<PAGE>

                                                                   EXHIBIT 10.24

                                                                  EXECUTION COPY
                                                                  --------------

                     STANDSTILL AND DISPOSITION AGREEMENT

                                   Between

                           EFFICIENT NETWORKS, INC.

                                      and

                            CABLETRON SYSTEMS, INC.

                         Dated as of December 17, 1999
<PAGE>

                              TABLE OF CONTENTS

<TABLE>
<S>                                                                               <C>
                                                                                  Page
                                                                                  ----
ARTICLE 1 DEFINITIONS...........................................................     1
     1.1  Certain Definitions...................................................     1

ARTICLE 2 STANDSTILL AND RELATED COVENANTS......................................     5
     2.1  Cabletron Ownership of Efficient Securities...........................     5
     2.2  Standstill Provisions.................................................     5
     2.3  Voting................................................................     6
     2.4  Voting Trust..........................................................     6
     2.5  Solicitation of Proxies...............................................     6
     2.6  Acts in Concert with Others...........................................     6
     2.7  Termination...........................................................     7

ARTICLE 3 RESTRICTIONS ON TRANSFER OF SECURITIES; COMPLIANCE WITH
     SECURITIES LAWS............................................................     7
     3.1  Restrictions on Transfer of Voting Securities of Efficient............     7
     3.2  Restrictive Legends...................................................     8
     3.3  Procedures for Certain Transfers......................................     9
     3.4  Covenant Regarding Exchange Act Filings...............................    10
     3.5  Termination...........................................................    10

ARTICLE 4 REGISTRATION RIGHTS...................................................    11
     4.1  Demand Registration...................................................    11
     4.2  Shelf Registration....................................................    11
     4.3  Piggyback Registration................................................    12
     4.4  Demand and Shelf Registration Procedures, Rights and Obligations......    14
     4.5  Expenses..............................................................    18
     4.6  Indemnification.......................................................    18
     4.7  Issuances by Efficient or Other Holders...............................    19
     4.8  Information by Cabletron..............................................    19
     4.9  Market Standoff Agreements............................................    19
     4.10 Additional Registration Rights Covenants..............................    20
     4.11 Termination...........................................................    20

ARTICLE 5 MISCELLANEOUS.........................................................    21
     5.1  Governing Law.........................................................    21
     5.2  Successors and Assigns................................................    21
     5.3  Entire Agreement; Amendment...........................................    21
     5.4  Notices and Dates.....................................................    21
     5.5  Language Interpretation...............................................    22
     5.6  Table of Contents; Titles; Headings...................................    23
     5.7  Counterparts..........................................................    23
     5.8  Severability..........................................................    23
     5.9  Injunctive Relief.....................................................    23
     5.10 Automatic Adjustments to Share Numbers................................    23
</TABLE>

                                      -i-
<PAGE>

                     STANDSTILL AND DISPOSITION AGREEMENT

     THIS STANDSTILL AND DISPOSITION AGREEMENT (this "Agreement") is made as of
December 17, 1999, between Cabletron Systems, Inc., a Delaware corporation
("Cabletron"), and Efficient Networks, Inc., a Delaware corporation
("Efficient").

                                   RECITALS
                                   --------

     A.   Pursuant to the terms of the Agreement and Plan of Reorganization,
dated as of November 21, 1999 (the "Merger Agreement"), by and among Efficient,
Cabletron, Fire Acquisition Corporation, a California corporation and Flowpoint
Corporation, a California corporation, Cabletron will receive 7,200,000 shares
of Efficient's Common Stock, par value $0.01 per share (the "Shares") and 6,300
shares of Efficient's Series A Non-Voting Convertible Stock (the "Preferred
Stock").

     B.   The Merger Agreement provides for the execution and delivery of this
Agreement.

     NOW, THEREFORE, in consideration of the representations, warranties,
covenants and conditions herein and in the Merger Agreement, the parties hereto
hereby agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS



     1.1  Certain Definitions.  As used in this Agreement:
          -------------------

          (a) "Affiliate" shall have the meaning set forth in Section 3.3(c).

          (b) "Available Shares" shall have the meaning set forth in Section
4.3(c)(ii).

          (c) "Base Shares" means the number of shares of Efficient equal to ten
percent (10%) of Efficient's Voting Securities.

          (d) "Beneficial ownership" or "beneficial owner" has the meaning
provided in Rule 13d-3 promulgated under the Exchange Act. References to
ownership of Voting Securities hereunder mean record and/or beneficial
ownership.

          (e) "Change in Control of Efficient" shall mean a merger,
consolidation or other business combination or the sale of all or substantially
all of the assets of Efficient (other than a transaction pursuant to which the
holders of the voting stock of Efficient outstanding immediately prior to such
transaction have the entitlement to exercise, directly or indirectly, fifty
percent (50%) or more of the Total Voting Power of the continuing, surviving
entity or transferee immediately after such transaction).
<PAGE>

          (f) "Cabletron" has the meaning set forth in the recitals hereto and
includes any Person controlling Cabletron.

          (g) "Cabletron Competitor" is any of the top five (5) data networking
companies, as measured by revenues from time to time.

          (h) "Cabletron Conflict of Interest Transaction" means any transaction
requiring the approval of Efficient's Stockholders (i) between Efficient and one
(or more) Persons in which Cabletron owns or controls a five percent (5%) equity
interest or (ii) a Change of Control of Efficient with a Cabletron Competitor.

          (i) "Cabletron Pooling Transaction Lock-Up" has the meaning set forth
in Section 4.9(a).

          (j) "Cabletron Public Offering Lock-Up" has the meaning set forth in
Section 4.9(a).

          (k) "Controlled Affiliate" means, with respect to any Person, any
Person directly or indirectly controlled by such other Person where, for
purposes of this definition, "control" or "controlled by" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Securities, by contract or otherwise.

          (l) "Conversion Stock" shall mean the Efficient Common Stock received
upon conversion of the Preferred Stock.

          (m) "Demand Breathing Period" means (x) 180 days after the closing of
the offering related to a prior Demand Request or (y) 90 days after the closing
of the last public offering of securities by Efficient for its own account.

          (n) "Demand Registration Statement" has the meaning set forth in
Section 4.1(a).

          (o) "Demand Request" has the meaning set forth in Section 4.1(a).

          (p) "Demand Managing Underwriters" has the meaning set forth in
Section 4.4(c).

          (q) "Demand Market Cut-Back" has the meaning set forth in Section
4.4(d).

          (r) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (s) "Exclusive Demand Period" means the period between the date hereof
and December 31, 2000; provided, that, the Exclusive Demand Period shall be
extended day per day for the duration of any Suspension Condition in effect
prior to December 31, 2000.

                                      -2-
<PAGE>

     (t)  "Exclusive Demand Period Offering" means a public offering of Voting
Securities for cash by Efficient for its own account (excluding the First
Offering) during the Exclusive Demand Period.

     (u)  "First Offering" means the first underwritten public offering of
Voting Securities for cash by Efficient for its own account following the date
hereof.

     (v)  "Group" or "group" shall have the meaning provided in Section 13(d)(3)
of the Exchange Act and the rules and regulations promulgated thereunder, but
shall exclude any institutional underwriter purchasing Voting Securities of
Efficient in connection with an underwritten registered offering for purposes of
a distribution of such securities.

     (w)  "Indemnified Party" has the meaning set forth in Section 4.6(c).

     (x)  "Indemnifying Party" has the meaning set forth in Section 4.6(c).

     (y)  "Investors" shall have the meaning set forth in the Investors" Rights
Agreement.

     (z)  "Investors" Rights Agreement" shall mean that certain Investors"
Rights Agreement of Efficient dated July 30, 1993, as amended (or any successor
to such agreement).

     (aa) "Minimum Demand Portion" shall have the meaning set forth in Section
4.4(d)(i).

     (bb) "Passive Investor" means a bank, a qualified pension trust or a
registered mutual fund which reports its ownership of securities under and
utilizing Section 13(G) of the Exchange Act (and Form 13(G) under the Exchange
Act) and which has not, within the two (2) year period prior to the time of
determination, participated in a solicitation of proxies against a portfolio
company or filed a Form 13(d) or converted from a Form 13(G) filer to a Form
13(d) filer with respect to any portfolio company.

     (cc) "Person" shall mean any person, individual, corporation, partnership,
trust, limited liability company or other non-governmental entity or any
governmental agency, court, authority or other body (whether foreign, federal,
state, local or otherwise).

     (dd) "Piggyback Market Cut-Back" has the meaning set forth in Section
4.3(c).

     (ee) "Piggyback Registrable Securities" has the meaning set forth in
Section 4.3(a).

     (ff) "Piggyback Registration Statement" has the meaning set forth in
Section 4.3(a).

     (gg) "Piggyback Request" has the meaning set forth in Section 4.3(a).

     (hh) "Piggyback Underwriting Agreement" has the meaning set forth in
Section 4.3(b).

                                      -3-
<PAGE>

     (ii) "Preferred Stock" has the meaning set forth in Section A of the
Recitals.

     (jj) "Proportionately" has the meaning set forth in Section 2.3.

     (kk) "Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

     (ll) "Registrable Securities" means (i) the Shares, (ii) Conversion Stock
and (iii) any securities issued in respect of the foregoing as a result of any
stock split, stock dividend, recapitalization, or similar transaction.

     (mm) "Registration Expenses" shall mean all expenses incurred in connection
with a registration hereunder, including, without limitation, all registration
and filing fees, listing fees, printing and automated document preparation
expenses, custody fees, fees and disbursements of counsel for Efficient, blue
sky fees and expenses, and the expenses of Efficient's independent accountants,
including any special audits or comfort letters incident to or required by any
such registration, but excluding the expenses of regular employees of Efficient,
which shall be paid in any event by Efficient.

     (nn) "Reserved Portion" shall mean (i) with respect to the First Offering,
provided the preliminary prospectuses with respect to such offering are printed
and distributed prior to May 1, 2000 and such offering closes by June 1, 2000
(the "Criteria"), 35% of the number of shares to be distributed in such
offering; (ii) with respect to an Exclusive Demand Period Offering (or the First
Offering if the Criteria are not met), the greater of 40% of the shares to be
distributed in such offering or 3,000,000 shares.

     (oo) "Reserved Shares" shall have the meaning set forth in Section
4.4(d)(ii).

     (pp) "Securities" has the meaning set forth in Section 3.2(a).

     (qq) "Securities Act" means the Securities Act of 1933, as amended.

     (rr) "SEC" means the Securities and Exchange Commission or any other
federal agency at the agency administering the Securities Act.

     (ss) "Selling Expenses" shall mean with respect to any registration
pursuant to this Agreement, all underwriting discounts and selling commissions
applicable to the sale of shares and all fees and disbursements of counsel to
any Person other than the Company.

     (tt) "Shares" has the meaning set forth in Section A of the recitals above;
provided, however, if not capitalized, "shares" shall mean shares of Efficient's
common stock generally.

     (uu) "Shelf Registrable Securities" has the meaning set forth in Section
4.2(a).

     (vv) "Shelf Registration Statement" has the meaning set forth in Section
4.2(a).

                                      -4-
<PAGE>

     (ww) "Suspension Condition" has the meaning set forth in Section 4.4(f).

     (xx) "Total Consideration Shares" shall mean the aggregate of (x) the total
number of Shares held by Cabletron and (y) the total number of shares of
Efficient Common Stock which the Preferred Stock has been converted into or is
convertible into.

     (yy) "Voting Securities" means all securities of Efficient, entitled, in
the ordinary course, to vote in the election of directors of Efficient. Voting
Securities shall not include stockholder rights or other comparable securities
having Voting Power only upon the happening of a trigger event or comparable
contingency and which can only be transferred together with the Voting
Securities to which they attach. References herein to meetings of holders of
Voting Securities shall include meetings of any class or type thereof.

     (zz) "Voting Power" or "Total Voting Power" of Efficient (or any other
corporation) refer to the votes or total number of votes which at the time of
calculation may be cast in the election of directors of Efficient (or such
corporation) at any meeting of stockholders of Efficient (or such corporation)
if all securities entitled to vote in the election of directors of Efficient (or
such corporation) were present and voted at such meeting; provided that for
purposes of references herein made to any Person's "Voting Power" or percentage
beneficial ownership of "Total Voting Power," any rights (other than rights
referred to in any rights plan of Efficient (or any such other corporation) or a
successor to such rights plan so long as such rights can only be transferred
together with the Voting Securities to which they attach) of such Person to
acquire Voting Securities (whether or not the exercise of any such right shall
be conditioned upon any contingency) shall be deemed to have been exercised in
full.

     All capitalized terms used and not defined herein shall have the respective
meanings assigned to such terms in the Merger Agreement.

                                   ARTICLE 2

                       STANDSTILL AND RELATED COVENANTS


     2.1  Cabletron Ownership of Efficient Securities. On the date hereof, and
          -------------------------------------------
without giving effect to the transactions contemplated by the Merger Agreement,
neither Cabletron nor any Controlled Affiliate of Cabletron beneficially owns
any Voting Securities of Efficient.

     2.2  Standstill Provisions. Cabletron shall not acquire, directly or
          ---------------------
indirectly, and shall not cause or permit any Controlled Affiliate of Cabletron
to acquire, directly or indirectly (through market purchases or otherwise),
record or beneficial ownership of any Voting Securities of Efficient without the
prior written consent of the Board of Directors of Efficient; provided, however,
that the prior written consent of the Board of Directors of Efficient shall not
be required for the acquisition of any Voting Securities of Efficient directly
from Efficient or resulting from a stock split, stock dividend or similar
recapitalization by Efficient. Nothing contained in this Section 2.2 shall
adversely affect any right of Cabletron or any Controlled Affiliate of Cabletron
to acquire record or beneficial ownership of Voting Securities of Efficient
pursuant to any rights plan instituted by Efficient.

                                      -5-
<PAGE>

     2.3  Voting. Unless the Board of Directors of Efficient otherwise consents
          ------
in writing in advance, Cabletron shall take such action (and shall cause each
Controlled Affiliate of Cabletron that beneficially owns Voting Securities of
Efficient to take such action) as may be required so that all Voting Securities
of Efficient beneficially owned by Cabletron (or any such Controlled Affiliate
of Cabletron) from time to time, other than the Base Shares, are voted on all
matters to be voted on by holders of Voting Securities of Efficient in the same
proportion (for, against and abstain, with lost, damaged or disfigured ballots
counting as abstentions to the extent that they cannot be counted as for or
against under applicable law) as the votes cast by the other holders of Voting
Securities of Efficient with respect to such matters ("Proportionately");
provided, however, that on any matter that constitutes, involves or is part of,
a Cabletron Conflict of Interest Transaction, Cabletron and any Controlled
Affiliate of Cabletron must vote all Voting Securities, including the Base
Shares, Proportionately. Cabletron (or any Controlled Affiliate of Cabletron),
as the holder of Voting Securities of Efficient, shall be present, in person or
by proxy, at all meetings of the stockholders of Efficient so that all Voting
Securities of Efficient beneficially owned by Cabletron (or such Controlled
Affiliate of Cabletron) from time to time may be counted for the purposes of
determining the presence of a quorum at such meetings. The foregoing provision
shall also apply to the execution by Cabletron of any written consent in lieu of
a meeting of holders of Voting Securities of Efficient or any class thereof.

     2.4  Voting Trust. Cabletron shall not, and shall not cause or permit any
          ------------
Controlled Affiliate of Cabletron to, deposit any Voting Securities of Efficient
in a voting trust or, except as otherwise provided herein, subject any Voting
Securities of Efficient to any arrangement or agreement with respect to the
voting of such Voting Securities of Efficient.

     2.5  Solicitation of Proxies. Without the prior written consent of the
          -----------------------
Board of Directors of Efficient, Cabletron shall not, and shall not cause or
permit any Controlled Affiliate of Cabletron to, directly or indirectly (i)
initiate, propose or otherwise solicit Efficient stockholders for the approval
of one or more stockholder proposals with respect to Efficient or induce or
attempt to induce any other Person to initiate any stockholder proposal, (ii)
make, or in any way participate in, any "solicitation" of "proxies" (as such
terms are defined or used in Regulation 14a-1 under the Exchange Act) with
respect to any Voting Securities of Efficient, or become a "participant" in any
"election contest" (as such terms are used in Rule 14a-11 of Regulation 14A
under the Exchange Act), with respect to Efficient or (iii) call or seek to have
called any meeting of the holders of Voting Securities of Efficient.

     2.6  Acts in Concert with Others. Except as contemplated herein, Cabletron
          ---------------------------
shall not, and shall not cause or permit any Controlled Affiliate of Cabletron,
to participate in the formation, or encourage the formation, of any Person which
owns or seeks to acquire beneficial ownership of, or otherwise acts in concert
in respect of the Voting or disposition of, Voting Securities of Efficient.
Without limiting the generality of the foregoing, and except as contemplated
herein, Cabletron shall not, and shall not cause or permit any Controlled
Affiliate of Cabletron to: (i) join a partnership, limited partnership,
syndicate or other group, or otherwise act in concert with any third person, for
the purpose of acquiring, holding, or disposing of Voting Securities of
Efficient; (ii) seek election to or seek to place a representative on the Board
of Directors of Efficient; (iii) seek the removal of any member of the Board of
Directors of Efficient; (iv) otherwise seek control of the management, Board of
Directors or policies of Efficient; (v) solicit, propose, seek to effect or
negotiate with any other Person with respect to any form of business combination
transaction with Efficient or any Controlled

                                      -6-
<PAGE>

Affiliate thereof, or any restructuring, recapitalization or similar transaction
with respect to Efficient or any Controlled Affiliate thereof; (vi) solicit,
make or propose or encourage or negotiate with any other Person with respect to,
or announce an intent to make, any tender offer or exchange offer for any Voting
Securities of Efficient; (vii) disclose an intent, purpose, plan or proposal
with respect to Efficient or any Voting Securities of Efficient inconsistent
with the provisions of this Agreement, including an intent, purpose, plan or
proposal that is conditioned on or would require Efficient to waive the benefit
of or amend any provision of this Agreement; or (vii) assist, participation in,
facilitate, encourage or solicit any effort or attempt by any Person to do or
seek to do any of the foregoing. Cabletron shall not, and shall not cause or
permit any Controlled Affiliate of Cabletron to, encourage or render advice to
or make any recommendation or proposal to any Person to engage in any of the
actions covered by Section 2.5 and this Section 2.6 hereof.

     2.7  Termination. The provisions of this Article 2 shall terminate at such
          -----------
time as (i) Cabletron (together with all Controlled Affiliates of Cabletron)
beneficially owns in the aggregate Voting Securities of Efficient representing
less than five percent (5%) of the Total Voting Power of Efficient or (ii) upon
a Change in Control of Efficient.

                                   ARTICLE 3

    RESTRICTIONS ON TRANSFER OF SECURITIES; COMPLIANCE WITH SECURITIES LAWS


     3.1  Restrictions on Transfer of Voting Securities of Efficient. Cabletron
          ----------------------------------------------------------
shall not, and shall not cause or permit any Controlled Affiliate of Cabletron
to, directly or indirectly, offer to sell, contract to sell, make any short sale
of, or otherwise sell, dispose of, loan, gift, pledge or grant any options or
rights with respect to, any Securities, now or hereafter acquired, or with
respect to which Cabletron or any Controlled Affiliate of Cabletron has or
hereafter acquires the power of disposition or enter into any agreement or
understanding with respect to the foregoing, except as set forth below (for
purposes of the following, the Preferred Stock shall be deemed converted into
Conversion Stock):

          (a)  to Efficient, or any Person or group approved in writing in
advance by the Board of Directors of Efficient;

          (b)  subject to Section 3.3(a) below, to any Controlled Affiliate of
Cabletron, so long as such Controlled Affiliate agrees in writing, in form
reasonably acceptable to counsel for Efficient, to hold such Voting Securities
or Preferred Stock of Efficient subject to all the provisions of this Agreement,
and so agrees to transfer such Voting Securities or Preferred Stock of Efficient
to Cabletron or another Controlled Affiliate of Cabletron if it ceases to be a
Controlled Affiliate of Cabletron;

          (c)  pursuant to a firm commitment, underwritten public offering of
Securities registered under the Securities Act;

          (d)  subject to Section 3.3(b) below, through a sale of Securities
pursuant to Rule 144 under the Securities Act or pursuant to the Shelf
Registration Statement; provided, however, that any such sale complies with the
manner of sale provisions under paragraph (f) of Rule

                                      -7-
<PAGE>

144 or the plan of distribution set forth in the Shelf Registration Statement,
as applicable and is not made to: (A) any Person or group which has theretofore
filed a Schedule 13D with the SEC with respect to any class of "equity security"
(as defined in Rule 13a11-1 under the Exchange Act) of Efficient and which, at
the time of such sale, continues to reflect beneficial ownership in excess of
five percent (5%) of the Total Voting Power of Efficient; (B) any Person or
group which, after giving effect to the sale and to the actual knowledge of
Cabletron (with no duty of investigation), will beneficially own in excess of
five percent (5%) of any Voting Securities of Efficient or to be accumulating
stock on behalf of or acting in concert with any such Person or group or a
Person or group contemplated by clause (A) above, provided however, that this
clause (B) shall not apply with respect to transfers less than 100,000 shares;
or (C) any Person or group that has announced or commenced an unsolicited offer
for any Voting Securities or Preferred Stock of Efficient or publicly initiated,
proposed or otherwise solicited Efficient stockholders for the approval of one
or more stockholder proposals with respect to Efficient or publicly made, or in
any way participated in, any "solicitation" of "proxies" (as such terms are
defined or used in Regulation 14A under the Exchange Act) with respect to any
Voting Securities or Preferred Stock of Efficient, or become a "participant" in
any "election contest" (as such terms are used in Rule 14a-11 of Regulation 14A
under the Exchange Act);

          (e)  (i) subject to Section 3.3(a) below, pursuant to any private sale
of Securities exempt from the registration requirements under the Securities
Act; provided, however, that (i) no such sale may be made to any Person or group
which, to the knowledge of Cabletron after reasonable inquiry and after giving
effect to such sale, will beneficially own or have the right to acquire Voting
Securities or Preferred Stock of Efficient with aggregate Voting Power of more
than five percent (5%) of the Total Voting Power of Efficient or group, except,
however, if such Person or group is a Passive Investor, such limitation shall be
ten percent (10%) of the Total Voting Power of Efficient; and (ii) in any event
any such purchaser shall agree to take and hold such Securities subject to the
provisions and upon the conditions specified in Sections 2 and 3 of this
Agreement, and it will be a condition precedent to the effectiveness of any such
transfer that Cabletron shall have delivered to Efficient a written agreement of
such purchaser to that effect in form and substance reasonably satisfactory to
Efficient; or

          (f)  in response to an offer to purchase or exchange for cash or other
consideration any Voting Securities or Preferred Stock, which in any case is not
opposed by the Board of Directors of Efficient within the time such Board is
required, pursuant to Regulations under the Exchange Act, to advise the
stockholders of Efficient of such Board's position with respect to such offer,
or, if no such Regulations are applicable, within ten (10) business days of the
commencement of such offer, or pursuant to a merger, consolidation or other
business combination involving Efficient approved by the Board of Directors of
Efficient.

     3.2  Restrictive Legends.
          -------------------

                                      -8-
<PAGE>

          (a)  The certificate or certificates representing the (i) the Shares,
(ii) the Preferred Stock, (iii) the Conversion Stock and (iv) any securities
issued in respect of the foregoing as a result of any stock split, stock
dividend, recapitalization, or similar transaction (collectively, the
"Securities") shall be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under
applicable state Securities laws):

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
          ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
          THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR
          TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
          OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AS TO THE
          AVAILABILITY OF AN EXEMPTION FROM REGISTRATION.

          (b)  In addition to the legend provided for in Section 3.2 (a), the
certificate or certificates representing the Securities and any other securities
of Efficient hereafter acquired (for example, in compliance with Section 2.2)
shall be stamped or otherwise imprinted with a legend substantially in the
following form:

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
          RESTRICTIONS ON TRANSFER, INCLUDING ANY SALE, PLEDGE OR
          OTHER HYPOTHECATION, WHICH RESTRICTIONS ARE SET FORTH IN AN
          AGREEMENT BETWEEN THE ISSUER AND CABLETRON SYSTEMS, INC., A
          COPY OF WHICH MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
          MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
          SECRETARY OF THE ISSUER AT THE ISSUER'S PRINCIPAL EXECUTIVE
          OFFICES.

     3.3  Procedures for Certain Transfers.
          --------------------------------

          (a)  Prior to any proposed transfer of any Securities pursuant to
Sections 3.1(b) and 3.1(e)(i) hereof, Cabletron shall give written notice to
Efficient of Cabletron's intention to effect such transfer. Each such notice
shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall be accompanied by either: (i) a written opinion of
legal counsel (including in-house counsel), who shall be reasonably satisfactory
to Efficient, addressed to Efficient and reasonably satisfactory in form and
substance to Efficient's counsel, to the effect that the proposed transfer of
the Securities may be effected without registration under the Securities Act; or
(ii) a "no action" letter from the SEC and a copy of any request by Cabletron
(together with all supplements or amendments thereto), which shall have been
provided to Efficient at or prior to the time of first delivery to the SEC's
staff, to the effect that the transfer of such Securities without registration
will not result in a recommendation by the staff of the SEC that action be taken
with respect thereto, whereupon Cabletron shall be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
Cabletron to Efficient.

                                      -9-
<PAGE>

          (b)  In connection with any proposed transfer of Securities pursuant
to Rule 144 as provided in Section 3.1(d) above, Cabletron shall comply with the
reasonable requirements of Efficient's transfer agent with respect to sales of
restricted securities pursuant to Rule 144.

          (c)  Each certificate evidencing the Securities transferred as herein
provided (other than a transfer pursuant to Section 3.1(c) or pursuant to the
Shelf Registration Statement) shall bear the appropriate restrictive legend set
forth (or described) in Section 3.4(a) above, except that such certificate shall
not bear such restrictive legend if: (i) in the opinion of counsel for
Efficient, such legend is not required in order to establish compliance with any
provisions of the Securities Act; (ii) the Securities have been held by the
holder for more than two years, and the holder represents to counsel for
Efficient that it has not been an "Affiliate" (as such term is defined for
purposes of Rule 144) of Efficient during the three-month period prior to the
sale and shall not become an affiliate (as such term is defined for purposes of
Rule 144) of Efficient without resubmitting the Securities for reimposition of
the legend; or (iii) the Securities have been sold pursuant to Rule 144 and in
compliance with Section 3.1(d). In addition, each certificate evidencing the
Securities transferred pursuant to this Article 3 (other than transfers pursuant
to Sections 3.1(c) or pursuant to the Shelf Registration Statement) shall bear
the legend set forth in Section 3.2(b) above. The restrictive legend specified
in Section 3.2(a) shall promptly be removed in connection with a sale pursuant
to Section 3.1(c) or the Shelf Registration Statement or the satisfaction of
subclause (i), (ii) or (iii) above. The restrictive legend specified in Section
3.2(b) shall be removed upon termination of Article 3 as set forth in Section
3.5 below or in connection with a transfer of securities which does not require
the transferee to be bound by this Section 3.

     3.4  Covenant Regarding Exchange Act Filings. With a view to making
          ---------------------------------------
available to Cabletron the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may any time permit Cabletron to
sell securities of Efficient to the public without registration. Efficient
agrees to:

               (i)   Make and keep public information available, as those terms
are understood and defined in SEC Rule 144;

               (ii)  File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and

               (iii) Furnish to Cabletron, so long as Cabletron owns any Voting
Securities, forthwith upon request (i) a written statement by Efficient that it
has complied with the reporting requirements of SEC Rule 144; (ii) a copy of the
most recent annual or quarterly report of Efficient and such other reports and
documents so filed by Efficient and (iii) such other information as may be
reasonably requested in availing Cabletron of any rule or regulation of the SEC
which permits the selling of any such securities without registration.

     3.5  Termination. The provisions of this Article 3 shall terminate (other
          -----------
than insofar they relate to general application of securities laws) upon the
later to occur of: (i) the tenth anniversary date of this Agreement and (ii)
such time as Cabletron (together with all Controlled Affiliates of Cabletron)
beneficially owns in the aggregate Voting Securities of Efficient representing
less than five percent (5%) of the Total Voting Power of Efficient or upon the
closing or other completion of a Change in Control of Efficient.

                                      -10-
<PAGE>

                                   ARTICLE 4

                              REGISTRATION RIGHTS


     4.1  Demand Registration.
          -------------------

          (a)  If at any time after July 21, 2000, Efficient shall receive from
Cabletron a written request (a "Demand Request") that Efficient register on Form
S-1 or Form S-3 under the Securities Act (or if such form is not available, any
registration statement form then available to Efficient) Registrable Securities
equal to at least 2,000,000 shares of the Voting Securities of Efficient
outstanding on the date of such Demand Request, then Efficient shall use
commercially reasonable efforts to cause the Registrable Securities specified in
such Demand Request (the "Demand Registrable Securities") to be registered as
soon as reasonably practicable so as to permit the offering and sale thereof
and, in connection therewith, shall prepare and file with the SEC as soon as
practicable, and in any event within thirty (30) days, after receipt of such
Demand Request, a registration statement (a "Demand Registration Statement") to
effect such registration; provided, however, that each such Demand Request
shall: (i) specify the number of Demand Registrable Securities intended to be
offered and sold by Cabletron pursuant thereto (which number of Demand
Registrable Securities shall not be less than 2,000,000 of the Voting Securities
of Efficient outstanding on the date of such Demand Request); (ii) express the
present intention of Cabletron to offer or cause the offering of such Demand
Registrable Securities pursuant to such Demand Registration Statement, (iii)
describe the nature or method of distribution of such Demand Registrable
Securities pursuant to such Demand Registration Statement (including, in
particular, whether Cabletron plans to effect such distribution by means of an
underwritten offering); and (iv) contain the undertaking of Cabletron to provide
all such information and materials and take all such actions as may be required
in order to permit Efficient to comply with all applicable requirements of the
Securities Act, the Exchange Act and the rules and Regulations of the SEC
thereunder, and to obtain any desired acceleration of the effective date of such
Demand Registration Statement.

          (b)  The procedures to be followed by Efficient and Cabletron, and the
respective rights and obligations of Efficient and Cabletron, with respect to
the preparation, filing and effectiveness of Demand Registration Statements and
the distribution of Demand Registrable Securities pursuant to Demand
Registration Statements under this Section 4.1 are set forth in Section 4.4
hereof.


     4.2  Shelf Registration.
          ------------------

          (a)  By July 21, 2000, Efficient shall use its commercially reasonable
efforts to register pursuant to Rule 415(a)(1)(i) under the Securities Act (or
any successor rule with similar effect) a continuous or delayed offering of
Registrable Securities (the "Shelf Registrable Securities") to be registered as
soon as reasonably practicable so as to permit the sale thereof and, in
connection therewith, shall prepare and file with the SEC a shelf registration
statement on Form S-3 relating to the Shelf Registrable Securities, if such Form
S-3 is available for use by Efficient (or any successor form of registration
statement to such Form S-3), to effect such registration (the "Shelf
Registration Statement"), to enable the distribution of the Shelf Registrable
Securities. In

                                      -11-
<PAGE>

connection with the Shelf Registration Statement, Cabletron shall undertake to
offer or cause the offering of such Shelf Registrable Securities in accordance
with the plan of distribution described in the Shelf Registration Statement
which shall include, to the extent allowable on such form, exchange transactions
or the over-the-counter market transactions; private transactions other than
exchange or over-the-counter market transactions; pledge to secure debts and
other obligations; writing of non-traded and exchange-traded call options, hedge
transactions and in settlement of other transactions in standardized or
over-the-counter options, or a combination of the above transactions; and
provide all such information and materials and take all such actions as may be
required in order to permit Efficient to comply with all applicable requirements
of the Securities Act, the Exchange Act and the rules and Regulations of the SEC
thereunder, and to obtain any desired acceleration of the effective date of the
Shelf Registration Statement.

          (b)  The aggregate number of shares sold by Cabletron pursuant to this
Section 4.2 hereof and pursuant to the resale allowances under Rule 144 may not
exceed an aggregate of 2,000,000 shares during any calendar quarter.

          (c)  The procedures to be followed by Efficient and Cabletron, and the
respective rights and obligations of Efficient and Cabletron, with respect to
the preparation, filing and effectiveness of the Shelf Registration Statement
and the distribution of Registrable Securities pursuant to the Shelf
Registration Statement under this Section 4.2 are set forth in Section 4.4
hereof.

     4.3  Piggyback Registration.
          ----------------------

          (a)  If at any time after the date of this Agreement, Efficient shall
determine to register any of its equity or equity-linked Securities, including
registration of shares in a so-called unallocated or universal shelf
registration, whether for sale for its own account or for the account of any
other Person, other than registration statements relating to (i) employee,
consultant or distributor compensation or incentive arrangements, including
employee benefit plans, or (ii) acquisitions or any transaction or transactions
under Rule 145 under the Securities Act or any successor rule with similar
effect, then Efficient will promptly give Cabletron written notice thereof and
include in such registration statement (a "Piggyback Registration Statement")
and in any underwriting involved therein, all Registrable Securities (the
"Piggyback Registrable Securities") specified in a written request made by
Cabletron (a "Piggyback Request") within five (5) business days (or such later
time as the underwriters may allow in writing) after receipt of such written
notice from Efficient.

          (b)  If the Piggyback Registration Statement of which Efficient gives
notice is for an underwritten offering or Efficient proposes to do an
underwritten take down from an unallocated or universal shelf registration,
Efficient shall so advise Cabletron as a part of the written notice given
pursuant to Section 4.3(a). In such event, the right of Cabletron to
registration pursuant to this Section 4.3 (or participate in an underwritten
take down in the case of an unallocated or universal shelf registration) shall
be conditioned upon the agreement of Cabletron to participate in such
underwriting and in the inclusion of such Piggyback Registrable Securities in
the underwriting to the extent provided herein. Cabletron shall (together with
Efficient and any other holders distributing Securities in such Piggyback
Registration Statement, if any) enter into an underwriting agreement (the
"Piggyback Underwriting Agreement") in customary form with the underwriter or
underwriters selected for such underwriting by Efficient. If Cabletron
disapproves of the terms of

                                      -12-
<PAGE>

any such underwriting, it may elect to withdraw therefrom by written notice to
Efficient and the managing underwriters. Any Piggyback Registrable Securities
excluded or excluded from such underwriting shall be excluded from such
Piggyback Registration Statement.

          (c)  Notwithstanding any other provision of this Agreement, if the
managing underwriters of any underwritten offering pursuant to a Piggyback
Request determine, in their sole discretion that, after including all the shares
proposed to be offered by Efficient and all the shares of any other Persons
entitled to registration rights with respect to such Piggyback Registration
Statement (pursuant to other agreements with Efficient), marketing factors
require a limitation of the number of Piggyback Registrable Securities to be
underwritten, Efficient may exclude Piggyback Registrable Securities (a
"Piggyback Market Cut-Back"), subject to the following:

               (i)   Cabletron shall, in any event, have the right to include in
the First Offering or an Exclusive Demand Period Offering, as the case may be, a
number of shares of Piggyback Registrable Securities equal to the Reserved
Portion, (to the exclusion of shares to be included by Efficient or any other
Person); and

               (ii)  With respect to shares in excess of the Reserve Portion in
the case of the First Offering or an Exclusive Demand Period Offering, or in
other offerings, the Piggyback Market Cut-Back shall be made among Cabletron and
the Investors pro-rata relative to the shares to be included in the offering
other than (a) any shares to be issued and sold by Efficient, or (b) any
Reserved Portion (the "Available Shares"); provided that other than in
connection with the First Offering or an Exclusive Demand Period Offering, the
Available Shares shall not be less than thirty percent (30%) of the shares to be
sold in the offering. An Investor's pro-rata portion of the Available Shares
shall be a fraction, the numerator of which is (a) the total number of shares of
Efficient common stock held by such Investor, and the denominator of which is
(b) the aggregate number of shares of common stock beneficially owned by all
Investors and the Total Consideration Shares then beneficially owned by
Cabletron (excluding the Reserved Portion). Cabletron's pro-rata portion of the
Available Shares shall be a fraction, the numerator of which is (a) the number
of Total Consideration Shares then beneficially owned by Cabletron (excluding
the Reserved Portion), and the denominator of which is (b) the aggregate number
of shares of common stock beneficially owned by all Investors and the number of
Total Consideration Shares then beneficially owned by Cabletron (excluding the
Reserved Portion).

          (d)  Except to the extent specifically provided in this Section 4.3
hereof, the procedures to be followed by Efficient and Cabletron, and the
respective rights and obligations of Efficient and Cabletron, with respect to
the distribution of any Piggyback Registrable Securities by Cabletron pursuant
to any Piggyback Registration Statement filed by Efficient shall be as set forth
in the Piggyback Underwriting Agreement, or any other agreement or agreements
governing the distribution of such Piggyback Registrable Securities pursuant to
such Piggyback Registration Statement.

          (e)  Notwithstanding the foregoing, however, nothing in this Section
4.3, or any other provision of this Agreement, shall be construed to limit the
absolute right of Efficient, for any reason and in its sole discretion: (i) to
delay, suspend or terminate the filing of any Piggyback Registration Statement;
(ii) to delay the effectiveness of any Piggyback Registration Statement; (iii)
reduce the number of securities to be distributed pursuant to any Piggyback
Registration

                                      -13-
<PAGE>

Statement (except below the 3,000,000 share minimum of the Reserve Portion in
either (a) an Exclusive Demand Period Offering or (b) if the First Offering has
not met the Criteria, then the First Offering, as the case may be); or (iv) to
withdraw such Piggyback Registration Statement.

     4.4  Demand and Shelf Registration Procedures, Rights and Obligations. The
          ----------------------------------------------------------------
procedures to be followed by Efficient and Cabletron, and the respective rights
and obligations of Efficient and Cabletron, with respect to the preparation,
filing and effectiveness of Demand Registration Statements and the Shelf
Registration Statement, respectively, and the distribution of Demand Registrable
Securities and Registrable Securities, respectively, pursuant thereto, are as
follows:

               (i)   Cabletron shall not be entitled to make a Demand Request
until expiration of the Demand Breathing Period, and shall not be entitled to
make more than two (2) Demand Requests; provided, however, that any Demand
Request that: (A) does not result in the corresponding Demand Registration
Statement being declared effective by the SEC; (B) is withdrawn by Cabletron
following the imposition of an order by the SEC with respect to the
corresponding Demand Registration Statement; (C) is withdrawn by Cabletron as a
result of the exercise by Efficient of its suspension rights pursuant to
Sections 4.4(e) or (f) hereof; (D) is withdrawn by Cabletron as a result of a
Demand Market Cut-Back in violation of Section 4.4(d)(i) below, (E) is withdrawn
if Cabletron shall have learned of a material adverse change in the condition,
business or prospects of Efficient different than that known to Cabletron at the
time of Cabletron shall have initiated the Demand Request (other than a decline
in Efficient's stock price since such time unless, however, Cabletron agrees to
pay, or otherwise reimburse Efficient, for all Registration Expenses) that makes
the proposed offering unreasonable in the good faith judgment of Cabletron; or
(F) is withdrawn because the terms of the underwriting agreement, as
contemplated by Section 4.4(c) below, are not reasonably customary, such Demand
Request in the event of any of (A) through (F) shall not count as one of the two
(2) Demand Requests. Any Demand Request that is withdrawn by Cabletron for any
reason other than as set forth in the previous sentence shall count as a Demand
Request.

          (b)  Efficient shall use commercially reasonable efforts to cause each
Demand Registration Statement and the Shelf Registration Statement to be
declared effective promptly and to keep such Demand Registration Statement and
the Shelf Registration Statement continuously effective until the earlier to
occur of: (i) the sale or other disposition of the Registrable Securities so
registered; (ii) in the case of Demand Registration Statements, one hundred
twenty (120) days after the effective date of any such Demand Registration
Statement; (iii) in the case of the Shelf Registration Statement, until
September 30, 2002; and (iv) the termination of Cabletron's registration rights
pursuant to Section 4.10 hereof. Efficient shall prepare and file with the SEC
such amendments and supplements to each Demand Registration Statement and the
Shelf Registration Statement and each prospectus used in connection therewith as
may be necessary to make and to keep such Demand Registration Statement and the
Shelf Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities proposed to be distributed pursuant to such Demand Registration
Statement and the Shelf Registration Statement until the earlier to occur of:
(i) the sale or other disposition of such Registrable Securities so registered;
(ii) in the case of Demand Registration Statements, one hundred twenty (120)
days after the effective date of any such Demand Registration Statement; (iii)
in the case of the Shelf Registration Statement, until September 30, 2002; and
(iv) the termination of Cabletron's registration rights pursuant to Section 4.10
hereof.

                                      -14-
<PAGE>

          (c)  In connection with any underwritten offering pursuant to a Demand
Registration Statement or the Shelf Registration Statement, Efficient shall
select and Cabletron shall approve, which approval shall not be unreasonably
withheld, one investment banking firm to serve as manager of such offering. The
manager is hereinafter referred to as the "Demand Managing Underwriter."
Efficient shall, together with Cabletron, enter into an underwriting agreement
with the Demand Managing Underwriter, which agreement shall contain
representations, warranties, indemnities and agreements then customarily
included by an issuer in underwriting agreements with respect to secondary
distributions under demand registration statements or shelf registration
statements, as the case may be, and shall stipulate that the Demand Managing
Underwriter will receive commissions and fees and other remuneration in
connection with the distribution of any Demand Registrable Securities or
Registrable Securities thereunder.

          (d)  Notwithstanding any other provision of this Agreement, the number
of shares proposed to be distributed by Cabletron pursuant to any underwritten
offering may be limited by and at the discretion of the Demand Managing
Underwriter (a "Demand Market Cut-Back"), subject to the following:

               (i)  The number of shares to be distributed by Cabletron may not
be limited to less than the greater of (x) 50% of the total number of shares
proposed to be distributed in the offering, (y) 4,000,000 shares, or (z) the
total number of shares proposed to be offered if such total proposed offering
size is less than 4,000,000 shares (the "Minimum Demand Portion"); and

               (ii) With respect to shares in excess of the Minimum Demand
Portion, the Demand Market Cut-Back shall be made among Cabletron and the
Investors pro-rata relative to the shares to be included in the offering other
than (a) any shares to be issued and sold by Efficient or (b) any Minimum Demand
Portion (the "Remaining Shares"). An Investor's pro-rata portion shall be a
fraction, the numerator of which is (a) the total number of shares of Efficient
Common Stock held by such Investor, and the denominator of which is (b) the
aggregate number of shares of common stock beneficially owned by all Investors
and the Total Consideration Shares then beneficially owned by Cabletron
(excluding the Minimum Demand Portion). Cabletron's pro-rata portion of the
Remaining Shares shall be a fraction, the numerator of which is (a) the Total
Consideration Shares then beneficially owned by Cabletron (excluding the Minimum
Demand Portion) and the denominator of which is (b) the aggregate number of
shares of common stock beneficially owned by all Investors and the Total
Consideration Shares then beneficially owned by Cabletron (excluding the Minimum
Demand Portion).

          (e)  Notwithstanding any other provisions of this Agreement, in the
event that Efficient receives a Demand Request, or Cabletron proposes an
underwritten offering utilizing the Shelf Registration Statement at a time when
Efficient (i) shall have filed, or has a bona fide intention to file, a
registration statement with respect to a proposed public offering of equity or
equity-linked Securities or (ii) has commenced, or has a bona fide intention to
commence, a public offering of equity or equity-linked Securities pursuant to an
existing effective shelf or other registration statement, then Efficient shall
be entitled to suspend, for a period of up to ninety (90) days after the receipt
by Efficient of such Demand Request or Cabletron proposal, the filing of any
Demand Registration Statement or the implementation of such proposal under the
Shelf Registration Statement; provided that if Efficient does not file and make
effective a primary registration statement with respect to such offering within
such 90 day period, Cabletron shall have a period of at least 90

                                      -15-
<PAGE>

consecutive days during the twelve (12) month period commencing with the
expiration of such 90 day period to effect a Cabletron Demand Request without
preemption or suspension.

          (f)  Notwithstanding any other provision of this Agreement, in the
event that Efficient determines that: (i) non-public material information
regarding Efficient exists, the immediate disclosure of which would be
significantly disadvantageous to Efficient; (ii) the prospectus constituting a
part of any Demand Registration Statement or the Shelf Registration Statement
covering the distribution of any Demand Registrable Securities or Registrable
Securities contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; or (iii) an offering of Demand Registrable Securities or Registrable
Securities would materially interfere with any proposed material acquisition,
disposition or other similar corporate transaction or event involving Efficient
(each of the events or conditions referred to in clauses (i), (ii) and (iii) of
this sentence is hereinafter referred to as a "Suspension Condition"), then
Efficient shall have the right to suspend the filing or effectiveness of any
Demand Registration Statement or to suspend any distribution of Demand
Registrable Securities or Registrable Securities pursuant to any effective
Demand Registration Statement or the Shelf Registration Statement for so long as
such Suspension Condition exists; provided that Efficient shall have suspended
the filing or effectiveness of all other registration statements registering
securities for the account of Efficient or any other Person or suspended the
distribution of any securities under such registration statements and; provided
further, that in the case of (ii) above, Efficient shall be obligated to use
best efforts to amend such registration statement to correct such material
misstatement or omission in the Registration Statement and related prospectus.
Efficient will as promptly as practicable provide written notice to Cabletron
when a Suspension Condition arises and when it ceases to exist. Upon receipt of
notice from Efficient of the existence of any Suspension Condition, Cabletron
shall forthwith discontinue efforts to: (i) file or cause any Demand
Registration Statement or the Shelf Registration Statement to be declared
effective by the SEC (in the event that such Demand Registration Statement or
the Shelf Registration Statement has not been filed, or has been filed but not
declared effective, at the time Cabletron receives notice that a Suspension
Condition has arisen); or (ii) offer or sell Demand Registrable Securities or
Registrable Securities (in the event that such Demand Registration Statement or
the Shelf Registration Statement has been declared effective at the time
Cabletron receives notice that a Suspension Condition has arisen). In the event
that Cabletron had previously commenced or was about to commence the
distribution of Demand Registrable Securities or Registrable Securities pursuant
to a prospectus under an effective Demand Registration Statement or the Shelf
Registration Statement, then Efficient shall, as promptly as practicable after
the Suspension Condition ceases to exist, make available to Cabletron (and to
each underwriter, if any, participating in such distribution) an amendment or
supplement to such prospectus. If so directed by Efficient, Cabletron shall
deliver to Efficient all copies, other than permanent file copies then in
Cabletron's possession, of the most recent prospectus covering such Demand
Registrable Securities or Registrable Securities at the time of receipt of such
notice.

          (g)  Notwithstanding any other provision of this Agreement, Efficient
shall not be permitted to postpone (i) the filing or effectiveness of any Demand
Registration Statement or the Shelf Registration Statement or (ii) the
distribution of any Demand Registrable Securities or Registrable Securities
pursuant to an effective Demand Registration Statement or the Shelf Registration
Statement pursuant to Sections 4.4(e) or 4.4(f) hereof more than four (4) times
in any 360 day period provided that the aggregate of such suspensions may not
exceed a total of sixty (60)

                                      -16-
<PAGE>

days in any 360 day period (excluding any market standoff periods applicable to
Cabletron pursuant to Section 4.9(a) hereof).

          (h)  Efficient shall promptly notify Cabletron of any stop order
issued or, to Efficient's knowledge, threatened, to be issued by the SEC with
respect to any Demand Registration Statement or the Shelf Registration
Statement, and will use its best efforts to prevent the entry of such stop order
or to remove it if entered at the earliest possible date.

          (i)  Efficient shall furnish to Cabletron (and any underwriter in
connection with any underwritten offering) such number of copies of any
prospectus (including any preliminary prospectus and any amended or supplemented
prospectus), in conformity with the requirements of the Securities Act, as
Cabletron (and such underwriters) shall reasonably request in order to effect
the offering and sale of any Demand Registrable Securities or the Registrable
Securities to be offered and sold, but only while Efficient shall be required
under the provisions hereof to cause the Demand Registration Statement or the
Shelf Registration Statement pursuant to which such Demand Registrable
Securities or Registrable Securities are intended to be distributed to remain
current.

          (j)  Efficient shall use commercially reasonable efforts to register
or qualify the Demand Registrable Securities and Registrable Securities covered
by each Demand Registration Statement and the Shelf Registration Statement,
respectively, under the state Securities or "blue sky" laws of such states as
Cabletron shall reasonably request, maintain any such registration or
qualification current, until the earlier to occur of: (i) the sale of such
Demand Registrable Securities or Registrable Securities so registered; (ii) in
the case of Demand Registration Statements, one hundred twenty (120) days after
the effective date of any such Demand Registration Statement; (iii) in the case
of the Shelf Registration Statement, until September 30, 2002; and (iv) the
termination of Cabletron's registration rights pursuant to Section 4.10 hereof;
provided, however, that Efficient shall not be required to take any action that
would subject it to the general jurisdiction of the courts of any jurisdiction
in which it is not so subject or to qualify as a foreign corporation in any
jurisdiction where Efficient is not so qualified.

          (k)  Efficient shall furnish to Cabletron and to each underwriter
engaged in an underwritten offering of Demand Registrable Securities or
Registrable Securities, a signed counterpart, addressed to Cabletron or such
underwriter, of (i) an opinion or opinions of counsel to Efficient (with respect
to Efficient and Securities law compliance by Efficient) and (ii) a comfort
letter or comfort letters from Efficient's independent public accountants, each
in customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as Cabletron or the managing
underwriters may reasonably request.

          (l)  Efficient shall use commercially reasonable efforts to make
appropriate members of its management reasonably available for due diligence
purposes, "road show" presentations and analyst presentations in connection with
any distributions of Demand Registrable Securities pursuant to a Demand
Registration Statement.

          (m)  Efficient shall use commercially reasonable efforts to cause all
Demand Registrable Securities and Registrable Securities to be listed on each
Securities exchange on which similar Securities of Efficient are then listed,
or, if Efficient does not have a class of equity securities listed on a national
securities exchange, apply for qualification and use commercially reasonable

                                      -17-
<PAGE>

efforts to qualify the Demand Registrable Securities and Registrable Securities
being registered for inclusion on the Nasdaq Stock Market.

          (n)  Efficient shall take all such other actions either reasonably
necessary or desirable to permit the Registrable Securities held by Cabletron to
be registered and disposed of in accordance with the methods of disposition
described herein.

     4.5  Expenses. Subject to Section 4.6, Cabletron, Efficient and any other
          --------
Person whose securities are included in any registration statements that are
initiated pursuant to Sections 4.1, 4.2 or 4.3 of this Agreement shall pay their
respective Selling Expenses, and, in the case of Sections 4.1 and 4.2, shall pay
the proportion of all Registration Expenses incurred in connection with any such
registration that the aggregate number of securities included in such
registration on behalf of such Cabletron or such Person bears to the aggregate
of number of all securities included in such registration. Efficient shall pay
all Registration Expenses incurred in connection with any registration statement
that is initiated pursuant to Section 4.3 of this Agreement.

     4.6  Indemnification.
          ---------------

          (a)  In the case of any offering registered pursuant to this Section
4, Efficient hereby indemnifies and agrees to hold harmless Cabletron (and its
officers and directors), any underwriter (as defined in the Securities Act) of
Registrable Securities offered by Cabletron, and each Person, if any, who
controls Cabletron or any such underwriter within the meaning of Section 15 of
the Securities Act against any losses, claims, damages or liabilities, joint or
several, to which any such Persons may be subject, under the Securities Act or
otherwise, and to reimburse any of such Persons for any legal or other expenses
reasonably incurred by them in connection with investigating any claims or
defending against any actions, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration statement
under which such Registrable Securities were registered under the Securities Act
pursuant to this Section 4, the prospectus contained therein (during the period
that Efficient is required to keep such prospectus current), or any amendment or
supplement thereto, or the omission or alleged omission to state therein (if so
used) a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading, except insofar as such losses, claims, damages or liabilities
arise out of or are (i) based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon information furnished
to Efficient in writing by Cabletron or any underwriter for Cabletron
specifically for use therein, or (ii) made in any preliminary prospectus, and
the prospectus contained in the registration statement as declared effective or
in the form filed by Efficient with the SEC pursuant to Rule 424 under the
Securities Act shall have corrected such statement or omission and a copy of
such prospectus shall not have been sent or otherwise delivered to such Person
at or prior to the confirmation of such sale to such Person.

          (b)  By requesting registration under this Section 4, Cabletron
agrees, if Registrable Securities held by Cabletron are included in the
Securities as to which such registration is being effected, and each underwriter
shall agree, in the same manner and to the same extent as set forth in the
preceding paragraph, to indemnify and to hold harmless Efficient and its
directors and officers and each Person, if any, who controls Efficient within
the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which any of such Persons may

                                      -18-
<PAGE>

be subject under the Securities Act or otherwise, and to reimburse any of such
Persons for any legal or other expenses incurred in connection with
investigating or defending against any such losses, claims, damages or
liabilities, but only to the extent it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact in any registration statement under which the Registrable
Securities were registered under the Securities Act pursuant to this Section 4,
any prospectus contained therein, or any amendment or supplement thereto, which
was based upon and made in conformity with information furnished to Efficient in
writing by Cabletron or such underwriter expressly for use therein.

          (c)  Each party entitled to indemnification under this Section 4.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at its own
expense, and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 4 unless such failure resulted in actual
detriment to the Indemnifying Party. No Indemnifying Party, (i) in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation, or (ii) shall be liable for amounts paid in any settlement if such
settlement is effected without the consent of the Indemnifying Party, which
consent shall not be unreasonably withheld.

     4.7  Issuances by Efficient or Other Holders. As to each registration or
          ---------------------------------------
distribution referred to in Section 4.1, additional shares of the Common Stock
to be sold for the account of Efficient or the Investors may be included
therein, provided that the inclusion of such Securities in such registration or
distribution shall be subject to and governed by the provisions of Sections
4.3(c) and 4.4(d).

     4.8  Information by Cabletron. Cabletron shall furnish to Efficient such
          ------------------------
information regarding Cabletron in the distribution of Registrable Securities
proposed by Cabletron as Efficient may reasonably request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Article 4.

     4.9  Market Standoff Agreements. In connection with the underwritten public
          --------------------------
offering by Efficient of at least 1,000,000 shares for its own account or
$50,000,000, whichever is lesser, Cabletron agrees that, upon the request of
Efficient or the underwriters managing any underwritten offering of Efficient's
Securities, Cabletron shall agree in writing (the "Cabletron Public Offering
Lock-Up") that neither Cabletron (nor any director, executive officer or
Controlled Affiliate of Cabletron) will, directly or indirectly, offer to sell,
contract to sell, make any short sale of, or otherwise sell, dispose of, loan,
gift, pledge or grant any options or rights with respect to, any Securities of
Efficient (other than those included in such registration statement, if any) now
or hereafter acquired by Cabletron (or any director, executive officer or
Controlled Affiliate of

                                      -19-
<PAGE>

Cabletron) or with respect to which Cabletron (or any director, executive
officer or Controlled Affiliate of Cabletron) has or hereafter acquires the
power of disposition without the prior written consent of Efficient and such
underwriters for such period of time (not to exceed fourteen (14) days prior to
the date such offering is expected to commence and ninety (90) days after the
date of the final prospectus delivered to the underwriters for use in confirming
sales in such offering) as may be requested by Efficient and the underwriters
provided that (i) the directors, executive officers (ii) all holders of more
than five percent (5%) of Efficient's Voting Securities which are an "affiliate"
of Efficient for purposes of the accounting rules governing pooling of interest
transactions and (iii) any Investor or other Person participating in such
offering enter into a public offering lock-up containing the same terms as the
Cabletron Public Offering Lock-Up; provided, however, that neither Cabletron
(nor any director, executive officer or Controlled Affiliate of Cabletron) shall
be bound by such Cabletron Public Offering Lock-Up more than once during any
twelve month period. Furthermore, Cabletron agrees that, at the request of
Efficient, Cabletron shall agree in writing (the "Cabletron Pooling Transaction
Lock-Up") that neither Cabletron (nor any director, executive officer or
Controlled Affiliate of Cabletron) shall, directly or indirectly, offer to sell,
contract to sell, make any short sale of, or otherwise sell, dispose of, loan,
pledge or grant any options or rights with respect to, any Securities of
Efficient now or hereafter acquired directly by Cabletron (or any director,
executive officer or Controlled Affiliate of Cabletron) or with respect to which
Cabletron (or any director, executive officer or Controlled Affiliate of
Cabletron) has or hereafter acquires the power of disposition without the prior
written consent of Efficient for such period of time as shall be necessary for
Efficient to complete any business combination transaction in the form of a
pooling of interests; provided that Efficient's independent accountants shall
have reasonably concluded, after reasonable inquiry, that, at the relevant time
with respect to such proposed pooling of interests transaction, Cabletron is or
was an "affiliate" of Efficient for purposes of the accounting rules governing
pooling of interests transactions. Cabletron agrees that Efficient may instruct
its transfer agent to place stop-transfer notations in its records to enforce
the provisions of the Cabletron Public Offering Lock-Up and the Cabletron
Pooling Transaction Lock-Up contained in this Section 4.9(a).

     4.10 Additional Registration Rights Covenants.
          ----------------------------------------

          (a)  First Offering. Efficient shall use its commercially reasonable
               --------------
efforts to conduct and close the First Offering as promptly as is practicable
after the date hereof with a target date for completion of such First Offering
of no later than March 31, 2000; provided, however, Efficient shall have no
obligation to so conduct and close such First Offering if the Efficient Board of
Directors concludes in good faith that so doing would be materially detrimental
to Efficient or its shareholders.

          (b)  Exclusive Demand Period. Without Cabletron's consent, during the
               -----------------------
Exclusive Demand Period and any other period during which Cabletron is
prohibited from effecting a Demand Registration or distributing securities under
the Shelf Registration Statement, Efficient will not file or cause or allow to
become effective a registration statement pursuant to Section 1.2 of the
Investors' Rights Agreement.

     4.11 Termination. The provisions of this Article 4 shall terminate upon the
          -----------
earlier to occur of: (i) five years after the date of the closing of
transactions contemplated by the Merger Agreement; and (ii) such time as
Cabletron and any Affiliates of Cabletron beneficially own, in the aggregate,
less than 5% of the Total Voting Power of Efficient.

                                      -20-
<PAGE>

                                   ARTICLE 5

                                 MISCELLANEOUS

     5.1  Governing Law. This Agreement shall be governed in all respects by the
          -------------
laws of the State of Delaware as applied to contracts entered into solely
between residents of, and to be performed entirely within, such state.

     5.2  Successors and Assigns. This Agreement shall be binding upon and shall
          ----------------------
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement may not be assigned by a party without the prior written
consent of the other party; provided that, without the consent of Efficient,
Cabletron may assign this Agreement (and the rights and obligations hereunder)
to any wholly-owned subsidiary in connection with a transfer of Voting
Securities of Efficient to such Affiliate of Cabletron pursuant to Section
3.1(b), and without the consent of Cabletron, Efficient may assign all or part
of this Agreement (and the rights and obligations hereunder) to the successor or
an assignee of all or substantially all of Efficient's business; provided that,
in each case, such assignee expressly assumes the relevant obligations of this
Agreement (by a written instrument delivered to the other party, in form and
substance reasonably acceptable to it) and, notwithstanding such assignment, the
parties hereto shall each continue to be bound by all of their respective
obligations hereunder. This Agreement is not intended and shall not be construed
to create any rights or remedies in any parties other than Cabletron and
Efficient and no Person shall assert any rights as third party beneficiary
hereunder.

     5.3  Entire Agreement; Amendment. This Agreement contains the entire
          ---------------------------
understanding and agreement between the parties with regard to the subject
matter hereof and thereof and supersedes all prior agreements and understandings
among the parties relating to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.

     5.4  Notices and Dates.
          -----------------

          (a)  All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be delivered personally (including
by courier) or given by facsimile transmission to the parties at the following
addresses (or to such other address as a party may have specified by notice
given to the other pursuant to this provision) and shall be deemed given when so
received:

                                      -21-
<PAGE>

               (i)  if to Efficient, to:
                    Efficient Networks, Inc.
                    4201 Spring Valley Road, Suite 1200
                    Dallas, Texas 75244
                    Attention: Jill Manning, CFO
                    Telephone: 972-991-3884
                    Facsimile: 972-991-3887

                    with a copy to:

                    Wilson Sonsini Goodrich & Rosati
                    650 Page Mill Road
                    Palo Alto, California 94304
                    Attention: Kenneth Siegel, Esq.
                    Telephone: (650) 493-9300
                    Facsimile: (650) 493-6811

                    if to Cabletron, to:
                    Cabletron Systems Inc.
                    35 Industrial Way
                    Rochester, NH 03867
                    Attention: General Counsel
                    Telephone: 630-332-9400
                    Facsimile:

                    with a copy to:

                    Ropes & Gray
                    One International Place
                    Boston, MA 02110
                    Attention: David A. Fine, Esq.
                    Telephone No.: (617) 951-7000
                    Telecopy No.: (617) 951-7050

All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.

          (b)  In the event that any date provided for in this Agreement falls
on a Saturday, Sunday or legal holiday, such date shall be deemed extended to
the next business day.

     5.5  Language Interpretation. In the interpretation of this Agreement,
          -----------------------
unless the context otherwise requires, (a) words importing the singular shall be
deemed to import the plural and vice versa, (b) words denoting gender shall
include all genders, (c) references to persons shall include corporations or
other entities and vice versa, and (d) references to parties, Sections,
schedules, paragraphs and exhibits shall mean the parties, Sections, schedules,
paragraphs and exhibits of and to this Agreement, unless otherwise indicated by
the context.

                                      -22-
<PAGE>

     5.6  Table of Contents; Titles; Headings. The table of contents and
          -----------------------------------
Section headings of this Agreement are for reference purposes only and are to be
given no effect in the construction or interpretation of this Agreement. All
references herein to Articles and Sections, unless otherwise identified, are to
Articles and Sections of this Agreement.

     5.7  Counterparts. This Agreement may be executed in one or more
          ------------
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.

     5.8  Severability. If any provision of this Agreement or portion thereof is
          ------------
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.

     5.9  Injunctive Relief. Cabletron, on the one hand, and Efficient, on the
          -----------------
other, acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specific
performance of the terms and provisions hereof in any court of the United States
or any state thereof having jurisdiction, this being in addition to any other
remedy to which they may be entitled at law or equity.

     5.10 Automatic Adjustments to Share Numbers. All numbers regarding the
          --------------------------------------
number of shares of Efficient (e.g., 2,000,000) shall be appropriately and
automatically adjusted to take into account any stock splits occurring after the
date hereof.


                           [Signature page follows]

                                      -23-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth in the
introduction to this Agreement.

EFFICIENT NETWORKS, INC.,                 CABLETRON SYSTEMS, INC.,
a Delaware corporation                    a Delaware corporation

        /s/ JILL MANNING                          /s/ PIYUSH PATEL
By:    _______________________________    By:    _______________________________

        Jill Manning                              Piyush Patel
Name:  _______________________________    Name:  _______________________________

        Chief Financial Officer                   President
Title: _______________________________    Title: _______________________________