Incredimail 2011 Annual Report Download - page 209

(c) The Company acknowledges and agrees that, if the Surviving Corporation suffers, incurs or otherwise become subject to any Damages as a
result of or in connection with any incompleteness of, inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of
their rights as Parent Indemnitees) Purchaser and Parent shall also be deemed, by virtue of its direct or indirect ownership of the shares of the Company, to have
incurred Damages as a result of and in connection with such incompleteness, inaccuracy or breach.
(d) The Participating Securityholders shall not be required to indemnify any Parent Indemnitee for an aggregate amount of Section 10.2
Damages exceeding the Escrow Fund, as may be adjusted as set forth in Section 1.9 above, which shall be the sole and exclusive remedy for Parent Indemnitees for
Section 10.2 Damages; provided, that any incompleteness of, inaccuracy in or breach of the IP Representation (except for any incompleteness of, inaccuracy in or
breach of any of the IP Infringement Representations that would not have occurred had such representations been qualified by the Company's Knowledge) or the
Special Representations shall be considered Section 10.5 Damages (as defined below).
(e) Within ten days after the Termination Date (the “ Escrow Release Date ”),
if the amount of cash remaining in the Escrow Fund exceeds
the amount of any Section 10.2 Damages or Section 10.5 Damages set forth in a Notice of Claim that has not been fully resolved and paid prior to the Escrow Release
Date (the “ Unresolved Claims ”),
Purchaser and the Shareholder Representative shall deliver joint written instructions to the Paying Agent to disburse or cause to be
disbursed to each Participating Securityholder from the Escrow Fund an amount equal to such Participating Securityholder’
s Consideration Fraction of such remaining
cash after reserving the amount of cash set forth in the Notice of Claim for the Unresolved Claims (it being understood that any amounts to be released in respect of
any Option Amount shall be delivered by the Paying Agent to the Purchaser and Purchaser shall cause such amounts, less applicable withholding Taxes, to be
disbursed to the applicable Optionholder). Following the Escrow Release Date, if an Unresolved Claim is finally resolved, Purchaser and the Shareholder
Representative shall deliver joint written instructions to the Paying Agent within three Business Days of such resolution to disburse or cause to be disbursed to each
Participating Securityholder any remaining cash in the Escrow Fund in an amount equal to each Participating Securityholder’
s Consideration Fraction of such
remaining cash after reserving the amount of cash set forth in the Notice of Claim for any remaining Unresolved Claims (it being understood that any amounts to be
released in respect of any Option Amount shall be delivered by the Paying Agent to the Purchaser and Purchaser shall cause such amounts, less applicable withholding
Taxes, to be disbursed to the applicable Optionholder).
10.3 Defense of Third Party Claims
. In the event of the assertion or commencement by any Person of any claim or Legal Proceeding (whether
against the Company, the Surviving Corporation, Parent, Purchaser or any other Person) with respect to which any of the Parent Indemnitees shall have the right to
seek indemnification pursuant to this Section 10, Purchaser shall promptly notify the Shareholder Representative of such claim, and shall have the right to conduct the
defense of such claim, provided, however
, that any failure of Purchaser to notify the Shareholder Representative shall not limit any of the rights of the Parent
Indemnitees under this Section 10, except to the extent that such failure materially and adversely affects the Participating Securityholders’
interests in the matter, it
being understood that a Notice of Claims in respect of a breach of a representation and warranty must be delivered prior to the expiration of any applicable survival
period specified in Section 10.1 for such representation and warranty. The reasonable costs of the defense of any such Legal Proceeding shall be considered Damages
for which the Parent Indemnitees shall be entitled to seek indemnification under this Section 10, and the Shareholder Representative shall be entitled to participate in
the defense of any such Legal Proceeding at the expense of the Participating Securityholders. Notwithstanding the foregoing, Parent and/or Purchaser shall not settle
any such claim or Legal Proceeding without the consent of the Shareholder Representative, such consent not to be unreasonably withheld; provided, however
, that if
the consent of the Shareholder Representative is so obtained, such settlement of any such claim or Legal Proceeding shall alone be determinative of the amount of the
claim and neither the Shareholder Representative nor any person who has a beneficial interest therein shall have any power or authority to object under any provision
of this Section 10 to the amount of any demand by Parent or Purchaser with respect to such settlement.
59