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
"▇▇▇▇▇ Group"), represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ("SK"), on the other part.
WHEREAS CYMI and the ▇▇▇▇▇ Group, are shareholders of ▇▇▇▇ Communications &
Software Ltd. ("▇▇▇▇"), and each of the ▇▇▇▇▇ Group represents that he holds
such number of ▇▇▇▇ shares as are listed opposite its name below; and
WHEREAS ▇▇▇▇ 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 ▇▇▇▇▇ Group shall cooperate with CYMI in effecting the Arrangement and
receipt of all required legal approvals.
2. Immediately following the date on which ▇▇▇▇ announces the completion of
the Arrangement, SK shall resign from ▇▇▇▇'▇ Board. Notwithstanding and as
long as ▇▇▇▇ remains a private company, once a calendar quarter, SK only,
on behalf of the ▇▇▇▇▇ Group shall be entitled to (i) receive ▇▇▇▇'▇
quarterly financial statements (ii) talk with ▇▇▇▇'▇ 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 ▇▇▇▇, then such
investments in an amount of up to US $ 7.5 million shall not be made in
▇▇▇▇'▇ equity (securities, convertibles, etc.). In the event of any further
investments, CYMI shall offer the ▇▇▇▇▇ 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 ▇▇▇▇▇ Group and SK shall have 10 business days to respond
to such offer.
4. Each member of the ▇▇▇▇▇ Group shall have a put option right to sell to
CYMI (or its successors) its ▇▇▇▇ shares for the same price per share(2)
paid for the ▇▇▇▇ 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 ▇▇▇▇ shall no longer be a
considered a public company under all applicable laws.
6. No member of the ▇▇▇▇▇ 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:
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CYMI Private Equity II LLC.
By: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇
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(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 ▇▇▇▇▇ Group:
NAME NO. OF SHARES SIGNATURE
---- ------------- ---------
Hagit & ▇▇▇▇▇▇ ▇▇▇▇▇ 300,000
▇▇▇ ▇▇▇▇▇ 60,000
▇▇▇▇ ▇▇▇▇▇ 50,000
▇▇▇ ▇▇▇▇▇ 50,000
▇▇▇▇ ▇▇▇▇▇ 60,000
▇▇▇▇▇▇ Bin-Nun 235,329
2