Incredimail 2012 Annual Report Download - page 224

(iii) The provisions of
Section 1.1(c)(ii) above shall not apply with respect to any payments made to the 102
Trustee (in respect of Company Shares subject to the provisions of Section 102(b) and in relation to Company Options granted to Israelis), or the
Israeli holders of Company Options, and applicable amounts will be deducted or withheld under the Israeli Income Tax Ordinance, unless, with
respect to Israeli holders of Company Options or of shares deriving therefrom addressed in the Israeli Options Tax Ruling or any interim Israeli
Options Tax Ruling (as defined below) -
the Israeli Options Tax Ruling (or any interim Israeli Options Tax Ruling) shall have been obtained
before the 15th of the calendar month following the month during which Closing occurs, which ruling shall provide that Purchaser, the Paying
Agent and anyone acting on their behalf shall be exempt from Israeli withholding tax with respect to any of the payments made pursuant to this
Agreement to the 102 Trustee or the Paying Agent, as applicable, and further instructing the 102 Trustee or the Paying Agent, as applicable, on
the withholding of Israeli tax on such payments; provided, however, that in any event in which a Company Shareholder and/or Israeli Company
Optionholder submits a Qualified Withholding Certificate, prior to any payment hereunder, in form and substance reasonably acceptable to
Purchaser, the Paying Agent shall withhold and transfer to the ITA such amount of withholding due from such Company Shareholder and/or
Israeli Company Optionholder as specified in such Qualified Withholding Certificate.
(iv) Notwithstanding the foregoing, the parties agree that the party withholding any amount may convert into
NIS any US$ on or prior to the date of the original payment in such amount as Purchaser deems adequate in order to meet its withholding
obligations including to cover for any deficiencies due to exchange rate fluctuations.
(v) Israeli Options Tax Ruling
. As soon as reasonably practicable after the Agreement Date, the Company
shall cause its Israeli counsel and/or Israeli consultants in full coordination with Purchaser and its Israeli counsel, to prepare and file with the
ITA an application for a ruling in relation to the Company Shares subject to the provisions of Section 102(b) and in relation to Company Options
held by Israeli tax residents confirming that: (A) the payment of the Aggregate Consideration for Company Shares which remain subject to the
statutory minimum trust period under such Section 102(b) and the exchange of Company Options for the Option Amount under Section 1.1(b)
above will not constitute a violation of the requirements of Section 102(b); and (B) Purchaser and anyone acting on its behalf, including the
Paying Agent, shall be exempt from withholding tax in relation to any payments or consideration, including transfer of the Aggregate
Consideration and Option Amount transferred to the 102 Trustee in relation to Company Shares subject to Section 102(b) and Company Options;
and (C) that the Deferred Payments and Contingents Payments in respect of Company Shares subject to Section 102(b) and Company Options
shall not be subject to Israeli Tax until actually received by the applicable Company Securityholders; and (D) that payment of the Special Cash
Dividend for Company Shares subject to Section 102(b) of the Israeli Income Tax Ordinance is eligible for the preferable tax rates provided in
Section 102(b) of the Israeli Income Tax Ordinance; which ruling may be subject to customary conditions regularly associated with such a ruling
(the “ Israeli Options Tax Ruling ”).
The parties will cause their respective Israeli counsel, advisors and accountants to cooperate and provide
all information required and which is in their possession with respect to the Company’
s preparation and filing of such application and in the
preparation of any written or oral submissions that may be necessary, proper or advisable to obtain the Israeli Options Tax Ruling. The
Company, its representatives and advisors shall not make any application to, or conduct any negotiation with, the ITA with respect to any matter
relating to the subject matter of the Israeli Options Tax Ruling without prior coordination with, and approval by, Purchaser or its representatives
and advisors, and will enable Purchaser's representatives and advisors to participate in all discussions and meetings relating thereto. To the
extent that Purchaser's representative and advisors elect not to participate in any meeting or discussion, the Company's representatives and
advisors shall update Purchaser regarding the discussions held. In any event, the final text of the Israeli Options Tax Ruling shall be subject to
the prior written consent of Purchaser, which consent shall not be unreasonably withheld or delayed.
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