Incredimail 2014 Annual Report Download - page 78

Standstill Agreements
In connection with the ClientConnect Acquisition, several large shareholders of Conduit, including Ronen Shilo, Dror Erez and
Benchmark Israel II, have each entered into a Standstill Agreement providing that for a period commencing on January 2, 2014 and ending on
the earlier of (i) the last business day preceding our 2015 annual shareholder meeting or (ii) December 30, 2015, they will not vote in favor of (x)
any change in the size of our Board of Directors, (y) any amendment to our Articles of Association to change the staggered structure of our
Board of Directors or to shorten or terminate the term of service of any member of our Board of Directors, or (z) any proposal to shorten or
terminate the term of service of any member of our Board of Directors (each, a "Fundamental Board Event"), in each case unless our Board of
Directors recommends an affirmative vote in favor of the Fundamental Board Event. The obligations pursuant to the Standstill Agreements will
expire if (i) any person (excluding any shareholder of Conduit as of September 16, 2013 and any person who is subject to standstill obligations
similar to those set forth in the Standstill Agreements) becomes the beneficial owner of 24.9% or more of our outstanding ordinary shares or (ii)
a Fundamental Board Event occurs despite such shareholder's compliance with its obligations thereunder and the compliance of all other
shareholders of our company that are subject to standstill obligations similar to those set forth in the Standstill Agreement with such obligations.
For information regarding our credit facilities, see Item 5.B "Operating and Financial Review and Prospects – Liquidity and Capital Resources
–
Credit Facilities."
D. EXCHANGE CONTROLS
Non-
residents of Israel who hold our ordinary shares are able to receive any dividends, and any amounts payable upon the dissolution,
liquidation and winding up of our affairs, freely repatriable in non-
Israeli currency at the rate of exchange prevailing at the time of conversion.
However, Israeli income tax is required to have been paid or withheld on these amounts. In addition, the statutory framework for the potential
imposition of exchange controls has not been eliminated, and may be restored at any time by administrative action.
E. TAXATION
The following is a general summary only and should not be considered as income tax advice or relied upon for tax planning purposes.
ISRAELI TAXATION
THE FOLLOWING DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX
CONSEQUENCES RELATING TO THE OWNERSHIP OR DISPOSITION OF OUR ORDINARY SHARES. YOU SHOULD CONSULT
YOUR OWN TAX ADVISOR CONCERNING THE TAX CONSEQUENCES OF YOUR PARTICULAR SITUATION, AS WELL AS ANY
TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING
JURISDICTION.
The following is a summary of the material Israeli tax laws applicable to us, and some Israeli Government programs benefiting us. This
section also contains a discussion of some Israeli tax consequences to persons acquiring our ordinary shares. This summary does not discuss all
the acts of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of
investors subject to special treatment under Israeli law. Examples of this kind of investor include residents of Israel or traders in securities who
are subject to special tax regimes not covered in this discussion. Since some parts of this discussion are based on new tax legislation that has not
yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the
views expressed in this discussion.
• Piggyback Registration Rights
. If we effect a registered offering of securities, the holders of registrable securities consisting of
at least 3% of our outstanding share capital at the relevant time (or 2% in the case of W Capital Engage, L.P.) or a holder
whose resale of registrable securities would otherwise be subject to volume limitations set forth in SEC Rule 144 will have the
right to include its shares in the registration effected pursuant to such offering. Each such holder will be afforded this right
regardless of the Contractual Lock-up that may apply to such holder’
s shares. The number of piggyback registrations is
unlimited.
•
All reasonable expenses incurred in connection with any such registrations, other than underwriting discounts and
commissions, will be borne by us. We are subject to customary indemnification undertakings with respect to any registration
effected pursuant to the Registration Rights Undertaking.
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