EXHIBIT C
Memorandum of Agreement
Made and executed as of November __, 2005 by and between CYMI Private Equity II
LLC. ("CYMI") on the one part, and the group of shareholders listed below (the
"Xxxxx Group"), represented by Xx. Xxxxxx Xxxxx ("SK"), on the other part.
WHEREAS CYMI and the Xxxxx Group, are shareholders of Xxxx Communications &
Software Ltd. ("Xxxx"), and each of the Xxxxx Group represents that he holds
such number of Xxxx shares as are listed opposite its name below; and
WHEREAS Xxxx intends to enter into going private transaction through a plan
of arrangement to be ordered by the Tel-Aviv District Court (the "Arrangement"),
and the parties have agreed to cooperate in effecting such Arrangement;
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
1. The Xxxxx Group shall cooperate with CYMI in effecting the Arrangement and
receipt of all required legal approvals.
2. Immediately following the date on which Xxxx announces the completion of
the Arrangement, SK shall resign from Xxxx'x Board. Notwithstanding and as
long as Xxxx remains a private company, once a calendar quarter, SK only,
on behalf of the Xxxxx Group shall be entitled to (i) receive Xxxx'x
quarterly financial statements (ii) talk with Xxxx'x CEO. The Board shall
consult SK prior to making strategic decisions but shall not be obliged in
any way to follow SK's advice.
3. If following the investment and conversion of the funds required for the
Arrangement, CYMI/CLM shall make further investments in Xxxx, then such
investments in an amount of up to US $ 7.5 million shall not be made in
Xxxx'x equity (securities, convertibles, etc.). In the event of any further
investments, CYMI shall offer the Xxxxx Group the opportunity to invest its
pro-rata portion of any proposed investment simultaneously with CYMI (or
its successors(1) or affiliates). Such offer shall be made in writing to SK
on behalf of the Xxxxx Group and SK shall have 10 business days to respond
to such offer.
4. Each member of the Xxxxx Group shall have a put option right to sell to
CYMI (or its successors) its Xxxx shares for the same price per share(2)
paid for the Xxxx shares purchased from the public shareholders in the
Arrangement, for a period of 30 months following completion of the
Arrangement. Payment for the sold shares shall be made no later than 60
days from the date of exercise of the option.
5. Following the completion of the Arrangement Xxxx shall no longer be a
considered a public company under all applicable laws.
6. No member of the Xxxxx Group shall be entitled to any additional rights
with the exception of those provided to shareholders by law, other than
those set forth in this Agreement.
7. This Agreement shall be construed in accordance with the laws of the State
of Israel.
IN WITNESS WHEREOF:
---------------------------
CYMI Private Equity II LLC.
By: Xx. Xxx Xxxxxxx
--------
(1) In the event of a sale by CYMI or its successors of their shares to a
non-affiliated party SK Group shall have tag along rights.
(2) Currently, $1.50 per share.
The Xxxxx Group:
NAME NO. OF SHARES SIGNATURE
---- ------------- ---------
Hagit & Xxxxxx Xxxxx 300,000
Xxx Xxxxx 60,000
Xxxx Xxxxx 50,000
Xxx Xxxxx 50,000
Xxxx Xxxxx 60,000
Xxxxxx Bin-Nun 235,329
2
