NETERGY NETWORKS, INC.
                            2445 MISSION COLLEGE BLVD
                              SANTA CLARA, CA 95054
                                  408-727-1885

Mr. Jonathan Foster
VP, Netergy Networks, Inc.

Dear Jon:

This confirms that you are effectively resigning as an officer of Netergy
Networks, Inc. ("Netergy" or the "Company") on April 30, 2001, which starts your
six-month severance. This letter outlines the terms of your employment during
the six-month period ending October 31, 2001:

1.  EMPLOYMENT. Your status will be that of a part-time employee through October
    31, 2001, subject to honoring the obligations of noncompete (which are
    determined at the time you are engaging in any activity) and NDA, as well as
    assignment of intellectual property developed through April 30, 2001; you
    owe the Company nothing on intellectual property developed after April 30,
    2001, except related to projects that you worked on specifically at the
    Company's request. Your responsibilities will be to consult on matters as
    they arise that relate to your employment prior to April 30, 2001, including
    answering questions that may arise and perhaps even talking to some customer
    or party who may want reassurance. Your annual salary will remain at
    $190,000 irrespective of the amount of time worked. Nothing in this
    agreement will limit your ability to accept full-time employment with a
    company that is not competing with Netergy.

2.  LITIGATION. You will answer questions relating to the litigation as they
    arise, but if you are called to a deposition or to appear at a trial as a
    witness (by Netergy or any other party relating to matters prior to April
    30, 2001), then Netergy will pay you $1,000 per day (or prorated to 1/4 day
    increments if less than a full day is required) for the time you have to
    make yourself available, including travel time. You will also get reimbursed
    for your out-of-pocket expenses incurred at our request upon furnishing the
    usual receipts (same process as if you were an employee). Such amounts will
    be offset by any amount that you are paid by the court or other party to
    appear. This arrangement on litigation issues applies any time in the
    future, including after October 31, 2001.

3.  MEDICAL AND OTHER BENEFITS. You will continue receiving medical and other
    benefits for this 6 months (through October 31, 2001) other than PTO, which
    due to the reduced scope of your responsibilities, will cease to accrue on
    April 30, 2001.

4.  NETERGY PROPERTY. You may continue to use Netergy equipment presently in
    your possession (though you will pay the cost of any internet connection
    outside Netergy's property, and you will reimburse Netergy for the cost of
    your cell phone, though you can get reimbursed for Netergy phone calls on
    your cell phone or elsewhere). You will deliver all Netergy property back to
    Netergy on or the week before October 31, 2001 at your final exit interview.

5.  WAIVER. You hereby waive any and all claims against Netergy, its affiliates
    and subsidiaries, and Netergy's officers, directors, employees, consultants
    and contractors, and you also reaffirm such waiver each time you cash a
    check from Netergy through October 31, 2001 as a precondition to cashing
    such check. You claim no other bonus after April 30, 2001 (though I may in
    my discretion award you one). Netergy does not waive any claims against you,
    but I can say that I know of no breach of your obligations that would cause
    a claim.

6.  OFFLOAD. Please offload your work and files to Bryan Martin, David Stoll and
    Barry Andrews. Discard any files that are obsolete and no longer relevant.

Thanks for your cooperation in this recent transition period. Thanks also for
your many contributions to Netergy.

Sincerely,                           Approved: /s/ JONATHAN FOSTER
                                               ---------------------------------
                                               Jonathan Foster
/s/ JOE PARKINSON
Joe Parkinson, Chairman


Source: OneCLE Business Contracts.