Incredimail 2011 Annual Report Download - page 157

(c) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of shares of capital stock
of the Company that were outstanding immediately prior to the Effective Time.
(d) On the seven-
month anniversary of the Closing Date, Purchaser shall deposit with the Paying Agent the Deferred Payment, as follows:
(A) cash in the amount of seven million U.S. Dollars ($7,000,000), subject to adjustment as set forth in this Agreement, less
the Market Value of the Founder Share
Consideration; and (B) a certificate representing the Founder Share Consideration. Ninety percent (90%) of each of the cash and Founder Share Consideration of the
Deferred Payment, as adjusted if applicable, shall be distributed by the Paying Agent to the Participating Shareholders holding shares of Common Stock and the
Optionholders holding In-the-Money Options and the Warrantholders holding In-the-Money Warrants other than the Preferred Warrant (each, a “
Participating
Securityholder ”),
and the balance shall be added to the Escrow Fund and shall be held by the Paying Agent, acting in its capacity as escrow agent pursuant to the
Escrow Agreement, and applied for the payment of indemnification obligations under Article 10 hereof (it being understood that any amounts to be distributed in
respect of any Option Amount shall be delivered by the Paying Agent to Purchaser and Purchaser shall cause such amounts, less applicable withholding Taxes, to be
disbursed to the applicable Optionholder). The Deferred Payment shall be subject to downward adjustment to the extent, if any, that the Company Net Working
Capital (as defined in Section 1.12(a) hereof, substituting "Measurement Date" (as defined below) for "Closing Date") on any Measurement Date shall be less than two
hundred sixty one thousand U.S. Dollars ($261,000) (the " Post-closing WC Adjustment "). The amount of the Post-
closing WC Adjustment shall be determined
based on the Measurement Date on which the Company Net Working Capital was the lowest of all the Measurement Dates, provided that the Post-
Closing WC
Adjustment shall not exceed seven hundred fifty thousand U.S. Dollars ($750,000). A " Measurement Date
" shall mean the last day of each calendar month ending
after the Closing Date and on or prior to the seven-
month anniversary of the Closing Date. The Shareholder Representative may object to Purchaser's calculation of the
Post-
closing WC Adjustment by providing written notice of such objection to Purchaser within 10 Business Days after receipt of such calculation. Any disputes
between Purchaser and the Shareholder Representative regarding the Post-
closing WC Adjustment shall be resolved in the same manner as set forth in Section 1.12(e)
and (f) hereof, mutatis mutandis
, and the fees of the Reviewing Accountant, if applicable, shall be allocated in the same manner as set forth in Section 1.12(h) hereof,
mutatis mutandis . Purchaser shall be entitled to withhold any amount of Post-
closing WC Adjustment that is in dispute until such dispute is
resolved. Notwithstanding the foregoing, in the event that, prior to the payment of the Deferred Payment, Parent publishes a consolidated balance sheet of Parent
reflecting an aggregate amount of cash and cash equivalents and marketable securities of less than eight million U.S. Dollars ($8,000,000), then upon the written
request of the Shareholder Representative, unless Parent presents the Shareholder Representative with evidence of an available credit line in an amount that, together
with the foregoing amount, exceeds eight million U.S. Dollars ($8,000,000), the Deferred Payment shall become immediately due and payable; provided, however,
that Purchaser may withhold from the Deferred Payment an amount equal to seven hundred fifty thousand U.S. Dollars ($750,000) for the purpose of making the Post-
Closing WC Adjustment, and the amount by which such withheld amount exceeds the amount of the Post-
closing WC Adjustment, if any, shall be deposited with the
Paying Agent on the seven-
month anniversary of the Closing Date in the same manner as set forth in the first sentence of this Section 1.9(d), subject to Purchaser's
right to withhold the amount in dispute, if any, until such dispute is resolved. Promptly following the receipt of the Deferred Payment by the Paying Agent, but in no
event later than three Business Days thereafter, the Paying Agent shall cause each Participating Securityholder to receive its portion of the distributable portion of the
Deferred Payment, which shall equal the product of the distributable portion of the Deferred Payment multiplied by such Participating Securityholder’
s Consideration
Fraction, less any required Tax withholdings.
7