AGREEMENT OF MERGER





         THIS  AGREEMENT OF MERGER (this  "Agreement")  dated as of November 16,

2001,  is by  and  among  CP  SOFTWARE  GROUP  INC.,  a  California  corporation

("Parent"),  COMMTOUCH  SOFTWARE  LTD.,  an Israeli  corporation  ("Commtouch"),

MAILCENTRO,  INC.  ("Acquisition") , a California corporation and a wholly owned

subsidiary  of  Commtouch  Software  Ltd.  and  CPSGNEWCO,  INC.,  a  California

corporation ("Merger Sub") and a wholly-owned subsidiary of Parent . Capitalized

terms not  otherwise  defined  herein shall have the  meanings  ascribed to such

terms in Section 7.8 of this Agreement.



         WHEREAS,   Commtouch  and  certain  of  its  subsidiary  companies  are

interested in selling and  transferring  to Parent,  and Parent is interested in

acquiring,  substantially all of Commtouch's and said subsidiaries' business and

assets relating to its Consumer-class Email Services division ("Business"); and



         WHEREAS,  the parties hereto, in facilitating the sale of the Business,

are interested in effecting the Merger (as defined below) of Merger Sub with and

into Acquisition,  with Acquisition as the surviving corporation in such merger,

all in accordance with the provisions of this Agreement;



         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the

representations,  warranties,  covenants and agreements  herein  contained,  and

intending to be legally bound hereby, Commtouch,  Acquisition, Parent and Merger

Sub hereby agree as follows:





                                    ARTICLE 1



                                   THE MERGER



         SECTION 1.1. The Merger.  At the Effective  Time (as defined below) and

upon  the  terms  and  subject  to the  conditions  of  this  Agreement  and the

applicable  provisions of the California  Corporations Code ("California  Law"),

Merger Sub shall be merged with and into Acquisition  (the "Merger"),  whereupon

the separate  existence of Merger Sub shall cease, and Acquisition  shall be the

surviving  corporation  (the  "Surviving  Corporation").  Parent,  as  the  sole

shareholder of Merger Sub, and Commtouch, as the sole shareholder of Acquisition

hereby  undertake to approve the Merger and this Agreement by unanimous  written

consent.



         SECTION 1.2.  Effective  Time.  Subject to the terms and  conditions of

this  Agreement,  Acquisition  and Merger Sub shall duly file the  Agreement  of

Merger, together with the required officers' certificates, with the Secretary of

State of the State of California,  at the time of Closing in accordance with the

relevant  provisions  of  California  Law  (the  time of such  filing  with  the

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