Home » Incredimail Annual Reports » 2015 Annual Report

Incredimail 2015 Annual Report Download

Download and view the complete annual report

Please find the complete 2015 Incredimail annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

PERION NETWORK LTD.

FORM 20-F

(Annual and Transition Report (foreign private issuer))

Filed 03/24/16 for the Period Ending 12/31/15

Telephone 972-73-398-1572

CIK 0001338940

Symbol PERI

SIC Code 7371 - Computer Programming Services

Industry Computer Services

Sector Technology

Fiscal Year 12/31

http://www.edgar-online.com

Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Page 1
...20-F (Annual and Transition Report (foreign private issuer)) Filed 03/24/16 for the Period Ending 12/31/15 Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 972-73-398-1572 0001338940 PERI 7371 - Computer Programming Services Computer Services Technology 12/31 http://www.edgar-online.com...

Page 2
... classes of capital or common stock as of the close of the period covered by the Annual Report. As of December 31, 2015, the Registrant had outstanding 75,811,487 ordinary shares, par value ILS 0.01 per share. Name of Each Exchange on which Registered NASDAQ Global Select Market Perion Network Ltd.

Page 3
... Exchange Act (Check one): Large accelerated filer Â£ Accelerated filer T Non-accelerated filer Â£ Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP T International Financial Reporting Standards as issued...

Page 4
... us on the date of this report. Except as required by applicable law, we undertake no obligation to update or revise any of the forward-looking statements after the date of this annual report to conform those statements to reflect the occurrence of unanticipated events, new information or otherwise...

Page 5
... Statistics and Expected Timetable Key Information Information on the Company Unresolved Staff Comments Operating and Financial Review and Prospects Directors, Senior Management and Employees Major Shareholders and Related Party Transactions Financial Information The Offer and Listing Additional...

Page 6
PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. ITEM 3. A. KEY INFORMATION SELECTED FINANCIAL DATA On January 2, 2014, we purchased all of the outstanding shares of ClientConnect Ltd. ("...

Page 7
...share and per share data) 2011 Revenues: Search Advertising and other Total Revenues Costs and Expenses: Cost of revenues Customer acquisition and media buy costs Research and development Selling and marketing General and administrative Restructuring charges Impairment, net of change... $ 2015 172,277...

Page 8
... Sheet Data (in thousands): 2011 Cash and cash equivalents Working capital (*) Total assets (*) Total liabilities (*) Shareholders' equity...2015 17,519 37,394 442,297 242,461 199,837 *In November 2015, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update No. 2015...

Page 9
... accounted for substantially all of the rest of search generated revenues. In addition, a small number of social network companies, and Facebook in particular are seizing a growing portion of the advertising market. This high market concentration causes us to be subject to unilateral changes set...

Page 10
... users to access and use these applications relative to those of competitors). For example, third parties continue to introduce technologies and applications (including new and enhanced web browsers and operating systems) that may limit or prevent certain types of applications from being installed...

Page 11
... agreement by our search partners. These guidelines, with respect to method of distribution, homepage resets, and default search resets to search engine services, were changed by both Microsoft and Google numerous times in the past, having negative revenue implications. Since then, both companies...

Page 12
..., based on StatCounter reports. Recently, Microsoft announced changes to its browser modifier detection criteria and issued a new operating system (Windows 10), which includes a new default internet browser (Edge). Some of these changes may limit our ability to maintain our users' browser settings...

Page 13
... the Internet, while most of our search revenue generation and services are currently not usable on mobile platforms. Also, web-based software and similar solutions are impacting the attractiveness of downloadable software products. The market related to personal computers ("PCs"), has accounted for...

Page 14
... stringent user consent requirements. Further, it will include stringent operational requirements for companies that process personal data and will contain significant penalties for non-compliance. Also in other relevant subject matters such as cyber security, e-commerce, copyright and cookies, new...

Page 15
... are highly dependent on our search services agreement with Microsoft Online Inc. ("Microsoft"), which covers all of our search business with Microsoft and has a term from January 1, 2015 until December 31, 2017. In 2015, our search services agreement with Microsoft accounted for 81% of our revenues...

Page 16
... us to collect some or all of this data or might limit our use of this data. For example, advertisers of mobile applications may not agree to provide us with the data generated by interactions with the content on their apps, or device users may not consent to having information about their device...

Page 17
... of our advertisers of mobile applications purchasing and design decisions generally require input from multiple internal parties of these customers. As a result, we must identify those involved in the purchasing decision and devote a sufficient amount of time to presenting our services to each of...

Page 18
... or advertising format thereby restraining our supply of available inventory. Online content and mobile applications may shift from an advertising-based monetization method to a pay for content/services model, thereby reducing available inventory. Social media platforms may be successful in keeping...

Page 19
... or exchange from working with our competitors or from offering competing services. The tools that we provide to advertisers of mobile applications allow them to make decisions as to how to allocate advertising inventory among advertising networks. Ad networks and exchanges may change the price at...

Page 20
... rely could have a material adverse effect on us . Some of our products and those of our partners currently run or are based on Microsoft Windows operating systems. Recently Android and Apple have gained popularity and market share, particularly in the mobile market. A decline in market acceptance...

Page 21
... on our operations or ability to provide products and services to our customers, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial...

Page 22
... competitive position or claims by customers. Alleviating any of these problems could require significant expense and resources and could cause interruptions. We depend on third party Internet and telecommunication providers to operate our websites and web-based services. Temporary failure of these...

Page 23
...skilled technical and creative personnel and skilled management, marketing and sales personnel, as well as third party technology vendors. Competition for well-qualified employees in our industry is intense and our continued ability to compete effectively depends, in part, upon our ability to retain...

Page 24
...time and attention of our management. A large portion of our operations are performed from outside the United States. In addition, we derive and expect to continue to derive a portion of our revenues from users outside the United States. Our international operations and sales are subject to a number...

Page 25
... need to regularly enhance our platform and develop and introduce new services on a timely basis. We also must update our software to reflect changes in advertising networks' application programming interfaces ("APIs"), technological integration and terms of use. The success of any enhancement or...

Page 26
..., including assistance in connecting such advertisers of mobile applications with advertising networks. If advertising networks significantly open their platforms and make more data available to their advertisers, the importance of our ability to manage an ad campaign and provide analytics would be...

Page 27
... as on enhancing customer awareness of it. Our Undertone brand, however, may be negatively impacted by a number of factors, including but not limited to, fraud on publisher sites on which we serve ads, service outages, product malfunctions, data protection and security issues, and exploitation of...

Page 28
... our Company or products, we may experience a loss in goodwill associated with our brand name, customer confusion and a loss of sales. Any lawsuit, regardless of its merit, would likely be time-consuming, expensive to resolve and require additional management time and attention. We use certain "open...

Page 29
... instability that affects the Israeli capital markets and can cause volatility in interest rates, exchange rates and stock market quotes. The political and security situation in Israel may result in parties with whom we have contracts claiming that they are not obligated to perform their commitments...

Page 30
... in a civil matter, including a judgment based upon the civil liability provisions of the U.S. securities laws, as well as a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met: Â· Â· Â· subject to limited exceptions, the judgment is final and...

Page 31
... and amounts received as excess distributions could be subject to an additional interest charge. A determination that we are a PFIC could also have an adverse effect on the price and marketability of our ordinary shares. We believe that in 2015 we were not a PFIC. Whether we are a PFIC is based upon...

Page 32
...do not pay dividends, long term holders of our stock will generate a return on their investment only if our stock price appreciates between the date of purchase and the date of sale of our shares. See "Item 8.A Consolidated Statements and Other Financial Information - Policy on Dividend Distribution...

Page 33
... of the Sarbanes-Oxley Act requires an annual assessment by our management of our internal control over financial reporting of the effectiveness of these controls as of year-end. In connection with our efforts to comply with Section 404 and the other applicable provisions of the Sarbanes-Oxley Act...

Page 34
...; the introduction of new products; the conditions of the securities markets, particularly in the Internet and Israeli sectors; and political, economic and other developments in Israel and worldwide. In addition, share prices of many technology companies fluctuate significantly for reasons...

Page 35
... located at 26 HaRokmim Street, Holon 5885849, Israel. Our phone number is 972-73-3981000. Our website address is www.perion.com . The information on our website does not constitute a part of this annual report. Our agent for service in the United States is Intercept Interactive Inc. d/b/a Undertone...

Page 36
Recent Developments Undertone Acquisition On November 30, 2015 ("Closing date"), we completed the purchase of Interactive Holding Corp., a Delaware corporation, and its subsidiaries (collectively referred to as "Undertone") for a purchase price of $133.1 million, comprised of $89.1 million paid in ...

Page 37
...of 92,348 ordinary shares that were subject to retention conditions, were paid to such key employees in February 2016. Make Me Reach has become part of Perion's focus on mobile marketing which was created to address the advertising needs of mobile app developers, and enables Perion to provide a more...

Page 38
... sales process to determine the best plan for that customer. Our customers purchase our products based on impressions served for each ad type, either using traditional insertion orders, or alternatively, programmatically, with options for managed service or self-service. Programmatic customers...

Page 39
... platform, we provide our clients with real-time analytics, custom reports, and advanced optimization and editing tools, which together act as a springboard to higher conversions and increased return on investment. We have generated the majority of our revenues from services agreements with our...

Page 40
...consumers. UDMS is integrated with over 70 different data providers and integrate with first-party and third party targeting data. Service and Support We provide our clients with service and support before, during, and after the campaign cycle. Our sales, client solutions, and planning teams utilize...

Page 41
... offerings. This is partly because most consumers find that the free version of a given software product or content adequately meets their needs. Accordingly, most app developers or web content publishers do not earn sufficient revenue to sustain a standalone business. We provide a broad spectrum of...

Page 42
... our patent applications to result in issued patents, would not be material to our business or financial position. Part of the components of our software products were developed solely by us. We have licensed certain components of our software from third parties. Except for our agreements regarding...

Page 43
... online service providers' collection of user information on minors as well as distribution of materials deemed harmful to minors. Many U.S. states, such as California, are adopting statutes that require online service providers to report certain security breaches of personal data and to report...

Page 44
... to some limited exceptions, the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her informed consent. Further, the new General Data...

Page 45
... States. Our servers include mainly web servers, application servers, data collection servers, data storage servers, data processing servers, mail servers and database servers. Bezeq and Cellcom Israel Ltd. provide our Internet and related telecommunications services in Israel, including hosting and...

Page 46
... mobile app developers improved optimization and monetization of their existing user base. Recent Acquisitions On November 30, 2015, we completed the purchase of Interactive Holding Corp., a Delaware corporation, and its subsidiaries (collectively referred to as "Undertone") for a purchase price...

Page 47
... on December 31, 2015. Grow Mobile provides an innovative platform for mobile advertising that enables advertisers of mobile applications to buy, track, optimize, and scale user acquisition campaigns from a single dashboard. Grow Mobile has become part of Perion's mobile marketing business, which...

Page 48
... to deliver ads. Customer acquisition costs are primarily based on fixed fee arrangements and on revenue share agreements with our traffic sources. We increased customer acquisition costs dramatically in 2013, with the aim to increase the number of product downloads, users, search queries generated...

Page 49
... high impact search-based formats in our desktop monetization offering, adapting and maintaining compatibility with the ever-changing software landscape in ...company, with all of its requisite costs, managing organic activity as well as being an active acquire of other businesses. In 2015, this number...

Page 50
... an interim goodwill impairment analysis for our reporting units existed in 2015. These indicators included a decrease in our share price and lower than expected sales and cash flow, as well as managerial decisions to abandon certain R&D projects. Based on our goodwill assessment for the search...

Page 51
...volatility was calculated based upon actual historical stock price movements of our stock. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term. The fair value of RSUs is based on the market value of the underlying shares at the date of grant...

Page 52
... towards mobile platforms and discontinuing some of the consumer products developed. In 2015, we incurred impairment charges of $11.9 million related to intangible assets and capitalized software costs associated with our Growmobile and monetization reporting units. In addition, in connection with...

Page 53
... it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December...

Page 54
... of our decision to dramatically reduce customer acquisition costs starting from the third quarter of 2014. This decision reduced the tail of revenues going into 2015, as compared to 2014, and also reduced ongoing revenues from our new revenue share model. Our search revenues have substantially...

Page 55
... such as the consolidation of our Israeli offices. In addition, in 2015, $4.0 million was capitalized, representing mainly compensation expenses for employees engaged in the development of our mobile advertising platform with an emphasis on the self-service offering and a platform for optimizing and...

Page 56
... an interim goodwill impairment analysis for our reporting units existed in 2015. These indicators included a decrease in our share price and lower than expected sales and cash flow, as well as managerial decisions to abandon certain R&D projects. Based on our goodwill assessment for the search...

Page 57
... due to an increase in the number of downloads and consequently the number of users using our search service. This increase is attributable to organic growth, as well as the acquisition of Perion's activity, which too was based on search-generated revenues. In 2013, Perion's search revenues were $59...

Page 58
... by operating activities Net cash used in investing activities Net cash provided by (used in) continuing financing activities Effect of exchange rate changes on cash and cash equivalents $ Year ended December 31 2014 $ 72,042 (6,984) 35,176 100,234 $ 2015 17,569 (120,446) 19,199 14 (83,664) 61,352...

Page 59
... of $2.1 million, non-cash stock-based compensation expenses of $10.4 million, other non-cash expenses of $1.2, a decrease in accounts receivables of $18.0 million and an increase in accounts payable of $8.7 million, offset by a decrease in deferred revenues of $6.2 million and changes in other...

Page 60
... the banks from time to time. On November 22, 2015, we borrowed $19.9 million under a new credit facility from Leumi. The credit facility is secured by a lien on the accounts receivable of ClientConnect, from its current and future business clients and is guaranteed by Perion. The credit facility...

Page 61
...) pursuant to a securities purchase agreement with J.P. Morgan Investment Management Inc., as investment advisor to the National Council for Social Security Fund and 522 Fifth Avenue Fund L.P. (collectively referred to as the "Investors"). The purchase price per share was $2.282 per share, which was...

Page 62
... it is becoming increasingly difficult to do so. In connection with these efforts by the browser companies, they are also making an effort to reset the applicable browser's settings back to its default setting, causing us to have to recapture our users on a more frequent basis. These activities have...

Page 63
... the difficulty in determining the timing of resolution of audits, these obligations are not included in the table. ITEM 6 . A. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES DIRECTORS AND SENIOR MANAGEMENT The following table sets forth information regarding our executive officers and directors as of...

Page 64
... Accountant in New York (inactive) and in Israel. Josef Mandelbaum has been the Chief Executive Officer of the Company ...Officer of Etz Lavud Ltd.. Avichay Nissenbaum has been an external director of the Company since July 2009, and in August 2015, he was reelected to serve a third three-year term...

Page 65
... our Chief Technology Officer since January 2015. From 2012 to 2014 Mr. Kolko served as the Company vP of the Data Services Group. Previously, Mr. Kolko served as vice president of data at LivePerson (NASDAQ:LSPN), a global leader of digital engagement technology. Prior to his work at LivePerson, Mr...

Page 66
... date of the annual meeting of shareholders on which such option was granted, as reported by the NASDAQ Stock Market. The options vest in three equal installments on each anniversary of date of grant. Following termination or expiration of the applicable director's service with the Company, provided...

Page 67
... 31, 2015. Such numbers are based on the option or RSU grant date fair value in accordance with accounting guidance for equity-based compensation and does not necessarily reflect the cash proceeds to be received by the applicable officer upon the vesting and sale of the underlying shares. For...

Page 68
... our financial status; and issuing securities and distributing dividends. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders. Our board of directors also appoints and may remove our chief executive officer and may appoint or...

Page 69
... hold office until the annual meeting of shareholders at which the term of his class expires, unless otherwise determined by our board of directors. There is no limitation on the number of terms that a non-external director may serve. Shareholders may remove a non-external director from office by...

Page 70
... information see Item "16.C - Principal Accountant Fees and Services." Under the NASDAQ Listing Rules, the approval of the audit committee is also required to effect related-party transactions that would be required to be disclosed in our annual report. Companies Law Requirements Under the Companies...

Page 71
... accounting firm or its representative. The Companies Law defines an interested party as a substantial shareholder of 5% or more of the shares or voting rights of a company, any person or entity that has the right to nominate or appoint at least one director or the general manager of the company...

Page 72
... by virtue of extension orders issued in accordance with relevant labor laws by the Israeli Ministry of Economy, and which apply such agreement provisions to our employees even though they are not directly part of a union that has signed a collective bargaining agreement. The laws and labor court...

Page 73
...for information on the options issued under the Incentive Plan. Under the Incentive Plan, as amended from time to time, we may grant to our directors, officers, employees, consultants, advisers, service providers and controlling shareholders options to purchase our ordinary shares, restricted shares...

Page 74
... our directors and officers in 2013. ITEM 7 . A. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS MAJOR SHAREHOLDERS The following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 1, 2016 by each person or group of affiliated persons that we know...

Page 75
... SEC on December 10, 2015, by JPMIM and SSF and supplemental information provided by these shareholders to us. (6) Based solely upon, and qualified in its entirety with reference to, a Schedule 13G filed with the SEC on January 16, 2014, by Zack and Orli Rinat. The Ordinary Shares are held by Zack...

Page 76
... Services Agreement Pursuant to the Administrative Services Agreement, dated December 31, 2013, between Conduit and ClientConnect, Conduit provided ClientConnect with certain services, including office and administrative support services, for consideration on market terms based on the number...

Page 77
...recorded at the time that we entered into the Share Purchase Agreement. In April 2015, pursuant to the Share Purchase Agreement, an arbitration process with respect to this claim was commenced in Israel. On December 22, 2015, Adtile Technologies Inc. ("Adtile") filed a lawsuit against Perion and its...

Page 78
... high and low market prices of our ordinary shares as reported on the NASDAQ and the TASE. The TASE prices have been translated from ILS to dollars based on the exchange rate between the ILS and the dollar, as quoted by the Bank of Israel with respect to the date of the applicable high or low market...

Page 79
F. EXPENSES OF THE ISSUE Not applicable. ITEM 10. A. ADDITIONAL INFORMATION SHARE CAPITAL Not applicable B. MEMORANDUM AND ARTICLES OF ASSOCIATION Registration Number and Purposes Our registration number with the Israeli Companies Registrar is 51-284949-8. Pursuant to Section 3 of our ...

Page 80
...by a majority vote at a shareholders' meeting, provided that either: Â· the majority of shares voted for the election includes at least a majority of the shares held by non-controlling shareholders voted at the meeting and excluding shares held by a person with a personal interest in the approval of...

Page 81
... total number of shares of non-controlling shareholders voted against the election of the external director does not exceed two percent of the aggregate voting rights in the company. See "Item 6.C Board Practices" regarding our staggered board. Transfer Agent and Registrar American Stock Transfer...

Page 82
... shall not apply to (i) the purchase of shares in a private placement, provided that such purchase was approved by the company's shareholders for this purpose; ; (ii) a purchase from a holder of more than 25% of the voting rights of a company that results in a person becoming a holder of more than...

Page 83
... with the Companies Law and our articles of association. C. MATERIAL CONTRACTS Search Services Agreement with Microsoft Online Inc. On August 1, 2014, we announced the signing of a three-year agreement with Microsoft, extending our existing partnership, starting January 1, 2015 through December...

Page 84
... Rights . We were required to file a "shelf" registration statement on Form F-3, as soon as practicable following the filing of our 2013 annual report, to register the resale from time to time by the holders thereof whose resale of shares would otherwise be subject to volume limitations set...

Page 85
...so that each will receive such number of ordinary shares in total that it would have purchased at the closing of the private placement at such lower price. J.P. Morgan Registration Rights Agreement On December 3, 2015, in connection with the J.P. Morgan Securities Purchase Agreement, we entered into...

Page 86
...of the purchase, ownership and disposition of our ordinary shares, including, in particular, the effect of any foreign, state or local taxes. General Corporate Tax Structure in Israel Taxable income of Israeli companies is generally subject to corporate tax at the rate of 26.5% for the 2015 tax year...

Page 87
... respect of real capital gains derived from the sale of shares issued by a company in which he or she is a substantial shareholder. The determination of whether the individual is a substantial shareholder will be made on the date on which the securities are sold. In addition, the individual will be...

Page 88
... from the sale of shares. Capital Gains Taxes Applicable to Non-Israeli Resident Shareholders. Shareholders that are not Israeli residents are generally exempt from Israeli capital gains tax on any gains derived from the sale, exchange or disposition of our ordinary shares, provided that (1) such...

Page 89
... tax laws, including insurance companies; dealers in stocks, securities or currencies; financial institutions and financial services entities; regulated investment companies or real estate investment trusts; grantor trusts; S corporations; persons that acquire ordinary shares upon the exercise of...

Page 90
...that receives foreign currency upon disposition of ordinary shares and converts the foreign currency into dollars after the settlement date or trade date (whichever date the U.S. holder is required to use to calculate the value of the proceeds of sale) may have foreign exchange gain or loss based on...

Page 91
...Holders who hold ordinary shares during a period when we are a PFIC will be subject to the foregoing rules even if we cease to be a PFIC. Unless otherwise provided by the IRS, if a non-U.S. corporation is a PFIC, a U.S. Holder generally is required to file an annual informational return with the IRS...

Page 92
... statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. Holders should consult their own tax advisors regarding their tax reporting obligations...

Page 93
... to in this annual report on Form 20-F, is available for public view (subject to confidential treatment of agreements pursuant to applicable law) at our principal executive offices at Perion Network Ltd., 26 HaRokmim Street, Holon 5885849, Israel. I. SUBSIDIARY INFORMATION Not applicable. ITEM...

Page 94
... income before tax by less than one percent (1%). The exchange rate of the U.S. dollar to the New Israeli Shekel, based on exchange rates published by the Bank of Israel, was as follows: Year Ended December 31, 2013 2014 3.609 3.577 3.471 3.889 2015 3.884 3.902 Average rate for period Rate at year...

Page 95
...and procedures were effective and ensured that information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding...

Page 96
... 213 59 54 945 2015 657 239 145 1,041 Audit Fees Tax Fees Audit Related fees Other Total $ $ $ $ Audit fees include fees for professional services rendered by our principal accountant in connection with the annual audit, review of quarterly consolidated financial data, internationally required...

Page 97
... event the required quorum shall consist of any number of shareholders present in person or by proxy. Annual Reports. While the NASDAQ Listing Rules generally require that companies send an annual report to shareholders prior to the annual general meeting, we follow the generally accepted business...

Page 98
...of interested party acts and transactions, set forth in sections 268 to 275 of the Israeli Companies Law, and the regulations promulgated thereunder, which allow for the approval of certain related party transactions, which are immaterial, in the normal course of business and on market terms, by the...

Page 99
PART III ITEM 17. Not applicable. ITEM 18. FINANCIAL STATEMENTS FINANCIAL STATEMENTS The following financial statements and related auditors' report are filed as part of this annual report: 96

Page 100
PERION NETWORK LTD. AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015 IN U.S. DOLLARS INDEX Page Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2014 and 2015 Consolidated Statements of Income (Loss) for the Years ...

Page 101
... with the standards of the Public Company Accounting Oversight Board (United States), Perion's Network Ltd. internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations...

Page 102
... ACCOUNTING FIRM TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF PERION NETWORK LTD. We have audited Perion Network Ltd. and subsidiaries (the "Company") internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued...

Page 103
.... criteria. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the...

Page 104
PERION NETWORK LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share and per share d ata ) December 31, 2014 Assets Current Assets: Cash and cash equivalents Short-term bank deposits Accounts receivable (net of allowance of $1,035 and $1,063 at December 31, ...

Page 105
... (except share and per s har e data) 2013 Revenues: Search Advertising and other Total Revenues Costs and Expenses: Cost of revenues Customer acquisition and media buy costs Research and development Selling and marketing General and administrative Restructuring charges Impairment, net of change in...

Page 106
... in net income (loss) Net change Change in foreign currency translation adjustment Other comprehensive (loss) Comprehensive Income (Loss) The accompanying notes are an integral part of the consolidated financial statements. F-6 $ $ Year ended December 31 2014 $ 42,826 $ 2015 (68,657) 28,613 28...

Page 107
PERION NETWORK LTD. AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREH OL DERS' EQUITY U.S. dollars in thousands (except share data) Additional paid-in capital $ Accumulated Other Comprehensive Loss $ Total shareholders' equity $ Common stock Number of Shares $ Balance as of December 31, 2012 ...

Page 108
... as of December 31, 2015 Accumulated unrealized gain from hedging activities Accumulated other comprehensive loss - - - - - (794) - (68,657) - (794) (68,657) 75,811,487 206 - - 227,258 (794) (25,831) (1,002) 199,837 28 (822) The accompanying notes are an integral part of the...

Page 109
... by shareholders Payments made in connection with acquisition Proceeds from the issuance of convertible debt Proceeds from short-term loans Repayment of long-term loans Net cash provided by (used in) continuing financing activities Effect of exchange rate changes on cash and cash equivalents Net...

Page 110
... equipment on credit Non-cash financing activities Issuance of shares in connection with acquisitions Contribution by shareholders Acquisition related expenses paid by shareholders Dividend in kind upon consummation of spin-off Stock-based compensation that was capitalized as part of capitalization...

Page 111
... FINANC IAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 1: GENERAL Perion Network Ltd. ("Perion") and its wholly-owned subsidiaries (collectively referred to as the "Company"), is a global technology company, providing high-quality advertising solutions to brands and...

Page 112
... at realizable value, net of an allowance for doubtful accounts. The Company evaluating its outstanding accounts receivable and establishes an allowance for doubtful accounts based on information available on their credit condition, current aging, and historical experience. These allowances are...

Page 113
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.) Internally Developed Software The Company capitalizes certain internal and external software ...

Page 114
... impairment existed during 2015, which triggered goodwill impairment analysis for its reporting units. These indicators included a decrease in the Company's share price and lower than expected sales and cash flow as well as management decisions to abandon certain R&D projects. Based on the goodwill...

Page 115
... evidence of an arrangement exists, services are rendered, the fee or price charged is fixed or determinable and collectability is reasonably assured. Deferred revenue is recorded when payments are received from customers in advance of the Company's rendering of services. Cost of revenues Cost of...

Page 116
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step ...

Page 117
... is associated with these customers. To date, the Company has not experienced any material bad debt losses. Total expenses for doubtful debts during 2013, 2014 and 2015 amounted to $0, $1,035 and $104, respectively. Stock-based compensation The Company accounts for stock-based compensation under ASC...

Page 118
... method over the requisite service period. The Company should reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on its probability assessment. The Company accounted for changes in award terms as a modification in...

Page 119
...and on actual historical data. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds, with a term which is equivalent to the expected term of the stock-based awards. The dividend yield is based on the current decision of the Company's management not to distribute any...

Page 120
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.) The notional value of the Company's derivative instruments as of December 31, 2014 and 2015, amounted ...

Page 121
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.) The following table present assets and liabilities, measured at fair value on a recurring basis, as of ...

Page 122
... Mobile Total fair value as of December 31, 2015 Treasury shares In the past, the Company repurchased its ordinary shares on the open market. The Company holds those shares as treasury shares and presents their cost as a reduction of shareholders' equity. Business combinations The Company accounted...

Page 123
... it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December...

Page 124
... per share data) NOTE 3: a. ACQUISITIONS Interactive Holding Corp. On November 30, 2015, The Company consummated the acquisition of 100% of the shares of Interactive Holding Corp., a Delaware corporation, and its subsidiaries (collectively referred to as "Undertone") for a total purchase price of...

Page 125
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 3: ACQUISITIONS (Cont.) The preliminary allocation of the purchase price to assets acquired and liabilities assumed is as follows: Cash Accounts ...

Page 126
...more effective mobile advertising tool. Additionally, the acquisition of MMR establishes the Company's first office in Europe which will lead the European sales efforts. The acquisition has been accounted for as a business combination under ASC No. 805, "Business Combination". The Purchase price was...

Page 127
..., the Company also conducted a valuation of intangible assets based on a market participant approach to valuation using an income approach and in connection therewith considered the report of an independent third party valuation firm and estimates and assumptions provided by management. Pro...

Page 128
... at the Closing Date: Cash Share consideration Contingent consideration Total purchase price at the Closing Date $ 6,892 5,545 7,410 19,847 $ On July 8, 2015, the Company and Grow Mobile's former security holders, entered into an agreement which amended the acquisition agreement that was signed in...

Page 129
... related to the acquisition. Under business combination accounting, the total purchase price was allocated to Grow Mobile's net tangible and intangible assets based on their estimated fair values as set forth below: Cash Accounts receivable Prepaid expenses and other assets Property and equipment...

Page 130
...2014 (the "Closing Date") Perion issued 54,753,582 shares and 2,815,963 stock options to ClientConnect's former shareholders and option holders. Upon closing, the Company was owned 81% by the pre-closing ClientConnect shareholders and option holders and 19% by the pre-closing Perion shareholders and...

Page 131
...Note 2). Under these accounting standards, the total purchase price has been calculated as follows: Number of shares of Perion ordinary shares outstanding on the Closing Date Closing price per share of Perion's ordinary shares on the Closing Date Total fair value of stock consideration Fair value of...

Page 132
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 3: ACQUISITIONS (Cont.) The following table sets forth the components of intangible assets associated with the acquisition: Estimated useful life ...

Page 133
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 3: ACQUISITIONS (Cont.) The following condensed combined pro forma information for the period ended December 31, 2013, gives effect to the ...

Page 134
... will no longer be in use. In connection with the 2015 restructuring plan, the Company recorded an impairment of $159, relating to disposal of certain office furniture and equipment (see Note 15). The impairment charges are included in restructuring charges in the statement of income. In addition...

Page 135
... in thousands (except share and per share data) NOTE 5: a. GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The changes in the net carrying amount of goodwill in 2014 and 2015 were as follows: Balance as of January 1, 2014 Acquisition of Perion Acquisition of Grow Mobile Balance as of December...

Page 136
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Cont.) The following is a summary of intangible assets as of December 31, 2015: December 31, 2014 $ ...

Page 137
...and 2015, the Company performed an impairment review of several intangible assets that were recognized in connection with the acquisition of Perion and Grow Mobile, respectively, which resulted in total impairment charge of $19,941 and $8,471 that are included in impairment, net of gain on change in...

Page 138
..., typically contained in facility agreements of this type. On April 1, 2015, the Company entered into an amended financial covenants agreement with one of the Banks, effective as of December 31, 2014, relating to both the long-term debt and the swap agreement in connection with the convertible debt...

Page 139
...16 and 20 equal quarterly installments, respectively, starting July 17, 2012, and bear annual interest rates of 4.35% and 4.64%. 2. On November 30, 2015, concurrently with the closing of the Undertone acquisition, Interactive Holding Corp. entered into a new secured credit agreement for $50,000, due...

Page 140
... annual instalments commencing on March 31, 2016. The Bonds are convertible, at the election of each holder, into the Company's ordinary shares at a conversion price of ILS 33.605 per share ($8.61 on December 31, 2015) from the date of issuance and until March 15, 2020. The ordinary shares issued...

Page 141
... commitments In January 2014, the Company entered into a lease agreement for new corporate offices in Holon, Israel. The lease expires in January 2025, with an option by the Company to extend for two additional terms of 24 months each. Additionally, the Company may choose an early termination in...

Page 142
...to the terms of the Share Purchase Agreement ("SPA") between the Company and SweetIM, the Company was obligated to pay SweetIM's shareholders, among other payments, a payment of up to $ 7,500 in cash in May 2014, if certain milestones were met (the "Contingent Payment"). The milestones were based on...

Page 143
... 3, 2015 (the "Effective date"), the Company completed a private placement of 4,436,898 ordinary shares for gross proceeds of $10,125 pursuant to a Securities Purchase Agreement (the "SPA") with Investors. The purchase price per share was $2.282 per share, which was the average closing price of...

Page 144
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 11: SHAREHOLDERS' EQUITY (Cont.) On November 30, 2015, the Company entered into Registration Rights Agreement (the "Agreement") with the Purchaser...

Page 145
... share data) NOTE 11: SHAREHOLDERS' EQUITY (Cont.) The following table summarizes the activities for the Company's service-based stock options for the year ended December 31, 2015: Weighted average Remaining contractual Exercise price term (in years 8.85 3.12 2.00 7.33 5.30 7.66 5.80 2.93 Number...

Page 146
... U.S. dollars in thousands (except share and per share data) NOTE 11: SHAREHOLDERS' EQUITY (Cont.) The following table summarizes the activities for the Company's performance-based stock options for the year ended December 31, 2015: Number of Performance based options Outstanding at January...

Page 147
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 11: SHAREHOLDERS' EQUITY (Cont.) Outstanding Weighted average remaining contractual life (years) 2.93 4.68 3.41 2.27 1.17 2.52 3.62 3.83 ...

Page 148
... in restructuring charges. In connection with the Undertone acquisition the Company granted warrants to purchase 200,000 ordinary shares, at a weighted average exercise price of $3.03 to a third-party vendor that provides development services to Undertone. The weighted-average grant-date fair value...

Page 149
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 12: FINANCIAL INCOME (EXPENSE), NET 2013 Financial income: Interest income Foreign currency translation gains, net Change in fair value of ...

Page 150
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data...23,432 (13,851) 9,581 $ 2015 9,670 (8,973) 697 10,778 11,838 22,616 $ $ $ * The year 2013 include non-recurring tax expenses in respect of the ...

Page 151
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 13: c. INCOME TAXES (Cont.) Deferred Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying ...

Page 152
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 13: d. INCOME TAXES (Cont.) Reconciliation of the Company's effective tax rate to the statutory tax rate in Israel A reconciliation between the ...

Page 153
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 13: e. INCOME TAXES (Cont.) Income tax rates Taxable income of Israeli companies is generally subject to corporate tax at the rate of 25% for the...

Page 154
... subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. As of December 31, 2015, Perion network Ltd. has net...

Page 155
... average number of ordinary shares outstanding during the year Weighted average effect of dilutive securities: Assumed conversion of convertible debt Shares to be issued in connection with acquisition Employee stock options and restricted stock units Diluted number of ordinary shares outstanding...

Page 156
...entered into agreements pursuant to which the parties agreed to provide and receive certain administrative and business support services and systems, including data services, information technology, information security and management information systems, for consideration at market terms, from each...

Page 157
... (except share and per share data) NOTE 16: c. RELATED PARTY TRANSACTIONS (Cont.) As a condition precedent to the closing of ClientConnect Acquisition on January 2, 2014, Conduit and ClientConnect entered into ancillary agreements. As a result of the ClientConnect Acquisition, two officers of...

Page 158
PERION NETWORK LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 18: GEOGRAPHIC INFORMATION The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which ...

Page 159
... Goshen as Shareholders' Agent, dated as of November 7, 2012, and Amendment No. 1, dated as of November 30, 2012. (3) Registration Rights Agreement among the Company and the investors listed therein, dated as of November 7, 2012. (3) Share Purchase Agreement by and among Perion Network Ltd., Conduit...

Page 160
... on April 10, 2014 as an exhibit to our annual report on Form 20-F, and incorporated herein by reference. (2) Previously filed with the SEC on April 16, 2015 as an exhibit to our annual report on Form 20-F, and incorporated herein by reference. (3) Previously filed with the SEC on April 29, 2013 as...

Page 161
...The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. Perion Network Ltd. /s/ Josef Mandelbaum Josef Mandelbaum Chief Executive Officer Date: March 24, 2016 99

Page 162
... dated November 30, 2015. Registration Rights Agreement by and between Perion Network Ltd. and the purchasers listed therein, dated December 3, 2015. List of subsidiaries. Certification required by Rule 13a-14(a) or Rule 15d-14(a) executed by the Chief Executive Officer of the Company. Certification...

Page 163
...the subject matter of the representations and warranties may change after the date of the agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. AGREEMENT AND PLAN OF MERGER among PERION NETWORK LTD. and INCREDITONE INC. and OR MERGER, INC. and...

Page 164
... CONTENTS Page ARTICLE I THE MERGER 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 The Merger Effective Time Closing of the Merger Effects of the Merger Certificate of Incorporation and Bylaws Directors Officers Conversion of Shares and Convertible Securities Payment for Shares Company...

Page 165
... AND PURCHASER 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Performance of Covenants Agreements and Documents Convertible Securities Governmental Approvals Consenting Stockholders Support Agreements Termination of Certain Agreements 280G Matters ARTICLE vII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY...

Page 166
...Purchaser and the Surviving Corporation Stockholder Liability Limitations, Etc. Defense of Third Party Claims Exercise of Remedies by Third Parties Purchase Price Remedies Exclusive Right....14 10.15 10.16 10.17 Entire Agreement Further Assurances Fees and Expenses Notices Headings Counterparts Dispute...

Page 167
... . At the Effective Time and upon the terms and subject to the conditions of this Agreement and in accordance with the DGCL, Merger Sub shall be merged with and into the Company. Following the Merger, the Company shall continue as the surviving corporation (the " Surviving Corporation ") and the...

Page 168
...Agreement (the " Closing Date "), at the offices of Goldfarb Seligman & Co., 98 Yigal Alon Street, Tel-Aviv, Israel, unless another time, date or place is agreed to in writing by the parties hereto. 1.4 Effects of the Merger . The Merger shall have the effects set forth in the DGCL. Without limiting...

Page 169
... nor Purchaser shall assume outstanding Company Stock Options, or issue any securities in exchange therefor, in connection with the transactions contemplated hereby. Immediately prior to the Effective Time and subject to consummation of the Merger and the terms and conditions of this Agreement, each...

Page 170
... and appropriate actions) to provide that, subject to consummation of the Merger and the terms and conditions of this Agreement, at the Effective Time, each then outstanding Company Warrant shall terminate, and the holder thereof shall have the right to receive the consideration equal to the...

Page 171
...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...

Page 172
... (v) the Working Capital Excess, if any, plus (vi) the Company Debt Shortfall, if any, plus (vii) the Closing Date Cash Excess, if any. (b) Promptly after the Effective Time, to the extent not previously delivered to the Paying Agent, the Paying Agent shall cause to be mailed to each Person who was...

Page 173
...books of the Surviving Corporation of Company Capital Stock that were outstanding immediately prior to the Effective Time. (d) On the eighteen-month anniversary of the Closing Date (the " Holdback Payment Date "), Parent shall deposit with the Paying Agent the Holdback Amount less any Set-off Amount...

Page 174
...Payment Amount "). (iii) Parent may, at any time and from time to time prior to the Applicable Payment Date, deposit with the Paying Agent all or any ...receive its portion of any such amount as directed in writing by the Stockholders' Representative, provided that the Paying Agent has been provided...

Page 175
... party hereto shall be liable to any holder of certificates formerly representing Shares for any amount paid to a public official pursuant to any applicable abandoned property, escheat or similar Legal Requirements. 1.10 Company Convertible Securities . (a) For purposes of this Agreement, " Stock...

Page 176
... who was, at the Effective Time, an Optionholder or a Warrantholder (together with the Participating Stockholders, the " Participating Holders "), a letter in a form reasonably acceptable to the Company and Purchaser, notifying such Person of the treatment of the applicable Company Stock Options and...

Page 177
... into, and to have become exchangeable for, as of the Effective Time, the right to receive the applicable Merger Consideration, without any interest thereon, upon surrender of the certificate or certificates that formerly evidenced such Shares in the manner provided in Section 1.9 hereof. 11

Page 178
... has delivered to Purchaser a certificate executed by the principal financial officer of the Company (in his or her capacity as such) detailing the Company's good faith best estimate (based on reasonable assumptions) of Company Net Working Capital, Closing Date Cash and Company Debt (" Company NWCC...

Page 179
... Company Net Working Capital shall be based on the Financial Statements and the methodology relating thereto as set forth in Schedule 1.12 . (b) Within 90 days after the Closing, Purchaser shall deliver to the Stockholders' Representative a certificate executed by Purchaser's Chief Financial Officer...

Page 180
... of Company Net Working Capital above the Company Net Working Capital set forth in the Company NWCC&D Certificate (which shall be a positive number, if any) shall be referred to as a " Positive WC Adjustment Amount ," (iii) any shortfall of Closing Date Cash below the Closing Date Cash set forth...

Page 181
... of the Stockholders' Representative. Parent and Purchaser shall cause the Surviving Corporation to promptly pay (and in any event, pay by the next regularly scheduled payroll date) to each Optionholder of In-the-Money Options (other than holders of Company 102 Options) and Warrantholder of In-the...

Page 182
...Other Payments . At the Effective Time, Parent and Purchaser shall, jointly and severally, pay (or cause to be paid) on behalf of the Company and its Subsidiaries, as applicable: (a) the portion of the Transaction Costs Amount that remains unpaid as of the Closing to the Persons owed such amounts as...

Page 183
... of Parent, Purchaser and Merger Sub, as of the date hereof and as of the Closing as follows, subject to the exceptions set forth in the applicable parts of the attached Disclosure Schedule corresponding to the Section numbers below: 2.1 Due Organization; Etc. (a) The Company is a corporation duly...

Page 184
... amendments thereto, currently in effect, have been made available to Purchaser and are attached to this Agreement as Part 2.2 of the Disclosure Schedule. The Company has made available to Purchaser accurate and complete copies of (1) the capital stock records of the Company and each Subsidiary and...

Page 185
... paid and non-assessable, and were issued in compliance with (A) the Charter Documents of the Company, (B) all applicable federal and state securities Laws, and (C) any preemptive rights of any Person granted by the Company. (b) The Company has reserved 12,894,850 shares of Common Stock for issuance...

Page 186
... The number of such Shares set forth as being so owned, or subject to Company Warrants so owned or subject to Company Stock Options so owned, by such Person constitutes, as of the date hereof, the entire record interest of such person in the issued and outstanding share capital, voting securities or...

Page 187
... LLP, independent public accountants (the " Company Auditor ") (collectively, the " Annual Financial Statements "), (ii) the unaudited consolidated balance sheet (" Company Balance Sheet ") of the Company and its Subsidiaries as of June 30, 2015 (" Company Balance Sheet Date ") and the related...

Page 188
... Stock Option, or (ii) any share purchase agreement or restricted stock agreement; (e) there has been no amendment to the Company's Certificate of Incorporation, or any charter or organizational documents of any Subsidiary and neither the Company nor any Subsidiary has effected or been a party...

Page 189
... Company nor any Subsidiary has (i) failed to file any Tax Return or pay any Tax timely when due, (ii) made or changed any election with respect to any Tax, (iii) adopted or changed any accounting method in respect of any Taxes, (iv) entered into any Tax allocation agreement, Tax sharing agreement...

Page 190
..., based on the condition as of the Closing, any material liability in connection with nor any material obligation under any Company Leases or applicable Legal Requirements to pay any amount to a third party (including, without limitation, any landlord of any of the Company Facilities) in connection...

Page 191
... of each such Bank Account as of the close of business on the date prior to the date hereof. (b) Except as set forth in Part 2.7(b) of the Disclosure Schedule, neither the Company nor any Subsidiary has any Accounts Receivable. Part 2.7(b) of the Disclosure Schedule provides an accurate and complete...

Page 192
... and continuations-in-part thereof and equivalent or similar rights in inventions and discoveries anywhere in the world, including invention disclosures; (C) copyrights, copyrightable works, whether registered or unregistered, and registrations and applications therefor, works of authorship and...

Page 193
...or management is restricted under any applicable Law, including, but not limited to, an individual person's: (A) personally identifiable information ( e.g. , name, street address, telephone number, e-mail address, photograph, social security number, credit card information and/or account information...

Page 194
... or in part, has performed services for, or was an employee of, or was otherwise engaged by any third party during or prior to the time of such Person's employment or engagement by the Company or any Subsidiary, in a manner that may provide the basis for any claim, interest, or right of such third...

Page 195
... not in connection with the Company's or any Subsidiary's business as currently conducted, become necessary to utilize any inventions, and specifically, inventions covered by patents or patent applications, of any current or former Service Provider made prior to their service with the Company or any...

Page 196
(g) Part 2.9(g) of the Disclosure Schedule lists all Intellectual Property Rights as of the close of business on November 20, 2015 that are the subject of an application or registration filed or recorded with any public legal authority by or on behalf of the Company or any Subsidiary worldwide (" ...

Page 197
... other material limitation, restriction or condition on the right of the Company or any Subsidiary to use or distribute any Company Intellectual Property. The Company has no escrow agreement or arrangement between the Company and any Person that would permit such Person or any other party to obtain...

Page 198
...any third party advertisers acting on behalf of the Company or any Subsidiary. None of the Company Intellectual Property installs "spyware," "adware" or other malicious code that could compromise the privacy or data security of end-users and/or their computer systems and/or collects information from...

Page 199
... access by any parties; and (ii) maintained its and their hardware, software, encryption, systems, policies and procedures to protect the privacy, security and confidentiality of all Personal Data in accordance with all applicable Legal Requirements. (o) (i) Neither the Company nor any Subsidiary...

Page 200
... orders for any Company or Subsidiary (v) (A) any Contract with the Key vendors as of the close of business on November 20, 2015, (B) any insertion order with the Key Agencies in effect as of the close of business on November 20, 2015 and (C) any master services agreement or similar Contract for or...

Page 201
..., advisory or similar services agreement involving the payments by the Company or any Subsidiary of more than $200,000 in base salary, target bonus and target commission for fiscal 2015; (xiii) any Contract with any Stockholder, Warrantholder, Optionholder or Related Party of the Company or any of...

Page 202
... course of business consistent with past practice, neither the Company nor any Subsidiary is a party to any credit sale or conditional sale agreement or any contract providing for payment on deferred terms in respect of assets purchased by the Company or any Subsidiary. 2.12 Compliance with Legal...

Page 203
... correct in all material respects to the Company's or any Subsidiary's Knowledge as of the date of submission and any necessary or required material updates, changes, corrections or modifications to such applications, submissions, information and data have been submitted to the relevant Governmental...

Page 204
...copies of the Tax Returns filed by the Company and each Subsidiary with the applicable Governmental Bodies in respect of 2012, 2013 and 2014 have been provided to Purchaser. The Company and each Subsidiary have at all times and within the requisite time limits promptly, fully and accurately observed...

Page 205
...or prior to the Closing Date: (i) an installment sale or other open transaction or (ii) any adjustment under Section 481(a) or 263A of the Code or any comparable provision under any Legal Requirement relating to Taxes by reason of a change in the accounting method of the Company or any Subsidiary or...

Page 206
...Pre-Closing Tax Period for which the applicable statute of limitations, after giving effect to extensions or waivers, has not expired. No claim has been received in writing from any Tax Authority in a jurisdiction where the Company or any of its Subsidiaries does not file Returns that the Company or...

Page 207
...to the receipt of the approvals set forth on Part 2.14(z) of the Disclosure Schedule and compliance by the Company and each of its Subsidiaries with the applicable requirements and conditions, the consummation of the transactions contemplated by this Agreement will not adversely affect the remaining...

Page 208
...corporation tax or an amount payable by way of R&D tax credit were valid when made and reasonable details of all such claims are set forth in Part...of this Agreement, the Merger, nor any other event since June 30, 2015, will ...been paid in full on the due date and no Subsidiary has applied to defer...

Page 209
..." Company Employee Plan " shall mean any employment agreement, consulting agreement, plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, change of control payments, stock or stock...

Page 210
... Subsidiary. (e) Part 2.15(e) of the Disclosure Schedule sets forth a complete and accurate list of all officers, employees (" Employees ") and paid consultants of the Company and each Subsidiary (together with officers and Employees, " Service Providers "), including names, positions and dates of...

Page 211
... practices, and the retention of other service providers. To the Company's Knowledge, no Employee of the Company or Subsidiary is in material violation of any term of any employment contract, proprietary information agreement or other agreement relating to the right of any such individual to be...

Page 212
... full-time or part-time status, date of hire, any incentive or bonus arrangement with respect to such person and a description of any oral employment Contract with its employees (except where the disclosure of such information would be prohibited by applicable Law relating to data privacy/protection...

Page 213
... or any Subsidiary of all Governmental Authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof. Neither the Company nor any Subsidiary has received any written, or to the Knowledge of the Company, oral, notice or other written, or to the...

Page 214
... (including indemnification agreements but excluding rights to receive compensation for services performed as a Service Provider of the Company as set forth in Section 2.15). For purposes of this Section 2.18 each of the following shall be deemed to be a " Related Party ": (i) each Person that...

Page 215
... prohibits such Service Provider from engaging in or continuing any conduct, activity or practice relating to the Company's or any Subsidiary's business. (c) The Company has provided Purchaser with all material documentation (including settlement agreements) and all material public filings relating...

Page 216
...duly authorized by all necessary corporate action on the part of the Company. This Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to (i) Laws of general application relating to bankruptcy, insolvency...

Page 217
... other than any Lien or other Encumbrance resulting from Purchaser and/or Parent's financing of the Merger. (f) Except as set forth in Part 2.21(f) of the Disclosure Schedule, neither the Company nor any Subsidiary will be required to make any filing or registration with or give any notice to, or...

Page 218
... manner materially adverse to the Company or any Subsidiary the terms of such Key Party's relationship with the Company or any Subsidiary. (b) Part 2.10(a)(v)(B) of the Disclosure Schedule sets forth the Forms of Key Insertion Orders. All other insertion orders that are in effect for each Key Agency...

Page 219
... in a violation or breach of, or constitute a default (with or without due notice or lapse of time or both) under the terms, conditions or provisions of any mortgage, indenture, license or material agreement to which Parent, Purchaser or Merger Sub is a party or (c) violate any order, writ, judgment...

Page 220
...is an informed and sophisticated Person, and has engaged expert advisors experienced in the evaluation and acquisition of companies such as the Company and its Subsidiaries as contemplated hereunder. 3.8 Financing . Parent and Purchaser, together, will have as of the Effective Time, sufficient funds...

Page 221
...Capital Stock, Company Stock Options or Company Warrants, or such Company Holder's sale thereof or such Company Holder's employment with the Company and its Subsidiaries, as applicable; provided that the foregoing release shall not cover claims (i) pursuant to or in connection with this Agreement or...

Page 222
... agreements between the Company and its current and former directors and officers as of the Closing that are set forth in Part 2.18 of the Disclosure Schedule and any indemnification provisions under the Charter Documents as in effect on the Closing Date, in each case, subject to applicable...

Page 223
...pursuant to this Section 5.2 for any matter involving fraud in connection with this Agreement or the transactions contemplated thereby. (c) The Company has purchased a "tail" directors' and officers' insurance policy to go into effect upon the Effective Time. The cost of such policy, and any related...

Page 224
...Documents . Purchaser shall have received the following agreements and documents, each of which shall be in full force and effect: (a) a certificate executed by the Chief Executive Officer and Chief Financial Officer of the Company which certifies (i) that the conditions relating to the Company and...

Page 225
... Closing Date, or certified resolutions of the applicable corporate organs removing the directors and officers and appointing directors and officers designated by Purchaser effective as of the Effective Time. 6.3 Convertible Securities . Immediately prior to the Effective Time, all Company Warrants...

Page 226
... and complied in all material respects with the agreements and covenants set forth in its Support Agreement that are required to be performed or compiled with by it on or prior to the Closing Date. 6.7 Termination of Certain Agreements . The Company shall have delivered to Parent evidence in a form...

Page 227
... Company shall have received the following agreements and documents: (a) a certificate executed by the Chief Executive Officer and Chief Financial Officer of each of Parent, Purchaser and Merger Sub certifying that the conditions set forth in Section 7.1 have been duly satisfied; Agent; and Closing...

Page 228
... Nature of Agreement ) and 2.22 ( Brokers ) (collectively, the " Company Special Representations ") shall survive the Closing and the Termination Date and shall expire on the sixtieth (60 th ) day following the expiration of the applicable statute of limitations (giving effect to any extensions...

Page 229
... obligations of Parent, Purchaser and Merger Sub, and the rights and remedies that may be exercised by the Stockholders' Representative, shall not be limited or otherwise affected by or as a result of either (i) any waiver of Closing conditions by the Company or (ii) any information furnished to, or...

Page 230
... Corporation or its Subsidiaries to any present or former officers, directors or employees of the Company or any Subsidiary pursuant to any indemnification provisions under the Charter Documents as in effect on the date of this Agreement and pursuant to any indemnification agreements listed on Part...

Page 231
... (the " Set-off Right "). Parent shall provide written notice (each, a " Set-off Notice ") to the Stockholders' Representative of the amount proposed to be set off by Parent pursuant to the Set-off Right (the " Set-off Amount "), specifying in reasonable detail (based on information then possessed...

Page 232
... by (i) the amount of any related insurance proceeds actually received by such Parent Indemnitee or its Affiliates in connection with the corresponding claim (net of applicable deductible or retention amounts, based on the parties' reasonable estimate of the increases in insurance premiums directly...

Page 233
... calculation of any limitations on indemnification set forth herein) to the extent Parent or Purchaser was previously compensated for such Damage in the final calculation under Section 1.12 of the Net Negative Adjustment Amount or Net Positive Adjustment Amount, as applicable. (c) No party shall, in...

Page 234
... by it pursuant to this Agreement. 9.7 Defense of Third Party Claims . In the event of the assertion or commencement by any Person of any claim or Legal Proceeding (whether against the Company, a Subsidiary, the Surviving Corporation, Parent, Purchaser or any other Person) with respect to which any...

Page 235
9.8 Exercise of Remedies by Third Parties . No Person who is not a party to this Agreement (or any successor thereto or assign thereof) shall be permitted to assert any indemnification claim or exercise any other remedy under this Agreement. 9.9 Purchase Price . Any payments made to a Parent ...

Page 236
... Return may be timely filed. The Reviewing Accountant shall make a determination with respect to any disputed issue within 5 days before the due date (including extensions) for the filing of the Tax Return in question, and the Purchaser shall cause the Company and its Subsidiaries to file such Tax...

Page 237
... Return may be timely filed. The Reviewing Accountant shall make a determination with respect to any disputed issue within 5 days before the due date (including extensions) for the filing of the Tax Return in question, and the Purchaser shall cause the Company and its Subsidiaries to file such Tax...

Page 238
... with respect to Tax matters pertinent to the Company or its Subsidiaries relating to any Pre-Closing Period or Straddle Period until the expiration of the applicable statute of limitations (and, to the extent notified by the Purchaser or the Stockholders' Representative, any extension thereof) of...

Page 239
... the Purchaser, which shall not be unreasonably withheld, conditioned, or delayed. (c) Transfer Taxes . All transfer, documentary, sales, use, stamp, registration, value added, and other such similar Taxes and fees (including any penalties and interest) incurred in connection with this Agreement or...

Page 240
...presented to Purchaser. Purchaser shall use commercially reasonable efforts to cause the Surviving Corporation's accountants to prepare and provide to the Stockholders' Representative, for its review and approval, (x) such IRS Form 4466 within thirty (30) days following the Closing Date and (y) such...

Page 241
... hereto), the Disclosure Schedules and the Mutual Non-Disclosure Agreement, dated as of June 30, 2015, by and between Parent and the Company, as amended, and the other agreements referred to herein set forth the entire understanding of the parties hereto relating to the subject matter hereof and...

Page 242
... be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by courier or express delivery service, by electronic mail or by facsimile) to the address or facsimile telephone number set forth beneath the name...

Page 243
..., Jr., Esq. Email: [email protected] and [email protected] if to the Company, after Closing, to the address set forth under "Parent, Purchaser or Merger Sub" above. Any notice sent in accordance with this Section 10.4 shall be effective (i) if mailed, nine (9) days after...

Page 244
...the federal courts applicable to Delaware. (c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROvERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INvOLvE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREvOCABLY AND UNCONDITIONALLY WAIvES ANY RIGHT SUCH PARTY MAY HAvE...

Page 245
... of their respective rights under this Agreement for collateral security purposes to any lender providing financing to Parent, Purchaser, Merger Sub, the Company or any of its Subsidiaries, or in connection with a transfer or sale of the business of Parent, Purchaser, Merger Sub, the Company or any...

Page 246
... "provided" or "furnished" by the Company to Parent, Purchaser and Merger Sub for purposes of Section 2 if such document or item was included no later than two days prior to the date hereof in the electronic data room established by the Company at https://services.intralinks.com/login/ in connection...

Page 247
...information is required to be disclosed in connection with the representations and warranties made by the Company, Parent, Purchaser or Merger Sub, as applicable, in this Agreement or that such information is material, nor shall such information...disclosure in any such numbered and lettered Section or...

Page 248
... with applicable rules of professional conduct regarding the confidentiality of any client information of the Company and its Subsidiaries other than as it pertains to Goodwin's representation of the Company and its Subsidiaries in connection with this Agreement, the Transaction Agreements and...

Page 249
... the rights of the Participating Holders to receive the Merger Consideration from Parent and Purchaser following the Effective Time; (vi) to make the determination of each Participating Holder's Securities Consideration Fraction and each Stockholder's Share Consideration Fraction at each date of...

Page 250
...' Representative may resign at any time and may be removed by the Stockholders representing a majority in interest of the Stockholders (based on the number of shares of Common Stock on an as-converted basis held by them, as set forth on the Closing Spreadsheet) (the " Required Stockholders ") upon...

Page 251
... shall be treated as having been received and voluntarily set aside by the Participating Stockholders at the time of Closing. The parties agree that the Stockholders' Representative is not acting as a withholding agent or in any similar capacity in connection with the Representative Fund and that...

Page 252
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed and delivered as of the date first above written. PERION NETWORK LTD. By: /s/ Josef Mandelbaum Name: Josef Mandelbaum Title: CEO By: /s/ Yacov Kaufman Name: Yacov Kaufman Title: CEO INCREDITONE INC. By: /s/ Josef ...

Page 253
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed and delivered as of the date first above written. INTERACTIVE HOLDING CORP. By: /s/ Corey Ferengul Name: Corey Ferengul Title: Chief Executive Officer [Signature Page to Agreement and Plan of Merger]

Page 254
... WHEREOF , the parties hereto have caused this Agreement to be executed and delivered as of the date first above written. FORTIS ADVISORS LLC, solely in its capacity as the Stockholders' Representative By: /s/ Richard A. Fink Name: Richard A. Fink Title: CEO & Managing Director [Signature Page...

Page 255
..., Cash & Debt Certificate Certain Definitions Stockholders Written Consent Form of Support Agreement Certificate of Merger Certificate of Incorporation of Merger Sub Closing Spreadsheet Paying Agent Agreement Letter of Transmittal Financial Statements Stockholders Notice FIRPTA Certificate under...

Page 256
...shall mean all accounts receivable, including without limitation, all trade accounts receivable, notes receivable from customers, vendor credits and accounts receivable from employees and all other obligations from customers with respect to sales of goods or services by the Company or any Subsidiary...

Page 257
... all Israeli income taxes applicable to such payments are paid is equal to the net amount such Optionholder would have received after income taxes if such payments were instead subject to an Israeli tax rate of 25%. " Company 102 Shares " shall mean Common Stock issued (A) pursuant to Section 102...

Page 258
...of Justice. " Encumbrance " shall mean any Lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, conditional and installment sale agreement, option, right of first refusal, preemptive right, call, community property interest or restriction of any nature (including any...

Page 259
... stock or voting securities, with all convertible and exercisable securities (or other rights to acquire capital stock) deemed converted or exercised, as the case may be, into shares of capital stock in accordance with their terms, whether or not then currently vested, exercisable, exchangeable...

Page 260
...all Indebtedness for the deferred purchase price of property or services represented by a note or other security, (c) all Indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired (even though the rights and remedies of the seller...

Page 261
..., deed of trust, lien, pledge, hypothecation, assignment, charge, option, preemptive purchase right, easement, encumbrance, security interest, or other adverse claim of any kind in respect of such property or asset. For purposes of this Agreement, a Person will be deemed to own subject to a Lien any...

Page 262
... the exercise price of a Company Stock Option or Company Warrant, as applicable. " Optionholder " shall mean any Person holding a Company Stock Option. " Parent Change of Control " shall mean means (a) any Person or group of persons within the meaning of Â§ 13(d)(3) of the Securities Exchange Act of...

Page 263
... " shall mean means that certain Credit Agreement dated as of November 30, 2015, by and among Merger Sub and the Company, as borrower, the lenders from time to time party thereto and SunTrust Bank, as administrative agent as in effect on the date hereof. " Share Consideration Fraction " as to any...

Page 264
...) under applicable Law for the imposition of any Tax, including the IRS and the ITA (each, a " Tax Authority "). " Tax Returns " shall mean returns, reports and information statements with respect to Tax required to be filed by or on behalf of the Company with the U.S. Internal Revenue Service and...

Page 265
... Companies in connection with or incident to this Agreement and the transactions contemplated hereby, including any Transaction Costs and any legal, accounting and investment banking fees, costs and expenses. The parties agree to apply the safe harbor election set forth in Internal Revenue Service...

Page 266
... date of the agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. CREDIT AGREEMENT dated as of November 30, 2015 among OR MERGER, INC. and INTERACTIVE HOLDING CORP. as Borrower INCREDITONE INC. as Holdings THE LENDERS FROM TIME TO TIME PARTY...

Page 267
... Mitigation of Obligations 2.24. Section Replacement of Lenders 2.25. Section Defaulting Lenders. 2.26. ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT Section Conditions to Effectiveness. 3.1. Section Conditions to Each Credit Event 3.2. Delivery of Documents. Section 3.3. 1 1 32 32...

Page 268
...Approvals; No Conflicts. 4.3. Section Financial Statements. 4.4. Section Litigation and Environmental Matters. 4.5. Section Compliance with Laws and Agreements. 4.6. Section Investment Company Act. 4.7. Section Taxes. 4.8. Section Margin Regulations. 4.9. Section ERISA. 4.10. i 68 68 68 68 68 69 69...

Page 269
...of Inbound Licensors. 5.16. Section [reserved]. 5.17. Section Information Privacy and Security. 5.18. Section Post Closing Conditions. 5.19. ARTICLE VI FINANCIAL COVENANTS Section Total Leverage Ratio. 6.1. Section Fixed Charge Coverage Ratio. 6.2. ARTICLE VII NEGATIVE COVENANTS Section Indebtedness...

Page 270
... of Assets. Transactions with Affiliates. Restrictive Agreements. Sale and Leaseback Transactions. Hedging Transactions. Amendment to Material Documents. Accounting Changes. Government Regulation. Cash Held in Foreign Jurisdictions. Limited Activities of Holdings. 89 90 91 91 92 92 92 92 92 93 93...

Page 271
... WAIvER OF JURY TRIAL. 10.6. Section Right of Set-off. 10.7. Section Counterparts; Integration. 10.8. Section Survival. 10.9. Section Severability. 10.10. Section Confidentiality. 10.11. Section Interest Rate Limitation. 10.12. Section Waiver of Effect of Corporate Seal. 10.13. Section Patriot Act...

Page 272

Page 273
...Secretary's Certificate Form of Officer's Certificate Form of Compliance Certificate iv Commitment Amounts Environmental Matters Intellectual Property Subsidiaries Deposit and Disbursement Accounts Material Agreements Existing Indebtedness Existing Liens Existing Investments Post-Closing Conditions

Page 274
CREDIT AGREEMENT THIS CREDIT AGREEMENT (this " Agreement ") is made and entered into as of November 30, 2015, by and among OR MERGER, INC. , a Delaware corporation ("Mergerco" and upon the Closing Date Acquisition, INTERACTIVE HOLDING CORP. , a Delaware corporation (the " Borrower ")), INCREDITONE ...

Page 275
... of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained. " Applicable Margin " shall mean (a) 4.50% per annum with respect to Base Rate Loans and (b) 5.50% per annum with...

Page 276
...reconciliation and information reporting, payables outsourcing, payroll processing, trade finance services, investment accounts and securities accounts, and (b) card services, including credit cards (including purchasing cards and commercial cards), prepaid cards, including payroll, stored value and...

Page 277
... (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other "equity security" (as such term is defined in Rule 3a11 1 of the General Rules and Regulations...

Page 278
..., or any change in the interpretation, implementation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank (or, for purposes of Section 2.18(b) , by the Parent Company of such...

Page 279
...and agreement executed and delivered in connection therewith. " Closing Date Certificate of Merger " shall mean the Certificate of Merger, dated as of November 30, 2015, to be filed in the office of the Secretary of State of the State of Delaware in order to effect the Closing Date Merger. " Closing...

Page 280
... income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary; and (v) any income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or...

Page 281
... Security Agreement " shall mean any Copyright Security Agreement executed by a Loan Party owning registered Copyrights or applications for Copyrights in favor of the Administrative Agent for the benefit of the Secured Parties, both on the Closing Date and thereafter. " Covered Personal Information...

Page 282
...date of determination without any option on the part of the obligor to extend or renew beyond such year and all accruals for federal or other taxes based...similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect. " Default " shall mean any condition...

Page 283
... and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and any Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system...

Page 284
... Closing Date executed by the Chief Financial Officer of each of the Parent, Incredimail Inc. and Holdings, and all other material documents relating to the Equity Contribution, including, without limitation, all subscription agreements, management agreements, operating agreements, investment rights...

Page 285
...the cash portion of the purchase price for any Permitted Acquisition, excluding any such portion financed with money borrowed or proceeds from any issuance of Capital Stock. " Exchange Act " shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time. " Excluded Equity...

Page 286
... mean all lenders parties to the Existing Credit Agreement on the Closing Date. " Fair Market value " shall mean, with respect to any asset or group of assets on any date of determination, the price in cash obtainable in a sale of such asset at such date of determination assuming a sale by a willing...

Page 287
... of credit, bankers acceptances or similar obligations issued or created for the account of such Person, (d) all liabilities of the type described in (a), (b) and (c) above that are secured by any Liens on any property owned by such Person as of such date even though such Person has not assumed or...

Page 288
... by the applicable Person in good faith. The term "Guarantee" used as a verb has a corresponding meaning. " Guarantor " shall mean each of Holdings and the Subsidiary Loan Parties. " Guaranty and Security Agreement " shall mean the Guaranty and Security Agreement, dated as of the date hereof and...

Page 289
... Funded Debt of a Person, (b) all Guarantees of such Person, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (d) all indebtedness of such Person arising in connection with any Hedging Transaction...

Page 290
... of such calendar month; (iv) each principal installment of the Term Loans shall have an Interest Period ending on each installment payment date and the remaining principal balance (if any) of the Term Loans shall have an Interest Period determined as set forth above; and (v) no Interest Period may...

Page 291
...or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing). " Loan Documents " shall mean, collectively, this Agreement, the...

Page 292
... Service, Inc. " Mortgaged Property " shall mean, collectively, the Real Estate subject to the Mortgages. " Mortgages " shall mean each mortgage, deed of trust, deed to secure debt or other real estate security documents delivered by any Loan Party to the Administrative Agent from time to time...

Page 293
... to be terminated as of that date). " Non-Defaulting Lender " shall mean, at any time, a Lender that is not a Defaulting Lender. " Non-U.S. Plan " shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established, contributed to (regardless of...

Page 294
... to such term in the Guaranty and Security Agreement. " Patent Security Agreement " shall mean any Patent Security Agreement executed by a Loan Party owning Patents or licenses of Patents in favor of the Administrative Agent for the benefit of the Secured Parties, both on the Closing Date and...

Page 295
... not exceed $3,500,000 (excluding the Closing Date Acquisition); (ii) before and after giving effect to such Acquisition, no Default or Event of Default has occurred and is continuing or would result therefrom, and all representations and warranties of each Loan Party set forth in the Loan Documents...

Page 296
...period completed within 45 days prior to the date of consummation of such Acquisition; (ix) before and after giving effect to such Acquisition and any Indebtedness incurred in connection therewith, each Loan Party is Solvent; (x) after giving effect to such Acquisition and any Indebtedness incurred...

Page 297
...; (iii) certificates of deposit, bankers' acceptances and time deposits maturing within 180 days of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of...

Page 298
... limitation, laws of countries or jurisdictions other than the United States) governing the collection, use, disclosure or maintenance of data or information of any kind; (ii) Contractual Obligations and fiduciary obligations related to data privacy and data security, including any requirements set...

Page 299
... Closing Date (or date of the applicable Mortgage if provided post closing), prepared by environmental engineers satisfactory to the Administrative Agent, all in form and substance satisfactory to the Administrative Agent, and such environmental review and audit reports, including Phase II reports...

Page 300
... be in effect from time to time, and any successor regulations. " Reinvest " or " Reinvestment " shall mean, with respect to (a) any net cash proceeds from the sale, transfer or disposition of assets, or (b) insurance proceeds or condemnation proceeds received by any Person, the application of such...

Page 301
... Transactions " shall mean, collectively, the making of the initial Loans on the Closing Date, the Equity Contribution, the Closing Date Acquisition, the repayment in full of all outstanding obligations under the Existing Credit Agreement (and any related loan and security documents), the payment of...

Page 302
... the United Kingdom. Providers. " Secured Parties " shall mean the Administrative Agent, the Lenders, the Issuing Bank, the Lender-Related Hedge Providers and the Bank Product " Seller " shall mean the "Stockholders' Representative" under and as defined in the Closing Date Acquisition Agreement. 29

Page 303
... the meaning specified in Section 8.3 . " Subsidiary " shall mean, with respect to any Person (the " parent ") at any date, any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the...

Page 304
... for the benefit of the Secured Parties, both on the Closing Date and thereafter. " Trading with the Enemy Act " shall mean the Trading with the Enemy Act of the United States of America (50 U.S.C. App. Â§Â§ 1 et seq.), as amended and in effect from time to time. " Type ", when used in reference to...

Page 305
... Code as in effect from time to time in the State of New York. " United States " or " U.S. " shall mean the United States of America. " Unrestricted Account " shall have the meaning set forth in Section 5.11(a). " U.S. Person " shall mean any Person that is a "United States person" as defined in...

Page 306
... Commitment Amount in effect from time to time; and (v) each Lender severally agrees to make a Term Loan to the Borrower in a principal amount not exceeding such Lender's Term Loan Commitment on the Closing Date. Section 2.2 . Revolving Loans . Subject to the terms and conditions set forth herein...

Page 307
...000,000 or a larger multiple of $100,000; provided that Base Rate Loans made pursuant to Section 2.4 or 2 .22(d) may be made in lesser amounts as provided therein. At no time shall the total number of Eurodollar Borrowings outstanding at any time exceed three (3). Promptly following the receipt of...

Page 308
... set forth herein, each Lender severally agrees to make a single term loan to the Borrower on the Closing Date in a principal amount equal to the Term Loan Commitment of such Lender. The Term Loans may be, from time to time, Base Rate Loans or Eurodollar Loans or a combination thereof; provided...

Page 309
... Office; provided that the Swingline Loans will be made as set forth in Section 2.4 . The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts that it receives, in like funds by the close of business on such proposed date, to an account maintained...

Page 310
... that are to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and ( iv ) shall be specified for each resulting Borrowing), (ii) the effective date of the election made pursuant to such Notice of Conversion/Continuation, which shall...

Page 311
... being in the aggregate principal amount for all Lenders set forth opposite such date below (and on such other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement): Installment Date March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016...

Page 312
... recorded (i) the Revolving Commitment and the Term Loan Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, the Class and Type thereof and, in the case of each Eurodollar Loan, the Interest Period applicable thereto, (iii) the date of any continuation of any Loan...

Page 313
... Period, (iii) no Default or Event of Default has occurred and is continuing at the time of the application of such proceeds to Reinvestment and (iv) until Reinvested, such proceeds are held in Controlled Accounts at SunTrust Bank or subject to Control Account Agreements. If any such proceeds...

Page 314
... or the Borrower of proceeds of any indemnification payment, purchase price adjustment or similar payment (including receipt thereof by way of set-off rights under the Closing Date Acquisition Agreement) under the Closing Date Acquisition Agreement, Holdings and the Borrower shall (and shall cause...

Page 315
... shall pay interest on each Swingline Loan at the Base Rate plus the Applicable Margin in effect from time to time. (c) Notwithstanding subsections (a) and (b) of this Section, at the option of the Required Lenders if an Event of Default has occurred and is continuing, and automatically after...

Page 316
... expires or is drawn in full (including, without limitation, any LC Exposure that remains outstanding after the Revolving Commitment Termination Date) and (ii) to the Issuing Bank for its own account a fronting fee, which shall accrue at the rate set forth in the Fee Letter on the average daily...

Page 317
... be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement. Unless the Borrower notifies the Administrative Agent at least one (1) Business Day before the date of any Eurodollar...

Page 318
... or after the date of this Agreement any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or the Issuing Bank's capital (or on the capital of the Parent Company of such Lender or the Issuing Bank) as a consequence...

Page 319
...Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or the date on which the ...term "Lender" includes Issuing Bank and the term "applicable law" includes FATCA. (b) Payments Free of Taxes . Any and all payments by or on account of any obligation of any Loan Party...

Page 320
...without limiting the ... connection ...set off and apply any and all amounts at any time...Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting...applicable...information reporting...

Page 321
... number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable...

Page 322
... recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming...

Page 323
...20 , or otherwise) prior to 12:00 noon on the date when due, in immediately available funds, free and clear of any defenses, rights of set-off, counterclaim, or withholding or deduction of taxes. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be...

Page 324
..., at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case...

Page 325
... the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall...

Page 326
... or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial...

Page 327
... Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such...

Page 328
... a legal or equitable discharge of, or provide a right of set-off against, the Borrower's obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any...

Page 329
... the Administrative Agent in connection with and at the time of any such proposed increase; (iii) at the time of and immediately after giving effect to any such proposed increase, no Default or Event of Default shall exist, all representations and warranties of each Loan Party set forth in the Loan...

Page 330
... and/or new Term Loan Commitments, as applicable, of such Lenders and setting forth the agreement of each Additional Lender to become a party to this Agreement and to be bound by all of the terms and provisions hereof; (ii) such evidence of appropriate corporate authorization on the part of the...

Page 331
... "), all such terms shall be as set forth in a separate assumption agreement among the Borrower, the Lenders providing such Incremental Term Loans and the Administrative Agent, the execution and delivery of which agreement shall be a condition to the effectiveness of the Non-Conforming Credit...

Page 332
...as margin the effect of any "LIBO rate floor" applicable on the date of the calculation), plus (B) (x) the amount of any Up-Front Fees on such Incremental Term Loans or such Incremental Revolving Commitments, as applicable (including any fee or discount received by the Lenders in connection with the...

Page 333
... by the termination of Defaulting Lender status of the applicable Lender), or (B) the determination by the Administrative Agent and the Issuing Bank that there exists excess Cash Collateral; provided that, subject to Sections 2.26(b) through 2.26(d) the Person providing Cash Collateral and each...

Page 334
... Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law: (i) Such Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of...

Page 335
... Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of...

Page 336
... the obligation of the Issuing Bank to issue any Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.2 ): (a) The Administrative Agent shall have received payment of all fees, expenses...

Page 337
... Exhibit 3.1(b)(v) , dated the Closing Date and signed by a Responsible Officer of the Borrower, certifying that after giving effect to the funding of the Term Loans, the issuance of the initial Letters of Credit and any initial Revolving Borrowing, (x) no Default or Event of Default exists, (y) all...

Page 338
... Financial Statements (setting forth in reasonable detail such calculations); (xiii) a certificate, dated the Closing Date and signed by the chief financial officer of each Loan Party, confirming that each Loan Party is Solvent before and after giving effect to the funding of the Term Loans, and...

Page 339
... of all Material Agreements; (xviii) evidence that no Indebtedness of Holdings or its Subsidiaries remains outstanding as of the Closing Date (other than Indebtedness permitted to remain outstanding as set forth on Schedule 7.1 ); (xix) such documents and other information regarding the Borrower...

Page 340
... Officer of the Borrower that such documents are in full force and effect as of the Closing Date. Without limiting the generality of the provisions of this Section, for purposes of determining compliance with the conditions specified in this Section, each Lender that has signed this Agreement...

Page 341
...of the Borrower or such Loan Party (as the case may be), enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general...

Page 342
..., the Investment Company Act of 1940, as amended and in effect from time to time, or (b) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from, or registration or filing with, any Governmental Authority in connection therewith...

Page 343
... to or under each Plan and Multiemployer Plan required by law within the applicable time limits prescribed thereby, by the terms of such Plan or Multiemployer Plan, respectively, or by any contract or agreement requiring contributions to a Plan or Multiemployer Plan. No Plan which is subject to...

Page 344
...with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where Holdings or any applicable Subsidiary operates. (d) As of the Closing Date, neither Holdings nor any of its Subsidiaries owns any Real...

Page 345
...percentage of each class of Capital Stock owned by any Loan Party. All Capital Stock of the Borrower and each Subsidiary has been validly issued, are (as applicable) fully paid and nonassessable and are free and clear of all Liens. As of the Closing Date, except as set forth on Schedule 4.14 , there...

Page 346
... be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person. (c) Each Mortgage (if...

Page 347
... of its Subsidiaries have in place reasonable and appropriate security measures that have been regularly tested and reviewed to protect Covered Personal Information that Holdings or its Subsidiaries, as applicable, receive, possess, store, or otherwise control, from loss and illegal or unauthorized...

Page 348
... Person's privacy, data protection or data security rights, nor has there been any court order affecting Holdings' or any of its Subsidiaries' use or disclosure of any Covered Personal Information that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect...

Page 349
... national securities exchange, or distributed by Holdings or the Borrower to their respective shareholders generally, as the case may be; and (g) promptly following any request therefor, such other information regarding the results of operations, business affairs and financial condition of Holdings...

Page 350
... or similar payments under the Closing Date Acquisition Agreement (including any action to set-off against the Holdback Amount (as defined in the Closing Date Acquisition Agreement)), including copies of any notices sent to any party to the Closing Date Acquisition Agreement in connection with...

Page 351
... report signed by Borrower, in form reasonably acceptable to the Administrative Agent, listing any applications or registrations that Holdings, the Borrower or any Subsidiary has made or filed in respect of any Patents, Copyrights or Trademarks (each as defined in the Guaranty and Security Agreement...

Page 352
...Related Transaction Documents. After the Closing Date, the Borrower will use the proceeds of Revolving Loans to finance working capital needs, Permitted Acquisitions and capital expenditures and for other general corporate purposes of the Borrower and its Subsidiaries. No part of the proceeds of any...

Page 353
... $25,000 at any time (collectively, the " Unrestricted Accounts "), all of which the Loan Parties may maintain without restriction (except for those restrictions set forth in the Guaranty and Security Agreement)) (each such deposit account, disbursement account, investment account and lockbox...

Page 354
... is working in good faith, such longer period as the Administrative Agent shall permit not to exceed 60 additional days, Holdings shall, or shall cause the applicable Loan Party to (i) pledge 65% of the issued and outstanding voting Capital Stock and 100% of the issued and outstanding non-voting...

Page 355
... period immediately following the Closing Date, the Borrower will maintain in effect at all times one or more Hedging Transactions on such terms and with such parties as shall be reasonably satisfactory to the Administrative Agent, the effect of which shall be to fix or limit the interest cost to...

Page 356
... time during which any of the Covered Personal Information was collected, obtained, or processed; or (iii) Privacy Law, in each case, except to the extent such violation could not reasonably be expected to have or result in a Material Adverse Effect. Section 5.19. Post Closing Conditions. Holdings...

Page 357
... Ratio. The Borrower will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on December 31, 2015, a Fixed Charge Coverage Ratio of not less than 2.00:1.00. ARTICLE VII NEGATIVE COVENANTS outstanding: Each of Holdings and the Borrower covenants and agrees that...

Page 358
... the Closing Date and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement); provided that (i) such Indebtedness exists at the time that such Person...

Page 359
... under non-compete agreements, purchase price adjustments or similar adjustments in connection with Permitted Acquisitions or dispositions of assets permitted hereunder; provided that any such Indebtedness in connection with a Permitted Acquisition shall be subject to the limitation on consideration...

Page 360
... on the Closing Date and set forth on Schedule 7.2 ; provided that such Liens shall not apply to any other property or asset of the Borrower or any such Subsidiary; (d) purchase money Liens upon or in any fixed or capital assets of the Borrower or its Subsidiaries to secure the purchase price or the...

Page 361
... sale of goods entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; (k) Liens on insurance policies and the proceeds thereof securing the financing of premiums with respect thereto; (l) Liens that are contractual rights of set-off relating to purchase orders...

Page 362
...any Subsidiary of the Borrower that is not a Subsidiary Loan Party (including all such Investments and Guarantees existing on the Closing Date) shall not exceed $2,000,000 at any time outstanding; (e) loans or advances to employees, officers or directors of the Borrower or any of its Subsidiaries in...

Page 363
... made in connection with the purchase of goods or services in the ordinary course of business; and (n) other Investments of the Borrower or its Subsidiaries not described above provided that both at the time of and immediately after giving effect to any such Investment (i) no Default or Event...

Page 364
... pursuant to Section 7.3 ; and (d) so long as no Default or Event of Default has occurred and is continuing at the time of each such sale or disposition, the sale or other disposition of such assets for cash or cash equivalents in an aggregate amount (based on the Fair Market value of such assets...

Page 365
... to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted...

Page 366
... or cash equivalents in deposit or other investments accounts outside of the United States of America in excess of $2,500,000 in the aggregate at any time. Section 7.15. Limited Activities of Holdings. Holdings will not, in addition to the other covenants set forth in this Agreement and the other...

Page 367
... law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition...

Page 368
...similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for Holdings or any of its Subsidiaries or for a substantial part... effect; or (n) a Change in Control shall occur or exist; or (o) any provision of this Agreement or...

Page 369
... term is defined in the Closing Date Acquisition Agreement); or (r) any Lien purported to be created under any Collateral Document shall fail or cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral, with the priority required by the applicable...

Page 370
... "), the applicable financial covenant set forth in Article vI shall be recalculated, giving effect to a pro forma increase to Consolidated EBITDA for the relevant Fiscal Quarter in respect of which such Cure Right was exercised in an amount equal to such cash proceeds; provided that such...

Page 371
... relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable Event of Default under Section 8.1 that had occurred shall be deemed cured. The exercise of the Cure Right shall be subject to the following limitations and...

Page 372
... with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements, or other terms and conditions set forth in any Loan Document, (iv...

Page 373
..., independently and without reliance upon the Administrative Agent, the Issuing Bank or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Lenders, the Swingline Lender and the...

Page 374
...as the case may be, effective at the close of business Atlanta, Georgia time on a date specified in such notice (which date may not be less than five (5) Business Days after the date of such notice). Section 9.8. Withholding Tax. To the extent required by any applicable law, the Administrative Agent...

Page 375
... Agent and its agents and counsel and all other amounts due the Lenders, the Issuing Bank and the Administrative Agent under Section 10.3) allowed in such judicial proceeding; and (ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute...

Page 376
... as a credit on account of the purchase price for any collateral payable by the Administrative Agent at such sale or other disposition. Section 9.14. Secured Bank Product Obligations and Hedging Obligations. No Bank Product Provider or Lender-Related Hedge Provider that obtains the benefits...

Page 377
...: (212) 685-8000 Email: [email protected] Increditone Inc. 340 Madison Avenue, 8 th Floor New York, New York 10173 Attention: Michael Waxman-Lenz Facsimile Number: (212) 685-8001 Telephone Number: (212) 685-8000 Email: [email protected] Perion Network Ltd. Azrieli Center 1, Building A, 4th Floor...

Page 378
...303 Peachtree Street, N.E. Atlanta, Georgia 30308 Attention: Shannon Offen Facsimile Number: (404) 439-7470 Email: [email protected] With a copy to (for Information purposes only): SunTrust Bank Agency Services 303 Peachtree Street, N.E. / 25th Floor Atlanta, Georgia 30308 Attention: Doug...

Page 379
... the date deposited into the mail or, if delivered by hand, upon delivery; provided that notices delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender shall not be effective until actually received by such Person at its address specified in this Section. (ii) Any agreement...

Page 380
... provision of this Agreement or of the other Loan Documents (other than the Fee Letter), nor consent to any departure by the Borrower or any other Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower or the applicable Loan Party and the...

Page 381
... for its account under this Agreement. Notwithstanding anything herein or otherwise to the contrary, any Event of Default occurring hereunder shall continue to exist (and shall be deemed to be continuing) until such time as such Event of Default is waived in writing in accordance with the terms of...

Page 382
... limitation, the reasonable documented fees, charges and disbursements actually incurred of outside counsel) incurred by the Administrative Agent, the Issuing Bank or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights...

Page 383
... or the Swingline Lender, as the case may be, such Lender's pro rata share (in accordance with its respective Revolving Commitment (or Revolving Credit Exposure, as applicable) and Term Loan determined as of the time that the unreimbursed expense or indemnity payment is sought) of such unpaid amount...

Page 384
... all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments, Loans and other Revolving Credit Exposure at the time owing to it); provided that any such assignment shall be subject to the following conditions: (i) Minimum Amounts . (A) in the...

Page 385
... be made to a natural person. (vii) Certain Additional Payments . In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the...

Page 386
... of any claim of any party hereunder arising from such Lender's having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of...

Page 387
... number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder; (vi) release all or substantially all of the Guarantors, or limit the liability of such Guarantors, under any guaranty agreement guaranteeing...

Page 388
(g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including, without limitation, any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or ...

Page 389
....7. Right of Set-off. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, each Lender and the Issuing Bank shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default...

Page 390
... such information may be disclosed (i) to any Related Party of the Administrative Agent, the Issuing Bank or any such Lender including, without limitation, accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal...

Page 391
...name and address of such Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. Section 10.15. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction...

Page 392
... parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. OR MERGER, INC. By: /s/ Josef Mandelbaum & Yacov Kaufman Name: Josef Mandelbaum & Yacov Kaufman Title: Chief Executive Officer & Chief Financial Officer...

Page 393
SILICON VALLEY BANK as a Lender By: /s/ Michael Moretti Name: Michael Moretti Title: MD COMERICA BANK as a Lender By: /s/ Seong Kim Name: Seong Kim Title: Senior vice President

Page 394
... change after the date of the agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this " Agreement ") is dated as of November 30, 2015, between Perion Network Ltd., a company...

Page 395
... " means the closing of the purchase and sale of the Shares pursuant to Section 2.1. " Closing Date " means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers' obligations to...

Page 396
...to issue, on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits...

Page 397
... similar transactions of the Ordinary Shares that occur after the date of this Agreement and prior to the Closing. " Person " means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government...

Page 398
...be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. " SEC Reports " shall have the meaning ascribed to such term in Section 3.1(h). " Securities Act " means the United States...

Page 399
... similar transaction during the applicable calculation period. ARTICLE II. PURCHASE AND SALE 2.1 Closing . On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company...

Page 400
... wire transfer to the account designated in writing by the Company prior to the Closing Date; the Registration Rights Agreement duly executed by such Purchaser. and (ii) (iii) 2.3 Closing Conditions . (a) The obligations of the Company hereunder in connection with the Closing are subject to the...

Page 401
... or the Company's Principal Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on...

Page 402
..., and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. (b) Organization and Qualification . The Company and each of the Subsidiaries...

Page 403
... as indemnification and contribution provisions may be limited by applicable law or public policy. (d) No Conflicts . The execution, delivery and performance by the Company of this Agreement and the Registration Rights Agreement, the issuance and sale of the Shares and the consummation by it of the...

Page 404
... stock purchase plans and pursuant to the conversion and/or exercise of Ordinary Share Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right...

Page 405
...(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements...

Page 406
...accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer...

Page 407
...employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any...

Page 408
... in the SEC Reports as necessary or required for use in connection with their respective businesses and which the failure to so have could have a Material Adverse Effect (collectively, the " Intellectual Property Rights "). None of, and neither the Company nor any Subsidiary has received a notice...

Page 409
... officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company...

Page 410
... Purchasers and except as set forth on Section 3.1(w) of the Disclosure Schedules, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary. (x) Listing and Maintenance Requirements . The Ordinary Shares are...

Page 411
... respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes...

Page 412
...of general solicitation or general advertising. The Company has offered the Shares for sale only to the Purchasers and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act. (dd) Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any...

Page 413
... another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company's placement agent in connection with the placement of the Shares. (ii) Compliance with Privacy Laws . All data which has been collected, stored, maintained or...

Page 414
... their data at all times in accordance with all applicable Israeli and U.S. Federal, state and other Laws, including but not limited to those relating to the use of information collected from or about consumers. (jj) Form F-3 Eligibility . The Company is eligible to register the resale of the Shares...

Page 415
... basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an " Issuer Covered Person " and, together, " Issuer Covered Persons ") is subject to any of the "Bad Actor" disqualifications...

Page 416
... all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will...

Page 417
... by an Israeli citizen, corporation or resident and (iii) not be related to any officer or director of the Company. Without derogating from the above, following the issuance of the Shares, the purchaser will not hold (in accordance with the term "holding" in the Israeli Securities Law), either alone...

Page 418
... the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser...

Page 419
... may transfer pledged or secured Shares to the pledgees or secured parties, provided that as a condition of transfer any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement. Such a pledge or...

Page 420
... the Ordinary Shares under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not...

Page 421
... the consent of the Company, any other Person, that any Purchaser is an "Acquiring Person" under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the...

Page 422
...Current Report on Form 6K.The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. 4.7 Use of Proceeds . The Company shall use the net proceeds from the sale of the Shares hereunder for working capital...

Page 423
... Shares (but not including customary price-based antidilution adjustments) or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price; provided , that commencing 60 days after the Effective Date...

Page 424
... in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to...

Page 425
... to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchasers at the Closing under applicable securities or "Blue...

Page 426
... (other than by merger, consolidation or sale of all or substantially all of the Company's assets). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be...

Page 427
...(18) months following the Closing Date. 5.11 Execution . This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other...

Page 428
... the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 5.15 Payment Set Aside . To the...

Page 429
... every reference to share prices and Ordinary Shares in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Ordinary Shares that occur after the date of this Agreement. 5.20 WAIVER OF...

Page 430
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. PERION NETWORK LTD. By: /S/ JOSEF MANDELBAUM Name: Josef Mandelbaum Title: Chief Executive Officer By : /S/ YACOv...

Page 431
... SIGNATURE PAGES TO PERION SECURITIES PURCHASE AGREEMENT] IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. NATIONAL COUNCIL FOR SOCIAL SECURITY FUND By: J.P. Morgan...

Page 432
... Name: Evrard Fraise Title: Executive Director Address for Notice to Purchaser: J.P. Morgan Asset Management Private Equity Group 320 Park Ave, 15th Floor New York, NY 10022 Fax: 212-648-0051 Address for Delivery of Shares to Purchaser (if not same as address for notice): Subscription Amount: US...

Page 433
...and, collectively, the " Purchasers "). This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the " Purchase Agreement "). The Company and each Purchaser hereby agrees as follows: 1. Definitions . Capitalized terms...

Page 434
... stock split, dividend or other distribution, recapitalization or similar event with respect to the Shares; provided, however , that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another...

Page 435
...pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. " Selling Shareholder Questionnaire " shall have the meaning set forth in...

Page 436
... a " Selling Shareholder " section based substantially on the information provided by the Holders pursuant to the questionnaire attached hereto as Annex B . Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause a Registration Statement filed under...

Page 437
... on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured (and pro-rated for any part of a month in which a cure is effected), the Company shall pay to each Holder an amount in cash, as partial liquidated...

Page 438
... form and (ii) undertake to register the Registrable Securities on Form F-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form F-3 covering the Registrable...

Page 439
...Company a completed questionnaire in the form attached to this Agreement as Annex B (a " Selling Shareholder Questionnaire ") on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the second (2 nd ) Trading Day following the date on which such Holder receives...

Page 440
... the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of Ordinary Shares then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional...

Page 441
... not be furnished. (g) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any...

Page 442
... possible under the circumstances taking into account the Company's good faith assessment of any adverse consequences to the Company and its shareholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or...

Page 443
...this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as...

Page 444
...Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information...

Page 445
...ii) to the extent, but only to the extent, that such information relates to such Holder's information provided in the Selling Shareholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use...

Page 446
... that are the subject matter of such Proceeding. Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not...

Page 447
... or such other securities, in cash or otherwise, during the period specified by the Managing Underwriter, with such period not to exceed 90 days following the effective date of such registration statement (the " Market Standoff Period "), provided that (i) if the Company issues an earnings release...

Page 448
... only be applicable to the Holder if all officers, directors and shareholders of the Company holding a percentage of the Company's share capital as determined by the Managing Underwriter, enter into similar agreements. (d) The underwriters in connection with a registration statement so filed are...

Page 449
... Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing supplements or amendments to registration statements filed prior to the date of this Agreement or from filing...

Page 450
...least a majority in interest of the Holders. The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by a Holder to any transferee of all or part of the Registrable Securities held by such Holder, provided that (i) the transferee is or becomes as...

Page 451
... entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with...

Page 452
... WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. PERION NETWORK LTD. By: /S/ JOSEF MANDELBAUM Name: Josef Mandelbaum Title: Chief Executive Officer By : /S/ YACOv KAUFMAN Name: Yacov Kaufman Title: Chief Financial Officer [SIGNATURE PAGE...

Page 453
... TO PERION RRA] NATIONAL COUNCIL FOR SOCIAL SECURITY FUND By: J.P. Morgan Investment Management Inc., as authorized signatory By: /S/ EvRARD FRAISE Name: Evrard Fraise Title: Executive Director Address for Notice to Purchaser: National Council for Social Security Fund South Tower, Fortune Time...

Page 454
... Name: Evrard Fraise Title: Executive Director Address for Notice to Purchaser: J.P. Morgan Asset Management Private Equity Group 320 Park Ave, 15th Floor New York, NY 10022 Fax: 212-648-0051 Address for Delivery of Shares to Purchaser (if not same as address for notice): Subscription Amount: US...

Page 455
Exhibit 8 1. 2. 3. 4. IncrediMail Inc., a Delaware corporation ClientConnect Ltd., an Israeli company Interactive Holding Corp., a Delaware corporation IncrediTone Inc., a Delaware corporation

Page 456
... respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods...

Page 457
... respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods...

Page 458
... ACT OF 2002 In connection with the Annual Report on Form 20-F of Perion Network Ltd., (the "Issuer"), for the period ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Josef Mandelbaum, Chief Executive Officer of the Issuer, certify...

Page 459
...OXLEY ACT OF 2002 In connection with the Annual Report on Form 20-F of Perion Network Ltd., (the "Issuer"), for the period ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Yacov Kaufman, Chief Financial Officer of the Issuer, certify...

Page 460
... 333-133968), of our reports dated March 24, 2016, with respect to (i) the consolidated financial statements of Perion Network Ltd. and its subsidiaries and (ii) the effectiveness of internal control over financial reporting of Perion Network Ltd., which appear in this Annual Report on Form 20-F for...

Incredimail 2015 Annual Report Download

Download and view the complete annual report

Table of contents