If I were you, I would just remove the images and then reply the notice, that's all. Issue an apology or something that says you regretted the action
For a DMCA complaint, you have to file a claim with Google that you have removed the specified images. You need to mail it or fax it to Google. The specific format is provide in a link in that email itself. Check for it. Without that fax, Google will close your account. With that fax, Google's work is done and you are free to do your business with them. Just tell them that whatever is mentioned in that email is removed from the site. No need to send an apology. Its not Google's task to see whether copyright is infringed or not. Their task is just that that if they receive a notification that it is infringed then they MUST receive a reply from that that it is corrected.
That alone won't help. If DMCA complaint is filed, you HAVE TO file a counter reply to it, else your account is gone. Take my word for it.
if someone needs how to write take down notice here is great info for DMCA http://www.dyniam.com/marketing-blog/what-to-do-when-google-bans-your-site-because-of-a-bogus-dmca-take-down-notice/
Embedding YouTube video code is safer than outright taking pictures from Google Image Search. If you want to include images in your blog, use Flickr's Creative Common Licensed images with proper attribution. You will be safe. After searching for images in flickr, filter them using the creative common radio button. There are other options also: I wrote a blog post a few months ago about where to get Royalty Free Photos for personal and commercial uses. Here is the link http://www.classifiedsforfree.com/free/where-to-get-royalty-free-photos-to-use-in-free-classifieds/
Remove immediately the images in your website and inform google as well as thet company about that with a note of apology to them.I think this will solve the issue.Please keep in mind not to use copyrighted images without the prior permission of the publisher.
That is copyright infringement. You can not take pictures or anything else off of a site and use it as your own. You just admitted that you took images from other sites. REMOVE THE IMAGES - RIGHT NOW, RIGHT THIS VERY SECOND!!!! Those are not your images, you stole them from another site. The only advice you need is to stop stealing other peoples property. If you want pictures and images, take them yourself. That way you own them. Or get a release from the owner of the images granting you permission to use the images.