Incredimail 2012 Annual Report Download - page 230

(iv) A portion of the cash portion of the Closing Payment otherwise payable to the Company Shareholders
equal to $200,000 (the “ Rep Reimbursement Amount ”),
shall not be paid at the Closing to the Company Shareholders, but shall instead be
deposited with the Paying Agent, to be used by the Shareholders’ Agent for the payment of expenses incurred by the Shareholders’
Agent in
performing his duties pursuant to this Agreement. The portion of the Closing Payment to be contributed hereunder to the Rep Reimbursement
Amount shall be based on the respective Pro Rata Share of each Company Shareholder. In the event that the Shareholders’
Agent has not used
the entire Rep Reimbursement Amount at such time as the termination of the Set-
off Right, any remaining amount shall be distributed by the
Paying Agent to the Company Shareholders according to the respective Pro Rata Share. If the Rep Reimbursement Amount shall be insufficient
to reimburse each of the Shareholders’ Agent’s expenses in accordance with this Agreement, then upon written request of the Shareholders’
Agent, each Company Shareholder shall make a payment of its respective share of such additional expenses to the Shareholders’
Agent, based on
such Company Shareholder Pro Rata Share.
(b) On the one-
year anniversary of the Closing Date, or if such day is not a Business Day, on the
first Business Day after the one-year anniversary of the Closing Date (the " Deferred Payment Date
"), Purchaser shall
deposit with the Paying Agent the Deferred Payment, as follows: cash in the amount of seven million five hundred
thousand U.S. Dollars ($7,500,000), subject to adjustment as set forth in this Agreement, less any Set-
off Amount and
subject to Section
1.5(g). Notwithstanding the foregoing, any Cash Consideration and Option Amount payable on the
Deferred Payment Date to Company Shareholders and Company Optionholders, as applicable, holding Company Shares
and Company Options pursuant to Section 102(b) shall be paid to the 102 Trustee. The Deferred Payment, as adjusted if
applicable, shall be distributed by the Paying Agent and the 102 Trustee to the Company Securityholders. Any Set-
off
Amount shall be held by Purchaser and applied for the payment of indemnification obligations under
ARTICLE 9
hereof. 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 Company Securityholder to receive its portion of the
Deferred Payment, pursuant to the Closing Spreadsheet, less any required Tax withholdings and Set-
off Amounts.
Notwithstanding the foregoing, upon the written notice of the Shareholders' Agent to Purchaser, the Deferred Payment
Date shall be accelerated and the Deferred Payment shall be immediately due and payable if Purchaser shall publish
(including by way of issuing a press release reporting its quarterly results) a consolidated balance sheet of Purchaser
reflecting an aggregate amount of cash, cash equivalents and marketable securities (as determined in accordance with
GAAP consistently applied) of less than four million U.S. Dollars ($4,000,000), unless Purchaser shall have delivered
concurrently to the Shareholders' Agent a certificate signed by the Chief Financial Officer of Purchaser setting forth in
reasonable detail that such shortfall has been remedied as of the date of such certificate, including by the immediate
availability of a credit line in an amount that, together with the foregoing balance, exceeds four million U.S. Dollars
($4,000,000). Notwithstanding the foregoing, in the event that the Deferred Payment Date is so accelerated, concurrently
with the payment of the Deferred Payment, Purchaser shall deposit in escrow three million five hundred thousand U.S.
Dollars ($3,500,000) of the Deferred Payment less any amount already set off pursuant to the Set-
off Right, with an
escrow agent to be mutually selected by the Shareholders' Agent and Purchaser, which escrow shall be used for the
indemnification of the Indemnified Persons pursuant to an escrow agreement to be entered into by Purchaser and the
Shareholders' Agent on terms substantially similar to those set forth in ARTICLE 9 hereof, mutatis mutandis
. In the
event that Purchaser fails to make any portion of the Deferred Payment within seven (7) Business Days when due in
breach of this Agreement, the unpaid amount shall bear interest at the rate of fifteen percent (15%) per year, computed on
the basis of a 365-day year.
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