Incredimail 2011 Annual Report Download - page 154

(E) Prior to the Effective Time, the Company shall amend each outstanding Company Warrant (and/or otherwise take all
necessary and appropriate actions) to provide that, subject to consummation of the Merger and the terms and conditions of this Agreement, at the Effective Time, each
then outstanding Company Warrant shall terminate, and the holder thereof shall have the right to receive the consideration equal to the product of (y) the Net Value of
each In-the-Money Warrant (the “ Warrant Net Value ”) and (z) the number of shares of Company Capital Stock subject thereto (such product, the “
Warrant
Amount ”),” less any applicable Tax withholding.
(F) The Share Amounts set forth in the Signing Spreadsheet are an estimate only, and the actual Share Amounts to be paid to
the Shareholders, Optionholders and Warrantholders shall be as set forth in the Closing Spreadsheet (as defined in Section 6.7).
(G) The maximum consideration payable as set forth in this Agreement in connection with the Merger for all of the issued
and outstanding capital stock of the Company on a Fully Diluted Basis as of the Closing Date shall be forty million U.S. Dollars ($40,000,000) (the “
Maximum
Merger Consideration ”), of which up to (i) twenty-five million U.S. Dollars ($25,000,000) shall be payable at the Closing (the “ Closing Payment ”
),
(ii) seven million U.S. Dollars ($7,000,000) shall be payable pursuant to Section 1.9(d) (the “ Deferred Payment ”)
and (iii) eight million U.S. Dollars ($8,000,000)
shall be payable pursuant to Section 1.13 (the “ Contingent Payment ”),
subject to downward adjustment and payable as provided in this Agreement. Such payments
shall be made in cash, except that 10% of the Merger Consideration (as defined in Section 1.9(a) hereof) payable for the Founder (as defined in Exhibit A
hereto) as
part of each of the Closing Payment, the Deferred Payment and the Contingent Payment shall be paid in the form of Parent Shares (as defined in Exhibit A
hereto) at
the Market Value thereof (as defined in Exhibit A hereto) (each such payment for the Founder in the form of Parent Shares being referred to herein as the “
Founder
Share Consideration ”).
Notwithstanding anything contained herein to the contrary, in no event shall the Maximum Merger Consideration exceed the sum of (1) the
product of the Series A Amount multiplied by the number of Series A Preferred Shares (the “ Total Series A Amount ”), (
2) the product of the Series B Amount
multiplied by the number of Series B Preferred Shares (the “ Total Series B Amount ”), (
3) the product of the Common Amount multiplied by the number of
Common Shares, (4) the sum of the Option Amount for all In-the-Money Options, (5) the sum of the Warrant Amount for all In-the-Money Warrants (the “
Total
Warrant Amount ” and the sum of the Warrant Amount for the Preferred Warrant (as defined in Exhibit A
) together with the Total Series A Amount and the Total
Series B Amount, the “ Total Preferred Share Amount ”),
in each case outstanding as of the Effective Time (including Dissenting Shares but excluding Excluded
Shares) (the amounts in clauses (1) through (5) above, the “ Total Share Amount ”), (
6) the Transaction Cost Amount and (7) the Working Capital Shortfall. If the
sum of the Total Share Amount plus the additional aggregate amounts referred to in clauses (6) and (7) above would exceed the Maximum Merger Consideration, then
the Merger Consideration shall, for all purposes hereunder, be adjusted downward, dollar-for-
dollar, by such aggregate amount and, consequently, each Preferred
Amount and the Common Amount shall be adjusted downward proportionately (based on the proportion each such Preferred Amount, Common Amount, Option Net
Value or Warrant Net Value bears to the Total Share Amount) to numbers such that such sum does not exceed the Maximum Merger Consideration.
4