Incredimail 2013 Annual Report Download - page 63

On December 10, 2012, Holine Finance Ltd. filed a Schedule 13G reporting it had beneficial ownership of 1,109,732, or 9.2%, of our
ordinary shares. As a result of the ClientConnect Acquisition, Holine Finance's percentage ownership was diluted to less than 5% of our
outstanding ordinary shares.
To our knowledge, as of April 3, 2014, we had 17 shareholders of record of which seven (including the Depository Trust Company)
were registered with addresses in the United States. These U.S. holders were, as of such date, the holders of record of approximately 98.8% of
our outstanding shares. The number of record holders in the United States is not representative of the number of beneficial holders nor is it
representative of where such beneficial holders are resident since many of these ordinary shares were held of record by brokers or other
nominees.
B. RELATED PARTY TRANSACTIONS
It is our policy that transactions with office holders or transactions in which an office holder has a personal interest will be on terms
that, on the whole, are no less favorable to us than could be obtained from independent parties.
See "Item 10.B Memorandum and Articles of Association — Approval of Related Party Transactions" for a discussion of the
requirements of Israeli law regarding special approvals for transactions involving directors, officers or controlling shareholders.
Agreements with Conduit
Conduit Commercial Agreement
On August 12, 2013, we entered into the Conduit Commercial Agreement, which was in operation until the consummation of the
Conduit Split on December 31, 2013. For additional information about this agreement, please see Item 5.A " Operating Results—
Year Ended
December 31, 2013 Compared to Year Ended December 31, 2012—Revenues".
As a condition precedent to the closing of ClientConnect Acquisition on January 2, 2014, Conduit and ClientConnect effected the
Conduit Split and entered into the ancillary agreements described below. As a result of the ClientConnect Acquisition, two office holders of
Conduit – Dror Erez and Roy Gen –
became members of our Board of Directors and the major shareholders of Conduit also became major
shareholders of the Company. For information about additional agreements we entered into in connection with the ClientConnect Acquisition,
see Item 10.C "Additional Information—Material Contracts—
Agreements Relating to the ClientConnect Acquisition". Such directors and major
shareholders are parties to or otherwise bound by some of such agreements, as described therein.
Split Agreement
Pursuant to the Split Agreement, dated September 16, 2013, between Conduit and ClientConnect, on December 31, 2013, the entire
activities and operations, and related assets and liabilities, of the ClientConnect business were transferred by Conduit to ClientConnect on a
cash-free and debt-
free basis and the Conduit shareholders became the shareholders of ClientConnect in proportion to their ownership of Conduit
(the "Conduit Split"). The assets of Conduit were transferred on an "as is" basis for no consideration. Certain liabilities were retained by
Conduit, such as pre-
closing taxes and litigation matters. The parties agreed to indemnify each other with respect to any damages incurred by
one party with respect to liabilities of the other. During a transitional period, Conduit is entitled to use the transferred intellectual property and
third party intellectual property licenses (subject to their terms), create derivative works in respect thereof and integrate, sell and license such
intellectual property with Conduit’s retained business, subject to non-
competition provisions. In addition, during a transitional period,
ClientConnect is entitled to use domains and URL addresses that use the word "conduit" for new downloads or installs.
Transition Services Agreement
Pursuant to the Transition Services Agreement, dated December 31, 2013, between Conduit and ClientConnect, ClientConnect provides
Conduit and its subsidiaries with certain business support services and systems, including data services, information technology, information
security and management information systems, for consideration at market terms. The term of the agreement is for a period of eight months,
except with respect to the data services to be provided thereunder, for which the term is 16 months, subject to extension by Conduit for an
additional eight months (in which case the consideration to be paid for such service would be increased by 20%). Conduit may terminate the
agreement or the providing of any specific service upon 30 days' prior notice. The agreement contains certain indemnification provisions
pursuant to which the parties agreed to indemnify and hold harmless the other party and its representatives upon the occurrence of certain events.
The agreement also contains standard provisions regarding confidentiality and non-
solicitation of the other party's officers, employees and
consultants during the term of the agreement and for a period of 24 months thereafter.
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