Incredimail 2014 Annual Report Download - page 76

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.
Upon the occurrence of any person (excluding any former ClientConnect shareholder or any person who is subject to transfer
restrictions identical to those of the Contractual Lock-
up) becoming the beneficial owner of 24.9% or more of our outstanding ordinary shares or
at such time as the total number of shares issued to the former shareholders of ClientConnect and still held by them constitutes less than 20% of
our outstanding ordinary shares, the Contractual Lock-up will be released.
Finally, upon the occurrence of any issuance of our ordinary shares or securities convertible into our ordinary shares in connection with
(x) an acquisition by us of any business, company or assets or (y) a private placement of ordinary shares, that are not subject to more strict or
identical transfer restrictions as provided under the Contractual Lock-
up, in which the aggregate number of ordinary shares issued (after giving
effect to the conversion of all convertible securities issued or issuable thereunder and assuming that all milestones and conditions for issuance
thereunder are fulfilled) constitutes 10% or more of our outstanding ordinary shares as of immediately prior to such issuance, the transfer
restrictions under the Contractual Lock-
up will be further relaxed to be no more restrictive (both in volume and period) than the transfer
restrictions imposed on the ordinary shares issued in such transaction.
In order to monitor the transfer restrictions under the Contractual Lock-up and the Tax Lock-
up described below, the applicable shares
have been deposited with brokerage firms who have undertaken to ensure compliance with such transfer restrictions. UBS Securities LLC has
been appointed by us and the holders of a majority of the shares subject to the Contractual Lock-
up as an advisor with respect to the Contractual
Lock-up. The advisor may determine to relax transfer restrictions under the Contractual Lock-
up, for the benefit of all of the shareholders on an
equal basis.
The Contractual Lock-
up does not apply to shares issued upon exercise of the Perion options issued in exchange for ClientConnect
options in the ClientConnect Acquisition. However, our CEO, Mr. Mandelbaum entered into certain lock-
up arrangements with respect to our
ordinary shares issuable pursuant to his equity grants.
Tax-related Restrictions
Pursuant to a tax ruling issued by the Israeli Tax Authorities, the tax events with respect to Conduit and its shareholders arising from the
Conduit Split and the ClientConnect Acquisition will be deferred until the sale of our ordinary shares issued at the closing of the acquisition by
any holder thereof or the sale of the assets or shares of ClientConnect shares by us. As a condition of this tax deferral, under Israeli tax law, each
of Conduit, ClientConnect, the former shareholders of ClientConnect and we will be required to comply with various restrictions until December
31, 2015, including the following:
•
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).
•
each of Conduit and ClientConnect may not sell a majority of its assets and such assets must be put to reasonable use under the
circumstances in the course of its business;
•
each of Conduit and ClientConnect must continue the principal business activities in which Conduit was engaged during the two
years preceding the Conduit Split;
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