OEM
        AGREEMENT

      


      THIS
        OEM
        AGREEMENT (this “Agreement”) is effective as of the 7th
        day of
        December 2004 (“Effective Date”), by and between Commtouch Ltd. (hereinafter
“Commtouch”), an Israeli corporation, having principal offices at 1A Htazoran,
        Netania, Israel, and IncrediMail, Inc. (hereinafter “OEM”), and Israeli
        corporation, having principal offices at Kaufman 2 Tel-Aviv,
        Israel.

      


      WITNESSETH:

      


      WHEREAS,
        Commtouch has developed a software development kit (the “Commtouch
        Anti-Spam Protection SDK” or “SDK”)
        in
        connection with its proprietary Commtouch Anti-Spam Protection solution,
        which
        enables third-party vendors to integrate the spam identification and
        classification services of Commtouch’s Commtouch Detection Center into their
        existing offerings; and 

      


      WHEREAS,
        Commtouch is willing to license the Commtouch Anti-Spam Protection SDK to
        OEM on
        the terms and conditions set forth herein for integration into original products
        built by OEM (the “Integrated
        Products”)
        and to
        market such Integrated Products to customers;

      


      NOW,
        THEREFORE, in consideration of the premises hereof, and the mutual obligations
        herein made and undertaken, the parties hereto agree as follows:

      


      1.
        Definitions. For
        the
        purposes of this Agreement, the definitions set forth in this Section shall
        apply to the respective capitalized terms:

      


      1.1
        “Customer.” A
        customer of OEM to whom OEM sells or licenses an Integrated Product for use
        in
        the regular course of such customer’s affairs and not for resale.

      


      1.2
        “Documentation.” Those
        printed instructions, manuals, and diagrams pertaining to the Programs to
        be
        furnished therewith.

      


      1.3
        “Enhancement(s).” Computer
        program modifications or additions, other than Maintenance Modifications,
        that
        may be integrated with the Program or offered separately by Commtouch and
        that
        alter the functionality of the Program or add new functions
        thereto.

      


      1.4
        “Error.” A
        defect
        in a Program that prevents it from functioning in substantial conformity
        with
        the published Specifications pertaining thereto.

      


      1.5
        “Maintenance Modification(s).” Computer
        software changes to be integrated with the Program to correct any Errors
        therein, but that do not alter the functionality of the Program or add new
        functions thereto. 

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          2

        

         

      

      1.6
        “Marketing Territory.” Worldwide.

      


      1.7
        “Object Code.” Computer
        programs assembled or compiled in magnetic or electronic binary form on software
        media, which are readable and usable by machines, but not generally readable
        by
        humans without reverse-assembly, reverse-compiling, or
        reverse-engineering.

      


      1.8“Program(s).” The
        Commtouch proprietary computer software, which consists of the SDK, including
        Maintenance Modifications, Enhancements and Documentation delivered by Commtouch
        to OEM hereunder.

      


      1.9
        “OEM Product(s).” The
        OEM
        produced or procured product(s).

      


      1.10
        “Integrated Products.” One
        or
        more combinations of Programs integrated by OEM into an OEM Product or several
        OEM Products, to be offered to customers, as more specifically detailed in
        the
        preamble above.

      


      2.
        OEM Certification. OEM
        hereby certifies and agrees that, in consideration of the benefits of this
        Agreement, OEM may enhance the functionality and/or capability of, the Programs
        by combining the Programs with other computer equipment and/or computer software
        programs to produce Integrated Products. OEM further certifies and agrees
        that
        it will market the Program solely as part of OEM Products as specified in
        Exhibit B hereunder or Integrated Products and that Integrated Products will
        be
        marketed by OEM in a manner to be determined at OEM’s own discretion in the
        normal course of its business. In the event that any of the foregoing
        representations and undertakings prove untrue at any time during the term
        of
        this Agreement, Commtouch shall have the right to terminate this Agreement
        as to
        any or all further copying and distribution of Programs (including any
        derivative works thereof) by OEM in the manner prescribed in Section 17 hereof.
        Notwithstanding the aforementioned, OEM will be given a 14 day grace period
        to
        cure any inaccuracy in the said representations, commencing on the receipt
        date
        of Commtouch’s first written complaint. Curing such inaccuracy by OEM within the
        14 day grace period will cancel Commtouch’s relevant right of
        termination.

      


      3.
        Commtouch’s Responsibilities.  Subject
        to the terms and conditions of this Agreement, Commtouch shall:

      


      
        	
              	1.	
                Grant
                  OEM the rights and licenses in the Program as set forth in Section
                  6
                  hereof;

              


      

      


      
        	
              	2.	
                Provide
                  Program integration support and training to OEM, and maintenance
                  for
                  the
                  Programs and Commtouch Detection Center as set forth in Section
                  9
                  hereof;

              


      

      


      
        	
              	3.	
                Warrant
                  the Programs as set forth in Section 15
                  hereof;

              


      

      


      
        	
              	4.	
                Ensure
                  the operation of and accessibility to the Commtouch Detection Center
                  by
                  way of the Integrated Product; and

              


      

       

      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          3

        

         

      

      
        	
              	
                5.

              	
                Indemnify
                  OEM as set forth in Section 16
                  hereof.

              


      

      


      4. OEM’s
        Responsibilities.  Subject
        to the terms and conditions of this Agreement, OEM shall:

       

      
        	 	
                1.

              	
                Exert
                  commercially reasonable efforts to integrate the Program with at
                  least one
                  OEM Product, independently developed or procured by OEM, so as
                  to create
                  at least one Integrated Product. OEM and Commtouch undertake to
                  make
                  commercially reasonable efforts to cause the successful completion
                  of the
                  Integrated Product as soon as practicable, after the signing of
                  this OEM
                  Agreement.

              


      

      


      
        	 	
                2.

              	
                Use
                  commercially reasonable efforts to be decided at OEM’s discretion to
                  market, sell, and deliver to Customers in the Marketing Territory
                  at least
                  one type of Integrated Product.

              


      

      


      
        	 	
                3.

              	
                Provide
                  technical support for Integrated Products to Customers as set forth
                  in
                  Section 9.2 hereof;

              


      

      


      
        	 	
                4.

              	
                Subject
                  to the terms and conditions hereunder, pay for the right to sell
                  licenses
                  to the Programs as set forth in Section 13
                  hereof;

              


      

      


      
        	 	
                5.

              	
                Provide
                  Commtouch with one working copy of each type of Integrated
                  Product.

              


      

      


      
        	 	
                6.

              	
                Protect
                  Commtouch’s proprietary rights in Program as set forth in Section 6
                  hereof; and

              


      

      


      
        	 	
                7.

              	
                Create
                  a unique IncrediMail ID for each Customer that will be sent to
                  Comstock
                  (through the SDK) by the Integrated
                  Product.

              


      

      


      5.
        Commtouch Representations Regarding the Anti-Spam Protection
        SDK

      


      5.1
        Any and
        all network connections initiated by the SDK to Commtouch’s servers or any other
        third party server will be controlled by OEM. Commtouch will not initiate
        any
        connection and/or communication between and Commtouch’s servers or any other
        third party server, whether manual or automatic, local or exterior, without
        receiving the prior express written permission of OEM.

      


      5.2
        Commtouch
        represents that the system will have a 95% uptime and that each connection
        initiated by the Integrated Products using the SDK to Commtouch’s servers will
        not exceed a time period of 1 second.

      


      5.3
        Commtouch
        hereby represents, warrants and undertakes that the Programs, their components,
        documentation and etc. were independently developed by Commtouch, and that
        it is
        the sole owner of their Intellectual Property.

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          4

        

         

      

      6.
        Licenses Granted.

      


      6.1
        Commtouch
        hereby grants to OEM a nonexclusive, nontransferable right and license to
        copy
        the Program, in Object Code, for purposes of further development or modification
        in connection with the design, development and sale of Integrated
        Products.

      


      6.2
        Commtouch
        hereby grants to OEM a nonexclusive, right and license to sell licenses to,
        distribute and market the Program as part of the Integrated Product. For
        the
        avoidance of doubt, Commtouch will continue supporting any Programs and/or
        Integrated Products (i.e. only the Commtouch related elements to which it
        is
        committed to supporting pursuant to the terms hereof) licensed, distributed
        and/or marketed by OEM to third parties even pursuant to any termination
        of this
        OEM Agreement, regardless of the cause of termination, provided that OEM
        has
        performed all of its material obligations, including payment obligations,
        required of it hereunder. Any and all licenses granted to third parties for
        usage of the Integrated Product will survive the termination of this OEM
        Agreement for the period of the license.

      


      7.
        Confidentiality of Information; Protection and Security.

      


      7.1
        OEM
        shall
        use all reasonable efforts to protect and defend the proprietary nature of
        the
        Programs, including Enhancements and any derivative works of such. Except
        as
        expressly provided otherwise in this Agreement, OEM shall not copy, modify,
        transcribe, store, translate, sell, lease, or otherwise transfer or distribute
        any of the Programs, including Enhancements, in whole or in part, without
        prior
        authorization in writing from Commtouch. Each of the Parties shall limit
        access
        to the Documentation to those employees having a specific need for such access
        in the performance of their duties, consistent with the purposes of this
        Agreement, and shall obtain written agreements from any employees given such
        access sufficient to maintain the confidentiality of such material.

      


      7.2
        Commtouch
        shall use all reasonable efforts to protect and defend the proprietary nature
        of
        any information received from OEM and marked as confidential (“OEM Confidential
        Information”). In no event will Commtouch employ less of an effort to protect
        and defend OEM Confidential Information, than that it does to protect its
        own
        confidential information. Except as expressly provided otherwise in this
        Agreement, Commtouch shall not copy, modify, transcribe, store, translate,
        sell,
        lease, or otherwise transfer or distribute any of the OEM Confidential
        Information, in whole or in part, without prior authorization in writing
        from
        OEM.

      


      8.
        Expenses. It
        is
        expressly understood and agreed that neither Party is under any obligation
        or
        requirement to reimburse the other Party for any expenses or costs incurred
        by
        such Party in the performance of its responsibilities under this Agreement.
        Any
        costs or expenses incurred by a Party shall be at such Party’s sole risk and
        upon its independent business judgment that such costs and expenses are
        appropriate.

      


      9.
        Support, Training and Maintenance.

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          5

        

         

      

      9.1
        By
        Commtouch:

      


      9.1.a.
        Commtouch
        will appoint a representative who will provide reasonable assistance, from
        Commtouch’s facilities, as necessary during OEM’s creation of Integrated
        Products. Commtouch shall provide OEM with written details of such
        representative upon signing of this OEM Agreement.

      


      9.1.b.
        Commtouch
        shall provide OEM with Maintenance Modifications, and Enhancements relating
        to
        the Programs, as and when available and distributed to its other OEMs.


      


      9.1.c.
        Commtouch
        shall provide to OEM urgent telephone and email support for material conditions
        in the Program that prevent a Customer from effectively communicating with
        the
        Commtouch Detection Center, as determined in good faith by OEM and confirmed
        by
        Commtouch. Email should be sent by OEM to: asapalert@commtouch.com,
        and
        phone inquiries from OEM should be directed to 650-864-2261, or +972 9 863
        6877
        during normal business hours, as described below. Urgent requests outside
        of
        normal business hours may be directed to +972-544-878045. All requests should
        include the OEM name, Customer name, a description of the problem, email
        address
        and telephone number of the OEM contact person. Normal non-holiday business
        hours for the Detection Center in the United States are Monday through Friday
        (9:00 am to 6:00 pm Pacific time). Normal non-holiday business hours for
        Commtouch in Israel are Sunday through Thursday (9:00 am to 6:00 pm Israel
        time).

       

      9.1.d.
        General
        Maintenance: During the term of this Agreement, Commtouch will provide the
        following standard maintenance services for the Commtouch Detection
        Center:

       

      
        	
              	a.	
                Timely
                  corrections of intermittent communication problems between the
                  Commtouch
                  Detection Center and the Integrated Product caused by problems
                  in the
                  Commtouch Detection Center, in order to achieve the desired communication
                  flow allowing for optimal spam detection and
                  prevention.

              


      

       

      
        	
              	b.	
                Subject
                  to 95% availability of the system, routine periodic maintenance
                  of
                  Commtouch equipment utilized in providing the Commtouch Detection
                  Center
                  services, at intervals determined by Commtouch at its sole discretion.
                  Commtouch will provide OEM with advance notice of the scheduled
                  maintenance.

              


      

       

      
        	
              	c.	
                Urgent
                  maintenance: Commtouch will perform urgent maintenance in the event
                  of a
                  Material condition that is not capable of being delayed until the
                  next
                  scheduled routine periodic maintenance. Commtouch will provide
                  OEM with
                  notice of this maintenance.

              


      

      


      9.2
        OEM
        shall
        provide Customers with first tier support. 

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          6

        

      

      


      10.
        Title. Title
        to
        the Program, including any Enhancements, shall at all times remain and vest
        solely with Commtouch. OEM agrees that it will not claim or assert title
        to the
        Programs or attempt to transfer any title to Customers or any third parties.
        Furthermore, OEM acknowledges that it has no claims to goodwill associated
        with
        the Program, Maintenance Modifications and/or Enhancements, and hereby waives
        any and all claims to goodwill therein. OEM expressly reserves all rights
        in the
        Integrated Products, not specifically granted herein to Commtouch, and except
        as
        specifically stated otherwise in the OEM Agreement, no rights or title or
        ownership in the Integrated Products shall pass to Commtouch. Regardless
        of
        anything to the contrary in this OEM Agreement, and except where specifically
        granted herein, any and all Integrated Products, documentation, copyrights,
        trademarks and other intellectual property rights that exist within them,
        are
        and shall at all times remain the exclusive property of OEM.

      


      11.
        Reserved.

      


      12.
        Reserved.

      


      13.
        Sales and Administration

      


      13.1
        OEM
        shall
        be entitled to offer a free trial of the Integrated Product to a Customer
        for a
        period not to exceed thirty (30) days. At the end of such period, OEM shall
        ensure that the Customer either purchases the Integrated Product, or is
        disconnected from the Integrated Product. OEM shall utilize the same type
        of
        protections utilized for its other “for fee” products in attempting to prevent
        Customers from signing up for the free trial more than once.

      13.2
        Within
        thirty (30) days of the end of each calendar month hereunder, OEM shall provide
        Commtouch with detailed monthly reports of all Integrated Product sales during
        the prior month, including a summary of all Customers who have purchased
        the
        Integrated Product during the prior month.

      13.1.
        OEM
        agrees to prepare and maintain complete and accurate books and records relating
        to its sales activities of the Integrated Product hereunder (the “Sales
        Reports”). Once a year, Commtouch will have the right to examine the Sales
        Reports during regular business hours, and with reasonable notice, at
        Commtouch’s own expense, in order to verify the number of Customers using the
        Integrated Product and amount of sales. Such examination will be reasonable
        in
        scope and shall be performed only after the execution of a specific
        non-disclosure agreement by Commtouch, its employees, and advisor which shall
        participate in such examination.

      


      14.
        Payment. In
        consideration of the licenses provided and other obligations undertaken by
        Commtouch hereunder, OEM shall make payments to Commtouch in accordance with
        the
        terms set forth in the attached Exhibit “A.”

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          7

        

      

      


      15.
        Limitation of Warranties and Liabilities

      


      15.1
        Commtouch
        makes no warranty whatsoever as to Integrated Products as an Integrated
        solution, or as to any individual component thereof not provided by Commtouch.
        Commtouch is committed to providing the support to OEM as detailed in Section
        9
        above.

      


      
        15.2
          EXCEPT
          AS
          SET FORTH IN THIS SECTION 15 AND SECTION 16.1.A, OEM AND COMMTOUCH DISCLAIM
          ALL
          OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
          WARRANTIES OF TITLE, NON-INFRINGEMENT, IMPLIED WARRANTIES OF MERCHANTABILITY
          OR
          FITNESS FOR A PARTICULAR PURPOSE RELATING TO THE PROGRAMS FURNISHED HEREUNDER
          OR
          FOR ANY INTEGRATED PRODUCTS PREPARED BY OEM. OEM, IN SIGNING ON THIS AGREEMENT,
          ACKNOWLEDGES THAT, WHILE THE ANTI-SPAM FUNCTIONALITIES ENABLED BY THE PROGRAM
          ARE INTENDED TO PERFORM TO A HIGH INDUSTRY STANDARD, THE PROGRAM AND RELATED
          COMMTOUCH DETECTION CENTER ARE NOT GUARANTEED TO BE ERROR FREE OR MEET
          PARTICULAR STANDARDS OF CUSTOMERS. 

        


        15.3
          IN
          NO
          EVENT SHALL OEM OR COMMTOUCH BE LIABLE FOR ANY LOST OR ANTICIPATED PROFITS,
          OR
          ANY INCIDENTAL, EXEMPLARY, SPECIAL, OR CONSEQUENTIAL DAMAGES, REGARDLESS
          OF
          WHETHER OEM OR COMMTOUCH WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
          IN ANY
          CASE, OEM OR COMMTOUCH SHALL NOT BE LIABLE FOR ANY DAMAGES IN EXCESS OF
          THE
          AMOUNTS PAID BY OEM TO COMMTOUCH UNDER THIS AGREEMENT FOR THE LAST MEASURABLE
          SIX-MONTH PERIOD PRIOR TO THE ACT(S) GIVING RISE TO SUCH DAMAGES. AS PERTAINS
          TO
          CLAIMS OF A PARTICULAR CUSTOMER, COMMTOUCH SHALL NOT BE LIABLE TO OEM FOR
          ANY
          DAMAGES IN EXCESS OF THE AMOUNTS PAID BY OEM TO COMMTOUCH IN RELATION TO
          SAID
          CUSTOMER.


      

      15.4
        Regardless
        of anything to the contrary in this OEM Agreement, there shall be no limitation
        on warranty, liability and/or indemnification with regards to damages or
        losses
        resulting from a breach or infringement related to patents, trademarks,
        copyrights, and/or other intellectual property rights of any third party.
        For
        the avoidance of doubt, warranty, liability and/or indemnification against
        damages resulting of such breach, infringement or initiation of proceedings
        as a
        result thereof, will not be limited in any way or manner and specifically
        will
        not be limited by limitations set forth in this section 15 and all of its
        subsections. 

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          8

        

      

      


      16.
        Indemnification

      


      16.1
        By
        Commtouch:

       

      16.1.a.
        Commtouch
        hereby indemnifies and holds harmless OEM from and against any claims, actions,
        or demands alleging that the Programs, any components thereof or any
        Documentation infringe any patent, trademark, copyright, or other intellectual
        property right of any third party. OEM shall permit Commtouch to replace
        or
        modify any affected Program, component or Documentation so to avoid
        infringement, or to procure the right for OEM to continue use and remarketing
        of
        such items. If neither of such alternatives is reasonably possible, the
        infringing items shall be returned to Commtouch and Commtouch’s shall be liable
        to refund amounts paid therefore by OEM. Regardless of anything to the contrary
        in this OEM Agreement, if as a result of Commtouch’s action, breach, negligence,
        inability to fulfill its obligations or wrongful termination of this OEM
        Agreement, OEM becomes required to pay, indemnify or compensate any third
        party,
        Commtouch will indemnify OEM for an amount paid to that third
        party.

      


      16.1.b.
        Commtouch
        shall also indemnify and defend OEM against all claims, suits, losses, expenses
        and liabilities (including reasonable attorney’s fees) filed by third parties
        against OEM as a result of Commtouch’s actions, breach, negligence, inability to
        fulfill its obligations or wrongful termination of this OEM Agreement. Commtouch
        shall have no obligation hereunder for or with respect to claims, actions,
        or
        demands alleging infringement that arise by reason of combination of no
        infringing items with any items not supplied by Commtouch.

      


      16.1.c.
        Commtouch
        further indemnifies and holds harmless OEM from and against any claims, actions,
        or demands arising out of a breach by Commtouch of Commtouch’s limited warrant
        set forth in the Customer License Agreement. The foregoing indemnity shall
        not
        apply to claims, demands, or actions arising from the improper use of the
        Programs or arising from alterations or additions to the Programs made by
        or on
        behalf of OEM or any Customer.

      


      16.2
        OEM
        hereby indemnifies and holds harmless Commtouch from and against any and
        all
        claims, actions, or demands alleging that the OEM Products infringe any patent,
        trademark, copyright, or other intellectual property right of any third party.
        Commtouch shall permit OEM to replace or modify and affected OEM Product
        so to
        avoid infringement, or to procure the right for Customer to continue use
        and
        remarketing of such items. OEM shall have no obligation hereunder for or
        with
        respect to claims, actions, or demands alleging infringement that arise by
        reason of combination on non-infringing items with any items not supplied
        by
        OEM. Regardless of anything to the contrary in this OEM Agreement, if as
        a
        result of OEM’s action, breach, negligence, inability to fulfill its obligations
        or wrongful termination of this OEM Agreement, Commtouch becomes required
        to
        pay, indemnify or compensate any third party, OEM will indemnify Commtouch
        for
        an amount paid to that third party, up to an amount not exceeding the amounts
        paid to Commtouch by OEM under this Agreement.

      


      16.3
        The
        foregoing indemnities are conditioned on prompt written notice of any claim,
        action, or demand for which indemnity is claimed; complete control of the
        defense and settlement thereof by the indemnifying party; and cooperation
        of the
        other party in such defense. 

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          9

        

      

      


      17.
        Term and Termination

      


      17.1
        This
        Agreement shall commence on the Effective Date and continue for one year
        as of
        the date that the Integrated Product is first offered commercially to Customers.
        The Parties may agree to renew the Agreement for a period of 12 months at
        a
        time. During any extension of this Agreement beyond the initial period described
        above, either party may terminate the Agreement at any time, and at its sole
        discretion, by providing a 90 days prior written notice. Prior to termination
        of
        this Agreement, the parties shall discuss in good faith the terms for any
        possible continuation of the Agreement.

      


      17.2
        Should
        either party commit a material breach of its obligations hereunder, or should
        any of the representations of either party in this Agreement prove to be
        untrue
        in any material respect, the other party may, at its option, terminate this
        Agreement, by thirty (30) days’ written notice of termination, which notice
        shall identify and describe the basis for such termination. If, prior to
        expiration of such period, the defaulting party cures such default, termination
        shall not take place. Notwithstanding the above, Commtouch shall be entitled
        to
        terminate this Agreement should OEM fail to cure a breach of a payment
        obligation within fourteen (14) days of the sending of a written notice
        identifying such breach.

      


      17.3
        Either
        party hereto may, at its option and without notice, terminate this Agreement,
        effective immediately, should the other patty hereto (1) admit in writing
        its
        inability to pay its debts generally as they become due; (2) make a general
        assignment for the benefit of creditors; (3) institute proceedings to be
        adjudicated a voluntary bankrupt, or consent to the filing of a petition
        of
        bankruptcy against it; (4) be adjudicated by a court of competent jurisdiction
        as being bankrupt or insolvent; (5) seek reorganization under any bankruptcy
        act, or consent to the filing of a petition seeking such reorganization;
        or (6)
        have a decree entered against it by a court of competent jurisdiction appointing
        a receiver, liquidator, trustee, or assignee in bankruptcy or in insolvency
        covering all or substantially all of such party’s property or providing for the
        liquidation of such party’s property or business affairs.

      


      17.4
        Termination
        of this Agreement shall not relieve either party of the obligations incurred
        hereunder pursuant to Sections 7, 15-17, and 19 hereof, which Sections shall
        survive such termination. Payment obligations of OEM arising prior to a
        termination shall not be relieved by the termination of this Agreement.
        Furthermore, to the extent that any OEM payment obligations arise following
        a
        termination in relation to Customers that continue to utilize the Program(s)
        following termination and, but for the termination, would otherwise have
        been
        paid by OEM, OEM shall remit such payment(s) to Commtouch as if the termination
        had not occurred. Provided that OEM has made payments to Commtouch in accordance
        with this Agreement, Commtouch shall continue to enable Customers to access
        the
        functionalities as pertaining to the SDK enabled Commtouch Anti-Spam Protection
        solution, for the remaining terms of their respective purchase agreement.
        

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          10

        

      

      


      17.5
        OEM
        shall
        continue to maintain all license rights provided by Commtouch hereunder and
        OEM
        license, rights and obligations shall become perpetual if Comstock (or a
        third
        party company merged or consolidated with Commtouch or obtaining a majority
        of
        Commtouch shares) discontinues all or part of its operations for any reason
        whatsoever (other than due to termination of this agreement in accordance
        with
        the terms hereof) in a way which could otherwise materially restrict OEM’s
        abilities to use the integrated solution.

      


      17.6
        On
        termination of this Agreement, OEM shall cease the sale of Integrated Products
        containing the Program(s).

      


      18.
        Limitation of Representations and Use of Name by OEM

      


      18.1
        Neither
        Party shall make representations concerning the other Party, the Programs,
        or
        OEM Products including any Maintenance Modifications or Enhancements, except
        as
        previously agreed by such Party. Neither Party shall reproduce, reference,
        distribute, or utilize any trade name or trademark of the other Party, except
        solely for purposes of identifying such Party’s products and programs, without
        the prior written approval of the other Party.

      


      18.2
        Each
        Party shall submit to the other for approval, prior to use, distribution,
        or
        disclosure, any advertising, promotion, or publicity in which the trade name
        or
        trademarks of the other Party are used. Each Party shall have the right to
        require, at its discretion, the correction or deletion of any misleading,
        false,
        or objectionable material from any such advertising, promotion, or
        publicity.

      


      18.3
        OEM
        shall
        disclose the relationship between itself and Commtouch, inasmuch as such
        relationship is relevant (i.e., in connection with the Integrated Products
        only), to Customers, and a “Powered by Commtouch” logo shall be reasonably
        displayed by OEM in connection with the usage of the Integrated Product by
        Customers. The exact location and size of the logo shall be mutually agreed
        upon
        by the parties.

      


      19.
        Independent Contractor Status. The
        Parties are independent contractors under this Agreement, and nothing herein
        shall be construed to create a partnership, joint venture, or agency
        relationship between the parties hereto with the sole exception that OEM
        acts as
        a licensing agent of Commtouch with respect to Programs as provided herein.
        Neither Party shall have authority to enter into agreements of any kind on
        behalf of the other Party. Further, neither Party shall have the power or
        authority to bind or obligate the other Party in any manner towards any third
        party.

      


      20.
        Compliance With Law. Each
        Party shall comply with all applicable laws and regulations of governmental
        bodies or agencies in its performance under this Agreement. Further, each
        of the
        Parties agrees to act in accordance with privacy laws, to the extent applicable,
        governing the use, disclosure, maintenance, handling, etc. of user data and/or
        email content.

      


      21.
        No Assignment. Each
        Party represents that it is acting on its own behalf and is not acting as
        an
        agent for or on behalf of any third party, and further agrees that it may
        not
        assign its rights or obligations under this Agreement without the prior written
        consent of the other Party, provided however, that either party may assign
        all
        of its rights and obligations under this OEM Agreement in the event of a
        sale of
        all or substantially all its assets to or acquisition of its business by
        a third
        party. 

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          11

        

      

      


      22.
        Notices. All
        notices under this Agreement shall be in writing and delivered personally
        or by
        facsimile, email, commercial overnight courier, or certified or registered
        mail,
        return receipt requested, to a party at its respective address set forth
        herein.
        Notices sent to Commtouch hereunder shall be addressed to or sent (in the
        case
        of email) to the “VP Finance” and “General Counsel.”

      


      23.
        Governing Law. All
        questions concerning the validity, operation, interpretation, and construction
        of this Agreement will be governed by and determined in accordance with the
        laws
        of the State of Israel (excluding the U.N. Convention on Contracts for the
        International Sale of Goods) without regard to choice of law principles.
        In any
        action or proceeding to enforce rights under this Agreement, the prevailing
        party shall be entitled to recover reasonable costs and attorneys’ fees. Any
        action arising hereunder shall be brought exclusively before the courts of
        Tel
        Aviv, Israel, and the parties hereto expressly and irrevocably agree to the
        personal jurisdiction of such courts. 

      


      24.
        No Waiver. Neither
        party shall by mere lapse of time without giving notice or taking other action
        hereunder be deemed to have waived any breach by the other party of any of
        the
        provisions of this Agreement. Further, the waiver by either party of a
        particular breach of this Agreement by the other party shall not be construed
        as, or constitute, a continuing waiver of such breach, or of other breaches
        of
        the same or other provisions of this Agreement.

      


      25.
        Force Majeure. A
        party
        will not be deemed to have materially breached this Agreement to the extent
        that
        performance of its obligations or attempts to cure any breach are delayed
        or
        prevented by reason of an act of God, fire, natural disaster, accident, act
        of
        government, shortage of equipment, materials or supplies beyond the reasonable
        control of such party, or any other cause beyond the reasonable control of
        that
        party (a “force
        majeure event”);
        provided that the party whose performances is delayed or prevented promptly
        notifies the other party of the nature and expected duration of the force
        majeure event.

      


      26.
        Severability. If
        any
        provision of this Agreement shall be held illegal, unenforceable, or in conflict
        with any law of a federal, state, or local government having jurisdiction
        over
        this Agreement, the validity of the remaining portions or provisions hereof
        shall not be affected thereby.

      


      27.
        No Conflict of Interest. Each
        Party represents and warrants that it has full power and authority to undertake
        the obligations set forth in this Agreement and that it has not entered into
        any
        other agreements, nor will it enter into any other agreements, that would
        render
        it incapable of satisfactorily performing its obligations hereunder, or place
        it
        in a position of conflict of interest, or be inconsistent of in conflict
        with
        its obligations hereunder. 

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          12

        

      

      


      28.
        Scope of Agreement. Each
        of
        the parties hereto acknowledges that it has read this Agreement, understands
        it,
        and agrees to be bound by its terms. The parties further agree that this
        Agreement is the complete and exclusive state of agreement and supersedes
        all
        proposals (oral or written), understandings, representations, conditions,
        warranties, covenants, and all other communications between the parties relating
        thereto. This Agreement may be amended only by a writing that refers to this
        Agreement and is signed by both parties.

      


      IN
        WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
        by
        their authorized representatives as set forth below:

      
 

      
        
          	
                  Commtouch
                    Software Ltd.

                	
                  IncrediMail,
                    Ltd.

                
	 	 
	
                  By:
                    /s/ Ronni Zehavi

                	
                  By:
                    /s/ Yaron Adler

                
	
                  Ronni
                    Zehavi, VP Int’l BD

                	
                  Yaron
                    Adler, CEO

                
	 	 
	
                  Date: 30             
                    , 2004

                	
                  Date:
                    Dec. 30, 2004

                


        

      

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          13

        

      

      


      EXHIBIT
        “A”

      PAYMENT
        TERMS

      


      Section
        A. Annual Anti-Spam Fee.

      


      A1.
        OEM
        shall
        pay Commtouch an annual fee for each Customer purchasing licenses to the
        Integrated Product based on actual collection, on the following tiered fee
        schedule.


      
        	 	 
	
                Volume
                  Customer Tiers

              	
                Commtouch
                  Annual Fee Per Customer

              
	
                1)
                  First - 25,000 Customers

                2)
                  25,001 - 75,000 Customers

                3)
                  75,001 - 175,000 Customers

                4)
                  175,001 - 375,000 Customers

                5)
                  Above 375,000 Customers

              	
                1)
                  $2.65 per Customer

                2)
                  $2.00 per Customer

                3)
                  $1.80 per Customer

                4)
                  $1.55 per Customer

                5)
                  $1.40 per Customer

              


      

      


      A2.
        During
        the second year of activity, and any subsequent year (a “Subsequent
        Year”),
        the
        Annual Fee Per Customer paid by OEM to Commtouch shall be calculated based
        on
        the Annual Fee Per Customer paid by OEM at the end of the previous year (the
        “Previous
        Year”)
        pursuant to the table set forth in A1 above. Once the Volume Customer Tier
        in
        the Subsequent Year exceeds the last Volume Customer Tier of the Previous
        Year,
        OEM payments to Commtouch will be reduced pursuant to the chart in section
        A1
        above. At the end of each Subsequent Year the parties shall calculate the
        final
        Volume Customer Tier of such year (the “Yearly
        Tier”)
        and if
        the Yearly Tier is lower than the Previous Year’s Yearly Tier, OEM shall pay
        Commtouch the deference between the Previous Year Yearly Tier and the current
        Yearly Tier.

      


      For
        example (any pre-paid sums should be reduced from the following):

       

      
        	
              	a.	
                Scenario
                  1:
                  2005 ends with 80,000 users. OEM pays Commtouch as follows: (25,000
                  * $2.65) + (50,000 * $2.00) + (5,000 * $1.80), or a total sum of 
                  $175,250.
                  2006 ends with 200,000 users. OEM pays Commtouch as follows: (175,000
                  * $1.80) + (25,000 * $1.55) or a total sum of
                  $353,750.

              


      

       

      
        	
              	b.	
                Scenario
                  2:
                  2005 ends with 200,000 users. OEM pays Commtouch as follows: (25,000
                  * $2.65) + (50,000 * $2.00) + (100,000 * $1.80) + (25,000 * $1.55),
                  or a
                  total
                  sum of $385,000. 2006 ends with 50,000 users. OEM pays Commtouch
                  as
                  follows:
                  (50,000 * 2.00), or a total sum of
                  $100,000

              


      

       

      
        	
              	c.	
                Scenario
                  3:
                  2005 ends with 20,000 users. OEM pays Commtouch the minimum sum
                  due.

              


      

      


      A3.
        OEM
        commits to paying Commtouch for at least 25,000 customers for the 1st
        year,
        irrespective of whether OEM has been successful in its collections
        efforts.

      


      A4.
        OEM
        is
        required to provide to Commtouch complete and accurate reports of the number
        of
        Customers during each calendar month under this Agreement. In the event of
        a 60
        days delinquency of a Customer, Commtouch shall be entitled to discontinue
        the
        service to such non paying Customers. Notwithstanding the method of payment
        offered by OEM to Customer, whether upfront or by
        installments, OEM will pay Commtouch the annual fee upon its first collection
        of
        fees from each customer.

      
 

      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          14

        

      

      


      A5.
        Any
        payment by OEM shall be based on collections and will exclude uncollected
        payments (for any reason whatsoever), refunds and/or returns made to Customers
        within 90 days of the end of the trial period of the Integrated Product for
        each
        such Customer. Notwithstanding the above, total refunds on behalf of sales
        in a
        specific month shall not exceed 12.5% of payments made to Commtouch in regards
        to sales in the said month. Other than VAT, the prices detailed above are
        inclusive of any relevant taxes. IncrediMail may deduct from payment any
        applicable taxes, levies, withholdings, which may apply thereon.

      


      Section
        B. Payment

      


      B1.
        Payment
        of annual Anti-Spam Fees by OEM to Commtouch shall be made within thirty
        (30)
        days of the end of each month during with a Customer or Customers have purchased
        from OEM the OEM Product(s) (i.e. completed the registration process necessary
        to purchase the OEM Product (s)), and such payment shall accompany the report
        identified in Section 13.2 to this Agreement. To the extent necessary, Commtouch
        shall submit an appropriate invoice/receipt to OEM following receipt of each
        payment. For purpose of clarification, in no event shall OEM be responsible
        for
        the uncollected fees from Customers. 

      


      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED

        

        
          
          

          
            

          

        

        
          15

        

         

      

      EXHIBIT
        “B”

      OEM
        PRODUCT(S)

      


      
        	1.	
                A
                  stand-alone anti-spam module. An anti-spam component that is either
                  a
                  stand-alone application or an add-on to an IncrediMail product
                  but
                  contains mainly anti-spam features and is charged separately.
                  

              


      

       

       

      
        
          COMMTOUCH
            CONFIDENTIAL. ALL RIGHTS RESERVED