Incredimail 2014 Annual Report Download - page 130

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The Bonds are unsecured and are not linked to any foreign currency or consumer price index. The Trust Agreement prohibits the creation of a
floating charge on all of the Company's assets in favor of a third party without the prior approval of the Bondholders or the creation of a similar
charge in favor of the Bondholders on a pari passu basis.
The Bonds are convertible, at the election of each holder, into the Company’
s ordinary shares, par value NIS 0.01 per share, at a conversion price
of NIS 33.605 per share (equal to approximately $9.19 on September 23, 2014) from the date of issuance and until March 15, 2020. The ordinary
shares issued upon conversion of the Bonds will be listed on the TASE and the NASDAQ Stock Market, to extent that the Company's ordinary
shares are generally listed thereon at the time of conversion.
The conversion price is subject to adjustment in the event that the Company effects a share split or reverse share split, a rights offering or a
distribution of bonus shares or a cash dividend.
The Company may redeem the Bonds upon delisting of the Bonds from the TASE, subject to certain conditions. In addition, the Company may
redeem the Bonds or any part thereof at its discretion after December 1, 2014, subject to certain conditions.
According to the Trust Agreement:
The forgoing constitutes a summary of the material terms of the Hebrew-
language Trust Agreement and is qualified in its entirety by reference
thereto, a copy of which may be obtained from the website of the Israel Securities Authority or from the Company.
-2-
6.
Security
7.
Conversion
8.
Forced Redemption
9.
Financial Covenants
a.
The Company's ability to make distributions is subject to various limitations, including:
i. The distribution will not cause shareholders' equity to be below $150 million or, except with respect to repurchases of equity
securities, retained earnings to be below $31.5 million;
ii.
The distributions in any year may not exceed 50% of the accumulated net income of the prior years, starting with 2013; and
iii.
The ratio of net financial indebtedness to twelve
-
month EBITDA is not more than 1.5 at the end of the prior quarter.
b.
The Company is required to maintain and comply with the following financial covenants:
i.
Shareholders' equity of at least $120 million at the end of each quarter;
ii.
Ratio of net financial indebtedness to twelve
-
month EBITDA of not more than 2.5 at the end of each quarter;
iii. Twelve-month EBITDA at the end of each quarter of not less than 40% of original aggregate principal amount of the Bonds;
and
iv. Cash and cash equivalents of at least $10 million (and, six months prior to each principal payment date, a sufficient amount to
repay the principal and interest then due).