VOTING AGREEMENT
VOTING AGREEMENT, dated as of November 26, 2003 (this "Agreement"), by
and among Commtouch Software Ltd., a corporation organized under the laws of the
State of Israel (the "Company"), and the shareholders of the Company listed on
the signature pages hereto under the heading "Shareholders" (each, a
"Shareholder", and collectively, the "Shareholders").
WHEREAS, the Company and certain investors (each, an "Investor", and
collectively, the "Investors") have entered into a Securities Purchase
Agreement, dated as of the date hereof (the "Securities Purchase Agreement"),
pursuant to which, among other things, the Company has agreed, upon the terms
and subject to the conditions set forth in the Securities Purchase Agreement, to
issue and sell to each Investor (i) senior secured convertible notes of the
Company (together with any notes issued in replacement or exchange thereof in
accordance with the terms thereof, the "Notes") which will be convertible into
the Company's ordinary shares, NIS 0.05 nominal value per share (the "Ordinary
Shares"), in accordance with the terms of the Notes, and (ii) warrants (the
"Warrants") which will be exercisable to purchase Ordinary Shares;
WHEREAS, as of the date hereof, the Shareholders own collectively
[________] Ordinary Shares, which represent in the aggregate approximately
[___]% of the total issued and outstanding share capital of the Company; and
WHEREAS, as a condition to the willingness of the Investors to enter
into the Securities Purchase Agreement and to consummate the transactions
contemplated thereby (collectively, the "Transaction"), the Investors have
required that the Shareholders agree, and in order to induce the Investors to
enter into the Securities Purchase Agreement, the Shareholders have agreed, to
enter into this Agreement with respect to all of the Ordinary Shares now owned
and which may hereafter be acquired by the Shareholders (the "Shares") and any
other securities, if any, which the Shareholders are entitled to vote at any
meeting of shareholders of the Company (the "Other Securities").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
PROXY OF THE SHAREHOLDERS
SECTION 1.01 Voting Agreement. Each Shareholder hereby agrees that at
any meeting of the shareholders of the Company, however called, and in any
action by consent of the Company, each of the Shareholders shall vote the Shares
and the Other Securities owned by such Shareholder: (a) in favor of any matters
relating to the Transaction, including, without limitation, in favor of the
Resolutions and the other matters described in Section 4(n) of the Securities
Purchase Agreement; and (b) against any proposal or any other corporate action
or agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under Section 4(n)
of the Securities Purchase Agreement or which could result in any of the
conditions to the Company's obligations under Section 4(n) of the Securities
Purchase Agreement not being fulfilled. Each Shareholder
acknowledges receipt and review of a copy of the Securities Purchase Agreement,
the Notes and the Warrants. The obligations of the Shareholders under this
Section 1.01 shall terminate immediately following the occurrence and tabulation
of votes at the shareholder meeting of the Company contemplated by Section 4(n)
of the Securities Purchase Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder hereby represents and warrants, severally but not
jointly, to the Investors as follows:
SECTION 2.01 Authority Relative to This Agreement. Such Shareholder has
all necessary power and authority to execute and deliver this Agreement, to
perform his or its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
Shareholder and constitutes a legal, valid and binding obligation of such
Shareholder, enforceable against such Shareholder in accordance with its terms.
SECTION 2.02 No Conflict. (a) The execution and delivery of this
Agreement by such Shareholder do not, and the performance of this Agreement by
such Shareholder shall not, (i) conflict with or violate any foreign, federal,
state or local law, statute, ordinance, rule, regulation, order, judgment or
decree applicable to such Shareholder or by which the Shares or the Other
Securities owned by such Shareholder are bound or affected or (ii) result in any
breach of 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 of, or result in the
creation of a lien or encumbrance on any of the Shares or the Other Securities
owned by such Shareholder pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which such Shareholder is a party or by which such Shareholder or
the Shares or Other Securities owned by such Shareholder are bound or affected.
(b) The execution and delivery of this Agreement by such Shareholder do
not, and the performance of this Agreement by such Shareholder shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental entity.
SECTION 2.03 Title to the Shares. As of the date hereof, such
Shareholder is the beneficial owner of the number of Ordinary Shares set forth
opposite such Shareholder's name on Appendix A attached hereto entitled to vote,
without restriction, on all matters brought before holders of ordinary shares of
the Company, which Shares represent on the date hereof the percentage of the
total issued and outstanding share capital of the Company set forth on such
Appendix. Such Shares are all of the securities of the Company owned, either of
record or beneficially, by such Shareholder. Such Shares are owned free and
clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on such Shareholder's voting rights,
charges and other encumbrances of any nature whatsoever. No Shareholder has
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares or Other Securities owned by such Shareholder.
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ARTICLE III
COVENANTS
SECTION 3.01 No Disposition or Encumbrance of Shares. Each Shareholder
hereby covenants and agrees that, except as contemplated by this Agreement, such
Shareholder has not offered or agreed to, and shall not offer or agree to, sell,
transfer, tender, assign, hypothecate or otherwise dispose of, grant a proxy or
power of attorney with respect to, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on any Shareholder's voting rights, charge or other encumbrance of
any nature whatsoever ("Encumbrance") with respect to the Shares or Other
Securities owned by such Shareholder, directly or indirectly, and such
Shareholder shall not initiate, solicit or encourage any person to take actions
which could reasonably be expected to lead to the occurrence of any of the
foregoing; provided, that such Shareholder may assign, sell or transfer any
Shares or Other Securities provided that any such recipient of such Shares or
Other Securities has delivered to the Company and each Investor a written
agreement in a form reasonably satisfactory to the Investors that such recipient
shall be bound by, and the Shares and/or Other Securities so transferred,
assigned or sold shall remain subject to, this Agreement.
SECTION 3.02 Company Cooperation. The Company hereby covenants and
agrees that it will not (and each Shareholder irrevocably and unconditionally
acknowledges and agrees that the Company will not (and waives any rights against
the Company in relation thereto)) recognize any Encumbrance or agreement on any
of the Shares or Other Securities subject to this Agreement unless the
provisions of Section 3.01 have been complied with. The Company agrees to use
its best efforts to ensure that at any time in which any shareholder approval is
required pursuant to Section 4(n) of the Securities Purchase Agreement, it will
cause holders of Shares or Other Securities representing the percentage of
outstanding share capital of the Company required to vote in order for the
Company to comply with its obligations under Section 4(n) of the Securities
Purchase Agreement to become party to and bound by the terms and conditions of
this Agreement, and the Shares and Other Securities held by such holders shall
be subject to the terms and conditions of this Agreement.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Further Assurances. Each Shareholder will execute and
deliver all such further documents and instruments and take all such further
action as may be necessary in order to consummate the transactions contemplated
hereby.
SECTION 4.02 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that any Investor (without
being joined by any other Investor) shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity. Any
Investor shall be entitled to its reasonable attorneys' fees in any action
brought to enforce this Agreement in which it is the prevailing party.
SECTION 4.03 Entire Agreement. This Agreement constitutes the entire
agreement among the Shareholders and the Company with respect to the subject
matter hereof
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and supersedes all prior agreements and understandings, both written and oral,
among the Shareholders and the Company with respect to the subject matter
hereof.
SECTION 4.04 Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto and consented to by the
holders of a majority of the principal amount (or rights to acquire a majority
of the principal amount) of the Notes.
SECTION 4.05 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto and the Investors
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the terms of this Agreement remain as originally
contemplated to the fullest extent possible.
SECTION 4.06 Governing Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of Israel, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Israel or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of Israel.
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. 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 WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
SECTION 4.07 Third-Party Beneficiaries. The Investors shall be intended
third party beneficiaries of this Agreement to the same extent as if they were
parties hereto, and shall be entitled to enforce the provisions hereof.
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IN WITNESS WHEREOF, each Shareholder and the Company has duly executed
this Agreement.
THE COMPANY:
COMMTOUCH SOFTWARE LTD.
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: November 26, 2003
SHAREHOLDERS:
Dated: November 26, 2003 /s/ Xxxxxxx Xxxx
------------------------------------
Xxxxxxx Xxxx
Dated: November 26, 2003 /s/Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
Dated: November 26, 2003 /s/Xxxx Xxx
------------------------------------
Xxxx Xxx
Dated: November 26, 2003 /s/Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
APPENDIX A
Shareholder Shares Percentage of Shares Outstanding
----------- ------ --------------------------------
Xxxxxxx Xxxx
Xxxxx Xxxxxxxx
Xxxx Xxx
Xxxxxx Xxxxxx
