Document:

Exhibit 4.1

 

 

EXECUTION COPY

 

Pathmark Stores, Inc.

200 Milik Street

Carteret, New Jersey 07008

 

 June 27, 2007

 

The Great Atlantic & Pacific

Tea Company, Inc.

Two Paragon Drive

Montvale, New Jersey  07645

Attention: Allan Richards

 

	
             
 	
            Re:
 	
            Payment for Fractional Shares
 

 

Ladies and Gentlemen:

Reference is made to that certain Agreement and Plan of Merger, dated March 4, 2007 (the “Merger Agreement”) among The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (“Parent”), Sand Merger Corp., a Delaware corporation (“Merger Sub”), and Pathmark Stores, Inc., a Delaware corporation (the “Company”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.

 

By its execution hereof, each of Parent, Merger Sub and the Company acknowledges and agrees that notwithstanding anything to the contrary set forth in Section 3.2(d) of the Merger Agreement,  each holder of Company Common Stock who would otherwise be entitled to receive fractional shares of Parent Common Stock as a result of the Merger shall be entitled to receive, in lieu thereof, an amount in cash equal to the product of (i) the number of such fractional shares of Parent Common Stock that such holder would otherwise have been entitled to and (ii) the closing price of Parent Common Stock on the NYSE (regular way) on the Trading Day immediately prior to the Effective Time.

 

Each of Parent, Merger Sub and the Company further acknowledges and agrees that, except as expressly modified hereby, the Merger Agreement shall continue in full force and effect in accordance with its terms.

 

(Signature page follows)

 

 

 

	
            Sincerely,
 
	
             
 
	
             
 
	
            PATHMARK STORES, INC.
 
	
             
 
	
             
 
	
            By:
 	
            /s/ Marc A. Strassler       
 
	
             
 	
            Name:
 	
            Marc A. Strassler
 
	
             
 	
            Title:
 	
            Vice President, Secretary and General Counsel
 

 

 

 

(SIGNATURE PAGE TO FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER)

 

Acknowledged, agreed and accepted

as of the date first written above:

 

THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.

 

 

	
            By:
 	
            /s/ Brenda Galgano      
 
	
             
 	
            Name:
 	
            Brenda Galgano
 
	
             
 	
            Title:
 	
            Senior Vice President & Chief Financial Officer
 

 

 

SAND MERGER CORP.

 

 

	
            By:
 	
            /s/ Chris McGarry      
 
	
             
 	
            Name: 
 	
            Chris McGarry
 
	
             
 	
            Title: 
 	
            President
 

 

 

 

(SIGNATURE PAGE TO FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER)20-F

Exhibit 4.29  

Building and Tenancy Lease  Agreement,  dated May 11, 2007,  by and between  Airport City Ltd.  ("Lessor")  and
AudioCodes Ltd. ("AudioCodes").

Agreement regarding the building and
lease of a new building for AudioCodes in “Airport City” (Modiin municipal area
as further detailed in the agreement). 

Planning and Building Period: The
Building will be planned according to AudioCodes’ requirements as further detailed in
the agreement. Planning period under the agreement is approximately 6 months. Building
period under the agreement is approximately 24 months after AudioCodes’ approval of
building plans. Lessor will bear all construction expenses and shall also bear expenses
related to Fittings (as defined in the Agreement) and improvements of premises according
to AudioCodes’ specifications in an amount up to $500 per square meter. In the event
that AudioCodes’ Fittings exceed $500 per meter, AudioCodes will bear the excess
costs. 

Leased Property: Approximately 13,500
square meters and an additional parking basement of approximately 6,750 square meters,
together with 337 open air parking spaces. 

Commencement and Lease period:
 Upon completion and delivery of the Building according to Plans, for a period of
eleven years with an option to extend lease for two additional periods of five years each. 

Price: For main premises $7.50 –
$12.85 per square meter per calendar month. For service basement area $5.00 – $10.35
per square meter per calendar month. For parking basement area $2.50- $7.85 per square
meter per calendar month. The price for parking is $45 per space in the open air parking
area. The price difference varies according to the amount expended by Lessor on the
Fittings. 

All of the above prices exclude all
taxes and are converted to New Israeli Shekels (NIS) as of signing of the agreement ($1
US= 3.977 NIS) and linked thereafter to changes in the Israeli Consumer Price Index. 

Additional Payments: Building
Management Company – 4.87 NIS per square meter per calendar month for main premises
only linked to changes in the Israeli Consumer Price Index from January 2005. 

Rent increase: Increase may occur
after 11 years and the exercise of any of the two option periods. Any rent increase is to
be negotiated or settled by arbitration. There is a maximum increase of 12%. 

Term: 134 months.  AudioCodes
has an option to terminate the agreement February 11, 2014 upon 6 months’ advance
notice of its intention to terminate, together with payment of part of the cost of
Fittings (as further detailed in the agreement). 

Fittings and refurbishment: Lessor
shall complete all building works and Fittings in accordance with AudioCodes’
specifications and the technical specifications of the Agreement. 

Restrictions on use: AudioCodes is
permitted to conduct the business of a high tech company, including, but not limited to,
maintaining offices, laboratories and warehouse space, and performing assembly and product
repairs. AudioCodes has the right to sublease 75% of building as further detailed in the
agreement. 

Security Deposit: AudioCodes is
required to provide a guarantee for 6,236,289 NIS (Approximately $1,568,000 on date of
agreement signing) linked to changes in Israeli Consumer Price Index. AudioCodes is also
required to provide 12 promissory notes each of 1,039,382 NIS (Approximately $261,348 on
date of agreement signing).20-F

Exhibit 4.30  

AGREEMENT AND PLAN OF
MERGER 

DATED AS OF JULY 6, 2006 

AMONG 

AUDIOCODES LTD, 

AUDIOCODES, INC., 

VIOLET ACQUISITION
CORP., 

NETRAKE CORPORATION 

AND 

WILL KOHLER, AS
SELLERS’ REPRESENTATIVE 

TABLE OF CONTENTS

			PAGE
	 		
			
			
			
	ARTICLE 1	THE MERGER	1 
	        SECTION 1.1.	THE MERGER	1 
	        SECTION 1.2.	CLOSING	1 
	        SECTION 1.3.	ACTIONS AT THE CLOSING	1 
	        SECTION 1.4.	EFFECTIVE TIME	2 
	        SECTION 1.5.	EFFECTS OF THE MERGER	2 
	        SECTION 1.6.	CERTIFICATE OF INCORPORATION AND BY-LAWS	2 
	        SECTION 1.7.	DIRECTORS AND OFFICERS OF SURVIVING CORPORATION	2 
	 
	ARTICLE 2	EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
	 	EXCHANGE OF CERTIFICATES	2 
	        SECTION 2.1.	CANCELLATION OF CAPITAL STOCK	2 
	        SECTION 2.2.	OPTIONS AND WARRANTS	3 
	        SECTION 2.3.	PAYMENT OF MERGER CONSIDERATION	3 
	        SECTION 2.4.	PAYMENT OF ADDITIONAL AMOUNT	4 
	        SECTION 2.6.	APPRAISAL RIGHTS	6 
	        SECTION 2.7.	NO FURTHER OWNERSHIP RIGHTS	6 
	 
	ARTICLE 3	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	6 
	        SECTION 3.1.	ORGANIZATION AND STANDING	6 
	        SECTION 3.2.	SUBSIDIARIES	7 
	        SECTION 3.3.	POWER AND AUTHORITY; BINDING AGREEMENT	7 
	        SECTION 3.4.	AUTHORIZATION	7 
	        SECTION 3.5.	CAPITALIZATION	8 
	        SECTION 3.6.	NONCONTRAVENTION	10 
	        SECTION 3.7.	COMPLIANCE WITH LAWS	10 
	        SECTION 3.8.	PERMITS	10 
	        SECTION 3.9.	FINANCIAL STATEMENTS	11 
	        SECTION 3.10.	ABSENCE OF CHANGES OR EVENTS	12 
	        SECTION 3.11.	UNDISCLOSED LIABILITIES	12 
	        SECTION 3.12.	ASSETS OTHER THAN REAL PROPERTY	12 
	        SECTION 3.13.	REAL PROPERTY	13 
	        SECTION 3.14.	CONTRACTS	13 
	        SECTION 3.15.	INTELLECTUAL PROPERTY	15 
	        SECTION 3.16.	LITIGATION	17 
	        SECTION 3.17.	TAXES	17 
	        SECTION 3.18.	INSURANCE	19 
	        SECTION 3.19.	BENEFIT PLANS	19 
	        SECTION 3.20.	EMPLOYEE AND LABOR MATTERS	22 
	        SECTION 3.21.	ENVIRONMENTAL MATTERS	23 
	        SECTION 3.22.	TRANSACTIONS WITH AFFILIATES	24 
	        SECTION 3.23.	ACCOUNTS; OFFICERS AND DIRECTORS	24 
	        SECTION 3.24.	EFFECT OF TRANSACTION	24 

	        SECTION 3.25.	BROKERS	24 
	        SECTION 3.26.	CERTAIN BUSINESS PRACTICES	25 
	        SECTION 3.27.	CORPORATE BOOKS AND RECORDS	25 
	        SECTION 3.28.	NO FORMER BUSINESS	25 
	        SECTION 3.29.	CUSTOMERS	25 
	        SECTION 3.30.	SUPPLIERS	25 
	        SECTION 3.31.	DISCLOSURE	25 
	 
	ARTICLE 4	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB	26 
	        SECTION 4.1.	ORGANIZATION AND STANDING	26 
	        SECTION 4.2.	POWER AND AUTHORITY; BINDING AGREEMENT	26 
	        SECTION 4.3.	NONCONTRAVENTION	26 
	        SECTION 4.4.	BROKERS	27 
	 
	ARTICLE 5	CERTAIN COVENANTS	27 
	        SECTION 5.1.	CONDUCT OF BUSINESS	27 
	        SECTION 5.2.	ACCESS	30 
	        SECTION 5.3.	TAX MATTERS	30 
	        SECTION 5.4.	NOTICE OF CERTAIN EVENTS	31 
	        SECTION 5.5.	INSURANCE	31 
	        SECTION 5.6.	EXCLUSIVITY	31 
	        SECTION 5.7.	STOCKHOLDER APPROVAL; NOTICES TO STOCKHOLDERS; RELEASE	32 
	        SECTION 5.8.	DELIVERY OF INTERIM FINANCIAL STATEMENTS	32 
	        SECTION 5.9.	SATISFACTION OF CONDITIONS INCLUDING CONSENTS	32 
	        SECTION 5.10.	INDEMNIFICATION	32 
	        SECTION 5.11.	RELEASE OF STOCKHOLDER BRIDGE NOTES	33 
	 
	ARTICLE 6	MUTUAL COVENANTS	33 
	        SECTION 6.1.	COMMERCIALLY REASONABLE EFFORTS	33 
	        SECTION 6.2.	PUBLICITY	34 
	        SECTION 6.3.	EXPENSES	34 
	        SECTION 6.4.	INTELLECTUAL PROPERTY MATTERS	34 
	 
	ARTICLE 7	CONDITIONS PRECEDENT	34 
	        SECTION 7.1.	CONDITIONS TO EACH PARTY'S OBLIGATION	34 
	        SECTION 7.2.	CONDITIONS TO PARENT'S OBLIGATION	35 
	        SECTION 7.3.	CONDITIONS TO THE COMPANY'S OBLIGATION	37 
	 
	ARTICLE 8	INDEMNIFICATION	37 
	        SECTION 8.1.	INDEMNIFICATION OF PARENT	37 
	        SECTION 8.2.	INDEMNIFICATION OF SELLER INDEMNIFIED PARTIES	38 
	        SECTION 8.3.	INDEMNIFICATION CLAIMS	39 
	        SECTION 8.4.	TERMINATION OF INDEMNIFICATION	41 
	        SECTION 8.5.	NO RIGHT OF CONTRIBUTION	41 

iii

	ARTICLE 9	TERMINATION	42 
	        SECTION 9.1.	TERMINATION	42 
	        SECTION 9.2.	EFFECT OF TERMINATION	42 
	 
	ARTICLE 10	GENERAL PROVISIONS	43 
	        SECTION 10.1.	NOTICES	43 
	        SECTION 10.2.	DEFINITIONS	45 
	        SECTION 10.3.	DESCRIPTIVE HEADINGS; CERTAIN INTERPRETATIONS	51 
	        SECTION 10.4.	SELLERS' REPRESENTATIVE	51 
	        SECTION 10.5.	ASSIGNMENT	52 
	        SECTION 10.6.	SPECIFIC ENFORCEMENT	52 
	        SECTION 10.7.	WAIVER AND AMENDMENT	52 
	        SECTION 10.8.	ENTIRE AGREEMENT	53 
	        SECTION 10.9.	NO THIRD-PARTY BENEFICIARIES	53 
	        SECTION 10.10.	COUNTERPARTS	53 
	        SECTION 10.11.	GOVERNING LAW; JURISDICTION; VENUE; SERVICE OF PROCESS; WAIVER
	 	OF JURY TRIAL.	53 
	        SECTION 10.12.	SEVERABILITY	54 
	        SECTION 10.13.	CURRENCY	54 

EXHIBITS: 

	EXHIBIT A 		
        FORM OF ESCROW AGREEMENT 

	EXHIBIT B 		
        FORM OF OPINION OF HAYNES AND BOONE LLP 

	EXHIBIT C 		
        STOCKHOLDER BRIDGE NOTE RELEASE 

	EXHIBIT D 		
        FORM OF STOCKHOLDER WRITTEN CONSENT 

SCHEDULE: 

DISCLOSURE SCHEDULE

SCHEDULE 6.4

iv

INDEX OF DEFINED TERMS 

			 		
			 		
			 		
			 		
			 		
	Accounting Firm	4 	 	Leased Property	13 
	Actual Value	5 	 	Legal Proceeding	16 
	Additional Amount	4 	 	Legal Restraints	35 
	Additional Amount Statement	4 	 	Lien	10 
	Agreement	1 	 	Low Value	5 
	Appraisal Shares	6 	 	Material Contract	13 
	Appraisal Statute	6 	 	Merger	1 
	Audiocodes	1 	 	Merger Consideration	3 
	Bridge Note Holder	4 	 	Merger Sub	1 
	Certificate of Merger	1 	 	Most Recent Balance Sheet	11 
	CFIUS	34 	 	Most Recent Balance Sheet Date	11 
	Closing	1 	 	Netrake Special Litigation Escrow Fund	38 
	Closing Date	1 	 	Objection Notice 	4 
	COBRA	21 	 	Ordinary Course of Business	11 
	Code	17 	 	Outside Date	42 
	Common Stock	8 	 	Parent	1 
	Company	1 	 	Parent Indemnified Party	37 
	Company Indemnified Parties	32 	 	Party	34 
	Company Personnel	11 	 	Pension Plan	19 
	Company Stock Plans	3 	 	Permits	10 
	Confidentiality Agreement	30 	 	Pre-Closing Tax Return	30 
	COSO	11 	 	Preferred Stock	8 
	Customers	25 	 	Remaining Bridge Notes	27 
	Delaware Secretary of State	1 	 	Required Disclosure	34 
	DGCL	1 	 	Sarbanes-Oxley	11 
	Disclosure Statement	32 	 	Securities Act	30 
	Effective Time	2 	 	Seller Indemnified Party	38 
	ERISA	19 	 	Seller Indemnity Threshold	38 
	ERISA Affiliate	21 	 	Sellers' Representative	51 
	Escrow Agent	1 	 	Series A Preferred	8 
	Escrow Agreement	2 	 	Series B Preferred	8 
	Escrow Fund	37 	 	Series C Preferred	8 
	Exchange Act	30 	 	Series D Preferred	8 
	Exon-Florio Act	10 	 	Series D-1 Preferred	8 
	Financial Statements	11 	 	Stockholder Approval	7 
	Foreign Antitrust Laws	10 	 	Suppliers	25 
	GAAP	11 	 	Surviving Corporation	1 
	High Value	5 	 	Third Party Contributor	40 
	Interim Financial Statements	32 	 	Voting Company Debt	8 
	Judgment	10 	 	Written Consent	42 
	Law	10 	 	 

v

	 	AGREEMENT AND PLAN OF MERGER dated
as of July 6, 2006 (this “Agreement”), among AUDIOCODES LTD., a company
organized under the laws of the State of Israel (“Audiocodes”) ,
Audiocodes Inc., a Delaware Corporation (“Parent”), VIOLET ACQUISITION
CORP., a Delaware corporation (“Merger Sub”), NETRAKE CORPORATION, a
Delaware corporation (the “Company”) and WILL KOHLER, as Sellers’ Representative. 	 
		
	

INTRODUCTION

        The
Boards of Directors of each of the Company, Audiocodes, Parent and Merger Sub have
approved the merger of Merger Sub with and into the Company (the
“Merger”) on the terms and subject to the conditions set forth in this
Agreement, and such Boards of Directors have approved in all respects this Agreement and
the transactions contemplated hereby and the other Transaction Agreements. As a result of
the Merger, each issued and outstanding share of capital stock of the Company will be
converted as provided in this Agreement. 

        In
consideration of the foregoing and the respective representations, warranties, covenants
and agreements set forth herein, the Parties agree as follows: 

ARTICLE 1

THE MERGER 

        Section
1.1. The Merger. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Delaware General Corporation Law (the “DGCL”),
at the Effective Time, Merger Sub shall be merged with and into the Company. At the
Effective Time, the separate corporate existence of Merger Sub shall cease and the
Company shall continue as the surviving corporation (the “Surviving Corporation”).  

        Section
1.2. Closing. The closing of the Merger (the “Closing”)
shall be held at the offices of Covington & Burling, 1330 Avenue of the Americas, New
York, New York 10019, at 10:00 a.m., New York time, on the date as soon as practicable,
and in any event not later than two (2) Business Days, following satisfaction of all
conditions and taking of all other actions (other than those that by their terms are to
be satisfied or taken at the Closing) set forth in Article 7 (or, to the extent permitted
by Law, waived by the Parties entitled to the benefits thereof), or on such other date,
and at such other time or place, as Parent and the Company may mutually agree in writing.
The date on which the Closing occurs is referred to in this Agreement as the “Closing
Date”.  

        Section
1.3. Actions at the Closing. At the Closing (a) the Parties shall cause a
certificate of merger in customary form acceptable to the Parent and the Company and
executed in accordance with the relevant provisions of the DGCL (the “Certificate
of Merger”) and other required documents to be filed in the office of the
Secretary of State of the State of Delaware (the “Delaware Secretary of State”),
and Parent, Merger Sub and the Company shall make all other filings or recordings
required under the DGCL and applicable Law to give effect to the Merger and the other
transactions contemplated hereby, (b) Parent shall deposit or cause to be deposited the
Escrowed Cash (as defined in the Escrow Agreement) with U.S. Bank Trust National
Association, in its capacity as escrow agent (the “Escrow Agent”) under
the Escrow Agreement to be entered into on or prior to the Closing Date by Parent, the
Sellers’ Representative and the Escrow Agent in substantially the form attached
hereto as Exhibit A (the “Escrow Agreement”), to be administered
in accordance with the Escrow Agreement, (c) Parent shall deposit or cause to be
deposited the Special Escrowed Cash (as defined in the Escrow Agreement) with U.S. Bank
Trust National Association, in its capacity as the Escrow Agent under the Escrow
Agreement, to be administered in accordance with the Escrow Agreement and (d) Parent
shall pay the balance of the Merger Consideration payable in connection with the Merger
as set forth in Section 2.3 hereof.  

        Section
1.4. Effective Time. The Merger shall become effective at such time (the “Effective
Time”) as the Certificate of Merger is duly filed with the Delaware Secretary of
State or at such later time as Parent and the Company shall agree and specify in the
Certificate of Merger.  

        Section
1.5. Effects of the Merger.  The Merger shall have the effects set forth
in Section 259 of the DGCL.  

        Section
1.6. Certificate of Incorporation and By-laws. Subject to the provisions of
Section 5.10, the Certificate of Incorporation of the Surviving Corporation shall be
amended and restated, as of the Effective Time, so as to read the same as the Certificate
of Incorporation of Merger Sub as in effect immediately prior to the Effective Time,
except that the name of the corporation set forth therein shall be changed to the name of
the Company and any references therein to the incorporator and the initial directors
shall be deleted, and, as so amended, such Amended and Restated Certificate of
Incorporation shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable Law. Subject to
the provisions of Section 5.10, the By-laws of Merger Sub as in effect immediately prior
to the Effective Time shall be the By-laws of the Surviving Corporation until amended,
except that the name of the corporation set forth therein shall be changed to the name of
the Company.  

        Section
1.7. Directors and Officers of Surviving Corporation.  The directors of
Merger Sub immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected or appointed and qualified, as the case may be.
The officers of Merger Sub immediately prior to the Effective Time shall be the officers
of the Surviving Corporation, until the earlier of their resignation or removal or until
their respective successors are duly elected or appointed and qualified, as the case may
be.  

ARTICLE 2 

EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; 

EXCHANGE OF CERTIFICATES 

        Section
2.1. Cancellation of Capital Stock. At the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any shares of Capital Stock of the
Company or any shares of Capital Stock of Merger Sub:  

        (a)
Capital Stock of Merger Sub. Each issued and outstanding share of Capital
          Stock of Merger Sub shall be converted into and shall become one fully paid and
          nonassessable share of common stock, par value $.001 per share, of the
Surviving           Corporation.  

2

        (b)
Cancellation of Treasury Stock. Each share, if any, of Capital Stock of
          the Company that is held by the Company as treasury stock or owned by the
          Company shall no longer be outstanding and shall be automatically cancelled and
          retired and shall cease to exist and no consideration shall be delivered or
          deliverable in exchange therefor.  

        (c)
Cancellation of Capital Stock. At the Effective Time, all shares of
          Capital Stock of the Company shall no longer be outstanding and shall
          automatically be cancelled and retired and shall cease to exist, and each
holder           of a certificate that immediately prior to the Effective Time
represented any           such shares shall cease to have any rights with respect
thereto.  

        Section
2.2. Options and Warrants.  

        (a)
          At the Effective Time, each Option and Warrant outstanding as of the Effective
          Time, shall terminate, without any consideration therefor and without any
          further action on the part of the Company.  

        (b)
          The Company agrees that the Board of Directors of the Company (or, if
          appropriate, any committee administering any stock option plan or other stock
or           equity-related plan of the Company (the “Company Stock Plans”)
          shall adopt such resolutions or take such other actions (including obtaining
any           required consents but not including the payment of any cash or non-cash
          consideration) as may be required to terminate all Company Stock Plans at the
          Effective Time.  

        Section
2.3. Payment of Merger Consideration. Subject to Schedule 6.4, the consideration
payable in connection with the Merger shall be $10,000,000 plus, if payable in accordance
with Section 2.4 of this Agreement, the Additional Amount (together, such amounts are
referred to as the “Merger Consideration”). The $10,000,000 shall be
payable by the Parent at the Closing as follows:  

        (a)
     an amount equal to $250,000  shall be paid on behalf of the Company to Paul Bowen,
 in full  satisfaction  of any finder's fee due to Paul Bowen by the Company in
connection with the consummation of the Merger; 

        (b)
     all unpaid legal fees and expenses of Haynes and Boone, LLP shall be paid on behalf
of the Company; 

        (c)
     all unpaid legal fees and expenses of Goodwin  Procter LLP as counsel to the certain
of the  Company's  investors in connection with the Merger shall be paid on behalf of the
Company; 

        (d)
     any  amount in excess of  $25,000  payable  with  respect  to the cost of the
 insurance  referred  to in Section 5.10(b)  hereof shall be paid on behalf of the
Company to  Traveler's  Insurance  Company in payment of the premium on the insurance
policy referred to in such section; 

        (e)
     the  Escrowed  Cash and the Special  Escrowed  Cash shall be delivered  to the
Escrow  Agent in  accordance  with Section 1.3; 

        (f)
     the balance of the Merger Consideration shall be paid as follows: 

		    (i)        Ten
percent (10%) of the balance shall be paid to the Company for  distribution  in
accordance with the Change of          Control Bonus Plan; and 

3

		    (ii)        Ninety
 percent  (90%) of the balance  shall be paid on behalf of the  Company to the holders of
the  Stockholder          Bridge Notes (each,  a "Bridge Note Holder" and,  together,
 the "Bridge Note  Holders"),  on a pro rata basis in          accordance with their
respective Stockholder Bridge Note Percentages. 

        Section
2.4. Payment of Additional Amount.  

        (a)
     Subject to this Section 2.4, the  $10,000,000  payable in accordance  with Section
2.3 of this Agreement shall be subject to an increase in the aggregate  amount of
$1,000,000  (the  "Additional  Amount") if, as of the Closing Date, the Company has
Deferred Revenue and Bookings in an aggregate amount of at least $2,000,000. 

        (b)
     On the Closing Date,  the Company  shall (i) deliver a statement  (the  "Additional
 Amount  Statement")  setting forth the  Company's  reasonable  estimate of the Deferred
 Revenue and Bookings  through and  including the Closing Date, including (x) customer
 name, (y) order or invoice  number,  as  applicable,  and (z) dollar amount (in U.S.
 dollars) and (ii) deliver or cause to be delivered the Additional Amount Statement, to
Parent. 

        (c)
     If Parent objects to the calculations set forth in the Additional Amount  Statement,
 then, in no event more than thirty  (30) days after the  delivery  to Parent of the
 Additional  Amount  Statement,  the Parent  shall  deliver to the Sellers'
Representative a written notice (the "Objection Notice"),  describing in reasonable
detail Parent's objections to the Additional  Amount Statement and setting forth the
calculation  determined by Parent to be correct and indicating with reasonable
 specificity  the sources of information  on which such  calculations  are based.  In the
event Parent fails to deliver the Objection Notice to the Sellers'  Representative
 during such 30-day period, the Company's  calculation of the Deferred  Revenue and
Bookings,  as set forth in the Additional  Amount  Statement,  shall be final and binding
on Parent, the  Sellers'  Representative  and the  other  parties  hereto.  If  Parent
 gives the  Objection  Notice to the  Sellers' Representative  within such  30-day
 period,  Parent and the  Sellers'  Representative  will use  commercially  reasonable
efforts to resolve the dispute during the 45-day period  commencing on the date the
Sellers'  Representative  receives the Objection  Notice from Parent.  During such 45-day
 period,  Parent shall provide to the Sellers'  Representative  and its Representatives,
 during normal business hours,  reasonable access to the Company's books,  records, work
papers and other information  relating to the Deferred  Revenue and  Bookings,  and to
Parent's  and the  Company's  accountants  and other personnel  involved in or  otherwise
 relevant to the  calculation  of Deferred  Revenue and  Bookings.  If Parent and the
Sellers'  Representative  do not obtain a final resolution  within such 45-day period,
 then the items in dispute shall be submitted immediately to a  nationally-recognized,
 independent  accounting firm reasonably acceptable to and unaffiliated with Parent and
the Sellers'  Representative  (the "Accounting  Firm");  provided,  that the fact that
the Accounting Firm may serve as independent auditor of a portfolio company of the
Sellers'  Representative shall not, by itself,  prevent the Accounting Firm from being
deemed  unaffiliated  with the Sellers'  Representative.  The Accounting Firm shall be
required to render a  determination  of the  applicable  dispute  within  forty-five
 (45) days after referral of the matter to the Accounting  Firm, which  determination
 must be in writing and must set forth, in reasonable  detail,  the basis therefor. The
 determination  of the Accounting  Firm shall be final and binding upon Parent,  the
Sellers'  Representative  and the other parties  hereto,  judgment may be entered upon
such  determination  in any court having  jurisdiction  thereof,  and Parent,  Sellers'
 Representative  and the other parties hereto agree that no appeals shall be taken
 therefrom  except as set forth in 9 U.S.C. §. 10. 

4

        (d)
     In the event Parent and the Sellers'  Representative  submit any unresolved
 objections to an Accounting Firm for resolution as provided in Section  2.4(c),  the
 responsibility  for the fees and expenses of the Accounting Firm shall be as follows: 

		     (i)        if
such Accounting Firm resolves all of the remaining  objections in favor of Parent's
 position (the calculation          so  determined  is referred to herein as the "Low
 Value"),  then all of the fees and expenses of the  Accounting          Firm shall be
paid by the Sellers' Representative;  

		    (ii)        if
the  Accounting  Firm  resolves all of the  remaining  objections  in favor of the
 Sellers'  Representative's          position (the  calculation  so determined  is
referred to herein as the "High  Value"),  then all of the fees and          expenses of
the Accounting Firm shall be paid by the Company; and 

		    (iii)        if
such  Accounting  Firm neither  resolves all of the  remaining  objections  in favor of
Parent's  position nor          resolves all of the remaining objections in favor of the
Sellers'  Representative's  position (the calculation so          determined  is referred
 to herein as the "Actual  Value"),  then that  fraction of the fees and  expenses of the
         Accounting  Firm equal to (x) the difference  between the High Value and the
Actual Value over (y) the difference          between the High Value and the Low Value
shall be paid by the  Sellers'  Representative,  and the Company will be
         responsible for the remainder of the fees and expenses of the Accounting Firm. 

        (e)
     Within thirty (30) days  following  the Closing Date or within five (5) days of a
resolution  of the  calculation in accordance  with Section  2.4(c),  the Seller's
 Representative  shall deliver a written  notice to Parent stating what portion of the
Additional  Amount  constitutes  Net  Acquisition  Proceeds as defined in the Change of
Control Bonus Plan, and Parent shall deliver the Additional Amount as follows in full
satisfaction of its obligation under this Section 2.4: 

		    (i)        Ten
 percent  (10%)  of such Net  Acquisition  Proceeds  shall be paid by the  Company  to
the  Persons  who were          Participants  in the Change of Control  Bonus  Plan,  as
defined  in the  Change of Control  Bonus  Plan,  on the          Closing Date as a
distribution in accordance with the Change of Control Bonus Plan; and 

		    (ii)        The
balance shall be paid to the Sellers' Representative. 

        Section
2.5. Indemnified Litigation. Any and all (i) judgments, settlement amounts,
arbitration awards or other amounts actually paid to the Company and not subject to any
further claim for recovery or reimbursement and (ii) insurance proceeds received as
reimbursement for judgments, settlement amounts, arbitration awards or other amounts or
costs and expenses paid and not subject to any further claim for recovery or
reimbursement and which are not required to be paid into the Base Escrow Fund or the
Netrake Special Litigation Escrow Fund pursuant to Section 8.3(e) hereof, in each case as
a result of or in connection with the Indemnified Litigation, shall be divided equally
between the Parent and the Sellers’Representative, with fifty percent (50%) of such
sums delivered to Parent and the remaining fifty percent (50%) of such sums delivered to
the Sellers’ Representative; provided, however, that once the Parent
has received under this Section 2.5 an amount equal to the Litigation Expense Amount, all
sums distributed under this Section 2.5 in excess of such amount shall be delivered to
the Sellers’ Representative. Any amounts paid or delivered to the Sellers’ Representative
under this Section 2.5 shall be deemed to be Merger Consideration.  

5

        Section
2.6. Appraisal Rights. Notwithstanding anything in this Agreement to the contrary,
shares (the “Appraisal Shares”) of the Company’s Capital Stock
issued and outstanding immediately prior to the Effective Time that are held by any
holder who is entitled to demand and properly demands appraisal of such shares pursuant
to, and who complies in all respects with, Section 262 of the DGCL (the “Appraisal
Statute”) shall be entitled to payment of the fair value of such Appraisal
Shares in accordance with the Appraisal Statute. At the Effective Time, the Appraisal
Shares shall no longer be outstanding and shall automatically be cancelled and shall
cease to exist, and each holder of Appraisal Shares shall cease to have any rights with
respect thereto, except the right to receive the fair value of such shares in accordance
with the provisions of the Appraisal Statute. Notwithstanding the foregoing, if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to
appraisal under the Appraisal Statute, or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief provided by the Appraisal
Statute, then the right of such holder to be paid the fair value of such holder’s
Appraisal Shares under the Appraisal Statute shall cease and such Appraisal Shares shall
be deemed to have been canceled at the Effective Time. The Company shall serve prompt
notice to Parent of any demands for appraisal of any shares of the Company’s Capital
Stock, withdrawals of such demands and any other related instruments served pursuant to
the DGCL and received by the Company, and Parent shall have the right to participate in
all negotiations and proceedings with respect to such demands pursuant to Article 8
hereof. Prior to the Effective Time, the Company shall not, without the prior written
consent of Parent, make any payment with respect to, or settle or offer to settle, any
such demands, nor shall the Company agree to or commit to making any such payment or
settlement or admit to any liability with respect to such matters.  

        Section
2.7. No Further Ownership Rights. After the Effective Time, there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Capital Stock of the Company that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, any certificates formerly
representing shares of Capital Stock of the Company are presented to the Surviving
Corporation or the exchange agent for any reason, they shall be canceled as provided in
this Article 2.  

ARTICLE 3 

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY 

        The
Company makes the representations and warranties set forth in this Article 3 to
Audiocodes, Parent and Merger Sub as of the date of this Agreement and as of the Closing,
subject to the exceptions set forth in the attached Disclosure Schedule. Each exception
set forth in the Disclosure Schedule is identified by reference to, or has been grouped
under a heading referring to, a specific individual section of this Agreement and shall be
deemed to qualify the particular section or sections of Article 3 specified for such item
and any other section of Article 3 to the extent it is clear from a reasonable reading of
such exception that such exception is applicable to such other section. 

6

        Section
3.1. Organization and Standing. The Company (i) is duly organized,
validly existing and in good standing under the laws of its jurisdiction or organization,
(ii) has all requisite corporate power and authority to carry on its business as now
being conducted and (iii) is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the ownership,
leasing or operation of its properties makes such qualification or licensing necessary,
which jurisdictions are listed in Section 3.1 of the Disclosure Schedule. The Company has
delivered to Parent complete and correct copies of its Constitutive Documents, as
amended.  

        Section
3.2. Subsidiaries. The Company does not have, and has not, since its formation,
had any Subsidiaries and does not own or control, directly or indirectly through any
Subsidiary, any membership interest, partnership interest, joint venture interest, other
equity interest or any other Capital Stock in any Person.  

        Section
3.3. Power and Authority; Binding Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, to consummate the
Merger and the other transactions contemplated hereby and to perform its obligations
hereunder. The execution and delivery by the Company of this Agreement and the
consummation by the Company of the Merger and the other transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the Company,
subject, in the case of the Merger, to the receipt of the Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and, assuming due execution
and delivery by the other parties thereto, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency or other similar
laws affecting creditors’ rights generally.  

        Section
3.4. Authorization.  

        (a)
          The Board of Directors of the Company, at a meeting duly called and held at
          which all directors were present, or by written consent in lieu thereof, duly
          and unanimously adopted resolutions (i) approving and declaring advisable the
          Merger, this Agreement and the other Transaction Agreements and the other
          transactions contemplated hereby and thereby (ii) determining that the Merger
          Consideration and the other terms of this Agreement are fair to and in the best
          interest of the Company and the stockholders of the Company, (iii) authorizing
          the Company to enter into this Agreement and to consummate the Merger and the
          other transactions contemplated hereby, on the terms and subject to the
          conditions set forth in this Agreement, (iv) directing that the Merger and this
          Agreement be submitted to the stockholders of the Company for approval and
          adoption of the Merger and this Agreement and (v) recommending that the
          Company’s stockholders adopt this Agreement. No state takeover statute or
          similar statute or regulation applies or purports to apply to the Company with
          respect to the Merger, this Agreement or any other Transaction Agreement or any
          other transaction contemplated hereby or thereby.  

        (b)
          The only votes of holders of any class or series of Capital Stock of the
          Company, which may be taken by written consent, necessary to approve, adopt and
          effect the Merger, this Agreement, the other Transaction Agreements and the
          other transactions contemplated hereby are the affirmative votes to adopt this
          Agreement of holders of (i) a majority of the outstanding shares of Capital
          Stock of the Company, voting together as a single class and on an as-converted
          to Common Stock basis and (ii) 662/3% of the outstanding shares of the the Series
          C Preferred, the Series D Preferred and the Series D-1 Preferred, voting
          together as a single class (collectively, the “Stockholder
          Approval”).  

7

        Section
3.5. Capitalization.  

        (a)
          The authorized capital stock of the Company consists of 1,119,153,822 shares of
          common stock, par value $0.001 per share (the “Common Stock”) and
          930,376,328 shares of preferred stock, par value $0.001 per share (the
          “Preferred Stock”), of which 10,215,131 shares are designated as
          Series A Preferred Stock (the “Series A Preferred”), 86,000,037 are
          designated as Series B Preferred Stock (the “Series B Preferred”),
          231,878,724 are designated as Series C Preferred Stock (the “Series C
          Preferred”), 442,282,436 are designated as Series D Preferred Stock (the
          “Series D Preferred”) and 160,000,000 are designated as Series D-1
          Preferred Stock (the “Series D-1 Preferred” and, together with the
          Series A Preferred, the Series B Preferred, the Series C Preferred and the
          Series D Preferred, the “Preferred Stock”). At the close of business
          on the date hereof: (i) 13,901,823 shares of Common Stock, 10,215,131 shares of
          Series A Preferred, 83,313,605 shares of Series B Preferred, 226,092,199 shares
          of Series C Preferred, 439,890,531 shares of Series D Preferred and 158,910,455
          shares of Series D-1 Preferred were issued and outstanding, (ii) no shares of
          Common Stock were held by the Company in its treasury, (iii) an aggregate of
          181,819,455 shares of Common Stock of the Company are reserved for issuance
          under the Company’s 2000 Omnibus Securities Plan, of which 6,953,784
shares           have been issued and are currently outstanding, 131,980,852 shares are
issuable           upon the exercise of outstanding options and 42,884,819 shares are
available for           future issuance, subject, in each case, to certain adjustment
provisions           applicable thereto, (iv) 2,686,432 shares of Series B Preferred were
subject to           outstanding Warrants, (v) 5,786,525 shares of Series C Preferred
were subject to           outstanding Warrants, (vi) 2,391,905 shares of Series D
Preferred were subject           to outstanding Warrants, (vii) 549,863 shares of Series
D-1 Preferred were           subject to outstanding Warrants, (v) 10,215,131 shares of
Common Stock were           reserved for issuance in connection with the conversion of
the Series A           Preferred, (vi) 86,000,037 shares of Common Stock were reserved
for issuance in           connection with the conversion of the Series B Preferred, (vii)
231,878,724           shares of Common Stock were reserved for issuance in connection
with the           conversion of the Series C Preferred, (viii) 442,282,436 shares of
Common Stock           were reserved for issuance in connection with the conversion of
the Series D           Preferred, (ix) 160,000,000 shares of Common Stock were reserved
for issuance in           connection with the conversion of the Series D-1 Preferred and
(x) 60,000 shares           of Common Stock were reserved for issuance upon exercise of
options held by the           Community Foundation of Texas. Except as set forth above,
at the close of           business on the date hereof, no shares of Capital Stock of the
Company were           issued, reserved for issuance or outstanding. All outstanding
shares of Capital           Stock of the Company are, and all such shares that may be
issued prior to the           Effective Time will be when issued, duly authorized,
validly issued, fully paid           and nonassessable and not subject to or issued in
violation of any purchase           option, call option, right of first refusal,
preemptive right, subscription           right or any similar right under any provision
of the DGCL or other Law, the           Company’s Constitutive Documents or any
Contract to which the Company is a           party or otherwise bound. There are not any
bonds, debentures, notes or other           Indebtedness of the Company having the right
to vote (or convertible into, or           exchangeable for, securities having the right
to vote) on any matters on which           holders of Capital Stock of the Company may
vote (“Voting Company           Debt”). Except as set forth above, as of
the date of this Agreement,           there are not any options, warrants, rights,
convertible or exchangeable           securities, “phantom” stock rights, stock
appreciation rights,           stock-based performance units, commitments, Contracts,
arrangements or           undertakings of any kind to which the Company is a party or by
which it is bound           (i) obligating the Company to issue, deliver or sell, or
cause to be           issued, delivered or sold, additional shares of Capital Stock or
other equity           interests in, or any security convertible or exercisable for or
exchangeable           into any Capital Stock of or other equity interest in, the Company
Voting           Company Debt, (ii) obligating the Company to issue, grant, extend or
enter into           any such option, warrant, call, right, security, commitment,
Contract,           arrangement or undertaking or (iii) that give any person the right to
receive           any economic benefit or right similar to or derived from the economic
benefits           and rights occurring to holders of Capital Stock of the Company. There
are not           any outstanding contractual obligations of the Company to repurchase,
redeem or           otherwise acquire any shares of Capital Stock of the Company. Since
inception,           the Company has not declared or paid any dividends or distributions
on any of           the Capital Stock of the Company.  

8

        (b)
          Section 3.5(b) of the Disclosure Schedule sets forth a complete and accurate
          list of the holders of Capital Stock of the Company as of the date hereof,
          showing the number of shares of such Capital Stock, and the class or series of
          such shares, held by each such stockholder and, with respect to shares other
          than Common Stock, the number of shares of Common Stock (if any) into which
such           shares are convertible. There has been no adjustment to the conversion
price for           the Preferred Stock. All of the issued and outstanding shares of
Capital Stock           of the Company have been offered, issued and sold by the Company
in compliance           with all applicable federal and state securities Laws.  

        (c)
          Section 3.5(c) of the Disclosure Schedule sets forth a complete and accurate
          list of all Company Stock Plans. Section 3.5(c) of the Disclosure Schedule sets
          forth a complete and accurate list of (i) all holders of outstanding Options as
          of the date hereof, indicating, with respect to each Option, the Company Stock
          Plan under which it was granted, the number of shares of Common Stock subject
to           such Option, the exercise price and the date of grant; and (ii) all holders
of           outstanding Warrants, indicating, with respect to each Warrant, the Contract
or           other document under which it was granted, the number of shares of Capital
Stock           of the Company, and the class or series of such shares, subject to such
Warrant,           the exercise price, the date of issuance and the expiration date
thereof. The           Company has delivered to Parent complete and accurate copies of
all Company           Stock Plans and all Contracts evidencing Options and Warrants. No
Option is           exercisable for any class or series of Capital Stock of the Company
other than           Common Stock.  

        (d)
          Except as set forth in Section 3.5(d) of the Disclosure Schedule, there is no
          Contract between the Company and any holder of its securities, or, to the
          Company’s Knowledge, among any holders of its securities, relating to the
          sale or transfer (including agreements relating to rights of first refusal,
          co-sale rights or “drag-along” rights), registration under the
          Securities Act of 1933 or voting, of any Capital Stock of the Company. The
          transfer restrictions (and any related purchase rights) in any such disclosed
          agreement or any other applicable agreement have been waived by the Company and
          the requisite majorities of the Preferred Stock and Common Stock required to
          approve such waivers in connection with the Merger, this Agreement and the
other           transactions contemplated hereby and thereby and true and complete copies
of           such waivers have been provided to Parent.  

9

        Section
3.6. Noncontravention.  

        (a)
          The execution and delivery by the Company of this Agreement, the other
          Transaction Agreements, the consummation of the Merger and the other
          transactions contemplated hereby and thereby and the compliance by the Company
          with the provisions hereof and thereof do not and will not conflict with, or
          result in any violation or default (with or without notice or lapse of time or
          both) under, or give rise to a right of, or result in, termination,
cancellation           or acceleration of any obligation or to a loss of a material
benefit under, or           result in the creation of any lien, pledge, claim, charge,
mortgage, encumbrance           or other security interest of any kind, whether arising
by Contract or by           operation of Law (a “Lien”), in or upon any
of the properties           or assets of the Company under, or give rise to any
increased, additional,           accelerated or guaranteed rights or entitlements under,
any provision of (i) the           Constitutive Documents of the Company, (ii) any
Material Contract or (iii)           subject to the governmental filings and other
matters referred to in Section           3.6(b)(i) and (ii), to the Knowledge of the
Company, any constitution, act,           statute, law (including common law), ordinance,
treaty, rule or regulation of           any Governmental Entity (a “Law”)
or (iv) any judgment, order           or decree (a “Judgment”) known to
the Company, in each case           applicable to the Company or its properties or
assets, except in the case of           clauses (ii), (iii) and (iv) where such conflict,
violation, default or other           result does not have a Material Adverse Effect on
the Company.  

        (b)
          No consent, approval, license, permit, order or authorization of, registration,
          declaration or filing with, or notice to, any Governmental Entity is required
by           or with respect to the Company in connection with the execution and delivery
by           the Company of this Agreement, the other Transaction Agreements, the
          consummation by the Company of the Merger and the other transactions
          contemplated hereby or thereby or the compliance by the Company with the
          provisions hereof and thereof, except for (i) filings required under, and
          compliance with other applicable requirements of, non-U.S. Laws intended to
          prohibit, restrict or regulate actions or transactions having the purpose or
          effect of monopolization, restraint of trade, harm to competition or
          effectuating foreign investment (collectively, “Foreign Antitrust
          Laws”), (ii) filings pursuant to, and compliance with other applicable
          requirements of Section 5021 of the Omnibus Trade and Competitiveness Act of
          1988 (the “Exon-Florio Act”), (iii) the filing of the
          Certificate of Merger with the Delaware Secretary of State and appropriate
          documents with the relevant authorities of other states in which the Company is
          qualified to do business and (iv) such other consents, approvals, orders,
          authorizations, registrations, declarations, filings and notices, the failure
of           which to be obtained or made individually or in the aggregate would not
cause a           Material Adverse Effect.  

        Section
3.7. Compliance with Laws. The Company is, and since its inception, has been, in
material compliance with all applicable Judgments and all material applicable Laws. Since
its inception, the Company has not received a notice or other communication alleging a
violation by the Company of any applicable Law or Judgment applicable to its businesses
or operations.  

        Section
3.8. Permits. Except as set forth in Section 3.8 of the Disclosure Schedule, the
Company validly holds and has in full force and effect all material federal, state or
local, domestic or foreign, governmental consents, approvals, orders, authorizations,
certificates, filings, notices, permits, concessions, registrations, franchises, licenses
or rights (“Permits”) necessary for it to own, lease or operate its
properties and assets and to carry on its businesses as now conducted, and there has
occurred no material violation of, or default (with or without notice or lapse of time or
both) under, or event giving to any other Person any right of termination, amendment or
cancellation of any such Permit. The Company has complied in all material respects with
the terms and conditions of all Permits issued to or held by the Company, and such
Permits will not be subject to suspension, modification, revocation or nonrenewal as a
result of the consummation of the Merger, the execution and delivery of this Agreement or
the other transactions contemplated hereby. No proceeding is pending or, to the Knowledge
of the Company, threatened seeking the revocation or limitation of any Permit. Section
3.8 of the Disclosure Schedule lists each Permit issued or granted to or held by the
Company. All of the Permits listed in Section 3.8 of the Disclosure Schedule are held in
the name of the Company and no Permits are held in the name of any current or former
director, officer, employee, independent contractor or consultant of the Company (“Company
Personnel”) or agent or otherwise on behalf of the Company.  

10

        Section
3.9. Financial Statements.  

        (a)
          The Company has delivered (A) the audited consolidated balance sheets of the
          Company as of December 31, 2005 and December 31, 2004, and the audited
          consolidated statements of income and cash flows of the Company for the years
          then ended, together with the notes to such financial statements and (B) the
          unaudited consolidated balance sheet (the “Most Recent Balance
          Sheet”) of the Company as of May 31, 2006 (the “Most Recent
          Balance Sheet Date”), and the unaudited consolidated statements of
          income and cash flows of the Company for the five months then ended (the
          financial statements described in clauses (A) and (B) above, together with the
          financial statements to be delivered pursuant to Section 5.9 (after such
          financial statements are delivered), collectively, the “Financial
          Statements”). The Financial Statements (i) are consistent with the
          books and records of the Company, (ii) have been prepared in accordance with
          United States generally accepted accounting principles, consistently applied
          (“GAAP”), except that the Financial Statements described in
          clause (B) above do not include the notes required by GAAP and (iii) present
          fairly the consolidated financial condition, results of operations,
          stockholders’ equity and cash flows of the Company as of the respective
          dates thereof and for the periods referred to therein.  

        (b)          All
accounts receivable of the Company, whether reflected on the Most Recent
          Balance Sheet or otherwise, are current and arose from valid transactions in
the           ordinary course of business in substantially the same manner as presently
          conducted and consistent with past practice (the “Ordinary Course of
          Business”) with unrelated third parties. The Company has not received
          any notice or other indication that any of the Company’s accounts
          receivable will not be collectible in full, net of any reserves shown on the
          Most Recent Balance Sheet.  

        (c)         The
Company maintains a system of internal accounting controls sufficient to
          provide reasonable assurance that: (i) transactions are executed in accordance
          with management’s general or specific authorizations; (ii) transactions
are           recorded as necessary to permit preparation of financial statements in
          accordance with GAAP and to maintain asset accountability; (iii) access to
          assets is permitted only in accordance with management’s general or
          specific authorization; and (iv) the recorded accountability for assets is
          compared with the existing assets at reasonable intervals and appropriate
          actions are taken with respect to any differences. By use of the term
          “reasonable assurance,” the Company means such level of detail and
          degree of assurance, taking into account the resources and developmental stage
          of the Company, as would satisfy prudent officials in the conduct of their own
          affairs. The Company is not a public company and is not subject to the
          Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). Accordingly,
the           Company makes no representation of whether it maintains the documentation,
          conducts the testing required, or performs the other activities that would be
          required in order to meet the requirements of Section 404 of Sarbanes-Oxley,
the           Foreign Corrupt Practices Act of 1977, or The Committee of Sponsoring
          Organizations of the Treadway Commission’s (“COSO”)
          Internal Control – Integrated Framework.  

11

        Section
3.10. Absence of Changes or Events. Except as otherwise disclosed on Section 3.10
of the Disclosure Schedule, since December 31, 2005, (a) the Company has conducted its
business only in the Ordinary Course of Business, (b) there has occurred no Material
Adverse Effect, or any change, circumstance, development, state of facts, event or effect
that could reasonably be expected to result in a Material Adverse Effect and (c) the
Company has not taken any of the actions that, if taken after the date of this Agreement
and before the Closing Date, would constitute a breach of any of the covenants set forth
in Section 5.1, other than (i) actions described in Section 5.1(l) and (ii) with respect
to Section 5.1(j)(i), continued provision of employee benefits under, and to the same
extent provided for in, Benefit Plans existing on December 31, 2005.  

        Section
3.11. Undisclosed Liabilities. The Company has no liabilities (whether known,
absolute, contingent, accrued or otherwise), except for such liabilities (a) reflected on
the Most Recent Balance Sheet, (b) that are not, individually or in the aggregate,
material and were incurred in the Ordinary Course of Business since the Most Recent
Balance Sheet Date or (c) set forth on Section 3.11 of the Disclosure Schedule.  

        Section
3.12.     Assets other than Real Property. 

        (a)
          The Company is the true and lawful owner or lessor and has good and valid title
          to, or a valid leasehold interest in, all material assets (tangible or
          intangible) reflected on the Most Recent Balance Sheet or thereafter acquired,
          except those sold or otherwise disposed of in the Ordinary Course of Business
          since the Most Recent Balance Sheet Date and not in violation of this
Agreement,           in each case free and clear of all Liens (other than Permitted
Liens).  

        (b)
          The Company owns or leases all material tangible assets sufficient for the
          conduct of its businesses as presently conducted and as presently proposed to
be           conducted. The tangible assets of the Company are free from material
defects,           have been maintained in accordance with the past practice of the
Company and           generally accepted industry practice, are in good working order and
are suitable           for the purposes for which they are presently used. All material
leased personal           property of the Company is in good working order, ordinary wear
and tear           excepted, and 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 and upon the expiration thereof.  

        (c)
          This Section 3.12 does not relate to real property or interests in real
          property, such items being the subject of Section 3.13, or to Intellectual
          Property or interests in Intellectual Property, such items being the subject of
          Section 3.15.  

12

        Section
3.13. Real Property. The Company does not own any real property or interests in
real property. Section 3.13 of the Disclosure Schedule lists all real property and
interests in real property leased by the Company (each, a “Leased Property”).
The Company has delivered to Parent complete and accurate copies of all such leases, and
any operating agreements relating thereto. With respect to each Leased Property, the
Company has good and valid title to the leasehold estate relating thereto, free and
clear of all Liens (other than Permitted Liens), leases, assignments and subleases and
the Company enjoys peaceful and undisturbed possession thereunder.  

        Section
3.14.     Contracts. 

        (a)
     Section  3.14(a) of the Disclosure  Schedule lists each of the following  Contracts
 which the Company is a party to or is bound by (each such Contract,  whether or not set
forth in such section of the Disclosure  Schedule,  a "Material Contract"): 

		    (i)        employment
or consulting  Contract,  or any employee collective  bargaining  agreement or other
Contract with any          labor union or any Company Personnel; 

		    (ii)        Contract
 not to  compete  or  otherwise  restricting  the  Company or any other  Affiliate  in
the  development,          manufacture,  marketing,  distribution or sale of any of its
respective  products or services or otherwise in its          respective operations and
business; 

		    (iii)        Contract
 containing any  "non-solicitation"  or "no-hire"  provision that restricts the Company,
 not including,          however,  the Company's standard  proprietary  information and
inventions  assignment agreement entered into with          its employees, to the extent
that such agreement has been provided to Parent prior to the Closing; 

		    (iv)        Contract
containing any provision that purports to restrict the operations or business of the
Company; 

		    (v)        Contract
with (A) any  stockholder of the Company or any Affiliate  (other than the Company) of
the Company or of          any  stockholder,  (B) any  former  holder of  Capital  Stock
of the  Company or any  Affiliate  (other  than the          Company) thereof or (C) any
Company  Personnel or any Affiliate (other than the Company)  thereof,  in each case,
         requiring or otherwise  involving,  or reasonably expected to involve,  payment
by or to the Company of more than          an aggregate of $25,000; 

		    (vi)        lease,
 sublease or similar  Contract  with any Person  under which the Company is a lessor or
 sublessor  of, or          makes  available for use to any Person (other than the
Company),  (A) any  Leased  Property or (B) any portion of          any premises
otherwise occupied by the Company; 

		    (vii)        lease
or  similar  Contract  with any Person  under  which (A) the  Company  is lessee of, or
holds or uses,  any          machinery,  equipment,  vehicle or other tangible  personal
 property owned by any Person or (B) the Company is a          lessor or sublessor  of,
or makes  available  for use by any Person,  any  tangible  personal  property  owned or
         leased by the Company,  in each case,  requiring  or  otherwise  involving,  or
 reasonably  expected to involve,          payment by or to the Company of more than an
aggregate of $25,000; 

13

		    (viii)        Contract
(or substantially  related  Contracts) for the purchase or sale of products or the
furnishing or receipt          of  services  (A)  calling  for  performance  over a
period of more than two years  and  requiring  or  otherwise          involving,  or
 reasonably  expected  to  involve,  payment  by or to the  Company of more than an
 aggregate  of          $25,000,  (B)  requiring or  otherwise  involving,  or
 reasonably  be expected to involve,  payment by or to the          Company of more than
an aggregate of $25,000,  (C) in which the Company has granted  manufacturing  rights,
"most          favored  nation"  pricing  provisions or marketing or  distribution
 rights relating to any products or territory          and requiring or otherwise
 involving,  or reasonably  expected to involve,  payment by or to the Company of more
         than an  aggregate  of $25,000,  (D) in which the  Company has agreed to
purchase a minimum  quantity of goods or          services  which would  exceed an
 aggregate  of $25,000 or has agreed to purchase  goods or services  exclusively
         from a certain party or (E) with any of the Customers or Suppliers (each as
defined herein); 

		    (ix)        Contract
for the  disposition  of any material  portion of the assets or business of the Company
or any agreement          for the  acquisition,  directly  or  indirectly,  of a material
 portion of the assets or  business  of any other          Person; 

		    (x)        Contract
for any joint  venture or  partnership,  requiring or otherwise  involving,  or
 reasonably  expected to          involve, payment by or to the Company of more than an
aggregate of $25,000; 

		    (xi)        Contract
 granting a third party,  including but not limited to  Affiliates of the Company,  any
license or other          right to any  Intellectual  Property owned or licensed by the
Company,  or pursuant to which the Company has been          granted by a third party any
right or license to any  Intellectual  Property  (excluding  non-exclusive  licenses
         for  commercial  off-the-shelf  Software),  or pursuant to which the Company
 obtained  any option to purchase or          obtain a license  to, the  Intellectual
 Property  of any other  Person,  in each case,  requiring  or  otherwise
         involving, or reasonably expected to involve, payment by or to the Company of
more than an aggregate of $25,000; 

		    (xii)        Contract
 (other  than trade debt  incurred  in the  Ordinary  Course of  Business)  under  which
the Company has          borrowed any money from, or issued any note,  bond,  debenture
or other evidence of  Indebtedness  to, any Person          requiring or otherwise
 involving,  or reasonably expected to involve,  payment by or to the Company of more
than          an aggregate of $25,000; 

		    (xiii)        Contract
 (including  so-called  take-or-pay or keep-well  agreements) under which (A) any Person
has directly or          indirectly  guaranteed  Indebtedness,  liabilities  or
obligations of the Company or (B) the Company has directly          or  indirectly
 guaranteed  Indebtedness,  liabilities  or  obligations  of any  Person  (in each case
other than          endorsements  for the purpose of  collection  in the Ordinary  Course
of  Business),  in each case,  requiring or          otherwise  involving,  or reasonably
expected to involve,  payment by or to the Company of more than an aggregate          of
$25,000; 

		    (xiv)        Contract
under which the Company has,  directly or  indirectly,  made any advance,  loan,
 extension of credit or          capital contribution to, or other investment in, any
Person, in each case,  requiring or otherwise involving,  or          reasonably expected
to involve, payment by or to the Company of more than an aggregate of $25,000; 

		    (xv)        Contract
providing for any mortgage or other Lien; 

		    (xvi)        Contract
 providing  for  indemnification  of any  executive  officer or director of the Company
 (other than the          Constitutive Documents of the Company); 

14

		    (xvii)        Contract
requiring or otherwise  involving,  or reasonably  expected to involve,  payment by or to
the Company of          more than an aggregate of $25,000; 

		    (xviii)        Contract
or other document involving the grant of a Warrant; and 

		    (xix)        Contract
not entered into in the Ordinary Course of Business. 

        (b)
     Each Material Contract is in full force and effect,  and is legal,  valid,  binding
and enforceable in accordance with its  terms.  True and  complete  copies of each
 Material  Contract  (and a written  summary of the terms of any oral Material
 Contracts) have been delivered to Parent.  There is no violation,  breach or default
under any Material Contract by the  Company,  to the  Knowledge  of the Company,  by any
other party  thereto,  and no event has occurred or condition exists that with the lapse
of time or the giving of notice or both would  constitute a default  thereunder by the
Company, to the  Knowledge of the Company,  any other party  thereto.  No notice,
 waiver,  consent or approval is required (or the lack of which  would  give rise to a
right of  termination,  cancellation  or  acceleration  of, or  entitle  any party to
accelerate,  whether after the giving of notice or lapse of time or both,  any
 obligation  under the Material  Contracts) under or relating to any Material  Contract
in connection  with the execution,  delivery and performance of this Agreement or the
 consummation  of the  Merger or any of the other  transactions  contemplated  hereby.
 Immediately  following  the Effective Time, each Material  Contract will continue to be
in full force and effect,  and valid,  binding and enforceable in accordance with its
terms. 

        Section
3.15.     Intellectual Property. 

        (a)
          The Company is the sole and exclusive owner of, or has the right to use, sell
          and license, as the case may be, all Intellectual Property used, sold or
          licensed by the Company in the business of the Company as presently conducted
          and as currently proposed to be conducted.  

        (b)
          The products and operation of the business of the Company and the use of
          Intellectual Property and the tangible embodiment thereof owned by the Company,
          and its present and currently proposed business practices and methods, do not
          infringe, constitute an unauthorized use of, or violate any Intellectual
          Property right of any third party. The Intellectual Property owned by or
          licensed to the Company includes all of the Intellectual Property necessary to
          enable the Company to conduct its business in the manner in which such business
          has been and is currently being conducted, and as currently proposed to be
          conducted.  

        (c)
          Except with respect to licenses of commercial off-the-shelf Software, and
except           pursuant to the licenses listed in Section 3.15(c) of the Disclosure
Schedule,           the Company is not obligated under any Contract to make any payments
by way of           royalties, fees or otherwise to any owner or licensor of, or other
claimant to,           any Intellectual Property, with respect to the Company’s use
thereof in           connection with the conduct of its business.  

        (d)
          Section 3.15(d) of the Disclosure Schedule sets forth a complete and correct
          list of all Patents, registered Marks, pending applications for registration of
          any Marks, unregistered Marks currently being used by the Company, registered
          Copyrights, and pending applications for registration of Copyrights, in each
          case, owned by the Company, including the jurisdictions in which such Patents,
          Marks and Copyrights have been issued or registered or in which such
          applications have been filed. The Company owns all rights, title and interests
          in and to all Intellectual Property listed on Schedule 3.15(d). All
          registration, renewal, maintenance and other applicable fees have been timely
          paid in connection with all issued, registered and applied for Intellectual
          Property owned by the Company, and all reasonable actions have been taken for
          the prosecution and protection of all issued, registered, applied for, and
          unregistered Intellectual Property owned or licensed by the Company.  

15

        (e)
          Except as disclosed in Section 3.15(e) of the Disclosure Schedule, the Company
          has not licensed any of its owned or licensed Intellectual Property to any
          Person, nor has the Company entered into any Contract limiting its ability to
          exploit fully any of its owned or licensed Intellectual Property.  

        (f)
          No non-public, proprietary Intellectual Property owned or licensed by the
          Company has been authorized to be disclosed or, to the Knowledge of the
          Company,actually disclosed by the Company to any employee or third party
          other than pursuant to a non-disclosure agreement that protects the proprietary
          interests of the Company in and to such Intellectual Property. The Company has
          taken reasonable security measures to protect the confidentiality of
          confidential Intellectual Property owned or licensed by the Company.  

        (g)
          Except as disclosed in Section 3.15(g) of the Disclosure Schedule, the Company
          is not the subject of any pending or, to the Knowledge of the Company,
          threatened action, suit, proceeding, claim, arbitration, mediation or
          investigation (a “Legal Proceeding”) which involvesa
          claim or notice of infringement of, unauthorized use of, or violation of any
          Intellectual Property of any third party or challenging the ownership, use,
          validity, priority, duration, scope or enforceability of any Intellectual
          Property owned or licensed by the Company, and has not received writtennotice
of any such threatened claim, and, to the Knowledge of the Company,           there are
no facts or circumstances which are likely to form the basis for any           claim of
infringement of, unauthorized use of, or violation of any Intellectual           Property
of any third party or challenging the ownership, use, validity,           priority,
duration, scope or enforceability of any Intellectual Property owned           or
licensed by the Company. To the Knowledge of the Company, all material
          Intellectual Property owned or licensed by the Company is valid, enforceable
and           in full force and effect, and has not through action or failure to act
lapsed,           been abandoned or otherwise been forfeited, or is likely to be
forfeited, in           whole or in part.  

        (h)
          To the Knowledge of the Company, no third party is infringing, violating,
          misusing or misappropriating any material Intellectual Property owned or
          licensed by the Company and no such claims have been made against a third party
          by the Company.  

        (i)
          The Company has taken reasonable measures to protect the secrecy and/or
          confidentiality of all non-public and proprietary Intellectual Property owned
or           licensed by the Company, including requiring all Company employees or
          consultants with access to such Intellectual Property and all other Persons
with           access to such Intellectual Property, as necessary, to execute a binding
          confidentiality agreement. The Company has taken reasonable measures to protect
          the value of all Intellectual Property used in the conduct of the business of
          the Company, including requiring all Company employees to execute an agreement
          which includes provisions sufficient to ensure that the Company becomes the
          owner of any Intellectual Property created by such employees within the scope
of           his or her employment, or in the case of a Person other than an employee
from           the services such Person performs for the Company. Copies or forms of the
          agreement or agreements referred to in this clause (i) have been made available
          to Parent and, to the Knowledge of the Company, there has not been a material
          breach of any such agreement or agreements.  

16

        (j)
          None of the execution and delivery of this Agreement, the consummation of the
          Merger and the other transactions contemplated hereby nor the performance by
the           Company of its obligations hereunder shall materially adversely affect any
          rights of the Company or any of its Subsidiaries with respect to any of Company
          Intellectual Property, or the validity, enforceability, use, ownership, license
          rights, or duration of any such Intellectual Property Rights.  

        Section
3.16. Litigation. Except as set forth in Section 3.16 of the Disclosure Schedule,
there is no Legal Proceeding that is pending or, to the Knowledge of the Company, has
been threatened against the Company. There are no Judgments outstanding against the
Company. Since the Company’s inception, there has not been any Legal Proceeding in
respect of the Company that (a) resulted in a Judgment against or settlement by the
Company (whether or not such Judgment or settlement was paid, in whole or in part, by an
insurer of the Company or other third party) or (b) resulted in any equitable
relief. There is no Legal Proceeding pending by the Company, or which the Company intends
to initiate, against any other Person.  

        Section
3.17.     Taxes. 

        (a)
          All Tax Returns required to be filed by or on behalf of the Company, have been
          timely filed and all Taxes shown as due on such Tax Returns have been timely
          paid.  

        (b)
          All Tax Returns filed by or on behalf of the Company are true and complete in
          all material respects. The charges, accruals and reserves for Taxes with
respect           to the Company reflected on the Most Recent Balance Sheet are
materially           adequate to cover all Tax liabilities payable or anticipated to be
payable in           respect of all periods or portions thereof ending on or before the
date hereof.           There are no Liens (other than Permitted Liens) for Taxes against
the Company or           the Company’s assets.  

        (c)
          No property of the Company is “tax exempt use property” within the
          meaning of Section 168(h) of the Internal Revenue Code of 1986 (the
          “Code”) and the Company has no assets subject to a lease to a
          “tax exempt entity” within the meaning of Section 168(h)(2) of the
          Code.  

        (d)
          Section 3.17(d) of the Disclosure Schedule (i) lists all federal, state, local,
          and foreign income Tax Returns filed with respect to the Company for taxable
          years in which the statue of limitations (including extensions thereof) has not
          expired; (ii) indicates those Tax Returns that have been audited; and (iii)
          indicates those Tax Returns that currently are the subject of an audit. All
          deficiencies resulting from such completed examinations have been paid in full.
          The Company has delivered to Parent correct and complete copies of all income
          Tax Returns, examination reports, and statements of deficiency assessed against
          or agreed to by the Company for taxable years in which the statute of
          limitations (including extensions thereof) has not expired, with respect to
          Taxes of any type. To the Company’s Knowledge, except as provided in
          Section 3.17(d) of the Disclosure Schedule, there are no actions, suits,
          proceedings, audits, investigations, proposed adjustments or claims now
proposed           or pending against the Company concerning the Tax liability of the
Company. No           issue has been raised in any examination by any Governmental Entity
with respect           to the Company which, by application of similar principles,
reasonably could be           expected to result in a proposed deficiency or increase in
Taxes for any other           period not so examined.  

17

        (e)
          There are no outstanding agreements or waivers extending the statutory period
of           limitation applicable to any Tax assessment or deficiency with respect to
the           Company, and the Company has not requested any extension of time within
which to           file any Tax Return, which Tax Return has not yet been filed.  

        (f)
          The Company has withheld and paid all Taxes required by Law to have been
          withheld and paid and has complied in all material respects with all rules and
          regulations relating to the withholding or remittance of Taxes (including,
          without limitation, employee-related Taxes).  

        (g)
          The Company is not a party to any Contract that, individually or collectively,
          could give rise to any payment (whether in cash or property) that would be
          non-deductible pursuant to Sections 162(m) or 280G of the Code or similar
          provision of state, local or foreign Law.  

        (h)
          The Company will not be required to include any item of income in, or exclude
          any item of deduction from, taxable income for any taxable period ending after
          the Closing Date as a result of any: (i) adjustment pursuant to Section 481 of
          the Code or similar provision of state, local or foreign Law associated with a
          change of accounting method that is effective on or before the date of this
          Agreement; (ii) closing agreement or other agreement with any Governmental
          Entity executed on or before the date of this Agreement; or (iii) installment
          sale or open transaction disposition made on or before the date of this
          Agreement.  

        (i)
          Since the Company’s formation, the Company has not constituted either a
          “distributing corporation” or a “controlled corporation”          (within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution
          qualifying for tax-free treatment under Section 355(a) of the Code.  

        (j)
          The Company has not been a United States real property holding corporation
          within the meaning of Section 897(c)(2) of the Code during the applicable
period           specified in Section 897(c)(1)(A)(ii) of the Code.  

        (k)
          To the Company’s Knowledge, no claim has ever been made by a Governmental
          Entity in a jurisdiction where the Company does not file Tax Returns that the
          Company is or may be subject to Tax in that jurisdiction.  

        (l)
          The Company is not a party to any Tax allocation, indemnity or sharing
Contract.           The Company has no liability for Taxes of any Person (i) under
Treasury           Regulation Section 1.1502-6 or similar provision of state, local
or foreign           Law, (ii) as transferee or successor, (iii) by Contract, or (iv)
otherwise. The           Company has never been a member of any affiliated, combined,
consolidated or           unitary group (other than a group the common parent of which
was the Company)           and has never filed Tax Returns as a member of such group.  

        (m)
          The Company has disclosed on its federal income Tax Returns all positions taken
          therein that could give rise to a substantial understatement of federal income
          Tax within the meaning of Section 6662 of the Code.  

18

        Section
3.18. Insurance. The insurance policies owned and maintained by the
Company and the coverage amounts thereunder are listed in Section 3.18 of the Disclosure
Schedule. All such policies are in full force and effect, all premiums due and payable
thereon have been paid, the Company shall not be liable for retroactive premiums or
similar payments related thereto, and the Company is in compliance in all material
respects with the terms of such policies. Such insurance policies are of the type and in
amounts customarily carried by organizations conducting businesses or owning assets
similar to those of the Company. There is no claim pending under any such policy as to
which coverage has been questioned, denied or disputed by the underwriter of such policy.
To the Knowledge of the Company, there has been no notice of cancellation or termination
(or any other threatened termination) of, or premium increase with respect to, any such
policy. Each such policy will continue to be enforceable and in full force and effect
immediately following the Effective Time in accordance with the terms thereof as in
effect as of the date hereof.  

        Section
3.19.     Benefit Plans. 

        (a)
          Section 3.19(a) of the Disclosure Schedule contains a list and brief
description           of all Benefit Plans. The Company has delivered to Parent true and
complete           copies of (i) each Benefit Plan (including amendments since the
most recent           restatement) or, in the case of any unwritten Benefit Plans
Contracts, written           descriptions thereof, (ii) the annual report (Form 5500)
filed with           the IRS or the Department of Labor with respect to each Benefit Plan
(if any           such report was required) for each plan year since the Company’s
formation,           (iii) the most recent determination letter issued to each “employee
          pension benefit plan”, as defined in Section 3(2) of ERISA (a
          “Pension Plan”), that is intended to be qualified under
Section           401(a) of the Code and any pending applications for a determination
letter for           such plans, (iv) the most recent summary plan description (and
any summary           of material modifications since the most recent summary plan
description) for           each Benefit Plan for which such a summary plan description is
required and any           summaries or other communications distributed to participants
for each Benefit           Plan whether or not required to provide a summary plan
description, (v) all           personnel, payroll, and employment manuals and policies,
(vi) each trust           agreement, recordkeeping or other third-party agreement and
group annuity           Contract currently in effect relating to any Benefit Plan, (vii) for
any           Pension Plan described in Section 401(a) of the Code, copies of
          confirmations that such Pension Plan satisfied applicable nondiscrimination
          tests in each plan year since such Pension Plan’s original effective date,
          (viii) all notices that were given by the Company or any Benefit Plan to the
          IRS, the Pension Benefit Guaranty Corporation, the Department of Labor, the
          Securities and Exchange Commission, the Equal Employment Opportunity
Commission,           or any other Governmental Entity relating to a Benefit Plan, and
(ix) all           notices that were given by the IRS, the Pension Benefit Guaranty
Corporation,           the Department of Labor, the Securities and Exchange Commission,
the Equal           Employment Opportunity Commission, or any other Governmental Entity
to the           Company relating to any Benefit Plan.  

        (b)
          Each Benefit Plan has been operated and administered in all material respects
in           accordance with its terms and applicable Law (including but not limited to
Laws           specifically mentioned in this Section 3.19). The Company and all the
Benefit           Plans are in all material respects in compliance with the applicable
provisions           of the Employee Retirement Income Security Act of 1974
          (“ERISA”), the Code, and other applicable Laws. All reports,
          returns and similar documents with respect to the Benefit Plans required to be
          filed with any Governmental Entity or distributed to any Benefit Plan
          participant, beneficiary, or alternate payee have been duly and timely filed or
          distributed. There are no lawsuits, actions, termination proceedings or other
          proceedings pending, or, to the Knowledge of the Company, threatened against or
          involving any Benefit Plan and there are no investigations by any Governmental
          Entity or other claims (except claims for benefits payable in the normal
          operation of the Benefit Plans) pending or, to the Knowledge of the Company,
          threatened against or involving any Benefit Plan or asserting any rights to
          benefits under any Benefit Plan. To the Knowledge of the Company, there are no
          unasserted claims that, if pending or threatened, would be of the type
described           in this Section 3.19(b). The Company does not have any material
liability to the           IRS with respect to any Benefit Plan, including any liability
imposed under           Chapter 43 of the Code.  

19

        (c)
          All contributions to, and payments from, the Benefit Plans that may have been
          required to be made in accordance with the terms of the Benefit Plans and
          applicable Laws, including, when applicable, Section 302 of ERISA or
          Section 412 of the Code, have been timely made. All such contributions to,
          and payments from, the Benefit Plans, except those payments to be made from a
          trust exempt under Section 501(a) of the Code, for any period ending
before           the Closing Date that are not yet, but will be, required to be made,
will be           properly accrued and reflected on the Most Recent Balance Sheet. There
is no           Lien on the assets of the Company arising under Section 302(f) or 4068(a)
of           ERISA or Section 412(n) of the Code.  

        (d)
          All Pension Plans intended to be qualified and exempt from federal income Taxes
          under Sections 401(a) and 501(a) of the Code, respectively, have received
          determination letters from the IRS to the effect that such Pension Plans are so
          qualified and exempt from federal income Taxes, and no such determination
letter           has been revoked nor, to the Knowledge of the Company, has revocation of
any           such determination letter been threatened. No such Pension Plan has been
amended           since the date of its most recent determination letter or application
therefor           in any respect, nor has any other circumstance or event occurred, that
would           adversely affect its qualification or materially increase its cost. A
          determination letter covering “GUST” (as defined in footnote 1 of
Rev.           Proc. 2004-25) has been received for each Pension Plan intended to be
qualified           under Section 401(a) of the Code or an application for such a letter
has been           filed within the applicable remedial amendment period. Timely “good
          faith” amendments (within the meaning of Notice 2001-42) with respect to
          the Economic Growth and Tax Relief Reconciliation Act of 2001 have been made
for           each Pension Plan intended to be qualified under Section 401(a) of the
Code. The           Company performed all material obligations required to be performed
by it under,           and is not in default under or in violation of, the terms of any
Benefit Plan.  

        (e)
          No transaction prohibited by Section 406 of ERISA and no “prohibited
          transaction” (as defined in Section 4975 of the Code) has occurred
          with respect to any Benefit Plan (without regard to whether an exemption is
          available). None of the Pension Plans has been terminated nor have there been
          any “reportable events” (as defined in Section 4043 of ERISA)
          with respect thereto. No Company Personnel, nor, to the Knowledge of the
          Company, any trustee, administrator or other fiduciary of any Benefit Plan nor,
          to the Knowledge of the Company, any agent of any of the foregoing has engaged
          in any transaction or acted or failed to act in a manner that could subject the
          Company to any liability for breach of fiduciary duty under ERISA or any other
          applicable Law (whether such liability is directly against the Company or the
          result of any existing indemnity agreements).  

20

        (f)
          No Benefit Plan is or has ever been (or has ever been the successor or
          transferee of) a “multiemployer plan” (as defined in           Section 3(37)
of ERISA) or a “defined benefit plan” (as defined           in Section 3(35) of
ERISA). The Company has no actual or, to the Knowledge of           the Company,
potential, secondary, or contingent liability to any Person under           Title IV
of ERISA and no Benefit Plan is subject to Title IV of ERISA. The           Company has
not contributed to, been required to contribute to, or withdrawn           from any “multiemployer
plan” (as defined in Section 3(37) of ERISA).  

        (g)
          The Company has never established, maintained or contributed to, or had an
          obligation to maintain or contribute to or has or had any liability with
respect           to, any “voluntary employees’ beneficiary association” (within
          the meaning of Section 501(c)(9) of the Code), any organization or trust
          described in Sections 501(c)(17) or 501(c)(20) of the Code or any “welfare
          benefits fund” described in Section 419(e) of the Code.  

        (h)
          The Company has not offered to provide health or life insurance coverage to any
          individual, or to the family members or beneficiaries of any individual, for
any           period extending beyond the termination of the individual’s employment
by           the Company, except to the extent required by the health care continuation
(also           known as “COBRA”) provisions of ERISA and the Code or similar
state           benefit continuation Laws. Each Benefit Plan that is a group health plan,
as           such term is defined in Section 5000(b)(1) of the Code, complies in all
          material respects with Sections 601 et seq. and 701 et seq. of ERISA and
Section           4980B and Subtitle K of the Code.  

        (i)
          The Company has no current or, to the Knowledge of the Company, projected
          liability or contingent obligation in respect of medical or other benefits for
          retired or former Company Personnel or any predecessor Person.  

        (j)
          Each Benefit Plan (including any such plan covering retirees or other former
          employees) may be discontinued or terminated without liability to the Company
on           or at any time after the Effective Time.  

        (k)
          Except as set forth in Section 3.19(k) of the Disclosure Schedule, neither the
          execution and delivery of this Agreement, nor the consummation of the Merger or
          the other transactions contemplated thereby will result in the payment,
vesting,           or acceleration of any bonus, stock option or other equity-based
award,           retirement, severance, job security or similar benefit or any enhanced
benefit           to any Person.  

        (l)
          Except as set forth in Section 3.19(l) of the Disclosure Schedule, the Company
          has no Benefit Plan in which non-United States based employees participate and
          is not required to maintain any such plan.  

        (m)
          Since the Company’s formation, no Person is or has been a Person which is
          (or at any relevant time was) a member of a “controlled group of
          corporations” with, under “common control” with, or a member of
          an “affiliated service group” with the Company as such terms are
          defined in Section 414(b), (c), (m) or (o) of the Code (an “ERISA
          Affiliate”).  

        (n)
          No event has occurred or circumstances exist that may result in (i) a material
          increase in premium costs of Benefit Plans that are insured, or (ii) a material
          increase in benefit or administrative costs of Benefit Plans that are
          self-insured.  

        (o)
          The Company has not taken any action that, by itself or in conjunction with any
          action of equal magnitude that may be taken after the Effective Time, will
          require any compliance with the Worker Adjustment and Retraining Notification
          Act of 1991 or any other similar or comparable applicable Law.  

21

        (p)
          Neither the Company nor any Affiliate thereof has a formal plan, commitment, or
          proposal, whether legally binding or not, or has made a commitment to any
          individual to create any additional Benefit Plan or modify or change any
          existing Benefit Plan that would affect any current employee, director or
          consultant, or former employee, of the Company, or any beneficiary or alternate
          payee of such an individual. No events have occurred or are expected to occur
          with respect to any Benefit Plan that would cause a material change in the cost
          of providing the benefits under such plan or would cause a material change in
          the cost of providing for other liabilities of such plan.  

        (q)
          All assets of any Benefit Plan consist of cash, actively traded securities, or
          other assets reasonably acceptable to Parent.  

        (r)
          Any Benefit Plan that is a “nonqualified deferred compensation plan”          within
the meaning of section 409A of the Code has been identified as such on           Schedule
4.18(a). Each such Benefit Plan has been operated in accordance with           the
requirements of section 409A (including Notice 2005-1).  

        (s)
          Except as set forth in Section 3.19(s) of the Disclosure Schedule, neither the
          execution and delivery of this Agreement nor the consummation of the
          transactions contemplated hereby will (i) result in any material payment
          (including severance, unemployment compensation, golden parachute or otherwise)
          becoming due under any Benefit Plan, (ii) materially increase any benefits
          otherwise payable under any Benefit Plan or (iii) result in the
          acceleration of the time of payment or vesting of any such benefits to any
          material extent. No benefit that is or may become payable by any Benefit Plan
as           a result of, or arising under, this Agreement shall constitute an “excess
          parachute payment” (as defined in section 280G(b)(1) of the Code) that is
          subject to the imposition of an excise tax under section 4999 of the Code or
          that would not be deductible by reason of section 280G of the Code.  

        Section
3.20.     Employee and Labor Matters. 

        (a)
          There is not, and since the Company’s formation there has not been, any
          labor strike, dispute, work stoppage, slowdown or lockout pending, or, to the
          Knowledge of the Company, threatened, against the Company. To the Knowledge of
          the Company, no union organizational campaign or petition for certification is
          in progress with respect to the Company Personnel. The Company is not a party
to           any collective bargaining or other similar labor Contracts with respect to
any           Company Personnel. There are no pending, or, to the Knowledge of the
Company,           threatened, charges against the Company or any Company Personnel
before the           Equal Employment Opportunity Commission or any other Governmental
Entity           responsible for the prevention of unlawful employment practices in any
          jurisdiction. Since the Company’s formation, the Company has not received
          notice of the intent of any Governmental Entity responsible for the enforcement
          of labor or employment Laws to conduct an investigation of the Company relating
          to unlawful employment practices and, to the Knowledge of the Company, no such
          investigation is in progress.  

        (b)
The Company has complied in all material respects with all applicable Laws
          relating to employment and governing payment of minimum wages and overtime
          rates, the withholding and payment of Taxes from compensation of employees and
          the payment of premiums and/or benefits under applicable worker compensation
          Laws.  

22

        (c)
          No officer or director of the Company is, and, to the Knowledge of the Company,
          no other employee of the Company is, a party to or bound by any Contract,
          license, covenant or Contract of any nature, or subject to any judgment, decree
          or order of any Governmental Entity, that may interfere with the use of such
          Person’s efforts to promote the interests of the Company, conflict with
the           business of the Company or the Merger and the other transactions
contemplated by           this Agreement, or that could reasonably be expected to result
in a Material           Adverse Effect. To the Knowledge of the Company, no activity of
any employee of           the Company as or while an employee of the Company has caused a
violation of any           employment Contract, confidentiality agreement, patent
disclosure agreement, or           other Contract.  

        (d)
          Section 3.20(d) of the Disclosure Schedule contains a true and complete list of
          the names, positions and rates of compensation of all officers, directors,
          employees and consultants of the Company, as of the date hereof, showing each
          such person’s name, positions and annualized remuneration, bonuses and
          fringe benefitsfor 2005 and 2006. Except as indicated in Section 3.20(d)
          of the Disclosure Schedule, (i) all employees are employed on an
          “at-will” basis and their employment can be terminated at any time
for           any reason without any amounts being owed to such individual other than
payments           required by applicable Laws, (ii) the Company’s relationships
with all           individuals who act on their own as contractors or other service
providers to           the Company can be terminated at any time for any reason without
any amounts           being owed to such individual other than with respect to
compensation or           payments accrued before the termination, and (iii) no employee
is on disability           or other leave of absence. The Company has complied, in all
material respects,           with all Laws governing the employment of personnel by U.S.
companies and the           employment of non-U.S. nationals in the United States,
including the Immigration           and Nationality Act 8 U.S.C. Sections 1101 et seq.
and its implementing           regulations. The Company has not sponsored any employee
for, or otherwise           engaged any employee working pursuant to, a non-immigrant
visa.  

        Section
3.21. Environmental Matters. The Company has, in all material respects, complied
at all times with all applicable Environmental Laws. No property (including soils,
groundwater, surface water, buildings or other structures) currently owned, leased or
operated by the Company has been contaminated with any Hazardous Material in amounts that
would violate or require remediation under any Environmental Laws. To the Knowledge of
the Company, no property (including soils, groundwater, surface water, buildings or other
structures) formerly owned, leased or operated by the Company is or was contaminated, in
amounts that would violate or require remediation under any Environmental Laws, with any
Hazardous Material on or prior to such period of ownership, lease or operation. To the
Knowledge of the Company, it is not subject to any liability for Hazardous Material
disposal or contamination on any third party property. To the Knowledge of the Company,
none of the properties currently or formerly owned or operated by the Company contains
any underground storage tanks, asbestos-containing material, lead-based paint products,
or polychlorinated biphenyls. To the Knowledge of the Company, there are no circumstances
involving the Company that could reasonably be expected to result in any material claims,
liability, investigations, costs or restrictions on the ownership, use or transfer of any
property in connection with any Environmental Law. Copies of all environmental reports,
studies, assessments and all material sampling data and other environmental information
in the possession of the Company relating to the Company have been made available to
Parent. The Company has not received any written notice, demand, letter, claim or request
for information from any Governmental Entity or other Person indicating that it may be in
violation of or subject to liability under any Environmental Law or regarding any actual,
alleged, possible or potential liability arising from or relating to the presence,
generation, manufacture, production, transportation, importation, use, treatment,
refinement, processing, handling, storage, discharge, release, emission or disposal of
any Hazardous Material and to the Company’s knowledge non is threatened. No Lien or
“superlien” has been placed on any site owned or operated by the Company
pursuant to the Federal Comprehensive, Environmental Response, Compensation, and
Liability Act of 1980 or any similar Law. To the Knowledge of the Company, all of the
products marketed by the Company are in full compliance with the applicable Environmental
Laws on chemical composition, environmental design and energy efficiency. The Company is
not subject to any order, decree, injunction or other similar arrangement with any
Governmental Entity or any indemnity or other Contract with any third party relating to
liability under any Environmental Law. The Company has taken appropriate steps to ensure
that its marketed products will be in full and timely compliance with all Environmental
Laws on the restriction of the use of hazardous substances, including but not limited to
Directive 2002/95/EC on the restriction of the use of hazardous substances in electrical
and electronic equipment. The Company has provided to Parent a written plan setting forth
the procedures that the Company has put in place to comply with these restrictions and
the estimated costs of compliance.  

23

        Section
3.22. Transactions with Affiliates. Section 3.22 of the Disclosure Schedule
describes any material transaction, since the Company’s formation, between the
Company, on the one hand, and any Seller or Affiliate (other than the Company) of any
Seller, on the other hand, other than (A) any employment Contract, Contract not to
compete with the Company, Contract to maintain the confidential information of the
Company, or Contract assigning Intellectual Property Rights to the Company, in each case
listed in Section 3.14(a) of the Disclosure Schedule or (B) any Contract requiring or
otherwise involving, or reasonably expected to involve, payment by or to the Company of
less than an aggregate of $25,000. Except as set forth in Section 3.22 of the Disclosure
Schedule, no Affiliate of the Company (i) owns or, to the Knowledge of the Company, has
any interest in any property (real or personal, tangible or intangible), Intellectual
Property Rights or Contract used in or pertaining to the business of, the Company, (ii)
has any claim or cause of action against the Company, (iii) owes any money to, or is owed
any money by, the Company or (iv) has any other rights with respect to the Company.  

        Section
3.23. Accounts; Powers of Attorney; Officers and Directors. Section 3.23 of the
Disclosure Schedule sets forth (i) a true and complete list of all bank and savings
accounts of the Company, identifying with respect to each any Person authorized to sign
thereon, (ii) a true and complete list of all powers of attorney granted by the Company,
identifying with respect to each any Person authorized to act thereunder and (iii) a true
and complete list of all officers and directors of the Company.  

        Section
3.24. Effect of Transaction. No lessor, lessee, licensor, licensee, officer,
employee, contractor, distributor, vendor, client, customer, supplier, Affiliate or other
Person having a relationship with the Company has informed the Company that such Person
intends to change such relationship because, in whole or in part, of the consummation of
the Merger or the other transactions contemplated by this Agreement.  

        Section
3.25. Brokers.  No broker, finder, financial advisor, investment banker
or other Person is or will be entitled to any brokerage, finder’s, financial advisor’s
or other similar fee or commission in connection with the Merger based upon arrangements
made by or on behalf of any Seller, for which the Company could be liable, or by or on
behalf of the Company.  

24

        Section
3.26. Certain Business Practices. Neither the Company nor, to the Knowledge of the
Company, any of its respective directors, officers, agents or employees, has (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to political activity; (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns or
violated any provision of the Foreign Corrupt Practices Act of 1977 or (iii) made any
payment in the nature of criminal bribery.  

        Section
3.27. Corporate Books and Records. The Company has made available to Parent and
its Representatives true and complete copies of the capitalization and transfer books and
the minute books of the Company, and all such records are true and complete in all
material respects.  

        Section
3.28. No Former Business. The Company has not, alone or with any other Person,
owned or operated any business other than its current business.  

        Section
3.29. Customers. Section 3.29 of the Disclosure Schedule sets forth the name of
the top ten (10) customers of the Company as a whole for last two fiscal years (the “Customers”).
SinceJanuary 1, 2005, no Customer has cancelled or otherwise terminated its
relationship with the Company or has materially decreased its usage, purchase of products
or services of the Company. No Customer has, to the Knowledge of the Company, any plan or
intention to terminate, cancel or otherwise materially and adversely modify its
relationship with the Company or to decrease materially or limit its usage, purchase or
distribution of the products and services of the Company.  

        Section
3.30. Suppliers. Section 3.30 of the Disclosure Schedule sets forth the name of
the top five (5) suppliers of the Company as a whole for the last two fiscal years (the
“Suppliers”). None of the Suppliers represents the sole source of
available supply for the products or services it provides to the Company. Since January
1, 2005, no Supplier has cancelled or otherwise terminated its relationship with the
Company. No Supplier has, to the Knowledge of the Company, any plan or intention to
terminate, cancel or otherwise materially and adversely modify its relationship with the
Company.  

        Section
3.31. Disclosure.  No representation or warranty of the Company contained in
this Agreement or any other written agreement or instrument furnished by the Company
pursuant to this Agreement, and no statement contained in any document, certificate or
schedule furnished or to be furnished by or on behalf of the Company to Parent or any of
its Representatives pursuant to this Agreement, contains any untrue statement of a
material fact, or omits to state any material fact required to be stated therein or
necessary in order to make the statements herein or therein not misleading or necessary
in order to fully and fairly provide the information required to be provided in any such
document, certificate or schedule. To the Knowledge of the Company, there is no fact
relating to the Company that the Company has failed to disclose in writing to Parent that
has resulted or could reasonably be expected to result in a Material Adverse Effect.  

25

ARTICLE 4 

REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB 

        Audiocodes,
Parent and Merger Sub make the representations and warranties set forth in Article 4 as
of the date of this Agreement and as of the Closing:  

        Section
4.1. Organization and Standing. Each of Audiocodes, Parent and Merger Sub is a
corporation duly organized, validly existing and, as applicable, in good standing under
the Laws of its jurisdiction of incorporation. Each of Audiocodes and Parent has all
requisite corporate power and authority to carry on its business as now being conducted.  

        Section
4.2. Power and Authority; Binding Agreement. Each of Audiocodes, Parent and Merger
Sub has all requisite corporate power and authority to execute and deliver this
Agreement, to consummate the Merger and the other transactions contemplated hereby and to
perform its obligations hereunder. The execution and delivery by Audiocodes, Parent and
Merger Sub of this Agreement and the consummation by Audiocodes, Parent and Merger Sub of
the Merger and the other transactions contemplated hereby, have been duly authorized by
all necessary corporate action on the part of Audiocodes, Parent and Merger Sub. This
Agreement has been duly executed and delivered by Audiocodes, Parent and Merger Sub and,
assuming the due execution and delivery of this Agreement by the Company constitutes a
legal, valid and binding obligation of Audiocodes, Parent and Merger Sub, enforceable
against Audiocodes, Parent and Merger Sub in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally.  

        Section
4.3. Noncontravention.  

        (a)
          The execution and delivery by Audiocodes, Parent and Merger Sub of this
          Agreement, the other Transaction Agreements to which it is a party, the
          consummation of the Merger and the other transactions contemplated hereby and
          thereby and the compliance by Audiocodes, Parent and Merger Sub with the
          provisions hereof and thereof do not and will not conflict with, or result in
          any violation or default (with or without notice or lapse of time or both)
          under, or give rise to a right of, or result in, termination, cancellation or
          acceleration of any obligation or to a loss of a material benefit under, or
          result in the creation of any Lien in or upon any of the properties or assets
of           Audiocodes, Parent or Merger Sub under, or give rise to any increased,
          additional, accelerated or guaranteed rights or entitlements under, any
          provision of (i) the Constitutive Documents of Audiocodes, Parent or Merger
Sub,           (ii) any Contract to which Audiocodes, Parent or Merger Sub is a party or
bound           by or their respective properties or assets are bound by or subject to or
          otherwise under which Audiocodes, Parent or Merger Sub has rights or benefits
or           (iii) subject to the governmental filings and other matters referred to in
          Section 4.3(b), any Law or Judgment, in each case, applicable to Audiocodes,
          Parent or Merger Sub or their respective properties or assets, other than, in
          the case of clauses (ii) and (iii), any such conflicts, violations, breaches,
          defaults, rights, losses, Liens or entitlements that individually or in the
          aggregate are not likely to impair in any material respect the ability of each
          of Audiocodes, Parent and Merger Sub to perform its obligations under this
          Agreement, or prevent or materially impede or delay the consummation of the
          Merger or any of the other transactions contemplated hereby.  

        (b)
          No consent, approval, license, permit, order or authorization of, registration,
          declaration or filing with, or notice to, any Governmental Entity is required
by           or with respect to Audiocodes, Parent or Merger Sub in connection with the
          execution and delivery by Audiocodes, Parent and Merger Sub of this Agreement,
          the other Transaction Agreements, the consummation by Audiocodes, Parent and
          Merger Sub of the Merger and the other transactions contemplated hereby or
          thereby or the compliance by Audiocodes, Parent and Merger Sub with the
          provisions hereof or thereof, except for (i) filings required under, and
          compliance with other applicable requirements of, Foreign Antitrust Laws, (ii)
          filings pursuant to, and compliance with other applicable requirements of, the
          Exon-Florio Act, (iii) the filing of the Certificate of Merger with the
Delaware           Secretary of State and appropriate documents with the relevant
authorities of           other states in which the Company is qualified to do business
and (iv) such           other consents, approvals, orders, authorizations, registrations,
declarations,           filings and notices, the failure of which to be obtained or made
individually or           in the aggregate would not impair in any material respect the
ability of each of           Audiocodes, Parent and Merger Sub to perform its obligations
under this           Agreement, or prevent or materially impede or delay the consummation
of the           Merger or any of the other transactions contemplated hereby.  

26

        Section
4.4. Brokers. No broker, finder, financial advisor, investment banker or other
Person is or will be entitled to any brokerage, finder’s, financial advisor’s
or other similar fee or commission in connection with the Merger based upon arrangements
made by or on behalf of Audiocodes, Parent or Merger Sub, for which the Company could be
liable.  

ARTICLE 5 

CERTAIN COVENANTS  

        Section
5.1. Conduct of Business. Except (A)with the prior written consent of Parent or
(B) as expressly permitted by the terms of this Agreement, from the date hereof to the
Effective Time, the Company shall (i) conduct its businesses in the Ordinary Course of
Business and in accordance with all applicable Laws and (ii) use all reasonable efforts
to preserve intact its current business organization, keep its physical assets in good
working condition, preserve, prosecute, maintain the value of, renew, extend and keep in
full force and effect all Intellectual Property owned or licensed by the Company, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers, licensors, licensees, distributors and others
having business dealings with it. Without limiting the generality of the foregoing,
except as expressly permitted by the terms of this Agreement, the Company shall not,
without the prior written consent of Parent:  

        (a)
          amend its Constitutive Documents;  

        (b)
          (i) declare, set aside or pay any dividend on, or make any other distribution
          (whether in cash, stock or property) in respect of, any of its Capital Stock;
          (ii) split, combine or reclassify any of its Capital Stock, or issue or
          authorize the issuance of any other securities in respect of, in lieu of or in
          substitution for shares of its Capital Stock; or (iii) purchase, redeem or
          otherwise acquire any shares of its Capital Stock, or any option, warrant, call
          or right relating to such shares, interests or other securities (including any
          Options);  

        (c)
          issue, deliver, sell or grant (i) any shares of its Capital Stock, (ii) any
          Voting Company Debt or other voting securities, (iii) any securities
convertible           into or exchangeable for, or any options, warrants or rights to
acquire, any           such shares, Voting Company Debt, voting securities or convertible
or           exchangeable securities or (iv) any “phantom” stock,
          “phantom” stock rights, stock appreciation rights or stock-based
          performance units, other than (A) the issuance of secured subordinated
          convertible promissory notes in an amount not exceeding $44,631.44 (the
          “Remaining Bridge Notes”) pursuant to the terms of the Secured
          Subordinated Convertible Promissory Note Purchase Agreement dated as of April
          27, 2006, or (B) the issuance of shares of Common Stock upon the exercise of
          Options or the conversion of Preferred Stock, in the case of this clause (B)
          outstanding on the date of this Agreement and in accordance with the terms of
          such Options or Preferred Stock on the date of this Agreement;  

27

        (d)
          repurchase, prepay, create, incur, assume or modify any terms of any
          Indebtedness of the Company other than the issuance of the Remaining Bridge
          Notes, issue or sell any warrants or other rights to acquire any Indebtedness
of           the Company, make any loans, advances or capital contributions to, or
          investments in, any Person, enter into any Contract to maintain any financial
          statement condition of another Person or enter into any Contract having the
          economic effect of any of the foregoing;  

        (e)
          sell, lease (as lessor), license or otherwise dispose of or subject to any Lien
          any properties or assets that are material, individually or in the aggregate,
to           the Company, except sales of inventory in the Ordinary Course of Business or
the           granting of Liens pursuant to the Security Agreement dated as of April 27,
2006           in connection with the issuance of the Remaining Bridge Notes;  

        (f)
          enter into any lease or sublease of real property (whether as a lessor,
          sublessor, lessee or sublessee) or modify, amend, terminate or fail to exercise
          any right to renew any lease or sublease of real property;  

        (g)
          acquire or agree to acquire (i) by merging or consolidating with, or by
          purchasing a substantial portion of the assets of, or by any other manner, any
          equity interest in or business of any Person or (ii) any assets that are
          material, individually or in the aggregate, to the Company, except purchases of
          inventory in the Ordinary Course of Business;  

        (h)
          change its fiscal year, revalue any of its material assets or make any changes
          in financial accounting methods, principles, practices or policies, except as
          required by GAAP or applicable Law;  

        (i)
          make or change any Tax election; change any Tax accounting period or method;
          file any amended Tax Return; enter into any closing agreement with respect to
          Taxes; settle any Tax claim or assessment; surrender any right to claim a
refund           of Taxes; consent to any extension or waiver of the limitations period
for the           assessment of any Tax; take any action outside the Ordinary Course of
Business           whose effect would be to increase the Company’s present or future
Tax           liability or to decrease the Company’s present or future Tax assets;  

        (j)
           (i) grant any awards under any Benefit Plan (including the grant of stock
          options, stock appreciation rights, stock based or stock related awards,
          performance units or restricted stock or the removal of existing restrictions
in           any Contract, Benefit Plan or Benefit Agreement or awards made thereunder),
          (ii) pay or provide to any Company Personnel any bonus, other amount or
          other benefit, or make any advance or loan to any Company Personnel, not
          provided for under any Contract, Benefit Plan or Benefit Agreement in effect on
          the date of this Agreement other than the payment of base compensation, normal
          sales commissions pursuant to the terms of existing agreements or policies, or
          advances for business expenses in the Ordinary Course of Business, (iii) grant
          to any Company Personnel any increase in compensation (including any increase
in           severance or termination pay) except to the extent required under existing
          employment agreements, (iv) enter into any employment, consulting,
          indemnification, severance or termination agreement with any Company Personnel,
          (v) establish, adopt, enter into or amend in any material respect any
collective           bargaining agreement, other Benefit Agreement or Benefit Plan or (vi) take
          any action to accelerate the vesting or payment of any compensation or benefit
          under any Contract, Benefit Plan or Benefit Agreement or to fund or in any
other           way secure the payment of compensation or benefits under any Contract,
Benefit           Plan or Benefit Agreement or make any material determinations not in
the           Ordinary Course of Business under any Benefit Agreement or Benefit Plan
          (including changing any previously allocated amounts or allocating any
          previously unallocated amounts under the Change of Control Bonus Plan, as
          previously delivered to Parent);  

28

        (k)
          incur or commit to incur any capital expenditure (or any obligation or
liability           in connection therewith), in an amount greater than $25,000
individually or           $100,000 in the aggregate;  

        (l)
          enter into any Contract (or any substantially related Contracts, taken
together)           (i) that would constitute a Material Contract, (ii) if consummation
of the           Merger or any of the other transactions contemplated hereby or
compliance by the           Company with the provisions of this Agreement will conflict
with, or result in           any violation or breach of, or default (with or without
notice or lapse of time           or both) under, or give rise to a right of, or result
in, termination,           cancellation or acceleration of any obligation or to a loss of
a benefit under,           or result in the creation of any Lien in or upon any of the
properties or assets           of the Company or Parent or any of Parent’s
Subsidiaries under, or give           rise to any increased, additional, accelerated or
guaranteed rights or           entitlements under, any provision of such Contract, or
(iii) containing any           restriction on the ability of the Company to assign all or
any portion of its           rights, interests or obligations thereunder, unless such
restriction expressly           permits any assignment to Parent and Parent’s
Subsidiaries in connection           with or following the consummation of the Merger and
the other transactions           contemplated hereby;  

        (m)
          pay, discharge, settle or satisfy any material Lien or material claims
          (including claims of stockholders and any stockholder litigation relating to
the           Merger or any other transaction contemplated hereby), liabilities or
obligations           (whether absolute, accrued, asserted or unasserted, contingent or
otherwise),           other than the payment, discharge or satisfaction, in the Ordinary
Course of           Business or in accordance with their terms, of liabilities reflected
or reserved           against in the Most Recent Balance Sheet or incurred since the Most
Recent           Balance Sheet Date in the Ordinary Course of Business (and all such
liabilities           incurred in the Ordinary Course of Business shall be paid or
otherwise satisfied           in the manner and time period consistent with past practice
in the normal course           of business); waive, release or assign any material rights
or material claims           under, fail to take a required action under, permit the
lapse of or default           under, or modify, amend or terminate any Material Contract;
or cancel any           material Indebtedness of another Person;  

        (n)
          record orders, ship products or collect its accounts receivable in any manner
or           over any time period that is inconsistent with past practices of the Company
in           the Ordinary Course of Business;  

        (o)
          create any Subsidiary of the Company; or  

        (p)
          authorize any of, or commit, resolve or agree, to take any of the foregoing
          actions.  

29

        Section
5.2. Access. The Company shall (i) make available for inspection by Parent,
Audiocodes and their Representatives all of the Company’s properties, assets, books,
records (including the work papers of the Company’s external accountants) and
Contracts and any other materials reasonably requested by any of them relating to the
Company at such times as Parent or Audiocodes may reasonably request; (ii) make
available to Parent, Audiocodes and their Representatives the officers, other senior
management and Representatives of the Company for interviews, at such times as Parent,
Audiocodes and their Representatives may reasonably request, to discuss the information
furnished to Parent, Audiocodes and their Representatives and otherwise discuss the
Company’s existing and prospective businesses and assets and liabilities; (iii) use
its commercially reasonable efforts to assist in gaining reasonable access for Parent, at
such times as Parent and its Representatives may reasonably request, to the Company’s
lenders, creditors, lessors, lessees, licensors, licensees, officers, employees,
developers, contractors, distributors, vendors, clients, customers, suppliers, Affiliates
or other Persons having a material business relationship with the Company; and (iv) make
available to Parent, Audiocodes and their Representatives such information and materials
relating to the Company as are necessary or appropriate in order to prepare and file
reports and registration statements with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the “Securities Act”) and under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”),
including using commercially reasonable efforts to assist Parent and Audiocodes in
obtaining any consents required from the Company’s independent public accountants in
order to file such reports and registration statements; and (v) otherwise assist Parent
and its Representatives in becoming familiar with the Company’s existing and
prospective businesses and assets and liabilities to such extent and at such times as
Parent and its Representatives may request. Any and all such investigations shall be
conducted in a manner that does not unreasonably interfere with the conduct of the
business of the Company. Any information that is provided by the Company to Parent,
Audiocodes or their Representatives in connection with the transactions contemplated by
this Agreement shall constitute “Confidential Information” as such term is
defined, and subject to the exceptions set forth, in the Confidentiality Agreement dated
as of August 18, 2005, between Parent and the Company (the “Confidentiality
Agreement”).  

        Section
5.3. Tax Matters.  

        (a)
          The Company shall timely prepare and file any Tax Return required to be filed
by           the Company on or before the Closing Date (a “Pre-Closing Tax
          Return”), and timely pay any Tax reflected thereon. In addition, the
          Company shall submit any Pre-Closing Tax Returns that are to be filed after the
          date hereof to Parent for approval prior to filing, such approval shall not be
          unreasonably delayed or withheld. Except as may be required by applicable Law,
          the Company will not take any position on such Tax Returns that is materially
          inconsistent with past custom and practice.  

        (b)
          All domestic stamp, transfer, documentary, sales, use, registration and other
          such Taxes (including all applicable real estate transfer or gains Taxes) and
          related governmental fees (including any penalties, interest and additions to
          Tax) incurred in connection with the Merger and the other transactions
          contemplated hereby shall be paid by the Bridge Note Holders, and the
          Sellers’ Representative and Parent shall cooperate in timely filing all
Tax           Returns as may be required to comply with the provisions of such Tax Laws.
          Parent and the Sellers’ Representative will reasonably cooperate with each
          other to lawfully minimize any such Taxes. Promptly upon Parent’s request,
          the Sellers’ Representative shall provide Parent with any information that
          is required with respect to any statement to be furnished to the Company’s
          stockholders or reporting requirements under Sections 6043 and 6043A of
the           Code, the regulations promulgated thereunder or forms prescribed by the
United           States Secretary of the Treasury.  

        (c)
          The Company shall cause the provisions of any Tax allocation, indemnity or
          sharing Contract to which it is a party to be terminated on or before the
          Closing Date.  

30

        (d)
          From the date hereof through the Closing Date, the Company shall not effect any
          extraordinary transactions (other than any such transactions expressly required
          by applicable Law or by this Agreement) that could result in Tax liability to
          the Company in excess of Tax liability associated with the conduct of its
          business in the ordinary course.  

        Section
5.4. Notice of Certain Events. The Company shall promptly notify Parent of, and
furnish Parent with any information it may reasonably request with respect to, the
occurrence of any event or condition or the existence of any fact that may reasonably be
expected to cause any of the Company’s representations and warranties in Article 3
hereof to no longer be true or correct or results in a failure of any of the conditions
to the obligation of Parent to consummate the Merger set forth in Section 7.2. The Company’s
satisfaction of its obligations under this Section 5.4 shall not relieve the Company of
its obligations under this Agreement and no information delivered to Parent pursuant to
this Section 5.4 shall update the Disclosure Schedule.  

        Section
5.5. Insurance. The Company shall use its commercially reasonable efforts to keep
all insurance policies set forth in Section 3.18 of the Disclosure Schedule, or
comparable replacements therefor, in full force and effect through the Effective Time.  

        Section
5.6. Exclusivity.  

        (a)
          From the date of this Agreement through the Closing, the Company shall not, and
          shall not permit through any of its officers, directors or affiliates to,
          directly or indirectly, encourage, solicit, initiate, participate or otherwise
          facilitate any inquiry, proposal, offer, discussion or negotiation with, or
          provide any information or assistance to, any Person or group (other than
Parent           and its Representatives in their capacities as Representatives of
Parent)           concerning any (i) merger, reorganization, share exchange,
consolidation,           business combination, joint venture, strategic alliance,
recapitalization,           liquidation, dissolution, sale of any securities or sale of
material assets           involving the Company, (ii) license or grant of rights to any
third party for           any of the Company’s Intellectual Property or technology
or (iii) similar           transaction involving the Company.  

        (b)
          Without limiting Section 5.6(a), it is understood that any violation of the
          restrictions set forth in Section 5.6(a) by any Person covered by Section
          5.6(a), whether or not such Person is purporting to act on behalf of the
          Company, shall be deemed to be a breach of Section 5.6(a) by the Company  

        (c)
          The Company shall notify Audiocodes of any inquiry, proposal or offer of the
          nature described in Section 5.6(a) within one Business Day of it or any of the
          Persons listed in Section 5.6(a) receiving such inquiry, proposal or offer or
          within one Business Day notify Parent of such inquiry, proposal or offer. In
          such notice to Audiocodes, the Company shall inform Audiocodes of the name of
          the Person making such inquiry, proposal or offer and the material terms,
          conditions and other aspects of such inquiry, proposal or offer, including a
          copy of any written materials received from such Person making the inquiry,
          proposal or offer.  

31

        Section
5.7.      Stockholder Approval; Notices to Stockholders; Release. 

        (a)
          The Company shall set the date hereof as the record date for action to be taken
          by written consent by the holders of Capital Stock of the Company to adopt this
          Agreement. As soon as practicable, but in any case at least twenty (20) days
          prior to the Closing, the Company shall deliver to the holders of Capital Stock
          of the Company a notice and disclosure statement (the “Disclosure
          Statement”) pursuant to Sections 228 and 262(d) of the DGCL,
which           shall comply with applicable Law and shall include (i) a summary of this
          Agreement and the transactions contemplated hereby and such other matters as
are           appropriate for such a disclosure document, (ii) a statement that
appraisal           rights are available for the shares of Capital Stock of the Company
pursuant to           the Appraisal Statute and a copy of the Appraisal Statute and (iii)
except in           the case of the Disclosure Statement given to stockholders executing
a Written           Consent, notice that the Stockholder Approval has been obtained
following           execution and delivery of this Agreement. The Company agrees not to
distribute           the Disclosure Statement until Parent has had a reasonable
opportunity to review           and comment on the Disclosure Statement and the Company
reflects such comments           in the Disclosure Statement. The Company shall ensure
that all holders of           Capital Stock who approve the Merger Agreement by written
consent under Section           228 of the DGCL shall have done so by executing and
delivering a Written           Consent.  

        (b)
          The Company will insure that the information in the Disclosure Statement will
          not, at the time the Disclosure Statement is provided to the holders of the
          Company’s Capital Stock, contain any statement that is false or misleading
          with respect to any material fact, or omit to state any material fact necessary
          in order to make the statements made therein, in light of the circumstances
          under which they are made, not false or misleading. If at any time prior to the
          Effective Time any event or information should be discovered by the Company
that           should be set forth in an amendment to the Disclosure Statement, the
Company           shall promptly inform Parent and shall communicate such information to
the           holders of the Company’s Capital Stock as necessary and in an
appropriate           manner.  

        Section
5.8. Delivery of Interim Financial Statements. As promptly as possible following
the last day of each month after the date of this Agreement and until the Closing Date,
and in any event within thirty (30) days after the end of each such month, the Company
shall deliver to Parent the consolidated balance sheet of the Company and the related
consolidated statements of income and cash flows for the one-month period then ended and
for the period from the beginning of the fiscal year through the end of such month, all
certified by the chief executive officer of the Company to the effect that such interim
financial statements are prepared in accordance with GAAP (provided that such financial
statements may omit notes required by GAAP), on a basis consistent with the Financial
Statements and fairly present the financial condition and results of operations of the
Company as of the date thereof and for the period covered thereby (collectively, the
“Interim Financial Statements”).  

        Section
5.9. Satisfaction of Conditions Including Consents. The Company will use its best
efforts, to the extent commercially reasonable, to obtain the satisfaction of the
conditions set forth in Section 7.2 of this Agreement, including without limitation,
obtaining all consents required as specified in Section 3.6(a)(ii) of the Disclosure
Schedule.  

        Section
5.10. Indemnification.  

        (a)
          For a period of six years after the Effective Time, Audiocodes and Parent will
          cause the Surviving Corporation to fulfill and honor all rights to
          indemnification pursuant to agreements listed on Section 5.10 of the Disclosure
          Schedule in favor of each Person who is now, or has been at any time prior to
          the date of this Agreement or who becomes prior to the Effective Time, an
          officer of director of the Company or any of its Subsidiaries (the “Company
          Indemnified Parties”). For six (6) years after the Effective Time,
          Audiocodes and Parent will cause the Certificate of Incorporation and Bylaws of
          the Surviving Corporation to contain provisions with respect to exculpation and
          indemnification that are at least as favorable to the Company Indemnified
          Parties as those contained in the Constitutive Documents of the Company as in
          effect on the date hereof, and Audiocodes and Parent will cause such provisions
          to not be amended, repealed or otherwise modified in any manner that would
          adversely affect the rights thereunder of the Company Indemnified Parties,
          unless such modification is required by applicable Law.  

32

        (b)
          For six (6) years after the Effective Time, Audiocodes and Parent will, or will
          cause the Surviving Corporation to, maintain directors’ and officers’          liability
insurance covering those Persons who are covered by the Company’s           directors’ and
officers’ liability insurance policy as of the date           hereof in an amount
and on terms no less favorable than those applicable to the           current directors
and officers of the Company.  

        (c)
          The provisions of this Section 5.10 are intended to be for the benefit of, and
          shall be enforceable by the Company Indemnified Parties and their heirs and
          personal representatives and shall be binding on Audiocodes, Parent and/or the
          Surviving Corporation, and their respective successors and assigns. In the
event           Audiocodes, Parent or the Surviving Corporation or any successor or
assign (A)           consolidates with or merges into any other Person and shall not be
the           continuing or surviving corporation or entity in such consolidation or
merger or           (B) transfers all or substantially all of its properties and assets
to any           Person, then in each such case proper provision shall be made so that
the           successor or assign of Audiocodes, Parent or the Surviving Corporation, as
the           case may be, honors the obligations set forth with respect to Audiocodes,
Parent           and/or the Surviving Corporation, as the case may be, in this Section
5.10.  

        Section
5.11. Release of Stockholder Bridge Notes. The Company will use its reasonable
best efforts to cause each Bridge Note Holder to deliver at the Closing an executed
release, in substantially the form attached as ExhibitC. 

ARTICLE 6 

MUTUAL COVENANTS 

        Section
6.1. Commercially Reasonable Efforts.  From the date of this Agreement
to the Closing and upon the terms and subject to the conditions set forth in this
Agreement, each of the Parties shall use all commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other Parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated hereby, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings and the taking of all reasonable steps
as may be necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary consents,
approvals, estoppels or waivers from third parties, (iii) the defending of any lawsuits
or other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the Merger, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity vacated or
reversed, (iv) the execution and delivery of any additional instruments necessary to
consummate the Merger and the other transactions contemplated hereby and to fully carry
out the purposes of the Transaction Agreements and (v) ensuring that its representations
and warranties remain true and correct in all material respects through the Closing Date
and that the conditions to the obligations of the other Parties to consummate the Merger
are satisfied.  

33

        Section
6.2. Publicity.  No party to this Agreement (a “Party”)
shall issue a press release or public announcement or otherwise make any public
disclosure concerning the subject matter of this Agreement without the prior written
approval of the other Parties; provided, however, that the Parties shall be
permitted to issue a press release in agreed form on the date hereof; provided further that
any Party may make any public disclosure it believes in good faith is required by
applicable Law, court process or by Nasdaq or national securities exchange rule (a “Required
Disclosure”). Any Party making a Required Disclosure will give the other Parties
sufficient prior notice of the Required Disclosure before such disclosure is made to
allow the other Parties to review and comment on the Required Disclosure. Communications
between the Company and its creditors or investors shall not be subject to this Section
6.2, provided that Company informs such persons of the confidential nature of such
communications. Audiocodes, Parent and Merger Sub shall hold confidential and not
disclose the terms of the Netrake Special Litigation Escrow Fund, except as required by
applicable Law.  

        Section
6.3. Expenses. Whether or not the Merger and the other transactions contemplated
hereby are consummated, each of the Parties shall bear its own fees and expenses incurred
or owed in connection with the Merger, this Agreement and the other transactions
contemplated hereby except as otherwise set forth in Article 8 and the Escrow Agreement.  

        Section
6.4. Certain Diligence Matters. From the date hereof until the Closing Date, the
parties shall cooperate in conducting such review and taking such actions as described on
Schedule 6.4.  

ARTICLE 7 

CONDITIONS PRECEDENT 

        Section
7.1. Conditions to Each Party’s Obligation. The respective obligation of each
Party to effect the Merger is subject to the satisfaction (or express written waiver by
Parent and the Company) on or prior to the Closing Date of the following conditions:  

        (a)
Stockholder Approval and Related Notices. The Stockholder Approval shall
          have been duly obtained and (i) the holders of the Preferred Stock and the
          Warrants shall have been given any requisite notice of the Merger (and related
          matters) to which they are entitled under the Company’s Constitutive
          Documents and Contracts or other document under which the Warrants were
granted,           as the case may be, or (ii) each of such holders shall have waived
such notice           (and copies of such waivers shall have been provided to Parent).  

        (b)
Regulatory. All review periods under the Exon-Florio Act applicable to
          the Merger or other transactions contemplated by this Agreement shall have been
          terminated or shall have expired; and approval from the Committee on Foreign
          Investment in the United States (“CFIUS”) shall have been
          received or Parent and Company shall have been advised by CFIUS that the
          applicable review period has terminated or expired and no further investigation
          of the Merger or other transactions contemplated by this Agreement is required,
provided, however, that nothing in this Section 7.01(b) shall
          require Parent to agree to any conditions that CFIUS may impose in order to
          approve the Merger or to terminate the applicable review period.  

34

        (c)
No Injunction or Restraint. No pending or threatened temporary
          restraining order, preliminary or permanent injunction or other order or decree
          issued by any court of competent jurisdiction or other legal restraint or
          prohibition (collectively, “Legal Restraints”) preventing the
          consummation of the Merger shall be in effect; provided, however,
          that prior to asserting this condition, subject to Section 6.1, each of the
          Parties shall have used all commercially reasonable efforts to prevent the
entry           of any such injunction or other order and to appeal as promptly as
possible any           such injunction or other order that may be entered.  

        Section
7.2. Conditions to Parent’s Obligation.  The obligations of
Audiocodes, Parent and Merger Sub to effect the Merger are further subject to the
satisfaction (or express written waiver by Parent) on or prior to the Closing Date of the
following conditions:  

        (a)
Representations, Warranties and Covenants of the Company.  The
               representations and warranties of the Company set forth in this Agreement
that                are qualified as to materiality (including in the definition of
Material Adverse                Effect) shall be true and correct, and all other
representations and warranties                of the Company set forth in this Agreement
that are not so qualified shall be                true and correct in all material
respects as of the Closing Date with the same                effect as though made as of
the Closing Date, except that the accuracy of                representations and
warranties that by their terms speak as of a specified date                will be
determined as of such date. The Company shall have performed or complied
               with in all materialrespects all covenants, agreements and
obligations                required by this Agreement to be performed or complied with by
the Company on or                before the Closing Date. The Company shall have
delivered to Parent a                certificate, dated the Closing Date and signed by
the chief executive officer                and chief financial officer of the Company,
confirming the foregoing.  

        (b)
No Material Adverse Effect. Since the date of this Agreement, there shall
               not have been a Material Adverse Effect and, in the reasonable belief of
Parent,                no Material Adverse Effect shall be foreseeable or likely to occur
after the                Closing.  

        (c)
Consents and Approvals. Parent shall have received evidence, in form and
               substance reasonably satisfactory to it, that all consents and approvals
of                third parties set forth in Section 3.6(a)(ii) of the Disclosure
Schedule in                connection with the Merger, this Agreement and the other
transactions                contemplated hereby, have been obtained and are in full force
and effect.  

        (d)
Appraisal Shares. The time during which a holder of Capital Stock is
               permitted to demand appraisal rights under the DGCL shall have expired and
               holders of not more than ten percent of the shares of the Company’s
Common                Stock issued and outstanding immediately prior to the Effective
Time, shall have                asserted their appraisal rights under Section 262 of the
DGCL and the Company                shall have delivered to Parent a certificate, signed
on behalf of the Company by                the Chief Executive Officer of the Company,
certifying the foregoing and the                date on which the Disclosure Statement
was first mailed to the holders of the                Capital Stock of the Company; provided,
however that if no such holders                of the shares of the Common Stock have
asserted or are seeking to assert their                appraisal rights under Section 262
of the DGCL, such certificate shall indicate                such.  

        (e)
Agreements with Stockholders. At or prior to the Closing, the agreements
               listed in Section 3.22 of the Disclosure Schedule and any other Contract
between                any stockholder of the Company or Affiliate thereof, on one hand,
and the                Company, on the other hand (other than (i) any confidentiality,
noncompetition                and nonsolicitation provisions, or provisions assigning or
to assign inventions                or other Intellectual Property or waiving to or waive
any appraisal rights,                contained therein inuring to the Company’s
benefit, (ii) the Contracts                listed in Section 7.2(e) of the Disclosure
Schedule, including, without                limitation, director and officer
indemnification agreements, and (iii) the                Releases and any other
agreements contemplated by this Agreement to be entered                into in connection
with this Agreement (including the agreements required by                this Agreement
to terminate other agreements)), shall have been terminated                pursuant to
written agreements in form and substance reasonably satisfactory to
               Parent, without payment of any consideration by the Company, and there
shall be                no obligations or liabilities of the Company with respect
thereto.  

35

        (f)
Agreement with Company Auditors. Ernst & Young LLP shall have
               provided (i) assurances, reasonably satisfactory to Parent, that it will
execute                and deliver, at such time or times as Parent shall request, its
consent to the                inclusion or incorporation by reference of its report as
independent auditor,                with respect to any Financial Statements for which it
served as the independent                auditor, in any report, registration statement
or other filing to be made by                AudioCodes within one year of the Closing
Date with the Securities and Exchange                Commission pursuant to the
Securities Act or the Exchange Act in which such                Financial Statements and
report thereon are required to be included; and (ii)                evidence reasonably
satisfactory to AudioCodes, of its independence under the                Securities Act
and the Exchange Act and the rules and regulations thereunder.  

        (g)
Sales Forecast. In the reasonable judgment of Parent, the Company shall
               be likely to meet, for the year ending December 31, 2006, at least 60% of
the                sales forecast attributable to the period ending on December 31, 2006,
as set                forth in the 2006-2007 Sales Forecast dated May 2, 2006 as
previously delivered                to Parent.  

        (h)
Certain Diligence Matters. On or prior to the Closing Date, the Company
               shall have obtained all documentation and taken such actions as Parent
deems, in                its sole discretion, to be necessary to address the matters
described on                Schedule 6.4.  

        (i)
Other Documentation. Parent shall have received:  

		    (i)        from
Haynes and Boone LLP, counsel to the Company, an opinion in substantially
               the form of Exhibit B, addressed to Audiocodes and Parent and dated
the                Closing Date;  

		    (ii)        a
letter from Paul Bowen in a form reasonably satisfactory to Parent confirming
               the receipt of payment in full satisfaction of any finder’s fee due
in                connection with the consummation of the Merger;  

		    (iii)        a
certificate, issued by the Company pursuant to Treasury Regulation Section
               1.897-2(h) (as described in Treasury Regulation Section 1.1445-2(c)(3)),
that                the Company is not, and within the five year period ending on the
Closing Date                has not been, a U.S. real property holding corporation, as
defined in Section                897 of the Code;  

		    (iv)        written
resignations, effective as of the Closing, of each director of the
               Company;  

		    (v)        counterparts
of the Escrow Agreement executed and delivered by the Sellers’               Representative
and the Escrow Agent;  

36

		    (vi)        evidence
in a form reasonably satisfactory to Parent that (A) the Company’s
               Secured Subordinated Convertible Promissory Note Purchase Agreement, dated
as of                November 15, 2005, (B) the Company’s Secured Subordinated
Convertible                Promissory Note Purchase Agreement, dated as of April 27,
2006, and (C) all                Stockholder Bridge Notes issued thereunder have been
terminated and that all                amounts thereunder have been paid in full,
including without limitation delivery                by each Bridge Note Holder of a
release in the form of Exhibit C; and  

		    (vii)        such
other certificates and other documentation from the Company as Parent or
               its counsel shall have reasonably requested and as is customary with
respect to                the Merger and the other transactions contemplated by this
Agreement.  

        Section
7.3. Conditions to the Company’s Obligation. The obligation of the Company to
effect the Merger is subject to the satisfaction (or express written waiver by the
Company) on or prior to the Closing Date of the following conditions:  

        (a)
Representations and Warranties. The representations and warranties of
          Audiocodes, Parent and Merger Sub set forth in this Agreement that are
qualified           as to materiality (including in the definition of Material Adverse
Effect) shall           be true and correct, and all other representations and warranties
of Audiocodes,           Parent and Merger Sub set forth in this Agreement that are not
so qualified           shall be true and correct in all material respects, in each case
as of the date           of this Agreement and as of the Closing Date with the same
effect as though made           as of the Closing Date, except that the accuracy of
representations and           warranties that by their terms speak as of a specified date
will be determined           as of such date. The Company shall have received a
certificate, dated the           Closing Date and signed on behalf of Parent by an
authorized signatory of           Parent, confirming the foregoing.  

        (b)
Covenants and Agreements. Parent and Merger Sub shall have performed or
          complied with in all materialrespects all covenants, agreements and
          obligations required by this Agreement to be performed or complied with by them
          on or before the Closing Date. The Company shall have received a certificate,
          dated the Closing Date and signed on behalf of Parent by an authorized
signatory           of Parent, confirming the foregoing.  

        (c)
Governmental Consents and Approvals. The Company shall have received
          evidence, in form and substance reasonably satisfactory to it, that all
consents           of Governmental Entities required in connection with the Merger, this
Agreement           and the other transactions contemplated hereby, have been obtained
and are in           full force and effect.  

        (d)
Escrow Agreement. The Seller’s Representative shall have received
          counterparts of the Escrow Agreement executed and delivered by Parent and the
          Escrow Agent.  

ARTICLE 8 

INDEMNIFICATION 

        Section
8.1. Indemnification of Parent.  

        (a)
               From and after the Closing, each of Audiocodes, Parent and their
Affiliates                (including, from and after the Closing, the Surviving
Corporation) (each, a                “Parent Indemnified Party”) shall be
entitled to be indemnified and                held harmless solely from the Base Escrow
Fund (as defined in the Escrow                Agreement, the “Base Escrow Fund”)
to the extent thereof pursuant to                the terms of the Escrow Agreement and
not from the Netrake Special Litigation                Escrow Fund or otherwise (except
as provided in Section 8.4) against any and all                Losses suffered or
incurred by such Parent Indemnified Party, arising from,                relating to or
otherwise in connection with:  

37

		    (i)        any
breach as of the Closing Date, of any representation or warranty of the
               Company contained in this Agreement or in any of the certificates
furnished by                the Company pursuant to this Agreement;  

		    (ii)        any
breach or failure to perform in any material respect any covenant or
               agreement of the Company contained in this Agreement;  

		    (iii)        any
claim by a stockholder or former stockholder of the Company, or by any other
               Person, seeking to assert, or based upon: (i) ownership or rights to
ownership                of any shares of stock of the Company; (ii) any right of a
stockholder of the                Company, including any option, preemptive right or
right to notice or to vote;                (iii) any right of a stockholder or former
stockholder under the Certificate of                Incorporation or By-laws of the
Company, excluding any right asserted by a                director or officer, or former
director or officer, for indemnification                thereunder or (iv) any right
under the Appraisal Statute;  

		    (iv)        any
of the matters described on Schedule 6.4; or  

		    (v)        the
matter described in the last sentence of Section 3.7 of the Disclosure
               Schedule;  

	 	
provided,
however, that no Parent Indemnified Party shall be entitled to be indemnified
pursuant to clause (i) above unless the aggregate of all Losses for which Parent
Indemnified Parties would, but for this proviso, be liable exceeds on a cumulative basis
$150,000 (the “Seller Indemnity Threshold”), at which point each Parent
Indemnified Party shall be entitled to be indemnified for the aggregate Losses and not
just amounts in excess of the Seller Indemnity Threshold (except that the foregoing
proviso shall not apply to any breach of the representations and warranties set forth in
Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.17, 3.21 and 3.25, the Consideration Certificate or
to any act of fraud). The consent of any particular Seller shall not be required in order
for Parent to be indemnified under this Article 8.  

        (b)
     From and after the Closing,  each Parent  Indemnified Party shall be entitled to be
indemnified and held harmless          solely  from the  Netrake  Special  Litigation
 Escrow Fund (as  defined in the Escrow  Agreement,  the  "Netrake          Special
 Litigation  Escrow Fund") to the extent  thereof  pursuant to the terms of the Escrow
 Agreement and not          from the Base Escrow Fund or otherwise  (except as provided
in Section 8.4),  against any and all Losses suffered          or incurred by such Parent
 Indemnified  Party,  arising from,  relating to or otherwise in  connection  with the
         Indemnified Litigation. 

        Section
8.2. Indemnification of Seller Indemnified Parties. From and after the Closing,
Audiocodes and Parent shall indemnify the Bridge Note Holders and their Affiliates (each
a “Seller Indemnified Party”) against and hold each Seller Indemnified
Party harmless from any and all Losses suffered or incurred by any such Seller
Indemnified Party arising from, relating to or otherwise in connection with:  

38

        (a)
          any breach, as of the date of this Agreement or as of the Closing Date, of any
          representation or warranty of Audiocodes, Parent or Merger Sub contained in
this           Agreement or in the certificate furnished by Parent pursuant to this
Agreement;           or  

        (b)
          any failure to perform any covenant or agreement of Audiocodes, Parent or
Merger           Sub contained in this Agreement;  

	 	
provided,
however, that, except with respect to fraud, any breaches of Audiocodes’ or
Parent’s covenants set forth in Article 5 or Article 6 hereof to be performed after
the Closing, or Audiocodes’ and Parent’s obligations under Article 2 hereof,
Audiocodes and Parent’s collective liability under this Section 8.2 shall be limited
to the initial Escrowed Cash.  

        Section
8.3. Indemnification Claims.  

        (a)
          In order for an Indemnified Party to be entitled to any indemnification
provided           for under Section 8.1 or 8.2 in respect of, arising out of or
involving a Third           Party Claim, such Indemnified Party must notify the
Indemnifying Party in           writing of the Third Party Claim (including in such
notice a brief description           of the applicable claim(s), including damages sought
or estimated, to the extent           actually known by such Indemnified Party) within 20
Business Days after receipt           by such Indemnified Party of notice of the Third
Party Claim; provided, however, that failure to give such notification
shall not affect the           indemnification provided under Section 8.1 or 8.2 except
to the extent the           Indemnifying Party has been actually prejudiced as a result
of such failure.           Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party,           within ten Business Days after the Indemnified Party’s
receipt thereof,           copies of all notices and documents received by the
Indemnified Party relating           to the Third Party Claim. The Indemnifying Party
shall conduct and control the           defense of such Third Party Claim in the name and
on behalf of the Indemnified           Party and the Indemnified Party shall be entitled
to participate in the defense           or settlement of such matter at its expense,
provided that the Indemnified Party           shall not be entitled to be indemnified or
held harmless under Section 8.1 or           8.2 for such Third Party Claim (but the
amount at stake shall nevertheless be           counted toward the Seller Indemnity
Threshold) if it shall settle such Third           Party Claim without the prior written
consent of the Indemnifying Party. If the           Indemnifying Party fails to assume
the defense of any such Third Party Claim           within ten (10) Business Days of
notice to the Indemnifying Party of such Third           Party Claim, the Indemnified
Party may defend against such Third Party Claim in           any manner it reasonably may
deem appropriate. The Indemnifying Party shall not           consent to the entry of any
judgment or settle any such Third Party Claim (i)           without the written consent
of the Indemnified Party (which consent shall not be           unreasonably withheld or
delayed) if any relief, other than the payment of money           damages, would be
granted by such settlement or if the Indemnified Party would           be liable to the
third party for the amount of such settlement, and (ii) unless           the Indemnified
Party is granted a full release of claims.  

        (b)
          In order for an Indemnified Party to be entitled to any indemnification
provided           for under this Agreement other than in respect of, arising out of or
involving a           Third Party Claim, such Indemnified Party shall deliver notice of
such claim           with reasonable promptness to the Indemnifying Party (including in
such notice a           brief description of the applicable claim(s), including damages
sought or           estimated, to the extent actually known by Parent); provided,
however, that failure to give such notification shall not affect the
          indemnification provided under Section 8.1 or 8.2 except to the extent the
          Indemnifying Party has been actually prejudiced as a result of such failure. If
          the Indemnifying Party does not notify the Indemnified Party within 20 Business
          Days following its receipt of such notice that the Indemnifying Party disputes
          the indemnity claimed by the Indemnified Party under Section 8.1 or 8.2, such
          indemnity claim specified by the Indemnified Party in such notice shall be
          conclusively deemed a liability to be indemnified under Section 8.1 or 8.2 and
          the Indemnified Party shall be indemnified for the amount of the Losses stated
          in such notice to the Indemnified Party on demand or, in the case of any notice
          in which the Losses (or any portion thereof) are estimated, on such later date
          when the amount of such Losses (or such portion thereof) becomes finally
          determined.  

39

        (c)
          Except with respect to fraud, from and after the Closing, the Escrow Agreement
          shall provide the sole and exclusive means by which Audiocodes and Parent may
          collect any Losses of any kind arising out of, related to or otherwise in
          connection with this Agreement, whether based in contract, tort (including,
          without limitation, strict liability or negligence), warranty,
misrepresentation           or on any other legal or equitable grounds. Notwithstanding
any provision of           this Article 8, no Indemnified Party will be entitled to
indemnification           pursuant to Section 8.1 or 8.2 hereof for any special,
consequential, incidental           or punitive Losses or lost profits, loss of business
or diminution in value           (collectively, “Special Damages”) it
suffers or incurs. If an           Indemnified Party is liable for Special Damages to a
third party in satisfaction           of a Third Party Claim, such amounts shall be
subject to indemnification           pursuant to Sections 8.1 and 8.2 hereof. The amount
of any Losses that an           Indemnified Party may recover under Article 8 shall be
net of (i) any amount           which such Indemnified Party actually recovers and
collects from third parties           or is otherwise actually reimbursed in connection
with such Losses and (ii) any           insurance proceeds actually received by such
Indemnified Party; provided,           in each such case, that any such amounts
actually recovered are not subject to           any further claim for recovery or
reimbursement.  

        (d)
          In the event that any claim for indemnification asserted under Section 8.1 or
          Section 8.2 of this Agreement is, or may be, the subject of insurance coverages
          of the Indemnified Party, or other right to indemnification or contribution
from           any third party (a “Third Party Contributor”), the
Indemnified           Party shall promptly notify the applicable insurance carrier of
such claim and           tender defense thereof to such insurance carrier, and shall also
promptly notify           any potential Third Party Contributor, in each case with copies
of such notice           to the Indemnifying Party. The Indemnifying Party may at the
sole cost and           expense of the Indemnifying Party, pursue such claims against
such insurance           carrier or Third Party Contributor in the name and on behalf of
the Indemnified           Party; provided however costs and expenses incurred by
the Seller’s           Representative in pursuit of such claims shall be shall be
Losses indemnified           under Section 8.1 for which claims may be made pursuant to
the terms of the           Escrow Agreement. In the pursuit of such claims, the
Indemnifying Party shall           consult with the Indemnified Party, keep the
Indemnified Party apprised of           material developments and provide to the
Indemnified Party copies of all notices           and documents received by the
Indemnifying Party relating to such claim. The           Indemnifying Party shall conduct
and control such claim against such insurance           carrier or Third Party
Contributor in the name and on behalf of the Indemnified           Party and the
Indemnified Party shall be entitled to participate in the pursuit           or settlement
of such matter at its expense. Upon the Indemnifying Party’s           satisfaction
of an Indemnified Party’s claim for Losses, the Indemnifying           Party shall
be subrogated to the rights of the Indemnified Party against such           insurance
carrier or Third Party Contributor.  

40

        (e)
          In the event that the Company receives any insurance proceeds relating to a
          Third Party Claim to reimburse amounts that have been paid from the Base Escrow
          Fund or the Netrake Special Litigation Escrow Fund and that are not subject to
          any further claim for recovery or reimbursement, Parent shall cause an amount
          equal to the amount so reimbursed to be deposited in the Base Escrow Fund or
the           Netrake Special Litigation Escrow Fund, as the case may be, and such
amounts           shall be available for satisfaction of indemnification obligations
under this           Article 8 and the Escrow Agreement in accordance with the terms
thereof.  

        (f)
          With respect to any claim for indemnification pursuant to this Article 8,
          notices by Audiocodes, Parent or Merger Sub shall be delivered to the
          Sellers’ Representative. Should the Sellers’ Representative resign or
          be unable to serve, a new Sellers’ Representative will be selected jointly
          by a vote of the Bridge Note Holders who, at Closing, held at least a majority
          of the principal amount of the Stockholder Bridge Notes, whose appointment
shall           be effective upon execution by such successor of a joinder agreement
providing           for such successor to become a party to the Escrow Agreement as the
          Sellers’ Representative, in which case such successor shall for all
          purposes of this Agreement and the Escrow Agreement be the Sellers’          Representative
(and the prior acts taken by the succeeded Sellers’          Representative shall
remain valid for purposes of this Agreement and the Escrow           Agreement).  

        (g)
          With respect to the Indemnified Litigation, (i) Parent hereby notifies, and the
          Sellers’ Representative hereby agrees, that the Indemnified Litigation
          constitutes a Third Party Claim under Section 8.3(a) hereof, (ii) as of the
          Closing, the Sellers’ Representative hereby notifies Parent, and Parent
          hereby agrees, that it shall conduct and control the Indemnified Litigation in
          the name and on behalf of the Company in accordance with Section 8.3(a) hereof,
          subject to any rights of the applicable insurance carrier, (iii) the
          Seller’s Representative hereby agrees that the applicable insurance
carrier           has been timely notified as contemplated by Section 8.3(d) hereof and
(iv) as of           the Closing, the Sellers’ Representative hereby undertakes to
pursue the           claim against such insurance carrier in the name of and on behalf of
the Company           as contemplated by Section 8.3(d) hereof, and in so doing to comply
with all           relevant policy terms and conditions including, without limitation,
those           regarding cooperation.  

        Section
8.4. Termination of Indemnification. All representations and warranties contained
in this Agreement shall survive the Closing solely for purposes of this Article 8 and
shall expire, and liability for covenants to be performed prior to the Closing and the
right to be indemnified and held harmless shall terminate, on the date one year following
the Closing Date; provided, however, that (i) the representations and
warranties contained in Section 3.17 and 3.21 shall survive the Closing solely for the
purposes of this Article 8 and shall expire, and the right to be indemnified and held
harmless shall terminate, on the date that is sixty (60) days following the expiration of
the applicable statute of limitations, (ii) the representations and warranties contained
in Section 3.5 shall survive the Closing indefinitely solely for purposes of this Article
8 and (iii) in accordance with the terms of the Escrow Agreement, such obligations to
indemnify and hold harmless shall not terminate with respect to any Losses as to which
the Indemnified Party shall have, on or prior to such date, previously made a claim by
delivering a notice of such claim to the Indemnifying Party.  

        Section
8.5. No Right of Contribution. No Seller shall have any right of contribution
against the Company or the Surviving Corporation with respect to any breach by the
Company of any of its representations, warranties, covenants or agreements.  

41

ARTICLE 9 

TERMINATION 

        Section
9.1. Termination. This Agreement may be terminated, and the Merger contemplated
hereby may be abandoned, at any time prior to the Effective Time whether before or after
receipt of the Stockholder Approval:  

        (a)
     by mutual written consent of Audiocodes, Parent, Merger Sub and the Company; 

        (b)
     by either Parent or the Company: 

		    (i)        if
the Merger is not  consummated  on or before August 31, 2006;  provided,  however,  that
if the Merger has not          been  consummated  on or before such date  because  the
 condition  set forth in Section  7.1(b) has not yet been          satisfied  (but the
 expiration of applicable  review periods has not occurred and approval has not been
denied),          then such date shall be extended  until the earlier of (i) two (2)
Business Days following  satisfaction  of such          condition or (ii)  September  30,
2006 (the date of August 31, 2006 or such  extended  date being  referred to as
         the "Outside Date");  provided,  further, that the Outside Date shall not be
extended past August 31, 2006 or any          later date unless the Parent is in
compliance with the provisions of Section 1.1.3 of the Loan Agreement; 

		    (ii)        if
any Governmental  Entity issues an order,  decree or ruling or taken any other action
 permanently  enjoining,          restraining  or  otherwise  prohibiting  the Merger and
such order,  decree,  ruling or other  action  shall have          become final and
nonappealable; or 

		    (iii)        if
any condition to the  obligation of such Party to consummate  the Merger set forth in
Section 7.2 (in the case          of Parent) or 7.3 (in the case of the Company) becomes
incapable of satisfaction prior to the Outside Date; 

        (c)
     by Parent,  if the Company  breaches  or fails to perform in any  material  respect
 any of its  representations, warranties  or  covenants  contained  in this  Agreement,
 which  breach or failure to perform  (i) would give rise to the failure of a  condition
 set forth in  Section 7.2(a)  and (ii) cannot be or has not been cured  within ten (10)
 Business Days after the giving of written notice to the Company of such breach; 

        (d)
     by the Company,  if  Audiocodes  or Parent  breaches or fails to perform in any
material  respect of any of their respective  representations,  warranties or covenants
contained in this Agreement,  which breach or failure to perform (i) would give rise to
the failure of a  condition  set forth in  Section 7.3(a)  or 7.3(b) and (ii) cannot be
or has not been cured within ten (10) Business Days after the giving of written notice to
Parent or Audiocodes of such breach; or 

        (e)
     by Parent if,  within one hour after of the  execution  and  delivery of this
 Agreement,  the holders of Capital Stock of the Company set forth in Section  9.1(e) of
the  Disclosure  Schedule  shall not have  executed and delivered the written  consent of
 stockholders  and notice to the Company  attached as Exhibit D hereto (the "Written
 Consent"),  duly adopting the resolutions contained therein, or the Stockholder Approval
shall not have been duly obtained. 

        Section
9.2. Effect of Termination. If this Agreement is terminated and the Merger and the
other transactions contemplated hereby are abandoned as described in this Article 9,
this Agreement shall forthwith become void and of no further force or effect, except for
the provisions of Sections 6.2, 6.4 and this Section 9.2; provided that nothing in
this Section 9.2 shall be deemed to release any Party from any liability for any breach
by such Party of the terms and provisions of this Agreement.  

42

ARTICLE 10 

GENERAL PROVISIONS 

        Section
10.1. Notices. All notices, requests, claims, demands, waivers and other
communications under this Agreement shall be in writing and shall be by facsimile,
courier services or personal delivery to the following addresses, or to such other
addresses as shall be designated from time to time by a Party in accordance with this
Section 10.1:  

        (a)
          if to Audiocodes  

	 	
Audiocodes
Ltd.           
            1 Hayarden Street, Airport City Lod, 70151

                      P.O. Box 255, Ben Gurion Airport , Israel 70100

                      Attention: Itamar Rosen               
        Facsimile No.:
972-3-976-4040 

	 	
with
a copy to:       
                Covington & Burling            
           1330 Avenue of
the Americas     
                  New York, New York 10019

                      Attention: Ellen Corenswet                       
Facsimile No.:
(212) 841-1010 

        (b)
     if to Parent or Merger Sub: 

	 	
Audiocodes
Ltd.             
          1 Hayarden Street, Airport City Lod, 70151

                      P.O. Box 255, Ben Gurion Airport , Israel 70100

                      Attention: Itamar Rosen              
         Facsimile No.:
972-3-976-4040 

	 	
and 

	 	
Audiocodes,
Inc.              
         2099 Gateway Place, Suite 500                       
San Jose,
California 95110        
               Attention: Chief Financial Officer
                      
Facsimile No: (408) 451-9520 

	 	
with
a copy to:          
             Covington & Burling                       
1330 Avenue of
the Americas           
            New York, New York 10019
                  
    Attention: Ellen Corenswet     
                  Facsimile No.:
(212) 841-1010 

43

        (c)
     if to the Company: 

	 	
Netrake
Corporation           
            3000 Technology Drive           
            Suite 100

                      Plano, Texas 75074         
              Attention: President
              
        Facsimile No.: (214) 291-1010 

	 	
with
a copy prior to the Closing to:      
                 Haynes and Boone LLP
                  
    2505 N. Plano Road   
                    Suite 4000

                      Richardson, Texas 75082      
                 Attention: Bill
Kleinman                       
Facsimile No.: (972) 692-9065 

	 	
and
with copies after the Closing to: 

	 	
Audiocodes
Ltd.              
         1 Hayarden Street, Airport City Lod, 70151

                      P.O. Box 255, Ben Gurion Airport, Israel 70100

                      Attention: Itamar Rosen               
        Facsimile No.:
972-3-976-4040                  

     Audiocodes, Inc.                       
2099 Gateway
Place, Suite 500      
                 San Jose, California 95110
                    
  Attention: Chief Financial Officer     
                  Facsimile
No: (408) 451-9520 

	 	
and 

	 	
Covington
& Burling                 
      1330 Avenue of the Americas   
                    New
York, New York 10019             
          Attention: Ellen Corenswet
                  
    Facsimile No.: (212) 841-1010 

        (d)
     if to the Sellers' Representative to: 

	 	
Will
Kohler               
        Prism Venture Partners        
               100 Lowder
Brook Drive, Suite 2500                  
     Westwood, Massachusetts 02090
                  
    Facsimile No.: (781) 302-4040 

	 	
with
a copy to:          
             Goodwin Procter LLP         
              53 State
Street                   
    Boston, Massachusetts 02109        
               Attention:
John M. Mutkoski          
             Facsimile No.: (617) 523-1231 

44

All notices and communications under
this Agreement shall be deemed to have been duly given) (w) when delivered by hand, if
personally delivered, (x) one Business Day after when delivered to a courier, if delivered
by commercial one-day overnight courier service, (y) when sent, if sent by facsimile, with
an acknowledgment of sending being produced by the sending facsimile machine or (z) upon
confirmation by telephone or an email response from the recipient, in the case of email. 

        Section
10.2.     Definitions.  The following capitalized terms have the following meanings: 

        “Affiliate” means,
with respect to any Person, a Person who is an “affiliate” of such first Person
within the meaning of Rule 405 under the Securities Act of 1933.  

        “Benefit
Agreement” means any employment, deferred compensation, severance, termination,
retention, change in control, employee benefit, loan, indemnification, stock repurchase,
consulting or similar agreement between the Company and any Company Personnel, or any
agreement between the Company and any Company Personnel, the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of a
transaction involving the Company of the nature contemplated by this Agreement.  

        “Benefit
Plan” means any Pension Plan or any bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
appreciation, restricted stock, stock repurchase rights, stock option (including the
Company Stock Plans), phantom stock, performance, retirement, vacation, severance or
termination, disability, death benefit, employment, supplemental unemployment benefit,
consulting, independent contractor, director, retention, hospitalization, fringe benefit,
medical, dental, vision, accident or other plan, program, policy, arrangement or Contract
(whether or not subject to the Laws of the United States or of another jurisdiction)
established, maintained, contributed to or required to be established, maintained or
contributed to by the Company or any ERISA Affiliate, in each case, providing benefits to
any Company Personnel (or to any other person for the benefit of any Company Personnel,
such as a beneficiary, alternate payee, or a dependent thereof), and in each case whether
written or oral, informal or formal, subject to ERISA or not. The term “Benefit Plan” shall
also include any plan, program, policy, arrangement or Contract with respect to which the
Company or any ERISA Affiliate may have liability (including potential, secondary or
contingent liability) under Title IV of ERISA or otherwise to any Person being and
including any liability by reason of any Person’s being or having been an ERISA
Affiliate.  

        “Business
Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which
banking institutions located in New York City or Tel Aviv, Israel are permitted or
required by Law, executive order or decree of a Governmental Entity to remain closed.  

45

        “Capital
Stock” means any capital stock or share capital of, other voting securities of,
other equity interest in, or right to receive profits, losses or distributions of, any
Person.  

        “Change
of Control Bonus Plan” means the Netrake Corporation Change of Control Incentive
Plan dated March 10, 2006, as amended on May 19, 2006.  

        “Company
Knowledge Persons” means Bruce Hill, Robert Maher, Michael Buckalew, Mona
Gaglione and Shashi Kanth.  

        “Constitutive
Documents” means (i) with respect to a Person that is a corporation, such
Person’s certificate or articles of incorporation and by-laws, (ii) with
respect to a Person that is a limited liability company, such Person’s certificate
of formation and operating or limited liability company agreement, (iii) with
respect to a Person that is a partnership, such Person’s partnership agreement, (iv) with
respect to a Person that is a trust, such Person’s trust instrument or agreement,
and (v) with respect to a Person that is a legal entity (including one of the type
described in clauses (i) through (iv)), any constitutive document of such entity or other
document or Contract analogous to those described in clauses (i) through this clause (v).  

        “Contract” means
any loan or credit agreement, bond, debenture, note, mortgage, indenture, guarantee,
lease or other contract, agreement, instrument or legally binding commitment,
arrangement, obligation, undertaking or understanding, whether written or oral.  

        “Deferred
Revenue and Bookings” means (i) the dollar amount of deferred revenue of the
Company for products previously shipped to customers less any amounts related to
shipping charges, letters of credit and banking charges, insurance, sales and withholding
or other similar taxes (but not income taxes), third party commissions, product returns,
refunds or credits (“Deferred Revenue”); provided, that no
amounts received shall constitute Deferred Revenue if a claim against the Company is
outstanding concerning such shipped product; and provided, further, that deferred
revenue related to support and other service fees shall be included in Deferred Revenue
only to the extent that the Company reasonably expects to be able to recognize such
deferred revenue as revenue within six (6) months of the Closing Date; and (ii) the
dollar amount of orders for products which have been received and accepted by the Company
but not shipped (“Bookings”); provided, however, that an
order will only be included in Bookings if the expected shipping date is within three
months of the date of acceptance by the Company of such order and the Company reasonably
expects such products to be shipped within such three-month period. Notwithstanding the
foregoing, no deferred revenue or bookings related to customers listed in Section 2.4 of
the Company Disclosure Schedule shall be included in the calculation of Deferred Revenue
and Bookings. The recording of Deferred Revenue and Bookings and the recognition of the
revenue comprising Deferred Revenue shall be in accordance with Parent’s revenue
recognition policy, GAAP and the applicable rules of the Securities and Exchange
Commission.  

        “Disclosure
Schedule” means a schedule of exceptions to the representations and warranties
of the Company set forth in Article 3 and other items as set forth herein, delivered
contemporaneously with this Agreement.  

46

        “Environmental
Law” means any applicable Law (including but not limited to principles of common
law) and binding administrative or judicial interpretations thereof relating to (i) the
protection of the environment (including indoor and outdoor air, water vapor, surface
water, groundwater, wetlands, drinking water supply, surface or subsurface land), natural
resources and human health and safety; (ii) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling, labeling,
presence, or the release or threatened release of, Hazardous Materials; (iii) the
collection, recovery and recycling of waste resulting from marketed products and their
packaging; and (iv) the environmental design, energy efficiency requirements or chemical
composition of marketed products and their packaging.  

        “Governmental
Entity” means any nation, state, province, county, city or political subdivision
and any official, agency, arbitrator, authority, court, department, commission, board,
bureau, instrumentality or other governmental or regulatory authority of any thereof,
whether domestic or foreign.  

        “Hazardous
Materials” means any and all materials (including without limitation substances,
chemicals, compounds, mixtures, products or byproducts, biologic agents, living or
genetically modified materials, wastes, pollutants and contaminants) that are (i) listed,
characterized or regulated pursuant to Environmental Law; (ii) identified or classified
as “hazardous,” “toxic,” “dangerous,” “pollutant,”“contaminant,” “explosive,” “corrosive,”“flammable,” “radioactive” or
“reactive”; (iii) capable of causing harm or injury to human health, natural
resources or the environment; or (iv) crude oils, petroleum, petroleum products, wastes
or byproducts, asbestos or asbestos containing materials, lead-based paint,
polychlorinated biphenyls, urea formaldehyde or explosives.  

        “Indebtedness” of
any Person means, without duplication, (i) all indebtedness of such Person for borrowed
money, with respect to deposits or advances of any kind or for the deferred purchase
price of property or services (other than current trade liabilities incurred in the
Ordinary Course of Business and payable in accordance with customary practices and not
more than 90 days past due), (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all obligations of such Person upon which
interest charges are customarily paid, (iv) all obligations of such Person under
conditional sale or other title retention agreements relating to property or assets
purchased by such Person, (v) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (vi) all guarantees by such Person of Indebtedness of
others, (vii) all capital lease obligations of such Person, (viii) all obligations of
such Person in respect of interest rate protection agreements, foreign currency exchange
agreements, caps or collar agreements or other interest or exchange rate hedging
arrangements either generally or under specific contingencies, (ix) all obligations of
such Person as an account party in respect of letters of credit and banker’s
acceptances, (x) all obligations of such Person consisting of overdrafts (e.g., cash
float reflected as a negative on the cash line) and (xi) all obligations of such
Person pursuant to any deferred compensation agreements.  

47

        “Indemnified
Litigation” means any action, suit, proceeding, claim, arbitration or mediation
arising from transactions between the Company and Volo Communications, Inc., VoIP, Inc.,
Volo Acquisitions Group, Inc., Caerus, Inc. or any Affiliate of such Persons, including,
without limitation, Volo Communications, Inc. and Volo Acquisitions, Inc. v. Netrake
Corporation, Case No. 05015001, in the Circuit Court of the Seventeenth Judicial
Circuit in and for Broward County, Florida; Netrake Corporation v. Volo
Communications, Inc. and Volo Acquisitions, Inc., VoIP, Inc. and Caerus, Inc., Cause
No. 05-10839, in the 192nd Judicial District Court for Dallas County, Texas,
Netrake Corporation v. Volo Communications, Inc. and Volo Acquisitions, Inc., VoIP,
Inc. and Caerus, Inc., AAA Case No. 71 181 Y 00623 05, in Dallas Texas.  

        “Indemnified
Party” means either a Parent Indemnified Party or a Seller Indemnified Party.  

        “Indemnifying
Party” means (i) with respect to a claim for indemnification pursuant to Section
8.1, the Bridge Note Holders, as represented by the Sellers’ Representative in
accordance with the Escrow Agreement and subject to the limitations of Section 8.4
hereof, and (ii) with respect to a claim for indemnification pursuant to Section 8.2,
Parent.  

        “Intellectual
Property” of any Person means all intellectual property rights of any kind,
including those arising from or in respect of the following, whether protected, created
or arising under any Law, including: (i) all patents and applications therefor, including
provisionals, non-provisionals, continuations, divisionals, continuations-in-part, or
reexaminations or reissues of patent applications and patents issuing thereon
(collectively, “Patents”); (ii) all trademarks, service marks, trade
names, service names, brand names, trade dress rights, logos, Internet domain names and
corporate names, together with the goodwill associated with any of the foregoing, and all
applications, registrations and renewals thereof, (collectively, “Marks”);
(iii) copyrights and registrations and applications therefor, works of authorship and
mask work rights (collectively, “Copyrights”); (iv) trade secrets,
discoveries, concepts, ideas, research and development, know-how, formulae, algorithms,
inventions, compositions, manufacturing and production processes and techniques,
technical data, procedures, methods, programs, subroutines, tools, materials, processes,
inventions (whether patentable or unpatentable and whether or not reduce to practice),
apparatus, creations, improvements, works of authorship and other similar materials, all
recordings, graphs, designs, drawings, reports, analyses, and other writings,
specifications, databases and other proprietary and confidential information, including
customer lists, supplier lists, pricing and cost information, and business and marketing
plans and proposals and other tangible embodiments of the foregoing, in any form whether
or note specifically listed herein, and all related technology; and (v) all Software.  

        “Knowledge” and
“knowledge”, with respect to the Company, means the actual knowledge and
the knowledge that could have been obtained following reasonable inquiry of the Company
Knowledge Persons.  

        “Litigation Expense
Amount” means court costs, fees and expenses of attorneys, accountants,
financial advisors, consultants, investigators and other experts and other expenses of
litigation relating to the Indemnified Litigation which are paid by the Company during
the period on or after June 1, 2006 and to and including the Closing Date.  

48

        “Loan
Agreement” means the Loan Agreement dated July 6, 2006 between Netrake
Corporation and Audiocodes, Inc.  

        “Losses” means
any debts, obligations and other liabilities (whether known or unknown, absolute or
contingent, liquidated or unliquidated, due or to become due, accrued or not accrued,
asserted or unasserted or otherwise), losses, claims, damages, Taxes, interest
obligations, deficiencies, Judgments, assessments, fines, fees, penalties and expenses
(including amounts paid in settlement, interest, court costs, fees, retainers (which
shall be subject to refund to the extent not used for services) and expenses of
attorneys, accountants, financial advisors, consultants, investigators and other experts
and other expenses of litigation, arbitration, mediation, investigation or pursuit of
insurance or contribution).  

        “Material
Adverse Effect” means any change, circumstance, development, state of facts,
event or effect (i) that has had or could reasonably be expected to have a material
adverse change or effect (taken alone or in the aggregate with any other adverse change
or effect) in or with respect to the business, assets, condition (financial or
otherwise), prospects or results of operations of the Company, taken as a whole or (ii)
that could reasonably be expected to prevent or materially impede, interfere with, hinder
or delay the consummation by the Company of the Merger or the other transactions
contemplated by this Agreement , in each case other than (A) any change, circumstance,
development, state of facts, event or effect caused by conditions affecting the United
States generally or the economy of any nation or region in which the Company conducts
business or (B) any change, circumstance, development, state of facts, event or effect
caused by conditions generally affecting the industry in which the Company conducts
business; provided, that in either such case, the Company is not
disproportionately affected.  

        “Option” means
an option to purchase or acquire shares of Common Stock of the Company held by an
employee, director or consultant of the Company under a Company Stock Plan.  

        “Permitted
Liens” means the following, to the extent not securing Indebtedness: (i)
statutory Liens for Taxes not yet due or payable; (ii) Liens for assessments and other
governmental charges or Liens of landlords, carriers, warehousemen, mechanics and
repairmen incurred in the Ordinary Course of Business, in each case for sums not yet due
and payable or due but not delinquent or being contested in good faith by appropriate
proceedings; and (iii) Liens incurred in the Ordinary Course of Business in connection
with workers’ compensation, unemployment insurance and other types of social
security.  

        “Person” means
an individual, corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity or any Governmental
Entity.  

        “Representatives” means,
with respect to a Person, such Person’s legal, financial, internal and independent
accounting and other advisors and representatives.  

        “Restricted
Stock” means any Capital Stock of the Company that is subject to a right of
repurchase or redemption by the Company, subject to forfeiture back to the Company or
subject to transfer or lock-up restrictions.  

49

        “Second
Amended and Restated Certificate” means the Second Amended and Restated
Certificate of Incorporation of the Company, as amended through the date of this
Agreement.  

        “Software” means
any and all (i) computer programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or object code form, (ii)
databases and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and other work product
used to design, plan, organize and develop any of the foregoing, screens, user
interfaces, report formats, firmware, development tools, templates, menus, buttons and
icons, and (iv) documentation including user manuals and other training documentation
related to any of the foregoing.  

        “Stockholder
Bridge Notes” means those promissory notes in the aggregate principal amount of
not more than $6,400,000 (but requiring repayment thereof, in certain circumstances, of
two times such amount) issued by the Company pursuant to the Secured Subordinated
Convertible Note Purchase Agreements dated as of November 15, 2005 and April 27, 2006
between the Company and the parties listed on Schedule 1 to such agreements, plus any
Remaining Bridge Notes issued by the Company after the date hereof.  

        “Stockholder
Bridge Note Percentage” means, with regard to each Bridge Note Holder, the
proportion that the principal amount of such Bridge Note Holder’s Stockholder Bridge
Note bears to the aggregate principal amount of all Stockholder Bridge Notes.  

        “Subsidiary” means,
with respect to any Person, another Person (i) an amount of the voting securities, other
voting ownership or voting partnership interests, of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned directly or
indirectly by such first Person or (ii) of which such first Person is a general partner.  

        “Tax” means:
(i) any United States federal, state, local and foreign income, profits, franchise,
license, capital, transfer, ad valorem, wage, severance, occupation, import,
custom, gross receipts, payroll, sales, employment, use, stamp, alternative or add-on
minimum, environmental, withholding and any other tax, duty, assessment or governmental
tax charge of any kind whatsoever, imposed or required to be withheld by any taxing
authority; (ii) any interest, additions to tax, or penalties applicable or related
thereto; and (iii) any amount described in clause (i) or (ii) for which a Person is
liable as a successor or transferee, or by Contract, indemnity or otherwise.  

        “Tax
Return” means any return, declaration, report, claim for refund, or information
return or statement or other form relating to Taxes filed or required to be filed with a
Governmental Entity, including any schedule or attachment thereto, and including any
amendment thereof.  

        “Third
Party Claim” means any Legal Proceeding, claim or demand by a Person other than
a Person from which indemnification may be sought under Article 8.  

50

        “Transaction
Agreements” means, collectively, this Agreement and the Escrow Agreement.  

        “Warrant” means
a warrant, option or other right to purchase or acquire Capital Stock of the Company
other than the Options.  

        Section
10.3. Descriptive Headings; Certain Interpretations. The table of contents and
headings contained in this Agreement are for reference purposes only and shall not
control or affect the meaning or construction of this Agreement. Except where expressly
stated otherwise in this Agreement, the following rules of interpretation apply to this
Agreement: (i) “or” is not exclusive and “include”, “includes” and
“including” are not limiting; (ii) “hereof”, “hereto”,
“hereby”, “herein” and “hereunder” and words of similar
import when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; (iii) “date hereof” refers to the date
of this Agreement; (iv) “extent” in the phrase “to the extent” means
the degree to which a subject or other thing extends, and such phrase does not mean
simply “if”; (v) definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms; (vi) references to an agreement or
instrument mean such agreement or instrument as from time to time amended, modified or
supplemented; (vii) references to a Person are also to its permitted successors and
assigns; (viii) references to an “Article”, “Section”, “Subsection”,
“Exhibit” or “Schedule” refer to an Article of, a Section or
Subsection of, or an Exhibit or Schedule to, this Agreement; (ix) words importing the
masculine gender include the feminine or neuter and, in each case, vice versa; and (x)
references to a Law include any amendment or modification to such Law and any rules or
regulations issued thereunder, whether such amendment or modification is made, or
issuance of such rules or regulations occurs, before the date of this Agreement or after
the date of this Agreement but before the Closing Date.  

        Section
10.4.     Sellers' Representative. 

        (a)
          The Company designates Will Kohler as the representative of the Bridge Note
          Holders and any other person who is or becomes, through the Effective Time, a
          Bridge Note Holder (such person, the “Sellers’          Representative”).
The Seller’s Representative hereby accepts its           appointment as of the date
hereof. From and after the date hereof, the           Sellers’ Representative shall
serve as the sole representative of such           Persons with respect to this
Agreement, the Escrow Agreement and the           transactions contemplated hereby and
thereby.  

        (b)
          The Sellers’ Representative shall serve in such capacity without
          compensation except for the reimbursement from such Persons of out-of-pocket
          expenses. Notwithstanding anything to the contrary contained in this Agreement,
          Sellers’ Representative shall have no duties or responsibilities except
          those expressly set forth herein, and no implied covenants, functions,
          responsibilities, duties, obligations or liabilities on behalf of any Seller
          shall otherwise exist against Sellers’ Representative. Following
          Parent’s payment to the Sellers’ Representative of any amount
pursuant           to this Agreement or the Escrow Agreement, Parent shall have no
liability to any           Bridge Note Holder for any such amount, including for the
Sellers’          Representative’s failure to distribute such amount to the
Bridge Note           Holder in accordance with their individual arrangements with the
Sellers’          Representative, and each such Bridge Note Holder’s sole
remedy shall be           against the Sellers’ Representative and not against
Audiocodes or Parent.           The Sellers’ Representative shall have reasonable
access to information           about the Company and the Surviving Corporation and the
reasonable assistance of           the Company’s and Surviving Corporation’s
officers and employees for           purposes of performing his duties and exercising his
rights hereunder, provided           that the Sellers’ Representative shall treat
confidentially and not           disclose any nonpublic information from or about the
Company or the Surviving           Corporation to anyone (except on a need to know basis
to individuals who agree           to treat such information confidentially).  

51

        Section
10.5. Assignment.  Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by operation
of Law or otherwise by any of the Parties without the prior written consent of the other
Parties, except that Merger Sub may assign, in its sole discretion, any of or all its
rights, interests and obligations under this Agreement to Audiocodes or to any Subsidiary
of Audiocodes, but no such assignment shall relieve Merger Sub of any of its obligations
hereunder. Any purported assignment without such consent shall be void. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by, the parties hereto and their respective successors and assigns.  

        Section
10.6. Specific Enforcement.  The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled at Law,
in equity or otherwise.  

        Section
10.7.     Waiver and Amendment. 

        (a)
          At any time prior to the Effective Time, the Parties may (a) extend the time
for           the performance of any of the obligations or other acts of the other
Parties,           (b) waive any inaccuracies in the representations and warranties
contained in           this Agreement or in any document delivered pursuant to this
Agreement or (c)           subject to the proviso of Section 10.7(b), waive compliance
with any of the           agreements or conditions contained in this Agreement. No
failure or delay on the           part of any Party in exercising any right, power or
remedy hereunder shall           operate as a waiver thereof, nor shall any single or
partial exercise of any           such right, power or remedy preclude any other or
further exercise thereof or           the exercise of any other right, power or remedy.
The remedies provided for           herein are cumulative and are not exclusive of any
remedies that may be           available to any Party at Law, in equity or otherwise.  

        (b)
          Except as otherwise specifically set forth in this Agreement, this Agreement
may           be amended by the Parties at any time; provided, however,
that           there shall be made no amendment that by Law requires further approval by
          stockholders of either Party, without the further approval of such
stockholders.           This Agreement may not be amended except by an instrument in
writing signed on           behalf of each of the Parties.  

        (c)
          Except as otherwise specifically set forth in this Agreement, any amendment,
          supplement or modification of or to any provision of this Agreement and any
          waiver of any provision of this Agreement shall be effective (i) only if it is
          made or given in writing and signed by Parent and the Company or, in the case
of           a waiver, by the party granting the waiver and (ii) only in the specific
          instance and for the specific purpose for which made or given.  

52

        Section
10.8. Entire Agreement.  The Transaction Agreements and the
Confidentiality Agreement contain the entire agreement and understanding between the
Parties with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both written and oral, with respect to the transactions
contemplated thereby. The Confidentiality Agreement shall survive any termination of this
Agreement.  

        Section
10.9. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the
Parties and their permitted successors and assigns and nothing herein express or implied
shall give or be construed to give to any Person, other than the Parties and such
successors and assigns, any legal or equitable rights or remedies; provided, however,
that the Bridge Note Holders, acting through the Sellers’ Representative, shall be
third party beneficiaries of this Agreement.  

        Section
10.10. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the Parties and delivered to
the other Parties.  

        Section
10.11. Governing Law; Jurisdiction; Venue; Service Of Process; Waiver of Jury Trial.  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, except matters mandatorily governed by the DGCL
shall be so governed. Each Party irrevocably submits to the exclusive jurisdiction of (a) the
Supreme Court of the State of New York, New York County and (b) the United States
District Court for the Southern District of New York for the purposes of any suit, action
or other proceeding arising out of or relating to this Agreement, any of the other
Transaction Agreements, any transaction contemplated hereby and thereby or the
relationship of the parties created hereby or thereby. Each Party agrees to commence any
action, suit or proceeding relating hereto in the United States District Court for the
Southern District of New York or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the State of
New York, New York County. Each Party irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out of or
relating to this Agreement, the other Transaction Agreements, the transactions
contemplated hereby or thereby or the relationship of the parties created hereby or
thereby in (i) the Supreme Court of the State of New York, New York County or (ii) the
United States District Court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives, and shall not assert by way of motion, defense,
or otherwise, in any such Legal Proceeding, any claim that it is not subject personally
to the jurisdiction of the above-named courts, that its property is exempt or immune from
attachment or execution, that the Legal Proceeding is brought in an inconvenient forum,
that the venue of the Legal Proceeding is improper, or that this Agreement or any other
Transaction Agreement or the Merger may not be enforced in or by any of the above-named
courts. Each Party irrevocably and unconditionally waives any right to trial by jury with
respect to any Legal Proceeding relating to or arising out of this Agreement or any other
Transaction Agreement, any of the transactions contemplated hereby or thereby or the
relationship of the parties created hereby or thereby.  

53

        Section
10.12. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule or Law, or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any Party. Upon
such determination that any term or other provision is invalid, illegal or incapable of
being enforced, the Parties shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the Parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the extent
possible.  

        Section
10.13. Currency. All references to “dollars” or “$” shall
refer to the lawful currency of the United States and all calculations of amounts herein
shall be determined in dollars unless otherwise provided herein.  

54

        IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first
written above.  

			AUDIOCODES LTD.

By: /s/ Shabtai Adlersberg
——————————————

Name: Shabtai Adlersberg
Title: Chairman of the Board, President and CEO

			AUDIOCODES INC.

By: /s/ Shabtai Adlersberg
——————————————

Name: Shabtai Adlersberg
Title: Director

			VIOLET ACQUISITION CORP.

By: /s/ Shabtai Adlersberg
——————————————

Name: Shabtai Adlersberg
Title: Director

			NETRAKE CORPORATION

BY: /S/ Bruce Hill
——————————————

Name: Bruce Hill
Title: President and Chief Executive Officer

			SELLERS' REPRESENTATIVE*

By: /s/ Will Kohler
——————————————

Name: Will Kohler

* For purposes of Section
10.4 of this Agreement only. 

2

EXHIBIT A  

	 	
ESCROW
AGREEMENT ("Agreement") dated as of ________, 2006, among AUDIOCODES, INC., a Delaware
corporation ("Parent"), WILL KOHLER (the "Sellers' Representative") and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as escrow agent (the "Escrow
Agent").  	 
		
 	 

INTRODUCTION 

        Parent,
AudioCodes Ltd., a company organized under the laws of the State of Israel, Violet
Acquisition Corp., a Delaware corporation (“Merger Sub”), Netrake
Corporation, a Delaware corporation (the “Company”), and the
Sellers’ Representative have entered into an Agreement and Plan of Merger dated as of
July 6, 2006 (as it may be amended and in effect from time to time, the “Merger
Agreement”), pursuant to which Merger Sub will be merged with and into the
Company (the “Merger”) and the Company shall continue as the surviving
corporation. Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings assigned to such terms in the Merger Agreement. 

        The
Merger Agreement requires, as a condition to the consummation of the transactions
contemplated thereby, that Parent, the Sellers’ Representative and the Escrow Agent
enter into this Agreement. Pursuant to the Merger Agreement, Parent will deposit
$1,000,000 (the “Escrowed Cash”) into the Base Escrow Fund (as defined
below) at the Effective Time, which date once known will be communicated in writing to the
Escrow Agent by Parent. 

        In
addition, pursuant to the Merger Agreement, Parent will deposit $4,000,000 (the
“Special Escrowed Cash”) into the Special Escrow Fund (as defined below)
at the Effective Time, which date once known will be communicated in writing to the Escrow
Agent by Parent. 

        The
parties hereto agree as follows: 

    1.        Appointment
of the Escrow Agent. Parent and the Sellers’          Representative appoint the
Escrow Agent as, and the Escrow Agent agrees to           assume and perform the duties
of, the escrow agent pursuant to this Agreement.  

    2.        The
Base Escrow Fund. The Escrowed Cash, as it may be reduced from time           to time
in accordance with the terms of this Agreement, and all earnings on the
          Escrowed Cash (such Escrowed Cash and such earnings being referred to in this
          Agreement as the “Base Escrow Fund”), shall be held by
          the Escrow Agent in a separate account maintained for the purposes, on the
terms           and subject to the conditions of this Agreement and the Merger Agreement,
until           5:00 p.m. Eastern Time on the first anniversary of the Closing Date (the
          “Base Escrow Release Date”). The Base Escrow Fund shall
          be held in escrow and shall not be subject to any lien, attachment or trustee
          process or any other judicial process by any creditor of any of the Bridge Note
          Holders or any party to this Agreement and shall be used solely for the
purposes           set forth in this Agreement and the Merger Agreement. Except as
specifically set           forth in this Agreement, amounts held in the Base Escrow Fund
shall not be           available to, and shall not be used by, the Escrow Agent to set
off any           obligations of Parent, any Indemnified Party, the Sellers’ Representative
          or the Bridge Note Holders in any capacity.  

    3.        The
Netrake Special Litigation Escrow Fund. The Special Escrowed Cash, as           it
may be reduced from time to time in accordance with the terms of this
          Agreement, and all earnings on the Special Escrowed Cash (such Special Escrowed
          Cash and such earnings being referred to in this Agreement as the
          “Netrake Special Litigation Escrow Fund”) shall be held by the
          Escrow Agent in a separate account maintained for the purposes, on the terms
and           subject to the conditions of this Agreement and the Merger Agreement, until
the           date on which one of the following has occurred with regard to the
Indemnified           Litigation: (A) the entry of a final, nonappealable judgment of a
court of           competent jurisdiction, (B) the execution and delivery of a settlement
agreement           and release by the parties to the Indemnified Litigation, or (C) the
entry of a           final, non-appealable award in an arbitration proceeding (such date
being           referred to as the “Special Escrow Release Date”).
The           Netrake Special Litigation Escrow Fund shall be held in escrow and shall
not be           subject to any lien, attachment or trustee process or any other judicial
process           by any creditor of any of the Bridge Note Holders or any party to this
Agreement           and shall be used solely for the purposes set forth in this Agreement
and the           Merger Agreement. Except as specifically set forth in this Agreement,
amounts           held in the Netrake Special Litigation Escrow Fund shall not be
available to,           and shall not be used by, the Escrow Agent to set off any
obligations of Parent,           any Indemnified Party, the Sellers’ Representative
or the Bridge Note           Holders in any capacity.  

    4.        Investment
of the Base Escrow Fund and the Special Escrow.  

    (a)        Permitted
Investments. The Escrow Agent shall invest and           reinvest the
Base Escrow Fund and the Netrake Special Litigation Escrow Fund in           such
Permitted Investments as Parent and the Sellers’ Representative shall
          jointly, from time to time, direct by written notice to the Escrow Agent, such
          direction to specify the particular investment, or category of investment, to
be           made. A “Permitted Investment” is an investment in (i) direct
          obligations of the United States Treasury or obligations guaranteed fully as to
          payment of interest, principal and premium (if any) by the United States
          Treasury that, in each case, mature within one year from the date of its
          acquisition by the Base Escrow Fund and the Netrake Special Litigation Escrow
          Fund, (ii) repurchase agreements fully collateralized by United States Treasury
          securities, or (iii) common trust funds, mutual funds, or money market funds
          (including any investment products maintained by the Escrow Agent) that invest
          solely in one or more investments described in clauses (i) or (ii) above;
          (provided that the net asset value of any such fund as of any date is publicly
          available and that the Base Escrow Fund’s and the Netrake Special
          Litigation Escrow Fund’s investment in such fund may be redeemed by the
          Escrow Agent at any time at 100% of the pro rata portion of such net asset
          value). The Escrow Agent shall have no responsibility for the review of
proposed           investments or otherwise to confirm whether any proposed investments
meet the           criteria for Permitted Investments prescribed in the preceding
sentence and may           rely conclusively upon a written investment instruction of
Parent and the           Sellers’ Representative as authorized in accordance with
such criteria. If           no written investment instructions are provided by 12:00 noon
(New York City           time) on the maturity date of any investment held in the Base
Escrow Fund or the           Netrake Special Litigation Escrow Fund, the Escrow Agent
shall reinvest the           proceeds of the same and uninvested cash in the Base Escrow
Fund or Netrake           Special Litigation Escrow Fund (if any) in [Name of Money
Market Fund To Come].  

- 2 -

    (b)        Liquidation
of Investments. The Escrow Agent shall have the           right to
liquidate any investments held in order to provide funds necessary to           make
required payments under this Escrow Agreement. The Escrow Agent shall have           no
liability for any loss, fee, tax or other charge sustained as a result of any
          investment or reinvestment made pursuant to the instructions of the parties
          hereto or as a result of any liquidation of any investment prior to its
          maturity.  

    5.        Claims
Against the Base Escrow Fund.  

    (a)        Procedure
For Claims Against Base Escrow Fund. An Indemnified           Party may make a
claim for indemnification against the Base Escrow Fund under           Sections 8.1(a) of
the Merger Agreement (such claims being referred to as the           “Base Claims”)
on or prior to the Base Escrow Release Date.  

    (b)        Indemnification
Certificates of Instruction. With respect to a Base           Claim, Parent may at
any time deliver to the Escrow Agent (with a copy to the           Sellers’ Representative)
one or more certificates in substantially the form           of Annex I (an “Indemnification
Certificate of Instruction”)           with respect to such claim (attaching
thereto a copy of a notice from Parent to           the Sellers’ Representative that
serves to identify for the Sellers’          Representative the indemnity claim
covered by such Indemnification Certificate           of Instruction). The Escrow Agent
shall give written notice to the Sellers’          Representative of its receipt of
an Indemnification Certificate of Instruction           within two (2) Business Days of
its receipt thereof.  

    (c)        Payment
of Owed Amount. If the Escrow Agent (i) shall not,           within
twenty (20) Business Days following its delivery of an Indemnification
          Certificate of Instruction to the Sellers’ Representative (the
          “Objection Period”), have received from the Sellers’          Representative
a certificate in substantially the form of Annex II (an “Objection Certificate”)
(a copy of which shall be delivered to           Parent) disputing the Indemnified Parties’ right
to be indemnified with           respect to the indemnified matter referred to, or
disputing the amount (the           “Owed Amount”) in respect thereof
claimed by the Indemnified           Parties to be owed to them in respect thereof
pursuant to the Merger Agreement,           in such Indemnification Certificate of
Instruction, or (ii) shall have received           such an Objection Certificate within
the Objection Period and shall thereafter           have received either (A) a
certificate from Parent and the Sellers’          Representative substantially in
the form of Annex III (a “Resolution           Certificate”) stating
that Parent and the Sellers’ Representative           have agreed that the Owed
Amount referred to in such Indemnification Certificate           of Instruction (or a
specified portion of the Owed Amount) is payable to one or           more of the
Indemnified Parties or (B) a copy of a final, nonappealable order of           a court of
competent jurisdiction (accompanied by a certificate of Parent           substantially in
the form of Annex IV (a “Litigation           Certificate”)) (a copy of
which shall also be provided to the           Sellers’ Representative) stating that
the Owed Amount referred to in such           Indemnification Certificate of Instruction
(or a specified portion of the Owed           Amount) is payable to one or more of the
Indemnified Parties, then the Escrow           Agent shall, on or prior to the second
Business Day next following, as           applicable, (x) the expiration of the Objection
Period or (y) the Escrow           Agent’s receipt of a Resolution Certificate or a
Litigation Certificate, as           the case may be, pay to Parent (or as otherwise
directed in such Resolution           Certificate or Litigation Certificate) from the
Base Escrow Fund, by wire           transfer of immediately available funds to a bank
account designated by Parent           in the Indemnification Certificate of Instruction,
the amount set forth in such           certificate plus any interest accrued thereon in
accordance with Section 12(a)           or, if such Resolution Certificate or Litigation
Certificate specifies that a           lesser amount than such Owed Amount is payable,
such lesser amount plus any           interest accrued thereon in accordance with Section
12(a).  

- 3 -

    (d)        Notification
of Dispute. The Escrow Agent shall give written notice to           Parent of its
receipt of an Objection Certificate within two (2) Business Days           of its receipt
thereof, together with a copy of such Objection Certificate. The           Escrow Agent
shall give written notice to the Sellers’ Representative of           its receipt of
a Litigation Certificate within two (2) Business Days of its           receipt thereof,
together with a copy of such Litigation Certificate.  

    (e)        Cancellation
by Payment. Upon the payment by the Escrow Agent of the Owed           Amount
referred to in an Indemnification Certificate of Instruction, such
          Indemnification Certificate of Instruction shall be deemed cancelled. Upon the
          receipt by the Escrow Agent of a Resolution Certificate or a Litigation
          Certificate and the payment by the Escrow Agent of the Owed Amount referred to
          in either such certificate, the related Indemnification Certificate of
          Instruction shall be deemed cancelled.  

    (f)        Cancellation
by Parent. Upon Parent’s determination that it then has           no claim or it
has released its claim with respect to an Owed Amount referred to           in an
Indemnification Certificate of Instruction (or a specified portion of the           Owed
Amount), Parent will deliver to the Escrow Agent a certificate           substantially in
the form of Annex V (a “Parent Cancellation           Certificate”)
canceling such Indemnification Certificate of Instruction           (or such specified
portion of the Owed Amount), and such Indemnification           Certificate of
Instruction (or portion thereof) shall thereupon be deemed           cancelled. The
Escrow Agent shall give written notice to the Sellers’          Representative of
its receipt of a Parent Cancellation Certificate within two           (2) Business Days
of its receipt thereof, together with a copy of such Parent           Cancellation
Certificate.  

    (g)        Cancellation
by the Sellers’ Representative. Upon receipt of a           final, nonappealable
order of a court of competent jurisdiction to the effect           that a Indemnified
Party is not entitled to be indemnified for any (or a           specified portion) of the
Owed Amount referred to in an Indemnification           Certificate of Instruction as to
which the Sellers’ Representative           delivered an Objection Certificate
within the Objection Period, the           Sellers’ Representative may, provided no
Resolution Certificate or           Litigation Certificate with respect to such matter
shall have previously been           received by the Escrow Agent, deliver a copy of such
final, nonappealable court           order (accompanied by a certificate of the Sellers’ Representative
          substantially in the form of Annex VI (a “Sellers’ Representative
          Cancellation Certificate”)) canceling such Indemnification Certificate
          of Instruction (or such specified portion of the Owed Amount) with respect to
          such Indemnified Party, and such Indemnification Certificate of Instruction (or
          portion thereof) shall thereupon be deemed cancelled. The Escrow Agent shall
          give written notice to Parent of its receipt of a Sellers’ Representative
          Cancellation Certificate within two (2) Business Days of its receipt thereof,
          together with a copy of such Sellers’ Representative Cancellation
          Certificate.  

    (h)        No
Duty to Verify. The Escrow Agent shall have no obligation to verify           that an
order attached to a Litigation Certificate or Sellers’          Representative
Cancellation Certificate constitutes a final, nonappealable order           of a court of
competent jurisdiction, and shall be entitled to conclusively rely           upon Parent’s
or the Sellers’ Representative’s statement to that           effect.  

- 4 -

    (i)        Parent
as Agent for Other Indemnified Parties. Only Parent may make a           claim
against the Base Escrow Fund, either for itself or on behalf of any other
          Indemnified Party. In the event that Parent makes a claim against the Escrow
          Fund on behalf of any other Indemnified Party, any amounts received by Parent
on           behalf of such other Indemnified Party shall be turned over to such other
          Indemnified Party promptly upon receipt by Parent.  

    (j)        Litigation
Claims. The Sellers’ Representative may conduct and           control litigation
in the name and on behalf of the Company pursuant to Section           8.3(a) of the
Merger Agreement. All claims for indemnification permitted by           Section 8.1(a) of
the Merger Agreement including, without limitation, amounts           incurred by the
Sellers’ Representative in the name of the Company (such           claims being
referred to as the “Base Litigation Claims”) made           on or prior
to the Base Escrow Release Date shall be made in accordance with the           procedure
set forth in this Section 5(j). Sellers’ Representative shall           submit to
Parent, within two (2) Business Days of receipt, any requests or           demands for
payment that he or any other Indemnifying Party receives in           connection with the
rights and obligations of the Indemnifying Parties under           Section 8.3 of the
Merger Agreement, together with invoices or other appropriate           evidence of such
amounts. Parent shall submit such Base Litigation Claims,           together with any
Base Litigation Claims that it receives directly or through           the Company, within
three (3) Business Days of receipt to the Escrow Agent           together with payment
instructions if such payment is to be made other than to           the Indemnified Party (e.g., to
counsel or to a party to the Indemnified           Litigation). If the Sellers’ Representative
has not previously received a           copy of such Base Litigation Claim and evidence
thereof, such claim shall also           be delivered concurrently to the Sellers’ Representative.
The Escrow Agent           shall pay any Base Litigation Claim submitted in accordance
with this Section           5(j) from the Base Escrow Fund within fifteen (15) Business
Days following           receipt of such claim; provided, however, the Escrow Agent shall
not pay any           Base Litigation Claim for the amount of any judgment, arbitration
award or           settlement unless such claim is accompanied by a Litigation
Certificate. All           amounts paid in accordance with this Section 5(j) shall be
considered           indemnification payments made under Section 8.1(a) of the Merger
Agreement.           Nothing contained in this Section 5(j) shall affect the rights or
obligations of           any party under Section 8.3 of the Merger Agreement.  

    6.        Claims
Against the Netrake Special Litigation Escrow Fund. Pursuant to           Section
8.3(f) of the Merger Agreement, the Sellers’ Representative shall           conduct
and control the Indemnified Litigation in the name and on behalf of the           Company
pursuant to Section 8.3(a) of the Merger Agreement. All claims for
          indemnification permitted by Section 8.1(b) of the Merger Agreement including,
          without limitation, amounts incurred by the Sellers’ Representative in the
          name of the Company (such claims being referred to as the “Special
          Litigation Claims”) made on or prior to the Special Escrow Release
Date           shall be made in accordance with the procedure set forth in this Section
6.           Sellers’ Representative shall submit to Parent, within two (2) Business
          Days of receipt, any requests or demands for payment that he or any other
          Indemnifying Party receives in connection with the rights and obligations of
the           Indemnifying Parties under Section 8.3 of the Merger Agreement, together
with           invoices or other appropriate evidence of such amounts. Parent shall
submit such           Special Litigation Claims, together with any Special Litigation
Claims that it           receives directly or through the Company, within three (3)
Business Days of           receipt to the Escrow Agent together with payment instructions
if such payment           is to be made other than to the Indemnified Party (e.g., to
counsel or to           a party to the Indemnified Litigation). If the Sellers’ Representative
has           not previously received a copy of such Special Litigation Claim and
evidence           thereof, such claim shall also be delivered concurrently to the Sellers’          Representative.
The Escrow Agent shall pay any Special Litigation Claim           submitted in accordance
with this Section 6 from the Netrake Special Litigation           Escrow Fund within
fifteen (15) Business Days following receipt of such claim;           provided, however,
the Escrow Agent shall not pay any Special Litigation Claim           for the amount of
any judgment, arbitration award or settlement unless such           claim is accompanied
by a Litigation Certificate. All amounts paid in accordance           with this Section 6
shall be considered indemnification payments made under           Section 8.1(b) of the
Merger Agreement. Nothing contained in this Section 6           shall affect the rights
or obligations of any party under Section 8.3 of the           Merger Agreement.  

- 5 -

    7.        Release
of Base Escrow Funds and Netrake Special Litigation Escrow Fund.  

    (a)        Release
of Base Escrow Fund. On the next Business Day following the Base           Escrow
Release Date, the amount (if any) equal to (A) all amounts that remain in           the
Base Escrow Fund as of such date minus (B) the Outstanding Claims
          Reserve (as defined below) as of such date shall be released from the Escrow
          Fund by the Escrow Agent as provided in Section 7(d). “Outstanding
          Claims Reserve” means, as of any date, the sum of all of the (i) Owed
          Amounts referred to in Indemnification Certificates of Instruction, Resolution
          Certificates and Litigation Certificates received by the Escrow Agent (on or
          before the Base Escrow Release Date in the case of Indemnification Certificates
          of Instruction) that have not been cancelled as of such date in accordance with
          Section 5(d), (e) or (f), without duplication, and (ii) Base Litigation Claims
          that remain unpaid. Parent and Sellers’ Representative shall mutually
          determine what amount, if any, should be retained with respect to any Base
          Litigation Claims that remain unpaid so that adequate funds will be available
in           the Base Escrow Fund for the payment of all such Base Litigation Claims.  

    (b)        Release
of Netrake Special Litigation Escrow Fund. On the next Business           Day
following the Special Escrow Release Date, the amount (if any) equal to (A)           all
amounts that remain in the Netrake Special Litigation Escrow Fund as of such
          date minus (B) any Special Litigation Claims that remain unpaid as of
          such date shall be released from the Escrow Fund by the Escrow Agent as
provided           in Section 7(d). Parent and Sellers’ Representative shall
mutually           determine what amount, if any, should be retained with respect to any
Special           Litigation Claims that remain unpaid so that adequate funds will be
available in           the Netrake Special Litigation Escrow Fund for the payment of all
such Special           Litigation Claims.  

    (c)        Reliance
on Certificates. The Escrow Agent shall have no duty whatsoever           to
calculate, determine or verify any amount due under this Agreement. The           Escrow
Agent shall be directed in writing by the proper parties, as set forth           herein,
as to the amounts to be distributed from the Base Escrow Fund or the           Netrake
Special Litigation Escrow Fund, the complete payment instructions to be           used in
connection with such disbursement and may conclusively rely on such           written
directions. It is understood that the Escrow Agent shall only be           responsible
for remitting payment to Parent or an entity acting on behalf of           Parent, and
shall not be responsible for remitting any payment directly to the           Sellers’ Representative
or any other party.  

- 6 -

    (d)        Delivery
of Funds. The Escrow Agent shall deliver the funds to be           released pursuant
to Sections 7(a) and (b) as follows:  

		    (i)        Ten
percent (10%) of such funds shall be released to the Company; and  

		    (ii)        The
balance shall be paid to the Sellers’ Representative.  

Following distribution to the Company
of the amount set forth in Section 7(d)(i), Parent will cause the Company to pay to the
Persons who were Participants in the Change of Control Bonus Plan, as defined in the
Change of Control Bonus Plan, on the Closing Date a distribution in accordance with the
Change of Control Bonus Plan. 

    8.       Duties
and Obligations of the Escrow Agent.  

    (a)       The
duties and obligations of the Escrow Agent shall be limited to and           determined
solely by the provisions of this Agreement and the certificates           delivered in
accordance with this Agreement, and the Escrow Agent is not charged           with
knowledge of, or any duties or responsibilities in respect of, any other
          agreement or document and no implied duties or obligations shall be read into
          this Agreement against the Escrow Agent. In furtherance and not in limitation
of           the foregoing:  

		    (i)       The
Escrow Agent shall not be liable for any loss, fee, tax or other charge
          sustained as a result of investments or reinvestments made under this Agreement
          in accordance with the terms of this Agreement, including losses sustained as a
          result of any liquidation of any investment of the Base Escrow Fund or the
          Netrake Special Litigation Escrow Fund prior to their maturity effected in
order           to make a payment required by the terms of this Agreement.  

		    (ii)       The
Escrow Agent shall not be liable for loss of interest or earnings incident           to
delays in the investment or reinvestment of cash held in the Base Escrow Fund
          or the Netrake Special Litigation Escrow Fund in accordance with the terms of
          this Agreement, provided that such delays did not result from the Escrow
          Agent’s willful misconduct, gross negligence or fraud.  

		    (iii)       The
Escrow Agent shall be fully protected in conclusively relying in good faith
          upon any written certification, notice, direction, request, waiver, consent,
          receipt or other document that the Escrow Agent reasonably believes to be
          genuine and duly authorized, executed and delivered.  

		    (iv)       The
Escrow Agent shall not be liable for any error of judgment, or for any act           done
or omitted by it, or for any mistake in fact or law, or for anything that           it
may do or refrain from doing in connection with this Agreement; provided, however,
that notwithstanding any other provision in           this Agreement, the Escrow Agent
shall be liable for its willful misconduct,           gross negligence or fraud.  

- 7 -

		    (v)       The
Escrow Agent may seek the advice of legal counsel selected with reasonable           care
in the event of any dispute or question as to the construction of any of           the
provisions of this Agreement or its duties under this Agreement, and it           shall
incur no liability and shall be fully protected in respect of any action           taken,
omitted or suffered by it in good faith in accordance with the opinion of           such
counsel.  

		    (vi)       In
the event that the Escrow Agent shall in any instance, after seeking the           advice
of legal counsel pursuant to the immediately preceding clause, in good           faith be
uncertain as to its duties or rights under this Agreement, it shall be           entitled
to refrain from taking any action in that instance and its sole           obligation, in
addition to those of its duties under this Agreement as to which           there is no
such uncertainty, shall be to keep safely all property held in the           Base Escrow
Fund or the Netrake Special Litigation Escrow Fund until it shall be           directed
otherwise in writing by each of the parties to this Agreement, or by a           final,
nonappealable order of a court of competent jurisdiction; provided,           however,
that in the event that the Escrow Agent has not received such           written direction
or court order within 180 calendar days after requesting the           same, it shall
have the right to interplead Parent and the Sellers’          Representative in any
court of competent jurisdiction and request that such           court determine its
rights and duties under this Agreement.  

		    (vii)       The
Escrow Agent may execute any of its powers or responsibilities under this
          Agreement and exercise any rights under this Agreement either directly or by or
          through agents or attorneys selected with reasonable care.  

		    (viii)       The
Escrow Agent shall not be obligated to take any legal or other action           hereunder
which might in its judgment involve or cause it to incur any expense           or
liability unless it shall have been furnished with reasonably acceptable
          assurances that the indemnification obligations of Parent and the Sellers’          Representative,
if any, will be satisfied.  

    (b)       Nothing
in this Agreement shall be deemed to impose upon the Escrow Agent any           duty to
qualify to do business or to act as fiduciary or otherwise in any           jurisdiction
other than the State of New York and the Escrow Agent shall not be           responsible
for and shall not be under a duty to examine into or pass upon the           validity,
binding effect, execution or sufficiency of this Agreement or the           Merger
Agreement or of any agreement amendatory or supplemental to this           Agreement.  

    (c)       Anything
in this Agreement to the contrary notwithstanding, in no event shall           the Escrow
Agent be liable for special, punitive, indirect or consequential           losses or
damages of any kind whatsoever (including, without limitation, lost           profits),
even if the Escrow Agent has been advised of the likelihood of such           losses or
damages and regardless of the form of action.  

    9.       Cooperation.
Parent and the Sellers’ Representative shall provide to           the Escrow Agent
all instruments and documents within their respective powers to           provide that
are reasonably necessary for the Escrow Agent to perform its duties           and
responsibilities under this Agreement.  

- 8 -

    10.       Fees
and Expenses; Indemnity.  

    (a)       Fees
and Expenses. Parent agrees to (i) pay the Escrow Agent upon           execution of
this Agreement and from time to time thereafter such compensation           as shall be
agreed in writing for the services to be rendered hereunder, which           unless
otherwise agreed in writing by Parent and the Escrow Agent shall be as
          described in Schedule I attached hereto, and (ii) pay or reimburse the Escrow
          Agent upon request for all reasonable expenses, disbursements and advances,
          including reasonable attorneys’ fees and expenses, incurred or made by it
          in connection with the preparation, execution, delivery, modification and
          termination of this Agreement. Each of Parent and Sellers’ Representative
          agrees, severally and not jointly, to reimburse the Escrow Agent upon request
          for one-half of all reasonable expenses, including reasonable attorneys’          fees
and expenses reasonably incurred in connection with any disputes arising           out of
this Agreement. The Sellers’ Representative and Parent acknowledge           that
the foregoing obligations shall survive the resignation or removal of the
          Escrow Agent or the termination of this Agreement.  

    (b)       Indemnification
of Escrow Agent. Parent and the Sellers’          Representative shall each,
severally and not jointly, reimburse and indemnify           the Escrow Agent and its
employees, officers, directors, and agents (together,           the “Escrow Agent
Indemnitees”) for, and hold them harmless           against, one-half of any and
all loss, liability, damage, cost or expense,           including, without limitation,
reasonable attorneys’ fees and expenses,           reasonably incurred by the Escrow
Agent in connection with the Escrow           Agent’s performance of its duties and
obligations under this Agreement, as           well as the reasonable costs and expenses
of defending against any claim           (whether asserted by Parent, the Sellers’ Representative
or any other           Person) or liability relating to this Agreement; provided, however,
that neither Parent nor the Sellers’ Representative shall           be required to
reimburse or indemnify the Escrow Agent for, or hold it harmless           against, any
such loss, liability, damage, cost or expense arising as a result           of the Escrow
Agent’s willful misconduct or gross negligence. The           Sellers’ Representative
and Parent acknowledge that the foregoing           indemnities shall survive the
resignation or removal of the Escrow Agent or the           termination of this
Agreement.  

    11.       Resignation
and Removal of the Escrow Agent.  

    (a)       Resignation
and Removal. The Escrow Agent may resign as such 30 days           after notifying
Parent and the Sellers’ Representative in writing of its           intent to resign.
In addition, the Escrow Agent may be removed and replaced on a           date designated
in a written instrument signed by Parent and the Sellers’          Representative
and delivered to the Escrow Agent. Notwithstanding the foregoing,           no such
resignation or removal shall be effective until a successor escrow agent           has
acknowledged its appointment as such as provided in Section 11(c). In either
          event, upon the effective date of such resignation or removal, and upon payment
          of all amounts owed to the Base Escrow Agent hereunder, the Escrow Agent shall
          deliver the property comprising the Base Escrow Fund and the Netrake Special
          Litigation Escrow Fund to the successor jointly designated by Parent and the
          Sellers’ Representative or designated by a court of competent jurisdiction
          as provided in Section 11(b), as applicable, together with such records
          maintained by the Escrow Agent in connection with its duties under this
          Agreement and other information with respect to the Base Escrow Fund and the
          Netrake Special Litigation Escrow Fund as such successor may reasonably
request.           Any corporation or association into which the Escrow Agent may be
merged or           converted or with which it may be consolidated, or any corporation or
          association to which all or substantially all the escrow business of the Escrow
          Agent’s corporate trust line of business may be transferred, shall be the
          Escrow Agent under this Agreement without further act.  

- 9 -

    (b)       Selection
of Successor by Escrow Agent. If a successor escrow agent shall           not have
acknowledged its appointment as such as provided in Section 11(c), in           the case
of a resignation, prior to the expiration of 30 days following the date           of a
notice of resignation or, in the case of a removal, on the date designated           for
the Escrow Agent’s removal, as the case may be, because Parent and the
          Sellers’ Representative are unable to agree on a successor escrow agent,
or           for any other reason, the Escrow Agent may petition, at the expense of
Parent           and Sellers’ Representative, a court of competent jurisdiction for
          appointment of a successor escrow agent and any such resulting appointment
shall           be binding upon Parent, the Sellers’ Representative and the Selling
          Stockholders; provided, however, that any such successor escrow agent
          shall be in the business of providing escrow services as contemplated
hereunder.  

    (c)       Release
of Withdrawing Escrow Agent. Upon written acknowledgment by a           successor
escrow agent appointed in accordance with the foregoing provisions of           this
Section 11 of its agreement to serve as escrow agent under this Agreement           and
the receipt of the property then comprising the Base Escrow Fund and the
          Netrake Special Litigation Escrow Fund, the Escrow Agent shall be fully
released           and relieved of all duties, responsibilities and obligations under
this           Agreement (except to the extent the withdrawing Escrow Agent’s
actions or           omissions to act with respect to such duties, responsibilities and
obligations           constituted gross negligence or willful misconduct) and the
successor escrow           agent shall for all purposes of this Agreement be the Escrow
Agent. Any Escrow           Agent acting under this Agreement shall each be entitled to
rely on the survival           of Section 10 following the withdrawal and replacement of
such Escrow Agent.  

    12.       Interest;
Tax Matters.  

    (a)       Subject
to Section 12(b), Parent shall receive all interest on the portion, if           any, of
the Base Escrow Fund and the Netrake Special Litigation Escrow Fund           ultimately
released to Parent that was earned during the period from the Closing           Date
through the date Parent receives funds under this Agreement and the           Sellers’ Representative
shall receive all interest earned on the Base           Escrow Fund and the Netrake
Special Litigation Escrow Fund ultimately released           to the Sellers’ Representative.  

    (b)       Parent
and the Sellers’ Representative agree that, solely for tax reporting
          purposes, all taxable interest on or other income, if any, attributable to the
          Base Escrow Fund, the Netrake Special Litigation Escrow Fund or any other
amount           held in escrow by the Escrow Agent pursuant to this Escrow Agreement
shall be           allocable to the Bridge Note Holders in proportion to their
Stockholder Bridge           Note Percentages. For purposes of IRS Form 1099, which the
Escrow Agent shall be           required to prepare and file, all reportable income shall
be reported to the           Internal Revenue Service as being attributable to Parent.  

- 10 -

    (c)       As
indicated in Sections 7(a) and 7(b) of this Agreement, the Escrow Agent shall
          only be responsible for remitting payment to the Sellers’ Representative,
          and shall not be responsible for remitting payment directly to the Bridge Note
          Holders. The Sellers’ Representative shall remit payment directly to the
          Bridge Note Holders and shall be responsible for all tax reporting to the
Bridge           Note Holders. If the Escrow Agent remits payment to the Sellers’          Representative,
the Escrow Agent shall have the right to request from the           Sellers’ Representative
the appropriate tax forms (in each case a Form W-8           or W-9) or such other forms
or documents that the Escrow Agent shall reasonably           request. Notwithstanding
the foregoing, the Escrow Agent shall report and, as           required, withhold and
remit to the appropriate authorities, any taxes as it           determines may be
required by any law or regulation in effect at the time of the           distribution to
the Sellers’ Representative. In the event that any earnings           remain
undistributed at the end of any calendar year, the Escrow Agent shall           report to
the Internal Revenue Service or such other authority such earnings as           it deems
appropriate or as required by any applicable law or regulation or, to           the
extent consistent therewith, as reasonably directed in writing by Parent and
          the Sellers’ Representative.  

    13.       Funds
Transfer Instructions. In the event funds transfer instructions are           given
(other than as set forth on Annex I or otherwise in writing at the time of
          execution of this Escrow Agreement), whether in writing, by facsimile or
          otherwise, the Escrow Agent is authorized to seek confirmation of such
          instructions by telephone call-back to the person or persons designated on
          Schedule II (which persons shall be different than the person who provided the
          instructions), and the Escrow Agent may conclusively rely upon the confirmation
          of anyone purporting to be the person or persons so designated. The individuals
          authorized to give or confirm funds transfer instructions may be changed only
in           a writing actually received and acknowledged by the Escrow Agent. The Escrow
          Agent and the beneficiary’s bank in any funds transfer may rely solely
upon           any account numbers or similar identifying numbers provided by Parent or
the           Sellers’ Representative to identify (i) the beneficiary, (ii) the
          beneficiary’s bank, or (iii) an intermediary bank. All funds transfer
          instructions must include the signature of the person(s) authorizing said funds
          transfer. Parent and the Sellers’ Representative (both in its role as
          Sellers’ Representative and on behalf of the Bridge Note Holders)
          acknowledge that these security procedures are commercially reasonable.  

    14.       Notices. All
notices, requests, claims, demands, waivers and other           communications under this
Agreement shall be in writing and shall be by           facsimile, courier services or
personal delivery to the following addresses, or           to such other addresses as
shall be designated from time to time by any party in           accordance with this
Section 12:  

         (a)       
          if to Parent: 

	 	
 AudioCodes Ltd.

1 Hayarden Street, Airport City Lod, 70151

P.O. Box 255, Ben Gurion Airport, Israel 70100

Attention: Itamar Rosen

Facsimile No.: 972-3-976-4040

and

AudioCodes Inc.

2099 Gateway Place, Suite 500

San Jose, California 95110

Attention: Chief Financial Officer

Facsimile No. (408) 451-9520

with a copy (which shall not constitute notice) to:

Covington & Burling

1330 Avenue of the Americas

New York, New York 10019

Attention: Ellen Corenswet

Facsimile No.: (212) 841-1010

- 11 -

    (b)        if
to the Sellers' Representative: 

	 	
 Will Kohler

Prism Venture Partners

100 Lowder Brook Drive, Suite 2500

Westwood, Massachusetts 02090

Facsimile No.: (781) 302-4040

with a copy (which shall not constitute notice) to:

Goodwin Proctor LLP

53 State Street

Boston, MA 02109

Attention: John M. Mutkoski

Facsimile No.: (617) 523-1231

    (c)        if
to the Escrow Agent: 

	 	
U.S. Bank National Association

100 Wall Street

16th Floor

New York, NY 10005

Attention: Corporate Trust Services

Facsimile No.: (212) 361-6159 

All notices and communications under
this Agreement shall be deemed to have been duly given (x) when delivered by hand, if
personally delivered, (y) one Business Day after when delivered to a courier, if delivered
by commercial one-day overnight courier service or (z) when sent, if sent by facsimile,
with an acknowledgment of sending being produced by the sending facsimile machine. The
Escrow Agent shall mail to Parent and the Sellers’ Representative each month during
the term of this Agreement a written statement of all transactions relating to the Escrow
Fund. 

- 12 -

    15.        Amendments
and Waivers. No failure or delay on the part of any party           hereto in
exercising any right, power or remedy hereunder shall operate as a           waiver
thereof, nor shall any single or partial exercise of any such right,           power or
remedy preclude any other or further exercise thereof or the exercise           of any
other right, power or remedy. This Agreement may not be amended except by           an
instrument in writing signed on behalf of each of the parties hereto. Except           as
otherwise specifically set forth in this Agreement, any amendment, supplement
          or modification of or to any provision of this Agreement and any waiver of any
          provision of this Agreement shall be effective (a) only if it is made or given
          in writing and signed by each party hereto or, in the case of a waiver, by the
          party granting the waiver and (b) only in the specific instance and for the
          specific purpose for which made or given.  

    16.        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.           Each party
irrevocably submits to the exclusive jurisdiction of (a) the Supreme           Court of
the State of New York, New York County and (b) the United States           District Court
for the Southern District of New York for the purposes of any           suit, action or
other proceeding arising out of and related to this Agreement,           and as between
Parent and Sellers’ Representative, the Merger Agreement,           any of the other
agreements contemplated by the Merger Agreement (collectively,           this Agreement,
the Merger Agreement, and any of the other agreements           contemplated by the
Merger Agreement shall be referred to herein as the           “Transaction
Agreements”), or any transaction contemplated           hereby and thereby. Each
party agrees to commence any action, suit or proceeding           relating hereto in the
United States District Court for the Southern District of           New York or if such
suit, action or other proceeding may not be brought in such           court for
jurisdictional reasons, in the Supreme Court of the State of New York,           New York
County. Each party further agrees that service of any process, summons,           notice
or document by U.S. registered mail to such party’s respective           address set
forth above shall be effective service of process for any action,           suit or
proceeding in New York with respect to any matters to which it has           submitted to
jurisdiction in this Section 16. Each party irrevocably and           unconditionally
waives any objection to the laying of venue of any action, suit           or proceeding
arising out of this Agreement, the other Transaction Agreements           and the
transactions contemplated hereby or thereby in (i) the Supreme Court of           the
State of New York, New York County or (ii) the United States District Court           of
New York, and hereby further irrevocably and unconditionally waives, and           shall
not assert by way of motion, defense, or otherwise, in any such legal
          proceeding, any claim that it is not subject personally to the jurisdiction of
          the above-named courts, that its property is exempt or immune from attachment
or           execution, that the legal proceeding is brought in an inconvenient forum,
that           the venue of the legal proceeding is improper, or that this Agreement or
any           other Transaction Agreement or the Merger may not be enforced in or by any
of           the above-named courts. Each party irrevocably and unconditionally waives
any           right to trial by jury with respect to any Legal Proceeding relating to or
          arising out of this Agreement or any other Transaction Agreement or any of the
          transactions contemplated hereby or thereby.  

    17.        Assignment.
Neither this Agreement nor any of the rights, interests or           obligations
hereunder shall be assigned, in whole or in part, by operation of           Law or
otherwise by any of the parties hereto without the prior written consent           of the
other parties hereto, except that Parent may assign, in its sole           discretion,
any of or all its rights, interests and obligations under this           Agreement to any
affiliate of Parent, but no such assignment shall relieve           Parent of any of its
obligations hereunder. Subject to the preceding sentence,           this Agreement shall
be binding upon, inure to the benefit of and be enforceable           by, the parties
hereto and their respective successors and assigns.  

- 13 -

    18.        Miscellaneous.
The headings contained in this Agreement are for reference           purposes only and
shall not control or affect the meaning or construction of           this Agreement. This
Agreement may be executed in any number of counterparts and           by facsimile, each
of which will be deemed an original, but all of which           together will constitute
one and the same instrument. This Agreement (including           its Schedules and
Annexes) constitutes the entire agreement among the parties           hereto with respect
to the subject matter hereof and supersedes all prior           agreements and
understandings, oral and written, among the parties hereto with           respect to the
subject matter hereof. Time is of the essence of this Agreement.           Except as
expressly provided herein, none of the provisions of this Agreement,           express or
implied, is intended to provide any rights or remedies to any Person           other than
the parties hereto and their respective successors and permitted           assigns, if
any. The Escrow Agent shall not be responsible for delays or           failures in
performance resulting from acts beyond its control if the Escrow           Agent could
not, after using all reasonable efforts, overcome such delays or           failures in
performance . Such acts shall include but not be limited to acts of           God,
strikes, lockouts, riots, acts of war, acts of terror, epidemics,           governmental
regulations superimposed after the fact, fire, communication line           failures,
computer viruses, power failures, earthquakes or other disasters.  

    19.        Account
Opening Information.  

    (a)        For
accounts opened in the U.S.: To help the government fight the funding           of
terrorism and money laundering activities, Federal law requires all financial
          institutions to obtain, verify, and record information that identifies each
          person who opens an account. When an account is opened, the Escrow Agent will
          request information that will allow it to identify relevant parties.  

    (b)        For
non-U.S. accounts: To help in the fight against the funding of           terrorism
and money laundering activities, the Escrow Agent, along with all           financial
institutions, is required to obtain, verify, and record information           that
identifies each person who opens an account. When an account is opened, the
          Escrow Agent will request information that will allow it to identify relevant
          parties.  

[The
remainder of this page is intentionally left blank.] 

- 14 -

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

			 PARENT:

AudioCodes, Inc.

By:
——————————————

Name:
——————————————
Title:

——————————————

			SELLERS'  REPRESENTATIVE:

Will Kohler

By:
——————————————

Name:
——————————————
Title:

——————————————

			ESCROW AGENT:

 U.S. Bank National Association, as Escrow Agent

By:
——————————————

Name:
——————————————
Title:

——————————————

[SIGNATURE PAGE TO
ESCROW AGREEMENT] 

SCHEDULE I 

ESCROW AGENT’S
COMPENSATION 

		
		
		
		
		
	Escrow Agent Annual Administration Fee:	$5,000 
	 	(Payable upon closing)

Activity
Fees:

The following Activity Fees cover
the ordinary and customary administrative duties as escrow agent under the agreement.  

			
			
			
			
			
	 	Check Issuance:	$20.00
	 	1099 Reporting:	Included in check and wire charge

The above fees are exclusive of
reasonable out-of-pocket expenses including the costs of external counsel (if required).  

Mailings
(if required) will be billed at cost. 

SCHEDULE II 

TELEPHONE NUMBER(S) FOR CALL-BACKS

AND

PERSONS DESIGNATED TO GIVE OR CONFIRM FUNDS TRANSFER INSTRUCTIONS

If to Parent: 

			
			
			
			
			
	Name 	Telephone Number 	Signature Specimen 

If to the Sellers’
Representative: 

			
			
			
			
			
	Name 	Telephone Number 	Signature Specimen 

Telephone call-backs shall be made to
each of Parent and the Sellers’ Representative if joint instructions are required
pursuant to this Escrow Agreement. 

Periodically, the parties may issue
payment orders to us to transfer funds by Federal funds wire. The Escrow Agent reviews the
orders to determine compliance with the governing documentation and to confirm signature
by the appropriate party, in accordance with the above schedule. The Escrow Agent’s
policy requires that, where practicable, it undertake callbacks to a party other than the
individual who signed the payment order to verify the authenticity of the payment order. 

Inasmuch as a person is the only
employee in his or her office who can confirm wire transfers, the Escrow Agent will call
him or her to confirm any Federal funds wire transfer payment order purportedly issued by
him or her. Such person’s continued issuance of payment orders to the Escrow Agent
and confirmation in accordance with this procedure will constitute such person’s
agreement (1) to the callback security procedure outlined herein and (2) that the security
procedure outlined herein constitutes a commercially reasonable method of verifying the
authenticity of payment orders. 

ANNEX I 

INDEMNIFICATION
CERTIFICATE OF INSTRUCTION 

TO 

U.S. BANK NATIONAL
ASSOCIATION 

as Escrow Agent 

        AudioCodes,
Inc., a Delaware corporation (“Parent”), ________________ (the
“Sellers’ Representative”), and U.S. Bank National Association a
national banking association, as escrow agent (the “Escrow Agent”), are
parties to an Escrow Agreement, dated as of [ ], 2006 (the “Escrow
Agreement”). Capitalized terms defined in the Escrow Agreement have the same
meanings when used in this Indemnification Certificate of Instruction. 

        Pursuant
to Section 4(a) of the Escrow Agreement, Parent:  

		    (a)        certifies
that (i) Parent has notified the Sellers’ Representative of the           existence
of a claim for Losses for which an Indemnified Party is entitled to be
          indemnified under the Merger Agreement, a copy of which notice is attached
          hereto, and (ii) the amount of $[__________] (the “Owed           Amount”)
is payable to Parent (or to another Indemnified Party, as the           case may be)
pursuant to the Merger Agreement by reason of the matter described           in such
notice; and  

		    (b)        instructs you
to pay to Parent from the Base Escrow Fund the Owed Amount, by           wire transfer of
immediately available funds to Parent’s account at [name           of bank], [ABA
number], [title of account], [account number], which Owed Amount           shall be
payable as follows: (i) if you do not receive an Objection Certificate           from the
Sellers’ Representative prior to the expiration of the Objection           Period,
within two (2) Business Days following the expiration of the Objection           Period,
or (ii) if you receive an Objection Certificate within the Objection           Period,
within two (2) Business Days following your receipt of a Resolution           Certificate
or a Litigation Certificate.  

			AUDIOCODES INC.

By:
——————————————

Name:
——————————————
Title:

——————————————

Dated:  [_________]

cc:     Sellers' Representative

ANNEX II 

OBJECTION CERTIFICATE 

TO 

U.S. BANK NATIONAL
ASSOCIATION 

as Escrow Agent 

        AudioCodes,
Inc., a Delaware corporation (“Parent”), ___________________ (the
“Sellers’ Representative”), and U.S Bank National Association a
national banking association (the “Escrow Agent”), are parties to an
Escrow Agreement, dated as of [ ], 2006 (the “Escrow Agreement”).
Capitalized terms defined in the Escrow Agreement have the same meanings when used in this
Objection Certificate. 

        Pursuant
to Section 4(b) of the Escrow Agreement, the Sellers’ Representative: 

		    (c)        disputes
that the Owed Amount referred to in the Indemnification Certificate of
          Instruction dated [_________] is payable to Parent (or to another Indemnified
          Party, as the case may be) pursuant to the Merger Agreement;  

		    (d)        certifies
that the undersigned has sent to Parent a written statement dated           [_________]
of the Sellers’ Representative, a copy of which is attached           hereto,
disputing the Indemnified Parties’ right to be indemnified (or to           another
Indemnified Party, as the case may be) with respect to the Owed Amount;           and  

		    (e)        objects
to your making payment to Parent as provided in such Indemnification
          Certificate of Instruction.  

			———————————————————

AS SELLERS' REPRESENTATIVE

———————————————————

Dated:  [_________]

cc:  Parent

ANNEX III 

RESOLUTION CERTIFICATE 

TO 

U.S. BANK NATIONAL
ASSOCIATION 

as Escrow Agent 

        AudioCodes,
Inc., a Delaware corporation (“Parent”), ___________________ (the
“Sellers’ Representative”), and U.S. Bank National Association a
national banking association, as escrow agent (the “Escrow Agent”), are
parties to an Escrow Agreement, dated as of [ ], 2006 (the “Escrow
Agreement”). Capitalized terms defined in the Escrow Agreement have the same
meanings when used in this Resolution Certificate. 

        Pursuant
to Section 4(b) of the Escrow Agreement, Parent and the Sellers’ Representative: 

		    (f)        certify
that (i) Parent and the Sellers’ Representative have resolved their
          dispute as to the matter described in the Indemnification Certificate of
          Instruction dated [_________] and the related Objection Certificate dated
          [_________] and (ii) the final Owed Amount with respect to the matter described
          in such Certificates is $[_________];  

		    (g)        instruct
you to pay to [name of recipient] from the Base Escrow Fund the Owed           Amount
referred to in clause (ii) of paragraph (a) above, by wire transfer of
          immediately available funds to [name of recipient]‘s account at [name of
          bank], [ABA number], [title of account], [account number], within two (2)
          Business Days following your receipt of this Certificate; and  

		    (h)        agree
that the Owed Amount designated in such Indemnification Certificate of
          Instruction, to the extent, if any, it exceeds the Owed Amount referred to in
          clause (ii) of paragraph (a) above, shall be deemed not payable to Parent (or
to           another Indemnified Party, as the case may be) and such Indemnification
          Certificate of Instruction is hereby cancelled.  

			AUDIOCODES, INC.

By:
——————————————

Name:
——————————————
Title:

——————————————

	

Dated: [_________]		———————————————————

AS SELLERS' REPRESENTATIVE

———————————————————

ANNEX IV 

LITIGATION CERTIFICATE 

TO 

U.S. BANK NATIONAL
ASSOCIATION 

as Escrow Agent 

        AudioCodes,
Inc., a Delaware corporation (“Parent”), ___________________ (the
“Sellers’ Representative”), and U.S. Bank National Association, a
national banking association, as escrow agent (the “Escrow Agent”), are
parties to an Escrow Agreement, dated as of [ ], 2006 (the “Escrow
Agreement”). Capitalized terms defined in the Escrow Agreement have the same
meanings when used in this Litigation Certificate. 

        Pursuant
to Section 4(b) of the Escrow Agreement, Parent: 

		    (i)        certifies
that (i) attached hereto is (A) a final, nonappealable order of a           court of
competent jurisdiction, (B) an executed settlement agreement and           release by the
parties to the Indemnified Litigation, or (C) of a final,           non-appealable award
in an arbitration proceeding, resolving the dispute between           Parent and the
Sellers’ Representative as to the matter described in the           Indemnification
Certificate of Instruction dated [_________] and the related           Objection
Certificate dated [_________] and (ii) the final Owed Amount with           respect to
the matter described in such Certificates, as provided in the           attached order is
$[__________];  

		    (j)        instructs
you to pay to Parent from the Base Escrow Fund the Owed Amount           referred to in
clause (ii) of paragraph (a) above, by wire transfer of           immediately available
funds to Parent’s account at [name of bank], [ABA           number], [title of
account], [account number], within two (2) Business Days           following your receipt
of this Certificate; and  

		    (k)        agrees
that the Owed Amount designated in such Indemnification Certificate of
          Instruction, to the extent, if any, it exceeds the Owed Amount referred to in
          clause (ii) of paragraph (a) above, shall be deemed not payable to Parent (or
to           another Indemnified Party, as the case may be) and such Indemnification
          Certificate of Instruction is hereby cancelled.  

			AUDIOCODES, INC.

By:
——————————————

Name:
——————————————
Title:

——————————————

Dated:  [_________]

cc: Sellers' Representative

ANNEX V 

PARENT CANCELLATION
CERTIFICATE 

TO 

U.S. BANK NATIONAL
ASSOCIATION 

as Escrow Agent 

        AudioCodes,
Inc., a Delaware corporation (“Parent”), __________________ (the
“Sellers’ Representative”), and U.S. Bank National Association, a
national banking association, as escrow agent (the “Escrow Agent”), are
parties to an Escrow Agreement, dated as of [ ], 2006 (the “Escrow
Agreement”). Capitalized terms defined in the Escrow Agreement have the same
meanings when used in this Parent Cancellation Certificate. 

        Pursuant
to Section 4(e) of the Escrow Agreement, Parent: 

		    (l)        certifies
that (i) it hereby withdraws its claim against the Company Bridge Note           Holders
with respect to [all] [specify portion] of the Owed Amount designated in           the
Indemnification Certificate of Instruction dated [_________] and (ii) as a
          result the Owed Amount with respect to such Indemnification Certificate of
          Instruction is $[_________]; and  

		    (m)        agrees
that such Indemnification Certificate of Instruction is, to the extent           released
as provided in clause (i) of paragraph (a) above, cancelled.  

			AUDIOCODES, INC.

By:
——————————————

Name:
——————————————
Title:

——————————————

Dated:  [_________]

ANNEX VI 

SELLERS’
REPRESENTATIVE CANCELLATION CERTIFICATE 

TO 

U.S. BANK NATIONAL
ASSOCIATION 

as Escrow Agent 

        AudioCodes,
Inc., a Delaware corporation (“Parent”), ___________________ the
“Sellers’ Representative”), and U.S. Bank National Association, a
national banking association, as escrow agent (the “Escrow Agent”), are
parties to an Escrow Agreement, dated as of [ ], 2006 (the “Escrow
Agreement”). Capitalized terms defined in the Escrow Agreement have the same
meanings when used in this Sellers’ Representative Cancellation Certificate. 

        Pursuant
to Section 4(f) of the Escrow Agreement, the Sellers’ Representative certifies that
(i) attached hereto is a final, nonappealable order of a court of competent jurisdiction
resolving the dispute between Parent and the Sellers’ Representative as to the matter
described in the Indemnification Certificate of Instruction dated [_________] and the
related Objection Certificate dated [_________] and (ii) as a result the Owed Amount with
respect to such Indemnification Certificate of Instruction is $[_________]. 

			———————————————————

AS SELLERS' REPRESENTATIVE

———————————————————

Dated: [_________] 

EXHIBIT B  

[FORM
OF OPINION OF HAYNES AND BOONE LLP] 

    1.        The
Company is (i) a corporation duly incorporated, validly existing and in good
          standing under the laws of the state of Delaware and (ii) duly qualified to do
          business as a foreign corporation and in good standing in the state of Texas.  

    2.        The
execution and delivery by the Company of the Merger Agreement and the Escrow
          Agreement the consummation by the Company of the Merger and the other
          transactions expressly contemplated by the Merger Agreement have been duly
          authorized by all necessary corporate action on the part of the Company and the
          holders of Capital Stock of the Company, including the approval of the Merger
          and the transactions expressly contemplated by the Merger Agreement by the
          Company’s stockholders under the provisions of the DGCL and the
          Company’s certificate of incorporation and bylaws, and no other corporate
          action or proceeding on the part of the Company or its stockholders is
necessary           to authorize the Merger Agreement or to consummate the Merger and the
other           transactions expressly contemplated by the Merger Agreement or for the
Company           to comply with the provisions of the Merger Agreement. Each of the
Merger           Agreement, the Escrow Agreement and the Certificate of Merger has been
duly           executed and delivered by the Company and, assuming due execution and
delivery           by the other parties thereto, constitutes a legal, valid and binding
obligation           of the Company, enforceable against the Company in accordance with
its terms,           except as limited by applicable bankruptcy, insolvency,
reorganization,           moratorium or other laws of general application affecting the
enforcement of           creditors’ rights.  

    3.        No
consent, approval, license, permit, order or authorization of, registration,
          declaration or filing with, or notice to, any United States, Texas or Delaware
          Governmental Entity is required by or with respect to the Company in connection
          with the execution and delivery by the Company of the Merger Agreement and the
          Escrow Agreement, the consummation by the Company of the Merger and the other
          transactions expressly contemplated by the Merger Agreement or the compliance
by           the Company with the provisions thereof, except for (i) filings pursuant to,
and           compliance with other applicable requirements of Section 5021 of the
Omnibus           Trade and Competitiveness Act of 1988 and (ii) the filing of the
Certificate of           Merger with the Delaware Secretary of State.  

    4.        The
execution and delivery by the Company of the Merger Agreement and the Escrow
          Agreement and the consummation of the Merger and the other transactions
          expressly contemplated by the Merger Agreement and the compliance by the
Company           with the provisions thereof do not and will not conflict with, or
result in any           violation of or default under (with or without notice or lapse of
time or both),           or give rise to a right of, or result in, termination,
cancellation or           acceleration of any obligation or to a loss of a material
benefit under, or           result in the creation of any Lien in or upon any of the
properties or assets of           the Company under, or give rise to any increased,
additional or guaranteed           rights or entitlements under, any provision of (i) the
Constitutive Documents of           the Company, (ii) any of the agreements listed on Exhibit
A hereto or           (iii) to our knowledge, any judgment, order, decree, statute,
law, ordinance,           rule or regulation applicable to the Company or its properties
or assets.  

    5.        The
authorized Capital Stock of the Company consists of (i) 1,119,153,822 shares           of
Company Common Stock and 930,376,328 shares of Company Preferred Stock, of
          which 10,215,131 shares are designated as Series A Preferred Stock, 86,000,037
          are designated as Series B Preferred Stock, 231,878,724 are designated as
Series           C Preferred Stock, 442,282,436 are designated as Series D Preferred
Stock and           160,000,000 are designated as Series D-1 Preferred Stock. There are
13,901,823           shares of Company Common Stock issued and outstanding and 10,215,131
shares of           Series A Preferred, 83,313,605 shares of Series B Preferred,
226,092,199 shares           of Series C Preferred, 439,890,531 shares of Series D
Preferred and 158,910,455           shares of Series D-1 Preferred issued and
outstanding. An aggregate of           181,819,455 shares of Common Stock of the Company
are reserved for issuance           under the Company’s 2000 Omnibus Securities
Plan, as amended, of which, to           our knowledge, 6,953,784 shares have been issued
and are currently outstanding,           131,980,852 shares are issuable upon the
exercise of outstanding options and           42,884,819 shares are available for future
issuance, subject, in each case, to           certain adjustment provisions applicable
thereto. 2,686,432 shares of Series B           Preferred are subject to outstanding
Warrants, 5,786,525 shares of Series C           Preferred are subject to outstanding
Warrants, 2,391,905 shares of Series D           Preferred are subject to outstanding
Warrants and 549,863 shares of Series D-1           Preferred are subject to outstanding
Warrants. There are 10,215,131 shares of           Common Stock reserved for issuance in
connection with the conversion of the           Series A Preferred, 86,000,037 shares of
Common Stock are reserved for issuance           in connection with the conversion of the
Series B Preferred, 231,878,724 shares           of Common Stock are reserved for
issuance in connection with the conversion of           the Series C Preferred,
442,282,436 shares of Common Stock are reserved for           issuance in connection with
the conversion of the Series D Preferred,           160,000,000 shares of Common Stock
are reserved for issuance in connection with           the conversion of the Series D-1
Preferred and 60,000 shares of Common Stock are           reserved for issuance upon
exercise of options held by the Community Foundation           of Texas. To our
knowledge, except as described above, there are no other shares           of Capital
Stock of the Company issued, reserved for issuance or outstanding.           All of the
issued and outstanding shares of Capital Stock of the Company have           been duly
authorized and validly issued and, to our knowledge, are fully paid           and
nonassessable. Except for the Company Options and Company Warrants and as
          otherwise set forth in the Disclosure Schedule, to our knowledge, (i) there are
          no options, warrants, calls, rights, convertible securities, commitments or
          agreements of any character, written or oral, to which the Company is a party
          obligating the Company to issue, deliver or sell, or cause to be issued,
          delivered or sold, any shares of Capital Stock of the Company, (ii) there are
no           outstanding or authorized stock appreciation, phantom stock, profit
          participation or other similar rights with respect to the Company, and (iii)
          there are no outstanding contractual obligations of the Company to repurchase,
          redeem or otherwise acquire any shares of Capital Stock of the Company.  

    6.        To
our knowledge, except as set forth in the Disclosure Schedule, there is no
          suit, action, claim or proceeding that is pending or has been threatened in
          writing against the Company.  

    7.        Upon
the filing of the Certificate of Merger with the Delaware Secretary of           State,
the Merger will be effective under the DGCL.  

- 2 -

EXHIBIT C  

TERMINATION AND RELEASE
OF STOCKHOLDER BRIDGE NOTES 

August __, 2006 

Netrake Corporation

3000 Technology Drive

Suite 100

Plano, Texas 75074

Attention: Bruce Hill

Facsimile No.: (214) 291-1010

Ladies and Gentlemen: 

        Reference
is made to (i) the Secured Subordinated Convertible Promissory Note Purchase Agreement
dated as of November 15, 2005 (the “2005 Note Purchase Agreement”) by and among
Netrake Corporation, a Delaware corporation (the “Company”), and the persons
listed on Schedule 1 thereto, (ii) the Secured Subordinated Promissory Note Purchase
Agreement, dated as of April 27, 2006 (the “2006 Note Purchase Agreement” and,
together with the 2005 Note Purchase Agreement, the “Note Purchase Agreements”),
by and among the Company and the persons listed on Schedule 1 thereto, (iii) the Security
Agreement dated as of November 15, 2005 (the “2005 Security Agreement”) by and
among the Company and the Investors listed on Schedule I thereto (iv) the Security
Agreement dated as of April 27, 2006 (the “2006 Security Agreement” and,
together with the 2005 Security Agreement, the “Security Agreements”) by and
among the Company and the Investors listed on Schedule I thereto, and (v) the promissory
notes in the aggregate principal amount of $__________ (the “Notes”) issued
pursuant to the Note Purchase Agreements. 

        This
Termination and Release of Stockholder Bridge Notes (the “Termination and
Release”) is being delivered pursuant to Section 7.2(i)(vi) of the Agreement and Plan
of Merger, dated as of July [ ], 2006, among AudioCodes Ltd., AudioCodes, Inc.
(“Parent”), Violet Acquisition Corp. and the Company (the “Merger
Agreement”) and shall be for the benefit of the Company, Parent, AudioCodes and
Merger Sub. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Merger Agreement. 

        The
undersigned hereby acknowledges and agrees as follows: 

    1.        Schedule
A to this Termination and Release sets forth a list of all Notes           held by
the undersigned pursuant to the Note Purchase Agreements (the           “Released
Notes”) and the undersigned does not hold any other notes           nor is the
Company otherwise indebted to the undersigned.  

[Termination and
Release] 

    2.        In
consideration for (i) the payment to the undersigned, by Parent on behalf of
          the Company, of the portion of the Merger Consideration set forth on Schedule
          A hereto at the Closing pursuant to Section 2.3(f) of the Merger Agreement,
          and (ii) the obligation of Parent to pay, to the Stockholder Representative on
          behalf of the Company, the Additional Amount, if any, under Section 2.4 of the
          Merger Agreement (the amounts in clauses (i) and (ii) together, the
          “Payment Obligation”), the undersigned:  

        (a)
agrees to accept the foregoing consideration in full satisfaction of all amounts
          due and owing under the Released Notes (including, but not limited to, all
          principal of and interest on the Released Notes, and all fees, costs and
          expenses under the Released Notes and applicable Note Purchase Agreements and
          Security Agreements) and herewith delivers the Released Notes for cancellation
          by the Company;  

        (b)
agrees that the Note Purchase Agreements and the Security Agreements to which
          the undersigned is a party are hereby terminated and shall have no further
force           or effect;  

        (c)
waives all appraisal rights that the undersigned may have under Section 262 of           the
General Corporation Law of the State of Delaware for all shares of capital
          stock of the Company owned by the undersigned; and  

        (d)
in its capacity as a holder of the Released Notes and as a holder of securities           of
the Company, and on behalf of itself and its successors and assigns,
          irrevocably, unconditionally and completely releases, acquits and forever
          discharges AudioCodes, Parent, Merger Sub and the Company, each of their
          affiliates (within the meaning of Rule 405 under the Securities Act of 1933, as
          amended) (“Affiliates”), and the successors and past, present
          and future assigns and legal, financial, internal and independent accounting
and           other advisors and representatives of any of the foregoing (collectively,
the           “Releasees”) from any past, present or future (to the
extent           legally permissible under applicable Law with respect to the future),
dispute,           claim, controversy, demand, right, obligation, liability, action or
cause of           action of every kind and nature, including any unknown, unsuspected or
          undisclosed claim or any claim or right that may be asserted or exercised by
the           undersigned in its capacity as a holder of the Released Notes and a holder
of           securities of the Company (each, a “Claim”), and
irrevocably,           unconditionally and completely waives and relinquishes each and
every Claim that           the undersigned may have had in the past, may now have or may
have in the future           (to the extent legally permissible under applicable Law)
against any of the           Releasees, relating to any Contract entered into, and any
events, matters,           causes, things, acts, omissions or conduct, occurring or
existing, at any time           on or prior to the Closing Date, including any Claim to
the effect that the           undersigned is or may be entitled to any compensation,
benefits or perquisites           from the Company or otherwise arising (directly or
indirectly) out of or in any           way connected with the undersigned’s
relationship with the Company, subject           to the limitations set forth below. The
release in this paragraph shall be           effective as of the Effective Time. In the
event that the Merger Agreement is           terminated without the Merger having been
consummated, the release in this           paragraph shall not take effect.  

[Termination and
Release] 

        On
behalf of the undersigned and its successors and assigns, the undersigned covenants not to
sue any Releasee with respect to any Claims that the undersigned has had, now has or may
have at any future time prior to the Closing Date, subject to the limitations set forth
below. The covenant not to sue in this paragraph shall be effective as of the Effective
Time. In the event that the Merger Agreement is terminated without the Merger having been
consummated, the covenant not to sue in this paragraph shall not take effect. 

        The
release and covenant not to sue contained in this Agreement do not include any release of
the undersigned’s rights and benefits, if any, nor include any covenant not to sue to
enforce the undersigned’s rights and benefits, if any, (i) to the Additional Amount
or to any other right or payment under or in accordance with the Merger Agreement and the
Escrow Agreement, or (ii) with respect to any matter against a Releasee arising from such
Releasee’s fraud. 

[Termination and
Release] 

        The
undersigned has executed this Termination and Release as of the date set forth above. 

			Very truly yours, 

By:
——————————————

Name:
Title

[Individual Signature
Page Termination and Release] 

        The
undersigned has executed this Termination and Release as of the date set forth above. 

 

			Very truly yours,

[Name of Fund]

——————————————

By: ___________________________

       Its General Partner

			By:
——————————————

Name:
——————————————
Title:
——————————————

[VC Signature Page
Termination and Release] 

SCHEDULE A  

SCHEDULE OF RELEASED
NOTES  

[Termination and
Release] 

EXHIBIT D  

NETRAKE
CORPORATION 

ACTION
BY WRITTEN CONSENT OF STOCKHOLDERS 
IN LIEU OF SPECIAL MEETING 

July
6, 2006 

        In
accordance with Section 228 of the Delaware General Corporation Law and the Certificate of
Incorporation and Bylaws of Netrake Corporation, a Delaware corporation (the
“Company”), the undersigned, constituting the holders of
the Company’s outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which all the
shares entitled to vote thereon were present and voted, hereby adopt the following
resolutions effective as of the date first set forth above: 

APPROVAL
OF MERGER AND RELATED MATTERS 

1. APPROVAL OF MERGER 

        a.
          General; Disclosure of Conflicts of Interest of Board; Disinterested Director
          Approval 

WHEREAS, the Company’s
Board of Directors (the “Board”) has considered and
approved that certain Agreement and Plan of Merger (the “Merger
Agreement”), dated as of July 6, 2006, by and among Audiocodes Ltd., a
company organized under the laws of the State of Israel
(“Audiocodes”), Audiocodes, Inc., a Delaware corporation
(“Parent”), Violet Acquisition Corp., a Delaware corporation (“Merger
Sub”), and the Company, and related agreements, which agreements
provide for, among other things, the merger of Merger Sub with and into the Company (such
transaction is referred to herein as the “Merger”); and  

WHEREAS, pursuant to Section
144 of the Delaware General Corporation Law, no contract or transaction between the
Company and one or more of the officers or directors of the Company (any such party is
referred to herein individually as an “Interested Party,”
or collectively the “Interested Parties,” and any such
contract or transaction is referred to herein as an “Interested Party
Transaction”) shall be void or voidable solely for that reason, or
solely because the director or officer is present at or participates in the meeting of the
Board of Directors of the Company (the “Board”) that
authorized the Interested Party Transaction or solely because the vote of any such
director or officer is counted for such purpose, if: (i) the material facts as to the
relationship or interest and as to the contract or transaction are disclosed or are known
to the Board, and the Board in good faith authorizes the contract or transaction by
affirmative votes of the majority of the disinterested directors, even though the
disinterested directors be less than a quorum; (ii) the material facts as to the
relationship or interest and as to the contract or transaction are disclosed or known to
the stockholders entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Company as of the time it is authorized, approved or
ratified by the Board or the stockholders; and 

WHEREAS, it is hereby
disclosed and made known to the stockholders that (i) Ed Olkkola is a director of the
Company and may have a financial interest in the Merger as general partner of Austin
Ventures VII, L.P. (“Austin Ventures”), which is a holder
of the Company’s Series B, Series C, Series D and Series D-1 Preferred Stock,
warrants to purchase shares of Series C Preferred Stock and the Company’s Secured
Subordinated Convertible Promissory Notes (the “Convertible
Notes”), which Convertible Notes, in accordance with the terms of the
Merger Agreement, will be repaid and satisfied with a substantial portion of the proceeds
to be received in the Merger; (ii) Fred Wang is a director of the Company and may have a
financial interest in the Merger as a general partner of Trinity Ventures VIII, L.P.,
Trinity VIII Side-By-Side Fund, L.P. and Trinity VIII Entrepreneurs’ Fund, L.P.
(collectively, “Trinity Ventures”), each of which is a
holder of the Company’s Series B, Series C, Series D and Series D-1 Preferred Stock,
warrants to purchase shares of Series C Preferred Stock and Convertible Notes; (iii) Eric
Rothfus is a director of the Company and may have a financial interest in the Merger as a
managing director of TL Ventures V L.P. and TL Ventures V Interfund L.P. (collectively,
“TL Ventures”), each of which is a holder of the
Company’s Series C, Series D and Series D-1 Preferred Stock and Convertible Notes;
(iv) William Kohler is a director of the Company and may have a financial interest in the
Bridge Financing as a principal of Prism Venture Partners IV, L.P. (“Prism
Ventures”), a holder of the Company’s Series D and Series D-1
Preferred Stock and Convertible Notes; and (v) Bruce Hill is a director of the Company and
may have a financial interest in the Merger as a participant in the Company’s Change
of Control Incentive Plan, as amended, as a result of which Mr. Hill may be entitled to
certain cash payments upon consummation of the Merger, such that Messrs. Olkkola, Wang,
Rothfus, Kohler and Hill may be Interested Parties, and the Merger may be an Interested
Party Transaction; and 

WHEREAS, although each member
of the Board may be deemed an Interested Party with respect to the Merger, the full Board,
based on, among other things, the factors set forth below, has concluded that the terms
and conditions of the Merger are fair to and in the best interests of the Company and its
stockholders, and has recommended that the Company’s stockholders approve and
authorize the Merger, and the undersigned stockholders of the Company have considered in
detail and acknowledge, among other things, the factors set forth below; and 

        b.
Financial Condition; Necessity of Transaction 

WHEREAS, if the Purchaser had
not provided the Purchaser Funding (as defined below) to the Company, the Company’s
cash resources would have been exhausted on or before June 30, 2006; and 

2

WHEREAS, over the past several
months, the Company has been in negotiations with the Company’s existing investors
and potential new outside investors to obtain venture capital equity financing,
convertible debt financing or other transactions to provide working capital to the
Company; and 

WHEREAS, the Company’s
existing investors have been, and currently are, unwilling to invest any additional
working capital in the Company, whether in the form of equity securities, debt or
otherwise, without the participation of a new outside investor; and 

WHEREAS, despite diligent
efforts, the Company has been unable to obtain venture capital equity financing,
convertible debt financing or other transactions to provide working capital to the
Company; and 

WHEREAS, the Board has
thoroughly apprised the undersigned stockholders of the Company’s financial
condition, results of operations, business plan, existing and prospective business and
outlook; and 

WHEREAS, the Company has been,
and the stockholders believe that the Company would be, unable to obtain any type of
financing before the Company’s cash resources are exhausted; and 

WHEREAS, the Purchaser has
provided, and is willing to continue to provide, bridge funding to the Company (the
“Purchaser Financing”) in order to allow the Company to
continue its operations until the Merger can be completed; and 

        c.
Market Check 

WHEREAS, over the past several
months, the Company has, through its independent financial advisors and otherwise,
conducted an extensive process to pursue strategic alternatives, including without
limitation an exhaustive search for potential acquirers of the Company, and has undertaken
extensive efforts to maximize the value of the Company for the benefit of the
Company’s stockholders; and 

WHEREAS, as a result of such
efforts, the Company received two offers for the acquisition of the Company and, based on
factors set forth in previous resolutions of the Board, the Board concluded that the terms
and conditions of Audiocodes’ term sheet were (and the Board hereby confirms that
such terms and conditions, as set forth in the Agreement, are) superior to that of the
other potential acquirer; and 

WHEREAS, based on the factors
set forth above, their review of the two acquisition offers received, the thorough check
of the market with respect to an acquisition of the Company and other factors, the
undersigned stockholders have concluded that the Merger, pursuant to the terms and
conditions of the Agreement, is the best available transaction for the Company; and 

3

WHEREAS, after taking into
consideration (i) the Company’s distressed financial condition, (ii) the
Company’s extensive market check, including the Company’s exhaustive search for
potential acquirers, (iii) the willingness of Audiocodes to provide the Purchaser
Financing (without which the Company would previously have been, and would currently be,
unable to continue its operations or complete the Merger), (iv) Audiocodes’
willingness and readiness to work expeditiously to complete the Merger as soon as
reasonably practicable, and (v) certain other factors, the undersigned stockholders hereby
deem the Merger to be necessary, advisable and the best alternative available to the
Company; and 

        d.
Best Interests; Approval of Merger 

WHEREAS, the undersigned
stockholders have further considered, among other things, (i) the fact that the Company
will be required to discontinue its operations unless it enters into a strategic
transaction, or otherwise obtains working capital, in the immediate future, (ii) the fact
that the Company has been unable to obtain financing or enter into a strategic transaction
with its existing Preferred Stock investors, a new outside investor or other third party
investors or acquirers, (iii) the fact that the Company believes that it would be unable
to obtain equity or debt financing from, or enter into a strategic transaction with, its
existing investors, outside investors or other third parties that could be completed
before its cash resources are exhausted, and (iv) the fact that if the Company does not
complete the Merger in the immediate future, the Company could be forced to cease its
operations, as a result of which the Company would be able to obtain less value than can
be obtained in the Merger; and 

WHEREAS, the undersigned
stockholders have thoroughly considered the other factors set forth above, and have
concluded that the Merger is in the best interests of the Company and its stockholders. 

NOW THEREFORE, BASED ON THE
FOREGOING, BE IT RESOLVED: That, in light of the factors set forth above, it is in the
best interests of the Company and its stockholders that the Company enter into the
Agreement and consummate the Merger. 

RESOLVED FURTHER: That the
Merger is the best alternative available to the Company, that the Board and the officers
of the Company have negotiated in the best interests of the Company and all of the
stockholders. 

RESOLVED FURTHER: That, after
careful consideration, and notwithstanding that the Merger may be an Interested Party
Transaction, the undersigned stockholders hereby determine that the Merger and the terms
and conditions of the Agreement are just, equitable and fair to the Company and that it is
advisable and in the best interests of the Company and its stockholders that the Company
enter into the Agreement and consummate the Merger, and the undersigned stockholders
hereby in all respects approve, ratify and confirm the Agreement and the consummation of
the Merger. 

RESOLVED FURTHER: That the
Merger is fair to the Company and its stockholders, both in terms of (i) the consideration
to be paid by Audiocodes and Parent in the Merger as set forth in the Agreement (and
notwithstanding that there will be insufficient consideration received in the Merger for
any payments to the holders of capital stock of the Company), and (ii) the course of
dealing by which it was achieved, and is in the best interests of the Company and all of
its stockholders. 

4

RESOLVED FURTHER: That the
form, terms and provisions of the Agreement, in substantially the form attached hereto as
Exhibit A, with such changes as the officers of the Company approve, and the
consummation of the Merger and the other transactions contemplated by the Agreement, on
the terms set forth therein, are hereby in all respects approved, authorized, adopted,
ratified and confirmed. 

RESOLVED FURTHER: That the
appropriate officers of the Company are authorized to execute the Agreement and to
negotiate, approve and execute such agreements, contracts, instruments and definitive
documents, including without limitation an Escrow Agreement to be entered into among
Audiocodes, Parent, the Sellers’ Representative (as defined in the Agreement) and the
escrow agent named therein and the Certificate of Merger to be filed with the Delaware
Secretary of State, as are necessary and advisable to consummate the Merger and to obtain
such consents, waivers and other approvals necessary to consummate the Merger
(collectively, the “Related Documents”), and all of such
Related Documents, in the form the officer executing the same shall approve, are hereby in
all respects authorized, approved ratified and confirmed. 

RESOLVED FURTHER: That all
actions heretofore taken by the Board are hereby in all respects approved, authorized,
adopted, ratified and confirmed. 

[Remainder
of Page Intentionally Blank]

5

        By
signing below, each stockholder is giving written consent with respect to all shares of
the Company’s capital stock held by such stockholder in favor of the above
resolutions. 

        Each
of the undersigned holders of Common Stock and Preferred Stock of the Company hereby
certifies and acknowledges that such stockholder is voting all shares of Common Stock and
Preferred Stock such stockholder is entitled to vote with all holders of outstanding
shares of capital stock of the Company as a single class. 

        Each
of the undersigned holders of Series C, Series D and Series D-1 Preferred Stock of the
Company also hereby certifies that such stockholder is voting all shares of Series C,
Series D and Series D-1 Preferred Stock held by such stockholder, on an as-converted
basis, with all holders of outstanding shares of Series C, Series D and Series D-1
Preferred Stock of the Company as a single class, pursuant to and in accordance with
Article FOURTH, Section A.4C of the Restated Certificate. 

        This
Action by Written Consent of the Stockholders in Lieu of Special Meeting may be executed
in any number of counterparts, each of which shall constitute an original and all of which
together shall constitute one action and shall be effective as of the date first set forth
above. A copy of this action that is signed and delivered by telecopy or other facsimile
transmission shall constitute an original, executed written consent. 

			Stockholders

PRISM VENTURE PARTNERS IV, L.P.

By:  Prism Investment Partners IV, L.P.
        its General Partner

By: 
Prism Ventures Partners IV L.L.C.,
        its General Partner

			By:
——————————————

Name:
——————————————

Title:
——————————————

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			
		TL VENTURES V L.P.

		By:	TL Ventures V Management L.P.,
its general partner

		By:	TL Ventures V LLC,
its manager

		By:	 ________________________________
 Name:
Title:

			
		TL VENTURES V INTERFUND L.P.

		By:	TL Ventures V LLC,
its general partner

		By:	 ________________________________
 Name:
Title:

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			
		AUSTIN VENTURES VII, L.P.

		By:	AV Partners VII, L.P.,
Its General Partner

			By:
——————————————

Name:
——————————————

Title:
——————————————

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			
		TRINITY VENTURES VIII, L.P.,
a California Limited Partnership

		By:	TRINITY TVL VIII, LLC,
a California limited liability company

		By:	 ________________________________
 Fred Wang, Member

			
		TRINITY VIII SIDE-BY-SIDE FUND, L.P.,
a California limited partnership

		By:	TRINITY TVL VIII, LLC,
a California limited liability company

		By:	 ________________________________
 Fred Wang, Member

			
		TRINITY VIII ENTREPRENEURS' FUND, L.P.,
a California limited partnership

		By:	TRINITY TVL VIII, LLC,
a California limited liability company

		By:	 ________________________________
 Fred Wang, Member

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			
		AGAVE CAPITAL II, L.P.

		By:	Agave Ventures, L.P.
Its General Partner

		By:	 ________________________________
 Robert H. Locklear, Jr., President

			
		THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY

		By:	 ________________________________
 Tyler Edelstein
 Managing Director, Separate Investments

			——————————————

Robert D. Maher

			 ARKOMA VENTURE PARTNERS VII, L.P.

By:
——————————————

Name:
——————————————

Title:
——————————————

			——————————————

Mike McCoy

			
		THE HYDE FAMILY TRUST

		By:	 ________________________________
 R. Reid Hyde, Trustee

			——————————————

Brian M. Forbes

			
		 MADANI FAMILY TRUST

		By:	 ________________________________
 Sam Madani, Trustee

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			——————————————

Dan Teal

			
		 TAMER CAPITAL, L.P.

		By:	 ________________________________
 Ford Tamer, General Partner

			 ecray, L.P.

By:
——————————————

Name:
——————————————

Title:
——————————————

			ecray II, L.P.

By:
——————————————

Name:
——————————————

Title:
——————————————

			ecray III, L.P.

By:
——————————————

Name:
——————————————

Title:
——————————————

			——————————————

Victor A. Bennett

			——————————————

Victoria M. Bennett

			——————————————

Joel K. Fontenot

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			Burlington Capital Group

By:
——————————————

Name:
——————————————

Title:
——————————————

			Christian and Timbers

By:
——————————————

Name:
——————————————

Title:
——————————————

			——————————————

Hamid Ansari

			——————————————

Darren Bensley

			——————————————

James Bondi

			——————————————

Kevin W. Brandon

			——————————————

John Bridges

			——————————————

John R. Carman

			——————————————

Michael W. Carrell

			——————————————

Lyman Chapin

			——————————————

Billie J. Cottongim

			——————————————

Craig J. Cox

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			——————————————

John J. Curreri

			——————————————

Ramanamurthy Dantu

			——————————————

James R. Deerman

			——————————————

 Sumit Dhamanwala

			——————————————

John Galgay

			——————————————

Corey A. Garrow

			——————————————

Mohammad Hasson

			——————————————

Michael P. Heiberger

			——————————————

 Mark W. Hervin

			——————————————

Bruce Hill

			——————————————

 Josette M. Hurley

			——————————————

Benjamin T. Jenkins

			——————————————

Joy John

			——————————————

James M. Judd

			——————————————

Vishnumoham Kandadai

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			——————————————

Shashi Kanth

			——————————————

William T. Kelly

			——————————————

Carrie L. Kirby

			——————————————

 Kay Kwon

			——————————————

 Christopher Lanzone

			——————————————

Milton A. Lie

			——————————————

Zhou Lu

			——————————————

 Kheng K. Ly

			——————————————

Thomas Mader

			——————————————

Larry G. Maxwell

			——————————————

James S. McAuley

			——————————————

David McDysan

			——————————————

Christopher L. Mobley

			——————————————

Greg Mokler

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			——————————————

Pamela S. Morrow

			——————————————

Victor Parente

			——————————————

William Payne

			——————————————

 Leland R. Phillips

			——————————————

Mark Qi

			——————————————

 Alicia Quan

			——————————————

Aswinkumar V. Rana

			——————————————

Mark D. Repman

			——————————————

Fred R. Siedenstrang

			——————————————

Jing Song

			——————————————

Travis E. Strother

			——————————————

Michael F. Sullivan

			——————————————

Robert A. Sussman

			——————————————

Henry Tran

			——————————————

David L. Trawick

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

			——————————————

William C. Wallace

			——————————————

Carrie A. Wrich

			——————————————

Yu Xia

			——————————————

Joseph C. Ying

			——————————————

Feng Zhou

			——————————————

Robert Burke

			——————————————

Chetan Desai

			——————————————

James Dzurisin

			——————————————

Hema Rajashekhara

NETRAKE CORPORATION

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING 

EXHIBIT
A  

Agreement
and Plan of Merger 

(see attached)

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