Incredimail 2012 Annual Report Download - page 301

(b) Notwithstanding the aforesaid, in the event of a breach by any Company Shareholder of any of
his, her or its respective representations and warranties (the “ Breaching Shareholder ”),
Purchaser or any Indemnified
Person shall only be entitled to present a demand, bring a claim, or be entitled to any remedy against the Breaching
Shareholder (or from the portion of the Set-
off Amount attributable to the Breaching Shareholder, as the case may be), and
none of the other Indemnifying Parties will be liable for such a breach (and each Breaching Shareholder will indemnify
and reimburse the Indemnifying Parties and any of their respective directors, officers, controlling persons, for
Indemnifiable Damage incurred by such Indemnifying Party or any such director, officer, or controlling person in
connection with any loss, claim, damage, liability or action, as incurred by them as a result of such a breach).
(c) From and after the Closing Date and until the first anniversary of the Closing Date, Purchaser
shall hold harmless and indemnify the Securityholders from and against, and shall compensate and reimburse the
Securityholders for, any Indemnifiable Damages arising out of, resulting from or in connection with (i) any failure of any
representation or warranty made by Purchaser in this Agreement to be true and correct as of the Agreement Date and as of
the Closing Date as though such representation or warranty were made as of the Closing Date (except in the case of
representations and warranties which by their terms speak only as of a specific date or dates, which representations and
warranties shall be true and correct as of such date), (ii) any breach of any of the covenants or agreements made by
Purchaser in this Agreement or any other agreements contemplated by this Agreement or the Share Purchase. A claim
under this Section 9.1(c) may only be brought by the Shareholders' Agent. Notwithstanding the foregoing, no
indemnification payment shall be required to be made by Purchaser to any Securityholder pursuant to Section 9.1(c)(i)
above unless and until the aggregate amount of Indemnifiable Damages sustained by all Securityholders exceeds the
Basket Amount. If the total amount of such Indemnifiable Damages exceeds the Basket Amount then the Securityholders
shall be entitled to be indemnified against and compensated and reimbursed the entire amount of such Indemnifiable
Damages including the Basket Amount. Except in the case of fraud by Purchaser and any failure of any of the
representations and warranties contained in Section 4.2 (Authority; Noncontravention), Section 4.3(b) (Valid Issuance)
and Section 4.4 (Capital Resources) (the " Special Purchaser Representations
") to be true and correct as aforesaid, the
maximum aggregate liability of Purchaser under this Section 9.1(c) shall not exceed three million five hundred thousand
U.S. Dollars ($3,500,000). In the case of any failure of any of the Special Purchaser Representations to be true and correct
as aforesaid, the maximum aggregate liability of Purchaser under this Section 9.1(c) shall not exceed the difference
between the total amount of the Aggregate Consideration that Purchaser is then currently obligated to pay pursuant to this
Agreement less
any amount of the Aggregate Consideration already paid by Purchaser. If the Share Purchase is
consummated, recovery by way of the indemnification right pursuant to this Section 9.1(c) shall constitute the sole and
exclusive monetary remedy of the Securityholders for the matters set forth in this Section 9.1(c), except in the event of
fraud by Purchaser.
9.2 Indemnifiable Damage Threshold; Other Limitations .
(a) Purchaser (on its behalf or on behalf of other Indemnified Persons) shall be entitled to set off up
to three million five hundred thousand U.S. Dollars ($3,500,000) (the " Maximum Set-off Amount
") due to the
Indemnified Persons pursuant to and in accordance with this ARTICLE 9
against a portion of the Deferred Payment and,
subject to Sections 9.3, 9.4(b) and
10.1, the Contingent Payment, if any, payable by Purchaser to the Company
Securityholders pursuant to this Agreement against Indemnifiable Damages (the " Set-off Right
"). The amount set off by
Purchaser pursuant to the Set-off Right shall be referred to as the " Set-off Amount ".
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