U.S. SEPARATION AND ASSET PURCHASE AGREEMENT

Exhibit 10.2

U.S. SEPARATION AND ASSET PURCHASE AGREEMENT

BETWEEN

ECI TELECOM-NGTS INC.

AND

VERAZ NETWORKS INTERNATIONAL, INC.

December 31, 2002

INDEX TO SCHEDULES

U.S. Separation And Asset Purchase Agreement

     This U.S. Separation And Asset Purchase Agreement (this “ Agreement ”) is made and entered into this 31st day of December, 2002, by and between Veraz Networks International, Inc., a Delaware corporation (“ Veraz U.S. ”) and ECI Telecom — NGTS Inc., a Delaware corporation (“ NGTS U.S. ”) and an indirect wholly owned subsidiary of ECI Telecom Ltd., an Israeli company (“ ECI Telecom ”). NGTS U.S. is sometimes referred to hereinafter as the “ Seller ” and each of Veraz U.S. and NGTS U.S. are sometimes referred to hereinafter individually as a “ Party ” and collectively as the “ Parties .”

WITNESSETH:

      WHEREAS , NGTS U.S. is engaged in the marketing, sale, distribution and service of products and solutions for gateways for point-to-point, point-to-multipoint and/or switching and non-switching applications for connecting end-to-end telephony or telephony over packet networks, which gateways include classification and/or compression of telephony signals, such as voice, modem, fax and/or other signals, such as video conference, and conversion of the classified and/or compressed signals into packets in formats suitable for media, such as Ethernet, IP, ATM or MPLS (the “ VoIP Distribution Business ”);

      WHEREAS , NGTS U.S. is also engaged in the marketing, sale, distribution and service of ECI Telecom’s DCME product line (the “ DCME Distribution Business ” and, together with the VoIP Distribution Business, the “ Businesses ”);

      WHEREAS , NGTS U.S. desires to sell certain assets and rights relating to the VoIP Distribution Business and the DCME Distribution Business to Veraz Networks, Inc. (formerly NexVerse Networks, Inc.), a Delaware corporation (“ Veraz ”), pursuant to a Share Exchange Agreement dated as of October 30, 2002 (as amended, the “ Share Exchange Agreement ”);

      WHEREAS , to effectuate the Share Exchange Agreement, NGTS U.S. desires to separate certain assets and rights relating to the VoIP Distribution Business and the DCME Distribution Business from NGTS U.S.’s business as of the Effective Date (the “ Separation ”) by transferring and conveying them to Veraz U.S. as set forth in this Agreement and the Exhibits hereto.

      NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and intending to be legally bound hereby, the Parties agree as follows:

1. Definitions

“ Affiliate ” means with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by or is under common control with, such Person. The term “ control ” means the ownership of more than 50% of the outstanding equity of a Person or the power to direct the management and policies of a Person.

“ Contracts ” means contracts, agreements, notes, indentures, restrictions, commitments, leases, purchase orders, arrangements, obligations or other contracts, agreements or instruments, whether written or oral.

“ Lien ” means all mortgages, liens, pledges, charges, security interests, bank guarantees, third party rights or other claims or encumbrances of any kind whatsoever.

“ Person ” means an individual, corporation, partnership, joint venture, trust or unincorporated organization.

“ VoIP ” means Voice over Internet Protocol.

2. Sale of the Businesses

2.1 Sale of Assets . Upon the terms and subject to the conditions set forth in this Agreement, the Seller hereby agrees to contribute, assign, transfer and convey to Veraz U.S. and Veraz U.S. hereby agrees to acquire and accept from the Seller, all of the Seller’s direct and indirect right, title and interest in and to all of the assets of the Businesses listed in this Section 2.1 and the schedules referenced herein (the “ Transferred Assets ”), the above contribution, assignment, transfer and conveyance being subject only to those liabilities and obligations of the Seller expressly set forth in Section 2.2 (the “ Assumed Liabilities ”). The Transferred Assets consist of the following assets and properties:

2.1.1 all machinery, equipment, fixtures, furniture, information technology infrastructure and tangible and intangible assets identified on Schedule 2.1.1 attached hereto or otherwise listed on the Fixed Assets itemization, dated September 30, 2002 and incorporated by reference in its entirety herein and all warranty, service or other similar rights related to such assets;

2.1.2 all Contracts identified on Schedule 2.1.2 hereto (the “ Assigned Contracts ”);

2.1.3 copies of software licensed to the Seller by third parties that, as of the Closing Date, is installed on any computer system contained in the Transferred Assets,

2.1.4 copies or originals of the business records, books, ledgers, plans, correspondence, advertising and promotional materials, marketing materials, studies, reports, equipment repair, maintenance or service records of the Seller, whether written or electronically stored or otherwise recorded, in each case as used in the Businesses and related to the Transferred Assets for, and relating directly to, their activities prior to the Closing (the “ Materials ”);

2.1.5 the Seller’s dealer, distributor, customer, agents and representatives lists, in each case as used in the Businesses and related to the Transferred Assets for and relating directly to, their activities prior to the Closing, in each case subject to ECI Telecom’s retained rights to use the information in such lists for ECI Telecom’s on-going businesses;

2.1.6 the permits, licenses, orders, ratings and approvals of all national, local or foreign governmental or regulatory authorities or industrial bodies, to the extent the same are

transferable, all as identified on Schedule 2.1.6 hereto, and copies of any respective third-party approvals to such transfers to Veraz U.S.;

2.1.7 all rights of the Seller to causes of action, lawsuits, judgments, claims and demands of any nature which relate to the above-referenced Transferred Assets or constitute counterclaims, rights of setoff, and affirmative defenses to any claims brought against Veraz U.S. by third parties relating to such Transferred Assets (except that Seller reserves its rights with respect to counterclaims, rights of set-off and affirmative defenses to any claims covered by Section 7.7.1(B) hereof.,

2.1.8 all prepayments made to the Seller for maintenance, warranty service and products to be performed by or sold by the Seller in connection with the VoIP Distribution Business;

2.1.9 all accounts receivable related to the VoIP Distribution Business; and

2.1.10 all inventories of products related to the VoIP Distribution Business, referenced on Schedule 2.1.10 hereto.

2.1.11 Notwithstanding anything to the contrary herein, the Transferred Assets shall not include any assets related to or used in ECI’s DCME product line that is not used for the marketing, sale, distribution or support of such product line, including, without limitation, all inventory, manufacturing assets and any assets related to or used in the prepaid calling card business.

2.2 Assumed Liabilities . Upon the terms and subject to the conditions set forth in this Agreement, Veraz U.S. hereby agrees to assume, pay, perform and discharge the Assumed Liabilities, and to pay, perform and discharge the Assumed Liabilities as they become due and payable. The Assumed Liabilities shall consist solely of (i) the obligations and liabilities under the Assigned Contracts listed in Schedule 2.1.2 attached hereto, but only to the extent such obligations and liabilities are related to sales that are consummated (i.e., product delivered) on or after the Effective Date or the grounds for which arose (e.g., services or supplies delivered) on or after the Effective Date, and (ii) the obligation to assume accrued vacation liabilities up to a maximum of $100,000 relating to the Business Employees, as defined in Section 6.1, as such vacation liabilities are detailed on Schedule 2.2 .

2.3 Retained Liabilities . All liabilities and obligations of the Seller (including liabilities and obligations relating to the Businesses) (the “ Retained Liabilities ”) shall remain the liabilities and obligations of the Seller and not of Veraz U.S., except for the Assumed Liabilities.

3. Closing

3.1 Closing Effective Date . The closing of the transactions contemplated hereby (the “ Closing ”) shall take place as soon as practicable following the date on which the conditions set forth in Article 8 hereto shall have been satisfied or waived (the “ Closing Date ”), at the offices of Brobeck, Phleger & Harrison LLP, 1633 Broadway, New York, New York, unless another place or time is mutually agreed upon by the Parties. Upon the Closing, the transactions contemplated by this Agreement shall become effective as if the Closing had

occurred on October 1, 2002 (the “ Effective Date ”), as more fully described in Section 9 below.

3.2 Actions at Closing . At the Closing, the following actions shall occur concurrently:

3.2.1 Transfer of Assets and Liabilities . (A) The Seller shall deliver or cause to be delivered to Veraz U.S. the following: (a) a bill of sale relating to the Transferred Assets in the form attached hereto as Exhibit A ; (b) a duly signed Assignment and Assumption Agreement in the form attached hereto as Exhibit B relating to the assignment of any and all Assigned Contracts and the assumption of the Assumed Liabilities (the “ Assignment and Assumption Agreement ”) and any signed consents to the assignments of the other parties to such Contracts and to Permits that have been obtained; (c) all agreements in the forms attached hereto as Schedule 6.3(a) executed by the Business Employees, (d) a copy of the resolutions of the board of directors of the Seller authorizing the transactions contemplated hereby and (e) all other documents and instruments required hereunder to be delivered by the Seller to Veraz U.S. (B) Veraz U.S. shall deliver or cause to be delivered to the Seller (a) a duly signed Assignment and Assumption Agreement, (b) a copy of the resolutions of the board of directors of Veraz U.S. authorizing the transactions contemplated hereby and (c) all other documents and instruments required hereunder to be delivered by Veraz U.S. to the Seller.

3.2.2 Issuance of Veraz U.S. Shares . In consideration of the foregoing, Veraz U.S. shall issue to NGTS U.S. 1000 shares of its common stock, par value $0.01 per share (the “ Veraz U.S. Shares ”).

3.2.3 Schedule Update . The Seller shall deliver to Veraz U.S. an addendum to Schedule 2.1.2 identifying any additional Contracts entered into prior to the Closing that, based on the principles used in preparing Schedule 2.1.2 attached hereto, ought to be assigned to Veraz U.S. pursuant to this Agreement. Upon Veraz U.S.’s written approval, which shall not be unreasonably withheld, such addendum shall be deemed part of Schedule 2.1.2. , and such Contracts shall be deemed Assigned Contracts, for all purposes of this Agreement.

4. Representations and Warranties of The Seller

     The Seller hereby represents and warrants to Veraz U.S. that the following representations and warranties are true and accurate in all respects, as of the date hereof and as of the Closing Date, and acknowledges that Veraz U.S. is entering into this Agreement in reliance thereon:

4.1 Organization, Qualification and Corporate Power . Seller is a company duly organized and validly existing under the laws of the State of Delaware. Seller has the corporate power and authority to own and hold its properties and to carry on its business as now conducted, and to execute, deliver and perform this Agreement. This Agreement constitutes the valid and legal binding obligation of Seller, enforceable against it in accordance with its terms.

4.2 Authority; No Violation; Due Execution; Etc. The execution and delivery by Seller of this Agreement and the agreements attached as exhibits hereto and the performance by Seller of its obligations hereunder have been duly authorized by all requisite corporate action and will not conflict with, or result in any violation of, or default under (with due notice or lapse

of time or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit (any such event, a “ Conflict ”) under (i) any provision of applicable law, (ii) any order of any court or other agency of government by which Seller or any of its properties or assets is or are bound, (iii) the certificate of incorporation or bylaws of Seller, each as amended, or (iv) any provision of any indenture, mortgage, lease or other agreement or instrument, permit, concession, franchise or license to which Seller is a party or, to the knowledge of Seller, by which any of its material properties or assets is or are bound, or result in the creation or imposition of any Lien upon any assets (tangible or intangible) of Seller, in each such event which is reasonably likely to prevent, impede, delay, avoid, condition, enjoin, prohibit or otherwise interfere with, in a material way, the full, valid and complete performance of Seller’s obligations under this Agreement.

4.3 Consents . No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other local or foreign governmental authority, instrumentality, agency or commission (“ Governmental Entity ”) or any third party (so as not to trigger any Conflict) is required by or with respect to Seller in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby by Seller, except such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings identified on Schedule 3.05 to the Share Exchange Agreement and those that are not material.

5. Representations and Warranties of Veraz U.S.

     Veraz U.S. hereby represents and warrants to the Seller that the following representations and warranties are true and accurate in all respects, as of the date hereof and as of the Closing Date, and acknowledges that the Seller is entering into this Agreement in reliance thereon:

5.1 Organization, Qualification and Corporate Power . Veraz U.S. is duly incorporated and validly existing under the laws of the State of Delaware. Veraz U.S. has the corporate power and authority to execute, deliver and perform this Agreement. This Agreement constitutes the valid and legal binding obligation of Veraz U.S., enforceable against Veraz U.S. in accordance with its terms.

5.2 Authority; Due Execution; Etc. The execution and delivery by Veraz U.S. of this Agreement and the agreements attached as exhibits hereto and the performance by Veraz U.S. of its obligations hereunder have been duly authorized by all requisite corporate action.

5.3 Shares . As of the Closing Date, 1000 Veraz U.S. Shares will be outstanding. All such Veraz U.S. Shares will be duly authorized, validly issued, fully paid and non-assessable. Such transfer will not trigger any preemptive or similar rights. As of the Closing Date, there will be no rights of any Person to acquire any securities of Veraz U.S..

6. Employment Matters

6.1 Employees of Businesses . Subject to the Closing, as soon as practicable, Veraz U.S. or one of its Affiliates will offer employment to each individual listed on Schedule 6.1 hereto. Each individual who accepts such offer of employment shall be referred to herein as a

“ Business Employee .” As of the Closing, the employment relationship between NGTS U.S. and each Business Employee shall cease and each such employee shall become an employee of Veraz U.S. or one of its Affiliates. NGTS U.S. hereby confirms that, notwithstanding any confidentiality or non-compete obligations of any Business Employees to NGTS U.S. or any Affiliate of NGTS U.S., the Business Employees shall be permitted to engage in the Businesses transferred to Veraz U.S., as mutually contemplated by the Parties prior to the Closing, on behalf of Veraz U.S. and its Affiliates.

6.2 Business Employee Liability . Any liability with respect to Business Employees the grounds for which arose during the period prior to the Closing Date shall be NGTS U.S.’s, and any liability with respect to Business Employees the grounds for which arose any time thereafter shall be Veraz U.S.’s; provided, however, that vacation liabilities up to a maximum of $100,000 accrued prior to the Closing Date shall be Veraz U.S.’s.

6.3 Employee Letters . Each Business Employee shall have executed and delivered to NGTS U.S. a letter substantially in the form of Schedule 6.3 hereto prior to the Closing Date.

6.4 Options . Any vested options to purchase ordinary shares of ECI Telecom held by a Business Employee on the Closing Date shall continue to be exercisable for as long as the Business Employee is employed by Veraz U.S. or one of its affiliates and for 30 days thereafter. Any unvested options to purchase ordinary shares of ECI Telecom held by a Business Employee on the Closing Date shall be governed by the terms of such options and the option plan under which they were granted.

7. Additional Matters

7.1 Allocation of Expenses . All expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Party incurring such expenses. For the avoidance of doubt, all fees and expenses of any legal advisors retained by the management of NGTS U.S. o