Incredimail 2012 Annual Report Download - page 293

(c) Following the Closing, Purchaser shall (i) cause the Israeli Subsidiary to hold the cash proposed
to distributed as the Special Cash Dividend in the Dividend Account and not to be used for any purpose whatsoever other
than as set forth pursuant to this Section 6.18 and (ii) cause the Israeli Subsidiary to pay the Special Cash Dividend to the
Company and cause the Company to pay the Special Cash Dividend to the Paying Agent for further disbursement to
holders of record of outstanding Company Shares as of the Record Date, subject to the deduction and withholding of
Taxes pursuant to Section 1.1(c), within ten (10) Business Days following the receipt by Purchaser of a written instruction
from the Shareholders’
Agent to pay the Special Cash Dividend, provided that unless the Domiciliation Ruling has been
obtained, such request shall not be made before a period of four (4) months shall have lapsed from the
Closing. Notwithstanding the foregoing, Purchaser shall be entitled to cause the Company and/or the Israeli Subsidiary to
reduce the amount of the Special Cash Dividend by (without duplication) (i) the amount of Tax liabilities recognized
pursuant to FASB Interpretation No. 48 as set forth in the Closing Financial Statements, (ii) the amount of deferred Tax
liabilities set forth in the Closing Financial Statements, (iii) any actual or contingent costs, liabilities or losses (including
non-
cash charges) of Purchaser, the Company or the Israeli Subsidiary for periods before the Closing Date with respect to
actions or inactions that took place prior to the Closing Date (but including the transfer of the Company Intellectual
Property from the Company to the Israeli Subsidiary) as a result of the terms and conditions of the Domiciliation Ruling,
or as a result of its not being received prior to the payment of the Special Tax Dividend, in comparison to the effect on
Purchaser, the Company or the Israeli Subsidiary had the Domiciliation Application been approved in full by the ITA, and
(iv) if the Domiciliation Ruling is not received prior to the earlier of (x) the payment of the Special Cash Dividend or (y)
the 12-
month anniversary of the Closing Date, or if the Domiciliation Ruling does not include both (A) the recognition of
the Company as an Israeli tax resident, effective no later than ninety (90) days following the Closing Date, and (B) the
tax-
free transfer of the Company Intellectual Property from the Company to the Israeli Subsidiary pursuant to Section
104A of the Israeli Income Tax Ordinance, an amount equal to seven hundred fifty thousand U.S. Dollars ($750,000).
(d) In the event that Purchaser shall make any reduction of the Special Cash Dividend as aforesaid,
Purchaser shall deliver to the Shareholders' Agent a notice setting forth the amount of such reduction and an explanation
thereof in reasonable detail (the " Reduction Notice "). The Shareholders’
Agent may object in a written notice signed by
the Shareholders’ Agent (a “ Disagreement Notice ”)
to all or a portion of such reduction, provided that such written
Disagreement Notice shall have been delivered to Purchaser prior to the expiration of ten (10) Business Days following
the delivery of the Reduction Notice (the " Disagreement Period "). Failure of the Shareholders’
Agent to deliver such
Disagreement Notice within such Disagreement Period shall be deemed a consent of the Shareholders' Agent to
Purchaser's reduction of the amount of the Special Cash Dividend. The Shareholders' Agent may not deliver a
Disagreement Notice after the Disagreement Period. Any reductions specified in the Reduction Notice to which there is no
Disagreement Notice delivered by the Shareholders' Agent by the expiration of the Disagreement Period, shall be deemed
final and binding.
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