Incredimail 2012 Annual Report Download - page 234

(g) If the Company Net Working Capital, as determined pursuant to Section 1.5 (b)
(in the event there is no Notice of
Objection), Section 1.5(e) or Section 1.5 (f) , as the case may be, is less than the Working Capital Target (such difference, the “
Negative
Adjustment Amount
” ),
then the amount of the Negative Adjustment Amount shall be offset against the Deferred Payment or against the
payment required by Section 1.5(h) below, if any, except to the extent that any payment of Aggregate Consideration already made by Purchaser
was reduced by all or a portion of the Working Capital Shortfall.
(h) Without derogating from the right of the Purchaser to receive the Negative Adjustment Amount pursuant to Section (
g),
Purchaser shall pay the lower
of (i) the amount by which the Company Net Working Capital is higher than the Cash as of the Closing Date, and
(ii) the Google Payments actually received by the Company following the Closing. The Purchaser shall transfer such payment to the Paying
Agent within 3 Business Days of final determination of the Company Net Working Capital under this Section
1.5 and shall instruct the Paying
Agent to distribute such amounts to the Company Securityholders in accordance with the provisions of the Paying Agent Agreement and this
Agreement, in accordance with each Company Securityholder's Pro Rata Share of such amount, less applicable withholdings. Notwithstanding
the foregoing, any Cash Consideration and Option Amount payable pursuant this Section 1.5(h)
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.
(i) If a Reviewing Accountant is engaged resulting in a Negative Adjustment Amount, then the fees and expenses of the
Reviewing Accountant shall be borne by the Company Securityholders by way of reduction of the Deferred Payment. Otherwise, such fees and
expenses shall be borne by Purchaser.
(j) Notwithstanding the foregoing, if the Deferred Payment shall be due and payable pursuant to Section 1.3(b)
hereof prior
to the final determination of Company Net Working Capital pursuant to this Section 1.5 , then any amounts described herein
as reducing the
Deferred Payment, as reasonably estimated by Purchaser, may be withheld from the Deferred Payment by Purchaser pending the final
determination of Company Net Working Capital.
1.6 Contingent Payment
(a) The Contingent Payment shall be subject to the following conditions: (i) if the Higher Milestone
(as defined in Schedule 1.6
) shall have been met, then Purchaser shall make a cash payment for the benefit of the
Company Securityholders in the amount of seven million five hundred thousand U.S. Dollars ($7,500,000) (the "
Higher
Milestone Payment
"), and (ii) if the Higher Milestone shall not have been met, then the Contingent Payment shall be
comprised of the following two components, which shall be independent of one another: (1) if the Lower Milestone (as
defined in Schedule 1.6
) is met, then Purchaser shall make a cash payment for the benefit of the Company
Securityholders in the amount of two million five hundred thousand U.S. Dollars ($2,500,000) (the "
Lower Milestone
Payment "); and (2) if there shall have been no Applicable Change (as defined in Schedule 1.6
), then Purchaser shall
make a cash payment for the benefit of the Company Securityholders in the amount of five million U.S. Dollars
($5,000,000) (the " Applicable Change Payment
"). For the avoidance of doubt, if there has been an Applicable Change,
then Purchaser shall not be obligated to make the Applicable Change Payment. The Contingent Payment may be reduced
by the applicable Set-off Amount pursuant to ARTICLE 9
. All such payments shall be made by Purchaser to the Paying
Agent and paid by the Paying Agent to the Company Securityholders in accordance with the terms of the Paying Agent
Agreement.
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