EXHIBIT 4.10

================================================================================

                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                                     TEKELEC

                                       AND

                                NICE-SYSTEMS LTD.


                           DATED AS OF APRIL 27, 2006

================================================================================

<PAGE>


                                TABLE OF CONTENTS

                                                                         PAGE

ARTICLE I DEFINITIONS                                                      1

    1.1     Certain Definitions                                            1
    1.2     Terms Generally                                                7

ARTICLE II PURCHASE AND SALE OF THE SHARES                                 7

    2.1     Purchase and Sale                                              7
    2.2     Consideration                                                  7
    2.3     Post-Closing Date Purchase Price Adjustment                    8
    2.4     Closing                                                        9
    2.5     Deliveries by Seller at the Closing                            9
    2.6     Deliveries by Buyer                                           10

ARTICLE III RELATED MATTERS                                               11

    3.1     Books and Records of the Company                              11
    3.2     Distributions                                                 11

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER                       11

    4.1     Organization                                                  12
    4.2     Authorization                                                 12
    4.3     Common Stock                                                  12
    4.4     Ownership of the Shares                                       13
    4.5     Consents and Approvals; No Violations                         13
    4.6     Financial Statements                                          13
    4.7     No Undisclosed Liabilities                                    14
    4.8     Product Warranties and Product Liability                      14
    4.9     Absence of Certain Developments                               14
    4.10    Real Property                                                 15
    4.11    Personal Property                                             16
    4.12    Intellectual Property                                         16
    4.13    Litigation                                                    20
    4.14    Compliance with Applicable Law; Permits                       20
    4.15    Certain Contracts and Arrangements                            20
    4.16    Labor Relations                                               22
    4.17    Employment Benefit Plans; ERISA                               22
    4.18    Taxes                                                         24
    4.19    Accounts Receivable                                           25
    4.20    Environmental Matters                                         26
    4.21    Insurance                                                     26
    4.22    Certain Fees                                                  27
    4.23    Corporate Records                                             27
    4.24    Transactions with Affiliates                                  27
    4.25    Certain Payments                                              27
    4.26    Banks; Powers of Attorney; Guarantees                         27
    4.27    Books and Records                                             27
    4.28    Customers and Suppliers                                       28
    4.29    Export Control                                                28
    4.30    Disclosure                                                    28

                                       i
<PAGE>


                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                         PAGE

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER                         28

    5.1     Organization and Authority of Buyer                           28
    5.2     Consents and Approvals; No Violations                         29
    5.3     Availability of Funds                                         29
    5.4     Investment Representation                                     29
    5.5     Litigation                                                    30
    5.6     Investigation by Buyer                                        30
    5.7     Certain Fees                                                  30

ARTICLE VI COVENANTS                                                      30

    6.1     Conduct of the Company's Business                             30
    6.2     Access to Information                                         31
    6.3     Consents                                                      32
    6.4     Reasonable Efforts                                            32
    6.5     Covenant to Satisfy Conditions                                33
    6.6     Public Announcements                                          33
    6.7     Use of "Tekelec" Name                                         33
    6.8     Employees; Employee Benefits                                  33
    6.9     Certain Tax Matters                                           36
    6.10    Exclusivity                                                   38
    6.11    Disclosure Schedule                                           38
    6.12    Non-Competition; Non-Solicitation                             39
    6.13    Remittances of Receivables                                    40
    6.14    Termination of Certain Contracts                              40
    6.15    Audited Financial Statements                                  40
    6.16    Blue Pumpkin Software License                                 40

ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE PARTIES                      40

    7.1     Conditions to Each Party's Obligation                         40
    7.2     Conditions to Obligations of Seller                           41
    7.3     Conditions to Obligations of Buyer                            41

ARTICLE VIII TERMINATION; AMENDMENT; WAIVER                               42

    8.1     Termination                                                   42
    8.2     Procedure and Effect of Termination                           43

                                       ii
<PAGE>


                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                         PAGE

ARTICLE IX SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION                   44

    9.1     Survival of Representations, Warranties and Agreements        44
    9.2     Seller's Agreement to Indemnify                               44
    9.3     Buyer's Agreement to Indemnify                                44
    9.4     Notice of Claims                                              45
    9.5     General Limitations; Exclusive Remedy                         45
    9.6     Third Party Indemnification                                   46
    9.7     Indemnity Payments                                            47

ARTICLE X MISCELLANEOUS                                                   47

   10.1     Fees and Expenses                                             47
   10.2     Further Assurances                                            47
   10.3     Notices                                                       47
   10.4     Severability                                                  48
   10.5     Binding Effect; Assignment                                    49
   10.6     No Third Party Beneficiaries                                  49
   10.7     Interpretation                                                49
   10.8     Jurisdiction and Consent to Service                           49
   10.9     Attorneys' Fees                                               49
   10.10    Governing Law                                                 50
   10.11    Specific Performance                                          50
   10.12    Entire Agreement                                              50
   10.13    Amendment, Modification and Waiver                            50
   10.14    Counterparts                                                  50

EXHIBITS

Exhibit A   Form of Transition Services Agreement
Exhibit B   Form of Legal Opinion of Counsel to Seller
Exhibit C   Form of Guarantee

                                      iii
<PAGE>



DISCLOSURE SCHEDULES

Schedule 1.1               Knowledge
Schedule 2.3(b)            Accounting Principles
Schedule 4.5               Consents; Approvals
Schedule 4.6               Financial Statements
Schedule 4.7               No Undisclosed Liabilities
Schedule 4.8(a)            Product Warranties and Product Liability
Schedule 4.8(b)            Product Claims
Schedule 4.9(b)            Absence of Certain Developments
Schedule 4.10(b)           Leases for Real Property
Schedule 4.11(c)           Personal Property Leases
Schedule 4.12(a)           Ownership of Technology and Intellectual Property
                           Rights
Schedule 4.12(b)           Company Intellectual Property Rights
Schedule 4.12(c)(i)        Certain Contracts Related to Company Technology or
                           Company Intellectual Property Rights
Schedule 4.12(c)(ii)       Transfers of Intellectual Property Rights
Schedule 4.12(e)           Necessary or Material Intellectual Property Rights
Schedule 4.12(f)           Proprietary Rights, Etc.
Schedule 4.12(g)(i)        Registered Intellectual Property Rights
Schedule 4.12(g)(ii)       Actions or Claims Related to Registered Intellectual
                           Property Rights
Schedule 4.12(h)           Indemnity
Schedule 4.12(j)           Licenses
Schedule 4.12(l)           Development of Intellectual Property Rights
Schedule 4.12(m)           Enforceability
Schedule 4.12(o)           Open Source Components
Schedule 4.13              Litigation
Schedule 4.15              Certain Contracts and Arrangements
Schedule 4.16              Company Employees
Schedule 4.17(a)           Employee Benefit Plans
Schedules 4.18(a) & (b)    Taxes
Schedule 4.18(k)           Foreign Taxes
Schedule 4.21              Insurance Policies
Schedule 4.24              Affiliate Transactions
Schedule 4.26              Bank Accounts; Powers of Attorney
Schedule 4.28(a)           Significant Customers
Schedule 4.28(b)           Significant Suppliers
Schedule 6.1(b)            Conduct of the Company's Business
Schedule 6.8(c)            Severance Policy
Schedule 7.3(f)            Consents, Approvals

                                       iv

<PAGE>


                            STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") is entered into as of April
27, 2006, by and between Tekelec, a California corporation ("SELLER"), and
NICE-Systems Ltd., a company limited by shares organized under the laws of the
State of Israel ("BUYER").

                                     RECITAL

     WHEREAS, pursuant to the terms and conditions of this Agreement, Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller, 100 shares
(the "SHARES") of Common Stock, par value $0.01 per share (the "COMMON STOCK"),
of IEX Corporation, a Nevada corporation (the "COMPANY"), representing all of
the issued and outstanding capital stock of the Company;

     NOW THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions set forth
below, and intending to be legally bound hereby, the parties hereto agree as
follows:

                                   ARTICLE I
                                   DEFINITIONS

          1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the following
     terms shall have the respective meanings set forth below:

          "ACQUIROR" shall have the meaning set forth in Section 6.12(c).

          "AFFILIATE" shall have the meaning set forth in Rule 12b-2 of the
     General Rules and Regulations under the Securities Exchange Act of 1934, as
     amended.

          "AGREEMENT" has the meaning set forth in the preamble of this
     Agreement.

          "ARBITER" has the meaning set forth in Section 2.3(c).

          "AUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section
     6.15.

          "BLUE PUMPKIN CROSS-LICENSE AGREEMENT" has the meaning set forth in
     Section 6.16.

          "BLUE PUMPKIN LICENSED PATENTS" has the meaning set forth in Section
     6.16.

          "BUSINESS DAY" means any day other than Saturday, Sunday or a day on
     which banking institutions in New York, New York are required to be closed.

          "BUYER" has the meaning set forth in the preamble of this Agreement.

          "BUYER FLEXIBLE BENEFITS PLAN" has the meaning set forth in Section
     6.8(e).

<PAGE>


          "BUYER INDEMNITEES" has the meaning set forth in Section 9.2.

          "CASH" means cash and cash equivalents (including marketable
     securities and short-term investments) calculated in accordance with GAAP.

          "CLOSING" has the meaning set forth in Section 2.4.

          "CLOSING BALANCE SHEET" has the meaning set forth in Section 2.3(b).

          "CLOSING DATE" has the meaning set forth in Section 2.4.

          "CLOSING WORKING CAPITAL" has the meaning set forth in Section 2.3(b).

          "CLOSING WORKING CAPITAL STATEMENT" has the meaning set forth in
     Section 2.3(b).

          "COBRA" has the meaning set forth in Section 4.17(e).

          "CODE" means the Internal Revenue Code of 1986, as amended.

          "COMMON STOCK" has the meaning set forth in the Recital to this
     Agreement.

          "COMPANY" has the meaning set forth in the preamble of this Agreement.

          "COMPANY CHARTER DOCUMENTS" has the meaning set forth in Section 4.1.

          "COMPANY EMPLOYEES" has the meaning set forth in Section 4.16.

          "COMPANY INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property
     Rights owned by the Company and used in the current operation of the
     Company's business, including without limitation all Company Registered IP
     and all Intellectual Property Rights in the Products (including the
     Technology embodied therein).

          "COMPANY PERMITS" has the meaning set forth in Section 4.14(b).

          "COMPANY REGISTERED IP" has the meaning set forth in Section 4.11(g).

          "COMPANY TECHNOLOGY" means all Technology owned by the Company and
     used in the current operation of the Company's business.

          "CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section
     6.2(c).

          "CONTRACT" means any contract, agreement, indenture, note, bond,
     mortgage, loan, instrument, lease, license, commitment or other
     arrangement, understanding, undertaking or obligation, whether written or
     oral.

          "DAMAGES" has the meaning set forth in Section 9.2.

                                       2
<PAGE>


          "DISABLING PROCEDURES" has the meaning set forth in Section 4.12(n).

          "DISCLOSURE SCHEDULE" has the meaning set forth in Article IV.

          "DISTRIBUTIONS" has the meaning set forth in Section 3.2.

          "EMPLOYEE" has the meaning set forth in Section 6.8(a).

          "ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.20(a).

          "ENVIRONMENTAL PERMITS" has the meaning set forth in Section 4.20(b).

          "ERISA" has the meaning set forth in Section 4.17(a).

          "ERISA AFFILIATE" has the meaning set forth in Section 4.17(a).

          "GAAP" means generally accepted accounting principles, as in effect in
     the United States from time to time, applied on a basis consistent with the
     accounting methods, principles or practices, policies and standards of the
     Company.

          "GOVERNMENTAL AUTHORITY" means any foreign, domestic, federal,
     territorial, state or local governmental authority, quasi-governmental
     authority, court, commission, board, bureau, agency or instrumentality, or
     any regulatory, administrative or other department, agency, or any
     political or other subdivision, department or branch of any of the
     foregoing.

          "HAZARDOUS SUBSTANCES" has the meaning set forth in Section 4.20(a).

          "H-S-R ACT" has the meaning set forth in Section 4.5.

          "INCOME TAXES" has the meaning set forth in Section 4.18(m)(i).

          "INDEBTEDNESS" means with respect to any Person, all obligations
     contingent or otherwise, in respect of: (1) borrowed money; (ii)
     indebtedness evidenced by notes, debentures or similar instruments; (iii)
     capitalized lease obligations; (iv) the deferred purchase price of
     properties, assets, services or securities (other than ordinary trade
     accounts payable or employee compensation); (v) conditional sale or other
     title retention agreements; (vi) any letter of credit, banker's acceptance
     or similar credit reimbursement obligation; (vii) interest rate or currency
     swap transactions (valued at the termination value thereof); (viii) all
     obligations of the types referred to in clauses (i) through (vi) for the
     payment of which such Person is responsible or liable, directly or
     indirectly, as obligor, guarantor, surety or otherwise, or secured by Lien
     on any property or asset of such Person; and (i) interest, premium,
     penalties and other amounts owing in respect of the items described in the
     foregoing clauses (i) through (v).

          "INDEMNIFYING PARTY" has the meaning set forth in Section 9.4(a).

          "INDEMNITY PERIOD" has the meaning set forth in Section 9.1.


                                       3
<PAGE>


          "INJURED PARTY" has the meaning set forth in Section 9.4(a).

          "INTELLECTUAL PROPERTY RIGHTS" means any or all of the following and
     all statutory and/or common law rights in, arising out of, or associated
     therewith, arising under the laws of the United States (i) all Patents;
     (ii) all inventions (whether patentable or not), invention disclosures and
     improvements, all trade secrets, proprietary information, know how and
     other Technology; (iii) all works of authorship, including derivative
     works, within the meaning of the United States Copyright Act, 17 U.S.C.
     ss.ss. 101 et seq., copyrights, mask works, copyright and mask work
     registrations and applications therefor; (iv) all industrial designs and
     any registrations and applications therefor; (v) all Trademarks and
     Internet domain names; (vi) all databases and data collections (including
     knowledge databases, customer lists and customer databases); (vii) all
     rights in Software; (viii) all other rights in or to any Technology; (ix)
     any similar, corresponding or equivalent rights to any of the foregoing;
     (x) all goodwill associated with any of the foregoing; and (xi) the right
     and power to assert, defend and recover title thereto and the right to sue
     for and recover damages for past, present and future infringement, misuse,
     misappropriation or other violation thereof.

          "IRS" has the meaning set forth in Section 4.17(b).

          "LEASED REAL PROPERTY" has the meaning set forth in Section 4.10(c).

          "LEASES" has the meaning set forth in Section 4.10(b).

          "LIABILITY" means any debt, loss, damage, adverse claim, fine,
     penalty, liability or obligation (whether direct or indirect, known or
     unknown, asserted or unasserted, absolute or contingent, accrued or
     unaccrued, matured or unmatured, determined or determinable, liquidated or
     unliquidated, or due or to become due, and whether in contract, tort,
     strict liability or otherwise.

          "LICENSE IN AGREEMENTS" has the meaning set forth in Section 4.12(j).

          "LICENSED INTELLECTUAL PROPERTY RIGHTS" means all Intellectual
     Property Rights licensed by the Company from third parties and used in the
     current operation of the Company's business.

          "LICENSED TECHNOLOGY" means all Technology licensed by the Company
     from third parties and used in the current operation of the Company's
     business.

          "LIEN" means any lien, pledge, mortgage, deed of trust, security
     interest, claim, lease, charge, option, right of first refusal, easement,
     servitude, proxy, voting trust or agreement, transfer restriction under any
     shareholder or similar agreement, encumbrance or any other restriction or
     limitation whatsoever.


                                       4
<PAGE>


          "MATERIAL ADVERSE EFFECT" means a material adverse effect on the
     business, results of operations or financial condition of the Company taken
     as a whole, other than changes (a) relating to generally applicable
     economic conditions or to the Company's industry in general (unless the
     Company is disproportionately affected thereby) or (b) resulting from the
     execution and delivery of this Agreement or the consummation of the
     transactions contemplated hereby.

          "MOST RECENT BALANCE SHEET" has the meaning set forth in Section 4.6.

          "NON-INCOME TAXES" has the meaning set forth in Section 4.18(m)(ii).

          "NOTICE OF CLAIM" has the meaning set forth in Section 9.4(a).

          "ORDINARY COURSE OF BUSINESS" means the ordinary course of business of
     the Company, consistent with past practice and custom.

          "PATENTS" means patents and applications therefor and all reissues,
     divisions, renewals, extensions, provisionals, continuations and
     continuations-in-part thereof.

          "PERMITS" means any approvals, authorizations, franchises, consents,
     licenses, permits or certificates of a Governmental Authority.

          "PERMITTED LIENS" means: (i) Liens for current taxes or assessments
     due but not yet payable or being contested in good faith by appropriate
     proceedings, (ii) servitudes, easements, restrictions, rights-of-way,
     encroachments and other similar rights in real property or any interest
     therein, (iii) Liens that constitute mechanics', carriers', workers' or
     similar liens arising in the Ordinary Course of Business, and (iv) Liens
     which individually or in the aggregate are not material.

          "PERSON" means an individual, a partnership, a joint venture, a
     corporation, a limited liability company, a trust, an unincorporated
     organization and a government or any department of agency thereof.

          "PERSONAL PROPERTY LEASES" has the meaning set forth in Section
     4.11(c).

          "PLAN" has the meaning set forth in Section 4.17(a).

          "POST-CLOSING TAX PERIOD" has the meaning set forth in Section
     4.18(m)(iii).

          "PRE-CLOSING TAX PERIOD" has the meaning set forth in Section
     4.18(m)(iv).

          "PRODUCTS" means the Company's TotalView(R) Workforce Management
     product and TotalNet(R) Call Routing product.

          "PTO" means the United States Patent and Trademark Office, and any
     successor thereto.

          "PURCHASE PRICE" has the meaning set forth in Section 2.2.


                                       5
<PAGE>


          "REASONABLE EFFORTS" means with respect to a given goal, the efforts
     that a reasonable person in the position of the promisor would use under
     the circumstances so as to achieve the goal as expeditiously as reasonably
     possible; provided, however, that Reasonable Efforts does not require a
     material expenditure of funds or the incurrence of a material liability on
     the part of the obligated party and does not require such party to take
     actions that would result in a material adverse change in the benefits to
     such party of this Agreement and the transactions contemplated hereby.

          "REGISTERED INTELLECTUAL PROPERTY RIGHTS" means Patents; Trademark
     registrations and applications for Trademark registrations; copyright
     registrations and applications for copyright registrations; and Internet
     domain names.

          "RESTRICTED BUSINESS" has the meaning set forth in Section 6.12(a).

          "REVIEW PERIOD" has the meaning set forth in Section 3.1(b).

          "SECURITIES ACT" has the meaning set forth in Section 5.4.

          "SELLER" has the meaning set forth in the preamble of this Agreement.

          "SELLER FLEXIBLE BENEFIT PLAN" has the meaning set forth in Section
     6.8(e).

          "SELLER INDEMNITEES" has the meaning set forth in Section 9.3.

          "SHARES" has the meaning set forth in the recital to this Agreement.

          "SOFTWARE" means any computer software and code, including assemblers,
     applets, compilers, source code, object code, data (including image and
     sound data), design tools and user interfaces, in any form or format,
     however fixed including source code listings and documentation.

          "STRADDLE PERIOD" has the meaning set forth in Section 4.18(m)(v).

          "TARGET WORKING CAPITAL" has the meaning set forth in Section 2.3(a).

          "TAX" has the meaning set forth in Section 4.18(m)(vii).

          "TAX RETURN" has the meaning set forth in Section 4.18(m)(vi).

          "TAXING AUTHORITY" means any governmental authority (domestic or
     foreign) responsible for the administration or collection of any Tax.

          "TECHNOLOGY" means, collectively, designs, formulas, algorithms,
     procedures, routines, ideas, concepts, models, methods, processes,
     techniques, know-how, Software, tools, data, databases, confidential and
     proprietary information, inventions (whether patentable or not), creations,
     improvements, and works of authorship, including derivative works, within
     the meaning of the United States Copyright Act, 17 U.S.C. ss.ss. 101 et
     seq., and all recordings, graphs, drawings, reports, analyses, other
     writings, and any other embodiment of the above, in any form whether or not
     specifically listed herein, and all related technology, that are used in,
     incorporated in, embodied in or displayed by any of the foregoing, or used
     or useful in the design, development, reproduction, maintenance or
     modification of any of the foregoing.


                                       6
<PAGE>


          "TO THE KNOWLEDGE" and similar phrases shall mean the actual knowledge
     of the persons listed on SCHEDULE 1.1.

          "TRADEMARKS" means trademarks, service marks, trade names, logos and
     registrations thereof and applications therefor.

          "TRANSACTION DOCUMENTS" has the meaning set forth in Section 4.2.

          "TREASURY REGULATIONS" means the rules and regulations promulgated
     under the Code.

          "UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section
     4.6.

          "WARN" has the meaning set forth in Section 4.16.

          "WORKING CAPITAL" has the meaning set forth in Section 2.3(a).

          1.2 TERMS GENERALLY. The definitions in Section 1.1 shall apply
     equally to both the singular and plural forms of the terms defined.
     Whenever the context may require, any pronoun shall include the
     corresponding masculine, feminine and neuter forms. The words "include,"
     "includes" and "including" shall be deemed to be followed by the phrase
     "without limitation" even if not followed actually by such phrase unless
     the context expressly provides otherwise. All references herein to
     Sections, paragraphs and Exhibits and Schedules shall be deemed references
     to Sections or paragraphs of or Exhibits or Schedules to this Agreement
     unless the context shall otherwise require. Unless otherwise expressly
     defined, terms defined in this Agreement shall have the same meanings when
     used in any Exhibit or Schedule. The words "herein," "hereof," "hereto" and
     "hereunder" and other words of similar import refer to this Agreement as a
     whole and not to any particular provision of this Agreement. References
     herein to "days," unless otherwise indicated, are to consecutive calendar
     days.

                                   ARTICLE II
                         PURCHASE AND SALE OF THE SHARES

          2.1 PURCHASE AND SALE. Upon and subject to the terms and conditions of
     this Agreement, at the Closing, Seller will sell, transfer and deliver to
     Buyer, and Buyer will purchase, acquire and accept from Seller, the Shares.

          2.2 CONSIDERATION. Subject to the terms and conditions of this
     Agreement, in consideration of the aforesaid sale, transfer and delivery of
     the Shares, Buyer will deliver or cause to be delivered to Seller at the
     Closing $200,000,000 (such amount is hereinafter referred to as the
     "PURCHASE PRICE"), in cash by wire transfer of immediately available funds
     to such bank account as shall be designated by Seller.


                                       7
<PAGE>


          2.3 POST-CLOSING DATE PURCHASE PRICE ADJUSTMENT.

               (a) The target working capital of the Company as of the Closing
          Date is $0 (such target working capital, the "TARGET WORKING
          CAPITAL"). "Working Capital" means the current assets of the Company
          minus all current liabilities of the Company; provided, however, that
          the following shall be excluded from the calculation of Working
          Capital: (i) all intercompany payables and receivables except to the
          extent any such specific intercompany payables are expressly assumed
          by Buyer at the Closing (e.g., accrued bonuses and related benefit
          costs, Seller funded infrastructure costs, etc.); (ii) deferred
          revenues; and (iii) income taxes, whether prepaid, paid, owing or
          deferred. Notwithstanding anything to the contrary herein, for
          purposes of this Section 2.3, Working Capital shall include any income
          tax liability related to deferred revenues which originate after
          December 31, 2005 and which remain on the Closing Balance Sheet, but
          only to the extent Seller has received cash for such deferred
          revenues, and such income tax liability shall be calculated using a
          combined overall tax rate of 40% for Federal and state income tax
          purposes.

               (b) Within 90 days following the Closing Date, Buyer shall
          deliver to Seller a balance sheet of the Company as of the open of
          business on the Closing Date (the "CLOSING BALANCE SHEET") and a
          statement setting forth a reasonably detailed calculation of Working
          Capital as of the Closing Date ("CLOSING WORKING CAPITAL"), prepared
          in accordance with the books and records of the Company (the "CLOSING
          WORKING CAPITAL STATEMENT"). The Closing Balance Sheet and the Closing
          Working Capital Statement shall be prepared in accordance with GAAP
          applied using the same accounting methods, practices, principles,
          policies and procedures, with consistent classifications, judgments
          and valuation and estimation methodologies that were used in the
          preparation of the Company's Unaudited Financial Statements. The
          Closing Working Capital shall be consistent with the calculation set
          forth in SECTION 2.3(B) OF THE DISCLOSURE SCHEDULE of Working Capital
          as of December 31, 2005.

               (c) ACCEPTANCE OF STATEMENTS; DISPUTE PROCEDURES. The Closing
          Balance Sheet and the Closing Working Capital Statement (and the
          computation of Closing Working Capital indicated thereon) delivered by
          Buyer to Seller shall be conclusive and binding upon the parties
          unless Seller, within 30 days after delivery to the Seller of the
          Closing Balance Sheet and the Closing Working Capital Statement,
          notifies Buyer in writing that Seller disputes any of the amounts set
          forth therein, specifying in reasonable detail the nature of the
          dispute and the basis therefor. The parties shall in good faith
          attempt to resolve any dispute and, if the parties so resolve such
          dispute, the Closing Balance Sheet and the Closing Working Capital
          Statement (and the computation of Closing Working Capital indicated
          thereon), as amended to the extent necessary to reflect the resolution
          of the dispute, shall be conclusive and binding on the parties. If the
          parties do not reach agreement in resolving the dispute within 60 days
          after notice is given by Seller to Buyer pursuant to the second
          preceding sentence, the parties shall submit the dispute to a partner
          at the New York office of Deloitte & Touche LLP (the "ARBITER") for
          resolution. If the parties cannot agree on the selection of a partner
          to act as Arbiter, the parties shall request the American Arbitration
          Association to appoint such a partner, and such appointment shall be
          conclusive and binding on the parties. Promptly, but no later than 30
          days after acceptance of his or her appointment as Arbiter, the
          Arbiter shall determine (it being understood that in making such
          determination, the Arbiter shall be functioning as an expert and not
          as an arbitrator), based solely on written submissions by Buyer and
          Seller, and not by independent review, only those issues in dispute
          and shall render a written report as to the resolution of the dispute
          and the resulting computation of the Closing Working Capital which
          shall be conclusive and binding on the parties. In resolving any
          disputed item, the Arbiter (x) shall be bound by the provisions of
          this SECTION 2.3 and (y) may not assign a value to any item greater
          than the greatest value for such items claimed by either party or less
          than the smallest value for such items claimed by either party. The
          fees, costs and expenses of the Arbiter shall be allocated to and
          borne by Buyer and Seller based on the inverse of the percentage that
          the Arbiter's determination (before such allocation) bears to the
          total amount of the total items in dispute as originally submitted to
          the Arbiter. For example, should the items in dispute total in amount
          to $1,000 and the Arbiter awards $600 in favor of Seller's position,
          60% of the costs of its review would be borne by Buyer and 40% of the
          costs would be borne by Seller.


                                       8
<PAGE>


               (d) PAYMENT. Upon final determination of Closing Working Capital
          as provided in SECTION 2.3(C) above, (A) if Closing Working Capital is
          greater than Target Working Capital, the Purchase Price shall be
          increased by the excess of Closing Working Capital over Target Working
          Capital and Buyer shall promptly, but no later than five business days
          after such final determination, pay the amount of such difference to
          Seller, and (B) if Closing Working Capital is less than Target Working
          Capital, the Purchase Price shall be decreased by the excess of Target
          Working Capital over Closing Working Capital and Seller shall
          promptly, but no later than five business days after such final
          determination, pay to Buyer the amount of such difference.

          2.4 CLOSING. The closing of the transactions contemplated by this
     Agreement (the "CLOSING") shall take place at the offices of Bryan Cave
     LLP, 120 Broadway, Suite 300, Santa Monica CA 90401, at 9:00 a.m., local
     time, on the second Tuesday of June, 2006 or, if the conditions to the
     Closing are not then satisfied, on such other date as the parties may agree
     after the satisfaction or waiver of all conditions to the obligations of
     the parties to consummate the transactions contemplated hereby, which date
     shall be no later than the fifth day after the satisfaction or waiver of
     such conditions. The date of the Closing is sometimes referred to herein as
     the "CLOSING DATE."

          2.5 DELIVERIES BY SELLER AT THE CLOSING. At the Closing, Seller will
     deliver or cause to be delivered to Buyer (unless delivered previously) the
     following:

               (a) The stock certificate or certificates (or similar evidence of
          ownership) representing the Shares, accompanied by stock powers duly
          executed in blank or duly executed stock transfer forms or instruments
          of transfer;

               (b) The resignations of all members of the Board of Directors of
          the Company;


                                       9
<PAGE>


               (c) The resignations of officers of the Company designated in
          writing by Buyer;

               (d) The stock books, minute books and corporate seal of the
          Company;

               (e) A certificate dated within five days prior to the Closing
          Date issued by the Secretary of State of the State of Nevada
          certifying that the Company has legal existence and is in good
          standing in the State of Nevada;

               (f) A certificate dated the Closing Date executed by the
          Secretary of Seller certifying (i) the names of the officers of Seller
          authorized to sign this Agreement and the other agreements, documents
          and instruments executed by Seller pursuant hereto, together with the
          true signatures of such officers, and (ii) as to copies of resolutions
          adopted by the Board of Directors of Seller authorizing the
          appropriate officers of Seller to execute and deliver this Agreement
          and all agreements, documents and instruments executed by Seller
          pursuant hereto, and to consummate the transactions contemplated
          hereby and thereby, and that such resolutions are still in effect and
          have not been amended, modified, rescinded or revoked;

               (g) The Transition Services Agreement, in the form attached
          hereto as EXHIBIT A, duly executed by Seller;

               (h) A certification described in Treasury Regulation Section
          1.1445-2(b)(2)(i) certifying that Seller is not a "foreign person";
          and

               (i) All other documents, instruments and writings required to be
          delivered by Seller at or prior to the Closing pursuant to this
          Agreement or otherwise reasonably requested by Buyer in connection
          herewith.

          2.6 DELIVERIES BY BUYER. At the Closing, Buyer will deliver or cause
     to be delivered to Seller (unless previously delivered) the following:

               (a) The Purchase Price referred to in Section 2.2 hereof;

               (b) A certificate dated within five days prior to the Closing
          Date issued by the Companies Registrar of the State of Israel
          certifying that Buyer has legal existence in the State of Israel;

               (c) A certificate dated the Closing Date executed by the
          Secretary or comparable officer of Buyer certifying (i) the names of
          the officers of Buyer authorized to sign this Agreement and the other
          agreements, documents and instruments executed by Buyer pursuant
          hereto, together with the true signatures of such officers, and (ii)
          as to copies of resolutions adopted by the Board of Directors or other
          governing body of Buyer authorizing the appropriate officers of Buyer
          to execute and deliver this Agreement and all agreements, documents
          and instruments executed by Buyer pursuant hereto, and to consummate
          the transactions contemplated hereby and thereby, and that such
          resolutions are still in effect and have not been amended, modified,
          rescinded or revoked;


                                       10
<PAGE>


               (d) The Transition Services Agreement in the form attached hereto
          as EXHIBIT A, duly executed by Buyer; and

               (e) All other documents, instruments or writings required to be
          delivered by Buyer at or prior to the Closing pursuant to this
          Agreement or otherwise reasonably requested by Seller in connection
          herewith.

                                  ARTICLE III
                                 RELATED MATTERS

          3.1 BOOKS AND RECORDS OF THE COMPANY.

               (a) Seller agrees to deliver to Buyer at or as soon as
          practicable after the Closing, as requested by Buyer, all books and
          records of the Company (including correspondence, memoranda, books of
          account, personnel and payroll records and the like), PROVIDED that
          Seller may retain a copy of all such books and records.

               (b) Buyer shall not, for a period (the "REVIEW PERIOD") of four
          years after the Closing Date or such longer period as retention
          thereof is required by applicable law or by any record retention
          agreements entered into with any Taxing Authority, dispose of or
          destroy any of the business records and files of the Company relating
          to the period prior to the Closing Date without first offering to turn
          over possession thereof to Seller by written notice to Seller at least
          90 days prior to the proposed date of such disposition or destruction.
          During the Review Period, Buyer shall permit, and shall take such
          actions as may be necessary to cause any of its successors or assigns
          to permit, Seller and its authorized representatives to have
          reasonable access to, and examine and make copies of, all such books
          and records as reasonably requested by Seller.

          3.2 DISTRIBUTIONS. The parties agree that Seller shall have the right,
     at or prior to the Closing, to cause the Company to distribute intercompany
     amounts (as described in the next sentence) and the intellectual property
     described in Section 6.9(a) and to distribute Cash out of funds legally
     available therefor, to Seller, by one or more cash dividends, repurchase of
     existing stock and/or other distributions (collectively, the
     "DISTRIBUTIONS"). In addition, the parties agree that on or prior to the
     Closing, Seller and the Company shall settle all intercompany amounts owed
     to each other by way of dividend, distribution or otherwise, except to the
     extent that any such amount is expressly assumed by Buyer at the Closing.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer, that except as set forth in the
Disclosure Schedule delivered by Seller to Buyer on the date hereof and attached
hereto (the "DISCLOSURE SCHEDULE"), each of the following representations,
warranties and statements is true and correct as of the date hereof and will be
true and correct as of the Closing Date:


                                       11
<PAGE>


          4.1 ORGANIZATION. Seller is a corporation duly organized, validly
     existing and in good standing under the laws of the State of California.
     The Company is a corporation duly organized, validly existing and in good
     standing under the laws of the State of Nevada. The Company has all
     requisite corporate and other power and corporate authority to own, lease
     and operate its properties and to carry on its operations as now being
     conducted. The Company is duly qualified, authorized or licensed to do
     business as a foreign corporation and is in good standing in each
     jurisdiction in which the property owned, leased or operated by the Company
     or the nature of the business conducted by the Company makes such
     qualification necessary, except in any such jurisdiction where the failure
     to be so duly qualified, authorized or licensed and in good standing would
     not have a Material Adverse Effect. The Company has previously made
     available to Buyer complete and correct copies of the Company's Articles of
     Incorporation and Bylaws of the Company, as currently in effect (the
     "COMPANY CHARTER DOCUMENTS"). The Company has no direct or indirect
     subsidiaries or any other equity interest in any Person.

          4.2 AUTHORIZATION. Seller has the requisite corporate power and
     authority to execute and deliver this Agreement and each other agreement,
     document, instrument or certificate contemplated hereby or to be executed
     and delivered by Seller in connection with the consummation of the
     transactions contemplated by this Agreement (the "TRANSACTION DOCUMENTS")
     and consummate the transactions contemplated hereby. The execution,
     delivery and performance of this Agreement and each of the Transaction
     Documents, and the consummation of the transactions contemplated hereby and
     thereby, have been duly authorized and approved by all necessary corporate
     action on the part of Seller. This Agreement has been duly executed and
     delivered by Seller and constitutes, and, when executed and delivered, each
     of the Transaction Documents will constitute (assuming in each case the
     valid authorization, execution and delivery of such agreement by Buyer),
     the legal valid and binding obligation of Seller, enforceable against
     Seller in accordance with its terms, except that (a) such enforcement may
     be subject to any bankruptcy, insolvency, reorganization, moratorium,
     fraudulent transfer or other laws, now or hereafter in effect, relating to
     or limiting creditors' rights generally and (b) the remedy of specific
     performance and injunctive and other forms of equitable relief may be
     subject to equitable defenses and to the discretion of the court before
     which any proceeding therefor may be brought.

          4.3 COMMON STOCK. The authorized capital stock of the Company consists
     solely of 20,000,000 shares of Common Stock, par value $0.01 per share, of
     which the Shares are the only shares issued and outstanding. All of the
     Shares are duly authorized, validly issued, fully paid and non assessable
     and were not issued in violation of any law or any preemptive or similar
     rights. There are no outstanding securities convertible into, exchangeable
     for, or carrying the right to acquire, equity securities of the Company,
     nor are there any subscriptions, warrants, options, rights or other
     arrangements or commitments (other than this Agreement) which could
     obligate the Company to issue or Seller to sell any shares of Common Stock.
     There are no obligations, contingent or otherwise, of the Company to (i)
     repurchase, redeem or otherwise acquire any shares of capital stock or
     other equity of the Company, or (ii) provide material funds to, or make any
     material investment in (in the form of a loan, capital contribution or
     otherwise), or provide any guarantee with respect to the obligations of,
     any Person. There are no outstanding share appreciation, phantom shares,
     profit participation or similar rights of the Company. There are no voting
     agreements, voting trusts, irrevocable proxies or other contracts or
     understandings to which the Company is a party or is bound with respect to
     the voting of any shares of capital stock or other equity of the Company.


                                       12
<PAGE>


          4.4 OWNERSHIP OF THE SHARES. Seller is the sole record and beneficial
     owner of the Shares and the Shares constitute all of the capital stock of
     the Company owned by Seller. Seller has good title to such Shares, free and
     clear of all Liens.

          4.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for applicable
     requirements of the Hart Scott Rodino Antitrust Improvement Act of 1976, as
     amended (the "H-S-R ACT"), neither the execution and delivery of this
     Agreement or the Transaction Documents nor the consummation by Seller of
     the transactions contemplated hereby will (a) conflict with or result in
     any breach of any provision of the Company Charter Documents or the
     Articles of Incorporation or Bylaws of Seller; (b) require any filing with,
     or the obtaining of any Permit, order, authorization, consent or approval
     of, any Governmental Authority; (c) except as set forth in SECTION 4.5 OF
     THE DISCLOSURE SCHEDULE, violate, conflict with or result in a default (or
     any event that, with notice or lapse of time or both, would constitute a
     default) under, or give rise to any right of termination, cancellation or
     acceleration under, any of the terms, conditions or provisions of any
     Contract to which the Company or Seller is a party or by which the Company
     or Seller or any of their assets may be bound; or (d) violate any judgment,
     order, injunction, decree, ruling, writ, assessment or arbitration
     applicable to the Company or Seller, excluding from the foregoing clauses
     (b), (c) and (d), such requirements, conflicts, defaults, rights or
     violations which, individually or in the aggregate, would not have or be
     reasonably likely to have a Material Adverse Effect and would not adversely
     affect or be reasonably likely to adversely affect the ability of Seller to
     consummate the transactions contemplated by this Agreement.

          4.6 FINANCIAL STATEMENTS. Attached (except as noted below) as SECTION
     4.6 OF THE DISCLOSURE SCHEDULE are copies of the Company's unaudited
     balance sheets as of December 31, 2005 (the "MOST RECENT BALANCE SHEET"),
     2004 and 2003, statements of income for the twelve months ended December
     31, 2005, 2004 and 2003 and (to be delivered to Buyer no later than seven
     (7) days following the date of this Agreement) statements of cash flows for
     the twelve months ended December 31, 2005, 2004 and 2003 (the financial
     statements referred to are referred to herein collectively as the
     "UNAUDITED FINANCIAL STATEMENTS"). The Unaudited Financial Statements (i)
     were prepared in accordance with GAAP, except as indicated therein and
     except that the footnotes required by GAAP are not included, (ii) were
     prepared in accordance with the books and records of the Company and (iii)
     present fairly, in all material respects, the financial position of the
     Company as of the date thereof, and the results of operations of the
     Company for the period indicated. Buyer acknowledges that the Unaudited
     Financial Statements are carve-out financial statements and that corporate
     costs are allocated in accordance with Rule 3-05 of Regulation S-X.


                                       13
<PAGE>


          4.7 NO UNDISCLOSED LIABILITIES. The Company has no material
     Indebtedness or Liabilities (whether or not required under GAAP to be
     reflected on a balance sheet or the notes thereto) other than those (i)
     specifically reflected on and fully reserved against in the Most Recent
     Balance Sheet, (ii) incurred in the Ordinary Course of Business since the
     Most Recent Balance Sheet, or (iii) disclosed in SECTION 4.7 OF THE
     DISCLOSURE SCHEDULE.

          4.8 PRODUCT WARRANTIES AND PRODUCT LIABILITY.

               (a) Set forth in SECTION 4.8(A) OF THE DISCLOSURE SCHEDULE are
          the standard forms of product warranties and guarantees used by the
          Company as of the date hereof.

               (b) Except as set forth in SECTION 4.8(B) OF THE DISCLOSURE
          SCHEDULE, since the date of the Most Recent Balance Sheet, no claim or
          allegation of personal injury, death or property or economic damages
          in connection with any Product has been asserted in writing against
          the Company, except for claims and allegations which would not,
          individually or in the aggregate, have a Material Adverse Effect.

          4.9 ABSENCE OF CERTAIN DEVELOPMENTS.

               (a) Since the date of the Most Recent Balance Sheet: (1) the
          Company has not suffered any Material Adverse Effect; and (2) there
          has been no material change in the condition, assets or business of
          the Company other than in the Ordinary Course of Business.

               (b) Since the date of the Most Recent Balance Sheet, except as
          set forth in SECTION 4.9(B) OF THE DISCLOSURE SCHEDULE, the Company
          has not, other than in the Ordinary Course of Business:

                    (1) (x) increased the compensation (including bonuses)
               payable or level of benefits provided, or to become payable or
               provided, to any director, executive officer or employee of the
               Company, (y) awarded or paid any bonuses with respect to the
               fiscal year ended December 31, 2005, except to the extent accrued
               in the Unaudited Financial Statements, or (z) amended or entered
               into any employment, deferred compensation, bonus or other
               incentive compensation, severance, retention, termination, change
               in control or similar agreement;

                    (2) declared or paid any dividends, issued, purchased or
               redeemed any shares of its capital stock or any convertible
               securities into or exchangeable for any of its capital stock, or
               made any other distributions to its shareholders;

                    (3) granted any options or other rights to purchase or
               obtain (including upon conversion, exchange or exercise) any of
               its capital stock;

                    (4) incurred, assumed, or guaranteed any material
               Liabilities or Indebtedness other than trade payables incurred in
               the Ordinary Course of Business;


                                       14
<PAGE>


                    (5) amended the Company Charter Documents;

                    (6) disposed of any material assets;

                    (7) changed or rescinded any election in respect of Taxes,
               changed any accounting or Tax reporting principle, method or
               policy in respect of Taxes, or settled or compromised any claim
               in respect of Taxes;

                    (8) made an investment in any Person;

                    (9) subjected any material assets to any Lien (other than
               Permitted Liens) or pledged or mortgaged any material assets;

                    (10) made any capital expenditure in excess of $100,000
               individually or $250,000 in the aggregate;

                    (11) instituted or settled any material legal proceedings;
               or

                    (12) agreed or committed to do anything set forth in this
               SECTION 4.9(B).

          4.10 REAL PROPERTY.

               (a) The Company owns no real property.

               (b) SECTION 4.10(B) OF THE DISCLOSURE SCHEDULE lists, as of the
          date hereof, all real property leases and subleases for space occupied
          by the Company (collectively, the "LEASES"). Copies of the Leases and
          all written amendments and agreements relating thereto have been made
          available to Buyer. All of the Leases are legal, valid, binding and
          enforceable in accordance with their terms subject to applicable
          bankruptcy, insolvency, reorganization, moratorium and similar laws
          affecting creditor rights and remedies generally and subject, as to
          enforceability, to general principles of equity (regardless of whether
          enforcement is sought in a proceeding at law or in equity), and
          neither the Company nor, to the knowledge of Seller, the other party
          to any Lease is in default in any material respect thereunder, and, to
          the knowledge of Seller, no event has occurred and no circumstance
          exists which, if not remedied, and whether with or without notice or
          the passage of time or both, would result in such a default under such
          Lease.

               (c) To the knowledge of Seller, the property the subject of the
          Leases (the "LEASED REAL PROPERTY") and their present uses, do not
          violate or conflict in any material respect with any zoning or
          building restrictions, or any other material covenants, conditions or
          restrictions applicable to the Leased Real Property. To the knowledge
          of Seller, the Leased Real Property is not subject to any leases,
          rights of first refusal, options to purchase or rights of occupancy,
          except the Leases.


                                       15
<PAGE>


          4.11 PERSONAL PROPERTY.

               (a) Except as may otherwise be set forth in Section 4.12 hereof,
          the Company has sufficiently good and valid title to all of the
          personal property it purports to own, free and clear of all Liens,
          other than Permitted Liens.

               (b) All items of machinery, equipment and the tangible assets
          material to the operation of the Company's business currently being
          used by the Company are in good operational condition and repair,
          normal wear and tear excepted, other than items currently under, or
          scheduled for, salvage, repair or construction.

               (c) SECTION 4.11(C) OF THE DISCLOSURE SCHEDULE sets forth all
          leases of personal property ("PERSONAL PROPERTY LEASES") involving
          annual payments in excess of $100,000 relating to personal property
          used in the business of the Company or to which the Company is a party
          or by which the properties or assets of the Company is bound, except
          those that are terminable by the Company without penalty on 60 or
          fewer days notice. All of the items of personal property under the
          Personal Property Leases are in good condition and repair (ordinary
          wear and tear excepted) and are suitable for the purposes used, and
          such property is in all material respects in the condition required of
          such property by the terms of the lease applicable thereto during the
          term of the lease. Seller has made available to Buyer true, correct
          and complete copies of the Personal Property Leases, together with all
          amendments, modifications or supplements thereto.

               (d) The Company has a valid and enforceable leasehold interest
          under each of the Personal Property Leases under which it is a lessee,
          subject to applicable bankruptcy, insolvency, reorganization,
          moratorium and similar laws affecting creditor rights and remedies
          generally and subject, as to enforceability, to general principles of
          equity (regardless of whether enforcement is sought in a proceeding at
          law or in equity). Each of the Personal Property Leases is in full
          force and effect and the Company has not received or given notice of
          any default or event that, to the knowledge of Seller, with notice or
          lapse of time, or both, would constitute a default by the Company
          under any Personal Property Leases and, to the knowledge of Seller, no
          other party is in material default thereof, and no party to the
          Personal Property Leases has exercised any termination rights with
          respect thereto.

          4.12 INTELLECTUAL PROPERTY.

               (a) Except as set forth in SECTION 4.12(A) OF THE DISCLOSURE
          SCHEDULE, the Company owns, licenses or otherwise possesses legally
          enforceable rights in the U.S. to use all Technology and Intellectual
          Property Rights used in the conduct of the business and operations of
          the Company as presently conducted in the U.S., including, without
          limitation, the design, development, manufacture, use, importation,
          marketing, sale, distribution, and provision of Products, Technology
          and services.


                                       16
<PAGE>


               (b) Except as set forth in SECTION 4.12(B) OF THE DISCLOSURE
          SCHEDULE, the Company owns and possesses all right, title and interest
          in and to all Company Intellectual Property Rights and Company
          Technology and, to the knowledge of Seller, no other party has any
          rights thereto. Each item of Company Intellectual Property Rights and
          Company Technology is free and clear of any Liens other than Permitted
          Liens. The Company has not, since January 1, 2000, transferred
          ownership of any foreign patents or patent applications or any foreign
          registered trademarks or applications to register trademarks,
          excluding any transfers of ownership by implication or operation of
          law.

               (c) SECTION 4.12(C)(I) OF THE DISCLOSURE SCHEDULE lists all
          Contracts to which the Company is a party with respect to the
          ownership or licensing of any Company Technology or Company
          Intellectual Property Rights other than non-exclusive Software
          licenses granted to end-user customers in the Ordinary Course of
          Business pursuant to the Company's standard customer agreements.
          Except as set forth in SECTION 4.12(C)(II) OF THE DISCLOSURE SCHEDULE,
          the Company has not (i) transferred ownership of, (ii) granted any
          exclusive license of or right to use, (iii) authorized the retention
          of any exclusive rights to use, or (iv) authorized joint ownership of
          any Intellectual Property Rights that constitute Company Intellectual
          Property Rights.

               (d) No Company Intellectual Property Right or Company Technology
          is subject to any proceeding or outstanding decree, order, judgment,
          or stipulation that, to the knowledge of Seller, either has adversely
          affected or is reasonably likely to adversely affect the validity, use
          or enforceability of the Company Intellectual Property Rights or the
          Company Technology.

               (e) Except as set forth in SECTION 4.12(E) OF THE DISCLOSURE
          SCHEDULE, the Company Intellectual Property Rights, the Company
          Technology, the Licensed Intellectual Property Rights and the Licensed
          Technology constitute all Intellectual Property Rights and Technology
          that are necessary or material to the conduct of the business and
          operations of the Company immediately following the Closing in
          substantially the same manner as currently conducted by the Company.

               (f) Except as set forth in SECTION 4.12(F) OF THE DISCLOSURE
          SCHEDULE, the Company has exercised reasonable care, including taking
          all reasonable steps, to protect the Company's proprietary rights,
          confidential information and trade secrets associated with or related
          to the Company Intellectual Property Rights and the Company
          Technology. Except as set forth in SECTION 4.12(F) OF THE DISCLOSURE
          SCHEDULE, to the extent required in the exercise of the Company's
          reasonable care, all current and former employees, consultants and
          contractors of the Company who have participated in the creation of
          any Intellectual Property Rights that are used by the Company in the
          conduct of its business have entered into proprietary information,
          confidentiality and assignment agreements substantially in the
          Company's standard forms (which have previously been provided to
          Buyer). The Company has not disclosed, nor is the Company under any
          contractual or other obligation to disclose, to another Person any
          trade secrets of the Company, except pursuant to an enforceable
          confidentiality agreement or undertaking, and, to the knowledge of
          Seller, no Person has materially breached any such agreement or
          undertaking.


                                       17
<PAGE>


               (g) SECTION 4.12(G)(I) OF THE DISCLOSURE SCHEDULE lists all
          Company Intellectual Property Rights that are Registered Intellectual
          Property Rights ("COMPANY REGISTERED IP") and all material
          unregistered copyrights, trademarks and service marks. All Company
          Registered IP is currently in compliance with formal legal
          requirements (including payment of filing, examination and maintenance
          fees and proofs of use) and is not subject to any unpaid maintenance
          fees or taxes or actions due within 90 days after the Closing Date.
          There are no proceedings or actions pending or, to the knowledge of
          Seller, threatened before any court or tribunal (including the PTO or
          equivalent authority) related to any such Company Registered IP other
          than those set forth in SECTION 4.12(G)(II) OF THE DISCLOSURE
          SCHEDULE. Seller is not aware of any reasonable basis for any
          assertions by any third party that any Company Registered IP is not
          valid and enforceable.

               (h) Neither the Company nor Seller is aware of any claim
          currently being asserted by any Person or of any facts that cause
          Seller to believe, that any aspects of the Business, the Company
          Intellectual Property Rights, the Company Technology, the Licensed
          Intellectual Property Rights or the Licensed Technology, or the use
          thereof in connection with the conduct of the business and operations
          of the Company infringe or misappropriate the Intellectual Property
          Rights of any Person or constitute unfair competition or trade
          practices under the laws of any jurisdiction, and to the knowledge of
          Seller, the conduct of the business and operations of the Company
          (including the development, manufacture, sale and distribution of
          Products) does not infringe or misappropriate, and has not infringed
          or misappropriated, the Intellectual Property Rights of any Person.
          SECTION 4.12(H) OF THE DISCLOSURE SCHEDULE lists all agreements
          pursuant to which the Company has agreed to indemnify any third party
          against any charge of infringement or misappropriation of any
          Intellectual Property Rights.

               (i) To the knowledge of Seller, no Person is infringing or
          misappropriating any Company Intellectual Property Rights.

               (j) The Company has the right to use, pursuant to valid licenses,
          all Licensed Intellectual Property Rights and Licensed Technology that
          are material to the Business as currently conducted by the Company.
          Except with respect to licenses of Software generally available for an
          annual license fee of no more than $25,000, SECTION 4.12(J) OF THE
          DISCLOSURE SCHEDULE sets forth a complete and accurate list of all
          contracts, licenses and agreements pursuant to which the Company
          licenses or otherwise is authorized to use any Technology or
          Intellectual Property Rights used in the businesses of the Company,
          ("LICENSE IN AGREEMENTS"). Neither the execution and delivery of this
          Agreement nor the consummation by Seller of the transactions
          contemplated hereby will violate, conflict with or result in a default
          (or any event that, with notice or lapse of time or both, would
          constitute a default) under, or give rise to any right of termination
          or cancellation under, any of the terms, conditions or provisions of
          any such material License In Agreement, excluding such violations,
          conflicts, defaults and rights which become applicable as a result of
          the business or activities in which Buyer is or proposes to be engaged
          or as a result of any acts or omissions by, or the status of or any
          facts pertaining to, Buyer. Except with respect to licenses of
          Software generally available for an annual license fee of no more than
          $25,000 and the licenses set forth on SECTION 4.12(J) OF THE
          DISCLOSURE SCHEDULE, the Company is not required, obligated, or under
          any liability under any agreements to make any payments by way of
          royalties, fees or otherwise to any third party with respect to use of
          any Intellectual Property Rights or Technology used in the business of
          the Company. No loss or expiration of any Intellectual Property Rights
          licensed to the Company under any License In Agreement is pending or
          reasonably foreseeable or, to the knowledge of Seller, threatened
          other than pursuant to the scheduled expiration of the term of any
          License In Agreement in the ordinary course. The execution, delivery
          and performance by the Company or Seller of this Agreement, and the
          consummation of the transactions contemplated hereby, will not result
          in the loss or impairment of, or give rise to any right of any third
          party to terminate or reprice or otherwise modify any of the Company's
          rights or obligations under any License In Agreement.


                                       18
<PAGE>


               (k) There are no Contracts between the Company and any other
          Person with respect to the Company Intellectual Property Rights, the
          Company Technology, the Licensed Intellectual Property Rights or the
          Licensed Technology under which there is, to the knowledge of Seller,
          any dispute or any threatened dispute regarding the scope of such
          Contract or performance under such Contract.

               (l) Except as set forth in SECTION 4.12(L) OF THE DISCLOSURE
          SCHEDULE, no government funding, facilities of a university, college,
          other educational institution or research center or funding from third
          parties was used in the development of any Intellectual Property
          Rights owned by the Company. Except as set forth in SECTION 4.12(L) OF
          THE DISCLOSURE SCHEDULE, no current or former employee, consultant or
          independent contractor of the Company who was involved in, or who
          contributed to, the creation or development of any Intellectual
          Property Rights owned by the Company has performed services for a
          government or a university, college, or other educational institution
          or research center such that such government, university, college or
          other educational institution or research center currently has any
          right, title or interest in or to the Company Intellectual Property
          Rights or Company Technology.

               (m) Except as set forth in SECTION 4.12(M) OF THE DISCLOSURE
          SCHEDULE, Seller has no knowledge of any facts or circumstances that
          would render any Intellectual Property Rights owned by the Company
          invalid or unenforceable, or would adversely affect any pending
          application or registration with respect to any Intellectual Property
          Rights owned by the Company.

               (n) The Software owned by the Company operates substantially as
          described in the user manuals and does not contain any program
          routine, device, or other undisclosed feature, including, without
          limitation, a time bomb, virus, software lock, drop-dead device,
          malicious logic, worm, trojan horse, bug, error, defect or trap door,
          that is capable of deleting, disabling, deactivating, interfering
          with, or otherwise harming the Software or Buyer's hardware, data, or
          computer programs or codes, or that is capable of providing access or
          produce modifications not authorized by Buyer (collectively,
          "DISABLING PROCEDURES"). Such representation and warranty applies
          regardless of whether such Disabling Procedures are authorized by
          Seller to be included in the Software.


                                       19
<PAGE>


               (o) Except as disclosed in SECTION 4.12(O) OF THE DISCLOSURE
          SCHEDULE, none of the Company's products, in whole or in part,
          incorporates or is distributed with any Open Source Software. None of
          the Software incorporated in any of the Company's products (including
          any proprietary Software developed by the Company without the use of
          any Open Source Software), by reason of the manner in which such
          Software is linked or otherwise integrated with any Open Source
          Software, is, in whole or in part, subject to the terms of any license
          under which such Open Source Software was made available such that the
          proprietary Software owned by the Company would be required to (x) be
          disclosed or distributed in source code form, (y) be licensed for the
          purpose of making derivative works, or (z) be redistributable at no
          charge. The term "OPEN SOURCE SOFTWARE" means (a) any Software that
          contains, or is derived in any manner (in whole or in part) from, any
          Software that is distributed as free Software, open source Software
          (E.G., Linux) or similar licensing or distribution models; and (b) any
          Software that requires as a condition of use, modification and/or
          distribution of such Software that such Software or other Software
          incorporated into, derived from or distributed with such Software (i)
          be disclosed or distributed in source code form, (ii) be licensed for
          the purpose of making derivative works, or (iii) be redistributable at
          no charge, including without limitation Software licensed or
          distributed under GNU's General Public License (GPL) or Lesser/Library
          GPL (LGPL) or the Apache Software license.

          4.13 LITIGATION. Except as set forth in SECTION 4.13 OF THE DISCLOSURE
     SCHEDULE, there is no claim, action, suit, proceeding or governmental
     investigation pending or, to the knowledge of Seller, threatened against
     Seller or the Company, by or before any Governmental Authority or in
     arbitration, mediation or other means of alternative dispute resolution.
     The Company is not subject to any material judgment, order, injunction or
     decree of any court, governmental or regulatory authority.

          4.14 COMPLIANCE WITH APPLICABLE LAW; PERMITS.

               (a) The Company is in compliance in all material respects with
          all applicable laws, statutes, ordinances, directives, rules and
          regulations of any Governmental Authority applicable to the Company
          and its operations (other than any Environmental Laws, which are
          covered by Section 4.20).

               (b) The Company has all Permits which are required for the
          operation of the business of the Company as currently conducted and as
          currently intended to be conducted ("COMPANY PERMITS"), other than
          those the failure of which to possess would not have and would not
          reasonably be expected to have a material adverse effect on the
          Company. The Company is not in default under or in violation of any of
          the Company Permits, and there are no pending or, to the knowledge of
          Seller, threatened proceedings which could result in the revocation,
          cancellation or inability of the Company to renew any Company Permit
          that is significant.

          4.15 CERTAIN CONTRACTS AND ARRANGEMENTS.

               (a) Set forth in SECTION 4.15 OF THE DISCLOSURE SCHEDULE, is a
          list of all Contracts of the types described below in effect as of the
          date hereof to which the Company is a party:


                                       20
<PAGE>


                    (i) all employment and consulting Contracts (other than
               offer letters);

                    (ii) all sales representative, agency, distributorship or
               franchise Contracts;

                    (iii) all Contracts relating to Indebtedness;

                    (iv) all indemnities or powers of attorney involving
               outstanding, contingent or continuing obligations of or to the
               Company;

                    (v) all Contracts with any present or former director,
               officer or shareholder of the Company or any Affiliate of any
               such Person;

                    (vi) any other Contract for the furnishing of services,
               goods or products by or to the Company after the date hereof (A)
               with firm commitments having a value in excess of $250,000 on an
               annual basis or (B) having a term which is greater than six
               months and which is not terminable by the Company on 90 days' or
               less notice;

                    (vii) all Contracts (or group of related Contracts) pursuant
               to which the Company (i) possesses or uses, or has agreed to
               acquire or lease, any property or asset and (ii) is required to
               make payments, accrue expenses or incur charges in excess of
               $100,000 per year;

                    (viii) all Contracts (or group of related Contracts), plans
               or programs that involve payments in excess of $100,000 per year
               pursuant to which payments, or an acceleration of or increase in
               benefits, may be required upon or after a change of control of
               the Company;

                    (ix) all Contracts that prohibit the Company from engaging
               in competition or soliciting to hire any person with respect to
               employment, or Contracts of any other Person not to compete with
               the Company;

                    (x) all Contracts for joint ventures, strategic alliances,
               partnerships, licensing arrangements or sharing of profits or
               proprietary information;

                    (xi) all Contracts relating to the acquisition (by merger,
               purchase of stock or assets or otherwise) by the Company of any
               operating business or material assets or the capital stock of any
               other Person; and

                    (xii) all purchase Contracts from vendors giving rise to
               Liabilities of the Company in excess of $100,000.


                                       21
<PAGE>


               (b) The Company has heretofore made available to Buyer a true,
          complete and correct copy of each of the Contracts described above,
          each as in effect on the date hereof, and all amendments and
          supplements thereto and all waivers thereunder. Each of the Contracts
          is in full force and effect and is the legal, valid and binding
          obligation of the Company, enforceable against the Company in
          accordance with its terms, except to the extent that (x) such
          enforcement may be subject to any bankruptcy, insolvency,
          reorganization, moratorium, fraudulent transfer or other laws, now or
          hereafter in effect, relating to or limiting creditors' rights
          generally, and (y) the remedy of specific performance and injunctive
          and other forms of equitable relief may be subject to equitable
          defenses and to the discretion of the court before which any
          proceeding therefor may be brought. Neither the Company nor Seller has
          received written notice that any party to any of the Contracts intends
          to cancel or terminate such Contract. Neither the Company, nor, to
          Seller's knowledge, any other party is in default under, or in breach
          or violation of, nor has an event occurred that (with or without
          notice, lapse of time or both) would constitute a default by the
          Company under any Contract in any material respect, other than such
          defaults, breaches and violations as would not have or be reasonably
          expected to have a material adverse effect on the Company.

          4.16 LABOR RELATIONS. The Company does not directly employ most
     employees and most employees who perform services for the Company are
     employed directly by Seller. SECTION 4.16 OF THE DISCLOSURE SCHEDULE lists
     each employee of the Company and each employee of Seller who primarily
     works on matters for the Company as of the date hereof ("COMPANY
     EMPLOYEES"). Seller shall update such Schedule immediately before the
     Closing (and such updated Schedule shall consist of the Company Employees
     as of the Closing). Neither the Company nor Seller is a party to any
     collective bargaining agreement covering any Company Employee, and no
     collective bargaining agreement with respect to any Company Employees as of
     the date of this Agreement is currently being negotiated by the Company,
     nor is there is any union organization activity involving any of the
     Company Employees, pending or, to the knowledge of Seller, threatened, nor
     has there ever been union representation involving any of the Company
     Employees in the last five years. There has been no strike or other
     material work stoppage during the five years immediately preceding the date
     of this Agreement. The Company and the Seller are in compliance in all
     material respects with all laws, regulations and orders relating to the
     employment of the Company Employees, including all such laws, regulations
     and orders relating to wages, hours, the Fair Labor Standards Act, the
     Worker Adjustment and Retraining Notification Act and any similar state or
     local "mass layoff" or "plant closing" law ("WARN"), collective bargaining,
     discrimination, civil rights, safety and health, workers' compensation and
     the collection and payment of withholding and/or social security taxes and
     any similar tax. There has been no "mass layoff" or "plant closing" as
     defined by WARN with respect to the Company or the Seller within ninety
     (90) days prior to the date hereof.

          4.17 EMPLOYMENT BENEFIT PLANS; ERISA.

               (a) SECTION 4.17(A) OF THE DISCLOSURE SCHEDULE lists each
          "employee benefit plan" (as defined in Section 3(3) of the Employee
          Retirement Income Security Act of 1974, as amended ("ERISA")), and all
          other employee benefit arrangements or payroll practices, including
          bonus and fringe benefit plans, employment, consulting or other
          compensation agreements, incentive, equity or equity-based
          compensation, or deferred compensation arrangements, change in
          control, termination or severance plans or arrangements, stock
          purchase, severance pay, sick leave, vacation pay, salary continuation
          for disability, hospitalization, medical insurance, life insurance and
          scholarship plans and programs maintained for the benefit of, or
          contributed to by the Company or any trade or business, whether or not
          incorporated (an "ERISA AFFILIATE"), that, together with the Company
          would be deemed a "single employer" within the meaning of Section 4001
          of ERISA, for the benefit of any Company Employee or any former
          employee of the Company, or with respect to which the Company has any
          liability, contingent or direct (a "PLAN" and collectively, the
          "PLANS"). The Company has made available to Buyer correct and complete
          copies to the extent applicable of (i) each of the Plans including all
          amendments to date (ii) the most recent IRS determination letter; and
          (iii) summary plan descriptions.

                                       22
<PAGE>

               (b) Each of the Plans has been administrated in compliance in all
          material respects with the applicable provisions thereof and with all
          applicable provisions of ERISA, the Code (including rules and
          regulations thereunder) and other federal and state laws and
          regulations, and each of the Plans intended to be "qualified" within
          the meaning of Section 401(a) of the Code, has been determined by the
          Internal Revenue Service (the "IRS") to be so qualified and Seller
          knows of no fact or set of circumstances that would adversely affect
          such qualification. None of the Plans is subject to Title IV of ERISA
          and neither Seller, the Company nor any of their ERISA Affiliates have
          within the past 6 years maintained, sponsored, contributed to or been
          obligated to contribute to any "employee benefit plan" (as defined in
          Section 3(3) of ERISA) subject to Title IV of ERISA, including any
          multiemployer plan (as defined in Section 3(37) of ERISA). No Plan
          maintained by the Company is an "employee benefit plan" (as defined in
          Section 3(3) of ERISA). There are no pending or, to the knowledge of
          Seller, threatened material claims (other than routine claims for
          benefits) by, on behalf of or against any of the Plans or any trusts
          related thereto.

               (c) All contributions (including all employee contributions and
          employee salary reduction contributions) which are due have been paid
          to each Plan which is an "employee benefit pension plan" as defined in
          Section 3(2) of ERISA, except where the failure to make such
          contributions would not be material.

               (d) Except as provided in Section 6.8(i) hereof, neither the
          execution and delivery of this Agreement nor the consummation of the
          transactions contemplated hereby, by itself or in combination with any
          additional or subsequent event, other than by reason of actions taken
          by Buyer or the Company following the Closing, will (i) result in any
          payment becoming due to any employee (current, former or retired) of
          the Company, (ii) increase any benefits otherwise payable under any
          Plan or (iii) result in the acceleration of the time of payment or
          vesting of any such benefits under any such plan.

               (e) None of the Plans provide for post-employment life or health
          insurance, benefits or coverage for any participant or any beneficiary
          of a participant, except as may be required under the Consolidated
          Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") and at
          the expense of the participant or the participant's beneficiary.


                                       23
<PAGE>


          4.18 TAXES.

               (a) Except as set forth in SCHEDULE 4.18(A) OF THE DISCLOSURE
          SCHEDULE, all Tax Returns (as defined below) required to be filed with
          any Taxing Authority on or before the Closing Date (taking into
          account any extension of a required filing date) by, or with respect
          to, the Company have been or will be timely filed on or before the
          Closing Date in accordance with all applicable laws. All such Tax
          Returns required to be filed by, or with respect to, the Company are
          or will be (when filed) true, correct and complete in all material
          respects.

               (b) Except as set forth in SCHEDULE 4.18(B) OF THE DISCLOSURE
          SCHEDULE, the Company has timely paid all Taxes it is required to have
          paid.

               (c) The Company is not a party to or bound by any Tax allocation,
          sharing, indemnity or similar agreement or arrangement.

               (d) The Company has not received any written notice of deficiency
          or assessment from any Taxing Authority with respect to Taxes that
          have not been fully paid or finally settled. There are no audits or
          investigations by any Taxing Authority in progress, nor has the
          Company received any written notice from any Taxing Authority that it
          intends to conduct such an audit or investigation. There are no
          waivers of statutes of limitation in effect with respect to the
          Company.

               (e) There are no liens for Taxes (except for Taxes not yet due)
          on any of the assets of the Company, and no action, proceeding or, to
          the knowledge of Seller, investigation has been instituted against the
          Company in which there is a reasonable probability of an adverse
          determination that would result in any such lien.

               (f) The Company has not been granted any extension or waiver of
          the statute of limitations period applicable to any Tax Returns, which
          period (after giving effect to such extension or waiver) has not
          expired.

               (g) Seller is not a "foreign person" within the meaning of
          Section 1445 of the Code.

               (h) There is no contract, agreement, plan or arrangement covering
          any person that, individually or collectively, could give rise to the
          payment of any amount that would not be deductible by Buyer, the
          Company or any of their respective Affiliates by reason of Section
          280G of the Code.

               (i) The Company has no liability for Taxes of any Person under
          Treasury Regulation Section 1.1502-6 (or any comparable provision of
          state, local or foreign law) other than liability for Taxes of the
          group of which Seller is the common parent.

               (j) The Company has not engaged in a `reportable transaction' as
          set forth in Treas. Reg. Section 1.6011-4(b).


                                       24
<PAGE>


               (k) Except as set forth in SCHEDULE 4.18(K) OF THE DISCLOSURE
          SCHEDULE, the Company is not subject to tax in any jurisdiction other
          than the United States.

               (l) The Company has no liability pursuant to any escheat or
          similar laws with respect to uncollected funds.

               (m) As used in this Agreement:

                    (i) "INCOME TAXES" means any federal, state, local or
               foreign tax imposed upon or measured by net income or gross
               income (excluding any Tax based solely on gross receipts)
               including any interest, penalty, or additions thereto.

                    (ii) "NON-INCOME TAXES" means any Taxes other than Income
               Taxes.

                    (iii) "POST-CLOSING TAX PERIOD" means any Tax period
               beginning after the Closing Date and the portion of Straddle
               Period beginning after the Closing Date.

                    (iv) "PRE-CLOSING TAX PERIOD" means any Tax period ending on
               or before the Closing Date and any portion of any Straddle Period
               ending on the Closing Date.

                    (v) "STRADDLE PERIOD" means any Tax period that includes
               (but does not end on) the Closing Date.

                    (vi) "TAX RETURN" means any return, declaration, statement,
               report, form or similar statement (including any attached
               schedules) filed or required to be filed with any Taxing
               Authority with respect to Taxes, including any information
               statement, any claims for refunds of Taxes, declarations of
               estimated Tax and any amendments or supplements of any of the
               foregoing.

                    (vii) "TAX" means any tax, governmental fee or other like
               assessment or charge of any kind whatsoever (including any tax
               imposed under the Code and any net income, alternative or add on
               minimum tax, gross income, gross receipts, sales, use, ad
               valorem, value added, transfer, franchise, profits, license,
               withholding on amounts paid to or by the Company, payroll,
               employment, excise, severance, stamp, capital stock, occupation,
               property, environmental or windfall profit tax, premium, custom,
               duty or other tax together with any interest, penalty, addition
               to tax or additional amount due from, or in respect of, the
               Company imposed by any Taxing Authority.

          4.19 ACCOUNTS RECEIVABLE. All of the accounts receivable of the
     Company set forth on the Most Recent Balance Sheet and those that have
     arisen between the date of the Most Recent Balance Sheet and the Closing
     Date arose or will have arisen in the Ordinary Course of Business.


                                       25
<PAGE>


          4.20 ENVIRONMENTAL MATTERS.

               (a) The Company is in compliance with all applicable
          Environmental Laws (as defined below) except where the failure to be
          in compliance would not reasonably be expected to have a Material
          Adverse Effect. "ENVIRONMENTAL LAWS" means all applicable Federal,
          state, municipal and local laws, statutes, ordinances, codes, orders,
          decrees, judgments or injunctions, and regulations rendered by, in or
          with any Governmental Authority, department or administrative or
          regulatory agency relating to pollution, quality or protection of the
          environment or the presence, treatment, exposure to persons,
          generation, use, processing, release, remediation, storage, disposal,
          transport or handling of Hazardous Substances (as defined below).
          "HAZARDOUS SUBSTANCES" means any element, compound, chemical mixture,
          contaminant, pollutant material, waste or other substance which is
          regulated or defined as hazardous, radioactive or toxic under any
          Environmental Law or the release of which is prohibited or materially
          restricted under any Environmental Law.

               (b) The Company has or has applied for all material permits,
          registrations, approvals and licenses required under Environmental
          Laws for the operation of the business of the Company as presently
          conducted (the "ENVIRONMENTAL PERMITS") and there are no violations,
          and no pending or threatened investigations or proceedings with
          respect to such Environmental Permits except where the failure to have
          such Environmental Permits or where the violation, investigation or
          proceeding relating thereto would not reasonably be expected to have a
          Material Adverse Effect.

               (c) Seller has made available to Buyer any environmental
          assessments, studies or similar documents in its possession with
          respect to the Leased Real Property.

               (d) There have been no material releases by the Company or, to
          the knowledge of Seller, by any other person of any Hazardous
          Substances at, on, from or under any Leased Real Property, property
          formerly owned or leased by the Company or property to which the
          Company has sent waste for disposal.

               (e) This Section 4.20 contains the sole and exclusive
          representations and warranties of Seller with respect to any
          Environmental Laws.

          4.21 INSURANCE. A summary of all policies of insurance now held by or
     for the benefit of the Company are set forth in SECTION 4.21 OF THE
     DISCLOSURE SCHEDULE. All such policies are in full force and effect, all
     premiums due thereon have been paid and Seller and the Company have
     complied in all material respects with the provisions of such policies. To
     the knowledge of Seller, there has been no threatened termination of,
     premium increase with respect to or material alteration of coverage under,
     any such policies. Set forth in SECTION 4.21 OF THE DISCLOSURE SCHEDULE is
     a description of any claims made by or on behalf of the Company under such
     policies.


                                       26
<PAGE>


          4.22 CERTAIN FEES. Except for the engagement of Houlihan Lokey Howard
     & Zukin, the fees and expenses of which will be the sole responsibility of
     Seller, no financial advisor, finder, broker, agent or other intermediary,
     acting on behalf of Seller or the Company, is or will become entitled to a
     commission, fee or other compensation in connection with this Agreement or
     the transactions contemplated hereby.

          4.23 CORPORATE RECORDS. The minute books of the Company previously
     made available to Buyer contain true, correct and complete records of all
     meetings and accurately reflect in all material respects all the actions of
     Seller and the board of directors (or other governing body and including
     committees thereof) of the Company. The stock certificate books and stock
     transfer ledgers of the Company previously made available to Buyer are
     true, correct and complete in all material respects. All stock or interest
     transfer taxes levied, if any, or payable with respect to all transfers of
     shares of the Company prior to the date hereof have been paid and
     appropriate transfer tax stamps affixed.

          4.24 TRANSACTIONS WITH AFFILIATES. SECTION 4.24 OF THE DISCLOSURE
     SCHEDULE sets forth a list of all significant relationships between the
     Company on the one hand and Seller, Affiliates of Seller, any officers or
     directors of the Company or Seller or, to Seller's knowledge, any of such
     officer's or director's Affiliates on the other hand. Except as set forth
     in SECTION 4.24 OF THE DISCLOSURE SCHEDULE, the Company is not indebted or
     otherwise obligated to any such Person, and no such Person owns any
     property or right, tangible or intangible, that is used or held for use in
     connection with the operation of the business of the Company.

          4.25 CERTAIN PAYMENTS. Neither the Company nor, to Seller's knowledge,
     any director, officer or employee of the Company or Seller has, for or on
     behalf of the Company, made any offer, payment or gift in violation of the
     Foreign Corrupt Practices Act of 1977, as amended.

          4.26 BANKS; POWERS OF ATTORNEY; GUARANTEES. SECTION 4.26 OF THE
     DISCLOSURE SCHEDULE contains a complete and correct list of the names and
     locations of all banks in which the Company has accounts or safe deposit
     boxes and the names of all Persons authorized to draw thereon or to have
     access thereto. Except as set forth in SECTION 4.26 OF THE DISCLOSURE
     SCHEDULE, no Person holds a power of attorney to act on behalf of the
     Company. The Company has no obligation to act under any outstanding power
     of attorney or any obligation or liability, either accrued, accruing or
     contingent, as guarantor, surety, co-signor, endorser (other than for
     purposes of collection in the Ordinary Course of Business), co-make or
     indemnitor in respect of the obligation of any Person.

          4.27 BOOKS AND RECORDS. The books, records and accounts of the Company
     are in all material respects true and correct.


                                       27
<PAGE>


          4.28 CUSTOMERS AND SUPPLIERS.

               (a) The Company has no outstanding material dispute concerning
          its goods and/or services with any customer who, in the year ended
          December 31, 2005, was one of the ten largest sources of revenue for
          the Company based on amounts paid or payable by such customer (each, a
          "SIGNIFICANT CUSTOMER"). Each Significant Customer is listed in
          SCHEDULE 4.28(A) OF THE DISCLOSURE SCHEDULE. The Company has not
          received any written notice from any Significant Customer that such
          customer intends to terminate its relationship with the Company or
          that any such customer desires to terminate or materially modify any
          existing contract with the Company.

               (b) The Company has no outstanding material dispute concerning
          goods and/or services provided by any supplier who, in the year ended
          December 31, 2005, was one of the five largest suppliers of goods
          and/or services to the Company based on amounts paid or payable (each,
          a "SIGNIFICANT SUPPLIER"). The Company's only material supplier is
          listed in SCHEDULE 4.28(B) OF THE DISCLOSURE SCHEDULE. The Company has
          not during the six months prior to the date of this Agreement received
          any written notice of termination or interruption of any existing
          contracts with any Significant Supplier.

          4.29 EXPORT CONTROL. To the knowledge of Seller, since 2002, the
     Company has acted without violation of any export control laws, orders or
     regulations, including without limitation the Export Administration
     Regulations administered by the U.S. Department of Commerce, as amended
     from time to time, and without violation and in compliance with any
     required export or reexport licenses or authorizations granted under such
     laws, regulations or orders, except violations which would not reasonably
     be expected to have a Material Adverse Effect.

          4.30 DISCLOSURE. The representations and warranties made by Seller in
     this Agreement (as qualified and modified by the Disclosure Schedule), when
     read together as a whole, do not contain any untrue statement of material
     fact or omit a material fact necessary to make each statement contained
     therein, in light of the circumstances under which they were made, not
     misleading.

                                   ARTICLE V
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to Seller that each of the following
representations, warranties and statements is true and correct as of the date
hereof and each of which shall be true and correct as of the Closing Date:

          5.1 ORGANIZATION AND AUTHORITY OF BUYER.

               (a) Buyer is a company limited by shares duly organized, validly
          existing and in good standing under the laws of the State of Israel.
          Buyer has previously delivered to Seller complete and correct copies
          of its Amended and Restated Memorandum of Association and Amended and
          Restated Articles of Association, as currently in effect. Buyer has
          the corporate power and authority to execute and deliver this
          Agreement and each other Transaction Document to which it is a party
          and to consummate the transactions contemplated hereby. The execution
          and delivery of this Agreement and the Transaction Documents to which
          it is a party, and the consummation of the transactions contemplated
          hereby and thereby, have been duly and authorized and approved by all
          necessary corporate action on the part of Buyer.


                                       28
<PAGE>


               (b) This Agreement has been duly executed and delivered by Buyer
          and constitutes, and, when executed and delivered, each of the
          Transaction Documents will constitute the legal, valid and binding
          obligation of Buyer (in each case, assuming the valid authorization,
          execution and delivery of such agreement by Seller and the Company, if
          applicable), enforceable against Buyer in accordance with its terms,
          except that (i) such enforcement may be subject to any bankruptcy,
          insolvency, reorganization, moratorium, fraudulent transfer or other
          laws, now or hereafter in effect, relating to or limiting creditors'
          rights generally, and (ii) the remedy of specific performance and
          injunctive and other forms of equitable relief may be subject to
          equitable defenses and to the discretion of the court before which any
          proceeding therefor may be brought.

          5.2 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for applicable
     requirements of the H-S-R Act, neither the execution and delivery of this
     Agreement or the Transaction Documents nor the consummation by Buyer of the
     transactions contemplated hereby will (a) conflict with or result in any
     breach of any provision of the Certificate of Incorporation or Bylaws of
     Buyer; (b) except for filings with the Securities and Exchange Commission
     and the Israeli Securities Authority, require any filing with, or the
     obtaining of any Permit, order, authorization, consent or approval of, any
     Governmental Authority; (c) violate, conflict with or result in a default
     (or any event which, with notice or lapse of time or both, would constitute
     a default) under, or give rise to any right of termination, cancellation or
     acceleration under, any of the terms, conditions or provisions of any
     Contract to which Buyer is a party or by which Buyer or any of its assets
     may be bound; or (d) violate any judgment, order, injunction, decree,
     ruling, writ, assessment or arbitration applicable to Buyer, excluding from
     the foregoing clauses (b), (c) and (d), such requirements, violations,
     conflicts, defaults, rights or violations which, individually or in the
     aggregate, would not have or be reasonably likely to have a material
     adverse effect on Buyer and would not adversely affect or be reasonably
     likely to adversely affect the ability of Buyer to consummate the
     transactions contemplated by this Agreement.

          5.3 AVAILABILITY OF FUNDS. Buyer has sufficient immediately available
     funds on hand or available pursuant to unconditional commitments to pay the
     Purchase Price and to pay any other amounts payable pursuant to this
     Agreement and to effect the transactions contemplated hereby.

          5.4 INVESTMENT REPRESENTATION. Buyer is acquiring the Shares for its
     own account, for investment and without any view to resale or distribution
     of the Shares or any portion thereof. Buyer acknowledges that the Shares
     have not been registered or qualified under the provisions of the
     Securities Act of 1933, as amended (the "SECURITIES ACT"), or the
     securities laws of any state and that the Shares may not be resold by Buyer
     except pursuant to registration or qualification under the Securities Act
     and any applicable state securities law or a valid exemption therefrom.


                                       29
<PAGE>


          5.5 LITIGATION. There is no claim, action, suit, proceeding or
     governmental investigation pending or, to the knowledge of Buyer,
     threatened against Buyer, by or before any Governmental Authority or in
     arbitration, mediation or other means of alternative dispute resolution
     which (a) challenges the validity of this Agreement, or (b) which seeks to
     enjoin or impair or to obtain damages in respect of the consummation of the
     transactions contemplated hereby.

          5.6 INVESTIGATION BY BUYER. Buyer has conducted its own independent
     review and analysis of the business, operations, technology, assets,
     liabilities, results of operations, financial condition and prospects of
     the Company and acknowledges that Seller has provided Buyer with access to
     the personnel, properties, premises and records of the Company for this
     purpose. Buyer acknowledges that neither Seller nor the Company nor any of
     the Company's directors, officers, employees, Affiliates, controlling
     persons, agents or representatives makes or has made any representation or
     warranty, either express or implied, as to the accuracy or completeness of
     any of the information provided or made available to Buyer or any of its
     directors, officers, employees, Affiliates, controlling persons, agents or
     representatives, except as and only to the extent expressly set forth
     herein with respect to such representations and warranties and subject to
     the limitations and restrictions contained in this Agreement.

          5.7 CERTAIN FEES. Except for Banc of America Securities LLC, the fees
     and expenses of which shall be the sole responsibility of Buyer, no
     financial advisor, finder, broker, agent or other intermediary, acting on
     behalf of Buyer or any of its Affiliates, is or will become entitled to a
     commission, fee or other compensation in connection with this Agreement or
     the transactions contemplated hereby.

                                   ARTICLE VI
                                    COVENANTS

          6.1 CONDUCT OF THE COMPANY'S BUSINESS. Seller agrees that, during the
     period from the date of this Agreement to the Closing, except as otherwise
     set forth in SECTION 6.1(B) OF THE DISCLOSURE SCHEDULE or as contemplated
     by this Agreement, including the making of the Distributions permitted
     under Section 3.2 and the provisions of Section 6.8(i), or consented to by
     Buyer (which consent shall not be unreasonably withheld or delayed):

               (a) Seller shall cause the Company to conduct its business in all
          material respects in the Ordinary Course of Business; and

                                       30
<PAGE>

               (b) Without limiting the generality of the foregoing, Seller
          shall cause the Company: to (i) not sell or dispose of any of its
          material properties or assets, except in the Ordinary Course of
          Business; (ii) maintain: (A) all of the material assets, properties,
          machinery and equipment owned, leased or used by the Company in their
          current condition, ordinary wear and tear accepted, and (B) insurance
          upon all of the properties and assets of the Company in such amounts
          and of such kinds comparable to that in effect on the date hereof;
          (iii) not, except in the Ordinary Course of Business: (A) amend,
          modify or terminate any Contract set forth in SECTION 4.15 OF THE
          DISCLOSURE SCHEDULE or (B) enter into any Contract that would have
          been required to be disclosed in SECTION 4.15 OF THE DISCLOSURE
          SCHEDULE had it been in effect on the date hereof; (iv) not enter into
          any written employment agreement with any employee or increase in any
          manner the compensation of any of the officers or other key employees
          of the Company, except for such increases as are granted in the
          Ordinary Course of Business in accordance with customary practices
          (which shall include normal periodic performance reviews and related
          compensation and benefit increases) or as required by a pre-existing
          commitment; (v) not adopt, grant, extend or increase the rate or terms
          of any bonus, insurance, pension or other employee benefit plan,
          payment or arrangement made to, for or with any such officers or
          employees of the Company, except increases required by any applicable
          law, rule or regulation or as required by a pre-existing commitment;
          (vi) not materially change or rescind any election in respect of
          Taxes, materially change any accounting or Tax reporting principle,
          method or policy in respect of Taxes, or settle or compromise any
          claim in respect of Taxes (vii) not incur any material Indebtedness
          payable to any third party, including Seller or any of its Affiliates;
          (viii) not amend the Company's Charter or Bylaws or issue or agree to
          issue shares of capital stock including securities exchangeable for a
          convertible into capital stock of the Company or merge, consolidate,
          recapitalize or reorganize; (ix) not license any Intellectual Property
          Rights (other than non-exclusive licenses to customers in the Ordinary
          Course of Business; (x) not hire any employee unless such hire is
          contemplated by the budget for the Company previously provided by
          Seller to Buyer; and (xi) use its Reasonable Efforts to (A) preserve
          its relationships with its material suppliers, customers, licensors,
          licensees and others having business relationships with the Company
          and (B) to preserve the present business operations, organization and
          goodwill of the Company.

          6.2 ACCESS TO INFORMATION.

               (a) Until the Closing, Seller shall cause the Company to (i) give
          Buyer and its authorized representatives reasonable access to all
          books, records, offices and other facilities and properties of the
          Company; (ii) permit Buyer to make such inspections thereof as Buyer
          may reasonably request; and (iii) furnish or cause the officers of the
          Company to furnish Buyer with such financial and operating data and
          other information with respect to the business and properties of the
          Company as Buyer may from time to time reasonably request; PROVIDED,
          HOWEVER, that Buyer shall in each instance give reasonable prior
          notice to Seller and that any such investigation shall be conducted
          during normal business hours under the supervision of Seller's or the
          Company's personnel and in such a manner as to maintain the
          confidentiality of this Agreement and the transactions contemplated
          hereby and shall not interfere unreasonably with the business
          operations of the Company; and, PROVIDED, FURTHER, that any such
          disclosure shall not be required if it would violate any laws or the
          terms or conditions of any contracts or adversely affect the ability
          of Seller or the Company to assert attorney-client, attorney work
          product or other similar privilege.


                                       31
<PAGE>


               (b) Any disclosure whatsoever during such investigation by Buyer
          shall not constitute an enlargement of or additional representations
          or warranties of Seller beyond those specifically set forth in Article
          IV of this Agreement.

               (c) All information concerning the Company and/or Seller
          furnished or provided by the Company or Seller to Buyer or its
          representatives (whether furnished before or after the date of this
          Agreement) shall be held subject to a confidentiality agreement among
          the Company, Seller and Buyer dated as of December 5, 2005 (the
          "CONFIDENTIALITY AGREEMENT").

          6.3 CONSENTS.

               (a) Each of Seller and Buyer shall cooperate, and use its
          Reasonable Efforts, to make all filings and obtain all licenses,
          Permits, consents, approvals, authorizations, qualifications and
          orders of Governmental Authorities necessary to consummate the
          transactions contemplated by this Agreement. Without limiting the
          generality of the foregoing, Seller and Buyer shall (i) make any and
          all notifications and filings required to be made to any court,
          administrative agency or commission or other governmental agency,
          authority or instrumentality having supervisory or regulatory
          authority with respect to the relevant party or parties to this
          Agreement in connection with the transactions contemplated by this
          Agreement; and (ii) file any Notification and Report Forms and related
          material that such party may be required to file with the Federal
          Trade Commission and the Antitrust Division of the United States
          Department of Justice under the H-S-R Act, use its Reasonable Efforts
          to cause the early termination of the waiting period(s) and to respond
          to any request for additional information and documentary material, as
          may be necessary, proper or advisable in connection therewith. Any and
          all filing fees in respect of such filings shall be paid by Buyer.
          Notwithstanding the foregoing, neither Buyer nor any of its Affiliates
          shall be required, in connection with the matters set forth in this
          Section 6.3, to hold separate (including by trust or otherwise) or
          divest any of their respective businesses, product lines or assets.

               (b) Seller shall use and shall cause the Company to use its
          Reasonable Efforts to obtain any third party consents or approvals
          that Buyer may reasonably request in connection with the consummation
          of the transactions contemplated by this Agreement. Buyer agrees to
          provide such assurances as to financial capability, resources and
          creditworthiness as may be reasonably requested by any third party
          whose consent or approval is sought hereunder.

               (c) With respect to any agreements for which any required consent
          or approval is not obtained prior to the Closing, Seller and Buyer
          shall each use its Reasonable Efforts to obtain any such consent or
          approval after the Closing Date until such consent or approval has
          been obtained.

          6.4 REASONABLE EFFORTS. Each of Seller and Buyer shall cooperate, and
     use its Reasonable Efforts to take, or cause to be taken, all actions, and
     to do, or cause to be done, all things necessary, proper or advisable under
     applicable laws and regulations to consummate the transactions contemplated
     by this Agreement (including satisfaction, but not waiver, of the closing
     conditions set forth herein).


                                       32
<PAGE>


          6.5 COVENANT TO SATISFY CONDITIONS. Seller will use its Reasonable
     Efforts to ensure that the conditions set forth in Article VII hereof are
     satisfied, insofar as such matters are within the control of Seller. Buyer
     will use its Reasonable Efforts to ensure that the conditions set forth in
     Article VII hereof are satisfied, insofar as such matters are within the
     control of Buyer. Notwithstanding the foregoing, none of the parties to
     this Agreement shall be required to waive any condition herein to its
     obligations at the Closing or to incur any substantial cost not otherwise
     required under this Agreement. Seller and Buyer further covenant and agree,
     with respect to a threatened or pending preliminary or permanent injunction
     or other order, decree or ruling or statute, rule, regulation or executive
     order that would adversely affect the ability of the parties hereto to
     consummate the transactions contemplated hereby, to use all Reasonable
     Efforts to prevent or lift the entry, enactment or promulgation thereof, as
     the case may be. Notwithstanding the foregoing, neither Buyer nor any of
     its Affiliates shall be required, in connection with the matters set forth
     in this Section 6.5, to hold separate (including by trust or otherwise) or
     divest any of their respective businesses, product lines or assets.

          6.6 PUBLIC ANNOUNCEMENTS. Prior to the Closing, except as otherwise
     agreed to by the parties and except for disclosures made by Buyer to its
     lenders or potential lenders pursuant to customary confidentiality
     provisions, the parties shall not issue any report, statement or press
     release or otherwise make any public statements with respect to this
     Agreement and the transactions contemplated hereby without obtaining the
     prior approval of the other party hereto, which approval will not be
     unreasonably withheld or delayed, unless, in the reasonable judgment of the
     party intending to make such release, disclosure is otherwise required by
     applicable law or by the applicable rules of any stock exchange on which
     such party or its Affiliates lists securities, PROVIDED, that, to the
     extent required by applicable law, the party intending to make such release
     shall use its Reasonable Efforts consistent with such applicable law to
     consult with the other party with respect to the text thereof. Upon the
     Closing, Seller and Buyer will consult with each other with respect to the
     issuance of a joint report, statement or press release with respect to this
     Agreement and the transactions contemplated hereby.

          6.7 USE OF "TEKELEC" NAME. From and after the Closing, Buyer agrees
     not to use and shall cause the Company and Buyer's affiliates not to use
     the "TEKELEC" name in any manner in any part of the world as part of their
     company names or in any manner in connection with their respective
     businesses.

          6.8 EMPLOYEES; EMPLOYEE BENEFITS.

               (a) Prior to the Closing Date, Seller shall transfer the
          employment of all Company Employees to the Company. Seller shall be
          solely responsible for any Liability incurred in connection with such
          transfers of employment (including, without limitation, any
          Liabilities under any Plan or under the WARN Act or any other
          applicable law). In connection with such transfers of employment,
          Seller shall obtain federal and state taxpayer identification numbers
          for the Company, activate income and employment tax accounts, and
          report and remit appropriate taxes with respect to compensation earned
          by Company Employees prior to the Closing Date, as well as ensure that
          the Company Employees receive workers' compensation coverage (or, to
          the extent it is not possible to complete such actions before the
          Closing Date, the Seller shall use Reasonable Efforts to initiate such
          actions). Because the Company does not directly employ most employees,
          and most employees who perform services for the Company are employed
          directly by Seller, certain Intellectual Property Rights and
          Technology used in the current operation of the Company's business may
          be owned by Seller pursuant to confidentiality, nondisclosure and
          invention assignment agreements between Seller and the Company
          Employees listed on SECTION 4.16 OF THE DISCLOSURE SCHEDULE and by
          virtue of the employer--employee relationship between Seller and the
          Company Employees. Prior to the Closing, Seller shall assign to the
          Company all of the Seller's right, title and interest to all
          Intellectual Property Rights and Technology (other than the
          intellectual property and associated rights comprising and related to
          the Company's ASi 4000 technology) used in the current operations of
          the Company's business that was developed or created by the Company
          Employees, and Seller shall assign to the Company all of Seller's
          right, title and interest under such agreements between Seller and
          such Company Employees. The covenants set forth in SECTION 4.12(A) OF
          THE DISCLOSURE SCHEDULE are hereby incorporated into this Agreement in
          their entirety.


                                       33
<PAGE>


               (b) Buyer agrees that prior to the Closing, it will not require
          or request of Seller or the Company that Seller or the Company
          terminate any Company Employees. For a one-year period following the
          Closing, Buyer shall, or shall cause the Company to, provide each
          Company Employee who continues as an employee of the Company (an
          "EMPLOYEE") with benefits that are at least substantially comparable
          in the aggregate to those benefits provided to similarly situated
          employees of Buyer (other than equity and performance based
          compensation). Buyer shall give full credit for all service with the
          Company or any Affiliate thereof, and any predecessor thereto to the
          extent that service with such predecessor entity was recognized under
          the applicable Plan of the Company or any Affiliate, to each Employee
          for purposes of vesting and eligibility, including waiting periods
          relating to preexisting conditions under medical plans (except for
          purposes of determining the amount of any benefit under any defined
          benefit pension plan and eligibility for early retirement or any
          subsidized benefit), any employee benefit plan (including any
          "employee benefit plan" as defined in Section 3(3) of ERISA)
          maintained by Buyer or its subsidiaries (including any vacation or
          accrued sick pay plan or policy) in which the Employees participate on
          or after the Closing Date. Prior to the Closing, the Company shall
          furnish Buyer with a list of the length of service with the Company or
          its Affiliates for each of the Employees. For purposes of computing
          deductible amounts (or like adjustments or limitations on coverage)
          under any employee welfare benefit plan (including any "employee
          welfare benefit plan" as defined in Section 3(1) of ERISA), expenses
          and claims previously recognized for similar purposes under the
          applicable welfare benefit plan of the Company or any Affiliate shall
          be credited or recognized under the comparable plan maintained after
          the Closing Date by Buyer or its subsidiaries in which the Employees
          participate.


                                       34
<PAGE>


               (c) Notwithstanding anything in paragraph (a) of this Section to
          the contrary, if any Employee is discharged by the Company on or
          within 12 months after the Closing Date, then the Company shall be
          responsible for severance for such discharged Employee, such severance
          payable to be determined at the greater of the Company's severance
          policy as set forth in SECTION 6.8(C) OF THE DISCLOSURE SCHEDULE or
          Buyer's then current severance policy, giving effect to the provisions
          of Section 6.8(b). The Company shall be responsible and assume all
          liability for all notices or payments due to any Employee, and all
          notices, payments, fines or assessments due to any government
          authority, pursuant to any applicable foreign, Federal, state or local
          law, common law, statute, rule or regulation with respect to the
          employment, discharge or layoff of employees by the Company after the
          Closing, including WARN and any rules or regulations as have been
          issued in connection with the foregoing.

               (d) Buyer shall cause the Company to indemnify, defend and hold
          harmless the officers, directors and employees of the Company to the
          same extent that such persons are entitled to indemnification as of
          the date hereof pursuant to the Company's Articles of Incorporation,
          Bylaws and any agreements between such persons and the Company, for
          any acts or omissions prior to the Closing Date. Until the seventh
          anniversary of the Closing Date, Buyer shall provide policies of
          officers' and directors' liability insurance with reputable and
          financially sound carriers of at least the same coverage and amount
          and containing terms and conditions that are no less favorable in
          respect of acts or omissions occurring prior to the Closing Date
          covering each such person currently covered by such policies in effect
          of the date hereof.

               (e) Seller shall retain all liabilities for claims incurred by an
          Employee (and his or her eligible spouse and dependents) on or prior
          to the Closing Date under the Plans that are welfare benefit plans
          within the meaning of Section 3(1) or ERISA and all short term
          disability and salary continuation plans or arrangements (the "WELFARE
          PLANS"). For this purpose claims under any medical, dental, vision or
          prescription drug plan will be deemed to be incurred on the date that
          the service giving rise to such claim is performed and not when such
          claim is made; PROVIDED, HOWEVER, that with respect to claims relating
          to hospitalization the claim will be deemed to be incurred on the
          first day of such hospitalization and not on the date that such
          services are performed. Claims for disability under any long or short
          term disability plan or arrangement will be incurred on the date the
          Employee is first absent from work because of the condition giving
          rise to such disability and not when the Employee is determined to be
          eligible for benefits under the applicable Welfare Plan or other
          arrangement. Seller will provide any continuation coverage required
          under COBRA to each "qualified beneficiary" (as defined in COBRA)
          whose first "qualifying event" (as defined in COBRA) occurs on or
          prior to the Closing Date. The Company shall be responsible for the
          continuation of health plan coverage, in accordance with the
          requirements of COBRA for any Employee or a qualified beneficiary
          under a Company health plan who first has a qualifying event after the
          Closing Date.


                                       35
<PAGE>


               (f) Effective as of the Closing Date, Seller shall transfer, or
          cause to be transferred, to Buyer an amount, in cash, equal to the
          excess, if any, of the aggregate 2006 contributions of all Employees
          then participating in Seller's or its Affiliate's flexible benefits
          plan (the "SELLER FLEXIBLE BENEFITS PLAN"), over the aggregate 2006
          reimbursements to all Employees under such plan. Buyer shall cause
          such amounts to be credited to each such employee's accounts under
          Buyer's (or one of its affiliate's) corresponding flexible benefit
          plan (the "BUYER FLEXIBLE BENEFITS PLAN") which shall be established
          and in effect for such employees as of the Closing Date, and all
          claims for reimbursement which have not been paid as of the date of
          the transfer to Buyer and credited under the Buyer Flexible Benefits
          Plan shall be paid pursuant to and under the terms of the Buyer
          Flexible Benefits Plan. In connection with such transfer, Buyer shall
          deem that such employees' deferral elections made under the Seller
          Flexible Benefits Plan for the 2006 calendar year shall continue in
          effect under the Buyer Flexible Benefits Plan for the remainder of the
          2006 calendar year following the Closing Date.

               (g) Buyer shall cause the Company to recognize and provide all
          accrued but unused vacation and personal days as of the Closing Date
          to the extent reflected on the Most Recent Balance Sheet.

               (h) On the date of this Agreement, Buyer and each of the key
          Company Employees designated by Buyer shall enter into agreements
          which shall provide for the terms of such employees employment after
          the Closing Date.

               (i) To the extent Seller and the Company deem advisable, Company
          Employees shall become fully vested in their accounts under the
          Tekelec 401(k) Plan.

          6.9 CERTAIN TAX MATTERS.

               (a) Seller shall accurately prepare and file all federal Income
          Tax Returns and all other Income Tax Returns with respect to the
          Company for all periods ending on or prior to the Closing Date. Such
          Tax Returns shall include any gain or income recognized by the Company
          as a result of: (i) the distribution by the Company of shares of stock
          of Santera Systems Inc. to Seller in November, 2003; (ii) the
          distribution by the Company to Seller of intellectual property and
          associated rights comprising and related to the ASi 4000 technology on
          or before the Closing Date; and (iii) the balance in the deferred
          revenue account of the Company on December 31, 2005 determined
          pursuant to Revenue Procedure 2004-34. Seller shall be responsible for
          the payment of all Taxes with respect to such Tax Returns. Seller
          shall also be responsible for (i) the accurate preparation of all
          Non-Income Tax Returns that are required to be filed with respect to
          the Company that are due before the Closing Date and (ii) for the
          payment of all Taxes payable with respect thereto. Buyer and its
          authorized representatives shall have the right to review and audit
          all Income Tax Returns of the Company that are required to be filed
          after the Closing Date, provided that in the case of the federal
          Income Tax Return, such review and audit shall be limited to the
          portions that relate to the Company and the supporting detail and work
          papers. Buyer and Seller agree to consult and resolve in good faith
          any issues arising as a result of the review and audit of such Tax
          Return by Buyer or its authorized representative. If, after the
          Closing Date, Buyer or the Company pays any such Taxes for which
          Seller is responsible, Seller shall reimburse Buyer or the Company
          within 5 days after the date Seller is notified by Buyer or the
          Company that such Taxes were paid. The covenants set forth in SECTION
          4.18(A) OF THE DISCLOSURE SCHEDULE are hereby incorporated into this
          Agreement in their entirety.


                                       36
<PAGE>


               (b) Buyer or the Company shall accurately prepare and file all
          Non-Income Tax Returns for the Company for all periods ending prior to
          the Closing Date that are required to be filed after the Closing Date.
          Seller shall cooperate with Buyer in filing and causing to be filed
          such Tax Returns. Seller shall be responsible for payment of, and
          shall pay when due, any Non-Income Taxes shown due on such returns or
          that are otherwise payable with respect to such Tax Returns. If, after
          the Closing Date, Buyer or the Company pays any such Non-Income Taxes
          for which Seller is responsible, Seller shall reimburse Buyer or the
          Company within 5 days after the date Seller is notified by Buyer or
          the Company that such Taxes were paid.

               (c) Buyer shall prepare or cause to be prepared and file or cause
          to be filed all Tax Returns for the Company for all Straddle Periods.
          All Taxes with respect to the Company attributable to Pre-Closing
          Periods shall be allocated to and paid by Seller, except to the extent
          such Taxes have been previously paid by Seller including amounts paid
          in respect of estimated Taxes, and all Taxes with respect to the
          Company attributable to Post-Closing Periods shall be allocated to and
          paid by Buyer. In the case of any Taxes with respect to the Company
          for a Straddle Period, the portion of such Taxes that are allocated to
          the Pre-Closing Period shall (x) be deemed to be the amount that would
          be payable if the relevant Tax period ended as of the Closing Date
          pursuant to an interim closing of the books in the case of all Income
          Taxes with respect to the Company and any Non-Income Taxes with
          respect to the Company not described in (y) below and (y) in the case
          of Non-Income Taxes with respect to the Company that cannot be
          allocated based upon an interim closing of the books (e.g., property
          or net worth taxes), be deemed to the amount of such Taxes for the
          entire Taxable period multiplied by a fraction, the numerator of which
          is the total number of days in that portion of such Taxable period
          ending on the Closing Date and the denominator of which is the total
          number of days in such Tax period. Seller shall pay to Buyer within 5
          days after the date Seller is notified that Taxes with respect to the
          Company attributable to a Straddle Period were paid by Buyer an amount
          equal to the portion of such Taxes attributable to the Pre-Closing
          Period and shall indemnify Buyer against such portion of such Taxes.
          All determination necessary to give effect to the foregoing
          allocations shall be made in a manner consistent with prior practice
          of Seller.

               (d) With respect to any Tax Return of the Company required to be
          filed by Buyer or the Company after the Closing Date for Pre-Closing
          Periods or Straddle Periods, Seller and its authorized representatives
          shall have the right to review and audit such Tax Returns prior to
          filing of the Tax Returns. Buyer and Seller agree to consult and
          resolve in good faith any issues arising as a result of the review and
          audit of such Tax Return by Seller or its authorized representative.

               (e) Buyer covenants that without the prior consent of Seller,
          which shall not be unreasonably withheld, it will not, and will not
          cause or permit the Company or any Affiliate of Buyer, to make or
          change any Tax election, amend any Tax Return or take any Tax position
          on any Tax Return, that results in any increased Tax liability of the
          Company or Seller in respect of any Pre-Closing Tax Period.
          Notwithstanding the foregoing, consent of Seller shall not be required
          to the extent any foregoing action by Buyer or Company is required by
          applicable law.


                                       37
<PAGE>


               (f) Buyer and Seller agree to furnish or cause to be furnished to
          each other, upon written request, as promptly as practicable, such
          information (including access to books and records) and assistance
          relating to the Company as is reasonably necessary for the filing of
          any Tax Return, for the preparation for any audit, and for the
          prosecution or defense of any claim, suit or proceeding relating to
          any proposed adjustment. Buyer and Seller shall cooperate with each
          other in the conduct of any audit or other proceedings involving the
          Company for any Tax purposes and each shall execute and deliver such
          powers of attorney and other documents as are necessary to carry out
          the intent of this subsection. Any Tax audit or other Tax proceeding
          shall be deemed to be a third party claim subject to the procedures
          set forth in Section 9.6 of this Agreement.

               (g) Buyer shall promptly pay or shall cause prompt payment to be
          made to Seller of all refunds of Taxes and interest thereon received
          by, or credited against the Tax liability of Buyer, any Affiliate of
          Buyer or the Company attributable to Taxes paid by Seller or the
          Company with respect to any Pre-Closing Tax Period or any portion of
          the Straddle Period prior to the Closing Date. If, with respect to a
          Tax Return required to be filed by the Company, Seller reasonably
          determines that the Company is entitled to file a claim for refund or
          an amended Tax Return with respect to a Pre-Closing Tax Period, Buyer
          shall, upon Seller's reasonable request, cause the Company to file all
          such claims or amended Tax Returns; provided that Buyer shall not be
          required to cause the Company to file any such claim or amended Tax
          Return if so doing (i) could have the effect of increasing the Tax
          liability of Buyer or the Company in any Post-Closing Tax Period or
          (ii) in Buyer's reasonable judgment is contrary to applicable law.
          Seller shall reimburse Buyer and Company for all reasonable expenses
          incurred to comply with Seller's request, including any third party
          professional, legal or accounting fees.

               (h) Notwithstanding any other provisions of this Agreement to the
          contrary, all transfer, documentary, sales, use, stamp, registration,
          and other such Taxes and fees (including any penalties and interest)
          incurred in connection with the transactions contemplated by this
          Agreement shall be paid by Buyer. Buyer shall at its own expense
          accurately file or cause to be filed all necessary Tax Returns and
          other documentation with respect such Taxes and timely pay all such
          Taxes.

          6.10 EXCLUSIVITY. From and after the date of this Agreement until the
     earlier of the Closing Date or termination of this Agreement pursuant to
     Article VIII, Seller shall not, directly or indirectly, solicit offers
     from, or in any manner initiate or encourage the submission of any proposal
     of, or enter into negotiations or agreement with any third party relating
     to the acquisition of all or substantially all of the Company's capital
     stock or assets, including any acquisition structured as a tender offer,
     exchange offer, merger, consolidation, recapitalization or share exchange.

          6.11 DISCLOSURE SCHEDULE. Notwithstanding any specific reference to
     the disclosure of any matter pursuant to any Section of the Disclosure
     Schedule, all disclosures made pursuant to any Section hereunder or on the
     Disclosure Schedule shall be deemed made for all other Sections to which
     such disclosure may apply to the extent its relevance to such other
     Sections is reasonably apparent, and any headings or captions on any
     Section herein or therein are for convenience of reference only.


                                       38
<PAGE>


          6.12 NON-COMPETITION; NON-SOLICITATION.

               (a) For a period of three years from and after the Closing Date,
          Seller shall not, and shall cause its majority owned subsidiaries not
          to, directly or indirectly, own, manage, engage in, operate, control,
          work for, consult with, render services for, do business with,
          maintain any interest in (proprietary, financial or otherwise) or
          participate in the ownership, management, operation or control of, any
          business, whether in witness corporate, proprietorship or partnership
          form or otherwise, engaged in the work force management call center
          contact business as currently conducted by the Company (a "RESTRICTED
          BUSINESS"); PROVIDED, HOWEVER, that the restrictions contained in this
          Section 6.12(a) shall not restrict the acquisition by Seller, directly
          or indirectly, of less than 5% (in the aggregate) of the outstanding
          capital stock of any publicly traded company engaged in a Restricted
          Business.

               (b) For a period of two years from and after Closing Date, except
          with Buyer's consent, Seller shall not, and shall cause its directors,
          officers, employees and majority owned subsidiaries not to, directly
          or indirectly (i) cause, solicit, induce or encourage any employees of
          the Company to leave such employment or hire, employ or otherwise
          engage any such individual; or (ii) cause, induce or encourage any
          material actual or prospective client, customer, supplier or licensor
          of the Company (including any former customer of the Company and any
          Person that becomes a customer of the Company after the Closing) or
          any other Person who has a material business relationship with the
          Company to terminate or modify any such actual or prospective
          relationship.

               (c) For the avoidance of doubt, and as a material inducement to
          Seller to enter into this Agreement, the parties agree that,
          notwithstanding anything to the contrary in the foregoing provisions
          of Section 6.12, in the event that a person, firm, corporation or
          other business acquires Seller or any of its majority-owned
          subsidiaries by merger, consolidation or otherwise (any such person,
          firm, corporation or other business, an "Acquiror"), such Acquiror and
          its Affiliates (other than Seller) shall not be deemed to be in
          breach, default or violation of any of the covenants set forth in
          Section 6.12 above unless, in taking any actions that would constitute
          a breach or violation of the obligation of Seller under the provisions
          of Section 6.12, such Acquiror or any of its Affiliates (other than
          Seller) uses: (a) the Company's corporate name or trademarks in
          existence as of the Closing Date; (b) any Company Technology or
          Company Intellectual Property Rights in existence as of the Closing
          Date; or (c) the services of any individuals who are employees of the
          Company as of the Closing Date.

               (d) The covenants and undertakings contained in this Section 6.12
          relate to matters which are of a special, unique and extraordinary
          character and a violation of any of the terms of this Section 6.12
          will cause irreparable injury to Buyer, the amount of which will be
          impossible to estimate or determine and which cannot be adequately
          compensated. Accordingly, the remedy at law of any breach of this
          Section 6.13 will be inadequate. Therefore, Buyer will be entitled to
          seek a temporary and permanent injunction, restraining order or other
          equitable relief from any court of competent jurisdiction in the event
          of any breach of this Section 6.12 without the necessity of proving
          actual damage or posting any bond whatsoever. The rights and remedies
          provided this Section 6.12 are cumulative and in addition to any other
          rights and remedies which Buyer may have hereunder or at law or in
          equity.


                                       39
<PAGE>


          6.13 REMITTANCES OF RECEIVABLES. After the Closing, if Seller or any
     of its Affiliates receive any accounts receivables or other amounts that
     are otherwise properly due and owing to the Company or Buyer, Seller shall
     remit, or shall cause to be remitted, such amount to Buyer within 5
     Business Days of receipt of such funds.

          6.14 TERMINATION OF CERTAIN CONTRACTS. On or prior to the Closing
     Date, Seller agrees to terminate, or cause to be terminated, all Contracts
     set forth in Section 4.24 of the Disclosure Schedules.

          6.15 AUDITED FINANCIAL STATEMENTS. At least five Business Days prior
     to the Closing, Seller shall deliver to Buyer audited balance sheets for
     the fiscal years ended December 31, 2005, 2004 and 2003, and the related
     statements of income, changes in stockholders' equity and cash flow for the
     fiscal years ended December 31, 2005, 2004 and 2003 (the "AUDITED FINANCIAL
     STATEMENTS"). The Audited Financial Statements shall (i) be prepared in
     accordance with GAAP and the books and records of the Company and (ii)
     present fairly, in all material respects, the financial position of the
     Company as of the date thereof, and the results of operations of the
     Company for the period indicated.

          6.16 BLUE PUMPKIN SOFTWARE LICENSE. On or prior to the Closing Date,
     the Company shall assign to Buyer all of its rights and obligations under
     the license granted to it under the Blue Pumpkin Licensed Patents, as
     defined below, pursuant to the Confidential Settlement and Cross License
     Agreement dated as of April 6, 2006 by and between Blue Pumpkin Software
     LLC, Blue Pumpkin Software, Inc. and the Company (the "BLUE PUMPKIN
     CROSS-LICENSE AGREEMENT"); PROVIDED, HOWEVER, that Buyer acknowledges and
     agrees that the Company may assign, on or prior to the Closing Date, its
     right to receive royalty payments under Section 6 of the Blue Pumpkin
     Cross-License Agreement to Seller. "BLUE PUMPKIN LICENSED PATENTS" shall
     have the meaning set forth in Section 1.5 of the Blue Pumpkin Cross-License
     Agreement.

                                  ARTICLE VII
                    CONDITIONS TO OBLIGATIONS OF THE PARTIES

          7.1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective obligation
     of each party to consummate the transactions contemplated herein is subject
     to the satisfaction at or prior to the Closing of the following conditions:

               (a) No statute, rule or regulation shall have been enacted,
          entered, promulgated or enforced by any court or Governmental
          Authority which prohibits or restricts the consummation of the
          transactions contemplated hereby;

               (b) There shall not be in effect any judgment, order, injunction
          or decree of any court of competent jurisdiction enjoining the
          consummation of the transactions contemplated hereby;


                                       40
<PAGE>


               (c) There shall not be any suit, action, investigation, inquiry
          or other proceeding instituted, pending or threatened by any
          Governmental Authority which seeks to enjoin or otherwise prevent
          consummation of the transactions contemplated hereby; and

               (d) All necessary regulatory notices, consents, authorizations
          and other approvals required for the consummation of the transactions
          contemplated herein shall have been obtained and any waiting periods
          applicable to the transactions contemplated by this Agreement under
          applicable U.S. antitrust or trade regulation laws and regulations,
          including under the H-S-R Act, shall have expired or been terminated.

          7.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
     consummate the transactions contemplated hereby are further subject to the
     satisfaction (or waiver) at or prior to the Closing of the following
     conditions:

               (a) The representations and warranties of Buyer contained in
          Article V of this Agreement shall be true and correct in all material
          respects at the date hereof and as of the Closing as if made at and as
          of such time, except for (i) representations and warranties which are
          as of a specific date, which representations and warranties will have
          been true as of such date and (ii) for representations and warranties
          qualified by materiality, which representations and warranties will be
          true and correct in all respects as of such date;

               (b) Buyer shall have performed in all material respects its
          obligations under this Agreement required to be performed by it at or
          prior to the Closing pursuant to the terms hereof;

               (c) Buyer shall have delivered to Seller those items set forth in
          Section 2.6 hereof; and

               (d) Buyer shall have delivered to Seller a Certificate executed
          by an executive officer of Buyer, dated as the Closing Date, to the
          effect that the conditions set forth in Sections 7.2(a) and (b) have
          been satisfied.

          7.3 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
     consummate the transactions contemplated hereby are further subject to the
     satisfaction (or waiver) at or prior to the Closing of the following
     conditions:

               (a) The representations and warranties of Seller contained in
          Article IV of this Agreement shall be true and correct in all material
          respects at the date hereof and as of the Closing as if made at and as
          of such time, except for (i) representations and warranties which are
          as of a specific date, which representations and warranties will have
          been true as of such date and (ii) for representations and warranties
          qualified by materiality or Material Adverse Effect, which
          representations and warranties will be true and correct in all
          respects as of such date;


                                       41
<PAGE>


               (b) Seller shall have performed in all material respects its
          obligations under this Agreement required to be performed by it at or
          prior to the Closing pursuant to the terms hereof;

               (c) Seller shall have delivered to Buyer those items set forth in
          Section 2.5 hereof;

               (d) Seller shall have delivered to the Buyer a Certificate
          executed by an executive officer of Seller, dated as the Closing Date,
          to the effect that the conditions set forth in Sections 7.3(a) and (b)
          have been satisfied;

               (e) There shall not have been a Material Adverse Effect since the
          date of this Agreement;

               (f) The consents, approvals, waivers and notices set forth in
          SECTION 7.3(F) OF THE DISCLOSURE SCHEDULE shall have been obtained;

               (g) Buyer shall have received an opinion dated as of the Closing
          Date of Bryan Cave LLP, counsel to Seller, substantially in the form
          attached hereto as EXHIBIT B;

               (h) Seller shall have completed and delivered to Buyer the
          Audited Financial Statements, and such Audited Financial Statements
          shall not be materially adversely different from the Unaudited
          Financial Statements; and

               (i) The Contracts set forth in SECTION 4.24 OF THE DISCLOSURE
          SCHEDULE shall have been terminated.

                                  ARTICLE VIII
                         TERMINATION; AMENDMENT; WAIVER

          8.1 TERMINATION. This Agreement may be terminated and the transactions
     contemplated hereby may be abandoned prior to the Closing as follows:

               (a) At any time, by mutual written consent of Seller and Buyer;

               (b) By Buyer, on the one hand, or by Seller, on the other hand,
          if any court of competent jurisdiction in the United States or any
          United States governmental body shall have issued a final and non
          appealable judgment, order, injunction, decree, or ruling permanently
          restraining, enjoining or otherwise prohibiting the consummation of
          the transactions contemplated hereby; PROVIDED that no party hereto
          affiliated with the person who brought the action seeking the
          permanent enjoinment of the transactions contemplated hereby may seek
          termination of this Agreement pursuant to this Section 8.1(b);


                                       42
<PAGE>


               (c) If the transactions contemplated hereby or any of the
          conditions to Closing hereunder become impossible to perform or
          obtain, as applicable, provided that no party hereto who caused such
          impossibility may seek termination of this Agreement pursuant to this
          Section 8.1(c);

               (d) Buyer may terminate this Agreement by giving written notice
          to Seller at any time prior to the Closing in the event (i) Seller has
          breached any material representation, warranty or covenant contained
          in this Agreement in any material respect, Buyer has notified Seller
          and the Company of the breach, and the breach has continued without
          cure for a period of ten business days after the notice of breach or
          (ii) there has been a Material Adverse Effect;

               (e) Seller may terminate this Agreement by giving written notice
          to Buyer at any time prior to the Closing in the event Buyer has
          breached any material representation, warranty or covenant contained
          in this Agreement in any material respect, Seller has notified Buyer
          of the breach, and the breach has continued without cure for a period
          of ten business days after the notice of breach; or

               (f) At any time on or after September 1, 2006 (or such later date
          as Seller and Buyer shall have agreed in writing), by either Seller,
          on the one hand, or Buyer, on the other hand, if the Closing shall not
          have occurred on or prior to such date (or such later date as Seller
          and Buyer shall have agreed in writing); PROVIDED that no party hereto
          may seek termination of this Agreement pursuant to this Section 8.1(f)
          if the failure of any condition precedent under Article VII results
          primarily from such party breaching any representation, warranty or
          covenant contained in this Agreement.

          8.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the
     termination of this Agreement and the abandonment of the transactions
     contemplated hereby pursuant to Section 8.1 hereof, written notice thereof
     shall forthwith be given by the party so terminating to the other party and
     this Agreement shall terminate and the transactions contemplated hereby
     shall be abandoned, without further action by Seller, on the one hand, or
     Buyer, on the other hand. If this Agreement is terminated pursuant to
     Section 8.1 hereof:

               (a) Each party shall redeliver all documents, work papers and
          other materials of the other parties relating to the transactions
          contemplated hereby, whether obtained before or after the execution
          hereof, to the party furnishing the same, and all confidential
          information received by any party hereto with respect to the other
          party shall be treated in accordance with the Confidentiality
          Agreement and Section 6.2(b) hereof;

               (b) All filings, applications and other submissions made pursuant
          hereto shall, at the option of Seller, and to the extent practicable,
          be withdrawn from the agency or other person to which made; and

               (c) There shall be no liability or obligation hereunder on the
          part of Seller or Buyer or any of their respective Affiliates, except
          that Seller or Buyer, as the case may be, may have liability to the
          other party if the basis of termination is a willful, material breach
          by Seller or Buyer, as the case may be, of one or more of the
          provisions of this Agreement, and except that the obligations provided
          for in Sections 6.2(c), 8.2(a), 8.2(b) and 10.1 hereof shall survive
          any such termination.


                                       43
<PAGE>


                                   ARTICLE IX
                  SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

          9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
     representations and warranties of the parties contained in this Agreement
     shall survive the Closing through and including the 12-month anniversary of
     the Closing Date; PROVIDED, HOWEVER, that (a) the representations and
     warranties contained in Sections 4.4 (Ownership of the Shares), 4.18
     (Taxes), 4.22 (Certain Fees), 5.1 (Organization and Authority of Buyer) and
     5.7 (Certain Fees) shall survive the Closing until the expiration of the
     applicable statute of limitations and (b) the covenants and agreements of
     the parties contained in this Agreement which by their terms require
     performance after the Closing Date shall survive until sixty (60) days
     after the end of the period of performance thereunder (in each case, as
     applicable, the "INDEMNITY PERIOD"); PROVIDED, HOWEVER, that any
     obligations under Sections 9.2 and 9.3 shall not terminate with respect to
     any Damages as to which the Person to be indemnified shall have given
     notice (stating in reasonable detail the basis of the claim for
     indemnification) to the indemnifying party in accordance with Section 9.4
     before the termination of the applicable Indemnity Period.

          9.2 SELLER'S AGREEMENT TO INDEMNIFY. Subject to the terms and
     conditions set forth herein, from and after the Closing, Seller shall
     indemnify and hold harmless Buyer and its directors, officers, employees,
     Affiliates, controlling persons, agents and representatives and their
     successors and assigns (collectively, the "BUYER INDEMNITEES") from and
     against all liability, demands, claims, actions or causes of action,
     assessments, losses, damages, costs and expenses (including the reasonable
     fees and expenses of attorneys and experts) (collectively "DAMAGES")
     asserted against or incurred by any Buyer Indemnitee, and pay to the
     applicable Buyer Indemnitee, the amount of all Damages, whether or not
     involving a third party claim, resulting from or arising out of (i) any
     breach or inaccuracy in any representation or warranty made by Seller under
     this Agreement, or (ii) any breach or violation of any covenant or
     agreement made in this Agreement by Seller.

          9.3 BUYER'S AGREEMENT TO INDEMNIFY. Subject to the terms and
     conditions set forth herein, from and after the Closing, Buyer shall
     indemnify and hold harmless Seller and its directors, officers, employees,
     Affiliates, controlling persons, agents and representatives and their
     successors and assigns (collectively, the "SELLER INDEMNITEES") from and
     against all Damages asserted against or incurred by any Seller Indemnitee,
     and pay to the applicable Seller Indemnitee the amount of all Damages,
     whether or not involving a third party claim, resulting from or arising out
     of (i) any breach or inaccuracy in any representation or warranty made by
     Buyer under this Agreement, or (ii) a breach or violation of any covenant
     or agreement made in this Agreement by Buyer.


                                       44
<PAGE>


          9.4 NOTICE OF CLAIMS.

               (a) Upon obtaining knowledge of any Damages, the party entitled
          to indemnification (the "INJURED PARTY") shall promptly deliver
          written notice (a "NOTICE OF CLAIM") to the party liable for such
          indemnification (the "INDEMNIFYING PARTY") which Notice of Claim shall
          set forth in reasonable detail and to the extent then known the basis
          of the claim for Damages and, to the extent reasonably practicable, a
          reasonable estimate of the amount thereof. The failure of an Injured
          Party to timely deliver a Notice of Claim to the Indemnifying Party
          shall not release the Indemnifying Party from its indemnity
          obligations under this Article IX, except to the extent that the
          Indemnifying Party is materially prejudiced in its ability to defend
          such claim.

               (b) The Injured Party and Indemnifying Party shall attempt for
          not less than 30 days to negotiate a mutually satisfactory resolution
          of the matter set forth in a Notice of Claim. In the event such
          parties are not able to agree on a mutually satisfactory resolution,
          either party may seek to resolve the depute by litigation in any court
          of competent jurisdiction in accordance with the provision of Section
          10.8 hereof.

          9.5 GENERAL LIMITATIONS; EXCLUSIVE REMEDY.

               (a) Each Indemnifying Party shall be obligated to indemnify the
          Injured Party only for those claims giving rise to Damages as to which
          the Injured Party has given to the Indemnifying Party written notice
          thereof prior to the end of the applicable Indemnity Period.

               (b) The provisions of this Article IX shall constitute the
          exclusive remedy for money damages of the parties with respect to any
          and all Damages resulting from or arising out of any breach of any
          representation, warranty, covenant or other provision of this
          Agreement, or otherwise resulting from or arising out of the
          transactions contemplated hereby and which may be asserted on or after
          the Closing (other than any claim relating to fraud).

               (c) Seller's obligations to indemnify the Buyer Indemnitees
          pursuant to Section 9.2 hereof with respect to a breach of a
          representation, warranty, covenant or agreement (excluding the
          covenants and agreements set forth in Sections 2.3, 3.2 and 6.9(a))
          contained in this Agreement are subject to the following limitations:

                    (i) No indemnification shall be made by Seller unless the
               aggregate amount of Damages exceeds $2,000,000 and, in such
               event, indemnification shall be made by Seller from first dollar
               provided that such limitation shall not apply to Damages related
               to breaches of Sections 4.2 (Authorization), 4.3 (Common Stock),
               4.4 (Ownership of the Shares) or 4.18 (Taxes);

                    (ii) In no event shall Seller's aggregate obligation to
               indemnify the Buyer Indemnitees exceed 20% of the Purchase Price,
               PROVIDED that such aggregate obligation shall not apply to
               Damages related to breaches of Sections 4.2 (Authorization), 4.3
               (Common Stock), 4.4 (Ownership of the Shares) or 4.18 (Taxes).


                                       45
<PAGE>


               (d) The amount of any Damages that may be subject to
          indemnification hereunder shall be reduced by any amount actually
          recovered by an Injured Party under insurance policies with respect to
          such Damages.

               (e) Solely for purposes of calculating any Damages hereunder as a
          result of any breach or inaccuracy in any representation or warranty
          or breach or violation of any covenant or agreement made in this
          Agreement, any materiality or Material Adverse Effect qualifications
          in the representations, warranties, covenants and agreements shall be
          disregarded.

          9.6 THIRD PARTY INDEMNIFICATION.

               (a) If the Injured Party settles or compromises any third-party
          claims, or initiates action which is for the purpose in whole or in
          part of causing a claim to be asserted, prior to giving a Notice of
          Claim to the Indemnifying Party, the Indemnifying Party shall be
          released from its indemnity obligation.

               (b) With respect to any action or any claim set forth in a Notice
          of Claim relating to a third-party claim, the Indemnifying Party may
          defend, in good faith and at its expense, any such claim or demand,
          and the Injured Party, at its expense, shall have the right, but not
          the obligation, to participate in (but not control) at its expense in
          the defense of any such third-party claim so long as (i) the
          Indemnifying Party shall have acknowledged in writing to the relevant
          Injured Party its obligation to indemnify such Injured Party as
          provided hereunder, (ii) the third-party claim involves primarily
          money damages and (iii) the Indemnifying Party conducts the defense of
          the third-party claim actively and diligently. So long as the
          Indemnifying Party is defending any such third-party claim, the
          Injured Party shall not settle or compromise such third-party claim
          without the consent of the Indemnifying Party. If such claim is
          settled by the Injured Party without the Indemnifying Party's consent,
          the Injured Party shall be deemed to have waived all rights hereunder
          for money damages arising out of such claim. The Indemnifying Party
          may settle or compromise such third-party claim without the consent of
          the Injured Party, if the settlement or compromise involves only the
          payment of monetary damages and included in such settlement or
          compromise as an unconditional term thereof is the delivery to Injured
          Party of a written release from all liability in respect of such
          third-party claim. Otherwise, the Indemnifying Party may not settle or
          compromise such third-party claim without the consent of the Injured
          Party, which consent shall not be unreasonably withheld. The Injured
          Party shall make available to the Indemnifying Party or its
          representatives all records and other materials reasonably required
          for use in contesting any third-party claim. The Injured Party shall
          cooperate fully with the Indemnifying Party in the defense of all such
          claims.

                                       46
<PAGE>


               (c) If the Indemnifying Party fails to assume the defense of any
          such third-party claims, within thirty (30) days after receipt of a
          Notice of Claim (or such shorter period of time that the Injured Party
          may be required to respond to any suit or governmental action), the
          Injured Party shall have the right to undertake the defense, settle or
          compromise any such third-party claim at the risk and expense of the
          Indemnifying Party, subject to the right of the Indemnifying Party to
          assume the defense of such claim at any time prior to settlement,
          compromise or final determination thereof. The failure of the
          Indemnifying Party to respond in writing to the aforesaid notice of
          the Injured Party with respect to such third-party claim within thirty
          (30) days after receipt thereof shall be deemed an election not to
          defend same. The Indemnifying Party will not, however, be responsible
          for any Damages if and to the extent that they arise from action taken
          or omitted to be taken by the Injured Party in bad faith,
          fraudulently, negligently or as a result of a breach of this Agreement
          by the Injured Party.

          9.7 INDEMNITY PAYMENTS. Except as provided by applicable law, for Tax
     purposes any indemnification payments shall be treated as adjustments to
     purchase price.

                                   ARTICLE X
                                  MISCELLANEOUS

          10.1 FEES AND EXPENSES. Except as otherwise provided herein, each of
     Seller, on the one hand, and Buyer, on the other hand, shall pay all fees
     and expenses incurred by, or on behalf of, such party in connection with,
     or in anticipation of, this Agreement and the consummation of the
     transactions contemplated hereby, including fees and expenses of attorneys,
     accountants and financial advisors, except any fees or expenses incurred to
     obtain the third party consents, approvals, waivers and notices set forth
     in SECTION 7.3(F) OF THE DISCLOSURE SCHEDULE shall be borne by Seller. In
     addition, each of Seller, on the one hand, and Buyer, on the other hand,
     shall indemnify and hold harmless the other party from and against any and
     all claims or liabilities for financial advisory and finders' fees incurred
     by reason of any action taken by such party or otherwise arising out of the
     transactions contemplated by this Agreement by any person claiming to have
     been engaged by such party.

          10.2 FURTHER ASSURANCES. From time to time after the Closing Date, at
     the reasonable request of another party hereto and at the expense of the
     party so requesting, each of the parties hereto shall execute and deliver
     to such requested party such documents and take such other action as such
     requesting party may reasonably request in order to consummate more
     effectively the transactions contemplated hereby. Seller shall not, in
     connection therewith or as a result thereof, incur any legal liability
     beyond that provided for in this Agreement.

          10.3 NOTICES. All notices, requests, demands, waivers and other
     communications required or permitted to be given under this Agreement shall
     be in writing and may be given by any of the following methods: (a)
     personal delivery; (b) facsimile transmission; (c) registered or certified
     mail, postage prepaid, return receipt requested; or (d) overnight delivery
     service. Notices shall be sent to the appropriate party at its address or
     facsimile number given below (or at such other address or facsimile number
     for such party as shall be specified by notice given hereunder):


                                       47
<PAGE>


                                    If to Buyer to:

                                    c/o NICE-Systems Ltd.
                                    8 Hapnina Street POB 690
                                    Ra'anana 43107 Israel
                                    Attention: General Counsel
                                    Facsimile: (972) 9-743-3520

                                    with a copy to:

                                    Gibson, Dunn & Crutcher LLP
                                    200 Park Avenue
                                    New York, NY 10166-0193
                                    Attention: Barbara L. Becker
                                    Facsimile: (212) 351-6202
                                    Telephone: (212) 351-4062

                                    If to Seller to:

                                    Tekelec
                                    5200 Paramount Parkway
                                    Morrisville, NC 27560
                                    Attn: General Counsel
                                    Facsimile: (919) 461-6845
                                    Telephone: (919) 460-5500

                                    with a copy to:

                                    Bryan Cave LLP
                                    120 Broadway, Suite 300
                                    Santa Monica, CA 90401
                                    Attn:  Katherine F. Ashton
                                    Facsimile: (310) 576-2200
                                    Telephone: (310) 576-2100

All such notices, requests, demands waivers and communications shall be deemed
received upon (i) actual receipt thereof by the addressee, (ii) actual delivery
thereof to the appropriate address or (iii) in the case of facsimile
transmission, upon transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error.

          10.4 SEVERABILITY. Should any provision of this Agreement for any
     reason be declared invalid or unenforceable, such decision shall not affect
     the validity or enforceability of any of the other provisions of this
     Agreement, which remaining provisions shall remain in full force and effect
     and the application of such invalid or unenforceable provision to persons
     or circumstances other than those as to which it is held invalid or
     unenforceable shall be valid and enforced to the fullest extent permitted
     by law.


                                       48
<PAGE>


          10.5 BINDING EFFECT; ASSIGNMENT. This Agreement and all of the
     provisions hereof shall be binding upon and shall inure to the benefit of
     the parties hereto and their respective successors and permitted assigns.
     Neither this Agreement nor any of the rights, interests or obligations
     hereunder shall be assigned, directly or indirectly, including by operation
     of law, by any party hereto without the prior written consent of the other
     party hereto; provided however that Buyer may assign its rights and
     obligations hereunder to any subsidiary of Buyer. In the event that Buyer
     exercises its right to assign this Agreement, Buyer shall deliver an
     executed guarantee to Seller in the form of Exhibit C hereto.

          10.6 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
     benefit of Seller, and its successors and permitted assigns, with respect
     to the obligations of Buyer under this Agreement, and for the benefit of
     Buyer, and its respective successors and permitted assigns, with respect to
     the obligations of Seller, under this Agreement, and this Agreement shall
     not be deemed to confer upon or give to any other third party any remedy,
     claim, liability, reimbursement, cause of action or other right, except for
     the parties entitled to the benefits of Sections 6.8(c), 9.2 and 9.3.

          10.7 INTERPRETATION.

               (a) The article and section headings contained in this Agreement
          are solely for the purpose of reference, are not part of the agreement
          of the parties and shall not in any way affect the meaning or
          interpretation of this Agreement.

               (b) The parties have participated substantially in the
          negotiation and drafting of this Agreement and agree that no ambiguity
          herein should be construed against the draftsman.

          10.8 JURISDICTION AND CONSENT TO SERVICE. Each of Seller and Buyer (a)
     agrees that any suit, action or proceeding arising out of or relating to
     this Agreement may be brought solely in the state courts having competent
     jurisdiction within the County of New York in the State of New York or
     Federal courts having competent jurisdiction within the southern district
     of New York; (b) consents to the exclusive jurisdiction of each such court
     in any suit, action or proceeding relating to or arising out of this
     Agreement; (c) waives any objection which it may have to the laying of
     venue in any such suit, action or proceeding in any such court; and (d)
     agrees that service of any court paper may be made in such manner as may be
     provided under applicable laws or court rules governing service of process.

          10.9 ATTORNEYS' FEES. In the event that litigation arises in
     connection with enforcement of any provision of this Agreement, the
     prevailing party in such litigation shall be entitled to recover its
     reasonable attorneys' fees and expenses, in addition to any other relief to
     which it may be deemed entitled.


                                       49
<PAGE>


          10.10 GOVERNING LAW. This Agreement shall be governed by and construed
     in accordance with the laws of the State of New York (regardless of the
     laws that might otherwise govern under applicable principles of conflicts
     of laws thereof) as to all matters, including but not limited to matters of
     validity, construction, effect, performance and remedies.

          10.11 SPECIFIC PERFORMANCE. The parties acknowledge and agree that any
     breach of the terms of this Agreement would give rise to irreparable harm
     for which money damages would not be an adequate remedy and accordingly the
     parties agree that, in addition to any other remedies, each shall be
     entitled to enforce the terms of this Agreement by a decree of specific
     performance without the necessity of proving the inadequacy of money
     damages as a remedy.

          10.12 ENTIRE AGREEMENT. This Agreement, the Confidentiality Agreement
     and the Disclosure Schedule and other documents referred to herein or
     delivered pursuant hereto which form a part hereof constitute the entire
     agreement among the parties with respect to the subject matter hereof and
     supersede all other prior agreements and understandings, both written and
     oral, between the parties or any of them with respect to the subject matter
     hereof.

          10.13 AMENDMENT, MODIFICATION AND WAIVER. This Agreement may be
     amended, modified or supplemented at any time by written agreement of
     Seller and Buyer. Any failure of Seller or Buyer to comply with any term or
     provision of this Agreement may be waived, with respect to the Buyer, on
     the one hand, by Seller, and with respect to Seller, on the other hand, by
     Buyer, by an instrument in writing signed by or on behalf of the
     appropriate party, but such waiver of failure to insist upon strict
     compliance with such term or provision shall not operate as a waiver of, or
     estoppel with respect to, any subsequent or other failure to comply.

          10.14 COUNTERPARTS. This Agreement may be executed in counterparts,
     each of which shall be deemed to be an original, but which together shall
     constitute one and the same agreement.

                                 * * * * * * * *

                        (signatures appear on next page)


                                       50
<PAGE>


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
     be executed as of the date first above written.

SELLER:                                TEKELEC


                                       By: /s/ William H. Everett
                                       -----------------------------------
                                       Name:   William H. Everett
                                       -----------------------------------
                                               Senior Vice President
                                       Title:  and Chief Financial Officer
                                       -----------------------------------


BUYER:                                 NICE-SYSTEMS LTD.


                                       By: /s/ Haim Shani
                                       -----------------------------------
                                       Name:   Haim Shani
                                       -----------------------------------
                                       Title:  Chief Executive Officer

                                       By: /s/ Ran Oz
                                       -----------------------------------
                                       Name:   Ran Oz
                                       -----------------------------------
                                       Title:  Chief Financial Officer
                                       -----------------------------------



                                       51