Incredimail 2010 Annual Report Download

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INCREDIMAIL LTD.
FORM 20-F
(Annual and Transition Report (foreign private issuer))
Filed 03/09/11 for the Period Ending 12/31/10
Telephone 972 3 516 0195
CIK 0001338940
Symbol MAIL
SIC Code 7371 - Computer Programming Services
Industry Computer Services
Sector Technology
http://www.edgar-online.com
© Copyright 2011, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ...FORM 20-F (Annual and Transition Report (foreign private issuer)) Filed 03/09/11 for the Period Ending 12/31/10 Telephone CIK Symbol SIC Code Industry Sector 972 3 516 0195 0001338940 MAIL 7371 - Computer Programming Services Computer Services Technology http://www.edgar-online.com © Copyright...

  • Page 2
    ...1934 For the fiscal year ended December 31, 2010 OR 1 TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR 1 SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report...For the...

  • Page 3
    ...is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes 1 No  If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934. Yes 1 No 

  • Page 4
    ...reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 1 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule...

  • Page 5
    ... us on the date of this report. Except as required by applicable law, we undertake no obligation to update or revise any of the forward-looking statements after the date of this annual report to conform those statements to reflect the occurrence of unanticipated events, new information or otherwise...

  • Page 6
    • our ability to maintain substantial revenues from advertisers and further increase these revenues.

  • Page 7
    ...and uncertainties relating to our business described in this annual report at "Item 3.D Risk Factors." Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the...

  • Page 8
    ... Securities by the Issuer and Affiliated Purchasers Changes in Registrant's Certifying Accountant Corporate Governance 71 71 71 72 72 72 72 72 73 73 73 Identity of Directors, Senior Management and Advisers Offer Statistics and Expected Timetable Key Information Information on the Company Unresolved...

  • Page 9
    ... SENIOR MANAGEMENT AND ADVISERS Not applicable. ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. ITEM 3. A. KEY INFORMATION SELECTED FINANCIAL DATA The following tables present selected financial data and should be read in conjunction with "Item 5 - Operating and Financial Review and...

  • Page 10
    ...Google services when providing downloadable applications on which we are heavily dependent; and consequently may terminate the then existing agreement, and renew it under different terms, effective as of July 1, 2010. This agreement was subsequently amended and extended under similar terms effective...

  • Page 11
    ... and services attractive to new users. In order to induce those consumers to use our products, accept the search properties offered, and purchase or license our products, we must continually enhance our existing products by offering additional features and content that appeal to our unique user base...

  • Page 12
    ... email users have multiple email clients and accounts, many of which are likely provided to them free of charge by large Internet and software companies, positively affects the potential market demand for our enhanced email software products. On the other hand, the growing popularity of web based...

  • Page 13
    ... than the company's ability to provide differentiating advantages to its downloadable solution, this could result in fewer downloads of our product and our ability to offer search services, less use of our product, fewer purchases of our products and services and loss of market share. See "Item...

  • Page 14
    ... security requirements and take all reasonable steps to insure the security of personal information, concerns may be expressed, from time to time, about whether our products compromise the privacy or confidentiality of the information of users and others. Concerns about our collection, use, sharing...

  • Page 15
    ... testing by some of our registered users, errors, failures or bugs may not be found in new products or releases until after commencement of commercial sales. In the past, we have discovered software errors, failures and defects in certain of our product offerings after their introduction and have...

  • Page 16
    ...sufficient share of an increasingly important portion of the market for online services, our product will become less relevant and may fail to attract advertisers and web traffic. Exchange rate fluctuations may decrease our earnings if we are not able to hedge our currency exchange risks effectively...

  • Page 17
    ... copying of our products or other third party violations of existing legal protections or reductions in the legal protection for intellectual property rights of software developers or use of open source software could adversely affect our distribution and revenue. The software products that we sell...

  • Page 18

  • Page 19
    ... to change the name of our Company or products, we may experience a loss in goodwill associated with our brand name, customer confusion and a loss of sales. Any lawsuit, regardless of its merit, would likely be time-consuming, expensive to resolve and require additional management time and attention...

  • Page 20
    ... number of services for free. The internet and internet based companies are providing an increasing number of services for free, including email clients and antispam software and services. A substantial part of our revenues comes from selling software products and services, currently accounting...

  • Page 21
    ... be material and we may not be able to comply with the applicable regulations in a timely or cost-effective manner. In response to evolving legal requirements, we may be compelled to change our business model and practices, which could reduce our sales, and we may not be able to replace the revenues...

  • Page 22
    ... as costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, the rules of the Nasdaq Stock Market, the provisions of the Israeli Securities Law that apply to dual listed companies (companies that are listed on the Tel Aviv Stock Exchange...

  • Page 23
    ...of our Company, which could prevent a change of control and, therefore, depress the price of our shares. Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or...

  • Page 24
    ... We are an Internet content and media company, whose products we believe bring a new level of fun, personality and convenience to email, desktops and screen savers, and have been downloaded more than eighty million times. Having secured a large active email user base, IncrediMail is now branching...

  • Page 25
    ... the number of individual users as a user may register more than one time. In addition, the term "active user" as used in this annual report means a registered user whose computer the Company can communicate with in order to verify if any of its products are resident on such computer, in the 30 days...

  • Page 26
    ..., in order to grow our business, beyond the organic growth, the Company intends to invest in acquiring other products and extend the business. This will enable us to diversify our revenue base, better serve the needs of our users and reduce the time required to offer these new products. By focusing...

  • Page 27
    ... version of IncrediMail® Xe . Users who upgrade their free version of IncrediMail through the purchase of IncrediMail ® Premium benefit from the following features no advertising banners displayed in the product; the ability to change the appearance of the product through the use of software...

  • Page 28
    21

  • Page 29
    ..."). HiYo is bringing new users and demographics into the IncrediMail ® experience. PhotoJoy soon to be marketed, is designed to reveal on a user's desktop all chosen photos saved on a user's personal computer. In addition, the software allows users to take photos from photo hosting web sites (such...

  • Page 30
    ... software products and services that aim to offer a simple, safe and useful application, providing a personalized and entertaining email experience for consumers. IncrediMail was among the first companies to offer to the consumer email market a solution that combines an email product with an online...

  • Page 31
    ... Yahoo! Mailâ„¢. Many of the large Internet and software companies offer their email software programs free of charge. Our Magentic and PhotoJoy products' main competitors, in area of providers of wallpapers, screensaver and digital photo management offer the following products: Picasa, webshots.com...

  • Page 32
    ...and disclosure of user data on our websites. Our website informs users both through a brief summary and a complete privacy policy what information we collect about them and about their use of our services. We also provide users with the opportunity to opt out of receiving certain communications from...

  • Page 33
    ... have data security breach laws that impose various requirements on service providers to report to state attorneys general and send notices to affected consumers in the event of a breach of security of network and computer systems that compromise a user's personal financial and other information...

  • Page 34
    ... using any IncrediMail® product or service, including opening or sending emails using IncrediMail®, sending a message utilizing our HiYo tool, downloading content or updating the product, in the 30 days prior to the measurement date. Our users use our products for as long as six years, based...

  • Page 35
    ... 2009, remaining at that level in 2010. As part of our growth strategy for 2011, we intend to significantly increase customer acquisition costs in 2011, both nominally and as a percentage of sales, in order to increase the number of downloads, users and revenue generated. General and Administrative...

  • Page 36
    ... in our email client, are recognized when we are entitled to receive the fee. Advertisers are charged and pay monthly, based on the number of clicks generated by users clicking on these ads. In accordance with ASC 605-50, "Customer Payments and Incentives" the Company accounts for cash consideration...

  • Page 37
    ... different term licenses constituted less than 5% of our revenues in 2010. Our estimation of the lifetime usage of The Gold Gallery is six years and is based on historical data collected. We continually track usage patterns, and as we gather more user information, we may update this estimated useful...

  • Page 38
    ...step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Impairment of investments in marketable securities. On April 1, 2009, we adopted a new guidance that changed the impairment and presentation model for our available for sale...

  • Page 39
    ...our continued focus on search generated revenues, as well as the decreasing popularity in purchasing downloadable software and the effect of the economic downturn in 2009 had on discretionary purchases. In the latter part of 2010, we saw this trend level out, with new product sales increasing. As we...

  • Page 40
    ... being provided by our partnership with Google and the remaining 12% coming from other search providers, primarily InfoSpace. The continued increase in search generated revenues reflects the success of our strategy to leverage our large user base, primarily those using our free products. In 2010 we...

  • Page 41
    ... downloadable software and the effect of the economic downturn in 2009 had on discretionary purchases. We believed that in 2010 we would be able to reverse this trend and see some growth in product sales, as a result of increased marketing efforts and an improvement in the economic environment. Cost...

  • Page 42
    ... revenues from PhotoJoy. We signed a new two-year agreement with Google for powering the search offered to IncrediMail and HiYo users. Although there are several changes in the terms and conditions in the new agreement, we expect that the new agreement will provide results similar to those of the...

  • Page 43
    ..., safe and useful products that assist in better utilizing their time. We intend to address this unique market segment by further adapting our products to better address their evolving requirements as well as offering them other products and services that they use frequently and address similar...

  • Page 44
    .... In addition, the software lets users take photos stored on other photo web sites (such as Flickr and Picasa) and enjoy them using PhotoJoy's fun capabilities. Until now we did not have the back-end systems required to support customer acquisition efforts needed for this product, as it is not...

  • Page 45
    ... three year term. Mr. Adler served as the Company's Chief Executive Officer since February 5, 2008 up until being replaced by Mr. Josef Mandelbaum on August 5, 2010 and Chief Product Officer until November 2, 2011 Before co-founding the Company, Mr. Adler worked as a trader and portfolio manager at...

  • Page 46

  • Page 47
    ... design and development of our products and online system. In that capacity he manages our research and development team as well as our quality assurance and information technology departments. As COO, Yuval is also responsible for business intelligence and customer support. Yuval joined us in 2000...

  • Page 48
    ... by IncrediMail promptly after the date of grant. In accordance with the shareholders approval of December 27, 2007 each of the directors who is not an employee of the Company, receives for each year of service by such person as a director of the Company, an option to purchase 10,000 ordinary shares...

  • Page 49
    ..., our directors' recurring annual stock option grants now have a vesting period of three years (instead of four years) from the date of their annual stock option grant. Also, upon termination or expiration of the applicable director's service with the Company, provided that the termination or...

  • Page 50
    ... as required to be provided under our articles of association. Shareholders may remove a director who is not an external director from office only by a resolution approved by shareholders holding more than two-thirds of the voting power of the issued and outstanding share capital of IncrediMail. The...

  • Page 51
    ... votes); or the total number of shares of non-controlling shareholders voted against the election of the external director does not exceed one percent of the aggregate voting rights in the company. • The Israeli Companies Law provides for an initial three-year term for an external director...

  • Page 52
    ... or (3) serving at, or providing services on a regular basis, to a company that controls the company or to a company that is under common control with the company or (4) directors who do not receive compensation from the company. A company also may issue shares or options to an external director at...

  • Page 53
    ...written charter. The compensation committee is authorized to approve on a yearly basis, the terms of compensation for officers who are not directors, the issuance of employee share options under our share option and benefit plans and approve incentive compensation for our other employees. Nominating...

  • Page 54
    ..., effective July 6, 2010, with Josef Mandelbaum to retain his services as Chief Executive Officer. The employment agreement does not provide for a specified term and may be terminated by either party upon 180 days prior notice. The employment agreement includes the grant of options, the terms of...

  • Page 55
    ...accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Ordinary shares that are subject to warrants or stock options that are presently exercisable or exercisable within 60 days of a specified date are deemed to...

  • Page 56
    ... certain tax benefits in connection with share-based compensation. Please also see Note 10 of our financial statements included in this annual report for information on the options issued under our plan. Under the 2003 Plan, we may grant to our directors, officers, employees, service providers and...

  • Page 57
    without re-pricing for 24 months following the end of the calendar year in which the options were granted, and if granted after January 1, 2006, for only 24 months. We may not deduct expenses pertaining to the options for tax purposes. 48

  • Page 58
    ...individual option agreements that if the options are not substituted or exchanged by a successor company, then the vesting of the options shall accelerate. Adjustments to the number of options or exercise price shall not be made in the event of rights offering on outstanding shares. In November 2010...

  • Page 59
    ... the closing price of an ordinary share on July 17, 2008, as reported by the Nasdaq Global Market; and (b) the options shall vest in four equal portions on each anniversary of the date of approval of the grant, commencing with the first anniversary. Any and all other terms and conditions pertaining...

  • Page 60
    .... It was resolved that; (a) the recurring annual stock option grants to the directors, for board service, will have a vesting period applicable to one term of office of a director, which under the Company's articles of association is a term of three (3) years (instead of a vesting period of four...

  • Page 61
    ...closing prices of our ordinary shares, as reported on the Nasdaq Global Market and on the Tel Aviv Stock Exchange on March 8, 2011 , which are the last full trading days before filing of this annual report, were $7.45 and NIS 26.47, (equal to $7.39 based on the Bank of Israel representative exchange...

  • Page 62
    ...SHAREHOLDERS Not applicable. E. DILUTION Not applicable. F. EXPENSES OF THE ISSUE Not applicable. ITEM 10. A. ADDITIONAL INFORMATION SHARE CAPITAL At our 2010 annual shareholder meeting held on January 6, 2011, the shareholders resolved to increase the authorized share capital of the Company...

  • Page 63
    ... company's office holders with respect to certain liabilities incurred by them require the approval at a general meeting of shareholders holding more than two-thirds of the voting power of the issued and outstanding share capital of the company. Notices Under the Israeli Companies Law, shareholders...

  • Page 64
    ... and shareholder approval, in such order. Disclosure of personal interest. The Israeli Companies Law requires that an office holder promptly disclose to the company any personal interest that he or she may have and all related material information known to him or her, in connection with any existing...

  • Page 65
    ... association; an increase in the company's authorized share capital; a merger; or approval of related party transactions that require shareholder approval. A shareholder has a general duty to refrain from depriving any other shareholder of their rights as a shareholder. In addition, any controlling...

  • Page 66
    ... companies' shareholders resolved to approve the merger, and (ii) at least 50 days have passed from the time that the merger proposal was filed with the Israeli Registrar of Companies. Tender Offer. The Israeli Companies Law requires a purchaser to conduct a tender offer in order to purchase shares...

  • Page 67
    ... to our shareholders at the Company's offices and mail such reports to shareholders upon request. IncrediMail also files its annual reports with the SEC. As a foreign private issuer, we are generally exempt from the SEC's proxy solicitation rules. Quorum - Under Israeli law a company is entitled...

  • Page 68
    ... for the activity performed through the Company's applications. The July 1, 2008 agreement with Google was amended in January 2009, primarily so as to add our HiYo product to our collaboration with Google, on July 1, 2009 it was amended and extended for another two years, and in June 2010 it was...

  • Page 69
    The employment agreements with our principal officers are described under "Item 6.C Board Practices - Employment Agreements". D. EXCHANGE CONTROLS Non-residents of Israel who hold our ordinary shares are able to receive any dividends, and any amounts payable upon the dissolution, liquidation and ...

  • Page 70
    ... program. The benefits available to an Approved Enterprise are conditioned upon terms stipulated in the Investment Law and the regulations thereunder and the criteria set forth in the applicable certificate of approval. If we do not fulfill these conditions in whole or in part, the benefits...

  • Page 71
    ... Enterprise - Year of Election), or 12 years from the first day of the Year of Election. The tax benefits granted to a Beneficiary Enterprise are determined, as applicable to its geographic location within Israel. Similar to the previously available alternative route, exemption from corporate tax on...

  • Page 72
    ... defined as an enterprise whose major activity in a given tax year is industrial production. The following corporate tax benefits, among others, are available to Industrial Companies: • amortization of the cost of purchased know-how and patents, which are used for the development or advancement of...

  • Page 73
    ... as well as in Israel) there is a special relationship between the parties (including but not limited to family relationship or a relationships of control between companies), and due to this relationship the price set for an asset, right, service or credit was determined or other conditions for the...

  • Page 74
    ...U.S., or that corporation is eligible for benefits of a comprehensive income tax treaty with the U.S. which includes an information exchange program and is determined to be satisfactory by the U.S. Secretary of the Treasury. The Internal Revenue Service has determined that the U.S.-Israel Tax Treaty...

  • Page 75
    ... person who is or was a 10-Percent Shareholder at any time during the five-year period ending with the sale or exchange is treated as dividend income to the extent of earnings and profits of the company attributable to the stock sold or exchanged. Under certain circumstances, a corporate shareholder...

  • Page 76
    ...or more in the taxable year of the sale or exchange, and other conditions are met. Passive Foreign Investment Company Considerations Special U.S. federal income tax rules apply to U.S. Holders owning shares of a passive foreign investment company. A non-U.S. corporation will be considered a passive...

  • Page 77
    ...the consequences of investing in a passive foreign investment company. Information Reporting and Back-up Withholding Holders generally will be subject to information reporting requirements with respect to dividends paid in the United States on ordinary shares. In addition, Holders will be subject to...

  • Page 78
    ... to in this annual report on Form 20-F, is available for public view (subject to confidential treatment of agreements pursuant to applicable law) at our principal executive offices at IncrediMail Ltd., 4 HaNechoshet Street, Tel-Aviv 69710, Israel. I. SUBSIDIARY INFORMATION Not applicable. ITEM 11...

  • Page 79
    ... fair value of marketable securities presented as part of cash, and cash equivalents and marketable securities, which are subject to risk of changes in interest rate, segregated by maturity dates as of December 31, 2010, were as follows: Up to 1 year Corporate debentures U.S. government agency...

  • Page 80
    ...Exchange Act) as of December 31, 2010. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2010, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file...

  • Page 81
    ... public accounting firm for the last three years in thousands: 2009 Audit Fees Tax Fees Other Total $ 96 92 188 $ 2010 128 68 9 205 $ Audit Fees include audit services, quarterly reviews. Audit related fees includes consultation regarding financial reporting. Tax fees include: corporate tax...

  • Page 82
    ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS Not applicable. ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT Not applicable. ITEM 16G. CORPORATE GOVERNANCE As a foreign private issuer whose shares are listed on the Nasdaq Global Market, we are ...

  • Page 83
    ...'s 2003 Israeli Share Option Plan and the form of Option Agreement (1) Google Services Agreement, dated December 27, 2010* Stock Purchase Agreement among Ofer Adler, the Company and the purchasers listed therein, dated January 24, 2011. Registration Rights Agreement among the Company and the...

  • Page 84
    INCREDIMAIL LTD. AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2010 IN U.S. DOLLARS INDEX Page Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2009 and 2010 Consolidated Statements of Income for the Years Ended ...

  • Page 85
    ...Aviv 67067, Israel Tel: 972 (3)6232525 Fax: 972 (3)5622555 www.ey.com/il REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of INCREDIMAIL LTD. & We have audited the accompanying consolidated balance sheets of Incredimail Ltd. ("the Company") and its...

  • Page 86
    INCREDIMAIL LTD . AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31, 2009 2010 ASSETS CURRENT ASSETS: Cash and cash equivalents Marketable securities Trade receivables Other receivables and prepaid expenses Total current assets LONG-TERM ASSETS: Severance pay ...

  • Page 87
    ...: Deferred revenues Accrued severance pay Total long-term liabilities COMMITMENTS AND CONTINGENT LIABILITIES SHAREHOLDERS' EQUITY: Share capital Ordinary shares of NIS 0.01 par value Authorized: 15,000,000 shares as of December 31, 2009 and 2010; Issued and outstanding: 9,527,821 and 9,701,750...

  • Page 88
    INCREDIMAIL LTD . AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands (except per share data) Year ended December 31, 2009 2010 2008 Revenues: Advertising and other services Products $ 12,748 9,158 21,906 $ 20,478 6,717 27,195 1,505 25,690 $ 24,093 5,404 29,497 1,...

  • Page 89
    ...share options Dividends Repurchase of Ordinary shares Comprehensive income: Net income Changes in unrealized holding gains on marketable securities, net Balance as of December 31, 2009 Stock based compensation expense Excess tax benefit from share-based payment arrangements Exercise of share options...

  • Page 90
    ... Capitalization of content costs and domain Proceeds from sales of marketable securities Investment in marketable securities Net cash provided by (used in) investing activities Cash flows from financing activities: Exercise of share options Excess tax benefit from share-based payment arrangements...

  • Page 91
    INCREDIMAIL LTD . AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Year ended December 31, 2009 2010 2008 Significant non-cash transactions: Purchase of property and equipment on credit $ The accompanying notes are an integral part of the consolidated financial ...

  • Page 92
    ... from advertising, by offering search powered by search providers, to the users of its applications, as well as from selling premium versions of its email products. The Company has one major customer which accounted for 49%, 68% and 70% of total revenues, in 2008, 2009 and 2010, respectively. Losing...

  • Page 93
    ... to be cash equivalents. e. Marketable securities: The Company accounts for investments in debt securities in accordance with ASC 320, "Investments - Debt and Equity Securities". Management determines the appropriate classification of its investments in debt securities at the time of purchase and...

  • Page 94
    ... from products include licensing the right to use its email software, content database and email anti spam. The Company generates revenues from search related advertising, receiving a share of the advertising revenues from companies providing search capabilities. In addition, the Company offers...

  • Page 95
    ... evidence of an agreement exists, delivery of the product has occurred, the fee is fixed or determinable, and collectability is probable. The Company's e-mail users may also purchase a license to its content database. This content database provides additional Incredimail content files in the form...

  • Page 96
    ... for the years ended December 31, 2008, 2009 and 2010 amounted to $3,466,000, $1,938,000 and $1,782,000, respectively. m. Content costs: The Company assembles content for the use of its customers through purchases of a variety of creative and diverse graphics, sound and multimedia from third party...

  • Page 97
    ... with respect to sales of the Company's software products and content database, as these sales are primarily obtained through credit card sales. The Company's major customer is financially sound, and the Company believes low credit risk is associated with this customer. To date, the Company has not...

  • Page 98
    ... options excluded from the calculations of diluted net earnings per Ordinary share because these securities are anti-dilutive was 1,205,834, 789,411 and 922,069 for the years ended December 31, 2008, 2009 and 2010, respectively. q. Accounting for stock-based compensation: The Company accounts...

  • Page 99
    INCREDIMAIL LTD AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.) The fair value of the Company's stock options granted to employees and directors was estimated using the following weighted average assumptions: Year ended December 31, 2008...

  • Page 100
    ...from time to time on the open market and holds such shares as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction of shareholders' equity. u. Impact of Recently Issued Accounting Standards Adoption of New Accounting Standards: In January 2010, the FASB updated...

  • Page 101
    ... have been reclassified in order to conform to current year presentation. NOTE 3:MARKETABLE SECURITIES The Company's marketable securities are classified as available-for-sale securities and are carried at fair value. The following table summarizes amortized costs, gross unrealized holding gains...

  • Page 102
    INCREDIMAIL LTD AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3:MARKETABLE SECURITIES (Cont.) For securities with fair value that is less than the amortized cost and that the Company intends to sell or it is more likely than not that it will be required to sell the securities ...

  • Page 103
    ...CONTINGENT LIABILITIES The Company rents its facilities under an operating lease agreement with an initial term expiring in November 2011, with an option for additional two years. Future minimum lease commitments under non-cancelable operating leases are $554,000 as of December 31, 2010. Total rent...

  • Page 104
    ... to the statutory Israeli corporate tax rate and the Company could be required to refund a portion of the tax benefits already received, with respect to such programs. As of December 31, 2010, management believes that the Company is in compliance with all the conditions required by the Law. In...

  • Page 105
    ... 9:INCOME TAXES (Cont.) The Company is examining the possible effect of the amendment on its results, and at this time has not yet decided whether to opt to apply the amendment. b. Corporate tax rates in Israel: The regular corporate tax rate in Israel in 2008 and 2009 and 2010 was 27% and 26% and...

  • Page 106
    ...benefits Non-deductible expenses Previous years taxes Losses (gains) from marketable securities and ARSs for which valuation allowance has been provided Other Taxes on income $ $ Year ended December 31, 2008 2009 2010 U.S. dollars in thousands, except for per share data Benefit per Ordinary share...

  • Page 107
    ... beginning and ending balances of unrecognized tax benefits is as follows: December 31, 2009 2010 U.S. dollars in thousands Balance at January 1, 2010 Reductions for prior year tax positions Increases in tax positions for current year Balance at December 31, 2010 g. Income before taxes on income is...

  • Page 108
    ... recorded as Treasury stock, at cost as part of shareholders' equity. c. Share option plans: In 2003, the Company adopted a share option plan ("the 2003 Option Plan"). Under the 2003 Option Plan, employees, officers and non-employees may be granted options to acquire Ordinary shares. Pursuant to the...

  • Page 109
    ... NOTE 10:SHAREHOLDERS' EQUITY (Cont.) A summary of the activity in the share options granted to employees and directors for the year ended December 31, 2010 and related information is as follows: Weighted average exercise price Weighted average remaining contractual term Number of options Years...

  • Page 110
    ... NOTE 11:SUPPLEMENTARY DATA ON SELECTED CONSOLIDATED STATEMENTS OF INCOME ITEMS a. Goodwill impairment and other charges: Year ended December 31, 2008 2009 2010 U.S. dollars in thousands Goodwill impairment Severance and other employee related Termination benefit Contract termination costs $ 125 528...

  • Page 111
    ...127 322 66 66 4,494 $ Net income available to Ordinary shareholders Numerator: 2. Denominator: Denominator for basic net earnings per share Weighted average number of Ordinary shares, net of treasury stock Effect of dilutive securities: Add - stock options Denominator for diluted net earnings per...

  • Page 112
    ... according to the terms of the contracts, based on the gross fair value of the Company's derivative contracts that are favorable to the Company, was approximately $27,000, presented as part of other receivables and prepaid expenses, as of December 31, 2010. The Company has limited its credit risk...

  • Page 113
    ... The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. IncrediMail Ltd. /s/ Josef Mandelbaum Josef Mandelbaum Chief Executive Officer Date: March 9, 2011 75

  • Page 114
    ...'s 2003 Israeli Share Option Plan and the form of Option Agreement (1) Google Services Agreement, dated December 27, 2010* Stock Purchase Agreement among Ofer Adler, the Company and the purchasers listed therein, dated January 24, 2011. Registration Rights Agreement among the Company and the...

  • Page 115
    ... displayed to End Users in that period in accordance with the applicable Agreement; "AdSense Services" means the AdSense services listed on the front pages of the applicable Order Form, as updated by Google from time to time; "AdSense Site" means, for the AdSense Services, the web site(s) located at...

  • Page 116
    ...third party for which Company is providing the Site on a white label basis; "End Users" means individual human end users of a Site, Approved Client Application or Feed; "Equivalent Ads" means any advertisements that are the same as or substantially similar in nature to the AFS Ads provided by Google...

  • Page 117
    ... sending search queries to Google as part of a Request; "Search Query" means a search query submitted directly on the Site or through any Approved Client Application by an End User by way of a Search Box; "Search Result" means a search result forming part of a Search Results Set; "Search Results Set...

  • Page 118
    2. 2.1 Implementation Requirements Launch of the AdSense Services and Search Services (a) (b) The parties will each use their reasonable endeavours to launch the AdSense Services and Search Services into live use within [***] from the effective date of the applicable Order Form. Company will not ...

  • Page 119
    ... or in any non-transitory manner store or cache information obtained from the Services (including any Results); display on any Site, Approved Client Application or Feed, any content that violates or encourages conduct that would violate any applicable laws, any third party rights, the Google Program...

  • Page 120
    ... will not knowingly or negligently allow any use of or access to the Services through any Site, Approved Client Application or Feed which is not in compliance with the terms of the applicable Agreement or not otherwise approved by Google. Company will use its reasonable endeavours to monitor for any...

  • Page 121
    ... and content of any Site, Approved Client Application or Feed in a manner consistent with its obligations under this Agreement. Company will provide Google with at least [***] advance notice of any change in code or serving technology that could reasonably be expected to affect use of the Services...

  • Page 122
    ...provide the Services or, where Company has ordered the Search Services and/or AdSense Services , any Google Brand Feature infringe (s) any Intellectual Property Rights of that third party; or Google receives a claim from a third party that the Company Content, Site and/or Approved Client Application...

  • Page 123
    ... from content, information or data provided to Company by Google save where Company's use of such content, information or data is in breach of the terms and conditions of this GSA or any Agreement. Google may (at its sole discretion) suspend Company's use of any Services or Google Brand Features...

  • Page 124
    ... Users that third parties may be placing and reading cookies on End Users' browsers or using web beacons to collect information in the course of advertising being served on the applicable Site(s); and includes information about End Users' options for cookie management. 14.3 14.4 14.5 14.6 Google...

  • Page 125
    ... provided under the relevant Order Form) calculated across [***] is less than or equal to [***]. The parties acknowledge that following any removal of the AFC Services from any Site or termination of an Agreement pursuant to clause 15.5 or 15.6, Company may continue to receive the applicable Google...

  • Page 126
    ... applicable Agreement(s); and (b) the assignment takes effect from 23:59 on the last day of the relevant calendar month. [***] Except as expressly stated otherwise, nothing in this GSA or any Agreement will create or confer any rights or other benefits in favour of any person other than the parties...

  • Page 127
    Signed by the parties on the dates shown below. Google By: _____ Print Name: _____ Title: _____ Date: _____ Company By: _____ Print Name: _____ Title: _____ Date: _____

  • Page 128
    ... UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Google Ireland Limited Gordon House Barrow Street Dublin 4 Ireland Google Search and Advertising Services Agreement ORDER FORM COMPANY: Incredimail Ltd GSA Effective Date: 1 st January 2011 commercial contact...

  • Page 129
    ... AdSense Revenues for AFS payable to Company [***] [***] (see Mock-Up screenshots attached at Exhibits A, B, C and D) Approved Client Application(s): Incredimail toolbar Hiyo toolbar (see Mock-Up screenshots attached at Exhibits E and F) Payment Information Details currency : 1 Euros 1 GB pounds...

  • Page 130
    ... TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. GSA Order Form Terms and Conditions "GSA" means the Google Search and Advertising Services Agreement entered into between Google Ireland Limited ("Google") and Company with the GSA Effective Date stated on...

  • Page 131
    -3-

  • Page 132
    ... entered into the Search Box by the End User. 3.4.2 3.4.3 3.4.4 3.4.5 3.4.6 3.5 3.6 Google may from time to time require that particular words or terms are not used as Company Provided Keywords. Google may prohibit the sending of Requests by Company using Company Provided Keywords, may refuse...

  • Page 133
    email) such consent not to be unreasonably withheld or delayed. Google may require Company to provide mock-ups of the Site incorporating Search History before giving such approval. -4-

  • Page 134
    ... with the GSA. Google Brand Features No licence to use Google Brand Features is granted by Google to Company under this Agreement and Company shall not be permitted to include any Google Brand Features or attribution on any Site or as part of or in association with any Approved Client Application...

  • Page 135
    Signed by the parties on the dates shown below. Google By: _____ Print Name: _____ Title: _____ Date: _____ Company By: _____ Print Name: _____ Title: _____ Date: _____ -6-

  • Page 136
    PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. MOCK - UPS EXHIBIT A [***] -7-

  • Page 137
    PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. EXHIBIT B [***] -8-

  • Page 138
    EXHIBIT B CONTINUED [***] -9-

  • Page 139
    PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. EXHIBIT C [***] - 10 -

  • Page 140
    EXHIBIT C CONTINUED [***] - 11 -

  • Page 141
    PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. EXHIBIT D [***] - 12 -

  • Page 142
    PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. EXHIBIT E [***] - 13 -

  • Page 143
    EXHIBIT E CONTINUED [***] - 14 -

  • Page 144
    EXHIBIT E CONTINUED [***] - 15 -

  • Page 145
    EXHIBIT E CONTINUED [***] - 16 -

  • Page 146
    EXHIBIT E CONTINUED [***] - 17 -

  • Page 147
    PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. EXHIBIT F [***] - 18 -

  • Page 148
    EXHIBIT F CONTINUED [***] - 19 -

  • Page 149
    PORTIONS OF THIS SCHEDULE WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Schedule 1 - Client Application Guidelines [***] - 20 -

  • Page 150
    PORTIONS OF THIS APPENDIX WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. APPENDIX A [***] - 21 -

  • Page 151
    PORTIONS OF THIS APPENDIX WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Appendix B [***] - 22 -

  • Page 152
    PORTIONS OF THIS APPENDIX WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Appendix C [***] - 23 -

  • Page 153
    PORTIONS OF THIS APPENDIX WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Appendix D-1 [***] - 24 -

  • Page 154
    Appendix D-2 [***] - 25 -

  • Page 155
    PORTIONS OF THIS APPENDIX WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Appendix E [***] - 26 -

  • Page 156
    Appendix E (continued) [***] - 27 -

  • Page 157
    PORTIONS OF THIS APPENDIX WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS. Appendix F [***]

  • Page 158
    ... the purchasers set forth on the signature pages hereto (each, a " Purchaser " and collectively, the " Purchasers ") and IncrediMail Ltd., an Israeli corporation (the " Company "). WHEREAS, Seller desires to sell certain of his shares of the Company's ordinary shares, par value New Israeli Shekels...

  • Page 159
    ..., to such Purchaser's right, at all times, to sell or otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. Nothing...

  • Page 160
    ... decision based only on public information. Such Purchaser acknowledges that the Seller may have non-public information (which may or may not be relevant to such Purchaser's consideration of an investment in the Shares) with respect to the Company which each Purchaser agrees need not be provided to...

  • Page 161
    ...Purchasers will acquire all right, title and interest in the Shares, free and clear of any lien, encumbrance or pledge other than restrictions on transfer in accordance with applicable securities laws. Such Seller has held the Shares continuously since the date such Shares were issued by the Company...

  • Page 162
    ...for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto, being collectively referred to herein as the " SEC Reports ") on a timely basis or has received a valid extension of...

  • Page 163
    ... and agrees to provide to the Purchasers and the Company any and all documents which may be reasonably required in order to effectuate the transactions contemplated by this Agreement. The Company will use its reasonable best efforts to prepare and file with the Securities and Exchange Commission...

  • Page 164
    ... to Purchase the Shares on the Closing Date . The obligation hereunder of each Purchaser to purchase the Shares from the Seller is subject to the satisfaction or waiver, on or before the Closing, of each of the conditions set forth below. a. This Agreement and the Registration Rights Agreement shall...

  • Page 165
    ... mail or overnight delivery (with evidence of delivery) to such party at the address set forth on the signature page hereto and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right...

  • Page 166
    ... when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered...

  • Page 167
    ...have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. SELLER _____ Ofer Adler Address: Facsimile: PURCHASER _____ By:_____ Name: Title: Address: Facsimile: Attn: Number of Shares being purchased:_____ INCREDIMAIL LTD. (FOR THE...

  • Page 168
    ... s pertaining solely to Rule 415 which are received by the Company from the Commission to a filed Registration Statement, a copy of which shall have been provided by the Company to the Holders, which either (i) requires the Company to limit the number of Registrable Securities which may be included...

  • Page 169
    ... Statements required to be filed due to SEC Restrictions, the 15 th day following the applicable Restriction Termination Date. th "Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities. "Indemnified Party" has the meaning set forth...

  • Page 170
    .... By 5:00 p.m. (New York City time) on the Business Day immediately following the Effective Date of each Registration Statement, the Company shall file with the Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in connection with sales pursuant to such...

  • Page 171
    ... Shares ") and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities, in each case as the Commission may require in order for the Commission to allow such Registration Statement to become effective; provided , that in no event may the Company...

  • Page 172
    ...Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond...

  • Page 173
    ... made, not misleading (provided that the Holder agrees to keep such information confidential until it is publicly disclosed). (d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement...

  • Page 174
    ... Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions, and except to the extent provided for in this Agreement or in the Purchase Agreement (the " Transaction Documents "), any legal fees or other costs...

  • Page 175
    ... Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable...

  • Page 176
    ..., within ten Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided , that the Indemnifying Party may require such Indemnified Party to undertake to reimburse...

  • Page 177
    ... amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or...

  • Page 178
    ... the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to...

  • Page 179
    ... or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and...

  • Page 180
    ... evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any...

  • Page 181
    ... be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Investors has been provided with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do...

  • Page 182
    IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. INCREDIMAIL LTD. By:_____ Name: Josef Mandelbaum Title: Chief Executive Officer By:_____ Name: Yacov Kaufman Title: Chief Financial Officer [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK...

  • Page 183
    IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. NAME OF INVESTING ENTITY _____ By: _____ Name: Title: ADDRESS FOR NOTICE c/o: _____ Street: _____ City/State/Zip: _____ Attention: _____ Tel: _____ Fax: _____ Email: _____ 16

  • Page 184
    ... applicable exchange; privately negotiated transactions; to cover short sales made after the date that this Registration Statement is declared effective by the Commission; broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share...

  • Page 185
    ... had no agreements or understandings, directly or indirectly, with any person to distribute any such securities. The Company has advised each Selling Stockholder that it may not use shares registered on this Registration Statement to cover short sales of Common Stock made prior to the date on which...

  • Page 186
    ...Registration Rights Agreement, dated as of January __, 2011 (the "Registration Rights Agreement" ), among the Company and the Investors named therein. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms used and...

  • Page 187
    ... in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? Yes 4 No 4 Note: If no, the Commission's staff has indicated...

  • Page 188
    ... Company has advised each Selling Stockholder that it may not use shares registered on the Registration Statement to cover short sales of Common Stock made prior to the date on which the Registration Statement is declared effective by the Commission, in accordance with 1997 Securities and Exchange...

  • Page 189
    ... authorized agent. Dated: _____ Beneficial Owner: _____ By: _____ Name: Title: PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: Yigal Arnon & Co. 1 Azrieli Center 46 th Floor (Round Tower) Tel Aviv, Israel 67021 Facsimile: (9723...

  • Page 190
    Exhibit 8 List of all subsidiaries 1. 2. IncrediMail Inc., a Delaware corporation. BizChord Ltd., a company incorporated in Israel.

  • Page 191
    ... the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report...

  • Page 192
    ... the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report...

  • Page 193
    ... CERTIFICATION OF PERIODIC FINANCIAL REPORTS UNDER 18 U.S.C 1350 In connection with the Annual Report on Form 20-F of IncrediMail Ltd., (the "Issuer"), for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby...

  • Page 194
    ...connection with the Annual Report on Form 20-F of IncrediMail Ltd., (the "Issuer") for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies that: 1. 2. The Report containing the financial statements...

  • Page 195
    ... the 2003 Israeli Share Option Plan of Incredimail Ltd., of our report dated March __ 2011, with respect to the consolidated financial statements of IncrediMail Ltd. and its subsidiaries included in this Annual Report on Form 20-F for the year ended December 31, 2010. Tel Aviv, Israel March 9, 2011...