Incredimail 2012 Annual Report Download - page 258

(h) Section 102 Options
. All Company Options which the Company or the Israeli Subsidiary has
purported to grant pursuant to the " capital gains route " of Section 102(b) of the Israeli Income Tax Ordinance ("
Section
102(b)
") have been granted in compliance in all respects with the applicable requirements of Section 102(b), and the
requirements of any rules or ITA policies relating to Section 102(b), including, without limitation, (i) the filing of
applicable documents, applications and notices with the ITA, (ii) the appointment of an authorized trustee to hold the
Company Options pursuant to
Section 102(b), and (iii) the timely deposit of such Company Options with such trustee
pursuant to the terms of Section 102(b).
(i) Country of Organization
. The Company is not treated for any Tax purpose as a resident in a
country other than the country of its organization and the Company has never had a branch, agency or permanent
establishment in a country other than the country of its organization. The Israeli Subsidiary is not treated for any Tax
purpose as a resident in a country other than the country of its organization and the Israeli Subsidiary has never had a
branch, agency or permanent establishment in a country other than the country of its organization.
(j) Restructure Limitations . Except in connection with the 104(h) Tax Pre-
Ruling and the
Domiciliation Ruling, the Company and the Company Shareholders (solely with respect to their holdings in the Company)
are not subject to any restrictions or limitations pursuant to Part E2 of the Israeli Income Tax Ordinance. The Israeli
Subsidiary is not subject to any restrictions or limitations pursuant to Part E2 of the Israeli Income Tax Ordinance.
(k) Tax Agreements and Rulings . Except as set forth in Schedule 2.10(k)
of the Company
Disclosure Letter and as contemplated under this Agreement, no closing agreements, rulings or similar agreements or
rulings relating to Taxes have been entered into or issued by any Governmental Entity with or in respect of the Company
or the Israeli Subsidiary. Neither the Company nor the Israeli Subsidiary has requested or received a ruling from any Tax
authority (except for the election of tax route under Section 102(b)). The Company has made available to Purchaser
accurate and complete copies of any Tax ruling relating to the Company or the Israeli Subsidiary obtained from the Israeli
Tax Authority and applications therefor, including with respect to Company Options, in each case since inception.
(l) Transfer Pricing
. Any related party transactions subject to Section 85A of the Israeli Income
Tax Ordinance conducted by the Company or the Israeli Subsidiary has been conducted on an arms-
length basis in
accordance with Section 85A of the Israeli Income Tax Ordinance and the regulations promulgated thereunder.
(m) Tax Incentives
. The Israeli Subsidiary is currently entitled to certain tax benefits or incentives
under the Israeli Law for the Encouragement of Capital Investments, 1959 (" Tax Incentives "). Schedule 2.10(m)
of the
Company Disclosure Letter lists each Tax Incentive to which the Company and/or the Israeli Subsidiary is entitled under
the laws of the State of Israel, the period for which such Tax Incentive applies, and the nature of such Tax
Incentive. Unless otherwise disclosed in Schedule 2.10(m)
of the Company Disclosure Letter, no claim or challenge has
been made, in writing, by any Governmental Entity with respect to the Company's or any of the Israeli Subsidiary's
entitlement to any Tax Incentive, and consummation of the transactions contemplated by this Agreement will not
adversely affect the continued qualification for the Tax Incentives or the terms or duration thereof or require any recapture
of any previously claimed Tax Incentive.
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