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                                  Standards of

                                Business Conduct













March 2004

Proprietary and Confidential

<PAGE>

Introduction

As an employee of VocalTec, you encounter numerous business and legal issues
during the course of your employment. Frequently, many of these issues can be
resolved by using practical business sense. However, others may require a
general understanding of the laws of the country in which you are located. This
handbook is intended to facilitate your identification of such issues and to
provide guidance in the appropriate course of action.

The policies in this handbook apply to VocalTec directors, officers and
employees globally in order to promote impartial treatment for all of VocalTec
directors, officers and employees worldwide. In the event that any policy in
this handbook is of a higher standard than local law, the policy in this
handbook shall govern.

Please feel free to contact the VocalTec Legal Department if you have any
questions or comments on any of the issues discussed in this handbook.

<PAGE>


1.  Treatment of Confidential Information

During the course of employment with VocalTec, employees typically have access
to confidential technical, financial and other business information regarding
VocalTec, and its products and services. VocalTec requires all employees to
agree in writing in their employment agreements to protect the use and
disclosure of VocalTec confidential information. In addition, employees should
mark all VocalTec Confidential Information as "VocalTec Proprietary and
Confidential" with the date and the document version number, if applicable. The
obligation to maintain the confidentiality of such information survives even
after termination of employment. If you have any questions regarding the
confidentiality of VocalTec information, please do not hesitate to contact the
Legal Department.

In addition to VocalTec's confidential information, many employees at VocalTec
have access to confidential technical, business or financial information of
third parties. When using such information, VocalTec employees must comply with
the restrictions of the applicable third party Non-Disclosure Agreement or
applicable license. VocalTec employees should never sign a third party
Non-Disclosure Agreement without review and approval by the Legal Department.
Improper use of any third party intellectual property rights or breach of a
contractual confidentiality obligation may result in legal action, sanctions
and/or damages against VocalTec and the individual employee.

Confidential Information may also include information of competitors. While it
is necessary and proper to obtain competitive information through market
research, product evaluation and other public information, VocalTec employees
may not obtain competitive information through illegal means.

2.  Conflicts of Interest

All VocalTec employees have an obligation to perform their duties in a manner
consistent with Vocal Tec's best interests and to avoid conflicts of interest. A
conflict of interest may result where there is a discrepancy between your
personal interests and your responsibilities toward VocalTec. Activity that may
constitute a conflict of interest should be avoided unless authorized by
VocalTec management at a vice-president level.

Examples of typical conflicts of interest are: (i) working for or serving on the
board of directors of a competitor, potential competitor, customer, or supplier;
(ii) using VocalTec property or time to engage in any outside business; (iii)
having a financial interest in a third party (including customers, vendors,
consultants, company affiliates, etc.) that may be affected by your position at
VocalTec; (iv) using VocalTec business opportunities for personal gain; or (v)
employing or doing business with family members or with companies owned or
controlled by them.

3.  Discrimination and Harassment

As a multinational company with offices worldwide, the interactions among
VocalTec employees are governed by the local laws of the country of employment.
Accordingly, VocalTec is dedicated to a company culture that promotes respect
for the rights of all VocalTec employees, and all employees should endeavor to
treat fellow employees with civility and equality.

In addition, VocalTec is committed to maintaining a work environment that is
free of unlawful discrimination. We are all under an obligation to ensure that
any employment actions we undertake, or are involved in, including recruitment,
selection, training, compensation, promotions and transfers, are accomplished
without discrimination based on race, religion, color, national origin, physical
or mental disability, medical condition, marital status, sex, age, or sexual
orientation.

In keeping with this commitment, we will not tolerate harassment of our
employees by anyone, including any supervisor, coworker, vendor or customer.

Harassment consists of unwelcome conduct, whether verbal, physical or visual,
that is based upon a person's protected status, such as sex, color, race,
religion, national origin, age, sexual orientation, physical handicap, medical
condition, disability, marital status, citizenship status or other protected
group status. VocalTec will not tolerate harassing conduct that affects tangible
job benefits, interferes unreasonably with an individual's performance or
creates an intimidating, hostile or offensive working environment.

Sexual harassment deserves special mention. Unwelcome sexual advances, requests
for sexual favors and other physical, verbal or visual conduct based on sex
generally constitute sexual harassment when (1) submission to the conduct is an
explicit or implicit term or condition of employment, (2) submission to or
rejection of the conduct is used as the basis for an employment decision, or (3)
the conduct has the purpose or effect of unreasonably interfering with an
individual's work performance or creating an intimidating, hostile, or offensive
working environment.

Sexual harassment may include explicit sexual propositions, sexual innuendo,
suggestive comments, sexually oriented kidding or teasing, practical jokes,
jokes about gender-specific traits, foul or obscene language or gestures,
displays of foul or obscene printed or visual material, and physical contact,
such as patting, pinching, or brushing against another person's body.

Everyone shares responsibility for avoiding harassment. If you feel that you
have experienced or witnessed harassment, you should immediately notify your
supervisor. If you feel uncomfortable reporting the matter to your supervisor,
you should report it to the Human Resources Department. Managers and human
resource professionals are responsible for promptly addressing all claims of
harassment and for making a reasonable determination based on a full, fair,
confidential investigation. VocalTec forbids retaliation against anyone who
reports harassment.

4.  Financial and Business Records

VocalTec's business and financial records constitute an important basis for
business and investment decisions that are made by the company's management and
shareholders, and by the business community in general. Business and financial
records must be created and maintained in accordance with generally accepted
accounting principles, SEC rules, and other legal requirements. No false or
misleading records may be made. If you become aware of any omission, inaccuracy
or falsification regarding VocalTec's business or financial records, bring the
situation promptly to the attention of the Company's finance department.

Under generally accepted accounting principles, revenue and expenses must be
properly recognized on a timely basis and assets and liabilities properly valued
and recorded. Accordingly, employees are required to report to the CFO on the
Revenue Recognition Certification attached to this handbook any and all verbal
or written arrangements with customers containing any contingencies that would
affect revenue recognition. A contingency is any term that may create the
possibility that VocalTec (1) may not receive payment within six months after
the due date, (2) may have to refund payment, (3) may incur a future obligation
for VocalTec to provide products or services; or (4) may incur a future
obligation for VocalTec to provide discounts; or (5) may authorize the customer
to return products purchased.

VocalTec's business and financial records are important assets of the company,
and VocalTec maintains and protects them as any other asset. Accordingly,
VocalTec maintains a records management policy for the retention and disposition
of company records to fulfill legal requirements, as well as to increase
operational efficiency. The Document Retention Policy lists every type of
company record which must be retained and identifies the appropriate retention
period. The Retention Policy applies to all records (in all media) produced or
maintained by VocalTec, and is attached to this handbook. When the retention
period expires and no continuing legal or business requirements exist the
records should be shredded.

4.  Gifts to Customers

National laws and international conventions strictly prohibit the provision of
bribes or kickbacks between persons or companies that are doing business with
each other. It is generally prohibited to provide or receive compensation to or
from employees of any customer or supplier, regardless of whether such
compensation is in the form of cash, expensive gifts, vacations, or any other
form of payment.

It is generally permissible to provide token gifts or meals to non-government
officials and employees if it is of customary value in the country where the
business is taking place, does not violate the country's laws, and is not
intended to influence a business decision or to create a business obligation.

5.  Gifts to Government Officials

In the United States and in other countries, it is a criminal offense to
directly or indirectly offer or give compensation or gifts to a government
official in order to be selected for a contract. In many countries, the laws and
regulations concerning bribery and kickbacks are strictly enforced, with
criminal sanctions and/or fines for the company and the employees involved.
VocalTec's policy is to prohibit employees from giving compensation or gifts to
government officials, and to require all employees worldwide to comply with
these laws.

6.  External Communications

Communications with stock market analysts, journalists, the press and the like
concerning Vocal Tec's financial information and performance should be made only
by persons authorized by Elon Ganor, CEO, Hugo Goldman, CFO, or the VocalTec
Investor Relations and Market Communications departments. All VocalTec employees
should refrain from providing any such information to analysts, journalists and
the like, and should refer all questions to the Investor Relations and/or Market
Communications departments. Those employees that are properly authorized to make
external communications should do so in accordance with the VocalTec Public
Relations Procedure attached to this handbook.

In addition, it is VocalTec's policy to respond consistently to questions about
rumors or speculations about company developments in the following manner: "It
is our policy not to comment on rumors or speculation."

Finally, VocalTec's policy requires all employees to refrain from engaging in
chatroom discussions regarding VocalTec, and its products, services, operations
or results.

If any employee has reason to believe that material non-public information has
been disclosed under circumstances that would be a violation of these
procedures, the employee should immediately inform the Legal Department.

7.  Insider Trading

As a publicly traded company on a major U.S. exchange, VocalTec is obligated to
comply with certain U.S. laws and SEC Regulations that prohibit employees that
possess inside information from trading in VocalTec stock. Inside information is
any material, non-public information that might influence an investor to trade
in the company's stock, and may include unannounced financial results, customer
orders, product developments, etc. Sanctions in violation of such laws include
(i) up to 10 years imprisonment; (ii) up to $1,000,000 in fines; and/or (iii)
civil penalties of up to three times the profit made or loss avoided by the
trading. For this reason, VocalTec has enacted an Insider Trading Policy, and
has required all employees to certify their acknowledgement and intent to comply
with such policy. A copy of our policy is attached as an appendix to this
handbook.

8.  Treatment of Competitors

The laws of many countries prohibit the making of false or deceptive statements
concerning another company and its products or services. Accordingly, VocalTec's
policy is to compete with its competitors based on the quality of its products
and services, rather than on statements concerning the competition's business
reputation. As a representative of VocalTec, you must ensure that all statements
concerning VocalTec competitors are accurate and complete, and should avoid
making false or inaccurate statements regarding a competitor.

9.  Implementation of the Code

Copies of this code are available from the Company's Legal Counsel.

Seeking Guidance

If any director, officer or employee has questions regarding any of the policies
discussed in this code, or is in doubt about the best course of action in a
particular situation, the director, officer or employee should seek guidance
from their immediate supervisor or the Company's Legal Counsel.

Reporting Violations

If any director, officer or employee knows of or suspects a violation of
applicable laws or regulations, the Code, or the Company's related policies, the
director, officer or employee must immediately report that information to his or
her supervisor or the Company's Legal Counsel. No one will be subject to
retaliation because of a good faith report of suspected misconduct.
Investigations of Suspected Violations All reported violations will be promptly
investigated and treated confidentially to the greatest extent reasonably
possible, given the need to conduct an investigation.

Discipline for Violations

The Company intends to use every reasonable effort to prevent the occurrence of
conduct not in compliance with this Code and to halt any such conduct that may
occur as soon as reasonably possible after its discovery. Subject to applicable
laws and agreements, directors, officers and employees who violate this code and
other Company policies may be subject to disciplinary actions, up to and
including discharge. In addition, disciplinary measures, up to and including
discharge, may be taken against anyone who directs or approves infractions or
has knowledge of them and does not promptly report and correct them in
accordance with Company policies.

10. Waivers of the Code

Waivers of the code for directors and executive officers may be made only by the
Board of Directors, or the Audit Committee of the Board. The Company is required
to disclose any such waivers, and the reasons for any waivers, in its U.S.
securities filings, interim report on Form 6-K or its next annual report on Form
20-F.
<PAGE>

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              Statement of Company Policy Regarding Insider Trading
              -----------------------------------------------------

As you know, U.S. federal securities laws prohibit insiders of a public company,
such as officers, directors, employees and subcontractors from trading in the
securities of that company on the basis of "inside" information. In addition to
the direct liability of insiders for insider trading violations, potential
liability on the part of companies and their directors and officers exists for
failures to prevent such violations by company personnel. In light of these
liabilities and the severity of sanctions which could be imposed upon both you
and VocalTec Communications Ltd. (the "Company") for insider trading violations,
we have adopted the policies and procedures set forth in this Policy Statement.

Please note that while these procedures and policies are Company policy, they
are not intended to replace the primary responsibility of each employee to
understand and comply with the prohibition on insider trading under federal
securities laws. If you have any questions on any of the following or with
respect to your obligations under federal securities laws generally, please
contact the VocalTec Legal Department.

Background

         The Insider Trading and Securities Fraud Enforcement Act of 1988 (the
"Insider Trading Act") imposes severe sanctions against those who engage in
insider trading. Individuals who trade on inside information or "tip" such
information to others may be subject to:

     o   Criminal fines of up to $1,000,000;

     o   Prison sentence of up to ten years; and

     o   Civil penalties of up to three times the profit gained or loss
         avoided as a result of such sale, purchase or communication.

         In addition to sanctions against those who directly violate the
prohibition on insider trading, the Insider Trading Act in certain circumstances
imposes a penalty on companies and their directors and officers for failure to
take measures to prevent such violations.

Company Policy

         In light of the severity of possible sanctions to employees and to the
Company, we have adopted the following procedures and policies. Since you will
be asked to certify as to your understanding and intention to comply as well as
to your actual compliance with this policy statement, you should read this
statement carefully and call the VocalTec Legal Department, if you have any
questions.

Restrictions

o    No director, officer, employee or subcontractor of the Company who
     possesses material non-public information relating to the Company may issue
     orders to buy or sell securities of the Company or engage in any other
     action to take advantage of, or pass on to others, such information.

o    No director, officer, employee or subcontractor who, while acting for the
     Company, obtains material non-public information which relates to any other
     company, including customers or suppliers of the Company, may issue orders
     to buy or sell securities of that company or otherwise misuse such
     information.

o    No director, officer, employee or subcontractor should engage in any of the
     following transactions with respect to securities of the Company: (i)
     selling short; or (ii) buying or selling puts or calls; and (iii)
     purchasing on margin.

o    Directors, officers, employees and subcontractors should avoid discussing
     or disclosing non-public information about the Company or its activities
     that may have an impact on the value of the Company's stock, except when
     clearly authorized in connection with the Company's business.

o    Directors, officers, employees and subcontractors may only issue orders
     during the Company's "Trading Window" to trade in the Company's securities
     beginning on the third business day following the public announcement of
     earnings for each of the Company's fiscal quarters and continuing until
     fourteen (14) days prior to the close of the current fiscal quarter.

o    Directors, officers, employees and subcontractors are required to notify
     the VocalTec Legal Department, prior to transactions in the Company's
     securities.


Applicability of Restrictions

Material Information. Material information is any information that a reasonable
investor could consider important to a decision to buy, hold or sell stock and
which therefore could reasonably affect the price of the stock. Examples of
material information include:

o    progress toward achieving revenue and earnings targets of public
     securities analysts

o    projections of future earnings or losses

o    knowledge regarding a pending or proposed merger, acquisition or tender
     offer or regarding a significant sale of assets

o    knowledge regarding establishment of a major strategic partnership

o    changes in dividend policies

o    the declaration of a stock split or the offering of additional securities

o    changes in management

o    breakthroughs in technology

o    the award or loss of a substantial contract

o    execution of a letter of intent or license agreement with a customer.

Either positive or negative information may be material. If you are unsure at
any time as to whether you are in possession of material information about the
Company, you should contact the VocalTec Legal Department for clarification.

Non-Public Information. The restriction on trading based on material
information applies not only to non-public information but also applies for a
limited time after such information has been released to the public. The
Company's shareholders and the investing public must be afforded time to
receive and digest material information. As a general rule, you should
consider material information to be non-public from the time you become aware
of material information until two business days after it has been released by
the Company to the public and, accordingly, you should not engage in any stock
transactions until the third business day after material information has been
released to the public. If the information is complex or is not widely
disseminated, we suggest that you wait an even longer period of time.

Family Members. The restrictions on trading set forth above apply not only to
you but also to members of your household. Insiders are responsible for
compliance of such persons and should, if necessary, review with them Company
policy and the general prohibitions on insider trading.

Tipping Information to Others. You may not disclose any material non-public
information to your friends, your social acquaintances or anyone else. This
prohibition applies whether or not you receive any benefit from the other
person's use of that information.

Posting Information in Chat Rooms. No director, officer or employee may
disclose any material non-public information or non-material information that
is already publicly available as well as your opinions about the Company or
its activities or any of the companies with whom we do business, or engage in
any speculation regarding the prospects of the Company (financial or
otherwise) in any Internet "chat rooms," "blackboards," electronic "bulletin
boards," in any e-mail correspondence or in any other electronic medium on the
Internet or the Company's intranet, except if clearly authorized by the
VocalTec Legal Department.

No Exceptions. Generally, there are no exceptions to these prohibitions.
Transactions that might otherwise be necessary for emergencies or other personal
reasons are prohibited.

Procedures

o    All directors, officers, employees and subcontractors shall execute the
     attached certification regarding compliance with the policies and
     procedures set forth in this policy statement and with the prohibition
     against insider trading.

o    On a periodic basis upon the request of Company, all directors, officers,
     employees and subcontractors shall certify as to compliance with the
     policies and procedures set forth in this policy statement and with the
     prohibition on insider trading.

o    Officers, directors, employees and subcontractors shall only trade during
     "Trading Windows" as specified by the Company. During all non-Trading
     Window periods, such persons shall not trade in Company securities.

o    Directors, officers, employees, and subcontractors of the Company are
     required to notify the Company before buying or selling securities of the
     Company.

<PAGE>

Conclusion

         This statement is intended to present the Company's procedures and
policies with respect to the trading of securities by directors, officers and
employees. The procedures and policies set forth in this policy statement
present only a general framework within which you may purchase and sell
securities of the Company without violating insider trading laws. You have the
ultimate responsibility for complying with insider trading laws. You should
therefore not rely totally on the procedures and policies set forth herein but
rather you should obtain additional guidance whenever possible.
<PAGE>

                           Document Retention Policy
                           -------------------------

Scope
-----

This Document Retention Policy is VocalTec's policy retention of company
documents and records. It lists every type of company record which must be
retained and identifies the appropriate retention period. The Retention Policy
applies to all records (in all media) produced or maintained by VocalTec.

The Retention Policy does not require that any records be produced; instead, it
specifies the retention periods for records which have already been created.


Purpose of the Global Record Retention Schedule

The Company believes its records are an important asset and maintains and
protects them as any other asset. The Company requires that employees create
only records necessary for business operations and retain such records as
specified in this Document Retention Policy.

In addition, the Company is required by generally accepted accounting
principles, SEC rules, and other applicable laws to preserve its business
records for pre-determined retention periods. When the retention period expires
and no continuing legal or business requirements exist the records should be
disposed or shredded if confidential. Disposal of records prior to the
expiration of the applicable retention period may results in sanctions and/or
damages against the Company and the applicable employee.

Background And Interpretation

     1.  The term "records" includes all tangible forms of information
         concerning the Company's business whether such information is in
         paper, photographic, electronic, video, or audio form, and whether
         used or stored on or off the premises. Records are the property of
         the Company and not the property of the individual who generates or
         receives them.

     2.  Each functional business manager is responsible for his or her
         department's compliance with the Document Retention Policy, following
         established standards and guidelines, and informing employees about
         the policy.

     3.  All employees are responsible for creating only records necessary for
         business operations, protection records so that information can be
         found when needed, incorporating record keeping practices info
         workflows, processes, and system controls, retaining records as
         specified in this Document Retention Policy, and only destroying
         records in accordance with approved procedures.

     4.  Destruction. Records shall be destroyed during the normal course of
         business. Employees shall ensure that record destruction occurs in a
         manner that protects the confidential of the records.


General Rule-Retention of Records

Routine documents generated by VocalTec and which pertain to VocalTec business
are to be retained for a period of seven years from record date or end of
business need.

Official Records

Each department should identify their official records- - i.e., the records that
they must retain. Department managers are responsible for identifying and
retaining official company records.

Retention and Destruction of Electronic or Hard Copy Records

All electronic data records or hard copy records created by VocalTec and which
pertain to VocalTec business must be retained and destroyed according to
VocalTec policy. Record retention periods apply to information in electronic
form in the same manner as paper records.

Ownership and Protection of Electronic or Hard Copy Records

All electronic data records or hard copy records created by VocalTec and which
pertain to VocalTec business are the property of VocalTec. The policy includes
electronic records residing on any hardware (including mobile, desktop and
VocalTec computers) and in any application (including electronic mail, a web
page, groupware tools such as Lotus Notes, and on-line gathering and reporting
systems). Additionally, all such records must be carefully controlled and
protected from unauthorized access.

Consolidations

Retention requirements must be followed whenever entities consolidate. Usually,
the absorbing entity assumes responsibility for the dissolving entity's records,
ensuring their proper protection and timely disposition.


Acquisitions

If VocalTec purchases a company including its assets, stock or lines of
business, the records of the at company prior to the acquisition and afterwards
become an issue as to the ownership and compliance with VocalTec's record
management policy.

Dissolutions

If all or part of a VocalTec entity ceases to exist, the VocalTec entity which
took over the business must own the records of the dissolved entity (see the
Consolidations above). If VocalTec ceases to perform the same business function
as the dissolved entity, then prior to the dissolution the Controller of the
dissolving entity and a VocalTec Legal representative must determine who should
own the records of the dissolving entity. The records must then be transferred
to the owning entity records management program. Functions at the ownership of
the records of the same functions of the dissolving entity.

Litigation

In the event of a lawsuit involving the VocalTec Company, an entity's records
may be subpoenaed to support the litigation. Before acting on the subpoena,
contact the Corporate Legal Department. Under no circumstances should records
be released to non-VocalTec organizations without the written approval of the
VocalTec Legal Department.
<PAGE>


VOCALTEC MEDIA RELATIONS
PROCEDURE
-------------------------------------------------------------------------------

MEDIA INTERVIEW TIPS

     >   Do not give interviews under any circumstances unless the media
         relations has authorized and scheduled the interview. Do not give an
         ad hoc interview with a journalist who has contacted you directly.
         Take the reporter's contact info as well as the topic at hand and
         refer the issue to media relations for follow-up.
     >   Do not send any written comments or answers to questions without
         discussing with the marketing communications team.
     >   Keep your answers focused, short and relevant.
     >   Stay within your own area of competence. If it is outside your area,
         say so and offer to take the reporter's name, number and area of
         concern down and refer the issue to media relations for follow-up.
     >   Frame your answers at a technical level appropriate to the reporter.
         Be sure to provide context and purpose around technology.
     >   Don't ever forget that every word you say can end up in print. There
         is no such thing as "off the record."
     >   For reasons of record keeping, the employee or the PR agency should
         make a written record of the main points of the conversation.
     >   Whenever possible, at least one official of the Company (or PR
         agency) should be present at any face-to-face meeting with the media.
     >   You are not obliged to answer a question you don't wish to answer or
         don't know the answer to, but avoid the term "no comment," which
         sounds evasive.

         o     For a technical question that the interviewee does not feel
               comfortable answering: "That's a good question, let me get you
               in touch with our expert on (specific technology, etc)."
         o     When a reporter asks about upcoming news, a customer or product
               or business plans that have not been announced: "I can't
               discuss any details with you at this time, but I'll make sure
               that we contact you when we have anything to discuss about
               (insert topic.)"
         o     No one outside senior management should be discussing our
               financial condition in any other respect. Anyone called upon to
               comment on our financial condition should stick to historical
               information only (such as giving the amount of cash on the
               balance sheet as of the most recent quarters' end and the
               number of ITXC shares we own (which anyone can get a current
               quote on). Employees should refer historical questions to
               Investor Relations, if they are not 100% sure of the
               information themselves.
         o     For questions about rumors or speculation about company
               developments, it is the policy of the Company to respond
               consistently to in the following manner, "It is our policy not
               to comment on rumors or speculation."

               |X|      Other answers include:
         o     "That's not information I'm at liberty to discuss with you."
         o     "I'm not able to answer that question at this time."
         o     "I'm sorry, that information is confidential."
     >   Keep up to date with what information has been published - best way
         is to regularly look at the press release list on the VocalTec
         website.
     >   Seize the opportunity to make the points you want to make, always
         returning to your key theme when answering a reporter's question. But
         don't try to "sell" VocalTec to a reporter; try to educate him or her
         instead.
     >   When faced with a leading, rambling or confusing question, restate
         the question back to the reporter, as you understand it.

DO

     >  Use posture, voice and energy to convey positive messages
     >   Provide key messages and only info that has been previously publicly
         disclosed.
     >   Provide proof, not promises
     >   Stay within area of competence
     >   Use simple language
     >   Clarify when you believe an editor has misinterpreted your comments

DON'T

     >   Answer questions outside your specialty or area of expertise
     >   Answer questions with proprietary information
     >   Speculate or give out projections
     >   Use jargon throughout the interview
     >   Answer with a defensive 'no comment'.
     >   Discuss corporate issues
     >   Don't give out sales figures, revenues or other financial
         information. Offer access to CFO/Investor Relations to answer these
         types of questions.
     >   Don't speak for others in the industry or interpret a competitor's
         position.

IMPORTANT

     >   Employees refrain from disclosing any VocalTec confidential business,
         technical or financial information.
     >   If in the course of the interview you believe you might have
         inadvertently disclosed material non-public information, you must
         notify an appropriate person at company headquarters (usually General
         Counsel or CFO) immediately.
     >   Since the commonly understood definition of materiality is very
         broad, anyone conducting a media interview should, as a practical
         matter, notify corporate headquarters anytime they have revealed
         information with financial implications (a future projection, a
         breakout of past revenue, a quantifiable trend, a market share
         estimate, etc.) that has not been previously disclosed publicly, for
         a determination as to materiality.
     >   Communications with stock market analysts, journalists, the press and
         the like concerning VocalTec's financial information and performance
         should be made only by persons authorized by Elon Ganor, Hugo Goldman
         or Ari Rabban and all VocalTec employees should refrain from
         providing any such information to analysts, journalists and the like,
         and should refer all questions to Hugo Goldman, as head of Investor
         Relations or Ari Rabban, as head of Market Communications.



                         REVENUE RECOGNITION DECLARATION

As you are well aware, VocalTec has adopted a policy for revenue recognition to
ensure that we report revenues in accordance with generally accepted accounting
principles in the U.S., and in accordance with the requirements of the U.S.
Securities and Exchange Commission. This revenue recognition policy applies to
VocalTec worldwide.

Under this policy, revenue is recognized when the following conditions are met:

   (1) VocalTec and a creditworthy customer enter into a legally binding
       commitment to pay for products or services free of contingencies,
   (2) VocalTec delivers the products or fulfills its obligations to provide
       the services,
   (3) payment is fixed and determinable, and
   (4) collection is probable.

A contingency is any term that may create the possibility that VocalTec (1) may
not receive payment within six months after the due date, (2) may have to refund
payment, (3) may incur a future obligation for VocalTec to provide products or
services; or (4) may incur a future obligation for VocalTec to provide
discounts; or (5) may authorize the customer to return products purchased.

Contingencies can exist in writing in the contract, agreement, or purchaser
order; in a side letter, memorandum of understanding; or in other documentation.
Contingencies may also exist as part of a separate verbal understanding or
verbal side arrangement between VocalTec and the customer.

Given that we do not recognize revenue when there is a contingency, you are
required to report to me any such verbal or written contingencies by the end of
a calendar quarter, by completing and returning to the company the attached.
Regarding the forth quarter of 2002 please complete, sign and return the form
immediately to my fax number: +972 9 951 5307.

Very truly yours,

Hugo Goldman, Chief Financial Officer
<PAGE>

                                   DECLARATION

I understand and agree that I am required to report to VocalTec any and all
verbal or written arrangements with customers containing any contingencies
during the previous calendar quarter, which would create the possibility that
VocalTec: (1) may not receive payment within six months after the payment due
date, or (2) may have to refund payment or (3) may incur a future obligation for
VocalTec to provide products or services; or (4) may create a future obligation
for VocalTec to provide discounts; or (5) may authorize the customer to return
products purchased.

I hereby declare and confirm that I did not enter into any verbal or written
arrangements containing any contingencies as stated above with any customers or
potential customers during the previous calendar quarter.


By:_________________________________