Incredimail 2013 Annual Report Download - page 74

Agreements Relating to the ClientConnect Acquisition
Share Purchase Agreement
On September 16, 2013, we entered into a Share Purchase Agreement among Perion, Conduit Ltd. and ClientConnect Ltd. providing for
our acquisition of all the outstanding shares of ClientConnect in exchange for our ordinary shares. On the same date, Conduit and ClientConnect
entered into a Split Agreement pursuant to which, on December 31, 2013, the entire activities and operations, and related assets and liabilities, of
the ClientConnect business were transferred 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. Upon the consummation of the ClientConnect Acquisition, which
took place on January 2, 2014, each ClientConnect ordinary share was exchanged for approximately 0.2387 of our ordinary shares, as a result of
which ClientConnect became a wholly owned subsidiary of ours. In addition, we granted options to purchase our ordinary shares to
ClientConnect employees in exchange for their options to purchase ClientConnect shares that were issued to them upon the consummation of the
Conduit Split as a roll-
over of their then existing options to purchase ordinary shares of Conduit. Accordingly, we issued 54.75 million of our
ordinary shares to the ClientConnect shareholders and granted options to purchase 2.82 million of our ordinary shares to the ClientConnect
employees. On November 18, 2013, our shareholders approved the ClientConnect Acquisition and certain related matters, including the increase
of our authorized share capital from 40 million ordinary shares to 120 million ordinary shares and the election of Dror Erez and Roy Gen to our
Board of Directors.
Lock
-up Arrangements
Pursuant to said Share Purchase Agreement, the former ClientConnect shareholders are subject to lock-
up arrangements with respect to
the ordinary shares issued to them in consideration for the ClientConnect Acquisition (the “Contractual Lock-up”)
pursuant to which each of
them will not be permitted to sell, offer to sell, grant any option to purchase or otherwise transfer or dispose of (each, a "transfer") any of such
shares during an initial period ending on July 2, 2014 and will be subject to conditional transfer restrictions set forth below.
From July 3, 2014 to January 2, 2016, each such shareholder will be permitted to transfer up to 10% of such shareholder's shares that
are subject to the Contractual Lock-up.
The Contractual Lock-
up contains certain relaxations of the restrictions on transfers during such subsequent period, such that each such
shareholder may be able to transfer a greater number of shares based upon the market price of our ordinary shares, as follows:
Notwithstanding the foregoing: (i) no such shareholder will be permitted to transfer more than an aggregate of thirty-
three percent
(33%) of such shareholder’s “unlocked” shares in any consecutive four-week period during the period of the Contractual Lock-
up; and (ii) the
Contractual Lock-
up will not apply in a tender offer for our ordinary shares or in a private transfer of our ordinary shares where the transferee
agrees in writing to be bound to the Contractual Lock-up.
At any time following the closing of a public offering by us in which shares of such shareholders who are entitled to “
piggyback
registration rights”
pursuant to the Registration Rights Undertaking described below with respect to such offering are in fact included in such
offering, the shares sold in such offering and the shares held by the shareholders that are not entitled to such piggyback registration rights will be
released from the Contractual Lock-up.
•
If the prevailing market price of our ordinary shares (defined as the closing price on NASDAQ for any consecutive ten trading
day period) is equal to or greater than $15.00 per share (as appropriately adjusted for any stock splits, cash dividends, stock
dividends, combinations, recapitalizations or the like) for any ten consecutive trading days, then each such shareholder may
transfer up to an aggregate of thirty-
three percent (33%) of the shares issued to such shareholder (including any such shares
previously transferred by such shareholder);
•
If the prevailing market price of our ordinary shares is equal to or greater than $18.50 per share (as appropriately adjusted as
aforesaid) for any ten consecutive trading days, then each such shareholder may transfer up to an aggregate of sixty seven
percent (67%) of the shares issued to such shareholder (including any such shares previously transferred by such shareholder);
and
•
If the prevailing market price of our ordinary shares is equal to or greater than $22.00 per share (as appropriately adjusted as
aforesaid) for any ten consecutive trading days, then each shareholder may transfer up to an aggregate of one hundred percent
(100%) of the shares issued to such shareholder (including any such shares previously transferred by such shareholder).
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