Document:

<PAGE>

                                                                   Exhibit 10.22

SETTLEMENT AGREEMENT

dated as of March 2, 2005

by and between

MICRUS S.A., En Chamard 55, CH-1422 Montagny-pres-Yverdon, and
MICRUS CORPORATION , 610 Palomar Avenue, Sunnyvale, California 94085

                                             (hereinafter, collectively, MICRUS)

and

MICHEL R. MOUNIER, Hohenweg 5, CH-4312 Magden

                                                                (hereinafter MM)
<PAGE>
THIS SETTLEMENT AGREEMENT (AGREEMENT) is made as of March 2, 2005 by and between
Micrus S.A. and Micrus Corporation (collectively MICRUS) and Michel Mounier
(MM).

WHEREAS

A.   MM, on the one hand, and Micrus S.A. and/or Micrus Corp., on the other
     hand, have entered into a Employment Contract dated August 20, 2001 (the
     EMPLOYMENT CONTRACT), an Indemnification Agreement dated August 2, 2004
     (the INDEMNIFICATION AGREEMENT and collectively with the Employment
     Contract, the EMPLOYMENT-RELATED AGREEMENTS), a Micrus Proprietary
     Information Agreement dated July 30, 2001 (the PROPRIETARY INFORMATION
     AGREEMENT), and Stock Option Agreements dated August 6, 2001, April 22,
     2002, June 24, 2003 and June 24, 2004 (collectively, the STOCK OPTION
     AGREEMENTS), which arise from and/or govern MM's role as an employee,
     officer or director of Micrus S.A. and/or Micrus Corp.

B.   Micrus has reported to and is cooperating with the U.S. Department of
     Justice and may file reports to and cooperate with other authorities
     (collectively the "Governmental Authorities"), including without limitation
     the Swiss Federal Attorney General and other Swiss authorities, in
     connection with Doctor Payments. The term DOCTOR PAYMENTS shall include,
     for the purpose of this Agreement and its Annexes, any acts, omissions and
     other facts or circumstances that are in any way connected to or in any way
     caused by payments or other benefits granted, promised, offered, incited,
     caused, made or carried out by, on behalf of, for the benefit of, or
     through Micrus or its employees or officers to doctors or other people at
     hospitals, universities or other institutions, whether private or public,
     and irrespective of the country they are located in. Micrus acknowledges
     that MM is not privy to any details of the ongoing discussions with the
     U.S. Department of Justice regarding Doctor Payments.

C.   On November 9, 2004, Micrus provided notice to MM of the termination of his
     Employment Contract for cause and released MM from his obligation to work
     with immediate effect, but ordered MM to remain available as needed until
     the termination of the three months notice period.

D.   On November 9, 2004 and November 14, 2004, respectively, pursuant to
     Micrus' request, MM resigned with immediate effect from the board of
     directors of Micrus Corporation and Micrus S.A, respectively.
<PAGE>
E.   MM acknowledges that he was an employee of Micrus S.A., and an officer and
     director of Micrus S.A. and Micrus Corp and that the terms and conditions
     of his roles for Micrus are set forth in the EMPLOYMENT-RELATED AGREEMENTS.

F.   The parties are in dispute as regards the justification of the termination
     and the claims the parties have or may have against each other in
     connection with their past and ongoing relationship and the termination
     thereof.

G.   The parties wish to settle by mutual consent and without any admission of
     liability, all such claims including, but not limited to those arising out
     of MM's role as employee or officer or director of Micrus S.A. and/or
     Micrus Corp. and the obligations of each party under the EMPLOYMENT-RELATED
     AGREEMENTS, subject to the terms and conditions set forth herein.

NOW, THEREFORE, the parties agree as follows:

1.   TERMINATION. The parties agree, that the Employment Contract shall be
     terminated and was terminated effective as of February 28, 2005, and that
     all rights, obligations and duties of each party under the Employment
     Contract have been extinguished, except as set forth hereinafter. However,
     the Indemnification Agreement, the Stock Option Agreements, the Proprietary
     Information Agreement and the present Agreement (including the Annexes to
     this Agreement) are not terminated and shall continue to govern the rights
     and obligations of the parties as set forth herein and in the Annexes to
     this Agreement. Concurrently with the execution of this Agreement, Micrus
     shall pay MM, an amount equal to 2,568.65 CHF which represents the total
     amount due to MM for salary and other employment related claims (including
     but not limited to remaining expense reimbursement, vacation entitlements,
     or other wages, including any claim for extra wages due to overtime) by
     February 28, 2005, the end of his notice period under his Employment
     Contract and the date of termination of his employment.

     Any possibly remaining vacation entitlements as well as any claim for
     salary, expense reimbursement, bonuses, or other wages, including any claim
     for extra wages due to overtime shall be fully discharged by the payment
     pursuant to Article 1 and the Compensation pursuant to Article 2 of this
     Agreement.

     MM understands and agrees that notwithstanding the termination of his
     employment, he is still bound by the terms of the Micrus Proprietary
<PAGE>
     Information Agreement and agrees to comply with his obligations thereunder
     to protect Micrus' confidential and/or proprietary information.

2.   COMPENSATION. In consideration of MM executing and performing this
     Agreement and in full discharge of any rights, privileges or entitlements
     of MM against Micrus, whether actual or potential, whether present or
     future, whether arising by operation of law, or by agreement of the
     parties, including rights and entitlements arising out of the now
     extinguished Employment Contract, Micrus will pay and/or provide MM with a
     gross payment of USD 100,000.00 (the COMPENSATION). The Compensation shall
     become due in equal installments of USD 20'000 over a period of five
     quarters and subject to MM being in full compliance with this Agreement.
     The payment of the first installment of the Compensation shall be made in
     accordance with the payment instructions provided by MM on or before April
     30, 2005 against the delivery of a waiver and release in the form attached
     hereto as Annex 1 executed not earlier than a month plus one day after the
     termination of the Employment Contract. Provided such waiver and release
     has been provided, payment of subsequent installments shall be made by July
     31, 2005, October 31, 2005, January 31, 2006 and April 30, 2006.

     It is agreed and understood that the payment of the Compensation does not
     constitute an admission of liability by Micrus. Should MM not be in
     compliance with this Agreement, Micrus is entitled to immediately reclaim
     any amounts paid and benefits granted and refuse further payments or grants
     still due and owing.

3.   STOCK OPTIONS. In further consideration of MM executing and performing this
     Agreement, Micrus also agrees to provide MM with enhanced opportunities to
     exercise the stock option rights he has been granted by Micrus. In order to
     effect the changes set forth in this Article 3, concurrently with the
     execution of this Agreement MM and Micrus Corporation shall enter into the
     Amendment to Stock Option Agreements attached hereto as Annex 2. For the
     avoidance of doubt, it is understood among the parties that Micrus is in no
     way whatsoever responsible for any taxation issues (if any) resulting from
     the Stock Option Agreements or amendments thereto.

4.   DOCTOR PAYMENTS. Micrus has reported to and is currently cooperating with
     the US Department of Justice and may in the future cooperate with other
     Governmental Authorities in connection with Doctor Payments.
<PAGE>
     It is understood that each party will bear its own costs in connection with
     any investigation or proceeding initiated and/or undertaken by a
     governmental agency or any other lawsuit or legal action in any way
     connected with Doctor Payments, including the costs of its legal
     representation, payments of damages, fines, penalties or amounts to be paid
     in settlements.

     MM, in exchange for the promises contained in this Agreement, hereby also
     waives any and all rights and claims which he might have, or which might
     arise, under the Indemnification Agreement or otherwise which are in any
     way connected to Doctor Payments or investigations, proceedings, lawsuits
     or legal action in any way connected to Doctor Payments, including without
     limitation any claims for indemnification for, or compensation of, costs of
     legal representations, other expenses, damages of whatever kind, fines,
     penalties and amounts paid in settlements.

5.   MUTUAL RELEASE OF CLAIMS. In exchange for the promises contained in this
     Agreement and to the fullest extent permitted by law, each party hereby
     waives, releases and fully discharges, and agrees not to pursue, any and
     all claims, claims for relief and/or causes of action it has or may have as
     of the date of execution of this Agreement against the other party, and/or
     any of its current or former affiliates, subsidiaries, predecessors or
     successors, and/or any of the current or former officers, directors,
     shareholders, employees, attorneys, employee benefit plans, agents or
     representatives, successors or assigns of the foregoing entities (the
     RELEASED Parties), arising out of and/or in any way connected with MM's
     employment relationship, and/or the termination of that employment
     relationship, and/or MM's relationship as an officer and director of Micrus
     Corp. and Micrus SA, and/or with respect to any other claim, matter, or
     event arising prior to the time this Agreement has been executed by the
     parties. Each party recognizes and agrees that such released claims, claims
     for relief, and/or causes of action include, but are not limited to, claims
     under U.S. and Swiss law, including, but not limited to the Swiss Code of
     Obligations, and the laws of all other jurisdictions and any rights,
     privileges or entitlements of the parties arising out of the now
     extinguished Employment Contract, MM's service as an officer and director
     of Micrus Corp. and Micrus SA, or by operation of law, including without
     limitation certain claims for indemnification, as described in this
     Agreement.

6.   MUTUAL WAIVER OF KNOWN AND UNKNOWN CLAIMS. As further consideration for the
     promises contained in this Agreement, each party agrees that its release
     and waiver of all claims against the other party includes not only
<PAGE>
     known or suspected claims but also all unknown, unsuspected and
     unanticipated injuries, damages, events, matters, or claims which may have
     arisen prior to the execution of this Agreement.

7.   VOTING OF COMMON STOCK. In exchange for the promises contained in this
     Agreement, MM agrees to vote and act with respect to any shares of Common
     Stock he may hold upon exercise of any options to purchase Common Stock of
     Micrus Corporation as set forth in the Voting Agreement attached hereto as
     Annex 3.

8.   BINDING ON SUCCESSORS AND HEIRS. MM agrees that he has executed this
     Agreement on his own behalf and on behalf of his heirs, administrators,
     representatives, attorneys, executors, successors, and assigns (the
     EMPLOYEE'S SUCCESSORS) he now has or will have in the future and that his
     agreement to waive and release all known and unknown claims against Micrus
     binds him and Employee's Successors.

     Micrus agrees that it has executed this Agreement on behalf of Micrus SA
     and Micrus Corporation and on behalf of their successors, and assigns (the
     MICRUS' SUCCESSORS) and that its agreement to waive and release all known
     and unknown claims against MM binds Micrus and the Micrus' Successors.

9.   CONFIDENTIALITY OF AGREEMENT TERMS. MM agrees that the terms and conditions
     of this Agreement and any and all actions by Micrus in accordance
     therewith, are strictly confidential and, with the exception of his
     counsel, tax advisor, immediate family, or as required by applicable law,
     the Swiss Federal Attorney General, other Swiss authorities or the U.S.
     Department of Justice, have not been and shall not be disclosed, discussed,
     or revealed to any other persons, entities, or organizations, whether
     within or outside Micrus, without prior written approval of Micrus. MM
     agrees to take all reasonable steps necessary to ensure that
     confidentiality is maintained by any of the individuals or entities
     referenced above to whom disclosure is authorized.

     For the avoidance of doubt, Micrus is not bound by an obligation of
     confidentiality.

10.  ENTIRE AGREEMENT. This Agreement, including Annexes 1,2, and 3, represent
     the full and complete agreement between MM and Micrus regarding its subject
     matter, including the terms and conditions of any payments to
<PAGE>
     MM, or his termination, and supersedes all prior or contemporaneous oral or
     written agreements or understandings between the parties concerning those
     subjects, except as explicitly provided for otherwise in this Agreement or
     any of the Annexes 1,2, and 3. This Agreement and the Annexes 1, 2 and 3
     cannot be changed except in a writing signed both by MM and Micrus.

11.  GOVERNING LAW, JURISDICTION. The parties agree that the laws of
     Switzerland, without regard to and excluding its choice of law provisions,
     shall govern the validity and interpretation of this Agreement and Annex 1
     to this Agreements. The parties agree that the Annexes 2, and 3 to this
     Agreement and the Proprietary Information Agreement, Stock Option
     Agreements and Indemnification Agreement shall be governed by the laws
     indicated in such agreements.

     The place of jurisdiction for all disputes arising out of or in connection
     with this Agreement or Annex 1 to Agreement shall be exclusively
     Montagny-pres-Yverdon, Switzerland. Notwithstanding the preceding sentence,
     the place of jurisdiction for all disputes arising out of or in connection
     with any of the matters referenced in the Proprietary Information
     Agreement, Stock Option Agreements and Indemnification Agreement shall be
     exclusively the jurisdictions indicated in such agreements.

12.  CLAIMS BY MICRUS. Notwithstanding Article 5 of this Agreement, Micrus
     Corporation and Micrus S.A. may independently or collectively pursue the
     enforcement of this Agreement (including the Annexes to this Agreement),
     the Indemnification Agreement, the Proprietary Information Agreement, the
     Stock Option Agreements or any other claims resulting out of or in
     connection with this Agreement (including the Annexes to this Agreement),
     the Stock Option Agreements, the Indemnification Agreement or the
     Proprietary Information Agreement and their validity.

13.  VOLUNTARY RELEASE OF CLAIMS. By signing this Agreement, MM confirms that he
     has been given the opportunity to discuss it with the attorney of his
     choice. He also acknowledges that he has read and fully understand the
     terms, nature, and effect of this Agreement and its release of claims and
     that he has executed it voluntarily, free of any duress or coercion, and in
     so doing, he has not relied on any promise, representation, or inducement
     other than those contained in this Agreement.
<PAGE>
ACKNOWLEDGED AND AGREED:

     MICHEL R. MOUNIER

     Signature /s/ Michel R. Mounier
               ----------------------------------------
     Place, Date March 2, 2005

     MICRUS, S.A.

     By /s/ Beat R. Merz
        ----------------------------------------
          Its Director
              -------------------------

     Place, Date March 2, 2005
                 ----------------------

     MICRUS CORPORATION

     By /s/ Michael Hensen
        ----------------------------------------
          Its Chairman of the Board of Directors
              ----------------------------------

     Place, Date March 2, 2005
                 ----------------------
<PAGE>
ANNEX 1 TO THE SETTLEMENT AGREEMENT BETWEEN MICHEL R. MOUNIER AND HIS
EMPLOYER, MICRUS, S.A. AND MICRUS CORPORATION (COLLECTIVELY, "MICRUS").

1. RELEASE OF CLAIMS. Michel R. Mounier hereby waives, releases and fully
discharges, and agrees not to pursue, any and all claims, claims for relief
and/or causes of action he has or may have as of the date he signs this Waiver
and Release against Micrus, and/or any of its or their current or former
affiliates, subsidiaries, predecessors or successors, and/or any of the current
or former officers, directors, shareholders, employees, attorneys, employee
benefit plans, agents or representatives, successors or assigns of the foregoing
entities ("Released Parties"), arising out of and/or in any way connected with
his employment relationship, and/or the termination of that employment
relationship, and/or his relationship as an officer and director of Micrus Corp.
and Micrus SA, and/or with respect to any other claim, matter, or event arising
prior to the time he executes this Waiver and Release. Michel R. Mounier
recognizes and agrees that such released claims, claims for relief, and/or
causes of action include, but are not limited to, claims under U.S. and Swiss
law, including, but not limited to the Swiss Code of Obligations, and the laws
of all other jurisdictions and any rights, privileges or entitlements of the
parties arising out of the now extinguished EMPLOYMENT CONTRACT (as defined in
the Settlement Agreement), his service as an officer and director of Micrus
Corp. and Micrus SA, or by operation of law, including without limitation the
claims for indemnification as described in the Settlement Agreement.

2. WAIVER OF KNOWN AND UNKNOWN CLAIMS. Michel R. Mounier agrees that his release
and waiver of all claims against Micrus includes not only known or suspected
claims but also all unknown, unsuspected and unanticipated injuries, damages,
events, matters, or claims which may have arisen prior to his execution of this
Waiver and Release.

3. NO OTHER CLAIMS. Michel R. Mounier agrees and represents that he has not
filed or otherwise pursued any charges, complaints or claims of any nature
against Micrus or any Released Party with any government agency or court with
respect to any matter connected with his employment relationship, and/or the
termination of that employment relationship and, to the extent permitted by law,
he agrees not do so in the future.

Place, Date: [NOT TO BE EXECUTED EARLIER THAN ONE MONTH PLUS ONE
     DAY AFTER THE TERMINATION OF THE EMPLOYMENT]_______________

______________________
Michel R. Mounier
<PAGE>
                                     ANNEX 2

                               MICRUS CORPORATION

                      AMENDMENT TO STOCK OPTION AGREEMENTS

      This Amendment to Stock Option Agreements (the "Amendment") is made as of
March 2, 2005 between Michel Mounier (the "Optionee") and Micrus Corporation,
a Delaware corporation (the "Company"), and amends (i) the Notice of Stock
Option Grant and Stock Option Agreement under the Company's 1998 Stock Plan
between the parties dated as of August 6, 2001 with respect to 700,000 shares of
Common Stock of the Company, (ii) the Notice of Stock Option Grant and Stock
Option Agreement under the Company's 1998 Stock Plan between the parties dated
as of April 22, 2002 with respect to 75,000 shares of Common Stock of the
Company, (iii) the Notice of Stock Option Grant and Stock Option Agreement under
the Company's 1998 Stock Plan between the parties dated as of June 24, 2003 with
respect to 147,250 shares of Common Stock of the Company, and (iv) the Notice of
Stock Option Grant and Stock Option Agreement under the Company's 1998 Stock
Plan between the parties dated as of June 24, 2004 with respect to 30,000 shares
of Common Stock of the Company (each an "Option" and collectively the
"Options").

                                    RECITALS

      The Company and Optionee are parties to a Settlement Agreement dated as of
March ___, 2005 (the "Settlement Agreement"). Pursuant to the Settlement
Agreement, the Company has agreed to extend the time period for Optionee to
exercise options to purchase Common Stock of the Company held by Optionee.

                                    AGREEMENT

      The parties hereby agree to amend each of the Options as follows.

      1.    The Options are hereby amended to provide that

      (a)   the section entitled "Vesting Schedule" in the Notice of Stock
            Option Grant of each of the Options shall be amended to read as
            follows:

            "Notwithstanding anything to the contrary set forth in the Option
            Agreement, it is understood and agreed that the vesting of Shares
            shall continue until February 28, 2005 and thereafter stop for all
            purposes".

      (b)   the first sentence of the section entitled "Termination Period" in
            the Notice of Stock Option Grant of each of the Options shall be
            amended to read as follows:

          "This Option shall be exercisable until August 31, 2005."

      2.    Except as amended as set forth herein, each of the
Options shall remain in full force and effect.

      3. This Amendment may be signed in one or more counterparts, each of which
shall be deemed an original and all of which, taken together, shall be deemed
one and the same document.
<PAGE>
      4. This Amendment shall be governed by the laws of the State of California
as such laws apply to contracts entered into and wholly to be performed therein
by residents of such state. Each of the parties hereto irrevocably consents to
the exclusive jurisdiction and venue of any federal or state court within the
Northern District of California in connection with any matter based upon or
arising out of this Amendment or the matters contemplated herein (whether based
on breach of contract, tort, breach of duty or any other theory), agrees that
process may be served upon it in any manner authorized by the laws of the State
of California for such persons and waives and covenants not to assert or plead
any objection that they might otherwise have to jurisdiction, venue and such
process. Each party agrees not to commence any legal proceedings based upon or
arising out of this Agreement (whether based on breach of contract, tort, breach
of duty or any other theory) except in such courts.

      The parties have executed this Amendment as of the date first set forth
above.

MICRUS CORPORATION.                       OPTIONEE

By:/s/ Michael Hensen                     /s/ Michel Mounier
   --------------------------             ---------------------------
                                          Michel Mounier

Title: Chairman of the Boards
       of Directors

                                                                             -2-
<PAGE>
                                     ANNEX 3

                                VOTING AGREEMENT

      This Voting Agreement (the "Agreement") is made as of March 2, 2005, by
and among Micrus Corporation, a Delaware corporation (the "Company") and Michel
Mounier ("MM").

                                    RECITALS

      The Company and MM are parties to a Settlement Agreement dated as of March
___, 2005 (the "Settlement Agreement"). Pursuant to the Settlement Agreement,
the Company has agreed to make certain cash payments to MM, extend the time
period for MM to exercise options to purchase Common Stock of the Company held
by MM, and entered into a mutual release of claims and as partial consideration
for such actions MM has agreed to enter into this Agreement.

                                    AGREEMENT

      The parties agree as follows:

      1. If, at any time after the date of this Agreement, the Company's Board
of Directors and holders of a majority of the then outstanding shares of
Preferred Stock of the Company (the "Proposing Holders") approve any matter, to
include, without limitation, any equity grant, financing, merger, sale of assets
or other item or transaction of any sort, (a "Matter"), then MM shall (i)
execute consents and appear in person or by proxy at each annual or special
meeting of stockholders for the purpose of obtaining a quorum and shall vote all
of the shares of the Company's capital stock owned by MM or with respect to
which MM exercises voting or dispositive authority, either in person or by
proxy, at such annual or special meeting in favor of the Matter and otherwise in
a manner so as to be consistent and not conflict with, and to implement, the
terms of this Section 1 (ii) waive any dissenters' rights, appraisal rights or
similar rights in connection with such Matter; and (iii) if such Matter is a
sale of the capital stock of the Company, MM will agree to sell all shares of
the Company's capital stock held by MM or with respect to which MM exercises
dispositive authority on the terms and conditions contemplated by the Matter. MM
will take all reasonably necessary and desirable actions approved by the
Proposing Holders in connection with the consummation of such Matter, including
executing such consents, agreements and instruments and taking such other
actions as may be necessary to effect the consummation of such Matter.

      2. In the event that MM shall fail to consent or vote the shares he is
entitled to vote in the manner set forth above, MM shall be deemed immediately
upon the existence of such breach to have granted the Proposing Holders a proxy
to its shares to ensure that such shares will be voted as set forth above. MM
acknowledges that each proxy granted hereby, including any successive proxy if
need be, is given to secure the performance of a duty, is coupled with an
interest, and shall be irrevocable until the duty is performed.

      3. MM will not grant any proxy or enter into or agree to be bound by any
voting trust with respect to the shares held by MM or with respect to which MM
has voting or
<PAGE>
dispositive authority nor shall MM enter into any stockholder agreements or
arrangements of any kind with any person with respect to their shares
inconsistent with the provisions of this Agreement. MM will not act, for any
reason, as a member of a group or in concert with any other persons in
connection with the acquisition, disposition or voting of shares of the
Company's capital stock in any manner which is inconsistent with the provisions
of this Agreement.

      4. The Company confirms that the restrictions contained in this Agreement
are similar to restrictions on voting of Common Stock the Company has agreed to
with Mr. Herbert Mertens. The Company also confirms that the shares of Common
Stock to be acquired by MM in the future upon exercise of any options to
purchase shares of Common Stock of the Company held by him shall be subject to
the same rights, preferences, privileges and restrictions as other shares of
Common Stock of the Company held by stockholders of the Company, but not such
rights, preferences and privileges attributable to shares of Common Stock by
virtue of such shares being issuable upon conversion of shares of Preferred
Stock.

      5. This Agreement shall terminate upon the consummation of a firm
commitment underwritten public offering by the Company of shares of its Common
Stock pursuant to a registration statement on Form S-1 under the Securities Act
of 1933, as amended pursuant to which all outstanding shares of Preferred Stock
of the Company are converted into Common Stock. Notwithstanding the foregoing,
any lock-up or market standoff provisions set forth in any agreements
representing shares of capital stock of the Company or rights to purchase
capital stock of the Company held by Mr. Mounier shall continue for the period
set forth in such agreements.

     6.     MISCELLANEOUS.

            6.1 ENTIRE AGREEMENT. This Agreement, constitutes and contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof, and any and all other written or oral agreements,
prior negotiations, correspondence, understandings, duties or obligations
between the parties relating to the subject matter hereof are hereby expressly
canceled and superseded by this Agreement.

            6.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties and to any successors in interest of the
shares of capital stock held by MM. MM agrees not to transfer any shares of
capital stock of the Company unless and until the person to whom such security
is to be transferred shall have executed a written agreement, substantially in
the form of this Agreement, pursuant to which such person becomes a party to
this Agreement and agrees to be bound by all the provisions hereof. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

            6.3 AMENDMENTS AND WAIVERS. Any term hereof may be amended or waived
only with the written consent of the Company and MM. Any amendment or waiver
effected in

                                      -2-
<PAGE>
accordance with this Section 6.3 shall be binding upon the Company, MM, and each
of their respective successors and assigns.

            6.4 NOTICES. Unless otherwise provided herein, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given (a) upon personal delivery to the party to be notified, (b)
one (1) business day after delivery by confirmed facsimile transmission, (c) one
(1) business day after the business day of deposit with a nationally recognized
overnight courier service for next day delivery, freight prepaid, or (d) three
(3) business days after deposit with the United States Post Office for delivery
by registered or certified mail, postage prepaid. Any such notice shall be
addressed to the party to be notified at the address indicated for such party
indicated on the signature pages, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties.

            6.5 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.

            6.6 GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the corporate laws of the State of Delaware and, as
to matters other than corporate law, the laws of the State of California as such
laws apply to contracts entered into and wholly to be performed therein by
residents of such state. Each of the parties hereto irrevocably consents to the
exclusive jurisdiction and venue of any federal or state court within the
Northern District of California in connection with any matter based upon or
arising out of this Agreement or the matters contemplated herein (whether based
on breach of contract, tort, breach of duty or any other theory), agrees that
process may be served upon it in any manner authorized by the laws of the State
of California for such persons and waives and covenants not to assert or plead
any objection that they might otherwise have to jurisdiction, venue and such
process. Each party agrees not to commence any legal proceedings based upon or
arising out of this Agreement or the matters contemplated herein (whether based
on breach of contract, tort, breach of duty or any other theory) except in such
courts.

            6.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

            6.8 COSTS AND ATTORNEYS' FEES. In the event that any action, suit or
other proceeding is instituted based upon or arising out of this Agreement or
the matters contemplated herein or any other matter relating to the equity
interests of MM in the Company (whether based on breach of contract, tort,
breach of duty or any other theory), the prevailing party shall recover all of
such party's costs (including, but not limited to expert witness costs) and
reasonable attorneys' fees incurred in each such action, suit or other
proceeding, including any and all appeals or petitions therefrom.

                            [Signature Page Follows]

                                      -3-
<PAGE>
The parties hereto have executed this Voting Agreement as of the date first
written above.

                                          COMPANY:

                                          MICRUS CORPORATION

                                          By:/s/ Michael Hensen
                                             --------------------------------
                                              Michael Henson
                                              Chairman of the
                                          Board of Directors

                                          Address:    610 Palomar Avenue
                                                      Sunnyvale, CA 94085

                                          Fax number:  (408) 830-5912

                                          /s/ Michel Mounier
                                          ------------------------------------
                                          Michel Mounier

                                          Address:    Hohenweg 5
                                                      CH-4312 Magden,
                                                      Switzerland

                                          Fax Number: ++41 61 843 93 21

                                      -1-<PAGE>
                                                                    EXHIBIT 10.1

VAN C. DURRER, II (CA State Bar No. 226693)
KURT RAMLO (CA State Bar No. 166856)
GLENN WALTER (CA State Bar No. 220015)
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California  90071
Telephone:  (213) 687-5000
Facsimile:   (213) 687-5600
KRamlo@Skadden.com

    -and-

J. GREGORY MILMOE
KAYALYN A. MARAFIOTI
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Four Times Square
New York, New York 10036-6522
Telephone:  (212) 735-3000
Facsimile:   (212) 735-2000

Proposed Attorneys for Debtors and Debtors in Possession

                         UNITED STATES BANKRUPTCY COURT

                         NORTHERN DISTRICT OF CALIFORNIA

                             San Francisco Division

In re                               )  Case Nos.     05-30145-TEC
                                    )                05-30146-TEC
First Virtual Communications, Inc.  )
      and CUseeMe Networks, Inc.,   )  Chapter 11
                                    )
              Debtors.              )  (Jointly Administered)
                                    )
                                    )  NOTICE OF WINNING OFFER
                                    )
                                    )  Sale Hearing: March 11, 2005, 10:00 a.m.
                                    )  Place:        U.S. BANKRUPTCY COURT
                                    )                Courtroom 23
                                    )                235 Pine Street
                                    )                San Francisco, California
                                    )  Judge:        Hon. Thomas E. Carlson
------------------------------------

            PLEASE TAKE NOTICE THAT in accordance with the Court's Final Order
Approving Bidding Procedures and Protections (the "Order", Docket No. 137),
First Virtual Communications, Inc. and CUseeMe Networks, Inc. (collectively, the
"Debtors") have determined, at the conclusion of a solicitation conference
("Solicitation Conference") conducted by the Debtors on February 28, 2005, that
the offer to purchase substantially all of the Debtors' assets submitted by

--------------------------------------------------------------------------------
                            NOTICE OF WINNING OFFER
<PAGE>
RADvision Ltd. is the highest or best offer--i.e., the Winning Offer, as defined
in the Order. Copies of the Winning Offer, in the form of an Asset Purchase
Agreement, a letter from RADvision Ltd. setting forth an improved bid made at
the Solicitation Conference, and the pertinent portion of the transcript of the
record of the Solicitation Conference during which the Buyer modified its
improved bid, are attached as Exhibit A.

Dated: March 2, 2005
                                    SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

                                    By: /s/  Van C. Durrer, II
                                        ----------------------------------------
                                                   Van C. Durrer, II
                                                        Kurt Ramlo
                                                       Glenn Walter

                                     Proposed Attorneys for Debtors and Debtors
                                                    in Possession

                                      - 2 -

--------------------------------------------------------------------------------
                             NOTICE OF WINNING OFFER
<PAGE>
                                                                               1

            1

            2    UNITED STATES BANKRUPTCY COURT
                 FOR THE NORTHERN DISTRICT OF CALIFORNIA
            3
                 ----------------------------------------x
            4    In The Matter Of

            5                                       Case Nos.
                                                    05-30145
            6                                       05-30146

            7    First Virtual Communications, Inc. and
                 CUseeMe Networks, Inc.
            8              Debtors

            9    ----------------------------------------x

           10
                                 February 28, 2005
           11                        10:39 a.m.

           12
                                     AUCTION
           13

           14         Auction held at the offices of Skadden, Arps,

           15    Slate, Meagher & Flom, Four Times Square, New York,

           16    New York, before Kathleen Keefe, a Shorthand

           17    Reporter for the State of New York.

           18

           19

           20

           21

           22

           23

           24

           25

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                               2

            1               First Virtual Communications

            2    A p p e a r a n c e s:

            3             SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                                Attorneys for First Virtual
            4                   Communications and
                                CUseeMe Networks, Inc.
            5                   300 South Grand Avenue
                                Los Angeles, California  90071-3144
            6
                          BY:   VAN C. DURRER, II, ESQ.
            7                   KURT RAMLO, ESQ.
                                DIONISIA KALOUDIS, ESQ.
            8

            9
                          SULMEYER KUPETZ
           10                   Attorneys for the Official Committee
                                of Unsecured Creditors
           11                   333 South Hope Street
                                   35th Floor
           12                   Los Angeles, California  90071

           13             BY:   CHRISTOPHER ALLIOTTS, ESQ.

           14

           15             CARTER LEDYARD & MILBURN LLP
                                Attorneys for Radvision, Ltd.
           16                   2 Wall Street
                                New York, New York 10005
           17
                          BY:   JAMES GADSEN, ESQ.
           18

           19
                          RADVISION, LTD
           20                   24 Raul Wallenberg Street
                                Tel Aviv 69719 Israel
           21
                          BY:   ARNOLD TARAGIN, ESQ.
           22

           23

           24

           25

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                       EXHIBIT A

                                                                               3

            1               First Virtual Communications

            2                         I N D E X

            3    Exhibit    Description                       Page

            4      1        2/4/05 Interim Order Approving      4
                            Bid Procedures
            5
                   2        2/18/05 Final Order Approving       4
            6               Bid Procedures

            7      3        Exhibits 1 and 2 to Debtor's        4
                            Emergency Motion for Orders
            8               Approving Bid Procedures and
                            Approving Transaction
            9
                   4        Set of Schedules in two parts       4
           10
                   5        2/21/05 Radvision Bid               4
           11
                   6        Pro Forma Cash Flow                 4
           12
                   7        Additional and/or Replacement      20
           13               Schedules Pursuant to the
                            Various Bids
           14
                   8        2/28/05 Successful Radvision       21
           15               Bid

           16

           17

           18

           19

           20

           21

           22

           23

           24

           25

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                               7

            1               First Virtual Communications

            2    asset purchase agreement submitted by

            3    Millennium Technology as well as Silicon Valley

            4    Bank and Morrison & Foerster, LLP.

            5                   Exhibit 4 consists of a set of

            6    schedules in two parts.  One is attached as a

            7    group, attached to an e-mail dated February 18

            8    from Kurt Ramlo to Allison Wauk, who represents

            9    Millennium Technology Ventures, and it consists

           10    of the schedules to Exhibit 3, and then there

           11    are certain modifications which are included

           12    also in an e-mail from Mr. Ramlo to Ms. Wauk

           13    dated February 21, 2005.  That collectively

           14    represents Exhibit 4.

           15                   Exhibit 5 consists of the

           16    Radvision bid, which is attached to a letter

           17    dated February 21, 2005 from Arnie Taragin to

           18    Jonathan Morgan and others, as well as an

           19    e-mail from Jane Xiao to Kurt Ramlo, dated

           20    February 21st, 2005, which consists of the

           21    schedules to that contract.

           22                   Off the record for a second.

           23              (Discussion off the record.)

           24                   MR. DURRER:  Finally, Exhibit 6

           25    is a pro forma cash flow which we have shared

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              20

            1               First Virtual Communications

            2                   All right.  At this point we're

            3    going to break for the bidders to come up with

            4    their improved bids and we'll be back on the

            5    record as close to noon as we can manage.

            6    Thank you.

            7             (A recess was taken from 10:57 a.m.

            8    to 3:13 p.m.)

            9             (Exhibit 7:  Marked for identification.)

           10                   MR. DURRER:  This is Van Durrer.

           11    We're recommencing the record at about 3:15

           12    East Coast time.  Present are everyone that was

           13    present before, including on the phone, with

           14    the exception of Mr. Schwerin.  Mr. Schwerin is

           15    not in the room, but I understand that

           16    Mr. Todaro is still on the phone for MTV.

           17                   We want to have two additional

           18    exhibits marked for the record.  Exhibit 7

           19    consists of additional and/or replacement

           20    schedules pursuant to the various bids.  They

           21    consist of a new schedule 1.01C, like Charlie;

           22    a schedule 1.01M, like Mary; a schedule 3.01B,

           23    like boy; 3.09B like boy; and a schedule 3.12.

           24    And that is collectively marked as Exhibit 7.

           25

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              21

            1               First Virtual Communications

            2             (Exhibit 8:  Marked for identification.)

            3                   MR. DURRER:  Exhibit 8 is

            4    marked, a copy of the successful bid received

            5    from Radvision this afternoon, and that Exhibit

            6    8 is the successful bid designated by the

            7    estate with consultation from the Creditors'

            8    Committee, subject to the following

            9    modifications which I'm going to put on the

           10    record and ask for Radvision to confirm.

           11                   Exhibit 8 speaks to schedules in

           12    the second paragraph provided as Exhibit 5 and

           13    as modified.  The modification consists of the

           14    exhibits that have been marked as Exhibit 7.

           15    The date of the contract going forward, the

           16    date of the Radvision bid, the asset purchase

           17    agreement annexed to the contract is going to

           18    be deemed to be February 28th, 2005.  The

           19    aggregate consideration in terms of purchase

           20    price is 7,150,000.  That would be reflected in

           21    section 1.05 of the contract.

           22                   And the way that that gets

           23    broken down is, 6,020,000 gets paid at closing

           24    pursuant to the terms of the original APA

           25    submitted with Radvision's qualifying bid,

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              22

            1               First Virtual Communications

            2    which was Exhibit 5 as part of this record,

            3    with the balance, 1,130,000, being the escrow

            4    that has been deposited in connection with that

            5    bid.

            6                   A couple of additional

            7    modifications that are reflected in part in

            8    Exhibit 8, but also in part in this record.

            9    There would be a couple of modifications to the

           10    proposed form of sale order.  One is that the

           11    sale order will be modified to provide that, to

           12    the extent that any contracts are removed from

           13    the list of assumed and assigned contracts by

           14    Radvision within 30 days of the closing, as is

           15    recited in the asset purchase agreement, that

           16    the Debtor will provide notice of such removal

           17    to that creditor or to that contract party, and

           18    then that contract party will have 30 days or

           19    so, you know, whatever the Court approves, to

           20    submit a rejection damage claim, if any.

           21                   Two additional modifications to

           22    the sale order.  The sale order will provide

           23    that in connection with Radvision's bid in

           24    Exhibit 8, it has agreed that, without

           25    accepting any liability or assuming any

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              23

            1               First Virtual Communications

            2    liabilities, to the extent that Radvision hires

            3    an employee, that it will provide the accrued

            4    vacation to that employee as part of that

            5    employee's compensation package.  We have

            6    provided a schedule of that accrued vacation

            7    liability and that would be the basis for that

            8    proposal in Exhibit 8.

            9                   The sale order will provide that

           10    to the extent that the Committee agrees, after

           11    consulting with the Committee, that a

           12    particular employee, you know, is appropriate

           13    to be paid that vacation, that that vacation

           14    can be paid at closing or soon thereafter to

           15    the extent that Radvision determines not to

           16    hire such employee.

           17                   With respect to the employee

           18    retention program, which had been budgeted by

           19    the estate in the amount of $200,000, Radvision

           20    and the Committee have also agreed that the

           21    approval of such retention program, subject to

           22    approval of the Committee, in consultation with

           23    Radvision, in terms of an explanation of the

           24    benefits to be provided by the program in a

           25    maximum amount not to exceed $200,000, that

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              24

            1               First Virtual Communications

            2    that approval can be included in the sale order

            3    and any such payments pursuant to that program

            4    would be made no earlier than closing under the

            5    Radvision contract.

            6                   And then lastly, there are

            7    provisions contained in Exhibit 8 with respect

            8    to a proposed consulting arrangement with the

            9    current CEO.  To clarify, Exhibit 8, the term

           10    of the proposed consulting agreement will be 12

           11    months at compensation of $200,000 for such 12

           12    months, that there will be a noncompete

           13    agreement by the executive that is coterminous

           14    with that term, that 12-month period.

           15                   In addition, the executive --

           16    Radvision will recommend to its board a

           17    20,000 -- 20,000 Radvision options be afforded

           18    to such executive at a strike price at whatever

           19    the closing price is on the date of such board

           20    approval with such options to terminate within

           21    one month following the end of the 12-month

           22    consulting period.  Those options will vest at

           23    the conclusion -- over a period ending at the

           24    conclusion of the consulting period.

           25                   And so that with those

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              25

            1               First Virtual Communications

            2    modifications, Exhibit 8, with the modified

            3    schedules contained in Exhibit 7, and then to

            4    the extent that there are not inconsistencies,

            5    Exhibit 5, which is the original form of the

            6    APA, constitutes the entirety of the winning

            7    proposal that the Debtors have -- with the

            8    consultation of the Committee, have designated

            9    as part of this auction subject to board

           10    approval and, of course, Court approval.

           11                   The Debtors will execute a

           12    conformed APA to the extent that it is

           13    consistent with this record.  To the extent

           14    that, you know, it is overly burdensome to sign

           15    a conformed APA, this record will stand as the

           16    APA that we will be submitting to the Court for

           17    approval.

           18                   Are there any clarifications or

           19    comments that Radvision needs to make based on

           20    that?

           21                   MR. GADSEN:  Let me have a

           22    minute to talk to Mr. Taragin.

           23                   MR. DURRER:  Off the record.

           24             (Pause.)

           25                   MR. GADSEN:  On the record.

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              26

            1               First Virtual Communications

            2    Which is that Radvision will be informed of how

            3    the retention money is spent?

            4                   MR. DURRER:  That's exactly

            5    right.

            6                   MR. GADSEN:  Who gets paid?

            7                   MR. DURRER:  The estate agrees

            8    to that clarification.

            9                   MR. GADSEN:  I just want to

           10    speak to my client.

           11                   MR. DURRER:  We'll go off the

           12    record.

           13                   MR. TODARO:  Two quick things.

           14    One, does this have the approval of the actual

           15    Creditors' Committee?  You mentioned them, but

           16    I wasn't sure.

           17                   MR. DURRER:  Yes, it does.

           18                   MR. ALLIOTTS:  I still have to

           19    report today's events to the Committee, but --

           20    it's certainly my intention to recommend

           21    acceptance of it, but I just need that formal

           22    approval of it.

           23                   MR. TODARO:  I wanted to make

           24    sure you were going to recommend approval.

           25                   The second is:  Are there any

                               Hudson Reporting & Video, Inc.
                 1-800-310-1769   www.hudsonreporting.com    New York
<PAGE>
                                                                              30

                            First Virtual Communications

                                C E R T I F I C A T E

                 STATE OF NEW YORK    )
                                      )Section
                 COUNTY OF NEW YORK   )

                          I, KATHLEEN A. KEEFE, a Registered

                 Professional Reporter and Notary Public in

                 and for the State of New York do hereby certify:

                          I reported the proceedings in the within

                 entitled matter, and that the within transcript

                 is a true record of such proceedings.

                          I further certify that I am not related,

                 by blood or marriage, to any of the parties in this

                 matter and that I am in no way interested in the

                 outcome of this matter.

                          IN WITNESS WHEREOF, I have hereunto set

                 my hand this 2nd day of March, 2005.

                                      /s/ Kathleen Keefe
                                     -------------------------------------------
                                     KATHLEEN KEEFE, R.P.R.
                                              oOo

                         Hudson Reporting & Video, Inc.
                 1-800-310-1769 www.hudsonreporting.com New York
<PAGE>
                         Exhibit 5 to Auction Transcript

<PAGE>
                            ASSET PURCHASE AGREEMENT

                                      AMONG

                                 RADVISION LTD.

                       FIRST VIRTUAL COMMUNICATIONS, INC.

                                       AND

                             CUSEEME NETWORKS, INC.

                                FEBRUARY 21, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>         <C>                                                                                        <C>
ARTICLE I SALE OF ASSETS AND TERMS OF PAYMENT............................................................1
   1.01     Assets Being Sold to Buyer...................................................................1
   1.02     Retained Assets;.............................................................................4
   1.03     Assumed Liabilities..........................................................................5
   1.04     Retained Liabilities;........................................................................5
   1.05     Purchase Price...............................................................................6
   1.06     Allocation of the Purchase Price.............................................................6
   1.07     Absolute Sale................................................................................6

ARTICLE II RELATED AGREEMENTS............................................................................7
   2.01     Assignments of Patent, Trademark, and Copyright Rights.......................................7
   2.02     Bill of Sale.................................................................................7
   2.03     Real Property Lease Assignments..............................................................7
   2.04     Contract Assignment..........................................................................7

ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS.........................................7
   3.01     Organization and Good Standing; Assets of Subsidiaries.......................................7
   3.02     Authorization: Compliance with Other Instruments and Law.....................................7
   3.03     Due Diligence................................................................................8
   3.04     Operation of the Business in the Ordinary Course.............................................8
   3.05     Tax Matters..................................................................................9
   3.06     Material Contracts and Commitments; Cure Costs...............................................9
   3.07     Licenses, Permits and Authorizations........................................................10
   3.08     Title to Purchased Assets...................................................................10
   3.09     Proprietary Rights..........................................................................11
   3.10     Employee Benefit Plans; Labor Matters.......................................................12
   3.11     Litigation and Other Claims.................................................................13
   3.12     Proprietary Information Agreements, etc.....................................................13
   3.13     Compliance with Laws;.......................................................................13
   3.14     Insurance...................................................................................13
   3.15     Real Property Leases........................................................................13
   3.16     Condition of Purchased Assets...............................................................14
   3.17     Environmental Matters.......................................................................14
   3.18     Full Disclosure.............................................................................16
   3.19     Representations and Warranties True at the Closing..........................................16

ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER...........................................16
   4.01     Organization and Good Standing..............................................................16
   4.02     Due Authorization; Noncontravention.........................................................16
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>         <C>                                                                                        <C>
ARTICLE V EMPLOYEES.....................................................................................17
   5.01     Employees and Employee Benefits.............................................................17
   5.02     Third Parties...............................................................................18

ARTICLE VI WORKERS COMPENSATION, PRODUCT LIABILITY AND WARRANTY RESPONSIBILITY..........................19
   6.01     Workers Compensation........................................................................19
   6.02     Product Liability and Warranty Claims.......................................................19

ARTICLE VII COVENANTS AND AGREEMENTS REGARDING BANKRUPTCY...............................................19
   7.01     Bankruptcy Actions..........................................................................19

ARTICLE VIII PRE-CLOSING COVENANTS......................................................................21
   8.01     General.....................................................................................21
   8.02     Disclosure..................................................................................21
   8.03     Operation of Business.......................................................................21
   8.04     Books of Account............................................................................21
   8.05     Access to Information.......................................................................22
   8.06     Key Employees...............................................................................22
   8.07     Consents....................................................................................22
   8.08     Delivery of Schedules; Notice of Developments...............................................22
   8.09     Related Agreements..........................................................................22
   8.10     Press Releases and Public Announcements.....................................................22
   8.11     Enforcement of Rights with Respect to Employees, etc........................................22
   8.12     Limitation on Solicitation, etc.............................................................23

ARTICLE IX CLOSING CONDITIONS...........................................................................23
   9.01     Condition to Obligations of all Parties.....................................................23
   9.02     Conditions to the Obligations of Sellers....................................................23
   9.03     Conditions to the Obligations of Buyer......................................................24

ARTICLE X THE CLOSING...................................................................................24
   10.01       Time and Place of Closing................................................................24
   10.02       Instruments of Transfer, Etc.............................................................24
   10.03       Termination of Agreement.................................................................25
   10.04       Effect of Termination....................................................................26

ARTICLE XI POST CLOSING COVENANTS.......................................................................26
   11.01       Expenses.................................................................................26
   11.02       Further Assurances.......................................................................26
   11.03       Commissions and Fees.....................................................................26
   11.04       Sales, Transfer and Use Taxes............................................................27
   11.05       Nondisclosure............................................................................27
   11.06       Publicity................................................................................27
   11.07       Accounts Receivable......................................................................27
   11.08       Non-competition..........................................................................28
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>         <C>                                                                                        <C>
   11.09       Enforcement of Rights with Respect to Employees, etc.....................................28

ARTICLE XII MISCELLANEOUS...............................................................................28

   12.01       Binding Effect...........................................................................28
   12.02       No Assignment;...........................................................................28
   12.03       Counterparts.............................................................................29
   12.04       Governing Law............................................................................29
   12.05       Venue....................................................................................29
   12.06       Notices..................................................................................29
   12.07       Amendment and Modification...............................................................30
   12.08       Waiver of Compliance.....................................................................30
   12.09       Interpretation...........................................................................30
   12.10       Incorporation of Exhibits and Schedules..................................................30
   12.11       Entire Agreement.........................................................................30
</TABLE>

                                    SCHEDULES

<TABLE>
<CAPTION>
                                                                                            SECTION
SCHEDULE                DESCRIPTION                                                        REFERENCE
--------                -----------                                                        ---------
<S>                     <C>                                                                <C>
   1.01(a)              Real Property Leases                                                 1.01(a)
   1.01(b)              Furniture, Machinery & Equipment                                     1.01(b)
   1.01(c)              Assumed Contracts; Defaults                                          1.01(c)
   1.01(f)              Government Licenses, Permits and Authorizations                      1.01(f)
   1.01(h)              Proprietary Rights                                                   1.01(h)
   1.01(k)              Assumed Insurance Policies                                           1.01(k)
   1.01(m)              Budget                                                               1.01(m)
   1.02                 Retained Assets                                                      1.02
   3.01                 Organization and Good Standing;                                      3.01
   3.01(b)              Assets of Subsidiaries                                               3.01(b)
   3.02                 Noncontravention                                                     3.02
   3.03                 Due Diligence Materials Provided to RADvision                        3.03
   3.04                 Operation of the Business in the Ordinary Course                     3.04
   3.06(a)              Sellers' Contracts; Defaults                                         3.06(a)
   3.06(b)              Government Contracts; Defaults                                       3.06(b)
   3.06(c)              Cure Costs                                                           3.06(c)
   3.07                 Licenses, Permits and Authorizations - Exceptions                    3.07
   3.08                 Encumbrances on Assets                                               3.08
   3.09(b)              IP - Computer Programs                                               3.09(b)
   3.09(c)              Licensee Software                                                    3.09(c)
   3.09(d)              IP - Litigation                                                      3.09(d)
   3.09(e)              IP - Infringements                                                   3.09(e)
   3.09(f)              IP - Encumbrances                                                    3.09(f)
   3.09(g)              IP - Licenses                                                        3.09(g)
   3.09(h)              IP - Royalty Fees                                                    3.09(h)
   3.10                 Employee Benefit Plans                                               3.10
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>
                                                                                            SECTION
SCHEDULE                DESCRIPTION                                                        REFERENCE
--------                -----------                                                        ---------
<S>                     <C>                                                                <C>
   3.11                 Litigation                                                           3.11
   3.12                 Proprietary Information Agreements, etc.--Exceptions                 3.12
   3.13                 Compliance with Laws                                                 3.13
   3.13(b)              List of US and ISO Standards                                         3.13(b)
   3.14                 Insurance                                                            3.14
   3.15                 Real Property Leases                                                 3.15
   3.17                 Environmental Matters                                                3.17
   5.01                 Employees                                                            5.01(b)
   8.06                 Key Employees                                                        8.06
  11.03                 Commissions and Fees                                                11.03
</TABLE>

                                    EXHIBITS

<TABLE>
<CAPTION>
Exhibit       Description                                        Section
                                                                 Reference
<S>           <C>                                                <C>
A             Form of Assignment of Patent Rights                2.01
B             Form of Assignment of Trademark Rights             2.01
C             Form of Assignment of Copyright Rights             2.01
D             Form of Bill of Sale                               2.02
E             Form of Assignment of Leases                       2.03
F             Form of Contract Assignment                        2.04
G             Form of Sale Order                                 7.01
H             Form of 9.03(a) Certificate                        9.03(a)
I             Certain Definitions                                Recitals
</TABLE>

                                       iv
<PAGE>

                            ASSET PURCHASE AGREEMENT

      THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of February 21,
2005 among RADvision Ltd., an Israeli corporation (the "Buyer"), First Virtual
Communications, Inc., a Delaware corporation ("FVC"), and CUseeMe Networks,
Inc., a Delaware corporation ("CUseeMe"; and together with FVC referred to
herein collectively as "Sellers" and each individually as a "Seller"). Each of
Buyer, FVC and CUseeMe are sometimes individually referred to herein as a
"Party" or collectively as the "Parties".

                             SUMMARY OF TRANSACTIONS

      Sellers are engaged in the business of providing integrated rich media
communication solutions to the enterprise, service provider and public sector
markets (the "Business"). CUseeMe is a wholly owned subsidiary of FVC.

      On January 20, 2005 (the "Petition Date"), each Seller filed with the
United States Bankruptcy Court for the Northern District of California, San
Francisco Division (the "Bankruptcy Court") a voluntary petition (the "Chapter
11 Cases") for relief under chapter 11 of Title 11 of the United States Code
(the "Bankruptcy Code").

      Prior to the filing of the Chapter 11 Cases, Buyer and FVC entered into a
letter of intent (the "Letter of Intent") dated January 20, 2005 confirming
their mutual intentions with respect to the potential purchase by Buyer or its
Affiliates of substantially all of the assets and Business of Sellers.

      Pursuant to the provisions of the Letter of Intent, Buyer, FVC and U.S.
Bank National Association (the "Escrow Agent") have entered into an escrow
agreement dated as of January 24, 2005 (as from time to time amended,
supplemented or restated, the "Escrow Agreement") and Buyer delivered $999,975
to the Escrow Agent on January 27, 2005 and will deliver an additional $130,025
for a total of $1,130,000 to be held in escrow pursuant to the terms of the
Escrow Agreement (the "Escrow Amount").

      Sellers wish to sell, and Buyer wishes to substantially all of the assets
of Sellers on the conditions and pursuant to the terms herein set forth.
Capitalized terms used herein shall have the meanings ascribed to them in this
Agreement, including the Schedule of Definitions annexed hereto as Exhibit I. To
effect such Transactions and in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties hereto agree as follows:

                                   ARTICLE I

                       SALE OF ASSETS AND TERMS OF PAYMENT

      1.01 ASSETS BEING SOLD TO BUYER. Upon the terms and conditions set forth
in this Agreement and subject to the provisions of the Sale Order, Seller agrees
to sell and transfer to Buyer and Buyer agrees to purchase, at the Closing, all
of Sellers' assets used

<PAGE>

in or associated with the Business (the "Purchased Assets"), as they shall exist
on the Closing Date (as defined in Section 10.01 hereof), but excluding the
Retained Assets (as defined in Section 1.02 hereof) including without limitation
the following assets:

      (A) REAL PROPERTY LEASES. To the extent that the Bankruptcy Court has
authorized Seller to assume and assign such leases to Buyer pursuant to section
365 of the Bankruptcy Code, all of the right, title and interest of Sellers in,
to and under the leases (the "Assumed Real Property Leases") covering Sellers'
leased premises (the "Leased Premises") listed on Schedule 1.01(a) hereto and
all of the right, title and interest of Sellers in and to all leasehold
improvements in or on the Leased Premises, which Schedule 1.01(a) shall be
initially finalized by Buyer on or before March 2, 2005, provided, however, that
Buyer may remove any lease from Schedule 1.01(a) at any time on or before the
date that is 30 days after Closing;

      (B) FURNITURE, MACHINERY, AND EQUIPMENT. All the furniture, machinery,
transportation vehicles, equipment, tools, fixtures, molds and dies and other
fixed assets of Sellers located on the Leased Premises, on the premises of
vendors or elsewhere, substantially all of which are listed on Schedule 1.01(b)
hereto, except those items sold or otherwise disposed of after the date hereof
in the ordinary course of business (subject to prior approval of Buyer);

      (C) ASSUMED CONTRACTS. To the extent that that the Bankruptcy Court has
authorized Seller to assume and assign such contracts to Buyer pursuant to
section 365 of the Bankruptcy Code or otherwise to transfer its rights under
such contracts to Buyer pursuant to section 363 of the Bankruptcy Code, all of
the right, title and interest of Sellers in, to and under those executory
contracts, agreements, commitments and understandings (including leases of
personal property) which are specifically listed on Schedule 1.01(c) hereto,
which Schedule 1.01(c) shall be initially finalized by Buyer on or before March
2, 2005, provided, however, that Buyer may remove any contract from Schedule
1.01(c) at any time on or before the date that is 30 days after Closing (the
"Assumed Contracts");

      (D) ACCOUNTS RECEIVABLE AND CUSTOMER CLAIMS. All of Sellers' accounts
receivable and notes receivable, subject to any trade credits or offsets owed to
customers of Sellers and all of Sellers' rights, claims and causes of action
against customers of the Business;

      (E) BOOKS AND RECORDS; All of Sellers' books and records (the "Records"),
including all sales and credit records, advertising and sales material,
literature, customer and distributor lists, financial records, personnel and
payroll records to the extent transferable under applicable law, Tax, accounting
and other books and records;

      (F) GOVERNMENTAL LICENSES, PERMITS AND AUTHORIZATIONS . To the extent
assignable and transferable under their terms and applicable law, all
governmental licenses, permits and authorizations related to the Business a
complete list of which, to Sellers' Knowledge, is set forth on Schedule 1.01(f)
hereto (the "Assumed Licenses");

                                       2
<PAGE>

      (G) DEPOSITS, CREDITS AND PREPAID EXPENSES. All of Sellers' deposits,
credits, prepaid expenses, other current assets and all security deposits and
similar assets relating to the Assigned Contracts (as defined below);

      (H) PROPRIETARY RIGHTS. Any and all Seller Proprietary Rights and any and
all Seller Registered Proprietary Rights which, to the extent they can be
specified, are included on Schedule 1.01(h) hereto;

      (I) INVENTORIES. All inventories of Sellers of any kind including, but not
limited to, finished goods, work in progress, supplies and raw materials;

      (J) INTANGIBLE ASSETS. The intangible assets of the Business of Sellers as
a going concern and good will thereof;

      (K) INSURANCE POLICIES. Those insurance policies specified by Buyer on
Schedule 1.01(k) hereof (the "Assumed Insurance Policies"), to the extent such
insurance policies are assignable and transferable under their terms and
applicable law, which Schedule 1.01(k) shall be initially finalized by Buyer on
or before March 2, 2005, provided, however, that Buyer may remove any insurance
policy from Schedule 1.01(k) at any time on or before the date that is 30 days
after Closing;

      (L) RIGHTS WITH RESPECT TO EMPLOYEES, ETC. To the extent assignable and
transferable under applicable law, any and all of Sellers' rights to enforce
employee secrecy, non-disclosure, non-competition agreements or covenants by
current or former employees and any other rights to protect the Seller
Proprietary Rights and Seller Registered Proprietary Rights and the Business;

      (M) CASH AND BANK ACCOUNTS. Sellers' cash and cash equivalents as of the
Closing Date, including, but not limited to any bank deposit accounts, provided,
however, that Sellers may retain the total sum (the "Retained Cash") in the
amount of (i) the Carve-Out as defined in the Interim Order Authorizing Debtor
to Obtain Postpetition Financing Secured by Liens on Property of the Estate or
the Final Order Authorizing Debtor to Obtain Postpetition Financing Secured by
Liens on Property of the Estate, whichever is then in effect (the "DIP Order"),
except that the time period in the Carve-Out following and defined by reference
to the delivery of a Default Notice in the DIP Order follows and is defined
instead under this Agreement by reference to the Closing Date, plus (ii)
accrued, unpaid administrative expenses under 11 U.S.C. Section 503(b) through
and including the Closing Date (other than the Carve-out, as modified under this
Agreement) to the extent previously or subsequently allowed, provided that such
administrative expenses are included in the budget attached as Schedule 1.01(m);
and

      (N) OTHER ASSETS. All other assets, properties and rights of Sellers, of
every kind and nature, owned or held by Sellers or in which Sellers have an
interest on the Closing Date, known or unknown, fixed or unfixed, choate or
inchoate, accrued, absolute, contingent or otherwise, whether or not
specifically referred to in this Agreement, where and as they are held, other
than the Retained Assets.

                                       3
<PAGE>

      1.02 RETAINED ASSETS; Notwithstanding the foregoing, the Purchased Assets
shall not include any of the following (collectively the "Retained Assets"):

      (A) any equity security of a Seller or any direct or indirect subsidiary
of a Seller;

      (B) Sellers' rights, title and interests under this Agreement and any
agreements executed in connection herewith, including, but not limited to, the
Letter of Intent;

      (C) any leases covering leased premises that are not Assumed Real Property
Leases;

      (D) any executory contracts, agreements, commitments and understandings
(including leases of personal property) that are not Assumed Contracts;

      (E) the corporate seal, minute books, charter documents, corporate stock
record books and such other Records as pertain to the organization, existence or
share capitalization of Sellers and duplicate copies of the Records as are
necessary to enable Seller to file its Tax returns and reports as well as any
other Records or materials relating to Seller generally and not involving or
relating to the Purchased Assets;

      (F) all personnel records and other Records that Sellers are required by
applicable law to retain in its possession, provided that Buyer will receive
copies of such Records (to the extent permitted by applicable law);

      (G) all "employee benefit plans" (as such term is defined by Section 3(3)
of the Employee Retirement Security Act of 1974, as amended ("ERISA")),
"employee pension benefit plans" (as such term is defined by Section 3(2) of
ERISA) and all other pension, profit sharing or cash or deferred compensation
plans and trusts and assets thereof and any other employee benefit plan or
arrangement thereof, if any, maintained by Sellers;

      (H) any Tax attributes of the Sellers, including without limitation, any
net operating loss carryovers and any right or claim for a Tax refund
attributable to the operation or assets of the Sellers, whether arising before
or after the Closing;

      (I) the Retained Cash;

      (J) Any rights or actions for avoidance of transactions or obligations, or
recovery under Sections 541 through 550 of the Bankruptcy Code (the "Avoidance
Actions"), that may be asserted on behalf of Sellers as debtors in possession or
a trustee in the Chapter 11 Cases against a Person other than Buyer or its
Affiliates, provided that Sellers shall not assert Avoidance Actions or other
claims against a Person with whom Sellers had a business relationship as of the
date immediately prior to the Closing Date;

      (K) Assets of the Sellers' former hardware business; and

      (L) Those assets specifically listed on Schedule 1.02 hereto.

                                       4
<PAGE>

      1.03 ASSUMED LIABILITIES. Buyer agrees to (A) assume, perform and
discharge all post-Closing liabilities due under the Assumed Real Property
Leases, the Assumed Contracts and Assumed Licenses and otherwise related to the
Purchased Assets arising on and after the Closing Date and (B) cure, at Buyer's
expense, any and all monetary defaults existing under each Assumed Real Property
Lease, Assumed License, Assumed Insurance Policy and Assumed Contract included
within the Purchased Assets (collectively the "Assigned Contracts") to the
extent required for Sellers to assume such Assigned Contracts in the Chapter 11
Cases, provided, however, that Buyer shall not be required to pay, and shall
have no liability for, any amounts to cure the Assigned Contracts in excess of
the total amount of cash and cash equivalents transferred to Buyer under Section
1.01(m) above (collectively, the foregoing shall be referred to as the "Assumed
Liabilities").

      On the Closing Date or, as regards a particular Assigned Contract, on such
later date as Buyer pays the monetary cure for such Assigned Contract, Sellers
shall (i) cure, at Sellers' sole expense, any and all non-monetary defaults
existing under each Purchased Asset, and Assigned Contract to the extent
required for Sellers to assume such Assigned Contracts in the Chapter 11 Cases,
(ii) assume each Assigned Contract in the Chapter 11 Cases to the extent
necessary to transfer such Assigned Contracts to Buyer, and (iii) subject to
Buyer providing adequate assurance of performance to the counterparty thereto to
the extent required by the Bankruptcy Court, assign such Assigned Contracts to
Buyer pursuant to an order of the Bankruptcy Court (which may be the Sale Order
or one or more other orders that are no less favorable to Buyer than the
provisions of the Sale Order). Effective upon and concurrently with such
assignment(s), Buyer shall assume each Assigned Contract assigned to it pursuant
to this Section 1.03 by executing and delivering to Sellers the Assignment and
Assumption of Contracts attached hereto as Exhibit F. Buyer shall not assume any
liabilities or obligations of Sellers except those specifically assumed by Buyer
pursuant to the provisions of this Section 1.03.

      1.04 RETAINED LIABILITIES; Buyer shall not assume any liabilities or
obligations of Sellers except those specifically assumed by Buyer pursuant to
the provisions of Section 1.03. Except for the Assumed Liabilities, Buyer shall
not assume and shall not be liable for any of the debts, obligations,
responsibilities (including, but not limited to, Sellers' responsibility for any
warranty or product liability claims (including claims for injury to person or
property) relating to the Business and arising from products sold or work
performed on or prior to the Closing Date), undertakings or liabilities, whether
matured or unmatured, fixed or contingent, secured or unsecured, accrued,
absolute or other of Sellers and all such liabilities will remain the
responsibility of the Sellers and shall be retained, paid, performed and
discharged by the Seller and the Sale Order shall so provide. The Assumed
Liabilities shall not include any of Sellers' accrued expenses or other
indebtedness or liabilities incurred, related to, or arising as a result of
operations conducted, actions taken or events occurring on or prior to the
Closing Date, including specifically, but without limitation, (i) federal, state
and local income Tax liabilities, including, without limitation, all Tax
liabilities associated with deferred income items and all franchise, gross
receipts, property, sales, use or value added Taxes or any interest, additions
to Tax or penalties thereon; (ii) bank and other short-term debt; (iii)
intercompany current liabilities; (iv) all environmental liabilities and claims
arising out of

                                       5
<PAGE>

conditions existing or actions taken or not taken prior to the Closing Date, (v)
all litigations, arbitrations and other third party claims and proceedings, (vi)
all employee benefit liabilities and obligations (including specifically, but
without limitation, post retirement medical benefits, severance pay, bonuses,
incentive pay and deferred compensation, and accrued vacation and WARN Act
liability to the extent arising or accruing prior to the Closing Date), and
(vii) all unknown, contingent and other liabilities and obligations not
specifically assumed by Buyer pursuant to Section 1.03 above (collectively the
"Retained Liabilities").

      1.05 PURCHASE PRICE. In consideration for the Purchased Assets being sold
pursuant to this Agreement, Buyer agrees to pay the Purchase Price (the
"Purchase Price") as follows:

      (A) At Closing, Buyer shall pay Sellers in immediately available federal
funds an amount equal to $4,520,000;

      (B) At Closing, Buyer shall cause the Escrow Agent to pay the Escrow
Amount to Sellers;

      1.06 ALLOCATION OF THE PURCHASE PRICE. Each of the parties agrees that the
Purchase Price shall be allocated as reasonably determined by Buyer (and
reasonably satisfactory to Sellers) prior to the Closing on a schedule to be
prepared by Buyer (and reasonably satisfactory to Sellers) in accordance with
Section 1060 of the Code. Each of the parties agrees to report these
Transactions for all state and federal Tax purposes and all accounting purposes
in accordance with such allocation. If any state or federal taxing authority
challenges such allocation, Buyer and Sellers shall cooperate in good faith in
responding to such challenge and shall each bear their own costs and expenses in
any response. The party receiving the notice of such challenge shall give prompt
written notice to the other party of any such challenge. Within thirty (30)
calendar days after receipt of such notice, Buyer shall have the option to elect
to assume the defense of any such challenge. Regardless of whether Buyer elects
to assume such defense, both Buyer and Sellers, respectively, shall be entitled
to approve the settlement, if any, that the other may desire to make with
respect to any such challenge, which approval shall not be unreasonably
withheld. The foregoing allocation shall not be determinative of the appropriate
allocation of the Purchase Price among any creditors of Sellers asserting the
right to receive a portion of the Purchase Price as a distribution under the
Bankruptcy Code.

      1.07 ABSOLUTE SALE. Subject to the Sale Order (as defined below) and to
the extent provided in the Sale Order, the Sellers' sale, conveyance, transfer
and delivery of the Purchased Assets to Buyer shall be free and clear of all
title defects, liabilities, obligations, liens, mortgages, security interests,
encumbrances, claims or similar adverse interests of any kind or character to
the extent provided in the Sale Order.

                                       6
<PAGE>

                                   ARTICLE II

                               RELATED AGREEMENTS

      Simultaneously with the Closing hereunder or, as regards a particular
Assigned Contract, on such later date as Buyer pays the monetary cure for such
Assigned Contract, the following agreements (the "Related Agreements") will be
executed and delivered:

      2.01 ASSIGNMENTS OF PATENT, TRADEMARK, AND COPYRIGHT RIGHTS. Assignment
Agreements (the "Intellectual Property Assignments") in the forms of Exhibit A,
Exhibit B, and Exhibit C hereto, pursuant to which Sellers will assign to Buyer,
all of Sellers' right, title and interest in, to and under all Seller
Proprietary Rights and Seller Registered Proprietary Rights included in the
Purchased Assets.

      2.02 BILL OF SALE. Bill of Sale, in the form of Exhibit D hereto,
transferring title to the Purchased Assets (other than the Real Property Leases)
to Buyer.

      2.03 REAL PROPERTY LEASE ASSIGNMENTS. Assignments and/or Subleases of the
Leased Premises to Buyer in the form of Exhibit E hereto.

      2.04 CONTRACT ASSIGNMENT. Assignment of the Assumed Contracts to Buyer in
the form of Exhibit F hereto.

                                  ARTICLE III

                         REPRESENTATIONS, WARRANTIES AND
                              COVENANTS OF SELLERS

      Each Seller, jointly and severally, represents and warrants to, and
covenants with, Buyer that as of the date hereof and as of the Closing Date:

      3.01 ORGANIZATION AND GOOD STANDING; ASSETS OF SUBSIDIARIES.

      (A) Each Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and authority to own, lease and operate its properties and assets
(including the Purchased Assets) and to conduct its business as it is now being
conducted. Each Seller is duly qualified to do business in each jurisdiction in
which it owns, leases or operates property or otherwise conducts business, each
of which is set forth on Schedule 3.01 hereto. Except as set forth on Schedule
3.01 hereto, no Seller has equity or similar investments, direct or indirect, in
any corporation, partnership, association, joint venture or other entity.

      (B) Schedule 3.01(b) lists all material assets of the subsidiaries of the
Sellers, including, but not limited to, any Proprietary Rights of such
subsidiaries.

      3.02 AUTHORIZATION: COMPLIANCE WITH OTHER INSTRUMENTS AND LAW. Subject to
the entry of the Sale Order, each Seller has full corporate power and authority
to enter into this Agreement, the Related Agreements and any other agreements
and documents to

                                       7
<PAGE>

be executed and delivered by it at Closing as contemplated hereby (collectively,
the "Closing Documents' ), to consummate the Transactions contemplated hereby
and thereby and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the Closing Documents
and the consummation of the Transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of each of
the Sellers. This Agreement has been duly executed and delivered by each Seller,
and is a valid and binding obligation of each Seller enforceable in accordance
with its terms and the Closing Documents will, when executed and delivered by
each Seller at Closing, constitute valid and binding obligations of each Seller
enforceable in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect which affect creditor's rights
generally and by legal and equitable limitations on the availability of specific
remedies.

      Except as set forth on Schedule 3.02 and upon entry of the Sale Order, the
execution, delivery and performance of this Agreement and the Closing Documents
will not to the Sellers' Knowledge (i) conflict with or result in a breach or
violation of any provision of the Certificate of Incorporation or By-Laws or any
other applicable organizational documents of either Seller or of any order,
writ, injunction, judgment, decree, law, statute, rule or regulation to which
either Seller is a party or by which any Seller or the Purchased Assets may be
bound or affected; or (ii) result in a default (or give rise to any right of
termination, cancellation or acceleration) or result in the creation of any
lien, encumbrance, security agreement, charge, pledge, equity or other claim or
right of any person in or to the Purchased Assets under the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which any of the Sellers is a party or by which any
Seller or the Purchased Assets may be bound. All necessary authorizations of the
Transactions contemplated by this Agreement required to be obtained by any
Seller from any Federal, state, local or foreign government or agency shall have
been obtained prior to the Closing, and any filings, notifications or
disclosures required by law or regulation of any such government or agency shall
have been made in such form as is acceptable as filed. Buyer shall cooperate
with Sellers with respect to the aforesaid filings, notifications or disclosures
to the extent necessary to obtain said authorizations. Sellers will deliver to
Buyer at the Closing true and complete copies of all resolutions of their boards
of directors by which the execution, delivery and performance of this Agreement
and the Closing Documents and the consummation of the Transactions contemplated
hereby and thereby were authorized, certified by the Secretary or Assistant
Secretary of each Seller as of the Closing Date.

      3.03 DUE DILIGENCE. To the Sellers' Knowledge, the due diligence materials
provided by Sellers and their agents to Buyer (as set forth in Schedule 3.03
hereto) in connection with the Transactions contemplated by this Agreement do
not contain any materially incorrect information.

      3.04 OPERATION OF THE BUSINESS IN THE ORDINARY COURSE. Since January 20,
2005, except as set forth on Schedule 3.04, except as to any foreign operations
and except by reason of the filing of Chapter 11 Cases, the Sellers' Business
has been operated in the

                                       8
<PAGE>

ordinary course, except to the extent that Buyer has otherwise agreed in
writing or as is expressly contemplated by this Agreement.

      3.05 TAX MATTERS. The Sellers will file any and all required Tax returns
and pay any and all Taxes due in connection with such returns on or prior to the
Closing Date.

      3.06 MATERIAL CONTRACTS AND COMMITMENTS; CURE COSTS.

      Schedule 3.06(a) hereto constitutes a full and complete list, as of the
date hereof, of the possible Assigned Contracts. Except as indicated on Schedule
1.01(c) or Schedule 3.06(a), the Sellers are not in breach or violation, or in
default under, any of the possible Assigned Contracts, and upon entry of the
Sale Order, the execution of this Agreement and the consummation of the
Transactions contemplated hereby will not constitute a default or breach under
the possible Assigned Contracts; and except as specifically indicated on
Schedule 1.01(c) or Schedule 3.06(a), the execution of this Agreement and the
consummation of the Transactions contemplated hereby will not give rise to any
consent requirement under any of the possible Assigned Contracts for which
consent has not already been obtained ("Required Consents"). All of the
contracts listed on Schedule 1.01(c) and Schedule 3.06(a) are in full force and
effect and have not been modified or amended in any material respect, except as
set forth on Schedule 1.01(c) or Schedule 3.06(a). To Sellers' Knowledge, there
exists no reason why any one of the possible Assigned Contracts or Government
Contracts cannot be assumed and assigned.

      (A) Schedule 3.06(b) contains a list of all Government Contracts (as
hereinafter defined) as of the date hereof, true, complete and correct copies of
which have been provided or made available to Buyer. Except as set forth in
Schedule 3.06(b) and except for the commencement of the Chapter 11 Cases, to
Sellers' Knowledge: (i) no Seller has taken any action or omitted to take any
action required under the terms of a Government Contract which would cause a
material breach or default under such Government Contract or cause a Seller to
be subject to disqualification or removal from any capacity which a Seller now
occupies with respect to, or as a result of the Government Contracts, either
directly or as a subcontractor, consultant or otherwise, nor has any Seller been
disqualified or removed from any such capacity; (ii) no Seller has received
notice of any default under, or notice of any violation of the terms of, any
Government Contract, other than those relating to the commencement of the
Chapter 11 Cases; (iii) no Seller is participating in, or is the subject of, any
investigation by an Governmental Authority relating to the Government Contracts,
billings, claims or business practices that is reasonably likely to lead to
criminal or material civil penalties or the cancellation of any Government
Contract, and no such investigation has been threatened or is actively being
considered; (iv) no Seller is debarred or suspended under the Federal
Acquisition Regulations or other similar applicable federal or state laws or
regulations by any Governmental Authority from bidding for, or obtaining any
Government Contract for services provided by, Sellers, and no such proceeding is
pending or threatened; (v) each Seller has complied in all material respects
with all applicable requirements, if any, under the Federal Truth in
Negotiations Act (codified at 10 U.S.C. Sections 2306 and 2306a; 41 U.S.C.
Section 254b) with respect to Government Contracts for services provided by
Sellers; (vi) no Government Contract is subject to the U.S. Government Cost
Accounting Standards, as

                                       9
<PAGE>

set forth in 48 C.F.R. Part 30; and (vii) no Seller has engaged in any
fraudulent act, bribery or other act of dishonesty or made any misrepresentation
of material fact in connection with soliciting, negotiating, obtaining or
maintaining any Government Contract which could serve as the basis of the
termination of any such Government Contract. Except as set forth in Schedule
3.06(b) and to the Sellers' Knowledge: (i) the operation of the Purchased Assets
has conformed, and is expected to conform, with the delivery schedule
requirements of each Government Contract except as otherwise agreed by the
applicable Governmental Authority; (ii) there has not been, nor is there
expected to be, any cost overrun liability or spending in excess of any
limitation of cost and fund provisions under any cost reimbursement type
Government Contracts; and (iii) no Governmental Authority has, in writing or
orally communicated, asserted or filed any actual or potential material price
reduction, adverse contract adjustment, or disallowance of costs or claims in
respect of any Government Contract. Except as set forth in Schedule 3.06(b) and
to the Sellers' Knowledge no Seller has received, with respect to any Government
Contract, notice of. (i) any cure notice pursuant to applicable contract default
provisions or notice of default, however termed; (ii) any contract termination,
whether for default, convenience, cancellation or a lack of funding or other
reasons; (iii) any final decision or unilateral modification assessing a price
reduction, penalty or claim for damages or other remedy, however termed; (iv)
any claim, based on assertions of defective pricing or asserted violations of
government cost accounting standards or cost principles; (v) any claim for
indemnification by an Governmental Authority; (vi) other than in the ordinary
course of business and in amounts less than $50,000, an equitable adjustment of
or claim concerning such Government Contract submitted by or brought by any
Seller or brought by any subcontractors or suppliers against a Seller; or (vii)
any disallowance of costs (direct or indirect) or related claims, in each case
referred to in one of the preceding clauses of this Section 3.06.

      (B) Schedule 3.06(c) lists the costs associated with curing defaults under
each possible Assigned Contract to the extent the default must be cured under
Bankruptcy Code Section 365(b).

      3.07 LICENSES, PERMITS AND AUTHORIZATIONS. Except as set forth on Schedule
3.07, each of the Sellers has all approvals, authorizations, consents, licenses,
franchises, orders, certificates and other permits of; and has made all filings
with, any governmental authority, whether foreign, Federal, state or local,
which are required for the ownership of their assets (including the Purchased
Assets) or the conduct of Seller's Business as presently conducted. A complete
list to the Sellers' Knowledge of all such approvals, authorizations, consents,
licenses, franchises, orders, certificates, permits and filings is included on
Schedule 3.07 hereto.

      3.08 TITLE TO PURCHASED ASSETS. Except as set forth on Schedule 3.08
hereto, Sellers have good and marketable legal title to the Purchased Assets
and, subject to entry of the Sale Order (as defined below) shall at the Closing
deliver to Buyer good and marketable legal title to the Purchased Assets free
and clear of all title defects, liabilities, obligations, liens, mortgages,
security interests, encumbrances, claims or similar adverse interests of any
kind or character to the extent provided in the Sale Order. All leases pursuant
to which Sellers lease any of the Purchased Assets, including the frequency and

                                       10
<PAGE>

amount of payments thereunder and duration of such leases are set forth on
Schedule 3.08 hereto. All such leases are valid and binding in accordance with
their respective terms.

      3.09 PROPRIETARY RIGHTS.

      (A) Schedule 1.01(h) sets forth a list of the Seller Proprietary Rights
and Seller Registered Proprietary Rights to the extent they can be specified.

      (B) Schedule 3.09(b) sets forth a list of computer programs (excluding
readily available, off-the-shelf personal computer software packages) currently
used or held for use by the Sellers.

      (C) To the Sellers' Knowledge, the Seller Proprietary Rights and Seller
Registered Proprietary Rights are valid and enforceable and the Sellers have the
right to use all Seller Proprietary Rights and Seller Registered Proprietary
Rights used or held for use in the Business except computer software identified
on Schedule 3.09(c) as computer software not owned by the Sellers and used in
the Business ("Licensee Software"). With respect to Licensee Software, at
Buyer's request and to the extent permitted under the license applicable to such
Licensee Software, Sellers shall sublicense the Licensee Software to Buyer on
the same terms and conditions as Sellers' license applicable thereto.

      (D) Except as set forth on Schedule 3.09(d), to the Sellers' Knowledge
there are no pending or threatened proceedings or litigation against any Seller.
(i) based upon the Seller Proprietary Rights or the Seller Registered
Proprietary Rights, or (ii) alleging that operation of the Sellers' Business or
any of the Purchased Assets infringe or misappropriate the patents, trademarks,
trade names, copyrights, trade secrets or other intellectual property rights of
others.

      (E) Except as set forth on Schedule 3.09(e), (i) there are no
infringements, misappropriations or other violations by others of valid,
enforceable items of Seller Proprietary Rights and Seller Registered Proprietary
Rights, and (ii) use of the Seller Proprietary Rights and Seller Registered
Proprietary Rights in the operation of the Sellers' Business as currently
conducted do not infringe, misappropriate or violate the patents, trademarks,
trade names, copyrights, trade secrets or other intellectual property rights of
others.

      (F) Except as set forth on Schedule 3.09(f) and upon entry of the Sale
Order, the Sellers have good and marketable title to the Seller Proprietary
Rights and Seller Registered Proprietary Rights, free and clear of all
encumbrances.

      (G) Except as set forth on Schedule 3.09(g), the Sellers have not granted
any license with respect to any of the Seller Proprietary Rights or Seller
Registered Proprietary Rights to any person.

      (H) Except as set forth on Schedule 3.09(h), none of the Seller
Proprietary Rights and Seller Registered Proprietary Rights requires payment of
any royalty or fee, however classified, to any person to be used in connection
with the Sellers' Business as presently used.

                                       11
<PAGE>

      3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.

      (A) Except as set forth on Schedule 3.10 hereto, no Seller maintains,
administers or otherwise contributes to any "employee benefit plan," as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), whether or not such plan is subject to any of the provisions
of ERISA, which covers any employee or beneficiary of any employee, whether
active or retired (any such plan being herein referred to as an "Employee
Plan"). None of such Employee Plans is intended to be qualified under Section
401 of the Code. No Seller has any commitment to create any additional Employee
Plans.

      (B) True and complete copies of each Employee Plan, including all
amendments thereto and related trust or other funding agreements and the latest
financial statements thereof, have been heretofore delivered to Buyer, together
with (i) a true and complete copy of the three most recent annual reports (if
required by law) for each such plan including any and all schedules, opinions
and attachments thereto prepared in connection with any such reports, and (ii) a
copy of the most recent summary plan description and summary of material
modifications of each such plan. None of Seller, any Employee Plan or any "party
in interest", as defined in section 3(14) of ERISA, has engaged in a "prohibited
transaction", as defined in section 406 of ERISA, which could subject any of
them or Buyer to liability under section 409 or 502(i) of ERISA.

      (C) Each Seller and each fiduciary for each of the Employee Plans, is in
compliance with the terms of the Employee Plans and with the requirements of any
and all laws, statutes, orders, decrees, rules and regulations, including but
not limited to ERISA, applicable to each such plan. No Seller has failed to make
any contribution to, or to pay any amount due and owing, as required by
applicable law or by the terms of any Employee Plan as of the last day of the
most recent fiscal year of each of such plans ended prior to the Closing Date.

      (D) To Sellers' Knowledge, there is no pending or threatened legal action,
proceedings or investigations against any Seller or any Employee Plan with
respect to any such plan, other than routine claims for benefits, which could
result in liability to any such plan, or to any Seller, and there is no basis
for any such legal action or proceeding.

      (E) Except as set forth on Schedule 3.10, (i) each Seller is in compliance
with all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and is not engaged in any
unfair labor practice; (ii) there is no unfair labor practice complaint against
any Seller pending before the National Labor Relations Board or any other
tribunal; (iii) to Sellers' Knowledge there is no labor strike, dispute,
slowdown or stoppage actually pending or threatened against or affecting Seller;
(iv) no Seller has received notice that any representation or petition
respecting any of its employees has been filed with the National Labor Relations
Board or comparable foreign regulatory authority; (v) no grievance or any
arbitration proceeding arising out of or under any collective bargaining
agreements is pending against any Seller; (vi) no Seller has experienced any
strike or work stoppage or other industrial dispute involving its employees in
the past five years; and (vii) to Sellers' Knowledge no claims,

                                       12
<PAGE>

charges, investigations, audits, arbitrations, administrative proceedings or
lawsuits are pending or threatened concerning any alleged violation of any Law
referenced in subparagraph (i) above.

      3.11 LITIGATION AND OTHER CLAIMS. To the Sellers' Knowledge, there are no
actions, suits, arbitration proceedings, claims, administrative charges,
investigations, audits or other proceedings related to the Sellers or relating
to any of the Purchased Assets pending or threatened before any foreign,
federal, state, municipal or other court, department, commission, arbitration
panel, board, bureau, agency, body or instrumentality against any Seller or
affecting any of the Sellers' property or assets (including the Purchased
Assets) at law or in equity except as set forth on Schedule 3.11. No Seller is a
party to or subject to the provisions of any order, writ, injunction, decree or
judgment of any court or foreign, federal, state, municipal or other
governmental or administrative body, department, commission, board, bureau, any
securities exchange or other agency or instrumentality in connection with the
ongoing operations of the Sellers except as set forth on Schedule 3.11. No
Seller is engaged in any arbitration nor has either Seller submitted any
disputed matter to an arbitrator in connection with the ongoing operations of
the Sellers except as set forth on Schedule 3.11.

      3.12 PROPRIETARY INFORMATION AGREEMENTS, ETC. Except as set forth on
Schedule 3.12, each current and former employee of the Sellers has executed a
proprietary information and inventions agreement and the New Hampshire employees
have also executed secrecy agreements, forms of which have been provided to
Buyer.

      3.13 COMPLIANCE WITH LAWS; Except as set forth on Schedule 3.13 hereof

      (A) The Sellers' Business is being conducted in material compliance with
all applicable Laws.

      (B) The Sellers comply in all material respects with the standards
applicable to the Sellers' Business established by the International
Organization for Standardization (ISO). Schedule 3.13(b) sets forth all United
States and ISO standards with which the Sellers comply and includes copies of
all certificates received by any Seller regarding its compliance with any United
States or ISO standards.

      3.14 INSURANCE. The Sellers maintain reasonable and customary insurance
insuring the Purchased Assets and the operations of their Business. All policies
of insurance of any kind maintained, owned or held by the Sellers are set forth
on Schedule 3.14 hereto and such policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the
Closing Date have been paid other than premiums for which the Sellers are
prohibited from making payment by the Bankruptcy Code or the Bankruptcy Court,
and to Sellers' Knowledge no notice of cancellation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancellation or
termination.

      3.15 REAL PROPERTY LEASES. Except as set forth on Schedule 3.15, all
possible Real Property Leases are valid and binding upon the lessor and are in
full force and effect.

                                       13
<PAGE>

Except as set forth on Schedule 3.15 and upon entry of the Sale Order, there are
no existing defaults by either Seller under the possible Real Property Leases
and no event has occurred which (whether with or without notice, lapse of time,
or both) would constitute a default thereunder by the Sellers. Sellers have
delivered to Buyer true and complete copies of the possible Real Property
Leases.

      3.16 CONDITION OF PURCHASED ASSETS. The Purchased Assets are in good
repair and working condition, normal wear and tear excepted, are suited for the
uses intended, and are in conformity with all applicable laws, ordinances, rules
and regulations.

      3.17 ENVIRONMENTAL MATTERS Except as set forth on Schedule 3.17 hereto:

      (A) Each Seller is in compliance with all environmental laws, regulations,
permits and orders applicable to it, and with all laws, regulations, permits and
orders governing or relating to asbestos removal or abatement. No Seller has
received nor is the subject of any Environmental Claim (as hereinafter defined)
with respect to its business.

      (B) Except for temporary storage on premises pending arrangements for
removal, no Seller has transported, stored, treated, disposed of or released,
nor has it allowed or arranged for any third parties not a party to this
Agreement, to transport, store, treat, dispose of or release, Hazardous
Substances (as hereinafter defined) or other waste to or at any location other
than a site lawfully permitted to receive such Hazardous Substances or other
waste for such purposes; no Seller has performed, arranged for or allowed by any
method or procedure such transportation, storage, treatment, disposal or release
in contravention of any laws or regulations. No Seller has disposed, treated,
stored, released or allowed or arranged for any third parties to dispose, treat,
store or release Hazardous Substances or other waste upon any property or
facility of the Sellers, whether owned or leased.

      (C) There has not occurred, nor is there presently occurring, a Release
(as hereinafter defined), treatment, storage or disposal of any Hazardous
Substance or other waste on, into, above or beneath the surface of any parcel of
real property in which any Seller has or has had an ownership interest or any
leasehold interest or which any Seller manages or operates or has managed or
operated. For purposes of this Section the term "Release" shall mean releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing into the environment. No Seller has
transported or disposed of, nor has it allowed or arranged for any third parties
to transport or dispose of, any Hazardous Substance or other waste to or at a
site, nor does or has any property or facility owned, leased, managed or
operated by any Seller, constitute or constituted a site, which, pursuant to the
U.S. Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA") or any similar state law, (A) has been placed on the
National Priorities List or its state equivalent or otherwise been designated as
an environmental or hazardous waste clean-up site, or (B) the Environmental
Protection Agency or the relevant state agency has proposed or is proposing to
place on the National Priorities List or its state equivalent or otherwise
designate as an environmental or hazardous waste clean-up site. To Sellers'
Knowledge, no Seller has received a notice or notice of any facts which could
give rise to any notice

                                       14
<PAGE>

that any Seller is a potentially responsible party for a federal or state
environmental cleanup site or for corrective action under CERCLA or any other
applicable law or regulation or of any other Environmental Claim. No Seller has
submitted nor was required to submit any notice pursuant to Section 103(c) of
CERCLA. To Sellers' Knowledge, no Seller has received any written or oral
request for information in connection with any federal or state environmental
cleanup site nor has it undertaken (or been requested to undertake) any response
or remedial actions or cleanup actions of any kind at the request of any
federal, state or local governmental entity, or at the request of any other
person or entity.

      (D) To Sellers' Knowledge, there are no laws, regulations, ordinances,
licenses, permits or orders relating to environmental or worker safety matters
requiring any work, repairs, construction or capital expenditures with respect
to the assets or properties of any Seller or otherwise required to be performed
by any Seller with respect to any properties or facilities owned, leased,
managed or operated by any Seller.

      (E) Schedule 3.17 identifies (A) all environmental audits, assessments or
occupational health studies undertaken by any Seller or its agents or by any
governmental agencies with respect to the business or properties of any Seller;
(B) the results of any groundwater, soil, air or asbestos monitoring undertaken
with respect to any real property owned or leased by any Seller; (C) all written
communications of any Seller with environmental agencies; and (D) all citations
issued with respect to any Seller under the Occupational Safety and Health Act
(29 U.S.C. Sections 651 et seq.).

      (F) For the purposes of this Agreement, "Environmental Claim" shall mean
any demand, claim, governmental notice or threat of litigation or the actual
institution of any action, suit or proceeding at any time by a Person or entity
which asserts that an Environmental Condition constitutes a violation of or
otherwise may give rise to any liability or obligation under, any statute,
ordinance, regulation, or other governmental requirement or the common law,
including, any such statute, ordinance, regulation, or other governmental
requirement relating to the emission, discharge, or release of any Hazardous
Substance into the environment or the generation, treatment, storage,
transportation, or disposal of any Hazardous Substance. "Environmental
Condition" shall mean the presence on the Closing Date, or the occurrence on or
at any time prior to the Closing Date of any storage, treatment, disposal or
Release, or the presence on the Closing Date of any condition or circumstances
which thereafter causes or gives rise to any storage, treatment, disposal or
Release, whether discovered or undiscovered on the Closing Date, in surface
water, ground water, drinking water supply, land surface, subsurface strata or
ambient air or any other location, of any pollutant, contaminant, industrial
solid waste or Hazardous Substance, arising out of or otherwise related to (i)
the operations or other activities of any Seller, or of any predecessor in
interest or line of business of any Seller, conducted or undertaken prior to the
Closing Date or (ii) any property, facility owned, leased, managed or operated
by any Seller. "Hazardous Substance" shall mean any substance defined in the
manner set forth in Section 101(14) of the U.S. Comprehensive Environment
Response, Compensation and Liability Act of 1980, as amended, and shall include
any additional substances designated under Section 102(a) thereof or any other
substance which is or contains asbestos in any form, urea

                                       15
<PAGE>

formaldehyde foam insulation, methane, petroleum, gasoline, diesel fuel or
another petroleum hydrocarbon product, transformers or other equipment, which
contain dielectric fluid containing levels of polychlorinated biphenys in excess
of 50 parts per million, or any other chemical material or substance which is
regulated as toxic or hazardous or exposure to which is prohibited, limited, or
regulated by foreign, federal, state, county, regional, local or other
governmental authority or which, even if not so regulated, may or could pose a
hazard to the health or safety of the occupants of any property or facility or
the owners or occupants of any property or facility adjacent thereto.

      3.18 FULL DISCLOSURE. To Sellers' Knowledge, no representation or warranty
by Sellers herein (including the Schedules hereto) or in any certificate
furnished by or on behalf of Sellers to Buyer in connection herewith, contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein, in the light of the circumstances under which they were made, not
misleading.

      3.19 REPRESENTATIONS AND WARRANTIES TRUE AT THE CLOSING. The
representations and warranties of Sellers herein and in any schedule attached
hereto shall be true and complete at the Closing Date with the same effect as
though made at and as of such time.

                                   ARTICLE IV

                           REPRESENTATIONS, WARRANTIES
                             AND COVENANTS OF BUYER

      Buyer hereby represents and warrants to, and covenants with, Sellers that:

      4.01 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Israel and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as proposed to be conducted.

      4.02 DUE AUTHORIZATION; NONCONTRAVENTION. Buyer has full corporate power
and authority to enter into this Agreement, the Related Agreements and any other
agreements and documents to be executed and delivered by it at Closing as
contemplated hereby (collectively, the "Closing Documents"), to consummate the
Transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement, the Related Agreements and the Closing Documents and the consummation
of the Transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Buyer. This Agreement has been
duly executed and delivered by Buyer, and is a valid and binding obligation of
Buyer enforceable in accordance with its terms and the Related Agreements and
the Closing Documents will, when executed and delivered by Buyer at Closing,
constitute valid and binding obligations of Buyer enforceable in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws from time to
time in effect which

                                       16
<PAGE>

affect creditor's rights generally and by legal and equitable limitations on the
availability of specific remedies.

      The execution, delivery and performance of this Agreement, the Related
Agreements and the Closing Documents will not (i) conflict with or result in a
breach or violation of any provision of the organizational documents of Buyer,
or of any order, writ, injunction, judgment, decree, law, statute, rule or
regulation to which Buyer is a party or by which Buyer may be bound or affected;
or (ii) result in a default (or give rise to any right of termination,
cancellation or acceleration) or result in the creation of any lien,
encumbrance, security agreement, charge, pledge, equity or other claim or right
of any person under the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which Buyer is a party or by which Buyer may be bound. All necessary
authorizations of the Transactions contemplated by this Agreement and the
Related Agreements required to be obtained by Buyer from any federal, state,
local or foreign government or agency shall have been obtained prior to the
Closing, and any filings, notifications or disclosures required by law or
regulation of any such government or agency shall have been made in such form as
is acceptable as filed Sellers shall cooperate with Buyer with respect to the
aforesaid filings, notifications or disclosures to the extent necessary to
obtain said authorizations. Buyer will deliver to Sellers at the Closing true
and complete copies of all resolutions of its board of directors by which the
execution, delivery and performance of this Agreement, the Related Agreements
and the Closing Documents and the consummation of the Transactions contemplated
hereby and thereby were authorized, certified by the Secretary or Assistant
Secretary of Buyer as of the Closing Date.

                                   ARTICLE V

                                    EMPLOYEES

      5.01 EMPLOYEES AND EMPLOYEE BENEFITS.

      (A) Buyer shall have no requirement to offer employment to any of the
employees of Sellers. Any offer Buyer determines to make shall be for employment
at-will by Buyer as new employees of Buyer (subject to any applicable probation
period not prohibited by law) to occupy positions designated by Buyer and
pursuant to the terms and conditions determined by Buyer in its sole discretion,
unless Buyer otherwise agrees in writing with any such employee.

      (B) Schedule 5.01 is a true and complete list of the names and positions
of those of Sellers' current and furloughed employees who work in positions
related to the Business (the "Employees"). At Buyer's request, Sellers shall
deliver, with respect to any Employee designated by Buyer, the following
compensation information for fiscal year 2004 and as of the date of Buyer's
request (i) annual base salary; (ii) annual bonus; (iii) commissions; (iv)
perquisites; (v) benefits; (vi) severance; and (vii) all other material items of
compensation. Buyer may engage in negotiations to employ any Employee on the
condition that any such employment not begin until on or after the Closing Date.

                                       17
<PAGE>

      (C) Sellers shall make available to Buyer to the fullest extent permitted
by law, all information and materials reasonably requested by Buyer from the
personnel files of each of the Employees who shall have elected to accept
employment with Purchaser ("Applicable Employees").

      (D) Seller shall remain responsible for the payment of all benefits that
accrue under each of such Seller's or its Affiliates' compensation plans,
"employee benefit plans" (as defined in Section 3(3) of ERISA) and stock plans
(collectively "Benefit Plans"). Buyer shall not at any time assume any liability
under any of the Sellers' Benefit Plans for the payment of any benefits to any
active or any terminated, vested or retired participants (or any of their
beneficiaries) in any of the Benefit Plans. Buyer assumes no obligations to
continue or assume any Benefit Plan or liabilities of the Sellers under any
Benefit Plans.

      (E) With respect to any Applicable Employee (and any dependent or
beneficiary of any such Applicable Employee), Sellers shall retain all
liabilities and obligations arising under any group life, accident, medical,
dental or disability plan or similar arrangement (whether or not insured) and
any other "employee welfare benefit plan" (as defined in Section 3(1) of ERISA)
maintained for the benefit of Sellers' employees and their dependents and other
beneficiaries under each such plan or similar arrangement, and such liabilities
and obligations shall constitute Retained Liabilities. Buyer shall be
responsible only for liabilities and obligations with respect to claims incurred
by any Applicable Employee (and any dependent or beneficiary of any such
Applicable Employee) on or after the later of the Closing Date and the date upon
which such Applicable Employee is hired by Buyer which are covered under any
life, accident, medical, dental or disability plan or similar arrangement
(whether or not insured) established or made available to Buyer for the benefit
of Applicable Employees and their dependents and beneficiaries after the Closing
Date. For this purpose claims under any medical, dental, vision, or prescription
drug plan, a claim generally will be deemed to be incurred on the date that the
service giving rise to such claim is performed and not when such claim is made.

      (F) Any former or current employees of Sellers hired by Buyer may share
and utilize any Proprietary Rights, information, inventions or know how derived
from their work for Sellers, including without limitation customer lists and
employee lists, and Buyer may use any such shared Proprietary Rights,
information, inventions or know how. Sellers waive any claims against such
employees and Buyer based on such sharing or use including, without limitation,
any claims arising under contract, statute or common law.

      5.02 THIRD PARTIES. The covenants of Buyer and Sellers in this Article V
are not intended to create any right in any of Sellers' current or former
employees or his or her heirs, executors, beneficiaries or personal
representatives.

                                       18
<PAGE>

                                   ARTICLE VI

                          WORKERS COMPENSATION, PRODUCT
                      LIABILITY AND WARRANTY RESPONSIBILITY

      6.01 WORKERS COMPENSATION. Sellers will retain responsibility for all
workers' compensation claims of employees of Sellers other than Applicable
Employees and will retain responsibility for workers' compensation claims by
Applicable Employees pending as of the Closing Date or arising as a result of
events occurring or conditions caused on or prior to the Closing Date. Buyer
will be responsible for workers' compensation claims by Applicable Employees
filed after the Closing Date and arising solely as a result of events occurring
or conditions caused solely after the later of the Closing Date and the date
upon which such Applicable Employee is hired by Buyer.

      6.02 PRODUCT LIABILITY AND WARRANTY CLAIMS. Buyer shall discharge all
product liability claims (including claims for injury to person or property),
warranty claims and litigation relating to the Business conducted by Buyer and
arising from products sold and work performed after the Closing Date; Sellers
shall retain responsibility for such claims and litigation relating to products
sold and work performed on or prior to the Closing Date.

                                  ARTICLE VII

                  COVENANTS AND AGREEMENTS REGARDING BANKRUPTCY

      7.01 BANKRUPTCY ACTIONS.

      (A) CHAPTER 11 FILING. The Sellers have filed the Chapter 11 Cases with
the Bankruptcy Court. Sellers will serve on Buyers' counsel, Carter Ledyard &
Milburn LLP and Winston & Strawn LLP by e-mail copies of all further papers
filed in the Chapter 11 Cases not later than the date of service of such papers
upon any other party in the Chapter 11 Cases.

      (B) COOPERATION; EFFORTS. Each of Sellers and Buyer shall use its best
reasonable efforts to cooperate, assist and consult with each other to procure
the entry of a sale order (the "Sale Order"), substantially in the form attached
as Exhibit G as promptly hereafter as practicable. Without limiting the
generality of the foregoing, Sellers each (i) shall comply with all requirements
under the Bankruptcy Code and Federal Rules of Bankruptcy Procedure and the
Local Rules of the United States Bankruptcy Court for the Northern District of
California and any applicable guidelines and procedures (collectively, the
"Bankruptcy Rules") in connection with obtaining the Sale Order, (ii) agree to
proceed with their Chapter 11 Cases pursuant to and in accordance with the terms
and provisions contemplated by the Sale Procedures Order or the Sale Order, in
each case after the order has been entered by the Bankruptcy Court and (iii)
comply or cause the compliance with the notice requirements of the Sale
Procedures Order or the Sale Order, in each case after the order has been
entered by the Bankruptcy Court, any other applicable order of the Bankruptcy
Court as it relates to the Chapter 11 Cases, the Bankruptcy Rules (including,

                                       19
<PAGE>

without limitation, Rules 2002, 6004, 6006 and 9014 of the Federal Rules of
Bankruptcy Procedure) and any applicable local rules of the Bankruptcy Court
with respect to the Transactions contemplated by this Agreement. Sellers further
agree to give notice of any proceeding in the Chapter 11 Cases to any Person
specified by Buyer in writing. In the event that the Sale Order or any other
orders of the Bankruptcy Court relating to this Agreement shall be appealed by
any party (or a petition for certiorari or motion for reconsideration,
amendment, clarification, modification, vacation, stay, rehearing or reargument
shall be filed with respect to any such order), each of Sellers and Buyer will
cooperate in taking such steps diligently to defend against such appeal,
petition or motion and each of Sellers and Buyer and Buyer shall use its best
reasonable efforts to obtain an expedited resolution of any such appeal,
petition or motion. Buyer must timely provide to Sellers, or to the Bankruptcy
Court upon Sellers' request, any information necessary or prudent to obtain
Bankruptcy Court approval of the Sale Order, including, but not limited to, the
Sale Order, and Sellers agree that Sellers shall cooperate with Buyer to avoid
the unnecessary disclosure of any of Buyer's confidential proprietary
information, which will remain subject to the Confidentiality Agreement. Buyer
agrees that Buyer shall cooperate with Sellers to present such information as is
necessary or prudent in connection with the Bankruptcy Court's consideration or
approval of the Sale Order, and Sellers agree that Sellers shall cooperate with
Buyer to avoid the unnecessary disclosure of any of Buyer's confidential
proprietary information. Buyer shall not make any filing in the Bankruptcy Court
with respect to the Sale Order (or otherwise take any position in the Bankruptcy
Court proceedings with respect thereto) without the express written consent of
Sellers, which consent may not be unreasonably withheld, conditioned or delayed,
or otherwise that would be reasonably likely to result in the failure of the
Transactions contemplated hereby. Notwithstanding anything to the contrary
herein, however, nothing in this Agreement shall be deemed to prohibit or
otherwise restrain Buyer from making any filing in the Bankruptcy Court to
challenge or object to the entry of an order by the Bankruptcy Court approving
the entry by one or more Sellers into an Alternate Transaction (as hereinafter
defined); provided that the Sellers do not acknowledge and reserve all rights to
challenge Buyer's standing to make any filing in the Bankruptcy Court.
Notwithstanding anything to the contrary contained herein, the Sellers shall not
be required to act in a manner inconsistent with their fiduciary duties under
(a) applicable Law, arising from their status as corporations organized under
Delaware Law, or (b) the Bankruptcy Code, arising from their status as a debtor
in possession.

      (C) NOTIFICATION. Sellers shall promptly provide written notification to
Buyer of the fact of any submissions, proposals, offers or inquiries regarding
an Alternate Transaction.

      (D) ASSIGNMENT OF RIGHTS. If, in connection with the auction or sale
referred to in the Sale Procedures Order, the Sellers or any of their Affiliates
enter into confidentiality or similar agreements with any Person, such Seller
shall assign all rights under those agreements to the extent relating to the
Sellers' Business to Buyer at the Closing.

                                       20

<PAGE>
                                                                    Exhibit 10.1

                                  ARTICLE VIII

                              PRE-CLOSING COVENANTS

      The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.

      8.01 GENERAL. Each of the Parties will use its reasonable efforts to take
all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the Transactions contemplated by this Agreement
(including supplementing the Schedules hereto as facts become known to the
parties and satisfaction, but not waiver, of the closing conditions set forth in
Article IX below). Notwithstanding the foregoing, the supplementing of the
Schedules will not relieve Sellers of the obligations with respect to the
representations and warranties made herein, subject to the Schedules as
originally prepared, nor will it relieve Sellers of their obligations to
republish the representations and warranties of Sellers herein at the Closing.

      8.02 DISCLOSURE. All information delivered to Buyer, or the directors,
officers, employees, agents or professional advisors of Buyer ( "Buyer
Disclosure Group"), by Sellers or the directors, officers, employees, agents or
professional advisors of Sellers ("Seller Disclosure Group"), in connection with
this Agreement and the Transactions contemplated hereby, or to which Buyer
Disclosure Group has been provided access by Seller Disclosure Group, shall be
subject to the terms of the Confidentiality Agreement which shall survive the
Closing or any termination of this Agreement. All information delivered to
Seller Disclosure Group by Buyer Disclosure Group in connection with this
Agreement and the Transactions contemplated hereby, or to which Seller
Disclosure Group has been provided access by Buyer Disclosure Group, shall be
subject to the terms of the Confidentiality Agreement, which Confidentiality
Agreement shall survive the Closing or any termination of this Agreement.

      8.03 OPERATION OF BUSINESS. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing, each Seller
shall (i) maintain its corporate existence in good standing, (ii) conduct the
Business in the ordinary course of business as contemplated in the budget(s)
approved in the Chapter 11 Cases, except as otherwise provided in Section 3.04,
(iii) decline to accept prepayments of sums due to Sellers under any contracts,
provided however, that Seller may collect payments as they normally come due
even if such payments constitute payments for obligations to be performed in the
future; (iv) maintain each Benefit Plan, (v) maintain the property, plant and
equipment included in the Purchased Assets in the ordinary course of business as
contemplated in the budget(s) approved in the Chapter 11 Cases, and (vi) refrain
from offering to any customer any discount on or incentive with respect to any
product or service (collectively, the "Incentives") in excess of the discount or
incentive being offered with respect to such product or service as of the date
of this Agreement.

      8.04 BOOKS OF ACCOUNT. The Sellers shall, in respect of the Sellers'
Business and the Purchased Assets, maintain its books and records of account in
the usual, regular and ordinary manner, consistent with past practices.

                                       21
<PAGE>
      8.05 ACCESS TO INFORMATION. Sellers agree to permit Buyer and
representatives of Buyer (including, without limitation, Buyer's legal counsel
and accountants) access during normal business hours to Sellers' premises and
books and records, following receipt of reasonable notice.

      8.06 KEY EMPLOYEES. Sellers shall use their reasonable efforts to assist
Buyer in procuring the employment immediately following the Closing of the
employees identified on Schedule 8.06 (the "Key Employees") pursuant to
employment agreements reasonably acceptable to Buyer; provided that Buyer
acknowledges that such employment decisions will be made by such employees.

      8.07 CONSENTS. The Parties will use their commercially reasonable efforts
(including the giving of required notices) to promptly obtain consents
(including any Required Consents and any required approvals or permit transfers)
of all Persons and governmental authorities necessary for the consummation of
the Transactions contemplated by this Agreement and the Related Agreements.

      8.08 DELIVERY OF SCHEDULES; NOTICE OF DEVELOPMENTS. The Sellers have
delivered to Buyer the Schedules set forth in this Agreement. From the date
hereof until the Closing Date, the Parties shall promptly notify each other in
writing and supply full details of (i) any facts indicating that any
representation or warranty was not true and correct when made, and (ii) any
matter arising after the date hereof which, if existing or occurring at the date
of this Agreement would have been required to be set forth or described in the
Schedules hereto.

      8.09 RELATED AGREEMENTS. The Parties hereto agree that at Closing or, as
regards a particular Assigned Contract, on such later date as Buyer pays the
monetary cure for such Assigned Contract, they will execute and deliver the
Related Agreements to which they are a Party.

      8.10 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing, without the prior written approval of the
other Parties, and Seller shall not issue any press release or make any public
announcement relating to the subject matter of this Agreement following the
Closing without the prior written approval of Buyer, provided, however, that any
Party may make any public disclosure it believes in good faith is (a) required
by applicable law or any listing or trading agreement concerning its
publicly-traded securities or (b) permitted or required to be filed with the
Bankruptcy Court or otherwise disclosed by this Agreement or the Sale Procedures
Order (in the case of either (a) or (b) above, the disclosing Party will, prior
to making any such disclosure, consult with the other Party regarding such
disclosure).

      8.11 ENFORCEMENT OF RIGHTS WITH RESPECT TO EMPLOYEES, ETC. Sellers shall
enforce any employee secrecy, non-disclosure, non-competition agreements or
covenants by current or former employees and any other rights to protect the
Seller Proprietary Rights, the Seller Registered Proprietary Rights and the
Business.

                                       22
<PAGE>
      8.12 LIMITATION ON SOLICITATION, ETC. Until the Closing and except as
provided in Section 8.05, Buyer shall not, and Buyer shall cause each of its
subsidiaries and affiliates not to, directly or indirectly, actively solicit for
employment any individual while employed by Sellers; provided, however, general
advertisements and other forms of general solicitations for employment shall not
be deemed a violation of this provision, provided that if this Agreement is
terminated for any reason other than a default by Buyer, this provision shall no
longer apply after the date of that termination.

                                   ARTICLE IX

                               CLOSING CONDITIONS

      9.01 CONDITION TO OBLIGATIONS OF ALL PARTIES. The respective obligations
of each Party to effect the Transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Closing Date of the following condition:

      (A) NO ORDER, DECREE OR INJUNCTION. Neither Sellers nor Buyer shall be
subject to any order, decree or injunction of a court of competent jurisdiction
or governmental agency and no statute, rule or regulation shall be enacted or
issued which (i) prevents or delays any of the Transactions contemplated by this
Agreement, or (ii) would impose any limitation on the ability of Buyer
effectively to exercise full rights of ownership of the Purchased Assets.

      9.02 CONDITIONS TO THE OBLIGATIONS OF SELLERS. The obligations of Sellers
to effect the Transactions contemplated hereby shall be further subject to the
fulfillment at or prior to the Closing Date of the following conditions, any one
or more of which may be waived by Sellers:

      (A) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE . Buyer shall
have performed and complied in all material respects with the covenants and
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing Date, and there shall be as of the Closing
Date no material incorrectness of any representation and warranty of Buyer set
forth in this Agreement, and Sellers shall have received a certificate to that
effect signed by an authorized officer of Buyer;

      (B) BANKRUPTCY COURT APPROVAL. (i)The Bankruptcy Judge presiding over the
Chapter 11 Cases shall have signed the Sale Order substantially in the form of
Exhibit G, without modification or the imposition of conditions or limitations
with respect thereto, except for such immaterial modifications, conditions or
limitations which do not, individually or in the aggregate, materially and
adversely affect Sellers or Buyer and which Sellers and Buyer approve, (ii) the
signed Sale Order shall include a determination that this Agreement has been
made and negotiated in good faith and that Buyer is entitled to the protections
of Section 363(m) of the Bankruptcy Code as a result, and (iii) the Sale Order
shall not have been vacated, stayed, amended, reversed or modified.

                                       23
<PAGE>
      9.03 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of Buyer to
effect the Transactions contemplated hereby shall be further subject to the
fulfillment at or prior to the Closing Date of the following conditions, any one
or more of which may be waived by Buyer:

      (A) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE. Sellers
shall have performed and complied in all material respects with the covenants
and agreements contained in this Agreement required to be performed and complied
with by them at or prior to the Closing Date, and there shall be as of the
Closing Date no material incorrectness of any representation and warranty of
Sellers set forth in this Agreement, and Buyer shall have received a certificate
to that effect in the form of Exhibit H from Jonathan Morgan and Truman Cole.

      (B) BANKRUPTCY COURT APPROVAL. (i) The Bankruptcy Judge presiding over the
Chapter 11 Cases shall have signed the Sale Order substantially in the form of
Exhibit G, without modification or the imposition of conditions or limitations
with respect thereto, except for such immaterial modifications, conditions or
limitations which do not, individually or in the aggregate, materially and
adversely affect Buyer and Sellers and which Buyer and Sellers approve, (ii) the
signed Sale Order shall include a determination that this Agreement has been
made and negotiated in good faith and that Buyer is entitled to the protections
of Section 363(m) of the Bankruptcy Code as a result, and (iii) the Sale Order
shall not have been vacated, stayed, amended, reversed or modified.

      (C) ASSIGNMENTS AND NOVATIONS . Buyer shall have received an assignment or
novation (including any necessary third-party consents and approvals) reasonably
satisfactory to Buyer to each of the Assigned Contracts which by their terms or
by law require third-party consent or approval as a result of the Transactions
contemplated by this Agreement, except where the Sale Order makes such
assignment or novation unnecessary.

                                   ARTICLE X

                                   THE CLOSING

      10.01 TIME AND PLACE OF CLOSING. Upon the terms and conditions of this
Agreement, the Closing of the Transactions contemplated hereby (the "Closing")
shall take place, effective as of the close of business on March 15, 2005, or if
the conditions contained in Article VIII hereof have not been satisfied or
waived by such date then on the second Business Day after the satisfaction or
waiver of the last such condition (the "Closing Date"), at the offices of Carter
Ledyard & Milburn LLP, 2 Wall Street, New York, New York, or at such other time
and place as the Parties hereto may agree in writing. All Closing Transactions
shall be deemed to take place simultaneously, and no Closing Transaction shall
be deemed consummated until all Transactions to take place at the Closing have
been consummated.

      10.02 INSTRUMENTS OF TRANSFER, ETC. At the Closing, or, as regards a
particular Assigned Contract, on such later date as Buyer pays the monetary cure
for such Assigned Contract, Sellers will deliver to Buyer such deeds, bills of
sale, instruments of assignment

                                       24
<PAGE>
and other good and sufficient instruments of transfer, executed by Sellers and
in a form reasonably satisfactory to Buyer, as Buyer may reasonably require to
vest in Buyer all right, title and interest of Sellers in and to the Purchased
Assets, and Buyer shall also deliver to Sellers the other documents and
instruments reasonably required of it at the Closing.

      Without limiting the foregoing, the documents to be delivered by the
Parties at the Closing or, as regards a particular Assigned Contract, on such
later date as Buyer pays the monetary cure for such Assigned Contract, shall
include the following:

      (A) SELLERS. Sellers shall execute and deliver (i) the Related Agreements,
(ii) the Secretary's Certificate contemplated by Section 3.02 hereof, (iii) the
certificates contemplated by Section 9.03(a) hereof, and (iv) such other
instruments and documents as may reasonably be required of it at the Closing
pursuant to the terms of this Agreement.

      (B) BUYER. Buyer shall execute and deliver (i) the Related Agreements,
(ii) the Secretary's Certificates contemplated by Section 4.02 hereof, (iii) the
Officer's Certificate contemplated by Section 9.02(a) hereof, and (iv) such
other instruments and documents as may reasonably be required of it at the
Closing pursuant to the terms of this Agreement.

      Sellers shall deliver to Buyer at the Closing possession of the Purchased
Assets being sold pursuant to this Agreement and the entire right, title and
interest of Sellers in and to such Purchased Assets shall pass to Buyer at the
Closing or, as regards a particular Assigned Contract, on such later date as
Buyer pays the monetary cure for such Assigned Contract.

      10.03 TERMINATION OF AGREEMENT. This Agreement may be terminated by the
Parties as provided below:

      (A) The Parties may terminate this Agreement by mutual written consent at
any time prior to the Closing;

      (B) Buyer may terminate this Agreement by giving written notice to Sellers
at any time prior to the Closing (i) in the event that Sellers have breached any
material representation, warranty, or covenant contained in this Agreement in
any material respect, Buyer has notified Sellers of the breach, and the breach
has continued without cure for a period of 10 days after the notice of breach,
or (ii) if the Closing shall not have occurred on or before March 18, 2005, by
reason of the failure of any condition precedent under Section 9.01 or 9.03
hereof (unless the failure results primarily from Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement);

      (C) Sellers may terminate this Agreement by giving written notice to Buyer
at any time prior to the Closing (i) in the event Buyer has breached any
material representation, warranty, or covenant contained in this Agreement in
any material respect, Sellers have notified Buyer of the breach, and the breach
has continued without cure for a period of 10 days after the notice of breach,
or (ii) if the Closing shall not have occurred on or before March 18, 2005, by
reason of the failure of any condition precedent under

                                       25
<PAGE>
Section 9.01 or 9.02 hereof (unless the failure results primarily from Sellers'
breach of any representation, warranty, or covenant contained in this
Agreement); and

      (D) Buyer or Sellers may terminate this Agreement by giving written notice
to the other if there shall be in effect any law or regulation that prohibits
the consummation of the Closing or if consummation of the Closing would violate
any non-appealable final order, decree or judgment of any court or governmental
body having competent jurisdiction.

      10.04 EFFECT OF TERMINATION. If either Party terminates this Agreement
pursuant to Section 10.03 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
or their respective Affiliates, directors, officers or employees, except for the
return of the escrow deposit upon the termination of this Agreement or the
consummation of an Alternative Transaction. Notwithstanding the foregoing
sentence, the obligations of the Parties hereto contained in provisions which
are stated to survive any termination of this Agreement, including, without
limitation, Sections 8.02, 8.12, 11.01, 11.03, 11.05, 12.04, 12.05, and 12.06
shall survive termination of this Agreement.

                                   ARTICLE XI

                             POST CLOSING COVENANTS

      11.01 EXPENSES. Except as otherwise provided herein, Sellers and Buyer
shall each bear their own costs and expenses incurred in connection with this
Agreement, the Related Agreements and the Transactions contemplated hereby and
thereby. Buyer shall be responsible for fees, commissions, expenses and
reimbursements incurred by or required to be paid to its professional advisors
(including, without limitation, its legal counsel) and Sellers shall be
responsible for the fees, commissions, expenses and reimbursements incurred by
or required to be paid to their professional advisors (including, without
limitation, its legal counsel).

      11.02 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the Parties hereto will use their best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Purchased Assets and the other
Transactions contemplated by this Agreement and the Related Agreements. From
time to time after the date hereof (including after the Closing Date if
requested), Sellers will, at their own expense, execute and deliver such
documents to Buyer as Buyer may reasonably request in order more effectively to
vest in Buyer good title to the Purchased Assets and to more effectively
consummate the Transactions contemplated by this Agreement and the Related
Agreements.

      11.03 COMMISSIONS AND FEES. Except as set forth on Schedule 11.03 hereto,
Sellers and Buyer each represent and warrant to the other that no broker,
finder, financial adviser or other person is entitled to any brokerage fees,
commissions or finder's fees in connection with the Transactions contemplated
hereby by reason of any action taken by

                                       26
<PAGE>
the Party making such representation. Sellers and Buyer will pay to the other or
otherwise discharge, and will indemnify and hold the other harmless from and
against, any and all claims or liabilities for all brokerage fees, commissions
and finder's fees (other than as described above) incurred by reason of any
action taken by such Party.

      11.04 SALES, TRANSFER AND USE TAXES. The Parties recognize and acknowledge
that the sale, transfer, assignment and delivery of the Purchased Assets may be
exempt under Section 1146(c) of the Bankruptcy Code and the Sale Order from all
state and local transfer, recording, stamp or other similar transfer Taxes that
may be imposed by reason of the sale, transfer, assignment and delivery of the
Purchased Assets. Notwithstanding the foregoing, the Seller on the one hand and
the Buyer on the other, will each bear and pay one-half of any sales Taxes, use
Taxes, transfer Taxes, documentary charges, recording fees, filing fees or
similar Taxes, charges, fees or expenses that may become payable by Buyer or
Seller in connection with the sale of the Purchased Assets to Buyer, the
assumption by Buyer of the Assumed Liabilities or any of the other Transactions
contemplated by this Agreement (the "Transfer Taxes").

      11.05 NONDISCLOSURE. All confidential information (as defined in the
Confidentiality Agreement) delivered to Buyer Disclosure Group by Seller
Disclosure Group in connection with this Agreement and the Transactions
contemplated hereby, or to which Buyer Disclosure Group has been provided access
by Seller Disclosure Group, shall be subject to the terms of the Confidentiality
Agreement, which Confidentiality Agreement shall survive the Closing or any
termination of this Agreement. All confidential information (as defined in the
Confidentiality Agreement) delivered to Seller Disclosure Group by Buyer
Disclosure Group in connection with this Agreement and the Transactions
contemplated hereby, or to which Seller Disclosure Group has been provided
access by Buyer Disclosure Group, shall be subject to the terms of the
Confidentiality Agreement, which Confidentiality Agreement shall survive the
Closing or any termination of this Agreement.

      11.06 PUBLICITY. Seller shall not issue any press release or make any
public announcement relating to the subject matter of this Agreement following
the Closing without the prior written approval of Buyer; provided, however, that
any Party may make any public disclosure it believes in good faith is (a)
required by applicable law or any listing or trading agreement concerning its
publicly-traded securities or (b) permitted or required to be filed with the
Bankruptcy Court or otherwise disclosed by this Agreement or the Sale Procedures
Order (in the case of either (a) or (b) above, the disclosing Party will, prior
to making any such disclosure, consult with the other Party regarding such
disclosure).

      11.07 ACCOUNTS RECEIVABLE. In the event that, following the Closing Date,
Sellers receive any payment with respect to any account receivable that is a
Purchased Asset, then Sellers shall promptly remit or forward such payment to
Buyer. In connection with this Section 11.07, for a period beginning on the
Closing Date and ending on the earlier of (a) the date which is two years after
the Closing Date and (b) the date of liquidation of the last of the Sellers,
Sellers shall provide Buyer, upon request, transmitted

                                       27
<PAGE>
not more frequently than once each month, with a written summary of payments
received by the Sellers since the period covered by the last prior summary.

      11.08 NON-COMPETITION. Sellers recognize that the value of the Business
would be diminished if Sellers or their Affiliates were to solicit any of the
Applicable Employees to engage in any business in competition with the Business,
or to entice any customer of the Business to terminate or diminish its current
level of business with the Business in contravention of the terms hereof.
Therefore, in consideration of the Purchase Price, Sellers hereby agree and
covenant that for a period beginning as of the Closing Date and continuing until
the third anniversary of the Closing Date, Sellers and their Affiliates will
not, directly or indirectly, alone or as a member of any partnership or other
business organization, or as a partner, stockholder, consultant or agent of any
corporation, partnership or business organization, without the written consent
of Buyer (i) engage in any business in competition with the Business, (ii)
request or cause any customer of the Business or any Applicable Employee to
cancel, terminate or diminish any business relationship with the Business, (iii)
solicit or otherwise cause any Applicable Employee of Seller to terminate such
employee's relationship with the Business, or (iv) employ any Applicable
Employee.

      11.09 ENFORCEMENT OF RIGHTS WITH RESPECT TO EMPLOYEES, ETC. For a period
beginning as of the Closing Date and continuing until the third anniversary of
the Closing Date, Sellers shall assign to Buyer or shall enforce any employee
secrecy, non-disclosure, non-competition agreements or covenants by current or
former employees and any other rights to protect the Seller Proprietary Rights,
the Seller Registered Proprietary Rights and the Business.

                                  ARTICLE XII

                                  MISCELLANEOUS

      12.01 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns.

      12.02 NO ASSIGNMENT; This Agreement may not be assigned by any Party
hereto without the prior written consent of the other Parties, provided,
however, that Buyer may assign its rights hereunder, in whole or in part, to any
corporation or other entity controlled by, controlling, or under common control
with Buyer or its assignee may assign its rights hereunder, in whole or in part,
to any purchaser of substantially all of the assets or business of Buyer.
Notwithstanding any assignment by Buyer of its rights hereunder, Buyer shall be
obligated (i) to perform all of its covenants under this Agreement, (ii) to pay
the Purchase Price to the Sellers in accordance with Section 1.05 hereof and
(iii) to perform all of its covenants under or guaranty the performance of such
assignee's covenants under any Real Property Leases, Assumed Licenses, Assumed
Contracts and Assumed Insurance Policies executed in connection with the
assumption and assignment of any Real Property Leases, Assumed Licenses, Assumed
Contracts and Assumed Insurance Policies. Any attempted or purported assignment
by either Party other than in accordance with this Section 12.02 shall be null
and void.

                                       28
<PAGE>
      12.03 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by any Party on separate counterparts, each of which as so
executed and delivered shall be deemed an original but all of which together
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement as to any Party, hereto to produce or account for
more than one such counterpart executed and delivered by such Party. The Parties
intend to be bound by the delivery of signature pages by mail, fax or other
delivery of an image.

      12.04 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of California as to
all matters, including but not limited to matters of validity, construction,
effect, performance and remedies.

      12.05 VENUE. Each of the Parties submits to the jurisdiction of the
Bankruptcy Court, or, if the Bankruptcy Court declines to exercise jurisdiction,
any state or federal court sitting in the County of San Mateo, California, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Any
Party may make service on any other Party by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner provided
for the giving of notices in Section 12.06 below. Nothing in this Section 12.05,
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

      12.06 NOTICES. All notices required to be given under the terms of this
Agreement or which any of the Parties desires to give hereunder shall be in
writing and personally delivered or sent by registered or certified mail, return
receipt requested, or sent by facsimile, addressed as follows:

      (A) TO BUYER. If to Buyer addressed to:

            If to Buyer addressed to:

                  RADvision Ltd.
                  24 Raul Wallenberg
                  Tel Aviv 69719
                  Israel
                  Attention: Mr. Arnold Taragin, Esq.
                  Facsimile No.:  972-3-767-9382

                  with a copy to:

                  Carter Ledyard & Milburn LLP
                  Two Wall Street

                                       29
<PAGE>
                  New York, New York 10005
                  Attention: Steven J. Glusband, Esq.
                  Facsimile No.: 212-732-3232

      (B) TO SELLERS. If to Sellers addressed to:

                  First Virtual Communications, Inc.
                  3200 Bridge Parkway, Suite 202
                  Redwood City, CA 94065
                  Attention: Jonathan G. Morgan
                  Facsimile No.: 408-988-7077

      with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  300 South Grand Avenue, Suite 3400
                  Los Angeles, California 90071
                  Attention: Van C. Durrer, II, Esq.
                  Facsimile No.: 213-687-5600

Any Party may designate a change in address at any time upon written notice to
the other Party.

      12.07 AMENDMENT AND MODIFICATION. The Agreement may be amended, modified
or supplemented only by a written instrument executed by the Party against whom
such amendment, modification or supplement is sought to be enforced.

      12.08 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party or Parties
entitled to the benefits thereof only by a written instrument signed by the
Party or Parties granting such waiver, but any such waiver or the failure to
insist upon strict compliance with any obligation, covenant, agreement or
condition herein, shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure or breach.

      12.09 INTERPRETATION. The table of contents and the article and section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the Parties and shall not in any way affect the
meaning or interpretation of this Agreement. When used herein, the masculine,
feminine or neuter gender and the singular or plural number shall each be deemed
to include the others whenever the context so indicates or permits.

      12.10 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof

      12.11 ENTIRE AGREEMENT. This Agreement, and the Related Agreements,
including the schedules, exhibits, documents, certificates and instruments
referred to herein and therein, embody the entire agreement and understanding of
the Parties hereto

                                       30
<PAGE>
in respect of any Transactions contemplated by this Agreement and the Related
Agreements and supersede all prior agreements and understandings between all the
Parties with respect thereto.

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

                                    RADVISION LTD.

                                    By: /s/ Arnold C. Taragin
                                        ----------------------------------------
                                    Name:  Arnold Taragin Esq., Adv.
                                    Title: Vice President and General Counsel

                                    FIRST VIRTUAL COMMUNICATIONS, INC.

                                    By: /s/ Jonathan G. Morgan
                                        ----------------------------------------
                                    Name:  Jonathan G. Morgan
                                    Title: President and Chief Executive Officer

                                    CUSEEME NETWORKS, INC.

                                    By: /s/ Jonathan G. Morgan
                                        ----------------------------------------
                                    Name:  Jonathan G. Morgan
                                    Title: President and Chief Executive Officer

                                       31
<PAGE>
                                       H-1
<PAGE>
                                                                       EXHIBIT I

                                  DEFINITIONS,

      Capitalized terms used in this Agreement that are not otherwise defined
herein shall have the following meaning for the purposes of this Agreement:

      1. "Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person. For purposes of this
definition, "control" as applied to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract, or otherwise.

      2. "Business Day" means any day other than a Saturday, a Sunday or a day
on which banks in San Francisco, California or New York, New York, are
authorized or obliged by law or executive order to close.

      3. "Code" means the Internal Revenue Code of 1986, as amended, together
with the Treasury regulations promulgated thereunder.

      4. "Confidentiality Agreement" means the Mutual Confidentiality Agreement
dated as of October 15, 2004 between FVC and Buyer.

      5. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      6. "GAAP" means generally accepted accounting principles as in effect and
as applied in the United States.

      7. "Government Contract" means those Assumed Contracts between a Seller
and the U.S. Federal government or any agency thereof or a Seller and another
party which is party to a contract with the U.S. federal government or any
agency therefor under which such Seller acts as subcontractor to such other
party and is obligated pursuant to any contractual flow down provisions to abide
by any government contracting regulations, including the Federal Acquisition
Regulations, that are applicable for the principal contractor.

      8. "Governmental Authority" means any domestic or foreign supranational,
national, federal, state or local judicial, legislative, executive or regulatory
authority.

      9. "Law" means any federal, state, local or foreign law, statute, code,
ordinance, rule, regulation, Order or rule of common law.

      10. "Order" means any decree, injunction, judgment, order, ruling, binding
settlement agreement or writ.
<PAGE>
      11. "Person" means and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization or a
governmental entity or any department or agency thereof.

      12. "Proprietary Rights" means all (i) U.S. and foreign patents, patent
applications, patent disclosures and improvements thereto, including petty
patents, utility models, design patents and provisional and non-provisional
applications therefor and reissues and extensions thereof, and rights of
priority thereunder, (ii) registered and unregistered U.S. and foreign
trademarks, service marks, trade dress, logos, trade names and corporate names
and the goodwill associated therewith and registrations and applications for
registration thereof, (iii) U.S. and foreign copyrights and registrations and
applications for registration thereof, (iv) U.S. and foreign mask work rights
and registrations and applications for registration thereof, (v) rights in
know-how, proprietary information and trade secrets, (vi) software and database
and data rights, (vii) domain name registrations and contents of all websites,
(viii) other proprietary rights, and (ix) licenses granting any rights with
respect to any of the foregoing.

      13. "Registered Proprietary Rights" means all United States, international
and foreign: (i) issued patents and patent applications (including provisional
applications), (ii) registered trademarks and servicemarks, applications to
register trademarks and servicemarks, intent-to-use applications, other
registrations or applications to trademarks or servicemarks, (iii) registered
copyrights and applications for copyright registration, (iv) any mask work
registrations and applications to register mask works, and (v) any other
Proprietary Right that is the subject of an application, certificate, filing,
registration or other document issued by, filed with, or recorded by, any state,
government or other public legal authority.

      14. "Sale Procedures Order" means the Final Order Approving Bidding
Procedures and Protections entered on February [ }, 2005 in the Sellers' Chapter
11 Cases.

      15. "Securities Act" means the U.S. Securities Act of 1933, as amended.

      16. "Seller Proprietary Rights" means any Proprietary Right (including,
but not limited to, all websites maintained or owned by any Seller or anyone on
its behalf (or used by others with the approval of any Seller) and the exclusive
right to use the names First Virtual Communications, Inc., FVC, CUseeMe
Networks, Inc. and Click to Meet Version 4.1) that (i) is owned or used by, (ii)
is licensed to, or (iii) was developed or created by or for the Sellers.

      17. "Seller Registered Proprietary Rights" means all Registered
Proprietary Rights owned by, filed in the name of, assigned to or applied by or
for the Sellers.

      18. "Sellers' Knowledge" means, with respect to the Transactions and the
Purchased Assets, the actual knowledge of any of the officers of the Sellers.

      19. "Tax" or "Taxes" means any foreign, United States federal, state or
local income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated or
other tax of any kind
<PAGE>
whatsoever, including all estimated taxes, deficiency assessments and any
interest, penalty or addition thereto.

      20. "Transactions" means the sale of the Purchased Assets, assumption of
the Assumed Liabilities and the other transactions contemplated by this
Agreement.
<PAGE>
                         Exhibit 8 to Auction Transcript
<PAGE>
[logo] RADVISION
                                         Arnold Taragin Esq., Adv.
                                              Vice President and General Counsel

28 February 2005

TO:  FIRST VIRTUAL COMMUNICATIONS

RADVISION has been requested to submit its best offer regarding the purchase of
the assets of First Virtual Communications and affiliated subsidiaries all in
accordance with the Asset Purchase Agreement submitted by RADVISION and which
has been identified for the record today as Exhibit 5.

This bid is based on the schedules provided as part of Exhibit 5 (and as
modified by the supplements provided to RADVISION after the solicitation
conference) being materially true and accurate to the best of debtor's knowledge
today.

It has also been stated on the record that the bids are confidential and will
only be used for purposes of this auction and the sale process and otherwise in
accordance with the Bankruptcy Rules.

RADVISION has made on the record certain objections regarding the process and
reserve its rights accordingly in the event it is not the successful bidder.

Despite having submitted formal request to interview the employees, RADVISION
has not been provided with the opportunity to interview employees and therefore
cannot fairly state at this juncture which employees it will hire. Rather
RADVISION affirmatively does state that it is prepared to meet with each such
employee of the company that has a desire to work with us, and is willing to
consider each such employee subject to mutually acceptable terms.

Subject to the terms of this letter, RADVISION's bid is as follows:

1.    RADVISION does hereby submit an offer of $7,150,000.00.  It is being
      submitted subject to the terms of the final order.

2.    Without accepting any liability or assuming any other liabilities or
      responsibilities to any existing company employees, RADVISION is willing
      to commit for any employee that it hires, that it will provide the accrued
      vacation as part of its compensation package.

3.    RADVISION will be consulted in advance for any material changes that occur
      within exhibit 6, prior to such change occurring.

In accordance with a discussion that occurred between Mr. Morgan and the
undersigned, RADVISION has offered and is willing to offer to Mr. Morgan, in the
event that RADVISION is the successful bidder, a consultation agreement for a
period of 6-12 months, at his choosing, and will make a recommendation to the
Board of the allocation of 20,000 RADVISION options which will vest over the
period of the consultation contract and expire one month following termination
of
<PAGE>
the consultation agreement. Such consultation agreement shall include a
non-compete with RADVISION.

Respectfully submitted

  /s/ Arnold C. Taragin
---------------------------------
Arnold C. Taragin, Esq., Adv.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]