Incredimail 2011 Annual Report Download - page 208

10.2 Indemnification .
(a) From and after the Closing Date (but subject to Section 10.1(a)), the Participating Securityholders shall, severally and not jointly,
indemnify and hold the Parent Indemnitees harmless from and against any Damages (as defined in Exhibit A
) that are directly or indirectly suffered or incurred by any
of the Parent Indemnitees (regardless of whether or not such Damages relate to any third-
party claim) and which arise from or as a result of, or are directly or
indirectly connected with: (i) any incompleteness of, inaccuracy in or breach of any representation or warranty by the Company set forth in Section 2 or elsewhere in
this Agreement or in any closing certificate; (ii) any failure to comply with, or breach of any covenant or obligation of the Company set forth in this Agreement or any
of the Company’
s obligations pursuant to the Merger; (iii) the matters set forth on Schedule 10.2 hereof; or (iv) any Legal Proceeding relating to any incompleteness,
inaccuracy, failure or breach referred to above (including any Legal Proceeding commenced by any Parent Indemnitee for the purpose of enforcing any of its rights
under this Section, 10.2 (collectively, “ Section 10.2 Damages ” ) ; provided, however
, that no Parent Indemnitee shall be entitled to any such indemnification in
respect of Section 10.2 Damages unless and until the Damages sought by all Parent Indemnitees exceed two hundred fifty thousand U.S. Dollars ($250,000) in the
aggregate (the “ Basket ”),
whereupon indemnification may be sought by the Parent Indemnitees for the full extent of such Damages (including the first $250,000);
provided, further,
that the Basket shall not be applicable for the matters set forth on Schedule 10.2 hereof for (x) determining entitlement to any indemnification for
such matters nor (y) aggregating such Damages with other Section 10.2 Damages to meet the Basket.
(b) Any payment for Section 10.2 Damages the Participating Securityholders are obligated to make to a Parent Indemnitee shall be paid by
release of funds from the Escrow Fund by the Paying Agent on the thirty-first Business Day after the date notice of any sums due and owing (the “ Notice of Claim ”
)
is given to the Shareholder Representative (with a copy to the Paying Agent pursuant to the terms of the Escrow Agreement) by the applicable Parent Indemnitee,
subject to the agreement of the Shareholder Representative and the applicable Parent Indemnitee to release such funds on an earlier date in accordance with the terms
of the Escrow Agreement or objection of the Shareholder Representative within 16 Business Days of receipt of the Notice of Claim, and shall accordingly reduce the
amount in the Escrow Fund. The Notice of Claim shall set forth in reasonable detail a description of the claim and amount of Damages. The Shareholder
Representative may object to the Notice of Claim by providing written notice of such objection to the applicable Parent Indemnitee within 16 Business Days after the
delivery of the Notice of Claim (the “ Notice of Escrow Objection ”).
If the Shareholder Representative timely provides the Notice of Escrow Objection, then the
parties shall confer in good faith for a period of up to 10 Business Days following Purchaser’
s timely receipt of the Notice of Escrow Objection, in an attempt to
resolve any disagreement, and any resolution by them shall be in writing and shall be final and binding. If, after such 10 Business Day period, the Shareholder
Representative and applicable Parent Indemnitee cannot resolve any such disagreement, then the parties shall resolve the disagreement in accordance with Section 11.7
hereof.
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