Execution Copy


                           SALE AND PURCHASE AGREEMENT


                                  BY AND AMONG


                            COMMTOUCH SOFTWARE LTD.,


                                 COMMTOUCH INC.,


                              WINGRA, INCORPORATED,


                            WINGRA TECHNOLOGIES, LLC,


                                    JAN EDDY


                                       AND


                                  STEVE ENTINE


                                February 25, 2002
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                           SALE AND PURCHASE AGREEMENT

                  THIS SALE AND PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of February 25, 2002,  by and between  Commtouch  Software  Ltd.
("Commtouch"), an Israeli corporation, Commtouch Inc., a wholly-owned subsidiary
of  Commtouch  and  a  California  corporation  ("CI"),   Wingra,   Incorporated
("WingraInc"),   a   wholly-owned   subsidiary  of  Commtouch  and  a  Wisconsin
corporation,   Wingra  Technologies,  LLC  ("WingraLLC"),  a  Wisconsin  limited
liability company, Jan Eddy ("Eddy") and Steven Entine ("Entine").

                                    RECITALS

                  A. In or about December 2000, Commtouch,  by way of an Amended
and  Restated  Merger and  Exchange  Agreement,  dated as of  November  24, 2000
("Merger  Agreement") and in furtherance of its business as an outsourced hosted
email  service  provider,  acquired  and  became  the sole  owner  (directly  or
indirectly) of the ownership interests in WingraInc and WingraLLC.

                  B.  On or  about  December  31,  2001  and  February  5,  2002
Commtouch sold its outsourced  hosted  consumer email service and its outsourced
Exchange  enterprise  email  service,  respectively,  to two  independent  third
parties and, in so doing, has effectively ceased its activities as an outsourced
hosted email services provider in general.

                  C. The respective  parties or some of them have certain claims
against each other that they are interested in resolving in an amicable manner.

                  D. Each of the Boards of Directors of Commtouch, CI, WingraInc
and  WingraLLC,  as well as Eddy and  Entine,  has  determined  that,  given the
above-stated  claims and the change in Commtouch's  business model, it is in the
best interests of the respective  companies and their security holders that Eddy
and Entine (sometimes  referred to herein as "Purchasers")  shall acquire by way
of purchase all of the outstanding  membership  interests of WingraLLC and share
interests  of  WingraInc  from  Commtouch  and CI (the  "Acquisition")  and,  in
furtherance thereof, has approved the Acquisition.

                  E. The  parties  desire to make  certain  representations  and
enter into releases and other agreements in connection with the Acquisition.

                  NOW,   THEREFORE,   in  consideration  of  the  covenants  and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:

                                   ARTICLE I

                                 THE ACQUISITION

         1.1 The Sale of Wingra Interests. At the Closing (as defined in Section
1.2) and  subject  to and upon  the  terms  and  conditions  of this  Agreement,
Commtouch and CI agree to sell to Purchasers,  and Purchasers  agree to purchase
all of the outstanding membership interests of
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WingraLLC and shares of WingraInc held by each of Commtouch and CI  (hereinafter
"Wingra Interests").

         1.2 Closing.  The closing of the transactions  contemplated hereby (the
"Closing")  shall take place on  February  28, 2002 or at such other time as the
parties hereto agree (the "Closing  Date").  The Closing shall take place at the
offices of McCutchen,  Doyle, Brown & Enersen, 1900 University Avenue, East Palo
Alto, California, 94303, or at such other location as the parties hereto agree.

         1.3 Resignation of Directors. At the Closing, Commtouch shall cause the
directors,  Gideon Mantel and James Collins, who were appointed to the Boards of
WingraInc and WingraLLC,  to resign except to the extent either or both has/have
already done so.

         1.4  Surrender  of  Certificates  and  Bill of  Sale.  At the  Closing,
Commtouch shall deliver to Purchasers the membership  certificates  (if any) and
original stock certificates representing the Wingra Interests, duly endorsed for
transfer to Purchasers or with duly endorsed stock transfer powers  transferring
such  certificates  to  Purchasers,  and a  related  Bill  of  Sale  (in a  form
reasonably acceptable to the parties),  with such delivery constituting full and
complete  transfer  of good and  marketable  title in the  Wingra  Interests  to
Purchasers,  with such  Wingra  Interests  being  free and  clean of all  liens,
encumbrances and other third party interests.

         1.5  Consideration.  In  consideration  for  the  sale  of  the  Wingra
Interests to Purchasers:

         a.       WingraLLC,  WingraInc,  Eddy and Entine  agree to provide  the
                  releases set forth in Article VI below;

         b.       WingraLLC,  WingraInc,  Eddy and Entine  release  and  forever
                  discharge   Commtouch   and  its   subsidiaries,   affiliates,
                  representatives,   officers,   directors  and  employees  from
                  Commtouch's  guarantees  of  Eddy's  and  Entine's  employment
                  agreements  dated  November 2, 2000 and any other  agreements,
                  oral or written,  concerning  their  employment  by  WingraInc
                  and/or WingraLLC; and

         c.       WingraInc  and  WingraLLC,  jointly  and  severally,  agree to
                  assume  or  retain  as the case may be,  all  liabilities  and
                  obligations of WingraLLC  and/or WingraInc for which Commtouch
                  is  obligated  (either  directly or  indirectly,  including as
                  guarantor  and an  indemnifying  party).  In  particular,  and
                  without  derogating from the generality of the foregoing,  the
                  personal  guaranties of Eddy that Commtouch  assumed or was to
                  assume  in the  manner  as set  forth in  Section  7.15 of the
                  Merger  Agreement  are  hereby  made null and void,  and Eddy,
                  WingraInc and WingraLLC shall use their best efforts to ensure
                  that  any  and  all  of  the  parties   ("noteholders")   that
                  previously  agreed to  Commtouch's  assumption of the personal
                  guarantees  are informed of and agree to waive and release any
                  and all rights against Commtouch in relation  thereof.  Should
                  such  noteholders  fail to agree to waive and release any such
                  claims against Commtouch,  then Eddy, WingraInc and WingraLLC,
                  jointly and severally,

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                  agree to fully indemnify Commtouch for all damages,  costs and
                  expenses incurred by Commtouch as a result thereof.

         d.       Notwithstanding  c. above,  immediately  prior to the Closing,
                  any intercompany debt owed to Commtouch or its subsidiaries by
                  WingraLLC   will  be  distributed  by  Commtouch  (or  through
                  Commtouch  if  owed  by  any  other  subsidiary,   other  than
                  WingraInc)  to WingraInc  and converted by WingraInc to equity
                  in WingraLLC,  such that such equity is included in the Wingra
                  Interests.

                                   ARTICLE II

                                  REFERRAL FEES

         2.1  Fees.   Should  WingraLLC  or  WingraInc   provide,   directly  or
indirectly,  software or services to or receive purchase/work orders during 2002
from any Referred Customers (as defined below), WingraLLC and/or WingraInc shall
pay to Commtouch  ten percent (10%) of any license fees and five percent (5%) of
any other services fees received in 2002 or to be due for  purchase/work  orders
received in 2002 by  WingraInc or WingraLLC  from the  Referred  Customers.  For
purposes of this Section 2.1,  "Referred  Customers" shall mean Jamcracker Inc.,
TeleComputing Inc., Mi8 Inc., and their affiliated companies only.

         2.2 Payments.  Payments for the amounts due and owing to Commtouch from
WingraLLC  and/or WingraInc under Section 2.1 above shall be made on a quarterly
basis by  WingraLLC  and/or  WingraInc  by no later  than the  tenth day of each
quarter based on the applicable revenues collected during the prior quarter. Any
payments  made more than 30 days past the due date  shall bear  interest  at the
rate of 1% for each month that such amount remains unpaid,  or the maximum legal
rate, whichever is less.

         2.3 Reports.  WingraLLC and/or  WingraInc shall provide  Commtouch with
detailed  quarterly  reports of all revenue  collected  for which  Commtouch  is
entitled to payments as described  herein,  including the source thereof and the
period to which it is applicable.

         2.4 Audit  Rights.  Commtouch  may  appoint  any  nationally-recognized
independent  accounting  firm that  agrees to accept  reasonable  and  customary
confidentiality  obligations to audit, upon not less than seven (7) days advance
written notice and during normal business hours,  WingraLLC's and/or WingraInc's
records applicable to the Referred  Customers.  Commtouch shall pay the costs of
any such audit unless the audit reveals an  underpayment of five percent (5%) or
more, in which case,  in addition to any other rights of Commtouch  hereunder or
at law, the audit costs shall be paid by WingraLLC and/or WingraInc.  Audits are
limited to no more than one per calendar quarter.

                                  ARTICLE III

                             SUBSEQUENT DISPOSITION

                  In the event that,  during 2002 and  following the Closing one
or more of the  following  transactions  with a third  party  ("Transaction(s)")
occurs:

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         (i) the assets or a portion thereof of WingraLLC  and/or  WingraInc are
         sold or an  agreement  in  relation  thereto is entered  into,

         (ii) an equity  investment  is made  into  WingraLLC  and/or  WingraInc
         either by way of a  majority  of the  Wingra  Interests  or  additional
         equity interests of WingraLLC and/or WingraInc, or debentures, warrants
         or other  such  instruments  under  which a majority  of the  ownership
         interests in WingraLLC and/or WingraInc may be issued, or

         (iii)  WingraLLC  and/or  WingraInc  is/are  acquired by way of merger,
         consolidation,  sale of a  controlling  interest  or any other  similar
         manner of  acquisition  or an agreement in relation  thereto is entered
         into,

and the Value (as defined below)  received from the above  Transaction(s)  is in
excess of (a) $900,000 plus (b) any equity investment made into WingraLLC and/or
WingraInc subsequent to the Closing ("Excess Value"), Purchasers,  WingraInc and
WingraLLC,  jointly and  severally,  agree to pay Commtouch  upon the closing of
such Transaction(s) an amount equal to:

         o        thirty-three  percent (33%) of any proceeds  representing  the
                  Excess  Value from the  Transaction(s)  that occur  within the
                  first six (6) months of 2002,  multiplied by the percentage of
                  WingraLLC and/or WingraInc that is sold in the Transaction(s),
                  or

         o        twenty-five  percent  (25%) of any proceeds  representing  the
                  Excess  Value from the  Transaction(s)  that occur  within the
                  second six (6) months of 2002  multiplied by the percentage of
                  WingraLLC and/or WingraInc that is sold in the Transaction(s).

For purposes of the above, "Value" shall mean the total of all proceeds received
from the  Transaction(s),  including cash,  non-cash,  debt assumption and other
consideration,  divided by the percentage of WingraLLC  and/or WingraInc that is
sold in the Transaction(s).

                                   ARTICLE IV

               REPRESENTATIONS AND WARRANTIES OF COMMTOUCH AND CI

                  Commtouch and CI, jointly and severally, represent and warrant
to Purchasers, WingraInc and WingraLLC that, as of the date hereof and as of the
Closing:

         4.1  Authority.  The execution  and delivery of this  Agreement and the
consummation of the transactions  contemplated hereby have been duly and validly
authorized by all necessary action on the part of each of Commtouch and CI. This
Agreement has been duly and validly  executed and delivered by each of Commtouch
and CI and constitutes the valid and binding  agreement of each of Commtouch and
CI enforceable in accordance with its terms.

         4.2  Corporate  Plans.  As of the Closing,  Commtouch is unaware of any
plans  involving  a  leveraged  buyout of  Commtouch  or to  voluntarily  delist
Commtouch's  Ordinary  Shares from the NASDAQ market or otherwise sell Commtouch
Ordinary  Shares or other equity or assets of Commtouch,  except as disclosed in
Exhibit A herein.

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         4.3 Absence of Continuing Interest;  Ownership of Wingra Interests.  As
from the  Closing,  neither  Commtouch  nor CI shall  retain any interest in the
Wingra  Interests or any assets of WingraLLC or WingraInc.  The Wingra Interests
constitute  all  of  the  outstanding   ownership  interests  in  WingraLLC  and
WingraInc,  no other  rights to  purchase  or  acquire  ownership  interests  in
WingraLLC or WingraInc  exist or are  outstanding,  and CI and WingraInc hold of
record and beneficially all of the Wingra Interests, free and clear of any liens
or other encumbrances.

         4.4 Fairness of  Transaction.  The Board of Directors of Commtouch,  in
unanimously  approving this Agreement,  has determined that in its opinion,  the
transactions  described  herein are in the best interests of the shareholders of
Commtouch and the creditors of WingraLLC  and  WingraInc,  and are on terms that
are fair to such shareholders and creditors.

         4.5 Advisors.  Except as set forth in this Agreement,  Commtouch and CI
are not relying on any statements or  representations of any other party to this
Agreement or any of the other party's  agents with respect to any legal,  tax or
other  consequences  of the  transactions  contemplated  by this  Agreement  and
understands  that it (and  not any  other  party  to this  Agreement)  shall  be
responsible  for its own  legal,  tax or other  liabilities  that may arise as a
result of the transactions contemplated by this Agreement.

         4.6  Taxation  of  WingraLLC.  Neither  Commtouch  nor CI has taken any
action that would be  reasonably  expected to cause  WingraLLC to be taxed other
than as a partnership for federal tax purposes.

                                   ARTICLE V

           REPRESENTATIONS AND WARRANTIES OF PURCHASERS, WINGRAINC AND
                                   WINGRALLC

                  Purchasers,  WingraInc and  WingraLLC,  jointly and severally,
hereby  represent and warrant to Commtouch that, as of the date hereof and as of
the Closing:

         5.1  Authority.  The execution  and delivery of this  Agreement and the
consummation of the transactions  contemplated thereby have been duly authorized
by all necessary  action on the part of WingraInc and WingraLLC.  This Agreement
has been duly and validly  executed and delivered by each  Purchaser,  WingraInc
and  WingraLLC  and  constitutes  the  valid  and  binding   agreement  of  each
Purchaser,WingraInc and WingraLLC, enforceable in accordance with its terms.

         5.2  Corporate  Plans.  As of  the  Closing,  there  are  no  plans  or
discussions with a third party involving the sale of WingraLLC and/or WingraInc,
including pursuant to the methods set forth in Article III above,  except as set
forth in Exhibit B hereto.

         5.3 Fairness of  Transaction.  The Board of Directors of WingraInc  and
WingraLLC,  in unanimously  approving this  Agreement,  have  determined that in
their opinion,  the  transactions  described herein are in the best interests of
the creditors of WingraInc and WingraLLC, and are on terms that are fair to such
creditors.
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         5.4  Purchase  for Own  Account.  The  Wingra  Interests  purchased  by
Purchasers  hereunder will be acquired for investment for their own account, not
as a nominee or agent,  and not with a view to the public resale or distribution
thereof  within  the  meaning of the  Securities  Act of 1933,  as amended  (the
"Securities  Act"),  and each  Purchaser  has no present  intention  of selling,
granting any  participation  in or otherwise  distributing  the same,  except in
compliance with the Securities Act.

         5.5 Investment  Experience.  Purchasers understand that the purchase of
the  Wingra  Interests  involves  substantial  risk.  They  have  experience  as
investors in securities of companies in the  development  stage and  acknowledge
that they are able to fend for  themselves,  can bear the  economic  risk of the
investment  and have such  knowledge  and  experience  in  financial or business
matters  that  they are  capable  of  evaluating  the  merits  and risks of this
investment  and  protecting   their  own  interests  in  connection   with  this
investment.

         5.6  Accredited  Investor  Status.  Each  Purchaser  is an  "accredited
investor"  within the meaning of Rule 501 of Regulation D promulgated  under the
Securities Act, as presently in effect.

         5.7  Advisors.  Except  as set  forth  in  this  Agreement,  WingraLLC,
WingraInc and Purchasers are not relying on any statements or representations of
any other  party to this  Agreement  or any of the  other  party's  agents  with
respect to any legal, tax or other consequences of the transactions contemplated
by this  Agreement  and  understand  that they (and not any other  party to this
Agreement) shall be responsible for its own legal, tax or other liabilities that
may arise as a result of the transactions contemplated by this Agreement.

                                   ARTICLE VI

                         RELEASES AND NEGATIVE COVENANTS

         6.1  Eddy  Release.   In  consideration  of  the  mutual  promises  and
representations herein and effective as of the Closing, Eddy hereby releases and
forever  discharges  Commtouch,  CI and  their  agents,  employees,  successors,
assigns, officers,  directors,  shareholders,  any affiliates (past, present and
future) of and from any and all actions, causes of action, claims and demands of
whatever nature, at law or in equity, known or unknown, which Eddy now has, ever
had, or hereafter  may have  generally  arising out of or relating to the Merger
Agreement,  any aspect of the  merger and  acquisition  by  Commtouch  and CI of
WingraInc  and  WingraLLC  and/or any aspect of the  relationship  of  Commtouch
and/or CI and/or their related entities with WingraInc, Eddy and/or WingraLLC up
to the  Closing,  except  for the  rights  and  obligations  created  under this
Agreement. In making the release hereinabove and below, Eddy is acting solely on
her own  behalf  and not on behalf of any of the other  former  shareholders  of
WingraInc or membership interests holders of WingraLLC.

         6.2  Entine  Release.  In  consideration  of the  mutual  promises  and
representations  herein and effective as of the Closing,  Entine hereby releases
and forever discharges Commtouch, CI, and their agents,  employees,  successors,
assigns, officers,  directors,  shareholders,  any affiliates (past, present and
future) of and from any and all actions, causes of action, claims and demands of
whatever nature,  at law or in equity,  known or unknown,  which

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Entine now has,  ever had, or  hereafter  may have  generally  arising out of or
relating to the Merger  Agreement,  any aspect of the merger and  acquisition by
Commtouch  and  CI  of  WingraInc  and  WingraLLC   and/or  any  aspect  of  the
relationship  of  Commtouch   and/or  CI  and/or  their  related  entities  with
WingraInc,  Entine and/or WingraLLC up to the Closing, except for the rights and
obligations created under this Agreement.

         6.3  Wingra  Release.  In  consideration  of the  mutual  promises  and
representations herein and effective as of the Closing, WingraInc and WingraLLC,
on  behalf  of  themselves  jointly  and  severally,  their  agents,  employees,
successors,  assigns, officers, directors, and any affiliates (past, present and
future) hereby  release and forever  discharge  Commtouch,  CI and their agents,
employees, successors, assigns, officers, directors, shareholders,  partners and
any  affiliates  (past,  present  and  future) of and from any and all  actions,
causes of action,  claims and demands of whatever  nature,  at law or in equity,
known or  unknown,  which  WingraInc  and/or  WingraLLC  now has,  ever had,  or
hereafter may have generally arising out of or relating to the Merger Agreement,
any aspect of the merger and acquisition by Commtouch of WingraInc and WingraLLC
and/or the  relationship  of Commtouch  and/or CI and/or their related  entities
with  WingraLLC  and/or  WingraInc up to the Closing,  except for the rights and
obligations created under this Agreement.

         6.4 Commtouch  Release.  In  consideration  of the mutual  promises and
representations  herein  and  effective  as of the  Closing,  Commtouch  and CI,
jointly  and  severally,  on  behalf of  themselves,  their  respective  agents,
employees,  successors,  assigns,  officers,  directors,  shareholders,  and any
affiliates  (past,  present and future)  hereby  indemnify,  release and forever
discharge  Purchasers,   WingraLLC  and  WingraInc,   their  respective  agents,
employees, successors, assigns, officers, directors, shareholders,  partners and
any  affiliates  (past,  present  and  future) of and from any and all  actions,
causes of action,  claims and demands of whatever  nature,  at law or in equity,
known or unknown, which Commtouch and/or CI now have, ever had, or hereafter may
have generally arising out of or relating to the Merger Agreement, any aspect of
the merger and acquisition by Commtouch and CI of WingraInc and WingraLLC and/or
the  relationship  of  Commtouch  and/or CI with  Purchasers,  WingraLLC  and/or
WingraInc up to the Closing, except for the rights and obligations created under
this Agreement.

         6.5  Release  of Unknown  Claims.  In making  the above  releases,  the
parties  expressly  waive the  provisions  and  benefits of Section  1542 of the
California Civil Code, which provides:

"A general release does not extend to claims which the creditor does not know or
suspect to exist in its favor at the time of  executing  the  release,  which if
known by him must have materially affected its settlement with the debtor."

and agree as a further consideration and inducement for this Agreement that this
Agreement shall apply to all unknown and unanticipated losses or damages arising
out of the  matters  the  subject  of this  Agreement,  which  losses or damages
hereafter  may be claimed  by the  parties,  as well as to those such  losses or
damages known by the parties.

         6.6 Covenant not to Participate in Proceedings.  Purchasers,  WingraInc
and WingraLLC agree,  jointly and severally,  that, unless compelled by an order
of a court of proper

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jurisdiction,  or as  otherwise  required by law,  none shall  lead,  support or
otherwise  participate  in any law suits or other  actions  of any kind  against
Commtouch and/or any of its related  companies,  or their  respective  officers,
directors,  employees, agents or representatives,  other than a lawsuit or other
action  that  arises  out  of  the   transactions   contemplated   hereunder  or
transactions  hereafter,   and  will  provide  reasonable  assistance  to  these
Commtouch  entities in dissuading  potential  plaintiffs  and defending any such
action (at Commtouch's expense).

                                  ARTICLE VII

                              ADDITIONAL AGREEMENTS

         7.1 Public  Disclosure.  Unless otherwise  permitted by this Agreement,
none of the parties shall, without the prior written consent of the others, make
any press  release or other public  statement or  disclosure  (whether or not in
response  to  an  inquiry)  regarding  the  terms  of  this  Agreement  and  the
transactions contemplated hereby. This Section 7.1 shall not prohibit Commtouch,
CI,  Purchasers,  WingraInc  or  WingraLLC  from  making  statements  as  may be
reasonably necessary regarding this Agreement and the transactions  contemplated
hereby  to  its  shareholders,  current  or  potential  investors,  noteholders,
creditors,  customers,  attorneys,  accountants or employees,  or as provided by
law,  including  SEC  rules  and  regulations,   provided  that  Commtouch,  CI,
Purchasers,  WingraInc  or  WingraLLC,  as the  case  may be,  shall  have  used
reasonable efforts to ensure that such information is held in confidence by such
recipients and does not become generally available to the public.

         7.2 Reasonable Efforts and Further  Assurances.  Each of the parties to
this Agreement shall use its commercially  reasonable  efforts to effectuate the
transactions  contemplated  hereby and to fulfill and cause to be fulfilled  the
conditions to closing under this Agreement. Each party hereto, at the reasonable
request  of  another  party  hereto,   shall  execute  and  deliver  such  other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting  completely the  consummation  of this Agreement and the
transactions contemplated hereby.

         7.3  WingraLLC  401(K)  Plan.  As soon as  administratively  practical,
Commtouch  shall cause the trustees of  Commtouch's  401(k) plan to transfer the
401(k) account  balances of WingraInc's  and/or  WingraLLC's  current and former
employees directly, in a plan-to-plan transfer,  from Commtouch's 401(k) plan to
the trustees of a qualified  retirement  plan  established  by WingraInc  and/or
WingraLLC  and to provide the  successor  trustee  with such  participant,  plan
account and related information as the trustee may reasonably request.

         7.4  Commtouch  Option  Plan.  As of  the  Closing,  all  employees  or
consultants of WingraLLC and WingraInc holding option grants under the Commtouch
Software  Ltd.  Amended  and  Restated  1996 CSI Stock  Option  Plan shall cease
vesting  immediately and shall no longer be considered  employees or consultants
for  purposes of  participation  under such plan.  Any  Commtouch  non-qualified
options that have vested prior to the Closing for then current  WingraLLC and/or
WingraInc employees and/or consultants may be exercised at any time during a 180
(one  hundred  and  eighty)  day  period as from the  Closing.  Any  shares  not
exercised  prior to or  during  this 180 day  period  shall  be  cancelled.  Any
Commtouch incentive stock options that have vested prior to the Closing for then
current WingraLLC and/or WingraInc

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employees  and/or  consultants  may be  exercised at any time during the maximum
period  allowed for  incentive  stock options under the terms of the Amended and
Restated 1996 CSI Stock Option Plan as from the Closing.

                                  ARTICLE VIII

                        TERMINATION, AMENDMENT AND WAIVER

         8.1 Termination.  At any time prior to the Closing,  this Agreement may
be terminated by consent of all parties.

         8.2  Effect  of  Termination.  In the  event  of  termination  of  this
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and  there  shall  be no  liability  or  obligation  on the  part of  Commtouch,
WingraInc, CI, WingraLLC, or Purchasers or their respective officers, directors,
shareholders or affiliates.

         8.3 Expenses and Termination Fees. Whether or not the Sale and Purchase
is  consummated,  all  costs  and  expenses  incurred  in  connection  with this
Agreement  and  the  transactions   contemplated   hereby  (including,   without
limitation,  the  fees and  expenses  of its  advisers,  accountants  and  legal
counsel) shall be paid by the party incurring such expense.

         8.4  Extension;  Waiver.  At any time  prior to the  Closing  any party
hereto  may,  to the  extent  legally  allowed,  (i)  extend  the  time  for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the  representations  and warranties made to such
party contained  herein or in any document  delivered  pursuant hereto and (iii)
waive  compliance  with any of the  agreements or conditions  for the benefit of
such party contained herein.  Any agreement on the part of a party hereto to any
such  extension or waiver shall be valid only if set forth in an  instrument  in
writing signed on behalf of such party.

                                   ARTICLE IX

                                 INDEMNIFICATION

         9.1 Commtouch  Indemnification.  Purchasers,  WingraInc and  WingraLLC,
jointly and severally,  shall  indemnify and hold harmless  Commtouch and CI and
their affiliates,  officers,  directors,  employees, agents and representatives,
from and against any and all expenses,  including attorneys' fees, witness fees,
damages,  judgments,  fines and amounts paid in settlement and any other amounts
that such entity becomes legally obligated to pay because of any claim or claims
made against it, relating to or arising from (i) any WingraLLC  and/or WingraInc
related  matter or the  business  thereto,  including  claims  by any  creditors
thereof,  (ii)  misrepresentations  or breaches of representations or warranties
made herein by WingraLLC,  WingraInc,  and/or Purchasers or (iii)  noncompliance
with or breach by WingraInc, WingraLLC and/or Purchasers of any of the covenants
or  agreements  contained  in this  Agreement  or (iv) by reason of  Commtouch's
and/or  CI's  and/or  their  related  parties'   relationships  with  customers,
suppliers,  employees  (other than  claims by  employees  relating to  Commtouch
options)  of  WingraInc  and/or  WingraLLC  prior  to  the  Closing.  The  above
indemnification  replaces and  supersedes  any prior  indemnifications  given by
Eddy,  WingraInc and/or WingraLLC to

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Commtouch within the framework of any other agreement or understanding, with the
exception of indemnities granted within the framework of the Merger Agreement.

         9.2 Purchasers, WingraInc and WingraLLC Indemnification.  Commtouch and
CI,  jointly  and  severally,  shall  indemnify  and hold  harmless  Purchasers,
WingraInc and WingraLLC and their affiliates,  officers,  directors,  employees,
agents and  representatives  from and  against any and all  expenses,  including
attorneys' fees,  witness fees,  damages,  judgments,  fines and amounts paid in
settlement  and any other amounts that such party becomes  legally  obligated to
pay because of any claim or claims made against it,  relating to or arising from
(i) a Commtouch  shareholder  or Commtouch  creditor  action taken  against such
party  in   relation   to  the   subject   matter   of  this   Agreement,   (ii)
misrepresentations  or breaches of  representations or warranties made herein by
Commtouch or CI or (iii)  noncompliance with or breach by Commtouch or CI of any
of the  covenants  or  agreements  contained  in this  Agreement.  In  addition,
Commtouch  and CI,  jointly and  severally,  shall  indemnify  and hold harmless
Purchasers, WingraInc and/or WingraLLC and any other party, from and against all
expenses, including attorneys' fees, witness fees, damages, judgments, fines and
amounts paid in settlement and any other amounts that such party becomes legally
obligated  to pay  because of any claim or claims made  against  it,  including,
without limitation,  any taxes,  interest and penalties finally determined to be
due,  relating  to or  arising  from  any  forgiveness  of  indebtedness  income
resulting from the  transactions  set forth in Section 1.5(d) of this Agreement.
The above  indemnification  replaces and supersedes  any prior  indemnifications
given  by  Commtouch  to  Purchasers,  WingraInc  and/or  WingraLLC  within  the
framework of any other agreement or understanding.  However,  to the extent that
Eddy or Entine are sued due to their capacity as an officer  and/or  director of
WingraLLC and/or WingraInc as set forth in WingraInc's articles of incorporation
or  by-laws or  WingraLLC's  operating  agreement  for an action  covered  under
Commtouch's  Directors' and Officers'  liability  insurance  policy  relating to
activities  during the period as from the closing of the Merger  Agreement until
the Closing Date hereunder,  Eddy and Entine shall be entitled to such coverage,
with any applicable deductibles being paid by Commtouch.

         9.3  Notification  and Defense of Claim. As soon as practicable and not
later than ten (10) days after  receipt by any party named above in Sections 9.1
and 9.2 as a party to be indemnified thereunder  ("Indemnified Party") of notice
of the  commencement of any action,  suit or proceeding,  such party will notify
the indemnifying party ("Indemnifying  Party") of the commencement  thereof; but
the  omission so to notify the  Indemnifying  Party will not relieve it from any
liability  which it may have to such  Indemnified  Party  hereunder,  unless the
Indemnifying  Party is materially  prejudiced by the delay.  With respect to any
such action,  suit or proceeding as to which such Indemnified  Party so notifies
the Indemnifying Party of the commencement thereof, the Indemnifying Party shall
assume the defense thereof at its own expense,  with the Indemnified Party being
entitled to  participate  therein at its own expense and own counsel  reasonably
satisfactory  to  such  Indemnifying  Party.  The  Indemnified  Party  shall  be
permitted to settle any such action  brought  against it, with the  acquiescence
thereto of Indemnifying Party, not to be unreasonably withheld.

         9.4  Successors.  Each  of the  parties  shall  require  any  successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of any such party,  expressly
to assume and agree to perform the

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indemnification  obligations set forth in this Article IX in the same manner and
to the same extent  that it would be  required to perform if no such  succession
had taken place.


                                   ARTICLE X

                               GENERAL PROVISIONS

         10.1 Survival at Closing.  It is  understood  and agreed by the parties
that the  representations  and  agreements  contained  herein shall  survive the
Closing in perpetuity.

         10.2 Notices. All notices and other  communications  hereunder shall be
in  writing  and shall be deemed  given (i) upon  actual  receipt  if  delivered
personally or by commercial  same-day delivery  service,  (ii) as of the date of
delivery indicated on the receipt issued by the relevant postal service,  or, if
the  addressee  fails or  refuses  to  accept  delivery,  as of the date of such
failure or refusal,  if mailed by registered or certified  mail (return  receipt
requested),  (iii) upon receipt, if sent by overnight delivery, or (iv) the next
business  day after  transmission  (and sender shall bear the burden of proof of
delivery),  if sent via  facsimile  or other  electronic  means of  transmitting
written documents, to the parties at the following address and facsimile numbers
(or at such other address or facsimile  number for a party as shall be specified
by like notice):

         (a) if to Commtouch or CI, to:

             Commtouch Inc.
             2029 Steirlin Court
             Mountain View, CA  94043
             Attention:       Gideon Mantel
             Facsimile No.: 650-864-2004
             Telephone No.:  650-864-2271

         (b) if to Eddy, Entine, WingraInc or WingraLLC, to:

             Wingra Technologies, LLC
             450 Science Drive
             One West
             Madison, WI 53711-1056
             Attention:  Jan Eddy
             Facsimile No.:  608-238-8986
             Telephone No.: 608-238-4454

             With a copy to:
             Foley & Lardner
             150 E. Gilman Street
             Madison, WI 53703
             Attention:  Joseph P. Hildebrandt
             Facsimile No.:  608-258-4258
             Telephone No.: 608-258-4232

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         10.3  Interpretation.  When a reference  is made in this  Agreement  to
Exhibits,  such  reference  shall  be to an  Exhibit  to this  Agreement  unless
otherwise indicated.  The words "include,"  "includes" and "including" when used
herein  shall be  deemed  in each  case to be  followed  by the  words  "without
limitation."  The phrase "made  available" in this Agreement shall mean that the
information  referred to has been made  available  if  requested by the party to
whom such  information  is to be made  available.  The phrases "the date of this
Agreement",  "the date hereof", and terms of similar import,  unless the context
otherwise requires,  shall be deemed to refer to February 25, 2002. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation  of this Agreement.  The parties hereto
agree  that  they have been  represented  by  counsel  during  the  negotiation,
preparation  and  execution  of  this  Agreement  and,   therefore,   waive  the
application of any law,  regulation,  holding or rule of construction  providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.

         10.4  Counterparts.  This  Agreement  may be  executed  in two or  more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other  parties,  it being  understood  that all
parties need not sign the same counterpart.

         10.5  Entire  Agreement;  Nonassignability.   This  Agreement  and  the
documents and instruments and other agreements  specifically referred to therein
or delivered  pursuant to the terms hereof,  including the Exhibits  thereto (a)
constitute  the entire  agreement  among the parties with respect to the subject
matter  hereof and  supersede  all prior  agreements  and  understandings,  both
written and oral,  among the parties with respect to the subject  matter  hereof
and (b)  shall  not be  assigned  by  operation  of law or  otherwise  except as
otherwise specifically provided.

         10.6  Severability.  In the event that any provision of this Agreement,
or the  application  thereof,  becomes or is  declared  by a court of  competent
jurisdiction  to be  illegal,  void  or  unenforceable,  the  remainder  of this
Agreement  will  continue in full force and effect and the  application  of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such  void or  unenforceable  provision  of  this  Agreement  with a  valid  and
enforceable  provision that will achieve, to the extent possible,  the economic,
business and other purposes of such void or unenforceable provision.

         10.7 Remedies Cumulative.  Except as otherwise provided herein, any and
all remedies herein expressly  conferred upon a party will be deemed  cumulative
with and not exclusive of any other remedy conferred hereby, or by law or equity
upon such party, and the exercise by a party of any one remedy will not preclude
the exercise of any other remedy.

         10.8 Governing  Law. This Agreement  shall be governed by and construed
in accordance with the laws of the State of Delaware,  without  reference to its
principles of conflicts of law. Each of the parties hereto irrevocably  consents
to the exclusive  jurisdiction  of any court located in Delaware,  in connection
with any matter  based  upon or arising  out of this  Agreement  or the  matters
contemplated herein.  Further, the parties agree that process may be served upon
them in any  manner  authorized  by the laws of the State of  Delaware  for such
persons and waives

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and covenants not to assert or plead any  objection  which they might  otherwise
have to such jurisdiction and such process.

                  [Remainder of Page Intentionally Left Blank]

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                  IN  WITNESS  WHEREOF,  each of the  parties  has  caused  this
Agreement to be executed  and  delivered  by itself or its  respective  officers
thereunto duly authorized, all as of the date first written above.


                                       COMMTOUCH SOFTWARE LTD.:



                                       By ___________________________________

                                       Name__________________________________

                                       Title_________________________________



                                       COMMTOUCH INC.:



                                       By ___________________________________

                                       Name__________________________________

                                       Title_________________________________


                                       WINGRA, INCORPORATED:



                                       By ___________________________________

                                       Name__________________________________

                                       Title_________________________________


                                       WINGRA TECHNOLOGIES, LLC:


                                       By ___________________________________

                                       Name__________________________________

                                       Title_________________________________


<PAGE>

                                                                  Execution Copy

                                       JAN EDDY



                                       By ___________________________________



                                       STEVE ENTINE



                                       By ___________________________________


<PAGE>

                                                                  Execution Copy

                                    Exhibit A

                           Corporate Plans Disclosures
                                    Commtouch

1.       Commtouch sold its hosted consumer email business to MailCentro (a CPSG
         company) in late 2001

2.       Commtouch is in the process of transferring its hosted enterprise email
         service ("SPS") to MailCentro as well

3.       Commtouch sold its hosted Exchange email business to  TeleComputing  in
         February, 2002

4.       Commtouch has sold and will continue to sell equipment and other assets
         that it no longer requires for its continuing operations

5.       Commtouch is  currently  working to obtain  additional  funding for its
         continuing business operations

         a.       Commtouch  is  in  contracting  stage  with  a  consortium  of
                  individuals   (including  Commtouch  founders)  for  a  direct
                  investment into the Company

         b.       Commtouch  has  negotiated  deal  terms and  certain  contract
                  language with a third party  investment  group - this deal has
                  been put on hold in order  to focus on the deal  listed  as 5a
                  above (Note the terms of the deal  described  in 5a are better
                  for  Commtouch  than those in the deal  described  here in 5b,
                  i.e.,  more net cash to  Commtouch  and no  discount  on share
                  price)

         c.       Commtouch  is in  early  discussions  with a  number  of other
                  potential investors and investor groups

         d.       As a standard  course of business,  Commtouch will continue to
                  look for  additional  funding  if and when  needed to  support
                  continued operations

6.       Commtouch has no plans to voluntarily delist from Nasdaq and is working
         to avoid involuntary delistment, but the Company can not guarantee that
         it will not be  delisted or moved to another  exchange  sometime in the
         future

                                      A-1
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                                                                  Execution Copy



                                    Exhibit B

                           Corporate Plans Disclosures
                                     Wingra

After obtaining  written  approval from Gideon Mantel and Carolyn Chin, Jan Eddy
contacted both AOL and Sun/iPlanet in the latter part of 2001 concerning  either
party's  interest in making an equity  investment in Wingra or acquiring  Wingra
from Commtouch. After preliminary discussions,  both parties indicated that they
were not interested in further pursuing an equity transaction with Wingra.

                                       B-1