Incredimail 2011 Annual Report Download - page 140

For the removal of doubt it shall be clarified, as long as the Company publishes quarterly statements, these shall be provided to the bank as prescribed for in
Section 7.2 below, and in the event the Company ceases to publish its quarterly statements, the Company is hereby obligated to provide the bank with quarterly
or administrative statements, signed by the CFO of the Company.
Tangible Equity Capital –
as the term appears in the Company's Financial Statements (including, amongst others, the Company's paid up share
capital, capital reserves, and unallocated profit, while deducting the cost of shares of the Company held by it or by its subsidiaries and deducting
minority rights) with the addition of deferred shareholders loans, deducting for loans and/or capital notes granted to Interested Parties and/or Affiliates,
and deducting guaranties granted by the Company to secure the debts of Interested Parties and/or Affiliates, and deducting intangible assets as they
appear in the Company's Financial Statements, including but not limited to, deferred expenses, goodwill, patents, trademarks, trade names, copyrights,
etc.
Notwithstanding the above, during the first three years as of the date the this letter is signed (for purposes of this section below, the "
Aforementioned
Period
") Intangible Assets on Account of Acquisitions made during the Aforementioned Period (as defined below), shall not be deducted from the
Company's equity capital. The Company undertakes that during the Aforementioned Period, the Tangible Equity Capital shall be no less than
$20,000,000 USD and its portion of the balance sheet shall not be less than 30%.
Intangible Assets on Account of Acquisitions –
Assets which are classified in the Company's Consolidated Financial Statements as intangible assets
and which originate from an acquisition/acquisitions by the Company of holdings in any corporations, including of the Company's subsidiaries and/or
affiliates, as such information will be approved by the Company's accountant, at those times prescribed for in Section 7.4 below.
Interested Parties, and/or Subsidiaries, and/or Affiliates shall have the definitions ascribed to them in the Israeli Securities Law 5728-1968.
Amounts deducted from the Company's equity capital for the purpose of calculating said equity capital, shall also be deducted from the Balance sheet
for purpose of balance sheet calculation, as prescribed in the first part of Section 1.1 above.
1.1.
The Company's Tangible Equity Capital in accordance with the abovementioned Financial Statements, shall not be less than $10,000,000 USD and its
portion of the balance sheet shall not be less than 15%.