EXHIBIT C1 FIXED CHARGE AGREEMENT
EXHIBIT
C1
THIS
FIXED CHARGE AGREEMENT
(the
“Agreement”)
is
made and executed on
the
the
1st
day of
April, 2008, by and among RADCOM LTD., an Israeli company, of ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (the “Pledgor”),
and
the entities identified in the signature page below (collectively, the
"Lenders”),
with
offices located at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ all of which
shall be represented exclusively hereunder by Plenus Management (2004) Ltd.
and
Plenus Management III 2007 Ltd. (collectively, “Plenus
Management”).
WHEREAS,
the Lenders and the Pledgor have entered into that certain Loan Agreement (the
“Loan
Agreement”)
dated
as of April 1, 2008; and
WHEREAS,
the Pledgor has agreed to enter into this Agreement in order to secure the
payment of all amounts due or which may become due to the Lenders pursuant
to
the Loan Agreement and other agreements ancillary thereto;
NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:
1. Interpretation.
The
Preamble to this Agreement constitutes a part hereof. All capitalized terms
used
and not otherwise defined herein shall have the meaning assigned to such terms
in the Loan Agreement.
2. Security.
To
secure the timely payment of all amounts due or which may become due to the
Lenders from the Pledgor pursuant to the Transaction Documents (collectively,
the “Secured
Obligations”),
the
Pledgor hereby unconditionally pledges and grants the Lenders a first priority
fixed charge (the “Fixed
Charge”)
on all
the Intellectual Property (as defined below) currently owned by the Pledgor
or
which shall be owned during the term of the Loan Agreement by the Pledgor,
including, but not limited to, any registered Intellectual Property and
applications for the registration of Intellectual Property, worldwide
(collectively, the "Collateral").
The
Collateral shall include, but shall not be limited to, the Intellectual Property
and other assets described in Annex
A attached
hereto.
The
registered Intellectual Property currently owned by the Pledgor and the current
applications for the registration of Intellectual Property filed by the Pledgor,
are described in Annex
B attached
hereto.
The
Pledgor undertakes, so long as the Secured Obligations are not fully
paid:
(i)
to
inform Plenus Management in writing of any additional registration of
Intellectual Property and to promptly take all such steps as shall be required
in order to amend Annex A to reflect such new registrations; and
(ii)
without derogating from the foregoing, to prepare and file the applicable
documents with the U.S Patent and Trademark Office (the “USPTO”)
as
required in order to perfect a security interest (the “Lien”)
over
the Collateral in order to protect the Lenders' rights pursuant to this
Agreement and to cause the Fixed Charge created pursuant to this Agreement
to be
registered also in each and every country in which Intellectual Property of
the
Pledgor is registered. Without derogating from the foregoing, the Pledgor will
update such filings following the registration of such Intellectual
Property.
The
Pledgor represents that as of the date hereof it has three Subsidiaries, Radcom
Equipment, Inc, Radcom (UK) Ltd. and Radcom Investments (1996) Ltd.,
and
except for Radcom Equipment, Inc., none
of
them
owns any
registered Intellectual Property. The
Pledgor undertakes to inform Plenus Management in writing of any registration
of
Intellectual Property under the name of any Subsidiary or
any
future
subsidiary and will promptly take all such steps as shall be required in order
to cause such subsidiaries to execute an agreement substantially similar to
this
Agreement and make the applicable filings. Furthermore, should the Pledgor
file
for the registration of any Intellectual Property in the United States or
elsewhere, it shall promptly inform Plenus Management in writing and, if
requested by Plenus Management will execute an appropriate Intellectual Property
security agreement and shall make the applicable filings.
For
purposes of this Agreement, the term “Intellectual
Property”
or
“Intellectual
Property Rights”
shall
be deemed to refer to (i) copyright; (ii) patents and any rights thereunder
and
all registrations, and renewals in connection therewith; (iii) trademarks,
service marks, together with all translations, adaptations, derivations, and
combinations thereof, and all registrations and renewals in connection
therewith; and (iv) all copyrighted computer software, in each case on a
worldwide basis, and all copies and tangible embodiments thereof, or any part
thereof, in whatever form or medium.
3. Incorporation
by Reference.
The
acceleration provisions set forth in Section 3 of the Loan Agreement, as amended
from time to time, are incorporated herein by this reference.
4. Encouragement
of Research and Development in the Industry Law.
The
Lenders hereby acknowledge that the security interests granted hereunder with
respect to the Intellectual Property of the Pledgor is hereby made subject
to
the provisions of the Encouragement of Research and Development in the Industry
Law, 5744-1984 (the ‘R&D
Law’)
(such
Intellectual Property, “Funded
IP”)
and is
subject to the Chief Scientist’s Rights (as hereinafter defined). In addition,
the Lenders hereby acknowledge that any realization of any charge, lien or
encumbrance, fixed or floating, of the Funded IP, including the sale of the
Funded IP and its transfer within the framework of realization procedures,
will
require the approval of the Research Committee (as hereinafter defined).
Likewise, any realization or transfer of said Funded IP will also be conditional
upon the potential buyer or transferee undertaking to assume obligations in
accordance with the R&D Law (including without limitation, Sections 18, 19
and 19A thereof and the obligation not to transfer the Funded IP to another
entity unless the Research Committee approves the transaction) and in accordance
with the terms of the program pursuant with which funds were provided to the
Pledgor.
In
this
Agreement, the ‘Chief
Scientist's Rights’
shall
mean all the rights, powers and privileges of the Israeli Office of the Chief
Scientist under the Ministry of Industry and Trade (the "OCS"),
including without limitation, all the rights, powers and privileges of the
Industrial Research and Development Committee (the "Research
Committee"),
by
virtue of an instrument of approval granted pursuant with the R&D Law and
the OCS rules and regulations.
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5.
Covenants.
(a)
The
Pledgor will take all action deemed by the Pledgor, in its reasonable commercial
judgment, to be necessary to maintain all of the registered Intellectual
Property Rights in full force and effect, including, without limitation, using
the proper statutory notices and markings, and subject to its reasonable
commercial discretion the Pledgor will not take any action or knowingly refrain
from taking any action whereby any registered Intellectual Property may become
invalidated; provided,
however,
that so
long as no Event of Acceleration has occurred and is continuing, the Pledgor
shall not have an obligation to use or to maintain any registered Intellectual
Property Rights of the Pledgor (A) that relates solely to any product or work,
that has been, or is in the process of being, discontinued, abandoned or
terminated, (B) that is being replaced with Intellectual Property substantially
similar to the registered Intellectual Property that may be abandoned or
otherwise become invalid, so long as the failure to use or maintain such
registered Intellectual Property does not materially adversely affect the
validity of such replacement Intellectual Property and so long as such
replacement Intellectual Property is subject to the Fixed Charge and Lien
created by this Agreement; (C) that is substantially the same as another
registered Intellectual Property that is in full force, so long as the failure
to use or maintain such registered Intellectual Property does not materially
adversely affect the validity of such replacement Intellectual Property and
so
long as such other Intellectual Property is subject to the Fixed Charge and
Lien
created by this Agreement; or (D) that is not deemed by the Pledgor, in its
sole
discretion, to be required for the purpose of conducting its business as
currently conducted or as proposed to be conducted.
(b)
The
Pledgor shall use reasonable commercial efforts to detect infringements of
the
registered Intellectual Property and protect the registered Intellectual
Property from any infringements. If any registered Intellectual Property of
the
Pledgor is infringed, misappropriated or otherwise violated in any material
respect by a third party, the Pledgor shall upon learning of such infringement,
misappropriation or other violation, to the extent the Pledgor shall deem
appropriate under the circumstances, ▇▇▇ for infringement, misappropriation
or
other violation, seek injunctive relief where appropriate and recover any and
all damages for such infringement, misappropriation or other violation, or
take
such other actions as the Pledgor shall deem appropriate under the circumstances
to protect such registered Intellectual Property.
(c)
The
Pledgor shall furnish to Plenus Management from time to time upon its request
statements and schedules further identifying and describing the registered
Intellectual Property in reasonable detail upon reasonable request of Plenus
Management.
(d)
The
Pledgor shall at all times maintain insurance covering the Pledgor, which is
customary for a company of the size, the stage of development and the industry
in which the Pledgor operates.
(e)
Subject to the provisions contained herein but without derogating from the
covenants referred to in Section 7.3 of the Loan Agreement, the Pledgor shall
not without the previous written consent of Plenus Management: (A) sell (or
grant an exclusive license to) any item of the registered Intellectual Property
or any part of the Collateral
other
than in the Pledgor's ordinary course of business;
or (B)
assign or transfer or otherwise encumber any item of the registered Intellectual
Property or any part of the Collateral in a way that is not in the Pledgor's
normal course of business.
3
6. Representations.
6.1 Representations.
The
Pledgor hereby represents that:
(i) the
Collateral is not charged, pledged or attached to or in favor of any other
person or entity;
(ii) to
the
Pledgor’s knowledge, all of the registered Intellectual Property Rights and
confidential information connected or related to any registered Intellectual
Property created by or for the Pledgor or created by its employees, consultants
or contractors is owned solely and exclusively by the Pledgor, except only
for
non-exclusive licenses granted by the Pledgor to its customers in the ordinary
and normal course of its business as now conducted;
(iii) to
the
Pledgor’s knowledge, there is no limitation in any provision of agreement which
the Pledgor is a party to, which restricts the creation of a pledge and charge
over the Collateral or, subject to Section 4 herein, the Pledgor is unaware
of
anything which may prevent or adversely affect Plenus Management's ability
to
freely sell, transfer and/or dispose of the Collateral, pursuant to the
provisions of this Agreement, without the consent or approval of any third
party
or governmental authority. For the avoidance of doubt, the Pledgor shall have
no
liability or responsibility for the failure to exercise any charge or lien
granted hereunder in the event that consent from the OCS and/or the Research
Committee, as applicable, was denied;
(iv) the
Pledgor has the complete power and authority to create the Fixed Charge and
the
Lien over the Collateral, in accordance with the provisions hereof;
(v)
to
the
Pledgor’s knowledge, no assignment or other disposition is currently affecting
the Collateral which may derogate from the value of the Collateral, subject
to
customary assignment provisions in commercial agreements; and
(vi)
to
the
Pledgor’s knowledge, there are no powers of attorney, proxies or assignments or
delegations thereof authorizing any action to be taken on behalf of the Pledgor
in connection with the Collateral, except as required pursuant to the provisions
of this Agreement.
6.2.
Notification
Requirement.
Without
derogating from the provisions of the Loan Agreement or any other notification
requirement set forth herein, the Pledgor shall promptly notify Plenus
Management, in writing, of (i) any Material Adverse Effect, or (ii) any steps
taken or threatened for the appointment of a special manager, temporary
liquidator, temporary receiver or trustee for or over all or any part of the
Collateral and, if any such official is appointed, of his appointment; or (iii)
the placement of an attachment on the Collateral or any portion thereof, or
(iv)
the filing against the Pledgor of any petition in liquidation or any petition
under the provisions of applicable law for the relief of
creditors.
4
7. Realization
of the Fixed Charge; Authorization; Independence of Fixed Charge.
The
Lenders and Plenus Management shall be entitled to realize the Fixed Charge
(in
accordance with the provisions contained herein) as of the time that all amounts
due to the Lenders from the Pledgor pursuant to the Loan Agreement shall become
due and payable as a result of the occurrence of an Event of
Acceleration.
The
Lenders undertake and confirm that: (a) the creation and realization of the
Fixed Charge must be in accordance with the applicable Israeli laws and
regulations and such governmental consents as may be necessary, and (b) in
the
event of the realization of the Fixed Charge with respect to the Funded IP
then
the sale, assignment and/or transfer of the Funded IP shall be subject to the
provisions of applicable Israeli laws and regulations and the Pledgor’s
undertakings towards the OCS.
The
Fixed
Charge created for the benefit of the Lenders herein shall be independent of
any
and all other charges created or which may be created in the future for the
benefit of the Lenders by the Pledgor or any other affiliated entity, subject
to
Section 1.6 of the Loan Agreement, shall not affect or be affected by such
other
charges and shall serve as a continuing security which shall remain in full
force until removed in accordance with the provisions contained herein and
in
the Loan Agreement.
8.
Power
of Attorney; Receiver; Additional Costs.
8.1 Power
of Attorney.
The
Pledgor acknowledges and agrees that Plenus Management will represent the
Lenders in all matters pertaining to this Agreement, and hence, shall have
the
right and power to take any and all actions on behalf of the Lenders in
connection herewith, including, without limitation, with respect to realization
of the Fixed Charge. No Lender shall have any claim whatsoever against the
Pledgor in respect of any actions taken by the Pledgor in compliance with
instructions or demands given to it by Plenus Management. Without derogating
from the obligations of the Pledgor under the Loan Agreement or this Agreement,
the Pledgor hereby irrevocably appoints Plenus Management as its true and lawful
attorney, with full power of substitution, to act in the name of and at the
expense of the Pledgor, effective upon such time as all amounts due to the
Lenders from the Pledgor pursuant to the Transaction Documents shall become
due
and payable as a result of the occurrence of an Event of Acceleration, in order
to do any act, including, without limitation, to sign in the name of the Pledgor
any and all documents as may, in the reasonable opinion of Plenus Management,
be
necessary, in order to secure the rights of the Lenders against third parties.
Plenus Management shall notify the Pledgor in writing of any action taken by
it
in accordance with this Section 8.1.
8.2
Receiver.
Subject
to the provisions of applicable laws, upon such time as all amounts due to
the
Lenders from the Pledgor pursuant to the Transaction Documents shall become
due
and payable as a result of the occurrence of an Event of Acceleration, Plenus
Management shall be entitled to take all such steps as it sees fit to collect
the Secured Obligations including, without limitation, the appointment of a
receiver or manager (the “Receiver”).
The
Receiver shall not be deemed the agent of Plenus Management or the Lenders
and
shall have all powers conferred upon it by law. The Receiver shall be empowered,
inter alia, to do the following:
8.2.1 to
take
possession of the Collateral and for that purpose to take any proceedings in
the
Pledgor’s name or otherwise as the Receiver shall see fit;
5
8.2.2 to
sell,
or agree to the sale of, the Collateral, in whole or in part, or to transfer
the
same in any other manner upon such conditions as the Receiver may see
fit;
8.2.3 to
make
any other arrangement with respect to the Collateral or any part thereof as
the
Receiver may reasonably see fit;
8.2.4 to
carry
on, or concur in carrying on, the Pledgor’s business and raise money on the
security of all or any part of the Pledgor’s assets;
8.2.5 to
take,
continue or defend any proceedings and make any arrangement or compromise which
the Receiver may see fit;
8.2.6 to
make
and effect all repairs, improvements and insurance;
8.2.7 to
appoint managers, officers and agents for any of the above purposes, at such
reasonable salaries as the Receiver may see fit;
8.2.8 to
call
up any of the uncalled capital of the Pledgor;
8.2.9 to
do all
other acts and things which the Receiver may consider to be incidental or
conducive to any of the above powers.
8.3 Additional
Costs Relating to the Realization of the Floating Charge.
Without
derogating from the above, the Pledgor shall pay, upon demand, all reasonable
actual
costs, charges and expenses (including reasonable attorney's fees), incurred
by
the Lenders or Plenus Management in enforcing their rights and remedies
hereunder. Such costs, charges and expenses shall be recoverable from the
Pledgor as part of the Secured Obligations.
9. Registration
of Fixed Charge; Removal of the Fixed Charge.
The
Pledgor shall arrange for the prompt and timely registration of (i) this Fixed
Charge with the Israeli Registrar of Companies and, if and when applicable,
in
the Patent and Trademarks Register maintained by the Israeli Patents and
Trademarks Registrar and any other governmental or other agency in the world
where Intellectual Property of the Pledgor is registered, and (ii) the Lien
with
the USPTO, if and when applicable, and shall bear all costs and expenses with
respect to such registrations. The Fixed Charge and Lien shall be removed upon
the final payment in full of all the Secured Obligations, and for such purpose,
Plenus Management shall promptly execute and provide the Pledgor with all
documents necessary in order to remove the Fixed Charge and Lien upon final
payment in full of all the Secured Obligations.
10. Secured
Obligations Unlimited.
The
amount being secured under the Fixed Charge and Lien created pursuant to this
Agreement shall be determined in accordance with the provisions of the Loan
Agreement and other agreements ancillary thereto. Upon the realization of the
Fixed Charge and Lien, payment to the Lenders shall be made in the following
order: (i) costs
and expenses,
(ii) Interest and Additional Interest, (iii) any other payments (other than
payment of the Principal Amount) and then (iv) payment of Principal
Amount.
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11. Miscellaneous.
11.1
Governing
Law; Forum for Dispute Resolution.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Israel, without regard to the conflict of laws provisions thereof.
Any dispute arising under or with respect to this Agreement shall be resolved
exclusively in the appropriate court in Tel-Aviv, Israel. Each of the parties
hereby irrevocably consents to the exclusive jurisdiction of such courts and
waives and agrees not to assert any objection to the jurisdiction or convenience
thereof.
11.2 Successors
and Assigns.
Except
as otherwise expressly limited herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors and assigns of the parties
hereto.
11.3
Assignment.
Except
as otherwise expressly stated to the contrary herein, each of the parties hereto
shall not assign or transfer any of its rights or obligations hereunder absent
the prior written consent of the other party, which consent shall not be
unreasonably withheld. Anything herein to the contrary notwithstanding but
subject to the following sentence, each of the Lenders may assign or transfer
its rights and obligations under this Agreement to any of the Permitted
Transferees without having to obtain the Pledgor’s consent. The transfer of
rights and obligations by a Lender to a Permitted Transferee shall be contingent
upon the Permitted Transferee (i) undertaking in writing to assume all
obligations of the assignor Lender under the Transaction Documents and this
Agreement and (ii) irrevocably appointing Plenus Management as the
representative of such Permitted Transferee. The foregoing provisions shall
apply,
mutatis mutandis,
to the
transfer of rights and obligations by a Permitted Transferee.
11.4
Notices.
All
notices and other communications required or permitted hereunder to be given
to
a party to this Agreement shall be in writing and shall be sent by facsimile
or
mailed by registered or certified mail, postage prepaid, or by electronic mail,
or otherwise delivered personally or by courier, to the following
addresses:
if
to the
Pledgor - to the address set forth above – to the attention of the Chief
Financial Officer;
if
to the
Lenders or to Plenus Management - to the address set forth above - to the
attention of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇;
or
to
such other address, or to the attention of such other person, as either party
shall notify the other party in writing as above provided. Any notice sent
in
accordance with this Section 10.4 shall be effective (i) if mailed within
Israel, three (3) Business Days after mailing, and in other cases, within seven
(7) Business Days after mailing, (ii) if sent by messenger, upon delivery,
and
(iii) if sent via fax or electronic mail, upon transmission and electronic
confirmation of receipt or (if transmitted and received on a non-Business Day)
on the first Business Day following transmission and electronic confirmation
of
receipt.
7
11.5 Amendment;
Waiver.
Any
term of this Agreement may be amended and the observance of any term hereof
may
be waived (either prospectively or retroactively and either generally or in
a
particular instance) only with the written consent of the Pledgor and Plenus
Management. No delay or omission to exercise any right, power, or remedy
accruing to any party upon any breach or default under this Agreement, shall
be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. All remedies, either under this Agreement or by law or otherwise
afforded to any of the parties, shall be cumulative and not
alternative.
11.6 Entire
Agreement.
This
Agreement and the other Transaction Documents constitute the full and entire
understanding and agreement among the parties with regard to the subject matters
hereof and thereof. The preamble, annexes and schedules hereto are part of
this
Agreement. In the event of contradiction between the provisions of this
Agreement and the provisions of the Loan Agreement, the provisions of the Loan
Agreement shall prevail.
11.7
Counterparts.This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed original, but all such counterparts
together shall constitute but one and the same instrument.
11.8
Headings.Section
headings herein are included for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive
effect.
11.9
Partial
Invalidity.
If any
provision of this Agreement is held by a court of competent jurisdiction to
be
invalid or unenforceable under applicable law, then such provision shall be
excluded from this Agreement and the remainder of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable
in
accordance with its terms; provided,
however,
that in
such event this Agreement shall be interpreted so as to give effect, to the
greatest extent consistent with and permitted by applicable law, to the meaning
and intention of the excluded provision as determined by such court of competent
jurisdiction.
11.10
Expenses.
Without
derogating from the provisions contained herein, the Pledgor shall pay for
the
expenses incurred in connection with the preparation, filing, perfection and
removal of the Floating Charge pursuant to this Agreement.
[SIGNATURE
PAGES FOLLOW]
8
IN
WITNESS WHEREOF, this
Agreement has been executed by the parties hereto as of the date first above
written.
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By:
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Its:
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PLENUS
II, LIMITED
PARTNERSHIP
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By:
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PLENUS
MANAGEMENT
(2004)
LTD.
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Its.
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Management
Company
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By:
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Its:
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PLENUS
II (D.C.M.), LIMITED
PARTNERSHIP
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By:
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PLENUS
MANAGEMENT
(2004)
LTD.
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Its.
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Management
Company
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By:
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Its:
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PLENUS
III L.P., LIMITED
PARTNERSHIP
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By:
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PLENUS
MANAGEMENT III
2007
LTD.
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Its.
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Management
Company
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By:
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Its:
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PLENUS
III (D.C.M.), LIMITED
PARTNERSHIP
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By:
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PLENUS
MANAGEMENT III
2007
LTD.
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Its.
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Management
Company
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By:
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Its:
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PLENUS
III (2) LIMITED
PARTNERSHIP.
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By:
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PLENUS
MANAGEMENT III
2007
LTD.
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Its.
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General
Partner
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By:
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Management
Company
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Its:
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PLENUS
III (C.I.), L.P.
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By:
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PLENUS
MANAGEMENT III
2007
LTD.
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Its:
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Management
Company
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[SIGNATURE
PAGES TO FIXED CHARGE AGREEMENT]
10
ANNEX
A
The
Pledgor’s Intellectual Property (including registered Intellectual Property)
shall include, without limitations, the following:
1. Table
of
current registered Intellectual Property Rights and all applications for the
registration of Intellectual Property Rights listed as set forth in Annex
B
to the
Agreement, as amended from time to time.
2.
All
claims for damages by way of any past, present and future infringement of any
of
the Pledgor’s Intellectual Property and all rights to compensation or indemnity
which may accrue to the Pledgor by reason of damage to, or theft or infringement
of, the Collateral.
3 All
insurance policies or the proceeds thereof in respect of the foregoing
Intellectual Property.
4.
Any
and all Intellectual Property registered following the Closing Date and prior
to
the termination of the Loan Agreement and owned by the Pledgor or any
Subsidiary.
11
ANNEX
B
Registered
Intellectual Property and Application for the Registration of Intellectual
Property
Trademark
Applications:
1.
PrismLite – Registration Number: 2,217,592; Expiration Date: January 12,
2009
2.
Wirespeed - Registration Number: 2,527,875; Expiration Date: January 8,
2012
3.
Gearset – Trademark Application: Application Filing Date: July 21, 2006;
Serial Number: 78941114
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