Incredimail 2011 Annual Report Download - page 211

10.6 Purchase Price
. Any payments made to a Parent Indemnitee pursuant to this Section 10 shall be treated as an adjustment to the purchase price
paid to the Participating Securityholders for Tax purposes.
10.7 Shareholder Liability .
(a) No Participating Shareholder, Optionholder or Warrantholder shall be liable for indemnification under Section 10 in excess of the Merger
Consideration payable to it pursuant to this Agreement, including any amounts held in the Escrow Fund (other than for any fraud committed by such Participating
Securityholder). Subject to Section 10.7(d), any Parent Indemnitees shall recover the amount of indemnification to which it may be entitled pursuant to Section 10
(whether or not involving a third party claim) initially from the Escrow Fund, which shall be the sole and exclusive remedy for Parent Indemnitees for indemnification
for Section 10.2 Damages. If the Escrow Fund has been exhausted, any Parent Indemnitee shall then recover the amount of indemnification for Section 10.5 Damages
by way of reduction of the amount of the Deferred Payment and/or the Contingent Payment payable by Purchaser pursuant to this Agreement. Thereafter, the
Participating Securityholders shall indemnify, severally and not jointly, the Parent Indemnitees based on each Participating Securityholder's Consideration Fraction. If
the total amount paid by the Participating Securityholders shall not have fully satisfied the indemnification obligations owing to the Parent Indemnitees hereunder, the
Preferred Holders shall indemnify, severally and not jointly, the Parent Indemnitees based on each Preferred Holder’
s Consideration Fraction for Preferred Stock;
provided that the Preferred Holders shall have no liability to indemnify the Parent Indemnitees hereunder until and if the Participating Securityholders shall have first
satisfied at least 80% of their aggregate indemnification obligations hereunder. Once the indemnification obligations payable hereunder to the Parent Indemnitees
shall have been determined by agreement with the Shareholder Representative, or pursuant to Section 11.7 hereof, such determination shall be binding on all the
Participating Securityholders and Preferred Holders. If any Participating Securityholders shall default, in whole or in part, on their respective indemnification
obligations hereunder (the amounts of such payment defaults, the " Default Amounts
"), and the Preferred Holders shall have satisfied the indemnification obligations
payable to the Parent Indemnitees hereunder in full, the Preferred Holders shall be entitled to collect the applicable Default Amounts from the defaulting Participating
Securityholders, severally and not jointly. Following the Closing, no Participating Securityholder or Preferred Holder shall be entitled to contribution or any other
payments from the Company for any indemnification obligations that such Participating Securityholder or Preferred Holder is obligated to pay hereunder. For any
indemnification payable out of the Merger Consideration for the Founder, the Founder shall pay its indemnification obligations to the Parent Indemnitees at the same
ratio of the Merger Consideration allocated to the Founder (ninety percent (90%) cash and ten percent (10%) in the form of Parent Shares), the number of which
Parent Shares shall be determined by dividing (x) the amount of Damages to be paid by the Founder by (y) the Market Value of the Parent Shares).
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