or proposed to be conducted from time to time by the Company.

6.15 No Promotion.  Except as otherwise required by law and as provided in Section 4.5 herein, the Company agrees that it will not, without the prior written consent of Goldman Sachs in each instance, (i) use in advertising, publicity, or otherwise the name of any GS Entity, or any partner or employee of any GS Entity, nor any trade name, trademark, trade device, service mark, symbol or any abbreviation, contraction or simulation thereof owned by any GS Entity or (ii) represent, directly or indirectly, that any product or any service provided by the Company has been approved or endorsed by any GS Entity.  This provision shall survive termination of the Transaction Documents.

[SIGNATURE PAGES TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

VYYO INC.
By:	/s/ Wayne H. Davis
Name: Wayne H. Davis
Title: CEO
Address for Notice:
6625 The Corners Parkway Suite 100 Norcross, Georgia 30092 Telephone:  (678) 282-8000 Facsimile:  (770) 446-1110 Attention:  General Counsel
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue Palo Alto, CA 94301 Telephone:  (650) 470-4500 Facsimile:  (650) 470-4570 Attention:  Gregory Smith, Esq.

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Investor Signature Page

By its execution and delivery of this signature page, the undersigned Investor hereby joins in and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of March 28, 2007 (the “Purchase Agreement”) by and among Vyyo Inc. and the Investors (as defined therein), as to the number of shares of Convertible Notes set forth below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts thereof.

GOLDMAN, SACHS & CO.
By:	/s/ Nick Advani
	Name:  Nick Advani
	Title:  Managing Director
Address for Notice:
Goldman, Sachs & Co. One New York Plaza New York, NY  10004 Telephone:  (212) 902-4934 Facsimile:  (212) 346-3124 Attention:  Nick Advani
with a copy to:
Goldman, Sachs & Co. One New York Plaza New York, NY  10004 Facsimile:  (212) 256-4104 Telephone:  (212) 902-7952 Attention:  Connie J. Shoemaker
and
Thelen Reid Brown Raysman & Steiner LLP 875 Third Avenue New York, NY  10022 Facsimile:  (212) 603-2001 Telephone:  (212) 603-2108 Attention:  Stuart Bressman, Esq.

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Exhibits:
A	Schedule of Investors
B	Form of Convertible Note
C	Form of Amended and Restated Senior Secured Note
D	Form of Registration Rights Agreement
E	Promissory Note, dated March 23, 2006, as amended on March 27, 2007
F	Form of Opinion of Company’s General Counsel
G	Schedule of Exceptions

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Exhibit A

Schedule of Investors

Investor	Convertible Note Purchase Price
Goldman, Sachs & Co.	$	35,000,000
TOTAL	$	35,000,000

EX-10.2

Exhibit 10.2

NEITHER THESE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) IF REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

VYYO INC.

CONVERTIBLE NOTE

Issuance Date: March 28, 2007 Principal: U.S. $35,000,000

FOR VALUE RECEIVED, Vyyo Inc., a Delaware corporation, (the “Company”), hereby promises to pay to Goldman, Sachs & Co.or registered assigns (“Holder”) the amount set out above as the Principal (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date (each, as defined herein) unless earlier redeemed or converted (in each case in accordance with the terms hereof), and to pay interest (“Interest”) on any outstanding Principal at the rate of 5.0% per annum (the “Interest Rate”), from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable unless earlier redeemed or converted.  This Convertible Note (including all Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”) is issued on the Closing Date pursuant to the Securities Purchase Agreement, dated as of the date hereof, by and among the Company and the Investors identified therein (the “Securities Purchase Agreement”). Certain capitalized terms used herein are defined in Section 28.  Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Securities Purchase Agreement.

1.  MATURITY.  On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal and the accrued and unpaid Interest thereon.  The Company shall make such payment on the Maturity Date, together with the amount of any accrued and unpaid interest on such Principal, by wire transfer of immediately available funds to an account designated in writing by the Holder.

2.  INTEREST; INTEREST RATE. Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year comprised of twelve 30-day months and shall be payable in arrears for each Calendar Quarter on the first day of the succeeding Calendar Quarter during the period beginning on the Issuance Date and ending on, and including, the Maturity Date (each, an “Interest Date”) with the first Interest Date being May 1, 2007 by wire transfer of immediately

payable funds.  Interest shall be payable on each Interest Date in cash.  Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable in cash upon any conversion in accordance with Section 4.  Upon the occurrence and during the continuance of any default in the payment of the Interest or Principal when due, the Interest Rate shall be increased by two percent (2.0%) per annum (the “Default Rate”).  In the event that such Interest or Principal payment default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure.  Interest on overdue interest shall accrue at the same rate compounded quarterly.

3.  SUBORDINATION.  The Principal and Interest on this Note is expressly subordinated in right of payment to (i) that certain Senior Secured Note in the principal amount of $7,500,000 issued on March 23, 2006 (“Senior Secured Note”), and (ii) any borrowed money by the Company designated as senior debt by the Board of Directors (“Indebtedness”).  Upon payment or distribution of the assets of the Company to creditors upon any dissolution, winding up, liquidation, reorganization, recapitalization or readjustment of the Company or its property, payment of the Principal and Interest will be subordinate to the prior payment in full of all such Indebtedness.  No payment of Principal or Interest may be made by the Company if (i) at any time there exists (or after giving effect to the payment there would exist) an event of default under the agreement pursuant to which such Indebtedness has been issued, or (ii) full payment of amounts then due for principal and interest on the Indebtedness has not been made or duly provided for.  The Holder of this Note shall execute any further documentation reasonably requested by a lender to effect the foregoing.

4.  CONVERSION OF NOTES.  Subject to Sections 7(a) and 15, this Note shall be convertible into shares of common stock of the Company, $0.0001 par value (the “Common Shares”), on the terms and conditions set forth in this Section 4.

(a)  Conversion Right.  At any time or times on or after the Issuance Date and prior to repayment, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable Common Shares in accordance with Section 4(c), at the Conversion Rate (as defined below); provided that, following a Fundamental Transaction, this Note shall be entitled to convert only into such consideration as the Common Shares outstanding prior thereto became entitled to receive, as appropriately adjusted to give effect to the Conversion Rate in this Note.  The Company shall not issue any fraction of a Common Share upon any conversion.  If the issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share to the nearest whole share.

(b)  Conversion Rate.  The number of Common Shares issuable upon conversion of any Conversion Amount pursuant to Section 4(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (such number of shares, the “Conversion Rate”).

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(i)  “Conversion Amount” means the portion of the Principal to be converted or redeemed with respect to which this determination is being made.

(ii)  “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination a price equal to $10.00, subject to adjustment as provided herein.

(c)  Mechanics of Conversion.

(i)  Optional Conversion.  To convert any Conversion Amount greater than $500,000 into Common Shares on any date (a “Conversion Date”), the Holder shall: (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice of conversion (the “Conversion Notice”) to the Company and (B) if required by Section 4(e), surrender this Note to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction).  On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile a confirmation of receipt of such Conversion Notice to the Holder and the Transfer Agent.  On or before the third (3rd) Trading Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall: (1) (x) provided that the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of Common Shares or other consideration to which the Holder shall be entitled to the Holder’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of Common Shares or other consideration to which the Holder shall be entitled, (2) pay to the Holder in cash an amount equal to the accrued and unpaid Interest on the Conversion Amount up to and including the Conversion Date and (3) for any conversions prior to March 28, 2011 in connection with a Fundamental Transaction, pay any applicable Make-Whole Premium in accordance with Section 4(d). The Person or Persons entitled to receive the Common Shares issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such Common Shares on the Conversion Date.

(d)  Make-Whole Premium.

(i)  If a Fundamental Transaction occurs prior to March 28, 2011, the Company also shall pay the Make-Whole Premium, if any, to the Holder who elects to convert its Note pursuant to this Section or elects to have its Note redeemed pursuant to Section 6(a) hereof pursuant to the Fundamental Transaction. The Make-Whole Premium, if any, shall be paid in cash on the Fundamental Transaction Effective Date to Holders who exercise such conversion right.

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(1)  The “Make-Whole Premium” shall be determined as follows:

(2)  If the Fundamental Transaction Effective Date is after March 28, 2011, no Make-Whole Premium shall be paid;

(3)  If the Stock Price equals or exceeds $17.50 (subject to adjustment pursuant to Section 8), no Make-Whole Premium shall be paid; and

(4)  In all other cases, the Make-Whole Premium shall be an amount equal to the interest that otherwise would accrue on the Principal of the Note had it remained outstanding from the date hereof through March 28, 2011, less the amount of interest accrued and paid prior to the date of conversion.  Notwithstanding anything to the contrary set forth herein, the Make-Whole Premium, if any, shall be paid in cash and shall not increase or affect the Conversion Amount, Conversion Price, or the number of Common Shares issuable upon conversion of this Note.

(ii)  For purposes of Section 4(d), the following terms shall have the meanings indicated:

(1)  “Fundamental Transaction Effective Date” means the date that a Fundamental Transaction becomes effective.

(2)  “Stock Price” means the price paid per Common Share in the transaction constituting the Fundamental Transaction, determined as follows:

(i)  If holders of the Common Shares receive only cash in the transaction constituting the Fundamental Transaction, then the Stock Price shall equal the cash amount paid per Common Share; and

(ii)  In all other cases, the Stock Price shall be the average of the daily Trading Prices per Common Share for the ten consecutive Trading Day period ending on the Trading Day immediately preceding the Fundamental Transaction Effective Date.

(e)  Book-Entry.  Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender.  The Holder and the Company shall maintain records showing the Principal converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion.

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5.  RIGHTS UPON EVENT OF DEFAULT.

(a)  Event of Default.  Each of the following events shall constitute an “Event of Default”:

(i)  The Company’s failure to convert a Note in accordance with Section 4 within five (5) Trading Days after the applicable Conversion Date;

(ii)  The Company shall fail to redeem or repay the amounts due under the 2006 Notes pursuant to Section 4.6 of the Securities Purchase Agreement;

(iii)  The Company shall fail to pay any Principal owing under this Note when due;

(iv)  The Company shall fail to pay any Interest owing under this Note when due, and such failure shall continue for thirty (30) days;

(v)  The Company or any Significant Subsidiary shall (A) fail to make any payment when due under the terms of any bond, debenture, note or other evidence of indebtedness to be paid by the Company or such Significant Subsidiary (excluding this Note, which default is addressed by clauses (ii) and (iii) above, but including any other evidence of indebtedness of the Company or such Significant Subsidiary) and such failure shall continue beyond any period of grace provided with respect thereto, or (B) default in the observance or performance of any other agreement, term or condition contained in any such bond, debenture, note or other evidence of indebtedness; and the effect of such failure or default in clause (A) or (B) is to cause, or permit the holder thereof to cause, indebtedness in an aggregate amount of One Million Dollars ($1,000,000) or more to become due prior to its stated date of maturity and such failure shall continue for thirty (30) days;

(vi)  An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (A) liquidation, reorganization or other relief in respect of the Company or any Significant Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Significant Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for thirty (30) days or an order or decree approving or ordering any of the foregoing shall be entered;

(vii)  The Company or any Significant Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (v) of this Section, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar

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official for the Company or any Significant Subsidiary or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors or (F) take any action for the purpose of effecting any of the foregoing;

(viii)  One or more judgments for the payment of money in an amount in excess of Five Million Dollars ($5,000,000) in the aggregate, outstanding at any one time, shall be rendered against the Company or any Significant Subsidiary and the same shall remain undischarged for a period of sixty (60) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of the Company or any Significant Subsidiary and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within sixty (60) days after issue or levy;

(ix)  Failure (A) of the Company to make any required filings with the SEC or (B) of the Common Stock to be listed on an eligible securities exchange, and in either case (A) or (B) such failure shall continue for sixty (60) days;

(x)  The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note or the Guaranty and Security Agreement and, to the extent such failure is capable of being cured, such failure shall continue for sixty (60) days.

(b)  Event of Default Redemption Right.  Promptly after the occurrence of an Event of Default with respect to this Note, the Company shall deliver written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the Holder.  The Holder, upon the approval of Holders holding more than 50% of the aggregate principal balance of the Notes then outstanding, by written notice to the Company, may declare all outstanding amounts payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding (“Redemption Price”).  Upon the occurrence or existence of any Event of Default described in Sections (v) or (vi) hereof, immediately and without notice, all outstanding amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Holder may exercise, upon the approval of Holders holding more than a majority of the aggregate principal balance of the Notes, any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

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6.  RIGHTS UPON FUNDAMENTAL TRANSACTION.

(a)  Fundamental Transaction Redemption Right.  No sooner than twenty (20) days nor later than ten (10) days prior to the consummation of a Fundamental Transaction, but not prior to the public announcement of such Fundamental Transaction, the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder (a “Fundamental Transaction Notice”).  At any time during the period (the “Fundamental Transaction Period”) beginning after the Holder’s receipt of a Fundamental Transaction Notice and ending on the date that is one (1) Trading Day before the Fundamental Transaction Effective Date, the Holder, at its option, may require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Fundamental Transaction Redemption Notice”) to the Company, which Fundamental Transaction Redemption Notice shall indicate the Conversion Amount the Holder is electing to redeem.  The portion of this Note subject to redemption pursuant to this Section 6 shall be redeemed by the Company in cash at a price equal to 101% of the Principal plus any accrued but unpaid Interest thereon up to, but not including, the Fundamental Transaction Effective Date (the “Fundamental Transaction Redemption Price”) on the Fundamental Transaction Effective Date.  In addition, for any redemption made prior to March 28, 2011, the Holder shall also be paid the Make-Whole Premium, if any, as applicable.  Redemptions required by this Section 6 shall have priority to payments to stockholders in connection with a Fundamental Transaction.  To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments.  Notwithstanding anything to the contrary in this Section 6, until the Fundamental Transaction Redemption Price (together with interest thereon and the Make-Whole Premium, if any) is paid in full, the Conversion Amount submitted for redemption under this Section 6 may be converted, in whole or in part pursuant to Section 4.  The parties hereto agree that in the event of the Company’s redemption of any portion of the Note under this Section 6, the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder.  Accordingly, any redemption premium due under this Section 6 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.

7.  RIGHTS UPON CERTAIN OTHER CORPORATE EVENTS.

(a)  Corporate Events.  Subject to the Section 4(d) and 6 herein as applicable, prior to the consummation of any Fundamental Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with respect to or in exchange for Common Shares (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon a conversion of this Note, such securities or other assets received by the holders of Common Shares in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion

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rights for the form of such consideration (as opposed to Common Shares) at a conversion rate for such consideration commensurate with the Conversion Rate.  The provisions of this Section shall apply similarly and equally to successive Corporate Events unless or until the Note is redeemed or repaid.

8.  ADJUSTMENT OF CONVERSION PRICE UPON SUBDIVISION OR COMBINATION OF COMMON SHARES.  If the Company at any time on or after the Issuance Date subdivides (by any share split, share dividend, recapitalization or otherwise) one or more classes of its outstanding Common Shares into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.  If the Company at any time on or after the Issuance Date combines (by combination, reverse share split or otherwise) one or more classes of its outstanding Common Shares into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

9.  COVENANTS.

(a)  Affirmative Covenants.  Until all Principal and Interest and any other amounts due and payable under this Note have been paid in full in cash, the Company shall, and shall cause each Significant Subsidiary to:

(i)  provide prompt written notice to the Holder of the occurrence of any Event of Default, or any event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, hereunder;

(ii)  do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence; and

(iii)  (A)  keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities, (B) permit any representatives designated by the Holder, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, and (C) provide to the Holder the same information rights as it provides to its stockholders.

(b)  Negative Covenants.  Until all principal and interest and any other amounts due and payable under this Note have been paid in full in cash, the Company shall not, and shall not permit any Subsidiary to:

(i)  create, incur, assume or permit to exist any indebtedness or guarantee, directly or indirectly, except:

(A)          indebtedness with respect to equipment leases or trade accounts of the Company or any Subsidiary arising in the ordinary course of business;

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(B)           indebtedness incurred in the ordinary course arising out of any lease agreement for the premises of the Company or any Significant Subsidiary;

(C)           indebtedness incurred in the ordinary course of the Company or any Significant Subsidiary for employee-related obligations or commitments, including, but not limited to, obligations for the payment of salaries, accrued vacation days, severance, prior notice periods, managers’ insurance, pension funds and other approved employee benefits;

(D)          indebtedness for Taxes (including municipality rates), assessments, levies to statutory bodies and government agencies, or similar charges, in all cases provided that such obligations were incurred in the ordinary course of business that are not yet due and payable;

(E)           indebtedness under the Convertible Notes;

(F)           indebtedness that is by its terms subordinate to the indebtedness under the Convertible Notes up to $15,000,000;

(G)           indebtedness, not greater than $6,500,000 in the aggregate under (i) that certain promissory note made by the Company and payable to Syntek Capital AG dated December 16, 2005 as amended as of the date hereof (the “Syntek Note”) and (ii) that certain letter of credit made by the Company in favor of Syntek Capital AG in connection with the Syntek Note (the “Syntek Letter of Credit”);

(H)          up to $15,000,000 of indebtedness assumed by the Company in the acquisition of all or substantially all of the assets or capital stock of another Person; provided that, (a) such indebtedness existed at the time of such acquisition and was not created in anticipation thereof, (b) the aggregate amount of such indebtedness assumed in connection with such acquisition shall not exceed 25% of the aggregate amount of consideration paid by the Company for such acquisition and (c) any Liens securing such indebtedness do not at any time cover or encumber any assets or property other than the assets or property of the Person acquired which is financed  by such indebtedness

(I)            up to $2,500,000 of additional indebtedness in the aggregate outstanding at any time; and

(J)            inter-company indebtedness for valid business purposes and consistent with the Company’s past practices.

(ii)  create, incur, assume or suffer to exist any mortgage, pledge, security interest, assignment, lien (statutory or other), claim, encumbrance, license or sublicense or security interest (collectively, a “Lien”) in or upon any of its assets, except:

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(A)          Liens for Taxes, assessments or similar charges incurred in the ordinary course of business that are not yet due and payable,

(B)           Liens created to secure the Syntek Note, which such Liens shall only consist of the Syntek Letter of Credit;

(C)           Licenses and sublicenses of the Company’s Intellectual Property Rights in the ordinary course of business;

(D)          Liens created in connection with Section 9(b)(i)(B),(G), (H) and (J) above;

(iii)  enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service with any Affiliate, except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary, than would obtain in a comparable arm’s length transaction with a Person not an Affiliate as reasonably determined by the Audit Committee of the Company’s Board of Directors;

(iv)  declare any cash dividends on any shares of any class of its capital stock or membership interests, or apply any of its property or assets to the purchase, redemption or other retirement of, or set apart any sum for the payment of any cash dividends on, or for the purchase, redemption or other retirement of, or make any other distribution by reduction of capital or otherwise in respect of, any shares of any class of its capital stock or membership interests, provided, however, that (i) any Subsidiary wholly owned by the Company may pay dividends directly to the Company and (ii) this restriction shall not apply to the repurchase of shares of Common Stock from employees, officers, directors, consultants or other persons performing services for the Company or any Subsidiary pursuant to agreements under which the Company has the option to repurchase such shares upon the occurrence of certain events, such as the termination of employment;

(v)  sell, transfer, lease or otherwise dispose (including pursuant to a merger) of any asset with a value greater than $1,000,000, except (a) sales, transfers, leases and other dispositions of inventory, used, obsolete or surplus equipment or other property and investments in each case in the ordinary course of business, (b) such sales, transfers or dispositions for cash or marketable securities which are reasonably approved by the Audit Committee of the Company’s Board of Directors or (c) assets that are substantially used in the Company’s wireless business;

(vi)  create or acquire any new Significant Subsidiary;

(vii)  make any capital expenditures (other than with respect to normal maintenance and replacement programs in the ordinary course of business) exceeding $1,000,000 in any fiscal year for the Company and its Significant Subsidiaries in the aggregate; or

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(viii)  permit the Subsidiaries that are not party to the Security Agreement to have assets in an aggregate amount greater than $500,000.

10.  RESERVATION OF AUTHORIZED SHARES.

(a)  Reservation. The Company shall have sufficient authorized and unissued Common Shares for each of the Notes equal to the number of Common Shares necessary to effect the conversion at the Conversion Rate with respect to the Conversion Amount of each such Note as of the Issuance Date. So long as any of the Notes are outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued Common Shares, solely for the purpose of effecting the conversion of the Notes, the number of Common Shares as shall from time to time be necessary to effect the conversion of all of the Notes then outstanding; provided that at no time shall the number of Common Shares so available be less than the number of shares required to be reserved by the previous sentence (without regard to any limitations on conversions) (the “Required Amount”).

11.   REDEMPTION MECHANICS.  In the event that the Company does not pay the applicable Redemption Price to the Holder within five (5) Trading Days, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price has not been paid.  Upon the Company’s receipt of such notice, (x) the Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 16(d)) to the Holder representing such Conversion Amount.

12.  RIGHTS UPON DISTRIBUTION OF ASSETS.  If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Note, then, in each such case any Conversion Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Shares entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Conversion Price by a fraction of which (i) the numerator shall be the Closing Bid Price of the Common Shares on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one Common Share, and (ii) the denominator shall be the Closing Bid Price of the Common Shares on the trading day immediately preceding such record date.

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13.  VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTES.  This Note may be amended and any provision may be waived with the consent of the Company and the Holder.  In addition, the Notes may be amended and a provision may be waived by the Company with the affirmative vote or consent of the holders of a majority of the aggregate principal amount of the Notes.  Any change or amendment so approved shall be binding upon all existing and future holders of this Note; provided that, no such amendment or waiver may materially and adversely affect the economic interest in the Company of the Holder of this Note in a manner disproportionate to the Holders of other Notes without the consent of the Holder hereof.

14.  TRANSFER.  This Note and any Common Shares issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company in aggregate principal amounts of at least $500,000, subject only to the provisions of Section 4.1 of the Securities Purchase Agreement and compliance with applicable law.

15.  RESTRICTIONS ON CONVERSION.  The Company shall not effect any conversion of this Note, and the Holder of this Note shall not have the right to convert any portion of this Note pursuant to Section 4(a), to the extent that after giving effect to such conversion, and taking into account all other shares of Common Stock beneficially owned by the Holder and its Affiliates, the Holder (together with the Holder’s Affiliates) would beneficially own in excess of 14.80% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates, in each case if such conversion or exercise of such instrument is not permitted in order to keep the Holder’s beneficial ownership of Common Stock at or below the Maximum Percentage. Except as set forth in the preceding sentence, for purposes of this Section 15, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of this Section 15, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  For any reason and at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the

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date as of which such number of outstanding shares of Common Stock was reported.  By written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage specified in such notice so long as such specified Maximum Percentage shall not exceed 14.80%; provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of Notes.

16.  REISSUANCE OF THIS NOTE.

(a)  Transfer.  If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 16(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less then the entire outstanding Principal is being transferred, a new Note (in accordance with Section 16(d)) to the Holder representing the outstanding Principal not being transferred.  The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 4(e) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

(b)  Lost, Stolen or Mutilated Note.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 16(d)) representing the outstanding Principal.

(c)  Note Exchangeable for Different Denominations.  This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 16(d) and in principal amounts of at least $100,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

(d)  Issuance of New Notes.  Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 16(a) or Section 16(c), the Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which

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is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest on the Principal of this Note, from the Issuance Date.

17.  REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief).  Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction.

18.  PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS.  If following an Event of Default (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the reasonable costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

19.  CONSTRUCTION; HEADINGS.  This Note shall be deemed to be jointly drafted by the Company and all the Holders and shall not be construed against any person as the drafter hereof.  The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

20.  FAILURE OR INDULGENCE NOT WAIVER.  No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

21.  NOTICES.  Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be delivered in accordance with Section 6.4 of the Securities Purchase Agreement.  The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable

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detail a description of such action and the reason therefore.  Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least twenty (20) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Shares or (B) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

22.  CANCELLATION.  After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

23.  WAIVER OF NOTICE.  To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.

24.  GOVERNING LAW.  This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the State of New York and waive trial by jury.  Both parties agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note.  Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.

25.  INDEMNIFICATION.

(a)  Subject to the limitations herein, the Company shall indemnify the Holder, and each Affiliate of the Holder (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, (excluding the legal fees of counsel for any Indemnitee), incurred by or asserted against any Indemnitee by a third party arising out of, in connection with, or as a result of:  (i) the execution or delivery of this Note, the performance by the Company and its Subsidiaries

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hereto of their respective obligations hereunder or the consummation of or the use of the proceeds therefrom, or (ii) the material breach by the Company or any Subsidiary of (a) any representation, warranty, covenant or agreement contained herein or (b) any representation or warranty in Section 3.1 of the Securities Purchase Agreement, as they relate to this Note; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(b)           To the extent permitted by applicable law, the Company and the Holder hereof shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages arising out of, in connection with, or as a result of, this the this Note, the Securities Purchase Agreement and the Registration Rights Agreement or any agreement or instrument contemplated hereby or thereby, or the use of the proceeds thereof.

26.  MAXIMUM PAYMENTS.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

27.  NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note.

28.  CERTAIN DEFINITIONS.  For purposes of this Note, the following terms shall have the following meanings:

(a)  “Calendar Quarter” means each of: the period beginning on and including February 1 and ending on and including April 30; the period beginning on and including May 1 and ending on and including July 31; the period beginning on and including August 1 and ending on and including October 31; and the period beginning on and including November 1 and ending on and including January 31.

(b)  “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially issued Notes pursuant to the terms of the Securities Purchase Agreement.

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(c)  “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., The Nasdaq Global Select Market or The Nasdaq Capital Market.

(d)  “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company, is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) be subject to an offer from another Person or group of related Persons (as defined in Sections 13(d) and 14(d) of the Exchange Act) other than the Holder to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding Voting Shares (not including any Voting Shares held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of related Persons (as defined in Sections 13(d) and 14(d) of the Exchange Act) whereby such other Person or group acquires more than the 50% of the outstanding Voting Shares (not including any Voting Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such share purchase agreement or other business combination), provided however, a Fundamental Transaction shall not include (i) any reorganization, recapitalization or reclassification of the Common Shares in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

(e)  “GAAP” means United States generally accepted accounting principles, consistently applied.

(f)  “Maturity Date” means March 27, 2012.

(g)  “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

(h)  “Principal Market” means The Nasdaq Global Market.

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(i)  “Redemption Notices” means, collectively, the Event of Default Redemption Notices, and the Fundamental Transaction Redemption Notices, each of the foregoing, individually, a Redemption Notice.

(j)  “Registration Rights Agreement” means that certain registration rights agreement dated as of the Closing Date by and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common Shares issuable upon conversion of the Notes.

(k)  “Required Holders” means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding.

(l)  “SEC” means the United States Securities and Exchange Commission.

(m)  “Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest).

(n)  “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, (b) if the Common Stock is not then listed or quoted and traded on any Eligible Market, then a day on which trading occurs on the Nasdaq Global Market (or any successor thereto), or (c) if trading ceases to occur on the Nasdaq Global Market (or any successor thereto), any Business Day.

(o)  “Voting Shares” of a Person means capital shares of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital shares of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.

VYYO INC.

By:

Name:

Title:

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EX-10.3

Exhibit 10.3

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is dated as of March 28, 2007, by and among Vyyo Inc., a Delaware corporation (the “Company”), and the undersigned Investors (each, a “Investor”, and collectively, the “Investors”).

WHEREAS:

A. In connection with the Securities Purchase Agreements dated March 18, 2006 and March 28, 2007 (collectively, the “Securities Purchase Agreements”) by and among the parties hereto, the Company has, or have agreed, upon the terms and subject to the conditions set forth in the Securities Purchase Agreements, to issue and sell to the Investors:  (i) shares of the Company’s common stock (“Common Shares”), par value $0.0001 per share, (ii) convertible notes of the Company (the “Convertible Notes”) which will, among other things, be convertible into shares of Common Stock (the “Conversion Shares”) in accordance with the terms of the Convertible Notes, (iii) Senior Secured Notes, and (iv) Warrants (the “Warrants”) which will be exercisable to purchase additional shares of Common Stock (as exercised collectively, the “Warrant Shares”).

B. To induce the Investors to execute and deliver the Securities Purchase Agreements, the Company has agreed to provide the registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:

1. Definitions.

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreements.  As used in this Agreement, the following terms shall have the following meanings:

(a) “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

(b) “Closing Date” shall mean the date of this Agreement.

(c) “Effective Date” means the date the Registration Statement (as defined below) has been declared effective by the SEC.

(d) “Effectiveness Deadline” means the date which is one hundred and eighty (180) days after the after the Closing Date.

(e) “Investor” means an Investor or any transferee or assignee thereof to whom an Investor assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

(f) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(g) “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC (as defined below).

(h) “Registrable Securities” means (i) the Common Shares, (ii) the Conversion Shares issued or issuable upon conversion of the Convertible Notes, (iii) the Warrant Shares issued or issuable upon exercise of the Warrants and (iv) any share capital of the Company issued or issuable with respect to the Common Shares, Conversion Shares or the Warrant Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of the Convertible Notes or exercises of the Warrants; provided that, such Shares will not be deemed to be “Registrable Securities” if such Shares are sold or sellable under Rule 144 without restriction of the volume limitations of Rule 144(e).

(i) “Registration Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering the Registrable Securities.

(j) “Required Holders” means the holders of at least a majority of the outstanding Registrable Securities.

(k) “Rule 415” means Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous or delayed basis.

(l) “SEC” means the United States Securities and Exchange Commission.

2. Registration.

(a) Mandatory Registration.  The Company shall prepare and, as soon as reasonably practicable, file with the SEC the Registration Statement on Form S-3 covering the resale of all of the Registrable Securities.  In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(d).  The Registration Statement shall contain (except if otherwise directed by the Required Holders) “Selling Shareholders” and “Plan of Distribution” sections to be mutually agreed upon by the Company and the Required Holders.  The Company shall use reasonable commercial efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline.

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(b) Legal Counsel.  Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel to review and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Thelen Reid Brown Raysman & Steiner LLP or such other counsel as thereafter designated by the Required Holders.  The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.

(c) Ineligibility for Form S-3.  In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as either such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC or the Company is no longer obligated to maintain a registration statement for the Registrable Securities pursuant to the terms hereof.

3. Related Obligations.

At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a) or 2(c), the Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

(a) Subject to Section (c) below, the Company shall submit to the SEC, within five (5) Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request.  The Company shall use commercially reasonable efforts to keep the Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without the volume limitations pursuant to Rule 144(e) (or any successor thereto) promulgated under the Securities Act, (ii) such time as the Registrable Securities have been sold pursuant to the Registration Statement, or (iii) two years from the effectiveness of the first Registration Statement filed hereunder; provided however, that after such two years if counsel to an Investor (which may be in-house counsel) advises an Investor in writing that such Investor is unable to freely sell Registrable Securities pursuant to Rule 144(k), then the Company shall maintain an effective Registration Statement for the Conversion Shares until clause (i) or (ii) is satisfied, but not to exceed a period of up to an additional two years (together, the “Registration Period”) if such Investor has continuously held such Conversion Shares (or the Notes relating thereto two years from the date hereof).  The Company shall take commercially reasonable efforts to ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

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(b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.  In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-Q, Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or, if necessary, shall file such amendments or supplements with the SEC on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K, and Reports on Form 10-Q and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel reasonably and timely objects.  The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall not be unreasonably withheld.  The Company shall furnish to Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto.  The Company shall reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to this Section.

(d) The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

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(e) The Company shall use commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all said jurisdictions in the United States where Investors intend to sell Shares, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e) or where qualification necessitates undue time or expense, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.  The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

(f) The Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall the Company deliver such notice to the Investors without the Investors’ prior consent if such notice contains any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as Legal Counsel or such Investor may reasonably request).  The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile or e-mail on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

(g) The Company shall use commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

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(h) The Company agrees that, if Goldman, Sachs & Co. (“Goldman Sachs” and, together with any other affiliate of Goldman Sachs, the “GS Entities” or the “GS Entity”) or any GS Entity could reasonably be deemed to be an “underwriter,” as defined in Section 2(a)(11) of the Securities Act, in connection with any registration of the Company’s securities of any GS Entity pursuant to this Agreement, and any amendment or supplement thereof (any such registration statement or amendment or supplement a “GS Underwriter Registration Statement”), then the Company will cooperate with such GS Entity in allowing such GS Entity to conduct customary “underwriter’s due diligence” with respect to the Company and satisfy its obligations in respect thereof.  In addition, at Goldman Sachs’ request, the Company will use commercially reasonable efforts to cause its auditor or counsel to furnish to Goldman Sachs, on the first date of the effectiveness of the GS Underwriter Registration Statement (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to Goldman Sachs, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such GS Underwriter Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, including, without limitation, a standard “10b-5” statement for such offering, addressed to Goldman Sachs; such comfort letter, legal opinion and/or 10b-5 statement shall be furnished to Goldman Sachs (i) at no additional cost to Goldman Sachs if they are already provided to another party in connection with a GS Underwriter Registration or (ii) at Goldman Sachs’ expense if such comfort letter, legal opinion and/or 10b-5 statement are not otherwise being provided in connection with a GS Underwriter Statement.  The Company will also permit legal counsel to Goldman Sachs to review and comment upon any such GS Underwriter Registration Statement at least five business days prior to its filing with the SEC and all amendments and supplements to any such GS Underwriter Registration Statement within a reasonable number of days prior to their filing with the SEC and not file any GS Underwriter Registration Statement or amendment or supplement thereto in a form to which Goldman Sachs’ legal counsel reasonably and timely objects.

(i) The Company shall use commercially reasonable efforts either to (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of all of the Registrable Securities covered by a Registration Statement on the American Stock Exchange or (iii) if, despite the Company’s commercially reasonable efforts to satisfy, the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses (i) or (ii), to secure the inclusion for quotation on The Nasdaq SmallCap Market for such Registrable Securities and, without limiting the generality of the foregoing, to use its best efforts to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable Securities.  The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(i).

(j) The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered and resold pursuant to a Registration Statement and enable such certificates to be in

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such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

(k) If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

(l) The Company shall use commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

(m) The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective date of a Registration Statement.

(n) The Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

(o) Within two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC.

(p) Notwithstanding anything to the contrary herein, at any time the Company may delay filing the Registration Statement or amendment or supplement thereto or the disclosure of material, non-public information concerning the Company, if, in the good faith opinion of the Board of Directors, the disclosure of which at the time would be seriously detrimental to the Company and its stockholders, (a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors without the prior written consent of the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided

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further, that the aggregate days in the Grace Periods shall not exceed ninety (90) days during any three hundred sixty five (365) day period (an “Allowable Grace Period”).  For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice.  The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period.  Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable.  Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Shares to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreements in connection with any sale of Registrable Securities with respect to which an Investor has otherwise complied with the requirements therein and entered into a contract for sale, and delivered a copy of the prospectus included as part of the applicable Registration Statement, prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.

(q) If the Company proposes to register any of its stock or other securities under the Securities Act in connection with an underwritten public offering of such securities solely for cash other than on Form S-8 or similar form, the Company shall, at such time, promptly give each Investor notice of such registration.  Upon the request of each Investor given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 3(r), cause to be registered all of the Registrable Securities that each such Investor has requested to be included in such registration.

(r) In the event of an underwritten public offering, any participant in the offering shall be required to enter into an underwriting agreement under the terms and conditions reasonably negotiated between the Company and the managing underwriter.  All Investors proposing to distribute their securities through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company.  Notwithstanding any other provision of Section 3 herein, if the managing underwriter determines in its reasonable discretion that the success of the offering will be jeopardized without a limitation on the number of shares to be underwritten, the managing underwriter may in its reasonable discretion limit the Registrable Securities or other securities to be distributed through such underwriting pro rata, and if necessary, exclude all selling stockholders, to the extent that other stockholders of the Company that have registration rights have been similarly limited.  If any Investor disapproves of the terms of any such underwriting, such Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.

4. Obligations of the Investors.

(a) At least five (5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement.  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with

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respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required in accordance with the Securities Act to effect the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

(b) Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of 3(f) or receipt of notice that no supplement or amendment is required.  Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreements in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of 3(f) and for which the Investor has not yet settled.

(d) Unless exempt from the prospectus delivery requirements of the Securities Act, pursuant to Rule 172 of the Securities Act, in connection with sales of Registrable Securities pursuant to the Registration Statement, each Investor covenants and agrees that it will comply with the prospectus delivery requirements Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement.

5. Expenses of Registration.

Except as otherwise provided herein, all reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

6. Indemnification.

In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within

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the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Damages”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Damages (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:  (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”).  Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Damages.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a):  (i) shall not apply to a Damages by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such Person from whom the Person asserting any such Damages purchased the Registrable Securities that are the subject thereof (or to the benefit of any Person controlling such Person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(d), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified Person, notwithstanding such advice, used it or failed to deliver the correct prospectus as required by the Securities Act and such correct prospectus was timely made available pursuant to Section 3(d); (iii) shall not be available to the extent such Damages is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section 3(d); and (iv) shall

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not apply to amounts paid in settlement of any Damages if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

(b) In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Party”), against any Damages or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Damages or actions or proceedings whether commenced or threatened in respect thereof or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement or any post-effective amendment thereof or any prospectus contained therein; and, subject to Section 6(c), such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Damages as promptly as such expenses are incurred and are due and payable; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Damages if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be only liable under this Section 6(b), together with any amount of contribution contained in Section 7, for only that amount of a Damages or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Damages, such Indemnified Person or Indemnified Party shall, if a Damages in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel reasonably satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain

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its own counsel with the reasonable fees and expenses of not more than one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding.  In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Company, subject to the reasonable consent of the Investors holding at least a majority in interest of the Registrable Securities included in the Registration Statement to which the Damages relates.  The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Damages by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Damages.  The indemnifying party shall keep the Indemnified Party or Indemnified Person reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability inrespect to such Damages or litigation.  Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

7. Contribution.

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that:  (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person

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involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities, together with any amount under Section 6, shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

8. Reports Under the Exchange Act.

With a view to making available to the Investors the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144;

(b) use reasonable, diligent efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

(c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon written request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights.

The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of at least 100,000 shares of such Investor’s Registrable Securities if:  (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within ten (10) days after such assignment; (ii) the Company is, within ten (10) days after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreements and applicable laws.

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders.  Any amendment or waiver

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effected in accordance with this Section 10 shall be binding upon each Investor and the Company.  No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

11. Miscellaneous.

(a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

If to the Company:

Vyyo Inc.

6625 The Corners Parkway
Suite 100
Norcross, Georgia 30092
Telephone:  (678) 282-8000

Facsimile:  (770) 447-2405

Attention:  General Counsel

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

525 University Avenue

Palo Alto, CA 94301

Telephone:  (650) 470-4500

Facsimile:  (650) 470-4570

Attention:  Gregory Smith, Esq.

If to an Investor, to its address and facsimile number set forth on the Schedule of Investors attached hereto, with copies to such Investor’s representatives as set forth on the Schedule of Investors, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change.  Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or

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electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(e) This Agreement, the other Transaction Documents (as defined in the Securities Purchase Agreements) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.  This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

(f) Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

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(g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(h) This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

(i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(j) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders.

(k) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

(l) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

(m) The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor.  Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

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IN WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Amended and Restated Registration Rights Agreement to be duly executed as of the date first written above.

COMPANY:
VYYO INC.
By:
	Name:
	Title:

IN WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Amended and Restated Registration Rights Agreement to be duly executed as of the date first written above.

INVESTORS:
GOLDMAN, SACHS & CO.
By:
	Name:
	Title:

EX-10.4

Exhibit 10.4

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THIS NOTE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) IF REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

March 23, 2006 $7,500,000.00

VYYO INC.

SENIOR SECURED NOTE DUE MARCH 22, 2011

(As Amended on March 28, 2007)

Section 1.               General.

FOR VALUE RECEIVED, VYYO, INC., a Delaware corporation (the “Company”), hereby promises to pay to the order of Goldman, Sachs & Co., or its registered assigns (the “Investor”), the principal sum of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS AND ZERO CENTS ($7,500,000.00), or such lesser amount as shall then equal the outstanding principal amount hereof, together with interest (“Interest”) thereon at a rate equal to 9.50% (the “Interest Rate”) per annum, computed on the basis of the actual number of days elapsed and a year of 360 days comprised of twelve 30 day months.  Except as set forth herein, all unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, unless earlier redeemed or repurchased, shall be due and payable on March 22, 2011 (the “Maturity Date”).  Notwithstanding anything to the contrary herein, this Note may be redeemed or prepaid without premium or penalty pursuant to the terms of that certain Securities Purchase Agreement dated March 28, 2007 between the Company and the Investor.  Any prepayments will be applied first to any accrued but unpaid interest and then to unpaid principal.

This Note is one of a duly authorized issue of notes of the Company (this note being referred to as the “Note” and, collectively, all similar notes issued by the Company being referred to as the “Notes”), issued in the aggregate principal amount limited to $7,500,000.00 pursuant to the Securities Purchase Agreement, dated as of March 18, 2006 (as the same may be amended, supplemented or otherwise modified from time to time, the “Securities Purchase Agreement”) by and among the Company and the Investors party thereto, and is entitled to the benefits thereof and to the exercise of the remedies provided thereby or otherwise available in respect thereof.  Capitalized terms used herein without definition have the meanings assigned thereto in the Securities Purchase Agreement.

Interest on this Note shall accrue from and including the date of issuance through and until repayment of the principal amount of this Note and payment of all Interest in full, and shall be payable in cash quarterly in arrears on each November 1, February 1, May 1 and August 1

that the Notes are outstanding or, if any such date shall not be a Business Day, on the next succeeding Business Day to occur after such date (each date upon which interest shall be so payable, an “Interest Payment Date”), beginning on May 1, 2006, by wire transfer of immediately available funds to an account at a bank designated in writing by the Investor on reasonable notice.

Notwithstanding the foregoing provisions of this Section 1, upon any default in the payment of Interest or principal under this Note, until such default is cured, the Interest Rate shall increase by an additional two percent (2.0%) per annum.  Subject to applicable law, any interest that shall accrue on overdue interest on this Note as provided in the preceding sentence and shall not have been paid in full in cash on or before the next Interest Payment Date to occur after the date on which the overdue interest became due and payable shall itself be deemed to be overdue interest on this Note to which the preceding sentence shall apply.

Section 2.               Repurchase Right Upon a Fundamental Transaction.

Notwithstanding anything to the contrary contained herein and in addition to any other right of the Investor, upon the occurrence of a Fundamental Transaction the Investor shall have the right, by written notice to the Company, to require the Company to redeem all of this Note on the repurchase date that is five Business Days after the date of delivery of such notice to the Company at a price equal to 101% of the outstanding principal amount under this Note, plus all accrued and unpaid interest on such principal amount to, but excluding, the repurchase date, plus any other amounts due hereunder. A “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company, is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) be subject to an offer from another Person or group of related Persons (as defined in Sections 13(d) and 14(d) of the Exchange Act) other than the Holder to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding Voting Shares (not including any Voting Shares held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of related Persons (as defined in Sections 13(d) and 14(d) of the Exchange Act) whereby such other Person or group acquires more than the 50% of the outstanding Voting Shares (not including any Voting Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such share purchase agreement or other business combination), provided however, a Fundamental Transaction shall not include (i) any reorganization, recapitalization or reclassification of the Common Shares in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.  “Voting Shares” of a Person means capital shares of such Person of the class or classes pursuant to which the holders

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thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital shares of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

Section 3.               Events of Default.

The occurrence of any of the following shall constitute an “Event of Default” under this Note:

(a)           The Company shall fail to pay any principal owing under this Note when due; or

(b)           The Company shall fail to pay any interest owing under this Note when due, and such failure shall continue for thirty (30) days; or

(c)           The Company or any Significant Subsidiary shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note (other than those specified in clauses (a) or (b) above) or the Guaranty and Security Agreement, dated the date hereof, among the Company, the Subsidiaries party thereto and Goldman, Sachs & Co., as Collateral Agent for the benefit of the Investors (as the same may be amended, supplemented or otherwise modified from time to time, and together with all other documents, agreements and instruments executed in connection therewith, the “Security Agreement”), and, to the extent such failure is capable of being cured, such failure shall continue for sixty (60) days; or

(d)           The Company or any Significant Subsidiary shall (i) fail to make any payment when due under the terms of any bond, debenture, note or other evidence of indebtedness to be paid by the Company or such Significant Subsidiary (excluding this Note, which default is addressed by clauses (a) and (b) above, but including any other evidence of indebtedness of the Company or such Significant Subsidiary) and such failure shall continue beyond any period of grace provided with respect thereto, or (ii) default in the observance or performance of any other agreement, term or condition contained in any such bond, debenture, note or other evidence of indebtedness; and the effect of such failure or default in clause (i) or (ii) is to cause, or permit the holder thereof to cause, indebtedness of the Company and the Subsidiaries in an aggregate amount of One Million Dollars ($1,000,000) or more to become due prior to its stated date of maturity and such failure shall continue for thirty (30) days; or

(e)           An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any Significant Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Significant Subsidiary or for a substantial part of the Company’s or such Significant Subsidiary’s assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

(f)            The Company or any Significant Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any

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federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (e) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Significant Subsidiary or for a substantial part of the Company’s assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; or

(g)           One or more judgments for the payment of money in an amount in excess of Five Million Dollars ($5,000,000) in the aggregate, outstanding at any one time, shall be rendered against the Company and the Significant Subsidiaries and the same shall remain undischarged for a period of sixty (60) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of the Company or any Significant Subsidiary and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within sixty (60) days after issue or levy; or

(h)           This Note or the Security Agreement shall cease, for any reason, to be in full force and effect, or the Company or any Significant Subsidiary shall so assert in writing or shall disavow any of its obligations thereunder; or

(i)            Any Lien purported to be created under the Security Agreement shall cease to be, or shall be asserted by the Company or any Significant Subsidiary not to be, a valid and perfected Lien on any Collateral, with the priority required by the Security Agreement; or

(j)            Failure (i) of the Company to make any required filings with the United States Securities and Exchange Commission or (ii) of the Common Stock to be listed on an eligible securities exchange and, in either case (i) or (ii), such failure shall continue for sixty (60) days; or

(k)           Any Event of Default, under and as defined in the Guaranty and Security Agreement shall have occurred.

Section 4.               Rights Of Investor Upon Default.

Upon the occurrence or existence of any Event of Default (other than an Event of Default referred to in Sections 3(f) or 3(g) hereof) and at any time thereafter during the continuance of such Event of Default, the Investor, upon the approval of Investors holding more than 33-1/3% of the aggregate principal balance of the Notes then outstanding, by written notice to the Company, may declare all outstanding amounts payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly

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waived, anything contained herein to the contrary notwithstanding.  Upon the occurrence or existence of any Event of Default described in Sections 3(f) or 3(g) hereof, immediately and without notice, all outstanding amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Investor may exercise, upon the approval of Investors holding more than a majority of the aggregate principal balance of the Notes, any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

Section 5.               Affirmative Covenants.

Until all principal and interest and any other amounts due and payable under this Note have been paid in full in cash, the Company shall, and shall cause each Significant Subsidiary to:

(a)           provide prompt written notice to the Investor of:  (i) the occurrence of any Event of Default, or any event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, hereunder; and (ii) any loss or damage to any Collateral (as defined in the Security Agreement) in excess of $100,000;

(b)           do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business;

(c)           maintain, with financially sound and reputable insurance companies, customary insurance for its insurable properties, all to such extent and against such risks, including fire, casualty, fidelity, business interruption and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses operating in the same or similar locations; and

(d)           (i) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities, (ii) permit any representatives designated by the Investor, upon reasonable prior written notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, and (iii) provide to the Investor the same information rights as it provides to its stockholders.

Section 6.               Negative Covenants.

Until all principal and interest and any other amounts due and payable under this Note have been paid in full in cash, the Company shall not, and shall not permit any Subsidiary to:

(a)           create, incur, assume or permit to exist any indebtedness or guarantee, directly or indirectly, except:

(i)            indebtedness with respect to equipment leases or trade accounts of the Company or any Subsidiary arising in the ordinary course of business;

(ii)           indebtedness incurred in the ordinary course arising out of any lease agreement for the premises of the Company or any Significant Subsidiary;

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(iii)          indebtedness incurred in the ordinary course of the Company or any Significant Subsidiary for employee-related obligations or commitments, including, but not limited to, obligations for the payment of salaries, accrued vacation days, severance, prior notice periods, managers’ insurance, pension funds and other approved employee benefits;

(iv)          indebtedness for taxes (including municipality rates), assessments, levies to statutory bodies and government agencies, or similar charges, in all cases provided that such obligations were incurred in the ordinary course of business that are not yet due and payable;

(v)           indebtedness under the Notes and the Convertible Notes;

(vi)          indebtedness, not greater than $6,500,000 in the aggregate under (A) that certain promissory note made by the Company and payable to Syntek Capital AG dated December 16, 2005 as amended as of the date hereof (the “Syntek Note”) and (B) that certain letter of credit made by the Company in favor of Syntek Capital AG in connection with the Syntek Note (the “Syntek Letter of Credit”);

(vii)         up to $15,000,000 of indebtedness assumed by the Company in the acquisition of all or substantially all of the assets or capital stock of another Person; provided that, (a) such indebtedness existed at the time of such acquisition and was not created in anticipation thereof, (b) the aggregate amount of such indebtedness assumed in connection with such acquisition shall not exceed 25% of the aggregate amount of consideration paid by the Company for such acquisition and (c) any Liens securing such indebtedness do not at any time cover or encumber any assets or property other than the assets or property of the Person acquired which is financed  by such indebtedness; and

(viii)        up to $2,500,000 of additional indebtedness in the aggregate outstanding at any time.

(b)           create, incur, assume or suffer to exist any mortgage, pledge, security interest, assignment, lien (statutory or other), claim, encumbrance, license or sublicense or security interest (collectively, a “Lien”) in or upon any of its assets, except:

(i)            Liens for taxes, assessments or similar charges incurred in the ordinary course of business that are not yet due and payable,

(ii)           Liens created pursuant to the Security Agreement, and

(iii)          Liens created to secure the Syntek Note, which such Liens shall only consist of the Syntek Letter of Credit;

(iv)          Liens created in connection with Section 6(a)(ii), (vii) and (viii) above;

(c)           enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service with any Affiliate, except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and

6

reasonable terms no less favorable to the Company or such Subsidiary, than would obtain in a comparable arm’s length transaction with a Person not an Affiliate as reasonably determined by the Audit Committee of the Company’s Board of Directors;

(d)           declare any cash dividends on any shares of any class of its capital stock or membership interests, or apply any of its property or assets to the purchase, redemption or other retirement of, or set apart any sum for the payment of any cash dividends on, or for the purchase, redemption or other retirement of, or make any other distribution by reduction of capital or otherwise in respect of, any shares of any class of its capital stock or membership interests, provided, however, that (i) any Subsidiary wholly owned by the Company may pay dividends directly to the Company and (ii) this restriction shall not apply to the repurchase of shares of Common Stock from employees, officers, directors, consultants or other persons performing services for the Company or any Subsidiary pursuant to agreements under which the Company has the option to repurchase such shares upon the occurrence of certain events, such as the termination of employment;

(e)           sell, transfer, lease or otherwise dispose (including pursuant to a merger) of any asset with a value greater than $1,000,000, except (a) sales, transfers, leases and other dispositions of inventory, used, obsolete or surplus equipment or other property and investments in each case in the ordinary course of business or (b) such sales, transfers or dispositions for cash which are reasonably approved by the Audit Committee of the Company’s Board of Directors;

(f)            create or acquire any new Significant Subsidiary, unless (i) such Significant Subsidiary promptly, and in no event later than fifteen Business Days, becomes a party to the Security Agreement in the manner provided therein and complies with all of the terms, provisions and requirements thereof, including, without limitation, taking such actions to create and perfect Liens on such Significant Subsidiary’s assets, and (ii) the Investor shall have received an opinion of counsel of such Significant Subsidiary containing such opinions that are reasonably acceptable to the Investor and that are materially identical in substance to the opinions received on the date hereof with respect to the Significant Subsidiaries entering into the Security Agreement on the date hereof;

(g)           make any capital expenditures (other than with respect to normal maintenance and replacement programs in the ordinary course of business) exceeding $1,000,000 in any fiscal year for the Company and its Significant Subsidiaries in the aggregate; or

(h)           permit the Subsidiaries that are not party to the Security Agreement to have assets in an aggregate amount greater than $500,000.

Section 7.               Defenses.

The obligations of the Company under this Note shall not be subject to reduction, limitation, impairment, termination, defense, set-off, counterclaim or recoupment for any reason.

Section 8.               Guaranty and Security Agreement.

This Note is a senior secured obligation of the Company.  The Company’s obligations under this Note are (i) guarantied by certain of its Subsidiaries, and (ii) secured by a security

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interest in substantially all of the assets of the Company and such Subsidiaries, in each case pursuant to the terms and provisions of the Security Agreement.  This Note is subject to the terms and provisions of the Security Agreement, and the Investor, by its acceptance of this Note, hereby acknowledges and agrees to such terms and provisions.

Section 9.               Transfer of Note; Lost or Stolen Note.

(a)           The Investor may sell, transfer or otherwise dispose of all or any part of this Note (including without limitation pursuant to a pledge) to any person or entity, so long as such sale, transfer or disposition is in accordance with the provisions of the Securities Purchase Agreement and is of at least $500,000 in principal amount.  From and after the date of any such sale, transfer or disposition, the transferee hereof shall be deemed to be the holder of a Note in the principal amount acquired by such transferee, and the Company shall, as promptly as practicable, issue and deliver to such transferee a new Note identical in all respects to this Note, in the name of such transferee and, if such transferee acquires less than the entire principal amount of this Note, the Company shall contemporaneously issue to the Investor a new Note identical in all respects to this Note, representing the outstanding balance of this Note.  The Company shall be entitled to treat the original Investor as the holder of this entire Note unless and until it receives written notice of the sale, transfer or disposition hereof.

(b)           Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Note, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of the Note, if mutilated, the Company shall execute and deliver to the Investor a new Note identical in all respects to this Note.

Section 10.             Attorneys’ and Collection Fees.

Should the indebtedness evidenced by this Note or any part hereof be collected at law or in equity or in bankruptcy, receivership or other court proceedings, the Company agrees to pay, in addition to the principal and interest due and payable hereon, all costs of collection, including reasonable attorneys’ fees and expenses, incurred by the Investor or its agent in collecting or enforcing this Note.

Section 11.             Indemnification

(a)           The Company shall indemnify the Investor, and each Affiliate of the Investor (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and expenses incurred by or asserted against any Indemnitee by a third party arising out of, in connection with, or as a result of (i) the execution or delivery of this Note, the performance by the Company and its Subsidiaries hereto of their respective obligations hereunder or the consummation of or the use of the proceeds therefrom, or (ii) the material breach by the Company or any Subsidiary of (a) any representation, warranty, covenant or agreement contained herein or (b) any representation or warranty in Section 3.1 of the Securities Purchase Agreement as they relate to the Note; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

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(b)           The Company shall pay all reasonable out of pocket costs and expenses incurred by the Investor, including the reasonable fees, charges and disbursements of counsel for the Investor and any consultant or expert witness fees and expenses, in connection with (i) any amendment, modification or waiver of any provision of any Transaction Document (whether or not the transactions contemplated thereby shall be consummated) required by the Company, and (ii) the enforcement or protection of its rights in connection with any Transaction Document, including its rights under this Section, and including all such reasonable out of pocket costs and expenses incurred during any workout, restructuring or negotiations in respect of any such Transaction Document (provided that references to the Transaction Documents contained therein shall be deemed to relate only to the Notes and the Guaranty and Security Agreement).

(c)           To the extent permitted by applicable law, the Company shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages arising out of, in connection with, or as a result of, this Note, the Securities Purchase Agreement, the Security Agreement or any agreement or instrument contemplated hereby or thereby, or the use of the proceeds thereof.

Section 12.             Waivers.

The Company hereby waives presentment, demand for payment, notice of dishonor, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of this Note.  No delay by the Investor in exercising any power or right hereunder shall operate as a waiver of any power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof, or the exercise thereof, or the exercise of any other power or right hereunder or otherwise; and no waiver whatsoever or modification of the terms hereof shall be valid unless set forth in writing by the Investor and then only to the extent set forth therein.

Section 13.             Amendments.

 This Note may be amended and any provision may be waived with the consent of the Company and the Holder.  In addition, the Notes may be amended and any provision may be waived by the Company with the affirmative vote or consent of the holders of more than a majority of the principal amount outstanding under the Notes.  Any change or amendment so approved shall be binding upon all existing and future holders of this Note; provided that, no such amendment or waiver may materially and adversely affect the economic interest in the Company of the Holder of this Note in a manner disproportionate to the holders of other Notes without the consent of the Holder hereof.

Section 14.             Governing Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial.

(a)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.

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(b)           THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES’ DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE COMPANY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)           THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, THE SECURITIES PURCHASE AGREEMENT OR THE SECURITY AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 16.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

(d)           EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE, THE SECURITIES PURCHASE AGREEMENT, THE SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN

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INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 15.             Successors and Assigns.

The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors (whether by merger or otherwise) and permitted assigns of the Company and the Investor.  The Company may not assign its rights or obligations under this Note.

Section 16.             Notices.

Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be delivered in accordance with Section 6.4 of the Securities Purchase Agreement.  The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore.

Section 17.             Entire Agreement.

The Securities Purchase Agreement, the Notes and the Security Agreement constitute the full and entire understanding and agreement between the parties with regard to the subjects hereto and thereof.

Section 18.             Headings.

The headings used in this Note are used for convenience only and are not to be considered in construing or interpreting this Note.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Note, as amended, to be duly executed as of March 28, 2007.

VYYO INC.
By:
	Name:
	Title:

12

EX-10.5

Exhibit 10.5

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) IF REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

VYYO INC.

PROMISSORY NOTE

(As Amended on March 27, 2007)

Issuance Date: March 23, 2006 Principal: U.S. $10,000,000

FOR VALUE RECEIVED, Vyyo Inc., a Delaware corporation, (the “Company”), hereby promises to pay to Goldman, Sachs & Co. or registered assigns (“Holder”) the amount set out above as the Principal (as reduced pursuant to the terms hereof pursuant to redemption or otherwise, the “Principal”) when due upon the Maturity Date (each, as defined herein) unless earlier redeemed (in each case in accordance with the terms hereof), and to pay interest (“Interest”) on any outstanding Principal at the rate of 10.0% per annum (the “Interest Rate”), from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable unless earlier redeemed.  This Note (including all Notes issued in exchange, transfer or replacement hereof, this “Note”) is issued on the Closing Date pursuant to the Securities Purchase Agreement, dated as of March 18, 2006, by and among the Company and the Investors identified therein (the “Securities Purchase Agreement”). Certain capitalized terms used herein are defined in Section 22.  Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Securities Purchase Agreement.

1.  MATURITY.  On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal and the accrued and unpaid Interest thereon.  The Company shall make such payment on the Maturity Date, together with the amount of any accrued and unpaid interest on such Principal, by wire transfer of immediately available funds to an account designated in writing by the Holder.  Except as set forth in Section 6, this Note may be redeemed or prepaid without premium or penalty.  Any prepayments will be applied first to any accrued but unpaid interest and then to unpaid principal.

2.  INTEREST; INTEREST RATE. Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year

comprised of twelve 30-day months and shall be payable in arrears for each Calendar Quarter on the first day of the succeeding Calendar Quarter during the period beginning on the Issuance Date and ending on, and including, the Maturity Date (each, an “Interest Date”) with the first Interest Date being May 1, 2006 by wire transfer of immediately payable funds.  Interest shall be payable on each Interest Date in cash.  Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable in cash.  Upon the occurrence and during the continuance of any default in the payment of the Interest or Principal when due, the Interest Rate shall be increased by two percent (2.0%) per annum (the “Default Rate”).  In the event that such Interest or Principal payment default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure.  Interest on overdue interest shall accrue at the same rate compounded quarterly.

3.  SUBORDINATION.  The Principal and Interest on this Note is expressly subordinated in right of payment to (i) the Senior Secured Notes issued on the date hereof, and (ii) any borrowed money by the Company designated as senior debt by the Board of Directors (“Indebtedness”).  Upon payment or distribution of the assets of the Company to creditors upon any dissolution, winding up, liquidation, reorganization, recapitalization or readjustment of the Company or its property, payment of the Principal and Interest will be subordinate to the prior payment in full of all such Indebtedness.  No payment of Principal or Interest may be made by the Company if (i) at any time there exists (or after giving effect to the payment there would exist) an event of default under the agreement pursuant to which such Indebtedness has been issued, or (ii) full payment of amounts then due for principal and interest on the Indebtedness has not been made or duly provided for.  The Holder of this Note shall execute any further documentation reasonably requested by a lender to effect the foregoing.

4.  MAKE-WHOLE PREMIUM.  If a Fundamental Transaction occurs prior to the Maturity Date, the Company also shall pay the Make-Whole Premium, if any, to the Holder who elects to have its Note redeemed pursuant to Section 6(a) hereof pursuant to the Fundamental Transaction. The Make-Whole Premium, if any, shall be paid in cash on the Fundamental Transaction Effective Date.  The “Make-Whole Premium” shall be an amount equal to the interest that otherwise would accrue on the Principal of the Note had it remained outstanding from the date hereof through the Maturity Date, less the amount of interest accrued and paid prior to the date of redemption.  For purposes of this Section 4, “Fundamental Transaction Effective Date” means the date that a Fundamental Transaction becomes effective.

5.  RIGHTS UPON EVENT OF DEFAULT.

(a)  Event of Default.  Each of the following events shall constitute an “Event of Default”:

(i)  The Company shall fail to pay any Principal owing under this Note when due;

(ii)  The Company shall fail to pay any Interest owing under this Note when due, and such failure shall continue for thirty (30) days;

(iii)  The Company or any Significant Subsidiary shall (A) fail to make any payment when due under the terms of any bond, debenture, note or other evidence of indebtedness to be paid by the Company or such Significant Subsidiary (excluding this Note, which default is addressed by clauses (i) and (ii) above, but including any other evidence of indebtedness of the Company or such Significant Subsidiary) and such failure shall continue beyond any period of grace provided with respect thereto, or (B) default in the observance or performance of any other agreement, term or condition contained in any such bond, debenture, note or other evidence of indebtedness; and the effect of such failure or default in clause (A) or (B) is to cause, or permit the holder thereof to cause, indebtedness in an aggregate amount of One Million Dollars ($1,000,000) or more to become due prior to its stated date of maturity and such failure shall continue for thirty (30) days;

(iv)  An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (A) liquidation, reorganization or other relief in respect of the Company or any Significant Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Significant Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 30 days or an order or decree approving or ordering any of the foregoing shall be entered;

(v)  The Company or any Significant Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (iv) of this Section, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Significant Subsidiary or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors or (F) take any action for the purpose of effecting any of the foregoing;

(vi)  One or more judgments for the payment of money in an amount in excess of Five Million Dollars ($5,000,000) in the aggregate, outstanding at any one time, shall be rendered against the Company or any Significant Subsidiary and the same shall remain undischarged for a period of sixty (60) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of the Company or any Significant Subsidiary and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within sixty (60) days after issue or levy;

(vii)  Failure (A) of the Company to make any required filings with the United States Securities and Exchange Commission or (B) of the Common Stock to be listed on an eligible securities exchange, and in either case (A) or (B) such failure shall continue for sixty (60) days;

(viii)  The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note or the Guaranty and Security Agreement and, to the extent such failure is capable of being cured, such failure shall continue for sixty (60) days.

(b)  Event of Default Redemption Right.  Promptly after the occurrence of an Event of Default with respect to this Note, the Company shall deliver written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the Holder.  The Holder, upon the approval of Holders holding more than 33 1/3% of the aggregate principal balance of the Notes then outstanding, by written notice to the Company, may declare all outstanding amounts payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding (“Redemption Price”).  Upon the occurrence or existence of any Event of Default described in Sections (iv) or (v) hereof, immediately and without notice, all outstanding amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Holder may exercise, upon the approval of Holders holding more than a majority of the aggregate principal balance of the Notes, any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

6.  RIGHTS UPON FUNDAMENTAL TRANSACTION.

(a)  Fundamental Transaction Redemption Right.  No sooner than twenty (20) days nor later than ten (10) days prior to the consummation of a Fundamental Transaction, but not prior to the public announcement of such Fundamental Transaction, the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder (a “Fundamental Transaction Notice”).  At any time during the period (the “Fundamental Transaction Period”) beginning after the Holder’s receipt of a Fundamental Transaction Notice and ending on the date that is one (1) Trading Day before the Fundamental Transaction Effective Date, the Holder, at its option, may require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Fundamental Transaction Redemption Notice”) to the Company.  The portion of this Note subject to redemption pursuant to this Section 6 shall be redeemed by the Company in cash at a price equal to 101% of the Principal plus any accrued but unpaid Interest thereon up to, but not including, the Fundamental Transaction Effective

Date, plus the Make-Whole Premium (the “Fundamental Transaction Redemption Price”) on the Fundamental Transaction Effective Date.  Redemptions required by this Section 6 shall have priority to payments to stockholders in connection with a Fundamental Transaction.  To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments.  The parties hereto agree that in the event of the Company’s redemption of any portion of the Note under this Section 6, the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder.  Accordingly, any redemption premium due under this Section 6 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.

7.  COVENANTS.  Until all Principal and Interest and any other amounts due and payable under this Note have been paid in full in cash, the Company shall, and shall cause each Significant Subsidiary to:

(a)  provide prompt written notice to the Holder of the occurrence of any Event of Default, or any event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, hereunder;

(b)  do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence; and

(c)  keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities, (ii) permit any representatives designated by the Holder, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, and (iii) provide to the Holder the same information rights as it provides to its stockholders.

8.   VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTES.  This Note may be amended and any provision may be waived with the consent of the Company and the Holder.  In addition, the Notes may be amended and a provision may be waived by the Company with the affirmative vote or consent of the holders of a majority of the aggregate principal amount of the Notes.  Any change or amendment so approved shall be binding upon all existing and future holders of this Note; provided that, no such amendment or waiver may materially and adversely affect the economic interest in the Company of the Holder of this Note in a manner disproportionate to the Holders of other Notes without the consent of the Holder hereof.

9.  TRANSFER.  This Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company in aggregate principal amounts of at least $500,000, subject only to the provisions of Section 4.1 of the Securities Purchase Agreement and compliance with applicable law.

10.  REISSUANCE OF THIS NOTE.

(a)  Transfer.  If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 10(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less then the entire outstanding Principal is being transferred, a new Note (in accordance with Section 10(d)) to the Holder representing the outstanding Principal not being transferred.  The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, following redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

(b)  Lost, Stolen or Mutilated Note.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 10(d)) representing the outstanding Principal.

(c)  Note Exchangeable for Different Denominations.  This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 10(d) and in principal amounts of at least $100,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

(d)  Issuance of New Notes.  Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 10(a) or Section 10(c), the Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest on the Principal of this Note, from the Issuance Date.

11.  REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific

performance and/or other injunctive relief).  Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction.

12.  PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS.  If following an Event of Default (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the reasonable costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

13.  CONSTRUCTION; HEADINGS.  This Note shall be deemed to be jointly drafted by the Company and all the Holders and shall not be construed against any person as the drafter hereof.  The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

14.  FAILURE OR INDULGENCE NOT WAIVER.  No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

15.  NOTICES.  Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be delivered in accordance with Section 6.4 of the Securities Purchase Agreement.  The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore.  Without limiting the generality of the foregoing, the Company will give written notice to the Holder at least twenty (20) days prior to the date on which the Company closes its books or takes a record for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

16.  CANCELLATION.  After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

17.  WAIVER OF NOTICE.  To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.

18.  GOVERNING LAW.  This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the State of New York and waive trial by jury.  Both parties agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note.  Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.

19.  INDEMNIFICATION.

(a)  Subject to the limitations herein, the Company shall indemnify the Holder, and each Affiliate of the Holder (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, (excluding the legal fees of counsel for any Indemnitee), incurred by or asserted against any Indemnitee by a third party arising out of, in connection with, or as a result of:  (i) the execution or delivery of this Note, the performance by the Company and its Subsidiaries hereto of their respective obligations hereunder or the consummation of or the use of the proceeds therefrom, or (ii) the material breach by the Company or any Subsidiary of (a) any representation, warranty, covenant or agreement contained herein or (b) any representation or warranty in Section 3.1 of the Securities Purchase Agreement, as they relate to this Note; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(b)           To the extent permitted by applicable law, the Company and the Holder hereof shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages arising out of, in connection with, or as a result of, this the this Note, the Securities Purchase Agreement or any agreement or instrument contemplated hereby or thereby, or the use of the proceeds thereof.

20.  MAXIMUM PAYMENTS.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

21.  NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note.

22.  CERTAIN DEFINITIONS.  For purposes of this Note, the following terms shall have the following meanings:

(a)   “Calendar Quarter” means each of: the period beginning on and including February 1 and ending on and including April 30; the period beginning on and including May 1 and ending on and including July 31; the period beginning on and including August 1 and ending on and including October 31; and the period beginning on and including November 1 and ending on and including January 31.

(b)  “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially issued Notes pursuant to the terms of the Securities Purchase Agreement.

(c)   “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company, is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) be subject to an offer from another Person or group of related Persons (as defined in Sections 13(d) and 14(d) of the Exchange Act) other than the Holder to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding Voting Shares (not including any Voting Shares held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or

scheme of arrangement) with another Person or group of related Persons (as defined in Sections 13(d) and 14(d) of the Exchange Act) whereby such other Person or group acquires more than the 50% of the outstanding Voting Shares (not including any Voting Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such share purchase agreement or other business combination), provided however, a Fundamental Transaction shall not include (i) any reorganization, recapitalization or reclassification of the Common Shares in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

(d)  “GAAP” means United States generally accepted accounting principles, consistently applied.

(e)  “Maturity Date” means September 26, 2007.

(f)  “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

(g)  “Principal Market” means The Nasdaq National Market.

(h)  “Redemption Notices” means, collectively, the Event of Default Redemption Notices, and the Fundamental Transaction Redemption Notices, each of the foregoing, individually, a Redemption Notice.

(i)  “Required Holders” means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding.

(j)  “SEC” means the United States Securities and Exchange Commission.

(k)   “Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest).

(l)   “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, (b) if the Common Stock is not then listed or quoted and traded on any Eligible Market, then a day on which trading occurs on the NASDAQ National Market (or any successor thereto), or (c) if trading ceases to occur on the NASDAQ National Market (or any successor thereto), any Business Day.

(m)  “Voting Shares” of a Person means capital shares of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital shares of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Note, as amended, to be duly executed as of March 27, 2007.

VYYO INC.
By:	/s/ Wayne H. Davis
Name: Wayne H. Davis
Title: CEO

CONSENTED AND AGREED TO

AS OF MARCH 27, 2007 BY:

HOLDER:

GOLDMAN, SACHS & CO.

By:	/s/ Nick Advani
	Name: Nick Advani
	Title: Managing Director

EX-99.1

Exhibit 99.1

VYYO SECURES ADDITIONAL FUNDING

FROM GOLDMAN, SACHS & CO.

Includes $17.5 million in new financing

plus $17.5 million to refinance existing debt

NORCROSS, GA (March 28, 2007) — Vyyo Inc. (NASDAQ: VYYO), a supplier of broadband access equipment for cable system operators, announced today an investment from Goldman, Sachs & Co., an existing investor in Vyyo. The transaction, to be closed within the week, will result in $17.5 million in new funding and an additional $17.5 million to pay off the aggregate of notes issued to Goldman Sachs in 2006. The total financing of $35 million consists of a five-year unsecured note convertible into Vyyo common stock at $10 per share, a premium of 34% over the closing price of Vyyo’s common stock on March 27th. The convertible note will bear a 5% annual interest rate.

Vyyo will utilize the funding to accelerate deployment of its spectrum overlay and business services solutions for the cable industry. Vyyo greatly expands the raw bandwidth of existing cable network infrastructures at a fraction of the cost of fiber, enabling operators to meet current and future bandwidth demands today to capitalize on the lucrative commercial and residential services markets.

The announcement follows two key events for Vyyo: Its selection as a vendor partner by StarHub, which passes one million homes in Singapore; and the announcement that prominent cable executives Jim Chiddix and Wayne Davis have joined the company as vice-chairman and CEO, respectively.

“Creating bandwidth, particularly for business services opportunities, has become increasingly important for cable system operators,” said Davis. “The cable industry is looking for solutions that can enable the delivery of advanced business and residential services, without stranding their existing investment in HFC networks.”

 “We believe that this investment by Goldman Sachs is yet another indicator of the timeliness and value of our solutions, and the significant market opportunity for companies like ours that can help cable operators increase bandwidth,” said Davidi Gilo, chairman of Vyyo. “Like StarHub and our

recent management additions, Goldman Sachs has chosen to throw its support behind Vyyo, based on its assessment of our technology and the cable industry’s needs.”

About Vyyo Inc.

Vyyo products designed for use by cable television operators include spectrum overlay solutions designed to expand cable operators’ typical HFC (hybrid-fiber coax) network capacity in the “last mile” and business services solutions that can help operators meet the needs of small/medium-sized enterprises using existing cable plant. Spectrum overlay increases bandwidth by up to 2x in the downstream and 4x or more in the upstream, addressing requirements for advanced residential and business services.  For more information, please visit www.vyyo.com.

Safe Harbor Statement

Consummation of the transaction described above is subject to a number of customary closing conditions. Statements made in this press release relating to the future, including those related to our use of the proceeds from such transaction in helping us accelerate deployment of our spectrum overlay and business services solutions for the cable industry and the opportunities created for our customers given our ability to provide spectrum overlay solutions and dramatically increase upstream and downstream bandwidth, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Risks that may cause these forward-looking statements to be inaccurate include among others: our ability to close the transaction as contemplated or at all; whether we will be able to accelerate the movement from development stage to deployment and establish meaningful commercial relationships with cable system operators; the current limited visibility available in the telecommunications and broadband access equipment markets; the willingness and ability of operators to adopt our new technology and apply it in a manner that meets customer demands; our ability to produce and distribute our spectrum overlay and T1 solutions in the quantities, and with the quality control, desired by the market; and other risks set forth in our annual report on Form 10-K for the year ended December 31, 2005, our quarterly reports on Form 10-Q and other reports filed by us with the Securities and Exchange Commission from time to time. We assume no duty to update these statements.

THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE FUNDING DESCRIBED ABOVE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT

TO AN EXEMPTION FROM REGISTRATION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY ANY OF THE SECURITIES REFERENCED ABOVE. AS THE OFFERING IS FULLY SUBSCRIBED, NO ADDITIONAL OFFERS MAY BE ACCEPTED NOR WILL ADDITIONAL SECURITIES BE SOLD.

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PRESS: Paul Schneider Paul Schneider Public Relations, Inc. (w) 215.702.9784 (m) 215.817.4384 pspr@att.net INVESTORS: Walt Ungerer VP, Corporate Communications Vyyo Inc. 678.488.0468 ir@vyyo.com