Document:

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

                                       9
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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

                                       10
<PAGE>

                                                                  Execution Copy

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

                                       11
<PAGE>

                                                                  Execution Copy

         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

                                       12
<PAGE>

                                                                  Execution Copy

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]

                                       13
<PAGE>

                                                                  Execution Copy

                  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
<PAGE>

                                                                  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-1BUSINESS UNIT PURCHASE AGREEMENT

                          DATED AS OF JANUARY 15, 2002

                                 BY AND BETWEEN

                               TELECOMPUTING, INC.

                                       AND

                                 COMMTOUCH INC.
<PAGE>

                        BUSINESS UNIT PURCHASE AGREEMENT

         THIS BUSINESS UNIT PURCHASE  AGREEMENT (this  "Agreement")  dated as of
January 15, 2002, is by and between  TeleComputing,  Inc., a Florida corporation
("Buyer") and COMMTOUCH INC., a California corporation  ("Seller").  Capitalized
terms not  otherwise  defined  herein shall have the  meanings  ascribed to such
terms in Section 9.7 of this Agreement.

         WHEREAS, Seller is interested in selling and transferring to Buyer, and
Buyer is interested in acquiring, Seller's business, assets, rights, and certain
obligations and liabilities,  relating to Seller's  proprietary  Hosted Exchange
Business Unit (the "Business");

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
representations,  warranties,  covenants and agreements  herein  contained,  and
intending to be legally bound hereby, Seller and Buyer hereby agree as follows:

                                    ARTICLE 1

                               PURCHASE OF ASSETS

         SECTION 1.1.  Purchase of Assets. At the Closing (as defined below) and
upon the terms and  subject to the  conditions  of this  Agreement,  Seller will
sell, transfer, assign and convey to Buyer, and Buyer will purchase from Seller,
the following assets (the "Assets"):

         (a)      Customer/Channel  Partner/Reseller  Agreements.  The customer,
                  channel  partner  and  reseller  agreements  set  forth in and
                  attached  to  Exhibit  A  hereto,   which  exhibit  is  hereby
                  incorporated into this Agreement.

         (b)      Equipment Lease Agreements. The equipment lease agreements set
                  forth in and  attached to Exhibit D hereto,  which  exhibit is
                  hereby incorporated into this Agreement.

         (c)      Data  Center  Agreements.  Seller's  use  of the  data  center
                  facilities  pursuant  to  the  agreements  set  forth  in  and
                  attached  to  Exhibit  B  hereto,   which  exhibit  is  hereby
                  incorporated   into  this  Agreement,   but  only  during  the
                  migration as described in Article 3 below.

         (d)      Seller Equipment.  All right, title and interest in and to the
                  equipment  set forth in  Exhibit  C,  attached  hereto,  which
                  exhibit is hereby incorporated into this Agreement, including,
                  but  not  limited   to,  any   applicable   and   transferable
                  manufacturers' and/or vendors' warranties and guarantees.

         (e)      Records. All relevant records, information, correspondence and
                  contracts relating to the foregoing.

         SECTION 1.2. Retained Assets.  Without  derogating from any other right
not  expressly   transferred   to  Buyer  herein  and  retained  by  Seller  and
notwithstanding the terms of
<PAGE>

Section 1.1, Seller shall not transfer to Buyer and the Assets shall not include
the Seller's  right,  title and  interest in and to any and all claims,  actions
and/or  demands of Seller  against  any  customer,  channel  partner,  reseller,
licensor,  vendor or  manufacturer  that accrued to Seller or arose prior to the
Closing including,  but not limited to, claims for payment of set-up, service or
professional service fees.

         SECTION 1.3.  Purchase Price. The "Purchase Price" for the assets shall
be paid in the manner described as follows:

         (a)      Buyer shall pay to Seller twenty percent (20%) of all revenues
                  collected  from  the  entities  set  forth  on  Exhibit  A for
                  services  performed  during the current  term of the  relevant
                  agreements identified in Exhibit A therewith, exclusive of any
                  renewal term of any such agreement. Such agreements may not be
                  cancelled,  replaced or otherwise amended voluntarily by Buyer
                  for the purpose of deferring revenues or otherwise  negatively
                  impact the payment obligations to Seller.

         (b)      Buyer shall pay to Seller ten percent  (10%) of all revenue of
                  any kind collected from prospective  customers,  resellers and
                  channel   partners   identified  by  the  parties  during  due
                  diligence prior to the Closing.  The payments  hereunder shall
                  be made based on revenue  collected  from each such entity for
                  services   performed   during  a  twelve  (12)  month   period
                  commencing  on the date  services are first  provided by Buyer
                  under each individual agreement entered into between Buyer and
                  any such customers,  resellers or channel partners. Before the
                  Closing,  these  entities  shall be  identified  on  Exhibit E
                  attached hereto and hereby incorporated into this Agreement.

         (c)      Buyer shall pay to Seller ten percent  (10%) of all revenue of
                  any kind  collected  from  customers,  resellers  and  channel
                  partners  referred  to Buyer by Seller for a period of two (2)
                  years subsequent to the Closing.  The payments hereunder shall
                  be made based on revenue  collected  from each such entity for
                  services   performed   during  a  twelve  (12)  month   period
                  commencing  on the date  services are first  provided by Buyer
                  under each individual agreement with such entity(ies).  Seller
                  shall submit to Buyer for its  consideration  a referral  form
                  containing, at a minimum, the information set forth in Exhibit
                  F attached hereto,  which exhibit is hereby  incorporated into
                  this  Agreement.  Buyer  may  accept  or  reject  to  pursue a
                  business   relationship   with  any   referral   at  its  sole
                  discretion.  Further, Buyer may reject any such referral if it
                  can prove by  reliable  means  that,  within the  twelve  (12)
                  months prior to the referral,  it had been in discussions with
                  the relevant  entity for sale of the relevant  service to such
                  entity.

         (d)      At  Closing,  Buyer  shall pay to  Seller  an amount  equal to
                  twenty-five  percent  (25%)  of  the  cost  to  Seller  of the
                  equipment  set forth on  Exhibit C plus any  applicable  sales
                  taxes. Seller shall provide to Buyer proper documentation from
                  its books  and  records  evidencing  the cost to Seller of the
                  equipment.  If such  documentation  is not readily  available,
                  Buyer and Seller shall use the cost  estimates  provided  from
                  Seller to Buyer on January 9, 2002.
<PAGE>

         SECTION 1.4 Payments.  Payments for the amounts due and owing to Seller
from Buyer under Section  1.3(a) - (c) above shall be made on a monthly basis by
Buyer,  by no later  than the tenth day of each  month  based on the  applicable
revenues  collected  during the prior month. 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.  Payments
from Buyer to Seller in  relation  to use of the data center and staff set forth
in Exhibit B shall be made in advance  semi-monthly,  commencing on the Closing,
based on  estimated  expenses,  with any  adjustments  to be made in  subsequent
payment periods.

         SECTION 1.5 Reports. Buyer shall provide Seller with detailed quarterly
reports of all  revenue  collected  for which  Seller is entitled to payments as
described  herein,  including  the source  thereof and the period to which it is
applicable.

         SECTION 1.6.  Security  Interest.  Buyer hereby grants a first priority
security  interest in all  customer,  channel  partner and  reseller  agreements
transferred by Seller to Buyer within the framework of this  Agreement,  as well
as the proceeds/fees  collected by Buyer thereunder,  as security for payment of
the Purchase Price as described in Section 1.3(a) - (c) hereinabove. Buyer shall
take all necessary  measures  reasonably  requested by Seller prior to or on the
Closing to perfect Seller's  security interest in such agreements and the stated
proceeds/fees,  and  shall  provide  proof  of same to  Seller  on the  Closing.
Furthermore,  Buyer  undertakes  not to  voluntarily  allow any third parties to
encumber, lien or attach in any way such agreements or proceeds/fees,  and shall
immediately     take    all     necessary     measures     to     remove     any
encumbrances/liens/attachments  when and if  effected  by a third  party.  Buyer
shall provide Seller with notice  immediately  upon discovering the placement or
attempted  placement  of any lien,  encumbrance  or  attachment  on the  subject
agreements and/or proceeds/fees. Buyer agrees to open a separate bank account in
which only the revenues  collected  within the framework of this Agreement shall
be  deposited.  The security  interest  granted  herein by Buyer shall be deemed
released upon the earlier of (i) Buyer's  payment of the Purchase  Price or (ii)
the  termination of this  Agreement in accordance  with Article 8, whereupon the
Seller shall take all such actions as shall be reasonably  requested by Buyer to
affect the termination of the security  interest  granted hereby,  including the
execution  of and  filing  with  appropriate  governmental  authorities  uniform
commercial code financing statements.
<PAGE>

                                    ARTICLE 2

                                     CLOSING

          SECTION 2.1. Closing of the Sale and Purchase. The closing of the sale
and purchase of the Business (the  "Closing") will take place at 2:00 pm Pacific
Time on January 31, 2002 (the "Closing  Date"),  subject to  satisfaction of the
conditions  set forth in Article 7 (other than  conditions  that by their nature
are to be satisfied at the Closing, but subject to the satisfaction or waiver of
those conditions),  at the offices of Seller,  2029 Stierlin Ct., Mountain View,
CA 94043,  unless  another  time,  date or place is agreed to in  writing by the
parties hereto.  If the Closing shall occur, it shall be deemed  effective as of
11:59 pm (Pacific Time) on the Closing Date.

         SECTION 2.2. Transfer of Assets. At the closing, Seller shall transfer,
assign,  deliver  and  convey  to  Buyer,  free and clear of all liens and other
encumbrances  other than any such lien or encumbrance  arising out if the rights
and  interests of lessors of equipment in the Assets,  including  execution  and
delivery  of a Bill of Sale,  in form and  substance  acceptable  to Seller (the
"Bill of Sale"), agreement of assignments and other appropriate documents. As to
the equipment  under Exhibits C and D, the equipment shall be delivered Ex Works
(Equinix  facility,  San Jose, CA).  Loading and shipping are at the expense and
responsibility of Buyer.

         SECTION 2.3.  Assumption of  Liabilities.  At the Closing,  Buyer shall
fully assume and agrees to pay, perform and discharge the following:

         (a)      All liabilities,  debts,  obligations,  claims, warranties and
                  guaranties  of any kind  arising  from and after  the  Closing
                  under or in relation to the  agreements  and leases  listed in
                  Exhibits  A, B and D to this  Agreement.  Notwithstanding  the
                  above,  Buyer's  obligations  in  relation  to the data center
                  agreements  described  in Exhibit B shall  only be  applicable
                  until the migration described in Article 3 is fully completed,
                  which  migration  will be completed  before March 31, 2002, at
                  which time such  obligations  shall  revert to  Seller.  Buyer
                  shall  provide  Seller with at least fifteen (15) days advance
                  written  notice of its intention to cease  utilizing  Seller's
                  data center.

         (b)      All  obligations  and  liabilities  arising from and after the
                  Closing  Date in  connection  with  Buyer's  ownership  of the
                  Assets and the  conducting  by Buyer of the  operations of the
                  Business,  including all obligations arising after the Closing
                  Date under the  contract  between  the  Seller  and  Microsoft
                  Corporation included in the Assets.

         (c)      All  out of  pocket  expenses  incurred  by  either  party  in
                  relation to the performance of migration services as set forth
                  in Section  3.1  below;  provided  that  Seller  shall  obtain
                  Buyer's prior written  approval,  including which approval may
                  be given by email, before incurring such expenses.
<PAGE>

         (d)      The fully-burdened cost to Seller for the allocation by Seller
                  of  employees  as set forth in Section 3.2 and  enumerated  in
                  Exhibit  B.  Payment  therefor  shall be made by Buyer  within
                  fifteen  (15) days of receipt of an  applicable  invoice  from
                  Seller.  Buyer shall provide Seller with at least fifteen (15)
                  days  advance   written  notice  of  its  intention  to  cease
                  utilization of such employees' services.

         (e)    All taxes  relating  to or  arising at any time from the sale of
                the Assets,  or in connection with the operation of the Business
                by Buyer from and after the Closing.
<PAGE>

                                    ARTICLE 3

                              MIGRATION OF SERVICE

         SECTION  3.1.  Migration  Services.  In order to  provide  for the most
stable service to customers,  channel partners and resellers during the transfer
of the Business from Seller to Buyer,  Buyer shall perform a seamless  migration
of all Exchange  mailbox  accounts to Buyer's  data center and Seller  agrees to
assist Buyer as may be necessary.

         SECTION 3.2. Use of Seller Employees.  Until the migration is complete,
Seller undertakes to make available those remaining  employees from the Business
who are necessary in managing the service, managing relationships with customers
and channel  partners and assisting in performing  the  migration  services,  as
mutually agreed by the parties hereto. Seller agrees to continue to employ these
employees during the migration  period,  and to provide them with their standard
facilities, as well as the time necessary to service the needs of the parties in
performing the migration.  Nothing herein shall prevent Seller from  terminating
an employee for "cause".  Buyer further  understands that any one or more of the
employees may  voluntarily  terminate his or her employment at any time. In this
regard, Buyer waives any and all claims, known or unknown, that it may have as a
result of such  terminations  (except  any  claims  directed  by such  employees
against Buyer for which Seller is legally  responsible),  including a claim that
its ability to properly  perform the migration  services was impaired in any way
by the  occurrence of such an event of  termination of employment or combination
of events, and Seller shall not be responsible for replacing the services of any
such   employee   whose   employment    terminates   (whether   voluntarily   or
involuntarily);  provided Seller uses commercially reasonable efforts to replace
such  employees  and/or to assist  Buyer in  replacing  such  employees.  Seller
acknowledges that its role, status and the status of its employees in connection
with  the  migration  services  provided  to  the  Buyer  shall  be  that  of an
independent  contractor and nothing in this Section shall be construed to create
an employer-employee  relationship between the parties. Seller's employees shall
not be entitled to any of the Buyer's employee benefits.  Seller shall have sole
responsibility for all federal, state and local withholding taxes,  unemployment
insurance  tax,  social  security tax and other similar taxes and levies arising
from Seller's employment of its employees to perform the migration services.

         SECTION 3.3. Wingra Services.  In performing  migrations for Jamcracker
customers,  unless otherwise expressly required by Jamcracker or unless Buyer is
able to secure a lower price,  Buyer  undertakes to use the  migration  services
offered by Wingra, an affiliated  company of Seller, for a period of twelve (12)
months from the Closing.
<PAGE>

                                    ARTICLE 4

                    REPRESENTATIONS AND WARRANTIES OF SELLER

As of the date  hereof and the date of Closing,  Seller  hereby  represents  and
warrants to Buyer that:

         SECTION 4.1. Organization and Qualification.  Seller is duly organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  of
organization,  and it has all requisite  power and  authority to own,  lease and
operate its assets or  properties  and to carry on its  businesses  as now being
conducted  and is qualified to do business and is in good  standing as a foreign
corporation in each jurisdiction  where the ownership or operation of its assets
or properties or conduct of its business requires such qualification.

         SECTION  4.2.  Authority  Relative  to this  Agreement.  Seller has all
necessary  corporate  power and authority to execute and deliver the Transaction
Agreements  to  which it is a party,  to  perform  its  obligations  under  such
Transaction  Agreements and to consummate the transactions  contemplated  hereby
and thereby.  The execution and delivery of the Transaction  Agreements to which
the  Seller is a party and the  consummation  of the  transactions  contemplated
hereby  and  thereby  have  been duly and  validly  authorized  by all  required
corporate  approval,  including without limitation any necessary  shareholder or
director  approval,  and as of the Closing  there will be no  revocation of such
approval and no other corporate  proceedings on the part of Seller are necessary
to  authorize  this  Agreement  and  such  other  Transaction  Agreements  or to
consummate the transactions  contemplated hereby or thereby.  This Agreement has
been, and when executed, each other Transaction Agreement to which the Seller is
a party  will be,  duly  and  validly  executed  and  delivered  by  Seller  and
constitutes,  or, when executed,  will  constitute,  a valid,  legal and binding
agreement of Seller,  enforceable against it in accordance with their respective
terms.

         SECTION 4.3.  Asset Status.  Seller has good,  marketable and undivided
title (or legal right in the case of the leased equipment  identified in Exhibit
D hereto) to and possession of the Assets. The agreements under Exhibits A and D
and the equipment under Exhibits C and D (except for the Lien held by the lessor
in the case of the leased equipment listed in Exhibit D) are held free and clear
of all Liens (as defined hereinbelow),  including Liens with respect to taxes or
other  governmental  charges,  obligations  or fees,  except  for liens for real
and/or personal property taxes not yet due and payable, and there are no pending
legal  actions by any party  relating to such  Assets.  As of the  Closing,  the
equipment listed in Exhibits C and D is in good operating condition, normal wear
and tear  excepted,  and is adequate and usable for the purposes for which it is
currently used.

         SECTION 4.4.  Contracts.  Attached to Exhibits A and D hereof are true,
correct and complete  copies of all of the existing  contracts,  agreements  and
leases,   including   summaries  of  any  oral   agreements   and  any  relevant
correspondence in respect of any thereof, relating to the Business and reflected
in the Accounts  Receivable Report (the "Contracts").  Except for the Contracts,
the Seller is not a party to or bound by any contract,  agreement or arrangement
relating  to the  purchase  or sale of any  goods or  services  relating  to the
Business.  Contracts are in full force and effect as against, and constitute the
legal,  valid and binding obligation of, Seller
<PAGE>

and, to the knowledge of Seller, each other party thereto. Seller and each other
party to each  Contract  has  performed  all of the  obligations  required to be
performed  by Seller  and such  other  party to date,  and there is no  existing
default by Seller or, to the knowledge of Seller, each other party thereto under
any of the Contracts or event that, with notice or lapse of time, or both, would
constitute  such a default.  None of the Contracts has been terminated or notice
of termination given with respect thereto, no notice has been given by any party
thereto of any alleged  default  thereunder by any party thereto,  and Seller is
aware of no  intention  or right of any  party  thereto  to  declare  a  default
thereunder.  There  exists no actual or  threatened  acceleration,  termination,
cancellation  or material  modification of any of Seller's rights or obligations
under any of the Contracts. No customer or lessor of Seller identified in any of
the  Contracts  has  notified  Seller that it intends to terminate or change its
business  relationship  with the  Business  following  the  consummation  of the
transactions contemplated under this Agreement.

          SECTION  4.5. No  Violations.  Neither  the  execution,  delivery  and
performance  by Seller of the  Transaction  Agreements  to which the Seller is a
party nor the  consummation by Seller of the transactions  contemplated  thereby
will (i) conflict  with or result in any breach of any provision of the articles
of association and other charter documents (or similar  governing  documents) of
Seller, (ii) to the best of Seller's knowledge,  result in a violation or breach
of or constitute (with or without due notice or lapse of time or both) a default
(or  give  rise  to  any  right  of  termination,   amendment,  cancellation  or
acceleration  or Lien) under any of the terms,  conditions  or provisions of any
note, bond, mortgage,  indenture,  lease, license, contract,  agreement or other
instrument  or  obligation to which Seller is a party or by which any of them or
any of their respective  properties or assets may be bound, or (iii) violate any
order, writ, injunction,  decree, law, statute, rule or regulation applicable to
Seller or any of its respective properties or assets.

          SECTION 4.6. Litigation. There is no civil, criminal or administrative
suits, claims, actions, grievances, arbitrations,  proceedings or investigations
pending or, to the best knowledge of Seller,  threatened against the Business or
any of its respective  properties or assets, or, except as set forth on Schedule
4.6 hereof, against the Seller.

         SECTION 4.7.  Compliance  with  Applicable Law. Seller is in compliance
with the terms of all laws, statutes, regulations, permits, licenses, variances,
exemptions,  orders  and  approvals  necessary  for the  lawful  conduct  of the
Business.  To the best knowledge of Seller,  no  investigation  or review by any
Governmental  Entity with respect to Seller is pending or  threatened in writing
that would impact in any materially adverse way the transactions contemplated by
the Transaction Agreements.

         SECTION 4.8. Accounts Receivable Report.

                  4.8.1 Accounts  Receivable  Report.  The "Accounts  Receivable
Report," a copy of which is attached  hereto as Schedule 4.8.1 and  incorporated
into this  Agreement,  provided to Buyer from Seller and dated  January 15, 2002
(the "Report Date")  represents fairly the accounts  receivable  balance of that
date for the  specific  customers  and  resellers to be  transferred  under this
Agreement.
<PAGE>

                  4.8.2  Absence of  Changes.  As from the Report Date and up to
the Closing,  the Business will be conducted in the ordinary  course  consistent
with past  practices and the covenants set forth in Section 6.1, and Seller will
disclose any events or conditions that are discovered that are,  individually or
in the  aggregate,  reasonably  expected  to  have  a  material  adverse  effect
(financial or otherwise) on the Business.

         SECTION 4.9. Brokers.  All negotiations  relating to this Agreement and
the  transactions   contemplated  hereby  have  been  carried  out  without  the
intervention  of any person acting on behalf of Seller in such manner as to give
rise to any valid claim  against  Buyer or Seller for any  brokerage or finder's
commission, fee or similar compensation.

         SECTION 4.10.  Consents of Third  Parties.  Except for the consents set
forth in  Schedule  4.10,  no  consents  or  approvals  of any  third  party are
necessary  in  connection  with the  execution  and  delivery  by  Seller of the
Transaction  Agreements to which the Seller is a party and the  consummation  by
Seller of the transactions  contemplated thereby,  including without limitation,
the transfer and assignment of the Assets contemplated under Section 1.1 hereof.

         SECTION  4.11.  Disclosure.  No  representation  or  warranty of Seller
contained herein, when read together with the Schedules and Exhibits referred to
herein,  is false or misleading in any material respect or omits to state a fact
herein or therein necessary in order to make the statements  contained herein or
therein not false or misleading in any material respect.

         SECTION  4.12.  Disclaimer  of Other  Representations  and  Warranties.
Seller does not make any  representations or warranties relating to the Business
in  connection  with the  transactions  contemplated  hereby  other  than  those
expressly set forth by it in this Agreement. It is also understood that any cost
estimates, projections or other productions, any data, any financial information
or any  memoranda or  presentations  are not and shall not be deemed to be or to
include  representations or warranties of Seller, except to the extent otherwise
expressly covered by the  representations  and warranties in this Agreement.  No
person has been  authorized  by Seller to make any  representation  or  warranty
relating to the  Business  or  otherwise  in  connection  with the  transactions
contemplated  hereby except as set forth in this  Agreement and the documents as
identified  in  Section  7.3  hereof.  If  any  statements  were  made  by  such
unauthorized person(s),  such representation or warranty must not be relied upon
as having been authorized by Seller.

                                    ARTICLE 5

                     REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

         SECTION 5.1.  Organization.  Buyer is duly organized,  validly existing
and in good standing under the laws of its state of incorporation  and Buyer has
all  requisite  power and  authority  to own,  lease and  operate  its assets or
properties and to carry on its business as now being  conducted and is qualified
to  do  business  and  in  good  standing  as  a  foreign  corporation  in  each
jurisdiction  where such  qualification  is required to carry on its business as
now being
<PAGE>

conducted, and to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.

         SECTION  5.2.  Authority  Relative  to this  Agreement.  Buyer  has all
necessary  corporate  power and authority to execute and deliver this Agreement,
to  perform  its  obligations   under  this  Agreement  and  to  consummate  the
transactions  contemplated  hereby.  The execution and delivery by Buyer of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and  validly  authorized  by the board of  directors  of  Buyer,  as of the
Closing  there will be no  revocation  of such  approval and no other  corporate
proceedings on the part of Buyer are necessary to authorize this Agreement or to
consummate the transactions  contemplated  hereby.  This Agreement has been duly
and validly  executed and delivered by Buyer and  constitutes,  assuming the due
authorization,  execution  and  delivery  hereof by Seller,  a valid,  legal and
binding agreement of Buyer, enforceable against it in accordance with its terms.

          SECTION  5.3. No  Violations.  Neither  the  execution,  delivery  and
performance  of this  Agreement  by Buyer nor the  consummation  by Buyer of the
transactions  contemplated hereby will (a) conflict with or result in any breach
of any  provision of the  certificates  of  incorporation  or bylaws (or similar
governing  documents)  of  Buyer,  (b)  result  in a  violation  or breach of or
constitute  (with or without  due notice or lapse of time or both) a default (or
give rise to any right of termination,  amendment,  cancellation or acceleration
or Lien) under any of the terms,  conditions or  provisions  of any note,  bond,
mortgage,  indenture, lease, license, contract, agreement or other instrument or
obligation  to which  Buyer  is a party or by which it or any of its  respective
properties  or assets may be bound or (c) violate any order,  writ,  injunction,
decree,  law,  statute,  rule or  regulation  applicable  to Buyer or any of its
respective properties or assets.

         SECTION 5.4. Litigation. There are no civil, criminal or administrative
suits, claims, actions, grievances, arbitrations,  proceedings or investigations
pending or, to the best knowledge of Buyer,  threatened  against Buyer or any of
its respective  properties or assets, which would have a material adverse effect
on Buyer's ability to perform its obligations under this Agreement.

         SECTION 5.5.  Compliance with Applicable Law. Buyer is in compliance in
all  material  respects  with the  terms of all  permits,  licenses,  variances,
exemptions,  orders  and  approvals  necessary  for the  lawful  conduct  of its
businesses (the "Permits").  To the best knowledge of Buyer, no investigation or
review by any Governmental Entity with respect to Buyer is pending or threatened
in writing  that would  impact in any  materially  adverse way the  transactions
contemplated by this Agreement.

         SECTION 5.6. No Vote Required. No vote of the holders of Buyer stock is
required  under  applicable law or corporate  governing  documents in connection
with this Agreement.

         SECTION 5.7. Investigation by Buyer.

         (a) Buyer has conducted its own independent  investigation,  review and
analysis of the Business,  including,  but not limited to,  operations,  Assets,
liabilities,   results  of  operations,   financial  condition,  technology  and
prospects of the Business.  Buyer  acknowledges that it and its  representatives
have been provided  adequate access to the personnel,  properties,  premises and
records of the  Business  identified  by Seller as relating  to the  Business as
Buyer has  requested for
<PAGE>

such purpose.  In entering into this Agreement,  Buyer  acknowledges that it has
relied solely upon the aforementioned investigation, review and analysis and not
on any factual  representations  or  opinions  of Seller or the  representatives
thereof  (except for the specific  representations  and warranties of Seller set
forth in this Agreement. Buyer has formed an independent judgment concerning the
Business and the rights, obligations, Assets and liabilities pertaining thereto.

         (b)  Buyer   acknowledges  that  none  of  Seller  and  its  respective
directors, officers, shareholders,  employees, affiliates,  controlling persons,
agents,  advisors or  representatives  makes,  or has made,  any oral or written
representation  or warranty,  either  express or implied,  as to the accuracy or
completeness  of any  estimates,  projections,  forecasts,  operating  plans  or
budgets  relating  to the  Business  delivered  or made  available  to  Buyer or
otherwise obtained by Buyer or its directors,  officers, employees,  affiliates,
controlling  persons,  agents or  representatives in respect of future revenues,
expenses or future results of operations except to the extent, if any, expressly
set forth herein.

         (c) Buyer agrees,  to the fullest extent permitted by law, that none of
Seller's directors, officers, employees,  shareholders or affiliates, shall have
any personal  liability or responsibility  whatsoever to Buyer or its directors,
officers, employees, affiliates,  controlling persons, agents or representatives
on any basis  (including in contract or tort,  under federal or state securities
laws or otherwise)  based upon any information  provided or made  available,  or
statements made (including in any memorandum  relating to Seller or the Business
provided to the Buyer, in presentations by Seller's  management or otherwise) to
Buyer or its directors,  officers, employees,  affiliates,  controlling persons,
advisors,  agents or representatives (or any omission  therefrom),  including in
respect of specific  representations  and  warranties,  other than any  specific
representations  and warranties set forth in Article 4 of this Agreement  except
for any liability  arising out of the intentional  misrepresentation  or willful
misconduct of any thereof or arising out of common law fraud.

         SECTION 5.8. Sufficiency of Skill and Knowledge.

         Buyer  understands  the  type,  quality  and scope of the  Business  as
provided by Seller to its customers, channel partners and resellers prior to the
Closing,  and Buyer  has or will  have at the  Closing  the  facilities,  means,
manpower,  finances and other resources to run the Business,  and will make best
efforts  in  satisfying  the  contractual  needs of those  entities  in a timely
fashion  during  the  current  terms  of the  agreements  with  those  entities.
Notwithstanding  the  foregoing,  the terms of this section shall not impose any
additional obligation or duty on the part of Buyer to renew those agreements.

                                    ARTICLE 6

                              ADDITIONAL COVENANTS

         SECTION 6.1. Conducting of Business.

         (a) Except as contemplated  by this  Agreement,  during the period from
the date  hereof to the Closing or the earlier  termination  of this  Agreement,
Seller will use all  reasonable  efforts
<PAGE>

to ensure that it conducts the  Business in the  ordinary  course of business in
substantially  the same  manner as  heretofore  conducted  consistent  with past
practice  and,  to the extent  consistent  therewith,  it shall seek to preserve
intact  the  service  of key  employees  and  preserve  its  relationships  with
customers,  channel  partners and resellers  with the intention that its ongoing
Business shall be unimpaired at the Closing.

         (b)  During  the  period  as  from  the  Closing,  Buyer  will  use all
reasonable  efforts to ensure that it conducts the Business in a manner so as to
preserve its  relationship  with customers,  channel partners and resellers with
the intention  that the  Business'  goodwill and revenue  generating  capability
shall be unimpaired after the Closing. Without derogating from the generality of
the above,  Buyer  agrees to  continue to meet the  requirements  of the Service
Level Agreement set forth in the agreements listed under Exhibit A.

         (c) Buyer  undertakes  to continue to run the Business for at least the
greater  of  twelve  (12)  months  as from the  Closing  or the  maximum  period
necessary to service the agreements transferred to Buyer under this Agreement.

         SECTION 6.2. Confidentiality. Each of the parties hereto will hold, and
will cause its consultants and advisers to hold, in confidence all documents and
information  furnished to it by or on behalf of another party to this  Agreement
in connection with the transactions  contemplated by this Agreement  pursuant to
the terms of that  certain  Confidentiality  Agreement  entered into between the
Seller and Buyer dated January 7, 2002.

         SECTION 6.3. Certain Filings; Reasonable Efforts.

         (a) Subject to the terms and conditions  herein  provided,  each of the
parties hereto agrees to use commercially reasonable efforts to take or cause to
be  taken  all  action  and to do or  cause  to be done  all  things  reasonably
necessary,  proper or advisable  under  applicable  law to  consummate  and make
effective the  transactions  contemplated  by this  Agreement,  including  using
commercially  reasonable efforts to execute any additional instruments necessary
to consummate the transactions contemplated hereby.

         (b) Buyer and Seller will consult and cooperate  with one another,  and
consider  in good  faith  the  views  of one  another,  in  connection  with any
analyses, appearances,  presentations, letters, white papers, memoranda, briefs,
arguments,  opinions or proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to any foreign, federal,
or state antitrust,  competition,  or fair trade law. In this regard but without
limitation,  each party hereto shall  promptly  inform the other of any material
communication between such party and the Federal Trade Commission, the Antitrust
Division  of the United  States  Department  of Justice,  or any other  federal,
foreign or state  antitrust or  competition  governmental  entity  regarding the
transactions contemplated herein.

         SECTION 6.4. Public Announcements. Neither Buyer nor Seller shall issue
any press release or otherwise  make any public  statements  with respect to the
transactions contemplated by this Agreement, including the sale of the Business,
without  the  prior  consent  of Buyer  and  Seller,  which  consent  may not be
unreasonably  withheld,  except as may be required by applicable  law, or by the
rules and  regulations  of, or pursuant to any  agreement  with,  the NASD,  the
Security
<PAGE>

Exchange Automated  Quotation System ("SEAQ") the Nasdaq National Market, or the
Oslo  Stock  Exchange,  in which  case the party  proposing  to issue such press
release or make such public  statement or  disclosure  shall use its  reasonable
best efforts to consult with the other party before  issuing such press  release
or making such public statement or disclosure.  The first public announcement of
this  Agreement  and the sale of the  Business  shall be by way of a joint press
release  agreed upon by Buyer and Seller,  or a press release  prepared by Buyer
subject to  Seller's  prior  review and  approval  which  approval  shall not be
unreasonably denied or delayed.

         SECTION 6.5. Additional Events.

         (a) During  the period  prior to the  Closing,  Seller and Buyer  shall
promptly notify the other party in writing of:

                  (i) the discovery by any of them of any event, condition, fact
         or  circumstance  that  occurred  or existed on or prior to the date of
         this  Agreement  and  that  caused  or  constitutes  a  breach  of  any
         representation or warranty made by them in this Agreement;

                  (ii) any breach of any covenant or  obligation of any of them;
         or

                  (iii)  the  discovery  of  any  event,   condition,   fact  or
         circumstance  that  would  reasonably  be  likely  to make  the  timely
         satisfaction  of any of the  conditions  set  forth  in this  Agreement
         impossible or unlikely.

         (b) In the event that the Buyer or any of its successors or assigns (i)
consolidates  with  or  merges  into  any  other  person  and  shall  not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially  all of its properties and assets
to any person then, and in each such case to the extent  necessary to effectuate
the purpose of this Agreement, Buyer shall take all necessary measures to ensure
that the  successors  and assigns of the Buyer shall succeed to the  obligations
set forth in this Agreement.

         SECTION 6.6. Customer Relations. Prior to the Closing:

         (i)      the parties  shall  cooperate in  developing a joint  customer
                  notification  of the  assignment  of  agreements to be sent to
                  each  transferred  customer/channel  partner/reseller  of  the
                  Business;

         (ii)     at  Buyer's  request  (but  only for the  first  30 days  from
                  Closing), Seller will introduce a Buyer representative to each
                  transferred customer/channel partner/reseller;

         (iii)    Seller will promptly  advise Buyer of any customer issues that
                  may affect the ongoing relationship with such customer.

         SECTION 6.7. Collection of Service Fees. As and from the Closing, Buyer
undertakes  to make all  reasonable  efforts  to  collect  in a  timely  fashion
outstanding amounts under the customer/channel  partner/reseller agreements. Any
amounts  collected  by Buyer on behalf of fees due and owing to Seller  prior to
the Closing shall be delivered promptly to Seller by Buyer.
<PAGE>

          SECTION 6.8.      Indemnification.

         (a)  Seller  will  indemnify,  defend and hold  harmless  Buyer and its
affiliates  and their  respective  officers,  directors,  employees,  agents and
shareholders  from and  against,  and pay and  reimburse  any of them  for,  any
claims, actions, damage, judgment, cost, expense, liability, loss or deficiency,
including,  without limitation,  reasonable  attorneys' fees and other costs and
expenses incident to any suit,  action,  claim or proceeding,  arising out of or
resulting  from (i) the  operation  of the Business  prior to Closing;  (ii) any
liabilities  of  Seller  not  assumed  by  Buyer  under  this  Agreement;  (iii)
misrepresentations  or breaches of  representations or warranties made herein by
Seller;  (iv)  noncompliance with or breach by Seller of any of the covenants or
agreements  contained  in this  Agreement;  or (v) the  discharge of any lien or
encumbrance  imposed  upon or  affecting  the Assets other than any such lien or
encumbrance  arising out of the rights and  interests of lessors of equipment in
the Assets.

         (b) Buyer  will  indemnify,  defend  and hold  harmless  Seller and its
affiliates  and their  respective  officers,  directors,  employees,  agents and
shareholders  from and  against,  and pay and  reimburse  any of them  for,  any
claims, actions, damage, judgment, cost, expense, liability, loss or deficiency,
including,  without limitation,  reasonable  attorneys' fees and other costs and
expenses incident to any suit,  action,  claim or proceeding,  arising out of or
resulting  from (i) the  operation of the  Business  after the Closing or of the
equipment  identified  on  Exhibits  C or D by Buyer  after  the  Closing;  (ii)
misrepresentations  or breaches of  representations or warranties made herein by
Buyer; or (iii) noncompliance with or breach by Buyer of any of the covenants or
agreements contained in this Agreement.
<PAGE>

         (c) Notwithstanding the foregoing, Buyer shall have the right to offset
from and against any amounts  payable by Buyer to Seller pursuant to Section 1.3
any amount due or owing by Seller to Buyer under this  Section 6.8  provided the
amount  due or owing by Seller  shall have been  admitted  in writing by Seller,
shall  have been  agreed to in  writing  by Buyer and  Seller or shall have been
determined  to be due or owing  by  Seller  to  Buyer  by a court  of  competent
jurisdiction or by an arbitrator or mediator having binding  authority over such
dispute.

         SECTION 6.9. Audit Rights. Seller may, upon reasonable notice,  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,
Buyer's records  applicable to the agreements  transferred or  customers/channel
partners/resellers  referred  hereunder by Seller to Buyer in order to determine
the  accuracy of payments  made and reports  provided by Buyer to Seller,  or to
discover any under-reported revenues and/or under-payments. Seller 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 Seller hereunder
or at law, the audit costs shall be paid by Buyer. Audits are limited to no more
than one per calendar quarter.

         SECTION 6.10. Nonassignable Contracts.  With respect to any contract or
agreement sold or transferred to Buyer hereunder whose consent to the assignment
thereof to Buyer shall not have been  obtained by the Closing,  the parties will
cooperate  with each other in any lawful and  reasonable  arrangement to provide
that Buyer shall  receive the benefits  under any such contract not assigned and
transferred  at the Closing by reason of the  failure to obtain such  consent (a
"Non-Transferred   Instrument"),   including   entering   into  a  sublease   or
subcontract.   Seller  shall  immediately  transfer  and  assign  to  Buyer  any
Non-Transferred   Instrument   for   which  a   consent   has   been   received.
Notwithstanding  anything to the  contrary in this  Agreement,  Seller shall not
transfer or assign any interest in any contract,  and Buyer shall not assume any
liability  arising  thereunder  or  resulting  therefrom,  if an  assignment  or
transfer or attempt to make an assignment or transfer of such contract,  without
the  consent or  approval  of a third  party or  governmental  authority,  would
constitute a breach or violation  thereof or a violation of  applicable  law, or
affect adversely the rights' of Buyer or Seller  thereunder,  until such consent
or  approval  has  been  obtained.   Furthermore,   as  to  the  open  standards
(non-Exchange  messaging  service)  portion of the  Outtask  agreement  assigned
hereunder,  no rights in said portion are assigned or otherwise  transferred  to
Buyer.

                                    ARTICLE 7

               CONDITIONS TO CONSUMMATION OF THE SALE AND PURCHASE

         SECTION  7.1.  Conditions  to Each  Party's  Obligations  to Effect the
Purchase and Sale. The respective obligations of each party hereto to effect the
purchase  and sale of the  Business  as  contemplated  herein are subject to the
satisfaction  or, if permitted by  applicable  law,  waiver,  at or prior to the
Closing of the following conditions:

         (a) no statute, rule, regulation,  executive order or other such order,
shall have been enacted,  entered,  promulgated or enforced and remain in effect
by any United States  federal or state or foreign court or United States federal
or state or foreign  governmental entity that
<PAGE>

prohibits,  restrains, enjoins or restricts the consummation of the transactions
described herein; and

         (b) any  governmental  or regulatory  notices,  consents,  approvals or
other requirements necessary to consummate the transactions  contemplated hereby
shall have been given, obtained or complied with, as applicable.

         SECTION 7.2. Conditions to the Obligations of Seller. The obligation of
Seller to effect the sale of the Business is subject to the  satisfaction or, if
permitted by applicable law, waiver, at or prior to the Closing of the following
conditions:

         (a) the  representations  and  warranties  of Buyer  contained  in this
Agreement  shall  be true and  correct  at and as of the  Closing  with the same
effect  as if  made  at  and as of  the  Closing  (except  to  the  extent  such
representations  specifically  relate to an  earlier  date,  in which  case such
representations  shall be true and correct as of such earlier  date) and, at the
Closing,  Buyer shall have  delivered  to Seller a  certificate  to that effect,
executed by two (2) executive officers or directors of Buyer; and

         (b) each of the covenants and  obligations  of Buyer to be performed at
or before the Closing  pursuant to the terms of this  Agreement  shall have been
duly performed in all material respects at or before the Closing,  and Buyer, at
the  Closing,  shall have  delivered  to Seller a  certificate  to that  effect,
executed by two (2) executive officers or directors of Buyer.

         SECTION 7.3. Conditions to the Obligations of Buyer. The obligations of
Buyer to effect the purchase of the Business are subject to the  satisfaction at
or prior to the Closing of the following conditions:

         (a) the  representations  and  warranties  of Seller  contained in this
Agreement  shall  be true and  correct  at and as of the  Closing  with the same
effect  as if  made  at  and as of  the  Closing  (except  to  the  extent  such
representations  specifically  relate to an  earlier  date,  in which  case such
representations  shall be true and correct as of such earlier  date) and, at the
Closing,  the Seller shall have delivered to Buyer a certificate to that effect,
executed by two (2) executive officers or directors of Seller;

         (b) Since the Report Date, there shall have been no change which has or
has had a material adverse effect (financial or otherwise) on the Business,  and
the Chief  Financial  Officer of the  Seller  shall  have  delivered  to Buyer a
certificate to that effect; and

         (c) Each of the covenants and  obligations of Seller to be performed at
or before the Closing  pursuant to the terms of this  Agreement  shall have been
duly  performed  in all  material  respects at or before the Closing and, at the
Closing,  the Seller shall have delivered to Buyer a certificate to that effect,
executed by two (2) executive officers or directors of Seller;

         (d)  Buyer  shall  have  received  written  consent  of  assignment  by
Jamcracker, Bill of Sale and other items to be delivered by Seller under Section
2.2,  duly  executed by an  authorized  officer of Seller,  except for the third
party consents to the assignment of the Contracts  identified on Schedule 7.3(e)
hereof.
<PAGE>

                                    ARTICLE 8

                         TERMINATION; AMENDMENT; WAIVER

         SECTION 8.1. Termination. This Agreement may be terminated and the sale
and purchase of the Business may be abandoned at any time prior to the Closing:

         (a) by mutual written consent of Seller and Buyer;

         (b) by Seller or Buyer if (i) any court of  competent  jurisdiction  or
other federal or state or foreign governmental entity of competent  jurisdiction
shall have  issued a final  order,  decree or ruling,  or taken any other  final
action,  restraining,  enjoining or otherwise  prohibiting the sale and purchase
and  such  order,  decree,  ruling  or other  action  is or  shall  have  become
nonappealable or (ii) the sale and purchase has not been consummated by February
1, 2002;  provided that no party may terminate this  Agreement  pursuant to this
clause (ii) if such party's failure to fulfill any of its obligations under this
Agreement  shall have been a principal  reason  that the Closing  shall not have
occurred on or before said date;

         (c)  by  Seller  if  (i)  there   shall  have  been  a  breach  of  any
representations  or warranties on the part of Buyer set forth in this  Agreement
or if any  representations  or warranties of Buyer shall have become untrue such
that the conditions herein would be incapable of being satisfied by the Closing,
provided that Seller has not willfully breached any of its obligations hereunder
in any material respect and provided further,  however, that Seller has provided
Buyer  with  notice of such  breach  and such  breach  shall not have been cured
within ten (10)  business  days of such  notice;  (ii)  there  shall have been a
breach  by Buyer of any of its  covenants  or  agreements  hereunder  materially
adversely  affecting  (or  materially  delaying)  the ability of either party to
consummate  the sale and purchase of the Business,  and Buyer has not cured such
breach within ten (10) business  days after notice by Seller  thereof,  provided
that Seller has not willfully breached any of their obligations hereunder in any
material respect;

         (d)  by  Buyer  if  (i)  there   shall   have  been  a  breach  of  any
representations  or warranties on the part of Seller set forth in this Agreement
or if any  representations or warranties of Seller shall have become untrue such
that the  conditions  set forth herein would be incapable of being  satisfied by
the  Closing,  provided  that  Buyer  has  not  willfully  breached  any  of its
obligations  hereunder in any material  respect and provided  further,  however,
that Buyer has provided  Seller with notice of such breach and such breach shall
not have been cured within ten (10)  business  days of such  notice;  (ii) there
shall have been a breach by Seller of one or more of its covenants or agreements
hereunder materially adversely affecting (or materially delaying) the ability of
either party to  consummate  the sale and purchase of the  Business,  and Seller
shall have not cured such breach  within ten (10)  business days after notice by
Buyer  thereof,  provided  that  Buyer  has not  willfully  breached  any of its
obligations hereunder in any material respect; or

         (e) if the Closing shall not have occurred by February 30, 2002.

         SECTION 8.2. Effect of Termination. In the event of the termination and
abandonment  of this  Agreement  pursuant to Section 8.1, this  Agreement  shall
forthwith  become void and have no effect  without any  liability on the part of
any  party  hereto  or  its  affiliates,
<PAGE>

directors, officers or shareholders provided, however, that nothing contained in
this Section 8.2 shall  relieve any party from  liability for any breach of this
Agreement made prior to such termination.

         SECTION 8.3. Fees and Expenses.  Each party shall bear its own expenses
in connection  with this  Agreement and the  transactions  contemplated  hereby,
except as otherwise provided in any provision hereof.

         SECTION  8.4.  Amendment.  This  Agreement  may be  amended  only by an
instrument in writing signed on behalf of the parties hereto.

         SECTION 8.5. Extension;  Waiver. At any time prior to the Closing, each
party  hereto  may  (i)  extend  the  time  for  the  performance  of any of the
obligations or other acts of the other party, (ii) waive any inaccuracies in the
representations  and  warranties of the other party  contained  herein or in any
document  certificate  or  writing  delivered  pursuant  hereto  or (iii)  waive
compliance by the other party with any of the agreements or conditions contained
herein.  Any agreement on the part of any 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.  The  failure  of any party  hereto to assert  any of its
rights hereunder shall not constitute a waiver of such rights.

                                    ARTICLE 9

                                  MISCELLANEOUS

         SECTION 9.1. Entire Agreement; Assignment. This Agreement and the other
Transaction  Agreements (a) constitute the entire agreement  between the parties
hereto with respect to the subject matter hereof,  and supersede all other prior
and contemporaneous  agreements and understandings both written and oral between
the parties, except for the Confidentiality  Agreement,  which shall continue in
full force and effect,  and shall survive any  termination  of this Agreement or
the  Closing  in  accordance  with its terms and (b)  shall not be  assigned  by
operation of law or otherwise.

         SECTION  9.2.  Validity.  If any  provision  of this  Agreement  or the
application   thereof  to  any  person  or   circumstance  is  held  invalid  or
unenforceable,  the  remainder of this  Agreement  and the  application  of such
provision to other persons or circumstances shall not be affected thereby and to
such end the provisions of this  Agreement are agreed to be severable,  and such
invalidity  or  unenforceability  shall not affect any other  provision  of this
Agreement  which  shall  be  enforced  in  accordance  with the  intent  of this
Agreement.

         SECTION 9.3 Notices. All notices and other  communications  pursuant to
this  Agreement  shall be in  writing  and  shall be deemed  given if  delivered
personally, facsimile, sent by nationally-recognized overnight courier or mailed
by registered or certified mail (return receipt requested),  postage prepaid, to
the parties at the  addresses  set forth  below or to such other  address as the
party to whom  notice is to be given  may have  furnished  to the other  parties
hereto in writing in accordance herewith. Any such notice or communication shall
be  deemed to have  been  delivered  and  received  (A) in the case of  personal
delivery,  on the date of such  delivery,  (B) in the case of facsimile,  on the
date  sent if  confirmation  of  receipt  is  received  and such  notice is
<PAGE>

also promptly mailed by registered or certified mail (return receipt requested),
(C) in the case of a  nationally-recognized  overnight  courier in circumstances
under which such courier  guarantees  next  business day  delivery,  on the next
business  day after the date  when sent and (D) in the case of  mailing,  on the
third  business day following  that on which the piece of mail  containing  such
communication is posted:

         if to Buyer:

         TeleComputing, Inc.
         45999 Center Oak Plaza, Suite 170
         Sterling, VA 20166
         Facsimile: 703.948.2506
         Attention: Matthew Soska

                  if to Seller:

         c/o  Commtouch Inc.
         2029 Stierlin Court
         Mountain View, California 94043
         Facsimile: (650) 864-2006
         Attention: General Counsel

or to such  other  address  as the  person  to whom  notice  is  given  may have
previously furnished to the others in writing in the manner set forth above.

         SECTION 9.4. Governing Law and Venue.

         (a) THIS  AGREEMENT  SHALL BE DEEMED TO BE MADE IN, AND IN ALL RESPECTS
SHALL BE INTERPRETED,  CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH, THE LAW
OF THE  STATE OF NEW YORK  WITHOUT  REGARD  TO THE  CONFLICT  OF LAW  PRINCIPLES
THEREOF.  Any lawsuit  filed by Seller  against  Buyer shall be  commenced  in a
federal  or state  court  of  competent  jurisdiction  in  Santa  Clara  County,
California and any lawsuit filed by Buyer against Seller shall be commenced in a
federal or state court of competent  jurisdiction  in Fairfax or Loudoun County,
Virginia, and each party hereby irrevocably submits to the personal jurisdiction
of such court, and hereby waives,  and agrees not to assert, as a defense in any
action,  suit or proceeding for the  interpretation or enforcement  hereof or of
any such document,  that it is not subject thereto or that such action,  suit or
proceeding may not be brought or is not  maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or any such document
may not be enforced in or by such  courts,  and the parties  hereto  irrevocably
agree that all claims with respect to such action or  proceeding  shall be heard
and  determined in such a court.  The parties hereby consent to and grant to any
such court  jurisdiction  over the person of such  parties  and over the subject
matter of such  dispute  and agree that  mailing  of process or other  papers in
connection  with any such action or proceeding in the manner provided in Section
9.3 or in such other  manner as may be  permitted by  applicable  law,  shall be
valid and sufficient service thereof.
<PAGE>

         (b) The parties agree that irreparable  damage would occur and that the
parties  would not have any adequate  remedy at law in the event that any of the
provisions  of this  Agreement  were not  performed  in  accordance  with  their
specific terms or were  otherwise  breached.  It is accordingly  agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this  Agreement  and to enforce  specifically  the terms and  provisions of this
Agreement in the court specified under item (a) above, this being in addition to
any other remedy to which they are entitled at law or in equity.

         (c) Should an action be brought  before a court in accordance  with the
above, the prevailing party shall be entitled to reasonable  attorneys' fees and
costs from the other party.

         SECTION 9.5. Descriptive Headings.  The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.

         SECTION 9.6. Parties in Interest.  This Agreement shall be binding upon
and inure  solely to the  benefit of each party  hereto and its  successors  and
permitted  assigns and,  except as expressly  provided  herein,  nothing in this
Agreement  is  intended  to or shall  confer  upon any other  person any rights,
benefits  or  remedies  of any  nature  whatsoever  under or by  reason  of this
Agreement.

         SECTION 9.7.  Certain  Definitions.  For the purposes of this Agreement
the term:

         (a) "applicable law" means, with respect to any person, any domestic or
foreign,  federal,  state or local statute,  law, ordinance,  rule,  regulation,
order,  writ,  injunction,   judgment,   decree  or  other  requirement  of  any
governmental  entity  existing  as of  the  date  hereof  or as of  the  Closing
applicable to such person or any of its respective properties, assets, officers,
directors, employees, consultants or agents.

         (b) "include" or "including"  means  "include,  without  limitation" or
"including,  without limitation," as the case may be, and the language following
"include" or "including" shall not be deemed to set forth an exhaustive list;

         (c) "Lien" means,  with respect to any asset  (including any security),
any mortgage,  lien, pledge,  charge, claim, security interest or encumbrance of
any kind in respect of such asset; provided, however, that the term "Lien" shall
not include (i)  statutory  liens for Taxes (as defined  below) that are not yet
due and payable, (ii) statutory liens for Taxes that are being contested in good
faith by appropriate  proceedings  and for which  adequate  reserves exist (iii)
statutory or common law liens to secure  obligations  to  landlords,  lessors or
renters under leases or rental agreements  confined to the premises rented, (iv)
deposits or pledges made in connection  with, or to secure payment of,  workers'
compensation,  unemployment insurance,  old age pension or other social security
programs  mandated under  Applicable  Laws, (v) statutory or common law liens in
favor of carriers,  warehousemen,  mechanics  and material men, to secure claims
for labor, materials or supplies and other like liens, and (vi) minor liens that
have arisen in the  ordinary  course of business and that do not (in any case or
in the  aggregate)  materially  detract  from the  value of the  assets  subject
thereto or materially impair the operation of Seller or any of its
<PAGE>

subsidiaries;  and (vi) purchase money liens incurred in the ordinary  course of
business and liens  securing debt which is reflected on the Accounts  Receivable
Report;

         (d) "person" means any individual,  corporation,  partnership,  limited
liability  company,  association,  trust,  unincorporated  organization or other
legal entity including any governmental entity;

         (e) "Transaction Agreement" means,  collectively,  this Agreement,  the
Bill of Sale and each other agreement or instrument  entered into by the parties
hereto pursuant to the terms hereof.

         SECTION 9.8 Personal  Liability.  This Agreement shall not create or be
deemed to create or permit any personal  liability or  obligation on the part of
any direct or indirect shareholder of Seller or Buyer or any officer,  director,
employee,  agent,  representative or investor of any party hereto except for any
liability arising out of the intentional misrepresentation or willful misconduct
of any thereof or arising out of common law fraud.

         SECTION  9.9.  Taxes.  To the extent that any  franchise,  sales,  use,
personal property,  excise,  value added or other such taxes, except taxes based
on income, are imposed in the United States as a result of the sale and purchase
of the Assets at the Closing or in relation to the  conducting of the operations
of the Business by Buyer thereafter,  such taxes shall be paid by Buyer.  Seller
shall be responsible  for all taxes imposed on the Business and the Assets prior
to the Closing.

         SECTION 9.10.  Commtouch Messaging Platform ("CMP").  Buyer agrees that
it will  evaluate and consider  for purchase and use Seller's  proprietary  high
volume  messaging  server,  CMP,  it being  understood  that Buyer shall have no
obligation to purchase or use the same.

         SECTION 9.11 Bulk Sales Laws. Buyer hereby waives compliance by Seller,
in connection with the  transactions  contemplated  by this Agreement,  with the
provisions of the Bulk Sales or Transfers Laws of the Uniform Commercial Code as
adopted in the State of California, and as adopted in any other states where any
of the Assets are located, and any other applicable bulk sales laws with respect
to or requiring notice to Seller's creditors, in effect as of the Closing.

         SECTION 9.12.  Counterparts.  This  Agreement may be executed in one or
more  counterparts,  each of which shall be deemed to be an original  but all of
which shall constitute one and the same agreement.

         IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.

                                TELECOMPUTING, INC.

                                By:
                                     --------------------------------
                                     Name:
                                     Title:
                                     Date:

                                COMMTOUCH INC.

                                By:
                                     --------------------------------
                                     Name:
                                     Title:
                                     Date:

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