EXHIBIT 10.1


AGREEMENT


This
AGREEMENT, effective as of the 29th day of June, 2007 (the “Effective Date”) by
and between Vyyo Inc., a Delaware corporation with an address at 6625 The
Corners Parkway, Suite 100, Norcross, Georgia 30092 (“Inc”), and Vyyo Ltd., an
Israeli company with an address at 4 Hanegev Street Kiryat Sde Hateufa P.O.Box
197, Ben-Gurion Airport, 70100 Israel (“Ltd”, and together with Inc, the “Parties”).


RECITALS


WHEREAS,
Inc owns 100% of the issued and outstanding shares of Ltd;


WHEREAS,
Inc has made loans (the “Loans”) to Ltd in an aggregate principal amount of $77,139,471
(the “Loan Amount”);


WHEREAS,
a total of $17,062,294 of interest payable from Ltd to Inc has accrued on the
Loans from the dates on which the Loans were made through the Effective Date
(the “Accrued Interest”), and none of the Accrued Interest has been paid;


WHEREAS,
Inc and Ltd wish to convert the Loan Amount (as such term is defined below) into
a convertible capital note of Ltd.


NOW,
THEREFORE, for good and valuable consideration, the Parties hereto agree as
follows:


1.                         Inc hereby forgives all of the Accrued
Interest owed to it by Ltd.


2.                         The Loans are hereby replaced, and the Loan
Amount is hereby converted into a capital note in the form of Exhibit A hereto
(the “Conversion”).  The Conversion is
effective as of the Effective Date.


3.                         This Agreement shall be governed by the laws
of the State of Israel without reference to the conflict of laws provisions
thereof.


IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first above written.




	
  VYYO INC.

  	
   

  	
  VYYO LTD.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ WAYNE H. DAVIS

  	
   

  	
  By:

  	
  /s/ JACOB KRUK

  
	
   

  	
   

  	
   

  
	
  Name: Wayne H. Davis

  	
   

  	
  Name: Jacob Kruk

  
	
   

  	
   

  	
   

  
	
  Title: Chief Executive Officer

  	
   

  	
  Title: General Manager

  
					







 1
 









Exhibit A


Convertible
Capital Note


This Convertible Capital
Note (“Capital Note”) in
the amount of US$77,139,471 (the “Principal”)
is entered into effect as of January 1st, 2007, by and between Vyyo Inc,  a corporation duly incorporated
under the laws of the State of Delaware (the “Holder”), and Vyyo Ltd., a company registered
and existing under the laws of the State of Israel (“Company”).


1.                                       Interest
Rate; Payment


(a)                                  The
outstanding balance of the Principal shall bear no interest.


(b)                                 The
Company will repay the Principal at such time as the Company and the Holder
shall jointly determine; provided that no such repayment shall be made until
the second anniversary of the date of this Capital Note. The Holder shall have
no right to demand the repayment of the Principal, or any balance thereof,
whether under Israeli or other applicable law. 
The Company shall not be entitled to repay or redeem the Capital Note
prior to the liquidation or dissolution of the Company, unless agreed otherwise
with the Holder.


2.                                       Conversion


(a)                                  This
Capital Note may be converted into ordinary shares of the Company, nominal
value NIS 1.00 per share (“Ordinary
Shares”), which conversion may be made, at the option of Holder,
at any time and from time to time, by a written notice to the Company. The
number of Ordinary Shares to be issued to the Holder shall be determined in
accordance with the Company’s fair market value at the date of such conversion,
as determined by the Company’s Board of Directors at such time.  Notwithstanding any other provision herein to
the contrary, the Company may satisfy its repayment obligation hereunder by
converting the Principal of this Capital Note into Ordinary Shares, which
conversion may be made, at the option of Company, at any time, by written
notice to the Holder. The number of Ordinary Shares to be issued to the Holder
upon any conversion shall be calculated by dividing (i) the amount of the
Principal being converted by (ii) US$500,000.


(b)                                 Upon
conversion of this Capital Note into Ordinary Shares in accordance herewith,
such Ordinary Shares shall confer upon the Holder all rights and obligations
conferred by all other issued and outstanding Ordinary Shares of the Company
upon the holders thereof for all intents and purposes, including, without
limitation, the right to receive notices of, and to attend, all annual or
special meeting of the shareholders of the Company in accordance with the 



 2
 









Israeli Companies Law 1999; the right to one vote per
each share held at all such annual or special meetings or shareholders resolutions
for all purposes; the right to participate and share equally, on a per share
basis, in distribution of dividends; and to participate and share equally, on a
per share basis, in distribution of surplus assets and funds in the Company,
including upon any liquidation of dissolution of the Company.


(c)                                  The
Company covenants that it will, at all relevant times, reserve and keep
available the necessary amount of its authorized Ordinary Shares solely for the
purpose of issue or delivery upon conversion of this Capital Note as hereof
provided.


3.                                       Subordination


The Company covenants and agrees, that the repayment
of the Principal is hereby expressly made subordinate and junior in right to
all other indebtedness of the Company, existing on the date hereof or in the
future. Notwithstanding the foregoing, nothing in this section shall prevent
the conversion of this Capital Note in accordance with the terms hereof.


4.                                       Rights
as a Shareholder


In its capacity as Holder of this Capital Note and
prior to any conversion, Holder shall not be entitled to any rights of a
shareholder of the Company, including, without limitation, the right to vote or
to receive dividends or other distributions.


5.                                       Accounting
and Tax Treatment


The Company and the Holder acknowledge that they will
treat this Capital Note as equity for all U.S. Federal income tax purposes and
as an equity investment for U.S. accounting purposes.


6.                                       Successors
and Assigns


This Capital Note shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto. The
Holder and the Company may not assign any of their rights under this Capital
Note without the prior written consent of the other, as the case may be.


7.                                       Liquidation
Event


Subject to section 3 above, in  the event (i) of any dissolution, liquidation
or winding-up of the Company; (ii) any bankruptcy, insolvency or reorganization
proceeding under any bankruptcy or insolvency or similar law, whether voluntary
or involuntary, is properly commenced by or against the Company; or (iii) a
receiver or liquidator has been appointed to all or substantially all of the 



 3
 









Company’s assets (each, a “Liquidation”), the Holder shall
receive the greater of (i) the Principal or (ii) the amount that the Holder
would have received if this Capital Note would have been converted into
Ordinary Shares immediately prior to such Liquidation.


8.                                       Amendments
and Waiver


(a)                                  No
failure or delay on the part of the Company or the Holder in exercising any
right, power or remedy hereunder shall operate as a waiver thereof. Nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.


(b)                                 Any
amendment, supplement or modification of or to any provision of this Capital
Note, any waiver of any provision of this Capital Note and any consent to any
departure by the Company from the terms of any provision of this Capital Note,
shall be effective (i) only if it is made or given in writing and signed by the
Company and the Holder, and (ii) only in the specific instance and for the
specific purpose for which made or given.


9.                                       Headings


The headings in this Capital Note are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.


10.                                 Governing
Law


This Capital Note shall be governed by and construed
in accordance with the laws of the State of Israel, without regard to the
conflicts of law principles thereof.


11.                                 Consent
to Jurisdiction


The parties hereby irrevocably consent to the
nonexclusive jurisdiction of the court of the Tel-Aviv-Jaffa District, Israel,
in connection with any action or proceeding arising out of or relating to this
Capital Note or any document or instrument delivered pursuant to this Capital
Note.


12.                                 Severability


In the event that any one of the provisions of this
Capital Note is for any reason held to be invalid or unenforceable, the
remaining provisions of this Capital Note will be unimpaired, and the invalid
or unenforceable provision will be replaced by a mutually acceptable provision,
which being valid and enforceable, comes closest to the intention of the
parties underlying the invalid or unenforceable provision.


13.                                 Entire
Agreement


This Capital Note is the sole and final expression of
the parties’ agreement and intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter hereof. There 



 4
 









are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.


14.                                 Further
Assurances


The Company shall execute such documents and perform
such further acts (including, without limitation, obtaining any consents,
exemptions, authorizations or other actions by, or giving any notices to, or
making any filings with, any governmental authority or any other person) as may
be reasonably required or desirable to carry out or to perform the provisions
of this Capital Note.


IN WITNESS WHEREOF, the
parties hereto have executed this Capital Note.




	
  Vyyo Inc.

  	
   

  	
  Vyyo Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ WAYNE H. DAVIS

  	
   

  	
  By:

  	
  /s/ JACOB KRUK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wayne H. Davis

  	
   

  	
  Jacob Kruk

  
	
   

  	
   

  	
   

  
	
  Chief Executive Officer

  	
   

  	
  General Manager

  (Name & Title of Signatory)

  
	
   

  	
   

  	
   

  
	
  Date: June 29, 2007

  	
   

  	
  Date: June 29, 2007

  






 


 



 5