Incredimail 2011 Annual Report Download - page 155

(ii) Each Share held in the treasury of the Company and each Share held by Parent, Purchaser, Merger Sub, any other subsidiary of
Parent or Purchaser, or any subsidiary of the Company immediately prior to the Effective Time (“ Excluded Shares ”)
will, by virtue of the Merger and without any
action on the part of the Company or the holder thereof, be canceled, retired and cease to exist, and no consideration will be delivered in exchange therefor.
(iii) Each outstanding share of common stock of Merger Sub shall be converted into one (1) fully paid and non-
assessable share of
common stock of the Surviving Corporation and shall constitute the only shares of capital stock of the Surviving Corporation outstanding immediately after the
Effective Time.
(b) The merger consideration payable pursuant to this Agreement to each holder of Shares, Company Stock Options or Company Warrants
(the “ Merger Consideration ”),
including Dissenting Shares but excluding Excluded Shares, shall be the sum of (1) the product of the Series A Amount multiplied
by the number of Series A Preferred Shares held by such holder, (2) the product of the Series B Amount multiplied by the number of Series B Preferred Shares held by
such holder, (3) the product of the Common Amount multiplied by the number of Common Shares held by such holder, (4) the aggregate of the Option Amount for all
In-the-Money Options held by such holder and (5) the aggregate of the Warrant Amount for all In-the-
Money Warrants held by such holder (such sum for each holder
in clauses (1), (2) and the Warrant Amount for the Preferred Warrant held by such holder, being referred to herein as such holder’s “
Holder Preferred Share
Amount”) and the sum for each holder in clauses (1) through (5) being referred to herein as such holder’s “ Holder Share Amount ”).
(
c) If between the date of this Agreement and the Effective Time, the number of outstanding shares of Company Common Stock, Preferred
Stock, Company Stock Option or Company Warrant is changed into a different number of shares or a different class or option, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split-
up, combination, exchange of shares, or the like, the per Share amounts set out in Sections 1.8(a) and (b) and the
Signing Spreadsheet will be correspondingly adjusted to reflect such change.
1.9 Payment for Shares; Escrow Fund .
(a) At the Effective Time, Purchaser shall deposit with U.S. Bank National Association, a national banking association (the “
Paying Agent
”), for the benefit of the holders of Shares, In-the-Money Options and In-the-
Money Warrants, excluding Dissenting Shares (and any Shares with respect to which
dissenters’ rights have not terminated) and Excluded Shares, the Closing Payment, as follows: (A) cash in an amount equal to twenty-
five million U.S. Dollars
($25,000,000) less (i) the Transaction Cost Amount, (ii) the Working Capital Shortfall, (iii) any amount retained by Purchaser in respect of Dissenting Shares pursuant
to Section 1.11(b) and (iv) the Market Value of the Founder Share Consideration; and (B) two certificates representing 90% and 10%, respectively, of the Founder
Share Consideration. The Closing Payment shall be allocated in the following order: (i) ten percent (10%) of the cash portion of the Closing Payment, as adjusted
pursuant to Section 1.9(a)(A)(i) to (iii), (and any interest accruing thereon) and ten percent (10%) of the Founder Share Consideration shall constitute the “
Escrow
Fund ”
and shall be held by the Paying Agent, acting in its capacity as escrow agent pursuant to the Escrow Agreement, and applied for the payment of
indemnification obligations under Article 10 hereof, (ii) fifty thousand U.S. Dollars ($50,000) shall be transferred to the Shareholder Representative and shall
constitute the Representative Fund in accordance with Section 12.5 hereof, (iii) one hundred percent (100%) of the Total Preferred Share Amount shall be distributed
to the holders of the Preferred Shares and the Preferred Warrant (the “ Preferred Holders ”), and (iv) the remaining cash portion of the Closing Payment (the “
Common Merger Consideration ”)
and ninety percent (90%) of the Founder Share Consideration shall be distributed by the Paying Agent to the Shareholders,
Optionholders and Warrantholders pursuant to Section 1.9(b) hereof (the sum of the amounts set forth in clauses (iii) and (iv), the “ Distribution Amount ”).
The
Company and the Purchaser shall each pay one-half of the fees and expenses of the Paying Agent.
5