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                             EMPLOYMENT AGREEMENT

     This Agreement ("Agreement") is made and entered into this 12th day of
May, 1999, by and between Elastic Networks Inc., a Delaware corporation
("Elastic"), with its principal place of business at 6120 Windward Parkway,
Suite 100, Alpharetta, George 30005, and Larry R. Hurtado, an individual
residing at 6005 Deerwoods Trail, Alpharetta, Georgia 30005 ("Executive").

                                  WITNESSETH:

     WHEREAS, Elastic shall employ employees to conduct its business on the
Commencement Date;

     WHEREAS, conditioned upon the closing of the Private Placement, Elastic
desires to employ the Executive during the Term under the terms and
conditions set forth in this Agreement;

     WHEREAS, the Executive desires to accept employment with Elastic during
the Term on the terms and conditions set forth in this Agreement;

     WHEREAS, it is a condition precedent to the closing of the agreements
related to the Private Placement that Elastic and the Executive enter into
this Agreement;

     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the Executive and Elastic agree as follows:

1.   Definitions.

     For purposes of this Agreement, the following terms shall have the
     meaning set forth below:

     (a)  "Acquisition Event" shall mean: (i) any merger or consolidation
          which results in the voting securities of Elastic outstanding
          immediately prior thereto representing immediately thereafter
          (either by remaining outstanding or by being converted into voting
          securities of the surviving or acquiring entity) less than 50% of
          the combined voting power of the voting securities of Elastic or
          such surviving or acquiring entity outstanding immediately after
          such merger or consolidation; (ii) any sale of all or substantially
          all of the assets of Elastic; or (iii) the complete liquidation of
          Elastic. Notwithstanding the foregoing, the election of any
          Purchaser (as defined in the Right of First Offer Agreement) to
          sell its Shares (as defined in the Right of First offer Agreement)
          to Nortel Networks Inc. pursuant to Section 6 of the Right of First
          Offer Agreement, and the purchase of any such Shares by Nortel
          Networks Inc., shall not be deemed to be an Acquisition Event.

     (b)  "Agreement" shall have the meaning set forth in the preamble hereto.

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     (c)  "Award" shall mean Options, restricted stock, or other stock based
          awards under the Plan.

     (d)  "Board" shall mean the Board of Directors of Elastic.

     (e)  "Cause" shall mean (i) the Executive's material breach of this
          Agreement, which includes, but is not limited to, a breach of
          Sections 9 and 10 of this Agreement or any sub-section thereof,
          (ii) a good faith finding by the Board of the Executive's
          dishonesty, fraud, malfeasance, gross negligence or willful
          misconduct with respect to Elastic or any Co-Employer, (iii) the
          Executive's continued failure to satisfactorily perform his duties
          with the Company, to follow the lawful direction (consistent with
          the Executive's duties) of the Board or to follow the established
          and lawful policies, procedures and rules of Elastic or any
          Co-Employer (other than any such failure resulting from incapacity
          due to mental or physical illness or injury that is certified by a
          physician satisfactory to Elastic); or (iv) Executive's indictment
          for (or similar finding of probable cause with respect to the
          Executive's commission of) or conviction of, or the Executive's
          entry of a pleading of guilty or nolo contendere to, a crime
          involving moral turpitude or a felony (other than an offense based
          solely on a traffic violation.) With respect to clauses (ii) and
          (iii) above, prior to terminating the Executive for Cause as
          provided in Section 8(a)(1) hereof, the Board shall deliver a
          written notice to the Executive stating in reasonable detail the
          facts and circumstances regarding the Executive's offense or
          failure and provide the Executive with sixty calendar (60) days to
          correct such offense or failure; PROVIDED, HOWEVER, that no such
          notice shall be required, and the Board may immediately terminate
          the Executive for Cause, if the Board in good faith determines that
          the Executive's offense or failure is or is likely to be
          immediately or materially injurious to Elastic or the Co-Employer
          or Executive has previously received a written notice of an offense
          or failure under clause (ii) or (iii) above in the twelve (12)
          month period immediately preceding the occurrence of the offense or
          failure at issue. The Executive shall not participate in the
          Board's determinations regarding Cause with respect to the
          Executive even if the Executive is a member of the Board.

     (f)  "Code" shall mean the Internal Revenue Code of 1986, as amended,
          and any regulations promulgated thereunder.

     (g)  "Co-Employer" shall mean that third party, if any, which, pursuant
          to an agreement with Elastic, provides certain human resources and
          payroll services with respect to Elastic employees and, with regard
          to such services, is viewed as the employer of Elastic employees.

     (h)  "Commencement Date" shall mean the day immediately following
          closing of Private Placement.

     (i)  "Developments" shall have the meaning set forth in Section 10(b)(1)
          of this Agreement.

     (j)  "Disability" shall mean the inability of the Executive to perform
          the duties set forth in Section 3 of this Agreement because of an
          illness or accidental injury for a period of one hundred eighty
          (180) calendar days, whether or not consecutive, during any three
          hundred sixty (360) calendar day period, as certified by a
          physician satisfactory to Elastic and the Executive. If Elastic and
          the Executive do not agree on a physician, the Executive and
          Elastic shall each

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         select a physician and those two (2) physicians shall together
         select a third physician, whose determination as to disability shall
         be binding on all parties.

     (k) "Elastic" shall have the meaning set forth in the preamble to this
          Agreement.

     (l) "Elastic's Affiliates" shall mean any individual or entity that
         directly or indirectly, through one or more intermediaries,
         controls, is controlled by or is under common control with Elastic.
         For purposes of this definition, "control" means the power to direct
         the management and policies of another, whether through the
         ownership of voting securities, by contract or otherwise.

     (m) "Employment Period" shall mean the Term and any period immediately
         following the Term during which Elastic and the Executive have
         mutually agreed to continue the Executive's employment.

     (n) "Entity" shall mean a corporation, partnership, limited liability
         company, trust, joint venture, association, organization, sole
         proprietorship or entity in any other form.

     (o) "Executive" shall have the meaning set forth in the preamble to this
         Agreement.

     (p) "Good Reason" shall mean (i) the assignment of the Executive,
         without the Executive's consent to a principal place of work which
         increases the Executive's commuting distance from his residence to
         his principal place of work by fifty (50) miles or more; (ii) the
         assignment to the Executive of job duties that are inconsistent with
         the Executive's position as set forth on Schedule A or a substantial
         adverse alteration of the Executive's position, reporting
         relationship or duties as set forth on Schedule A without the
         Executive's consent; or (iii) a reduction of the Executive's annual
         base salary then in effect without the Executive's consent;
         PROVIDED, however, that "Good Reason" shall not include any event or
         circumstance that occurs more than one hundred twenty (120) calendar
         days prior to Elastic's receipt of the Executive's written notice of
         his intention to terminate for Good Reason as established in Section
         8 below, a reduction in the Executive's base salary that is applied
         to all or substantially all Elastic employees or a reduction or
         suspension in base salary that occurs as a result of the Executive's
         receipt of disability payments under a fringe benefit plan in which
         he participates as an Elastic employee. Notwithstanding the
         occurrence of any event or circumstance set forth in clauses (i)
         through (iii), above, such occurrence shall not be deemed to
         constitute Good Reason if, while the Executive is employed during
         the Notice Period, such event or circumstance has been fully
         corrected and the Executive has been reasonably compensated for any
         losses or damages resulting therefrom (provided that such right of
         correction by Elastic shall only apply to the first notice of
         termination for Good Reason given by the Executive).

     (q) "Notice Period" shall mean the ninety (90) calendar day period
         immediately following the date on which Elastic receives the
         Executive's written notice of his intent to terminate employment
         under Section 8(b) of this Agreement.

     (r) "Options" shall mean those options granted by the Board under the
         Plan for the purchase of shares of Elastic common stock.

     (s) "Plan" shall mean the Elastic Networks Inc. 1999 Stock Incentive
         Plan.


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     (t)  "Private Placement" shall mean the first sale of Elastic securities
          to any person or entity other than Nortel Networks Inc., specifically
          excluding any issuance of Elastic securities or any right to acquire
          Elastic securities granted to employees' vendors or consultants.

     (u)  "Proprietary Information" shall have the meaning set forth in
          Section 10(a)(1) of this Agreement.

     (v)  "Right of First Offer Agreement" shall mean the Right of First
          Offer and Co-Sale Agreement, dated as of May 1999, and as amended
          from time to time, by and among Elastic, Nortel Networks Inc. and
          the persons and entities listed on Exhibit A thereto.

     (w)  "Severance Period" shall mean the twelve (12) month period
          immediately following the Executive's termination of employment.

     (x)  "Term" shall mean the period commencing on the Commencement Date
          and ending on the fourth anniversary of the Commencement Date,
          unless terminated sooner in accordance with the provisions of
          Section 8 of this Agreement.

2.   Term.

     Conditioned upon (i) the closing of the Private Placement, (ii) the
     Executive's status as an active employee of Nortel Networks Inc. as of
     the closing of the Private Placement, (iii) the Executive providing
     documentation required by the Immigration Reform and Control Act of
     1986 and (iv) the Executive's completion of employment forms required by
     any Co-Employer, Elastic hereby agrees, as the sole employer or jointly
     with a Co-Employer, to employ the Executive, and the Executive hereby
     accepts employment with Elastic, upon the terms and conditions set forth
     in this Agreement, for the Term. If the Executive and Elastic desire to
     continue the Executive's employment after the Term, such employment
     shall be upon terms and conditions mutually agreed upon by Elastic and
     the Executive.

3.   Duties.

     The Executive shall have the job, duties and reporting relationship set
     forth in Schedule A. Except as otherwise provided in this Section 3, the
     Executive shall devote his full working time, attention, skill,
     knowledge, experience and energies to the performance of his duties set
     forth on Schedule A. Notwithstanding the preceding sentence, the
     Executive shall not be prohibited from engaging in activities from time
     to time on his own behalf or on the behalf of non-profit organizations
     or industry associations, provided that such activities do not
     interfere with the performance of his duties or obligations under this
     Agreement. With the consent of the Board, the Executive may serve on the
     boards of directors or trustees of other companies or organizations and
     devote a reasonable amount of working time to such approved activities.
     The Executive shall abide by, and comply with, all rules, policies and
     procedures of Elastic and any Co-Employer and all applicable laws and
     regulations including, but not limited to, those relating to antitrust.
     The Executive's principal place of work shall be 6120 Windward Parkway,
     Suite 100, Alpharetta, Georgia 30005, until such time as the Board (or
     any other individual or entity to whom the Executive reports), in its or
     his discretion, designates another location as the Executive's principal
     place of work.

4.   Compensation.

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      (a)  BASE SALARY. The Executive shall receive the annual base salary set
           forth in Schedule B, which shall be payable in installments in
           accordance with such payroll schedule as is then in effect with
           respect to all Elastic executive employees.

      (b)  DEDUCTIONS. Elastic or the Co-Employer,as applicable, is authorized
           to deduct from the Executive's compensation such sums as may be
           required to be deducted or withheld under the provisions of any
           applicable law now in effect or hereafter put into effect, including,
           but not limited to, social security, unemployment and income tax
           withholding, and such other deductions permitted by Elastic or the
           Co-Employer which the Executive may authorize from time to time.

5.    Plan Incentives.

      (a)  INITIAL AWARD. Subject to the Board's adoption of the Plan, which
           shall be substantially similar to Draft Stock Incentive Plan that
           is attached hereto as Schedule C, the Executive shall be eligible
           to participate in the Plan. Conditioned upon the Board's approval
           and in accordance with the terms and conditions of the Plan,
           effective on the Commencement Date the Executive shall be granted
           an Option(s) to purchase a number of shares of Elastic common
           stock that is equal to One and a Half Percent (1.5%) of the sum of
           the number of shares of Elastic common and preferred stock issued
           and outstanding on the grant date plus the number of shares of
           Elastic common stock authorized for grant under the Plan, with an
           exercise price to be determined by the Board. The vesting, rights
           and obligations with respect to such Option(s) shall be determined
           by the Board in accordance with the Plan and shall be set forth in
           appropriate option agreements which shall be substantially similar
           to the Draft Incentive Stock Option Agreement and Draft
           NonStatutory Stock Option Agreement attached hereto as Schedules D
           and E, respectively. Notwithstanding anything in the preceding
           sentence to the contrary, the outstanding Option(s) granted to the
           Executive pursuant to this Section 5(a) shall (i) upon the
           occurrence of an Acquisition Event, be assumed or an equivalent
           option or award substituted by the successor corporation or a
           parent or subsidiary of the successor corporation, provided that
           any such Options substituted for Incentive Stock Options shall
           satisfy, in the determination of the Board, the requirements of
           Section 424(a) of the Code, unless the successor corporation
           refuses to assume or substitute for the Option(s), in which case
           the Executive shall have the right to exercise the Option(s) in
           full, including with respect to shares of Common Stock as to which
           it would not otherwise be exercisable, and such Option(s) shall be
           exercisable for a period of not less than forty-five (45) days
           from the date on which the Board gives the Executive written
           notice that such period; and (ii) upon Elastic's termination of
           the Executive's employment without Cause, as provided in Section
           8(a)(2) hereof, or the Executive's termination of this employment
           for Good Reason, as provided in Section 8(b)(2) hereof, be
           immediately exercisable in full.

      (b)  PERFORMANCE BASED AWARDS. The Executive shall be eligible to
           receive additional Awards under the Plan at the sole discretion of
           the Board. The Executive shall not participate in decisions to
           grant Awards to the Executive under the Stock Plan even if the
           Executive is a member of the Board.

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     (c)  AMENDMENT OF THE PLAN.  Notwithstanding anything to the contrary in
          this Agreement, the Board may amend, suspend or terminate the Plan
          or any portion thereof at any time, except as otherwise provided by
          applicable law.

6.   Fringe Benefits.

     (a)  FRINGE BENEFITS OTHER THAN VACATION.  The Executive shall be
          eligible to participate in the fringe benefit plans and programs
          generally made available by Elastic or, if applicable, the
          Co-Employer, to Elastic executive employees in accordance with the
          terms of those plans and programs. Elastic shall make contributions
          for the Executive's participation in such fringe benefit plans and
          programs as it generally makes for its other executive employees.
          Except as otherwise provided by law, Elastic or the Co-Employer, as
          applicable, has the right to modify, add to or eliminate any or all
          of its fringe benefit plans or programs at any time and for any
          reason.

     (b)  VACATION.  The Executive shall be entitled to three (3) weeks
          (fifteen (15) business days) of paid vacation for each year of the
          Term, to be taken at such time as may be approved by the Board or
          its designee or the individual or entity to whom the Executive
          reports. The Executive shall accrue such annual vacation on a
          prorata basis each month starting with the Commencement Date.
          Accrual of paid vacation shall cease once the Executive has accrued
          three (3) weeks of paid vacation and shall not resume until the
          accrued vacation is reduced by reason of vacation taken by the
          Executive.

7.   Reimbursement of Expenses.

     (a)  BUSINESS EXPENSES.  Elastic shall reimburse the Executive for
          expenses incurred by the Executive in carrying out those duties set
          forth in Section 3 of this Agreement in accordance with Elastic's
          policies and procedures relating to expense reimbursement of
          executive employees.

     (b)  FINANCIAL AND ESTATE PLANNING AND TAX ASSISTANCE.  Elastic shall
          reimburse the Executive for expenses incurred by the Executive for
          personal financial and estate planning and tax assistance services
          up to a total of Five Thousand Dollars ($5,000) for each year of
          the Term upon the Executive's submission of appropriate receipts
          documenting the Executive's payment for such services.

     (c)  ATTORNEY'S FEES WITH RESPECT TO THIS AGREEMENT.  Elastic shall
          reimburse the Executive for one hundred percent (100%) of the
          reasonable expenses incurred by the Executive for the services of
          an attorney with respect to the review of this Agreement upon the
          Executive's submission of appropriate receipts documenting the
          Executive's payment for such services.

8.   Employment Termination.

     (a)  BY ELASTIC.  Elastic shall have the right to terminate the
          employment of the Executive at any time during the Term, including,
          without limitation, for Cause or without Cause.

          (1)  If Elastic terminates the employment of the Executive upon the
               occurrence of the expiration of the Term on the fourth
               anniversary of the Commencement Date, the death or Disability
               of the Executive or with Cause, Elastic shall pay to the
               Executive, or, in the event of the


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          Executive's death, the estate of the Executive, the compensation
          and benefits ordinarily payable to him under this Agreement
          through and until the last day of his actual employment by Elastic.

     (2)  If Elastic terminates the employment of the Executive without
          Cause, subject to the conditions set forth below, Elastic shall pay
          the Executive a lump sum amount which is equal to the sum of (i)
          the Executive's base salary in effect on his termination date (or,
          if higher, the highest base salary in effect at any time during the
          six (6) months prior to his termination date) calculated for the
          Severance Period, (ii) the expense the Executive incurs during the
          Severance Period to continue those health and life insurance
          benefits offered under the Consolidated Omnibus Budget
          Reconciliation Act of 1985 and benefit conversion options,
          respectively, less contributions the Executive would have made for
          such coverage as an Elastic employee and (iii) a bonus payment in
          an amount equal to the target bonus for the Executive at one
          hundred percent (100%) performance on all factors under the bonus
          plan in which the Executive is participating, if any, as of his
          employment termination date, multiplied by a fraction, the numerator
          of which is the Executive's calendar months of participation as an
          active employee under such plan and the denominator of which is the
          term of such plan in calendar months. The foregoing payment shall
          be conditioned upon the Executive's execution of a Settlement
          Agreement with Elastic, the form of which shall be determined by
          the Board and shall contain, at a minimum, the Executive's (x)
          release of all claims against Elastic and Elastic's Affiliates, (y)
          obligation to notify Elastic of his employment by any person or
          Entity during the Severance Period and (z) agreement to repay that
          portion of the foregoing lump sum amount relating to any part of
          the Severance Period during which the Executive is employed by
          Elastic or any of Elastic's Affiliates or is in breach of any
          provisions of this Agreement that survive the termination of this
          Agreement or relating to the continuation of the Executive's health
          or life insurance benefits on or after the Executive terminates
          such benefits or the Executive's employment by an Entity or person
          offering Executive comparable benefits or benefits that would
          result in the termination of the Executive's opportunity to
          continue Elastic health benefits under the Consolidated Omnibus
          Budget Reconciliation Act of 1985.

     (b)  BY EXECUTIVE.  The Executive shall have the right to terminate his
          employment with Elastic during the Term for any reason, including,
          without limitation, for Good Reason or for other than Good Reason;
          PROVIDED, however, that the Executive shall give Elastic ninety
          (90) calendar days prior written notice of his intention to
          terminate his employment and shall continue his employment during
          all or such part of the Notice Period as determined by the Board.
          In order to terminate for Good Reason, the Executive must also
          state in such written notice the facts and circumstances giving
          rise to Good Reason in reasonable detail.

          (1)  If the Executive terminates his employment with Elastic for
               other than Good Reason and satisfies the conditions set forth
               in Section 8(b), above, Elastic shall pay the Executive the
               compensation and benefits ordinarily payable to him under this
               Agreement through and until the last day of his actual
               employment by Elastic and his base salary only with respect to
               any portion of the Notice Period remaining following the last
               day of his actual employment.


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          (2)  If the Executive terminates his employment with Elastic for
               Good Reason and satisfies the conditions set forth in Section
               8(b), above, Elastic shall pay the Executive the compensation
               and benefits ordinarily payable to him under this Agreement
               through and until the last day of his actual employment by
               Elastic. Additionally, Elastic shall pay the Executive the
               lump sum amount that would be payable to the Executive under
               Section 8(a)(2) above as if Elastic terminated the Executive's
               employment without Cause, conditioned upon the Executive's
               execution of a Settlement Agreement as described in Section
               8(a)(2) above.

9.   Restrictive Covenants.

     (a)  During the Employment Period and for a period of one (1) year after
          the termination or expiration thereof, the Executive shall not
          directly or indirectly:

          (1)  as an owner, partner, officer, director, employee, consultant,
               contractor, joint venturer, investor, lender or shareholder
               (other than as the holder of not more than one percent (1%) of
               the total outstanding stock of a publicly held company),
               participate in, direct, control or manage the operations,
               research or development functions or activities of any Entity
               or person competitive with the business of Elastic or those
               Elastic Affiliates that Elastic controls in the United States
               without the written permission of Elastic; or

          (2)  recruit, solicit or induce, or attempt to induce, any
               employee, consultant or contractor of Elastic or Elastic's
               Affiliates to terminate their employment with, or otherwise
               cease their relationship with, Elastic or Elastic's
               Affiliates; or

          (3)  solicit, divert or take away, or attempt to divert or to take
               away, the business or patronage of any of the clients,
               customers or accounts, or prospective clients, customers or
               accounts, of Elastic or Elastic's Affiliates which were
               contacted, solicited or served by the Executive during the
               Employment Period.

     (b)  If any restriction set forth in this Section 9 is found by any
          court of competent jurisdiction to be unenforceable because
          it extends for too long a period of time, in too broad a geographic
          area or over too great a range of activities, it shall be
          interpreted to extend only over the maximum period of time,
          geographic area or range of activities as to which it may be
          enforceable.

     (c)  The Executive recognizes, understands and agrees that this
          Agreement is entered into in connection with the spin-off of
          Elastic and is a condition to the provision of financing of certain
          investors. The Executive further recognizes, understands and agrees
          that the geographic area specified in Section 9(a)(1) is reasonable
          in light of the national and international scope of Elastic's
          business, the expected expansion of Elastic's business during the
          Employment Period and the Executive's expected ownership, as a
          result of Option(s) issued pursuant to Section 5(a) of this
          Agreement, of a number of shares of Elastic common stock equal to
          One and a Half Percent (1.5%) of the sum of the number of shares of
          Elastic common and preferred stock issued and outstanding on the
          grant date plus the number of shares of Elastic common stock
          authorized for grant under the Plan. The Executive further
          recognizes, understands and agrees that the foregoing limitations
          are properly required for the adequate protection of


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          Elastic's legitimate business interests and do not preclude the
          Executive from pursuing his livelihood. The Executive further
          recognizes, understands and agrees that the consideration provided
          in this Agreement, including, but not limited to, any payment
          provided pursuant to Section 8 of this Agreement, is sufficient
          consideration for the foregoing limitations.

10.  Proprietary Information and Developments.

     (a)  PROPRIETARY INFORMATION.

          (1)  The Executive agrees that all information and know-how,
               whether or not in writing, of a private, secret or
               confidential nature concerning the business or financial
               affairs of Elastic, any of Elastic's Affiliates, Nortel
               Networks Inc. or Nortel Networks Corporation is and shall be
               the exclusive property of Elastic, Elastic's Affiliates,
               Nortel Networks, Inc. or Nortel Networks Corporation, as
               applicable, such information and know-how including, but not
               limited to, inventions, products, processes, methods,
               techniques, formulas, compositions, compounds, projects,
               developments, plans, research data, clinical data, financial
               data, personnel data, computer programs, and customer and
               supplier lists (collectively, "Proprietary Information"). The
               Executive shall not disclose any Proprietary Information to
               others outside Elastic, Elastic's Affiliates, Nortel Networks
               Inc. or Nortel Networks Corporation or use the same for any
               unauthorized purposes without written approval by an officer
               of Elastic, either during or after the Employment Period,
               unless and until such Proprietary Information has become
               public knowledge without fault by the Executive or as
               otherwise required by law.

          (2)  The Executive agrees that all files, letters, memoranda,
               reports, records, data, sketches, drawings, laboratory
               notebooks, program listings, or other written, photographic,
               or other tangible material containing Proprietary Information,
               whether created by the Executive or others, which shall come
               into his custody or possession, shall be and are the exclusive
               property of Elastic, Elastic's Affiliates, Nortel Networks
               Inc. or Nortel Networks Corporation, as applicable, to be used
               by the Executive only in the performance of his duties for
               Elastic. The Executive agrees to deliver to Elastic upon the
               expiration of the Employment Period such material containing
               Proprietary Information.

          (3)  The Executive agrees that his obligation not to disclose or
               use information, know-how and records of the types set forth
               in paragraphs (1) and (2) above, also extends to such types of
               information, know-how, records and tangible property of
               customers of Elastic, Elastic's Affiliates, Nortel Networks
               Inc. or Nortel Networks Corporation or suppliers to Elastic or
               Elastic's Affiliates or other third parties who may have
               disclosed or entrusted the same to Elastic, Elastic's
               Affiliates, Nortel Networks Inc. or Nortel Networks
               Corporation or to the Executive in the course of Elastic's
               business.

     (b)  DEVELOPMENTS.

          (1)  The Executive shall make full and prompt disclosure to Elastic
               of all inventions, improvements, discoveries, methods,
               developments, software, and works of authorship, whether
               patentable or not, which are create,


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               made, conceived or reduced to practice by the Executive or
               under his direction or jointly with others during the
               Employment Period, whether or not during normal working hours
               or on the premises of Elastic or Elastic's Affiliates
               (collectively, "Developments").

          (2)  The Executive agrees to assign and does hereby assign to
               Elastic (or any Entity designated by Elastic) all his right,
               title and interest in and to all Developments and all related
               patents, patent applications, copyrights and copyright
               applications. The Executive also hereby waives all claims to
               moral rights in any Developments. However, this Section
               10(b)(2) shall not apply to Developments which do not relate
               to the present or planned business or research and development
               of Elastic or Elastic's Affiliates and which are made and
               conceived by the Executive not during normal working hours,
               not on the premises of Elastic or Elastic's Affiliates and not
               using the tools, devices, equipment of Elastic or Elastic's
               Affiliates or Proprietary Information.

          (3)  The Executive agrees to cooperate fully with Elastic or
               Elastic's Affiliates, both during and after the Employment
               Period, with respect to the procurement, maintenance and
               enforcement of copyrights and patents (both in the United
               States and foreign countries) relating to Developments. The
               Executive shall sign all papers, including, without
               limitation, copyright applications, patent applications,
               declarations, oaths, formal assignments, assignment of
               priority rights, and powers of attorney, which Elastic or
               Elastic's Affiliates may deem necessary or desirable in order
               to protect their rights and interests in any Development.

     (c)  OTHER AGREEMENTS.  The Executive hereby represents that he is not
          bound by the terms of any agreement with any previous employer,
          other than Elastic's Affiliates, or other party to refrain from
          using or disclosing any trade secret or confidential or proprietary
          information in the course of his employment with Elastic or to
          refrain from competing, directly or indirectly, with the business
          of such previous employer or any other party. The Executive further
          represents that his performance of all the terms of this Agreement
          and as an employee of Elastic does not and will not breach any
          agreement, other than agreements with Elastic's Affiliates, to keep
          in confidence proprietary information, knowledge or data acquired
          by him in confidence or in trust prior to his employment with
          Elastic.

11.  Breach of Covenants by the Executive.

     The restrictions contained in Sections 9 and 10 of this Agreement are
     necessary for the protection of the business and goodwill of Elastic or
     Elastic's Affiliates and are considered by the Executive to be
     reasonable for such purpose. The Executive agrees that any breach of
     Sections 9 or 10 shall cause Elastic or Elastic's Affiliates substantial
     and irrevocable damage and therefore, in the event of any such breach,
     in addition to such other remedies which may be available, Elastic or
     Elastic's Affiliates shall have the right to seek specific performance
     and injunctive relief.

12.  Survival of Certain Provisions after the Term.

     Subject to the terms and conditions contained in this Agreement, the
     provisions of Sections 8, 9, 10 and 11 shall survive and continue after
     the Term as provided in such Sections.


                                      10
<PAGE>

13.  Indemnification.

     During the Term, Elastic shall indemnify the Executive as provided under
     the Bylaws of Elastic.

14.  Miscellaneous.

     (a) The waiver by either party of a breach of any provision of this
         Agreement shall not operate or be construed as a waiver of any
         subsequent breach by either party.

     (b) Any notice required or permitted to be given under this Agreement
         shall be sufficient if in writing sent by certified mail to the
         Executive's residence as it appears on the records of Elastic in the
         case of the Executive or to the address set forth above with respect
         to Elastic, or to such other address as either party may hereafter
         specify in writing to the other.

     (c) This agreement shall be binding upon and inure to the benefit of
         both parties and their respective successors and assigns, including
         Elastic's Affiliates and any corporation with which or into which
         Elastic may be merged or which may succeed to its assets or business
         provided, however, that the obligations of the Executive are
         personal and shall not be assigned by him.

     (d) This Agreement constitutes the entire agreement between the parties
         relating to the subject matter of this Agreement and there are no
         representations, warranties, covenants or obligations except as set
         forth in this Agreement. This Agreement supersedes all prior and
         contemporaneous agreements, understandings, negotiations, and
         discussions, written or oral, of the parties hereto, relating to the
         subject matter of this Agreement. Nothing in this Agreement is
         intended or shall be construed to confer upon or to give any person
         other than the parties hereto any rights or remedies under or by
         reason of this Agreement except as specifically set forth herein.

     (e) This Agreement may be amended only in writing executed by the
         parties hereto.

     (f) No delay or omission by Elastic in exercising any right under this
         Agreement shall operate as a waiver of that or any other right. A
         waiver or consent given by Elastic on any one occasion shall be
         effective only in that instance and shall not be construed as a bar
         or waiver of any right on any other occasion.

     (g) The enumeration and heading contained in this Agreement are for
         convenience of reference only and are not intended to have any
         substantive significance in interpreting this Agreement.

     (h) If any provision of this Agreement shall be held to be illegal,
         invalid or unenforceable, such provision shall be enforced to the
         maximum extent permissible so as to effect the intent of the
         parties, and the validity, legality and  enforceability of the
         remaining provisions shall not in any way be affected or impaired
         thereby. If necessary to effect the intent of the parties, the
         parties shall negotiate in good faith to amend this Agreement to
         replace the unenforceable language with enforceable language which
         as closely as possible reflects such intent.

                                       11

<PAGE>

     (i)  This Agreement shall be interpreted and enforced in accordance with
          the laws of the State of Georgia, except for its rules with
          respect to the conflict of laws.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.

Elastic Networks Inc.                         Executive

By: /s/ Guy Gill                             /s/ Larry R. Hurtado
    ---------------------------------         -------------------------------

Title: President
       ------------------------------

Date:  May 12, 1999                           Date:  May 12, 1999
       ------------------------------                ------------------------



                                       12

<PAGE>


                                 SCHEDULE A


                     POSITION/DUTIES/REPORTING RELATIONSHIP



Executive's Position:      Vice President, Operations, or such other title as
                           the Chief Executive Officer, Board or such other
                           individual or entity to whom the Executive reports
                           may assign from time to time.

Reports to:                Chief Executive Officer or such other individual
                           or entity as may be designated from time to time.

Duties:                    Management of all aspects of Elastic's operations
                           and research and development functions and
                           activities and such other duties as the Chief
                           Executive Officer or such other individual or
                           entity to whom the Executive reports may assign
                           from time to time.




<PAGE>

                                SCHEDULE B

                               Compensation

ANNUAL BASE SALARY: One Hundred Fifty Thousand Five Hundred Dollars ($150,500).

The Executive's annual base salary stated above shall be subject to increase or
decrease from time to time as determined in the sole discretion of the
Chief Executive Officer, the Board or other individual or entity to whom the
Executive reports; provided that any reduction in the Executive's annual base
salary shall be subject to the provisions of Section 1(p).