<PAGE>

                                CONFIDENTIAL

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                                      OEM
                               PURCHASE AND SALE
                                   AGREEMENT

                                BY AND BETWEEN

                              NORTEL NETWORKS INC.

                                       &
                                SONOMA SYSTEMS






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<PAGE>

                                  CONFIDENTIAL


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     ----
<S>     <C>                                                                                         <C>
1.       DEFINITIONS....................................................................................1
2.       SCOPE..........................................................................................2
3.       EXHIBITS.......................................................................................3
4.       NORTEL NETWORK'S PRODUCT QUALIFICATION AND
         ACCEPTANCE PROGRAM.............................................................................3
5.       PRODUCT AND PROCESS CHANGES....................................................................4
6.       QUALITY CONTROL AND RELIABILITY REQUIREMENTS,
         SUPPLY MANAGEMENT AND NORTEL NETWORK'S
         AUDITING RIGHTS................................................................................6
7.       INTENTIONALLY DELETED..........................................................................7
8.       ORDERING.......................................................................................7
9.       DELIVERY.......................................................................................8
10.      PRICES AND PAYMENTS............................................................................9
11.      TITLE AND RISK OF LOSS.........................................................................10
12.      INSPECTION.....................................................................................10
13.      WARRANTY.......................................................................................10
14.      REPAIR PROCEDURES..............................................................................12
15.      REPAIR SERVICES................................................................................13
16.      CONTINUING AVAILABILITY OF TECHNICAL ASSISTANCE,
         REPAIR SERVICES, MAINTENANCE, REPLACEMENT
         AND REPAIR PARTS...............................................................................15
17.      TECHNICAL ASSISTANCE AND MARKETING SUPPORT.....................................................15
18.      DOCUMENTATION..................................................................................16
19.      CONFIDENTIAL INFORMATION.......................................................................16
20.      INTELLECTUAL PROPERTY RIGHT INFRINGEMENT.......................................................17
21.      HAZARDOUS MATERIALS............................................................................18
22.      INDEMNITY......................................................................................18
23.      COMPLIANCE WITH LAWS...........................................................................19
24.      CONSEQUENTIAL DAMAGES..........................................................................19
25.      INSURANCE......................................................................................19
26.      FORCE MAJEURE..................................................................................19
27.      TERM...........................................................................................20
28.      TERMINATION AND CONTINUING RIGHTS..............................................................20
29.      NOTICES........................................................................................21
30.      MANUFACTURING ESCROW AND CONTINGENT LICENSE....................................................21
31.      GOVERNING LAW..................................................................................21
32.      GENERAL........................................................................................21

</TABLE>
<PAGE>

                                  CONFIDENTIAL

                                    EXHIBITS
<TABLE>
<S>            <C>
Exhibit A -     Product Lists, Part I and Part II, Prices, Discounts, Availability Dates and FCA Delivery Locations

Exhibit B -     Specifications and Acceptance Program

Exhibit C -     Demand-Pull Program

Exhibit D -     Repair Services Rates, FCA Repair Locations and Technical Assistance Rates

Exhibit E -     Procedures for Orders utilizing EDI and TDI

Exhibit F -     Monthly Reports

Exhibit G -     Change Notification

Exhibit H -     Technical Assistance

Exhibit I -     RUS Debarment Certificate

Exhibit J -     INTENTIONALLY DELETED

Exhibit K -     Marketing Support

Exhibit L -     Trade Agreement - Procedures

Exhibit M -     Notices

Exhibit N -     Escrow Terms and Conditions and Escrow Agreement

</TABLE>
<PAGE>

                                  CONFIDENTIAL

                         OEM PURCHASE AND SALE AGREEMENT

This OEM Purchase and Sale Agreement ("Agreement") entered into by and between
NORTEL NETWORKS INC., a Delaware corporation with offices located at 2375B
North Glenville, Richardson, Texas, 75082, (hereinafter referred to as "NORTEL
NETWORKS") and SONOMA SYSTEMS, a California corporation with offices located at
4640 Admiralty Way, Suite 600, Marina del Rey, CA 90292 (hereinafter referred
to as "SUPPLIER").

WITNESSETH that the Parties hereto hereby agree as follows:

1.       DEFINITIONS

1.1      As used herein:

a)       "ARO" means after receipt of a Purchase Order or Release.

b)       "BLANKET PURCHASE ORDER" means a Purchase Order which does not set
         forth a Delivery Date.

c)       "BUSINESS DAY" means any day other than a Saturday, Sunday, a
         non-working day or statutory holiday observed in the jurisdiction where
         a right is to be exercised or an obligation to be executed hereunder.

d)       INTENTIONALLY DELETED.

e)       "DELIVERY DATE" means the date specified in a Purchase Order or a
         Release when the Products are to be delivered to the FCA Delivery
         Location except in the event Nortel Networks elects to take delivery of
         such Products at Supplier's loading dock, in which case the Delivery
         Date shall be the date Nortel Networks takes delivery of such Products
         at Supplier's loading dock.

f)       "DEMAND-PULL PROGRAM" means Nortel Networks' ordering process which may
         be established by Nortel Networks pursuant to Section 8 (Ordering) and
         Exhibit C.

g)       "DOCUMENTATION" means the documentation as described in Section 18.

h)       "EDI" means the electronic data interchange procedures established in
         Exhibit E.

i)       "EFFECTIVE DATE" means February 9, 2000.

j)       "EXHIBIT" means any Exhibit listed in Section 3 hereof.

k)       "FCA DELIVERY LOCATIONS" means FCA delivery locations listed in Exhibit
         A Part III or as specified in the applicable Order or Release.

l)       "FCA REPAIR LOCATIONS" means Supplier's FCA repair locations listed in
         Exhibit D, Part II.

m)       "FREE CARRIER" and "FCA" have the meaning set forth in the
         International Chamber of Commerce document, "INCOTERMS 1990".

n)       "HARDWARE" means the hardware components of the Products and any set of
         programs in machine-executable code whether residing in fixed coded
         instructions resident in read-only memory or equivalent devices forming
         part of hardware and sometimes known as firmware or whether residing in
         any other form of memory device such as `flash memory'.

o)       "PARTY" means Nortel Networks or Supplier and "PARTIES" means Nortel
         Networks and Supplier.

p)       "PRICES" means the prices applicable to the Products and Repair
         Services determined in accordance with Section 10 (Prices and Payments)
         hereof, Exhibit A, Part I and Part II and Exhibit D.

q)       "PROCESS" means a set of inter-related resources and activities which
         transform inputs into outputs; resources may include personnel,
         finance, facilities, equipment, techniques and methods.

r)       "PRODUCT" means any one of the products comprising Hardware and
         Software components, listed in the Product List attached hereto as
         Exhibit A, Part I, as such Exhibit A, Part I may be modified, from time
         to time, in accordance herewith or by agreement of the Parties and
         "PRODUCTS" means some or all Products.


<PAGE>

                                   CONFIDENTIAL

         Whenever the term "PRODUCT" is used in this Agreement with respect to
         any Supplier product, such term designates any such product listed in
         Exhibit A, Part II not yet accepted by Nortel Networks in accordance
         with Section 4 (Nortel Networks' Product Qualification and Acceptance
         Process) and "PRODUCTS" means some or all products.

s)       "PURCHASE ORDER" means any purchase order issued (by any means of
         transmission) or output of an electronic "paperless" process, initiated
         by Nortel Networks, in respect of the Products or products and accepted
         pursuant to Section 8 (Ordering).

t)       "RELEASE" means a verbal release confirmed in writing within two (2)
         Business Days, the document issued (by any means of transmission) or
         output of an electronic "paperless" process, initiated by Nortel
         Networks, pursuant to a Blanket Purchase Order by which the Delivery
         Date for such Blanket Purchase Order or portion(s) thereof is
         requested.

u)       "REPAIR DATE" means the date on which the repair of a Product is
         completed as stamped on the Products in accordance with Section 14.4.

v)       "REPAIR SERVICES" means in the case of Hardware, the upgrade, the
         repair or replacement of defective Hardware and in the case of
         Software, the update, the correction or replacement of defective
         Software as set forth in Section 15 (Repair Services) to be performed
         during and after the applicable Product Warranty Period.

w)       "SOFTWARE" means any set of programs in machine readable object code,
         residing in memories or diskettes or other media for application in or
         with the Products, which provides basic logic, operating instructions,
         user-related application instructions and network management
         information as well as associated Software documentation.

x)       "SPECIFICATIONS" means the technical specifications and the other
         requirements listed, described or referred to in Exhibit B, Part I,
         including acceptance test specifications, which are required to be met
         by the Products and the Documentation.

y)       "SUBSIDIARY" means a corporation in which Nortel Networks effectively
         owns or controls, and continues to own or control, directly or
         indirectly, more than fifty percent (50%) of the voting stock or
         shares.

z)       "TERM" has the meaning ascribed to such term in Section 27 (Term) of
         this Agreement.

aa)      "$" OR "DOLLARS" means lawful money of the United States of America
         except as otherwise expressly set forth herein.

1.2      Any reference in this Agreement to another agreement shall mean such
         other agreement as executed by the Parties thereto and all amendments
         thereto, unless otherwise explicitly stated.

2.       SCOPE

2.1      From time to time Nortel Networks may request Supplier to sell the
         Products to Nortel Networks and Supplier agrees to sell such Products
         to Nortel Networks. The sale of Products by Supplier and the purchase
         of Products by Nortel Networks shall be in accordance with the terms of
         this Agreement and Exhibits thereto. The terms and conditions of this
         Agreement shall also apply in their entirety to products purchased by
         Nortel Networks from Supplier during the ninety (90) day period prior
         to the Effective Date.

2.2      Nortel Networks shall have the right to request Supplier to customize
         any Product, product or Documentation and Supplier, upon Nortel
         Networks' request undertakes to so customize any such Product, product
         or Documentation. Customization requirements, if any, shall be
         incorporated in the Specifications and the sale and purchase of any
         customized Product, product or Documentation shall be in accordance
         with the terms and conditions of this Agreement and Exhibits thereto.
         At the time any customized Product, product or Documentation is
         incorporated in this Agreement, Exhibit A, Part II and Exhibit B shall
         be amended to add thereto the prices and the availability date and the
         acceptance program applicable to such customized Product, product or
         Documentation. This Section is also applicable to Documentation
         included with the Products and products. If Supplier receives an order
         for product documentation from a customer of Nortel Networks, to the
         extent Supplier has customized any documentation so ordered for Nortel
         Networks, Supplier shall furnish such customer with the customized
         documentation and not Supplier's documentation.

         If requested by Nortel Networks, the Products will incorporate Nortel
         Networks' branding requirements, in accordance with the Specifications
         to include, as mutually agreed and without limitation, Nortel Networks'
         name, trademark and logotype, Nortel Networks' color, Nortel Networks'
         part number as per Specifications, Nortel Networks' bar-codes and/or
         CLEI codes, Nortel Networks' technical handbook (standard gray color
         binder) with each Product, packing material with Nortel Networks'
         logotype and Nortel Networks' box bar coding, applicable to each
         shipment. In respect of Supplier's obligations under this Section 2.2,
         Nortel Networks shall pay Supplier a one-time fee of [*] dollars
         ($[*]). Supplier may invoice this amount to Nortel Networks no earlier
         than March 15, 2000.


* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


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                                   CONFIDENTIAL

2.3      Supplier hereby grants to Nortel Networks' the non-exclusive worldwide
         right to distribute and sell Products, directly or indirectly,
         including the right to sublicense for use the Software for the life of
         the Products. Any sublicensing of Software by Nortel Networks' in
         accordance with the foregoing will be pursuant to terms and conditions
         consistent with terms and conditions which govern the licensing of
         Nortel Networks' software used for the operation of Nortel Networks'
         products comparable to the Products. Supplier hereby grants to Nortel
         Networks the non-exclusive worldwide royalty-free right to use the
         during the life of the Products, Software in connection with its
         support, including without limitation network management undertaken by
         Nortel Networks, and evaluation of the Products. With respect to
         Products used by Nortel Networks internally during the Term, Supplier
         shall provide Nortel Networks the same support is as given to the
         Products during the Warranty Period. Supplier shall provide for Nortel
         Networks use in accordance with the terms of this Section 2.3, all
         patches, modifications and upgrades to the Software as such become
         available during the Term.

2.4      Nortel Networks and Supplier may from time to time, by mutual
         agreement, modify the Product Lists contained in Exhibit A, to add
         thereto other products offered for sale by Supplier, and/or to
         incorporate therein enhancements or new features introduced in Products
         by Supplier. Supplier shall advise Nortel Networks during scheduled
         Product marketing reviews and offer and make available to Nortel
         Networks for incorporation in this Agreement, any new product or
         Product enhancement or new feature that Supplier makes generally
         available. Such notification shall be made by Supplier to Nortel
         Networks within seven (7) calendar days of the Supplier's internal
         design authorization allowing any such new product, enhancement or
         feature. If Nortel Networks accepts Supplier's offer, the actual
         incorporation in this Agreement of any such new product or any Product
         enhancement or new feature will take place only after it complies with
         Nortel Networks' acceptance requirements under Section 4 (Nortel
         Networks' Product Qualification and Acceptance Process). At the time
         any new product or Product enhancement or new feature is incorporated
         in this Agreement, Exhibit A, Part II and Exhibit B shall be amended to
         add thereto the prices and the availability date and the acceptance
         program applicable to such new product or Product enhancement or new
         feature.

2.5      Nothing in this Agreement shall be interpreted or construed to limit
         either Party's right to perform or to continue to perform its own
         independent research, development, manufacturing or marketing of any
         type of products or systems even if such research, development,
         manufacturing or marketing pertains to technology or products similar
         to the Products or products.

2.6      Supplier accepts and acknowledges that Nortel Networks may request it
to sell Products to Nortel Networks Companies and in such event this Agreement
shall be deemed to extend to and for the benefit of Nortel Networks Companies.
Such Nortel Networks Companies shall be entitled to exercise on their own
behalf Nortel Networks' rights in respect of the purchase of Products pursuant
to this Agreement including, without limitation, the right to place Purchase
Orders together with the rights which accrue in respect of the Products or in
respect of the ordering or delivery of such Products. For the purposes of
giving effect to the above, where a Nortel Networks Company purchases Products
pursuant to this Agreement, where the context so admits, references to Nortel
Networks shall be deemed to be to the relevant Nortel Networks Company which is
ordering and/or purchasing Products in accordance with the terms of this
Agreement. Each Blanket Purchase Order, Release and Purchase Order shall create
rights and obligations solely between Supplier and the Nortel Networks Company
which issues the Blanket Purchase Order, the Release and the Purchase Order.
For the purpose of this Agreement, "Nortel Networks Company" shall mean
individually or collectively: (i) a Manufacturing Licensee (i.e. a third party
which enters into an agreement with a Nortel Networks Company to (1)
manufacture in modified or unmodified form, a Nortel Networks product
incorporating the Product, and (2) lease, sell, sublicense or otherwise
distribute (directly or indirectly through distributors such Nortel Networks
product under Nortel Networks' or the Manufacturing Licensee's own brand name;
and/or (ii) a joint venture, which is a cooperative enterprise formed between a
Nortel Networks Company and one or more other autonomous entities to address
more effectively certain mutual business interests and opportunities; and (iii)
a corporation or other legal entity other than a Subsidiary in which a Nortel
Networks Company, directly or indirectly owns or controls, and continues to own
or control, twenty percent (20%) or more of the voting stock or shares, or
other control mechanism; and/or (iv) a Subsidiary. Without prejudice to the
foregoing provisions, Supplier shall not sell Products to Nortel Networks
Companies without having first obtained the written consent of Nortel Networks'
Brand Management. The date of Nortel Networks' Management's consent shall be
deemed to be the date of the Purchase Order for the purposes of Section 8
(Ordering).



3.       EXHIBITS

3.1      The following Exhibits, attached hereto, are an integral part of this
         Agreement and are incorporated herein by reference:

<TABLE>
       <S>               <C>
         Exhibit A -      Product Lists, Part I and Part II, Prices, Discounts, Availability Dates and FCA Delivery Locations
         Exhibit B -      Specifications and Acceptance Program
         Exhibit C -      Demand-Pull Program
         Exhibit D -      Repair Services Rates, FCA Repair Locations and Technical Assistance Rates
         Exhibit E -      Procedures for Orders utilizing EDI and TDI
         Exhibit F -      Monthly Reports
         Exhibit G -      Change Notification


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                                      CONFIDENTIAL

         Exhibit H -      Technical Assistance
         Exhibit I -      RUS Debarment Certificate
         Exhibit J -      INTENTIONALLY DELETED
         Exhibit K -      Marketing Support
         Exhibit L -      North America Free Trade Agreements - Procedures
         Exhibit M -      Notices
         Exhibit N -      Escrow Terms and Conditions and Escrow Agreement.
</TABLE>

3.2      Any amendment to any Exhibit shall be in the form of a revised Exhibit
         duly dated and signed by authorized representatives of the Parties.

4.       NORTEL NETWORKS' PRODUCT QUALIFICATION AND ACCEPTANCE PROGRAM

4.1      Supplier undertakes to supply Products which comply with the
         Specifications. Except as otherwise set forth herein, prior to being
         purchased by Nortel Networks, the products listed in Exhibit A, Part II
         will undergo a program of evaluation, qualification and acceptance by
         Nortel Networks ("ACCEPTANCE PROGRAM") to verify their compliance with
         the Specifications. Products listed in Exhibit A, Part I have been
         accepted by Nortel Networks in accordance with this Section 4. The
         Acceptance Program will be conducted in accordance with Exhibit B, Part
         II.

4.2      It is acknowledged by Supplier that circumstances may arise where
         Nortel Networks will desire to purchase one or more products as are
         listed in Exhibit A, Part II, prior to acceptance thereof in accordance
         with this Section 4. Such circumstances will be examined in good faith
         by the Parties on a case-by-case basis. In the event Supplier accepts
         to sell any one of the products, Nortel Networks will issue Purchase
         Order(s) covering same and the provisions of Section 4.6 shall be
         applicable to such Purchase Order(s). If products are ordered pursuant
         to this Section 4.2, such products shall be treated as Products for all
         purposes of this Agreement. Supplier shall not unreasonably refuse to
         accept Nortel Networks' Purchase Orders covering products.
         Specifications applicable to products ordered pursuant to this Section
         4.2 shall be the specifications set forth in Exhibit B, part I of this
         Agreement.

4.3      Acceptance by Nortel Networks of the products will take place upon
         successful completion by Nortel Networks of its Acceptance Program
         provided that the products comply with the Specifications. Nortel
         Networks will notify Supplier in writing of its acceptance of the
         products within three (3) Business Days from successful completion of
         its Acceptance Program.

4.4      In the event that in the course of the carrying out of the Acceptance
         Program, Nortel Networks determines that the products fail to comply
         with the Specifications, Nortel Networks will promptly notify Supplier
         in writing of such failure, with reasonable detail, and upon receipt of
         such notice, Supplier will, at its expense, take prompt and effective
         action to correct the notified deficiencies by the applicable
         Acceptance Date, as such term is hereafter defined. Product acceptance
         dates shall be agreed upon by the Parties on a case-by-case basis, any
         such date to be, in any event, no later than twelve (12) weeks after
         the product availability date specified in Exhibit A, Part II for each
         product (herein referred to as "ACCEPTANCE DATE"), or extensions
         thereof, if any, granted in writing by Nortel Networks. In such case,
         acceptance of the products will take place upon verification by Nortel
         Networks that the notified deficiencies have been corrected, and
         accepted products shall become Products hereunder and be deemed to be
         included in Exhibit A, Part I.

4.5      In the event that acceptance of the products does not take place on or
         before the Acceptance Date or extensions thereof, if any, granted in
         writing by Nortel Networks, or in the event Nortel Networks, acting
         reasonably, does not expect that acceptance will take place on the
         Acceptance Date or extensions thereof, if any, granted in writing by
         Nortel Networks , Nortel Networks may, in addition to any other
         remedies hereunder, at law or in equity, recover all costs and charges
         it has incurred as a result of the products not being accepted by the
         Acceptance Date, including, without limitation as to the nature of such
         costs and expenses, laboratory testing cancellation charges. In
         addition Nortel Networks may, upon notice to Supplier to that effect,
         request that a design review be held between Supplier's and Nortel
         Networks' engineers in order to determine how far away the products
         actually are from acceptance.

4.6      In the event Supplier has accepted Nortel Networks' Purchase Order(s)
         for products pursuant to Section 4.2 hereof, Nortel Networks may, in
         addition to its rights under Section 4.5 hereof, request that Supplier
         provide, and in such event, Supplier will provide as a temporary
         solution, functionally equivalent equipment acceptable to Nortel
         Networks' customer(s). Once the products have passed acceptance,
         Supplier shall, at its own cost, replace the functionally equivalent
         equipment with the Products, and shall invoice Nortel Networks for the
         price of Products only, once the Products have been delivered to Nortel
         Networks' customer(s). Nortel Networks shall not be responsible for the
         cost of the equipment sent as an alternate and temporary solution.

4.7      Supplier represents and warrants that it has identified and will use
         its best efforts to continue to identify to Nortel Networks any sole
         source/critical components incorporated into the Products.


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                                    CONFIDENTIAL

4.8      Acceptance of the Products by Nortel Networks under this Section 4
         shall not relieve Supplier from its obligations to manufacture,
         deliver, repair and support the Products in accordance with this
         Agreement.

5.       PRODUCT AND PROCESS CHANGES

5.1      Supplier shall notify Nortel Networks in writing of all proposed
         modifications and changes that affect form, fit, function, performance
         or Price (herein "CHANGE(S)") to the Products and/or Processes. Such
         notification shall be made by Supplier to Nortel Networks within seven
         (7) calendar days of the Supplier's internal design authorization
         allowing any such Change except in the cases contemplated in Section
         5.6, in which case Supplier shall promptly so notify Nortel Networks
         and initiate immediate action to correct the situation. The Changes
         which require that a notice be forwarded to Nortel Networks shall
         include, without limitation, any proposed Change to the Products in
         accordance with the classifications described in GR-209-CORE (herein
         "GR-209"). All Changes proposed outside the spectrum of GR-209 shall be
         classified as "O". Supplier shall comply with GR-209 except to the
         extent expressly set forth in this Section 5. The interpretation of
         GR-209 resides with Nortel Networks. Supplier's Change notifications
         (herein "CHANGE NOTIFICATIONS") shall be in the form and content of
         Exhibit G. The Parties will work together to address any known
         deviations from GR-209.

5.2      Supplier's written Change Notifications shall be numbered in a single
         sequential numbering scheme and shall include the information specified
         in GR-209 including the following: a detailed list of the Products
         and/or Processes affected and associated Changes that must be
         implemented in conjunction with or prior to the notified Change, the
         compatibility of the Change with the Products and/or Processes
         currently deployed, a detailed description of the reason for the
         Change, the effect on the Products and/or Processes once the Change is
         implemented and the procedure of implementation. In addition, a
         detailed description of the Change, the consequences if the Change is
         not implemented and the planned implementation date of the Change shall
         be included in the Change Notification. Supplier will propose a
         disposition plan for Nortel Networks' and its customers' stockrooms.
         Nortel Networks will notify Supplier of the type and quantity of
         Products it requires for the implementation of the Change and location
         where such Products should be delivered.

5.3      Nortel Networks reserves the right to request reasonable test data
         associated with any Product Changes. Furthermore, in the event Nortel
         Networks determines it is necessary to verify the Change prior to
         acceptance, Supplier shall supply, on loan and without charge,
         sufficient production level quality Products for such verification, or
         offer some other alternative arrangement, satisfactory to Nortel
         Networks, for such verification.

5.4      If Nortel Networks disagrees with any classification issued by
         Supplier, Supplier shall present evidence in writing, within a period
         of five (5) calendar days from Nortel Networks' request therefor, that
         such a classification is justified. If Nortel Networks still disagrees
         with the justification, Supplier shall negotiate in good faith with
         Nortel Networks until a final resolution is mutually agreed upon by the
         Parties within thirty (30) calendar days from the date of Supplier's
         Change Notification. In the event that thirty (30) calendar days after
         the date of Supplier's Change Notification, the Parties still disagree
         on the Change classification, Nortel Networks' reasonable determination
         shall prevail and be final.

5.5      Supplier shall not implement a Change such as those contemplated above
         without the prior written consent of Nortel Networks, which consent may
         not be unreasonably withheld. Should Nortel Networks fail to respond
         within a period of forty (40) calendar days from the date it has
         received a notice forwarded by Supplier under this Section 5, then
         Supplier shall have the right to implement such Change.

5.6      In addition to Supplier's warranty obligations contained in Section 13
         (Warranty) and without diminishing Supplier's obligations under this
         Section 5 and Sections 6 (Quality Control and Reliability Requirements,
         Supply Management and Nortel Networks' Auditing Rights) and 15 (Repair
         Services), in the event that, during the Product Warranty Period or the
         Term, whichever is longer, an intrinsic design or manufacturing defect
         of the Product(s), including a failure of the Software to operate in
         the environment in which it is installed, without troubles, due to
         defects which result from the failure of the Software to conform to the
         Specifications, causes an inoperative, hazardous or unsatisfactory
         condition of a nature as to require the introduction in the Product(s)
         of a Class A or AC Change, as described in GR-209, Supplier shall, as
         expeditiously as possible, at its expense, generate a Class A or AC
         Change, as applicable, to eliminate the defect, and supply such Change,
         at no charge, for installation by Nortel Networks at reasonable costs,
         at Supplier's expense, in all defective units of the Product(s), both
         installed and stocked, in accordance with a retrofit program negotiated
         by Nortel Networks with its customers. A retrofit program is a program
         that allows Nortel Networks to install the Change in all of Nortel
         Networks' stockrooms and customer locations within a period not to
         exceed one hundred and eighty (180) calendar days from the date such
         inoperative, hazardous or unsatisfactory condition first occurs. In the
         course of negotiations of the retrofit program with its customers,
         Nortel Networks shall consult closely with Supplier with a view to
         endeavor to achieve the twofold objective of customers' satisfaction
         and minimization of retrofit costs to Supplier.

         Supplier shall provide, at its expense, seed stock units to support a
         retrofit project completion within said one hundred and eighty (180)
         days in quantities determined in accordance with the following
         formulae: The one hundred and eighty (180) day period begins when all
         the details of the retrofit program are determined by Nortel Networks.


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                                       CONFIDENTIAL

         Seed Stock Units = Material Cycle Time (Weeks) x Repair and Return Rate

         Repair and Return Rate =         Number of units to be retrofitted
                                    --------------------------------------------
                                    Change Completion Date - Implementation Date

5.7      Nortel Networks shall provide to Supplier Nortel Networks' Product
         Engineering Code, the release number of the Product and the CLEI code
         of the Product, if required, for each Product Change under this Section
         5. At Nortel Networks' request, this information shall be placed on the
         Products by Supplier in accordance with the Specifications.

5.8      From acceptance of the Products by Nortel Networks in accordance with
         Section 4 (Nortel Networks' Product Qualification and Acceptance
         Process), Supplier shall provide Nortel Networks with a field baseline
         report which will include: part number, Current Revision Level, New
         Revision Level, Reason for Change, Parts affected by Change, Old and
         New Revision of PCB, if applicable. This report will be updated
         whenever a Change is generated by Supplier which affects form, fit,
         function, performance or Price of the Products. Supplier will use its
         best efforts to produce these updates within seven (7) Business Days of
         each Change date.

5.9      Throughout the Term, Supplier shall requalify the Products once every
         twelve (12) month period in accordance with Bellcore Standard
         TR-NWT-000418, Issue 2 (Draft 3) September 1992. The parties will work
         together to address any known deviations from such standard.

5.10     Change notices relating to Product Changes should be sent to Nortel
         Networks' System Engineering department and Change notices relating to
         Process Changes should be sent to Nortel Networks' Quality Department.
         Supplier's designated point of contact shall be responsible for the
         obligations described in this Section 5.

6.       QUALITY CONTROL AND RELIABILITY REQUIREMENTS, SUPPLY MANAGEMENT AND
         NORTEL NETWORKS' AUDITING RIGHTS

6.1      ISO 9001 CERTIFICATION

6.1.1    Supplier represents and warrants that on the Effective Date, its
         Product and component manufacturers and suppliers have received ISO
         9002 certification. Supplier undertakes to ensure that such parties
         maintain ISO 9002 certification in effect throughout the Term including
         in respect of such parties quality control systems and Supplier's
         failure to ensure that such parties maintain ISO 9002 certification
         shall constitute a material breach by Supplier of its obligations
         hereunder.

6.1.2    In the event any of Supplier's Product and component manufacturers and
         suppliers receive any notice of non-conformance to ISO from the ISO
         registrars, Supplier shall immediately advise Nortel Networks and
         forthwith provide Nortel Networks with (i) the list and details of the
         non-conformance and (ii) the detailed plan submitted to the ISO
         registrars by such party including timelines and goals to achieve
         compliance with ISO 9002.

6.1.3    By March 15, 2000, Supplier shall submit to Nortel Networks sufficient
         documentation for Nortel Networks to review Supplier's internal quality
         control systems, and the parties shall work together to effect such
         changes thereto as Nortel Networks may reasonably request.

6.2      QUALITY CONTROL AND RELIABILITY REQUIREMENTS

6.2.1    All Products delivered by Supplier shall comply with the Specifications
         including those quality and reliability target metrics set out therein,
         such metrics to include, without limitation, Mean Time Between Failure
         ("MTBF"), Return Rate ("RR") and Supplier Product Quality Level
         ("SPQL"). In the event Nortel Networks proposes any changes or
         additions to such quality and reliability target metrics, Supplier
         shall not unreasonably refuse to agree or delay compliance with such
         changes.

6.2.2    Products furnished hereunder by Supplier shall be tested and inspected
         by Supplier prior to shipment in accordance with testing and inspection
         procedures as approved by Nortel Networks. Supplier agrees to perform
         all quality control functions to ensure compliance of the Products with
         the Specifications and conformance with good commercial practice.
         Supplier warrants that all Products furnished hereunder shall meet all
         criteria set forth in the Specifications. Detailed inspection records
         are to be maintained by Supplier and made available to Nortel Networks
         upon request.

6.2.3    Supplier shall provide Nortel Networks with a monthly report covering
         the items shown in Exhibit F and any other items reasonably required by
         Nortel Networks in a format acceptable to Nortel Networks .

6.2.4    Supplier shall, within seven (7) calendar days of becoming aware of any
         such event, report to Nortel Networks by Technical Bulletin any
         potential, suspected or actual (i) defect in design and/or
         manufacturing of the Products, (ii) malfunction of the Products or of
         products similar to the Products, (iii) failure of the Products to
         conform to the Specifications or (iv) uses of the


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         Products in combination with other product(s) or services which cause
         or have the potential of causing disruption in the services provided
         by end-users using the Products.

6.3      SUPPLY MANAGEMENT

6.3.1    Nortel Networks may, from time to time, identify in a notice to
         Supplier those components and materials used in the manufacture of
         Products which are subject to this Section 6.3. From the date of Nortel
         Networks' notice to Supplier, all components and materials so
         identified by Nortel Networks, and the vendors of such components and
         materials, shall be approved by Nortel Networks and Supplier shall only
         use such approved components and materials procured from such approved
         vendors in its manufacture of the Products hereunder. Upon signature of
         this Agreement Supplier shall provide Nortel Networks with a list of
         its sole source and critical lead time suppliers so that Nortel
         Networks may approve such suppliers under this Section 6.3.1. In the
         event a supplier is found to be unacceptable to Nortel Networks,
         Supplier and Nortel Networks shall work together to find a substitute
         vendor as soon as possible, without unnecessarily disrupting supply of
         the Products. In addition, in order to decrease the cost of components
         to Supplier, from time to time Nortel Networks may elect to to procure
         for Supplier the right to purchase Product components directly from
         Nortel Networks suppliers and at the prices and on the terms offered to
         Nortel. Supplier shall pass all cost savings realized pursuant to this
         Section 6.3.1 to Nortel Networks in the form of decreased Product
         Prices.

6.3.2    In the event Nortel Networks determines that components, materials
         and/or vendors are no longer approved for use in the manufacture of
         Products and so advises Supplier, Supplier shall approve all substitute
         vendors and perform the qualification of all substitute components and
         materials to ensure that Products incorporating such components and
         materials comply with the Specifications. The selection of any
         substitute approved vendors by Supplier is subject to Nortel Networks'
         audit to assess the acceptability and establish the credibility of such
         vendors. Supplier and Nortel Networks shall work together to find a
         substitute vendor as soon as possible, without unnecessarily disrupting
         the supply of Products.

6.3.3    Supplier's supply management Processes and records are subject to audit
         by Nortel Networks, to assess their efficiency and ensure corrective
         and preventive actions are taken internally by Supplier or externally
         with the approved vendors. Nortel Networks' audit of suppliers approved
         by Supplier, other than those recognized by Nortel Networks' Integrated
         Electronic Data Base ("IEDB") and Nortel Networks' Divisional Component
         Database ("DCD"), and of the Processes and records for non-conforming
         components and materials, may be held within thirty (30) calendar days
         of evidence of receiving non-conforming Products from Supplier.

6.4      NORTEL NETWORKS' INSPECTION RIGHTS

6.4.1    Nortel Networks may inspect or test, at all reasonable times and at
         Supplier's locations, any Products covered by this Agreement. Supplier
         shall provide at no additional cost such facilities, labor, data,
         specifications, manuals and information as are reasonably required to
         allow Nortel Networks to perform a full range of quality assurance
         functions without unduly interfering with Supplier's normal day-to-day
         operations. Inspection of Products may be performed in whole or in part
         prior to final assembly and/or completion of manufacturing or repair
         Processes.

6.4.2    In addition to, and without restricting, Nortel Networks' auditing and
         inspection rights described in this Section 6, Nortel Networks shall
         have the right to visit Supplier's manufacturing location(s) for the
         purpose of inspecting any of the Processes, upon fifteen (15) Business
         Days' written notice. Nortel Networks shall request inspection no more
         frequently than required by good commercial practices.

6.4.3    Nortel Networks shall keep Supplier informed as to any problems
         encountered with the Products and Processes and to communicate promptly
         to Supplier any and all modifications or improvements to the Products
         and Processes suggested by any customer, employee or agent, as Nortel
         Networks considers appropriate.

6.4.4    Any exercise of, or failure by Nortel Networks to inspect Products,
         Processes and Supplier's manufacturing locations as set forth in this
         Section 6 and Section 12 (Acceptance or Rejection) shall not
         constitute, or be construed as acceptance of the Products and Processes
         by Nortel Networks or as relieving Supplier from its obligation to
         furnish all Products in strict compliance with this Agreement,
         including the Specifications, and the applicable Blanket Purchase
         Order, Release or Purchase Order.

7.       INTENTIONALLY DELETED.

8.       ORDERING

8.1      Products will be purchased, if the parties mutually agree to institute
         the Demand-Pull Program, through Blanket Purchase Orders and Releases
         under the Demand-Pull Program or, absent mutual agreement to enter into
         such Demand-Pull Program, Nortel Networks may purchase Products through
         Purchase Orders with a schedule of delivery, which may be issued by
         Nortel Networks, from time to time, in accordance with this Agreement.
         The Parties acknowledge that such Blanket Purchase Orders, Releases and
         Purchase Orders shall be transmitted by EDI as described in Exhibit E.
         Nortel Networks shall, on the first business day of each


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         month (and as may be updated from time to time by Nortel Networks)
         during the Term, provide Supplier with a twelve (12) month rolling
         forecast ("Forecast") of its Product requirements, if any.

8.2      Notwithstanding that a Blanket Purchase Order, a Release or a Purchase
         Order issued in respect of Products does not refer to this Agreement,
         any such Blanket Purchase Order, Release or Purchase Order issued by
         Nortel Networks during the Term shall be deemed to have been issued
         pursuant to this Agreement and shall be deemed to incorporate and be
         governed solely by the terms and conditions set forth in this Agreement
         unless the Parties expressly agree in writing to the contrary. Any
         printed terms and conditions contained in any Blanket Purchase Order,
         Release or Purchase Order or in any Supplier's acknowledgment, invoice
         or other documentation shall be deemed deleted and of no force or
         effect. Any additional typed and/or written terms and conditions
         contained in any Purchase Order or Release and any Supplier's
         acknowledgment, invoice or other documentation shall be for
         administrative purposes only, i.e. to identify the types and quantities
         of Products to be supplied, line item Prices and total Price, delivery
         schedule, and other similar ordering data, all in accordance with the
         provisions of this Agreement.

8.3      Nortel Networks shall not be obligated to purchase any quantities of
         Products hereunder, except and only to the extent required in order to
         satisfy its obligations to purchase Products pursuant to the
         Demand-Pull Program, if any, as expressly set forth in Exhibit C.
         Supplier acknowledges that no minimum line item value or minimum order
         values shall apply to Blanket Purchase Orders, Releases or Purchase
         Orders issued hereunder.

8.4      Supplier undertakes to accept any Blanket Purchase Orders and Releases
         or Purchase Orders issued hereunder by Nortel Networks and Nortel
         Networks Companies, provided that such Blanket Purchase Orders and
         Releases or Purchase Orders are consistent with this Agreement.
         Supplier shall acknowledge receipt of each Blanket Purchase Order,
         Release or Purchase Order within two (2) Business Days ARO.

8.5      Any change to the original Purchase Order or Release initiated by
         Nortel Networks after Supplier's acknowledgment and any resulting
         adjustments to prices, schedule and/or other requirements of the
         Purchase Order or Release shall be negotiated and mutually agreed upon
         and subsequently detailed in a written change to the Purchase Order or
         Release ("CHANGE ORDER"), referencing the original Purchase Order or
         Release and executed by authorized representatives of Nortel Networks
         and Supplier. In the event that the Change Order affects work already
         performed, the adjustment of the Purchase Order or Release price shall
         include reasonable charges incurred by Supplier related to such work.
         No such changes shall be performed until a Change Order has been
         executed by Supplier and Nortel Networks as described above.

8.6      The Blanket Purchase Orders, Releases, or Purchase Orders shall:

         a)       reference the number of Nortel Networks' Blanket Purchase
                  Order, Release or Purchase Order issued for the Products;
         b)       include a signature of an authorized employee of Nortel
                  Networks (to be provided by Nortel Networks );
         c)       have the correct Product and options description (including
                  item numbers and part numbers if shown for that item in the
                  Product list);
         d)       have the correct Price in accordance with Exhibit A of this
                  Agreement or any amendments hereto;
         e)       specify the exact quantity of Products to be delivered;
         f)       provide tax status for each "ship-to" location including the
                  exemption certificate number if tax exempt;
         g)       have firm delivery schedules and a firm Delivery Date (where
                  applicable) for each shipment;
         h)       specify the FCA Delivery Location, "ship to" and the Nortel
                  Networks location where the invoice shall be rendered for
                  payment;
         i)       specify the method of shipment including the names of carrier
                  and broker, if applicable; and
         j)       specify special shipping and transportation instructions, if
                  any.

9.       DELIVERY

9.1      Products shall be delivered as follows:

           a)   Products ordered pursuant to the Demand-Pull Program shall be
                delivered by Supplier FCA Delivery Location set forth in the
                Release within a delivery lead time not to exceed twenty-four
                (24) hours from Nortel Networks' Release(s).

           b)   Subject to Section 9.1.1 below, Products not ordered pursuant to
                the Demand-Pull Program shall be delivered by Supplier FCA
                Delivery Location set forth in the Purchase Order, within a
                delivery lead time not to exceed [*] ([*]) weeks ARO.

         No partial shipment shall be made without Nortel Networks' prior
         written consent.

9.1.1    For Products not ordered pursuant to the Demand-Pull Program, in the
         event Nortel Networks orders Products in excess of one hundred and
         fifty percent (150%) of the amount forecasted in the calendar month
         prior to the calendar month in which the Purchase Order is received,
         then the delivery lead time shall not exceed [*] ([*]) weeks ARO for
         the excess portion of the Purchase Order.

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9.2      Supplier shall package the Products in accordance with Nortel Networks'
         standard packing and external marking practices in compliance with the
         standards listed in Schedule B, Part III and the Specifications
         together with any modification reasonably requested by Nortel Networks
         with respect to size and external markings.

9.3      Supplier shall mark each Product listed in Exhibit A with the
         Supplier's model number and where practical, the description of the
         Product and the revision level. Each Product shall be marked, as
         outlined in Specifications, set forth in Exhibit B, Part III. When
         requested by Nortel Networks, Product shall include Nortel Networks'
         logotype.

9.4      In the event that Supplier fails to deliver Products by the Delivery
         Date or extension thereof granted in writing by Nortel Networks, if
         any, Nortel Networks may, in addition to any other right available to
         it hereunder, including under Section 9.5 (Liquidated Damages), cancel,
         without charge or liability, the affected Purchase Order and/or Release
         or applicable portion thereof. Supplier shall promptly advise Nortel
         Networks of any anticipated delay in meeting the Delivery Date
         specified in any Purchase Order or Release and shall cooperate with
         Nortel Networks in the implementation by Supplier of any appropriate
         action or workaround plans with a view to enable Nortel Networks to
         satisfy its customer requirements. Without limiting the generality of
         the foregoing or otherwise affecting Nortel Networks' rights, in the
         event a Nortel Networks customer cancels one or more orders for
         Products as a result of Supplier's delay in the delivery of Products of
         more than five (5) calendar days, Nortel Networks shall have the right
         to cancel, without charge or liability, the Purchase Order and/or
         Release issued to Supplier in respect of Nortel Networks' customer
         cancelled order(s).

9.5      In the event Supplier fails to meet a Delivery Date by a period of more
         than [*] ([*]) calendar days through no fault of Nortel Networks and
         such failure is not attributable to force majeure as described in
         Section 26 (Force Majeure), Supplier shall pay to Nortel Networks, as
         fixed and liquidated damages, and not as a penalty, an amount equal to
         [*] percent ([*]%) per calendar day, up to [*] percent ([*]%), of
         the total Price of the affected Purchase Order or Release. At Nortel
         Networks' option, Supplier shall either credit the liquidated damages
         against the Price of the applicable Purchase Order or Release (if not
         cancelled) or promptly make payment to Nortel Networks.

9.6      Nortel Networks may at any time for its convenience and without cause,
         reschedule the Delivery Date of ordered Products no more than once,
         provided such rescheduled Delivery Date shall not exceed ninety (90)
         Business Days from the date the Products were originally scheduled to
         be delivered.

9.7      Nortel Networks may at any time for its convenience and without cause,
         cancel, in whole or in part, any Purchase Order placed hereunder for
         Products. In the event of such cancellation, Supplier will undertake
         all commercially reasonable efforts to minimize the economic effects of
         such cancellation, including without limitations, utilizing the
         cancelled portion of the Purchase Order to fulfill existing commitments
         to Nortel Networks or other purchasers of Supplier products. Solely to
         the extent Supplier is otherwise unable to ameliorate the effects of
         such cancellation as set forth above, Supplier may invoice Nortel
         Networks for an amount equal to [*] percent ([*]%) of the cancelled
         portion of the Purchase Order. This Section 9.7 is solely applicable to
         Products not purchased pursuant to the Demand-Pull Program;
         cancellation of Purchase Orders pursuant to the Demand-Pull Program
         shall be in accordance with the terms of Exhibit C.

10.      PRICES AND PAYMENTS

10.1     Except as specifically provided herein, all charges incurred by
         Supplier in performing its obligations hereunder shall be paid by
         Supplier and shall not be subject to reimbursement by Nortel Networks.

10.2     Prices applicable to Blanket Purchase Orders, Releases and Purchase
         Orders for Products and Repair Services issued hereunder shall be,
         subject to the provisions of this Section 10, the Prices as set forth
         in Exhibit A. Prices shall be firm throughout the Term except for cost
         reductions and volume discounts. Nortel Networks shall promptly
         reimburse Supplier, upon invoice, or shall pay directly, if so
         requested by Supplier, all taxes and charges imposed by any federal,
         state, or local governmental or taxing authority, relating to the
         purchase, ownership, possession, use, operation or relocation of
         Products purchased, excluding, however, all taxes computed upon the net
         income of Supplier.

10.3     Product Prices are: (a) FCA Supplier's shipping location within the
         continental United States; (b) stated and payable in US currency; (c)
         include packing, import duties and customs charges; (d) exclude all
         applicable federal, state and local taxes.

10.4     Supplier represents and warrants that, except for Supplier's existing
         direct customers as of the Effective Date, the Prices charged to Nortel
         Networks for Products and Repair Services supplied hereunder are and
         will continue to be at least [*] percent ([*]%) lower than the prices
         that Supplier charges directly to Nortel Networks existing or
         internally identified customers for the Products or Supplier's dealers
         or value-added resellers, at a particular time, for the same Products
         and Repair Services or for products or services interchangeable with,
         or similar to, the Products and Repair Services. For comparison
         purposes, Supplier shall aggregate purchases of Products by all Nortel
         Networks Companies.

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10.5     Supplier further represents and warrants that the Prices charged to
         Nortel Networks for Products and Repair Services supplied hereunder are
         and will continue to be as low as those charged by Supplier, at a
         particular time, to any other party with whom Supplier has entered into
         an OEM or distribution agreement (or similar contractual arrangement),
         for the same Products and Repair Services or for products or services
         interchangeable with, or equivalent to, the Products and Repair
         Services, in the same year and in similar quantities. For comparison
         purposes, Supplier shall aggregate purchases of Products by all Nortel
         Networks Companies.

10.6     To the extent that Supplier's records may be relevant in determining
         whether Supplier is complying with the requirements of this Agreement,
         Nortel Networks shall have the right, through independent Certified
         Professional Accountants acceptable to both Parties, to examine and
         audit, at most on a quarterly basis, during normal business hours, such
         records as may, under recognized accounting practices, contain
         information bearing upon the prices applicable to the providing of
         repair services similar to, or interchangeable with, the Repair
         Services to any other party or the sale of the same Products or
         products similar to, or interchangeable with, the Products to any other
         party, such records to be kept clear and accurate and in a form and
         content sufficient and adequate to permit audit as aforesaid. Nortel
         Networks shall retain such inspection and audit rights for so long as
         it will be procuring Products and Repair Services from Supplier.

10.7     Supplier shall promptly notify and extend to Nortel Networks any
         reductions made by Supplier in its published list prices and any
         increases in discounts for Products. Such price reductions and
         increased discounts shall apply to Blanket Purchase Orders, Releases
         and Purchase Orders received by Supplier on or after the effective date
         of the price reduction. Any price decreases will be immediately applied
         to any Blanket Purchase Orders, Releases or Purchase Orders received
         and acknowledged but not delivered by Supplier.

10.8     In an effort to provide Nortel Networks the opportunity to
         competitively and profitably offer Products in high volume
         applications, Supplier shall offer to Nortel Networks, as agreed upon
         by the Parties, additional discounts on Products set forth in Exhibit A
         for Nortel Networks' use in high volume, competitive price proposals.

10.9     Payment shall be due to Supplier from Nortel Networks forty five (45)
         calendar days following the receipt by Nortel Networks of an invoice
         for the Products, which invoice shall be delivered to Nortel Networks
         no earlier than the Delivery Date of the Products.

10.10    Invoices for Products delivered hereunder and for any other amounts
         which may be payable hereunder shall be forwarded directly to the
         following address (unless Nortel Networks designates, in writing,
         another address):

         NORTEL NETWORKS
         P.O. Box 80510
         Nashville, Tennessee
         37208-0510 USA
         Attention:  Accounts Payable Dept.
         1-800-684-2228

11.      TITLE AND RISK OF LOSS

11.1     Title to the Products (excluding Software) and risk of loss of and
         damage to the Products will pass to Nortel Networks upon delivery FCA
         Delivery Location specified by Nortel Networks in accordance with
         Section 9 (Delivery) provided that under Section 13.6 (Warranty), 14.2
         and 14.7 (Repair Procedures), risk of loss of or damage to the
         replacement Products will pass to Nortel Networks upon the delivery
         thereof at a Nortel Networks designated destination.

12.      INSPECTION

12.1     Nortel Networks reserves the right to accept or reject Products ordered
         hereunder after the delivery of such Products to Nortel Networks'
         facility or, as the case may be, to a Nortel Networks customer's site.
         Products shall be deemed accepted by Nortel Networks unless Nortel
         Networks notifies Supplier that such Products are rejected and provides
         the reasons for such rejection within thirty (30) Business Days after
         Nortel Networks' receipt thereof at its facilities or, when the
         Products are received at a Nortel Networks customer's site, as the case
         may be.

12.2     If any Products are found not to be in substantial conformance with
         this Agreement, including the Specifications, applicable Purchase Order
         or Release, and/or fail to meet any of the acceptance criteria
         specified in the applicable Specifications, and/or in the event an
         excessive failure rate (as defined in the Specifications) is observed
         by Nortel Networks with respect to Products contained in a
         lot/shipment, Nortel Networks shall have the right, notwithstanding the
         warranty provisions contained in this Agreement, to reject the same and
         cancel the affected Purchase Order or Release, or, at its option,
         require that such Products be


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         replaced or repaired within ten (10) Business Days at Supplier's risk
         and expense (including shipping charges). Any notice of rejection
         issued by Nortel Networks under this Section 12.2 will include a
         reasonable description of the deficiencies.

12.3     Payment or acceptance by Nortel Networks shall not be deemed to
         constitute a waiver of the rights which Nortel Networks may have
         resulting from Supplier's delivery of faulty or defective Products.

13.      WARRANTY

13.1     Supplier warrants that:

         a)       Product shall, at the Delivery Date, be new and free and clear
                  of all security interest or other lien and other encumbrance;

         b)       for a period of [*] ([*]) months from the Delivery Date, in
                  the event the Products are delivered to a Nortel Networks
                  customer facility, and otherwise for a period of [*] ([*])
                  months from the Delivery Date, such period being hereinafter
                  referred to as the "PRODUCT WARRANTY PERIOD"), the Hardware
                  and the Software shall be free from defects in materials and
                  workmanship and shall conform to and operate in accordance
                  with the Specifications;

         c)       the Software will operate in the environment in which it is
                  installed, without troubles, due to defects which result from
                  the failure of the Software to conform to the Specifications;

         d)       with the exception of any notice which may be provided by
                  Supplier pursuant to Section 21 (Hazardous Materials), the
                  Hardware furnished by Supplier, as described in this
                  Agreement, is safe for normal use, is non-toxic, presents no
                  abnormal hazards to persons or their environment, and may be
                  disposed of as normal refuse without special precautions;

         e)       all Products provided pursuant to this Agreement, when used in
                  accordance with the Specifications and Documentation, as well
                  as all and any software, systems or tools of Supplier used by
                  it in the supply of Product and/or Services or performance of
                  this Agreement in any way, shall (1) process date and time
                  related data without causing any processing interruptions,
                  abnormal terminations, or changes in performance
                  characteristics, and (2) shall process and manipulate all date
                  and time related functions correctly. Without limiting the
                  generality of the foregoing, all Products and in all and any
                  software, systems or tools of Supplier used by it in the
                  supply of Product and/or Services or performance provided
                  pursuant to this Agreement shall:

                  i)      correctly handle date and time related data before,
                          during and after January 1, 2000, including but not
                          limited to accepting date and time input, providing
                          date and time output, and performing ongoing
                          operations on dates and times and portions of dates
                          and times including, but not limited to, calculating,
                          comparing and sequencing of dates and times (in both
                          forward and backward operations spanning century
                          boundaries);

                  ii)     correctly handle leap year calculations (including but
                          not limited to identification of leap years, interval
                          calculations, (in both forward and backward operations
                          spanning century boundaries), day-in-year
                          calculations, day-of-the-week calculations, and
                          week-of-the-year calculations);

                  iii)    correctly handle all two digit date and time related
                          input in a manner that resolves ambiguity as to
                          century in a disclosed, defined and predetermined
                          manner; and

                  iv)     correctly store and provide output of all date and
                          time data in a manner that is unambiguous as to
                          century;

                  Supplier shall immediately notify Nortel Networks of any and
                  all date or time-related bugs, errors or deficiencies in the
                  Products and in all and any software, systems or tools of
                  Supplier used by it in the supply of Product and/or Services
                  or performance of this Agreement in any way. For the purpose
                  of problem resolution, any such date or time-related bugs,
                  errors or deficiencies shall be deemed (as established by the
                  appropriate license or support agreement) to be bugs, errors
                  or deficiencies of the highest priority level, and shall be
                  resolved according to the procedures provided for such
                  priority level;

                  any provisions of this Agreement that tend to limit or
                  eliminate the liability of Supplier shall have no application
                  with respect to the year 2000 compliance warranty set out
                  above;

         f)       it has developed, is the owner of and/or possesses all
                  necessary rights, including, without limitation, rights in
                  respect of third party software, to use and to market the
                  Products, including the Product Software required for the
                  operation of the Products, as contemplated hereunder;

         g)       no license or other agreement is or will be violated by the
                  terms and conditions of this Agreement;

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         h)       it is either the owner or is otherwise in possession of
                  sufficient licensed rights pertaining to any portion of the
                  Products (including the Product Hardware and Product Software)
                  in order to allow it to satisfy all of its obligations
                  hereunder.

         i)       without limiting the generality of the foregoing provisions,
                  Supplier represents and warrants that it has the authority to
                  enter into this Agreement and has obtained all rights and
                  waivers necessary to sell Products to Nortel Networks and to
                  grant the rights granted hereunder. Supplier represents and
                  warrants that the Products and the exercise of the rights
                  granted in this Agreement do not infringe any third-party
                  patent, copyright, trademark, trade secret or other
                  intellectual property right.

         The warranty provisions contained in this Section 13.1 shall apply
         during and after the Product Warranty Period, except as expressly set
         forth in 13.1 b) and c) above.

13.2     This warranty does not apply to items normally consumed in operation,
         such as lamps and fuses and to any defect which has been caused by
         Nortel Networks and arises from mishandling, misuse, neglect or
         improper testing or repair.

13.3     Supplier shall, at its expense, during the Product Warranty Period,
         provide Repair Services in accordance with Section 15 (Repair Services)
         in respect of Hardware and Software which have failed to conform to
         above warranties.

13.4     All Hardware or Software supplied under Section 15 (Repair Services)
         pursuant to Supplier's warranty obligations under this Section 13,
         shall be functionally equal or better than the vintage of the replaced
         units and must be backward compatible and meet the minimum field
         baseline.

13.5     Hardware repairs or replacements and Software corrections effected
         during the Product Warranty Period shall be warranted, as above
         provided, for the remainder of the Product Warranty Period or for
         [*] ([*]) days from the Repair Date, whichever is longer. Hardware
         repairs or replacements and Software corrections or replacements
         effected after expiry of the Product Warranty Period shall be
         warranted, as above provided, for a period of [*] ([*]) days from the
         Repair Date stenciled or otherwise identified in accordance with
         Section 14.4 (Repair Procedures). All transportation and other expenses
         arising from shipping the non-conforming Products to, and the repaired
         or replacement Products from, Supplier shall be paid in accordance with
         Section 14.2 or 14.7, as appropriate.

13.6     Above warranty shall survive inspection, acceptance and payment. In the
         event Supplier does not so perform under the warranty provisions for
         repair or replacement in accordance with this Section, then upon Nortel
         Networks' request, and in addition to any other right available to
         Nortel Networks hereunder, Supplier shall: (a) refund to Nortel
         Networks the Price of such Products; and (b) be entitled to the return
         of such Products. All transportation and other expenses arising from
         shipping the non-conforming Products to, and the repaired or
         replacement Products from, the Delivery Location shall be paid by
         Supplier.

13.7     In addition to Nortel Networks' rights as described in Section 13.3
         above, in the event Supplier is in breach of its obligations regarding
         repair or support of Hardware or Software hereunder, Nortel Networks
         reserves the right to repair or replace any defective Hardware or to
         correct any defective Software on its own or to arrange for such
         repair, replacement or correction by other entities. In that event
         Supplier shall reimburse Nortel Networks for all reasonable costs and
         expenses incurred by Nortel Networks in exercising either right under
         this Section during the applicable Product Warranty Period.

13.8     Any material failure by Supplier to execute its warranty obligations as
         contained in this Section 13 and Section 15 (Repair Services) shall
         constitute a material breach of Supplier's obligations hereunder.

13.9     EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, SUPPLIER
         DISCLAIMS ALL WARRANTIES ON PRODUCTS FURNISHED UNDER THIS AGREEMENT,
         INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF
         MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

14.      REPAIR PROCEDURES

14.1     This Section 14 shall be applicable to the providing of Repair Services
         described in Section 15 by Supplier during and after the Product
         Warranty Period.

14.2     a)       Prior to returning any defective Products to the FCA Repair
                  Location, Nortel Networks will notify Supplier orally of the
                  defect, if known at that time, and will request authorization
                  from Supplier for the return of such Products. Upon such
                  request, Supplier shall provide Nortel Networks with a Return
                  Material Authorization ("RMA") number to be prominently
                  displayed on the shipping container for the defective Products
                  and advise Nortel Networks of the FCA Repair Location to which
                  the Products should be returned.

         b)       In all cases covered in Section 15 (Repair Services), Nortel
                  Networks shall then ship such Products to Supplier, freight
                  prepaid and properly insured. Nortel Networks shall prepare
                  proper export documentation as per Supplier's instructions,

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                  evidencing Nortel Networks' ownership of the Products and
                  shall comply with the requirements set forth in Exhibit L
                  (NAFTA).

14.3     Nortel Networks shall furnish the following information with Products
         returned to Supplier for Repair Services:

         i)       Nortel Networks' or the Nortel Networks Company's name and
                  complete address;
         ii)      quantities and model numbers of Products being delivered for
                  repair;
         iii)     the nature of the defect or failure, if known;
         iv)      Purchase Order number under which repairs are to be made, if
                  Product is no longer under warranty;
         v)       name(s) and telephone number(s) of Nortel Networks'
                  employee(s) or other designated persons to contact in case of
                  questions about the Products;
         vi)      ship-to address or Nortel Networks' location to which repaired
                  or replacement Products should be returned;
         vii)     whether or not returned Products are under warranty.

14.4     Supplier shall date stamp each repaired and returned Product with the
         Repair Date and type of repair "pre fix" as per Bellcore GR-209
         specifications and Specifications described in Exhibit B. Hardware
         repaired by Supplier shall be stamped in accordance with requirements
         outlined in Bellcore TR-NWT-000078. Without limiting the generality of
         the foregoing, the stamping shall include the Repair Date stenciled or
         otherwise identified in a permanent manner at a readily visible
         location on the Hardware, unless otherwise directed by Nortel Networks.

14.5     Supplier shall promptly provide a written notice to Nortel Networks
         with the name(s) and telephone number(s) of the individual(s) to be
         contacted concerning any questions that may arise with respect to the
         Repair Services, and if required, specify any special packing of
         Products which might be necessary to provide adequate in-transit
         protection from transportation damage.

14.6     Once Products have been repaired or replaced by Supplier, Supplier
         shall reissue to Nortel Networks an invoice for such repaired or
         replacement Products and the charges applicable to the providing of
         Repair Services, if any, as set forth in Exhibit D. Supplier's invoice
         shall contain the following:

         i)       Nortel Networks' Purchase Order number for these Repair
                  Services;
         ii)      a detailed description of the Repair Services provided by
                  Supplier and the need therefor;
         iii)     quantities and model numbers of Products repaired and
                  associated repair charges;
         iv)      applicable sales or excise taxes;
         v)       total amount payable;
         vi)      address to which payment should be made.

14.7     The repaired or replacement Products shall be delivered by Supplier to
         the destination specified by Nortel Networks, freight prepaid and
         properly insured. Supplier shall prepare proper export documentation as
         per Nortel Networks' instructions, evidencing Nortel Networks'
         ownership of the Products and shall comply with the requirements set
         forth in Exhibit L (NAFTA).

14.8     Supplier shall promptly notify Nortel Networks of returned Products
         which are found by Supplier to be beyond repair. Products shall only be
         considered beyond repair after agreement of the Parties to that effect.
         All Products which are found to be beyond repair shall be returned to
         Nortel Networks if Nortel Networks so requests.

14.9     Nothing in this Agreement shall be construed as giving Supplier an
         exclusive privilege to repair any Products covered under this
         Agreement, provided however, that during the Term, if Supplier is not
         in material breach of this Agreement, Nortel Networks shall afford
         Supplier the first opportunity to provide the technical support
         services to be provided by Supplier hereunder.

15.      REPAIR SERVICES

15.1     Repair Services shall be available to Nortel Networks in accordance
         with the provisions contained in this Section 15 and in Section 14
         (Repair Procedures).

15.2     This Section 15 shall be applicable to the providing of Repair Services
         by Supplier during and after the Product Warranty Period.

15.3     To order Repair Services after expiry of the applicable Product
         Warranty Period, Nortel Networks shall issue a Purchase Order and such
         Purchase Order shall contain the description of the requested Repair
         Services.

15.4     Repair Services shall be provided by Supplier at no charge to Nortel
         Networks during the Product Warranty Period. After expiry of the
         Product Warranty Period, Repair Services shall be at prices set forth
         in Exhibit D (Repair Services and Technical Assistance Rates) unless
         otherwise set forth in this Section 15 or unless covered by Section 5
         (Product and Process Changes).

15.5     LIKE-FOR-LIKE REPAIR SERVICES


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15.5.1   Supplier shall hold at its expense a quantity of spares at the module
         level ("SPARE BUFFER"), such quantity to be determined and agreed to by
         the Parties on the basis of the volume of Products delivered hereunder
         and the applicable Mean Time Between Failure ("MTBF") rates. In any
         event, the Spare Buffer to be held by Supplier shall be sufficient to
         enable immediate replacement of Products by Nortel Networks to its
         customers in all cases of failure which do not fall in the category of
         a retrofit. Supplier's obligations under this Section 15.5.1 do not
         cover spares which may be required by Nortel Networks for Product
         retrofits or upgrades.

15.5.2   Nortel Networks will at its option provide customers with one of the
         following replacement services:

         i)       replacement of Products from the Spare Buffer after the
                  receipt of defective Products; or
         ii)      in exceptional cases, replacement of the Products from the
                  Spare Buffer on a "Phone-in" advance replacement basis within
                  [*] ([*]) business [*]. The defective Products are generally
                  returned to Nortel Networks by end-user customers within sixty
                  (60) calendar days. Supplier may invoice Nortel Networks at
                  the Prices set forth in Exhibit A for Products not returned to
                  Supplier within such period

         Supplier will maintain sufficient Products in the Spare Buffer to
         accommodate both replacement services.

         Supplier will immediately replenish the Spare Buffer with Product
         replacements that are functionally equal or better than the vintage of
         the replaced Products, are backward compatible and meet the minimum
         field baseline, or with new Products, at Supplier's option.

         In cases of "catastrophic" failure, Supplier shall divert manufacturing
         output for replacement of faulty modules. Supplier must use its best
         efforts not to affect the delivery schedule of new Products but should
         delays in delivery occur, they shall not constitute a breach of this
         Agreement.

15.5.3   Products returned to Supplier for Repair Services shall be shipped by
         Nortel Networks freight and insurance prepaid

15.5.4   Supplier shall track any defective Product by its unique serial number
         throughout the repair process and provide a failure analysis report as
         set forth in Exhibit F.

15.6     SAME-FOR-SAME REPAIR SERVICES

         The following procedures will apply:

         a)       Products returned to Supplier for Repair Services shall be
                  shipped by Nortel Networks freight and insurance prepaid.
         b)       Supplier shall track any defective Product by its unique
                  serial number throughout the repair process.
         c)       Supplier shall return, after having repaired and updated the
                  Products to the minimum field baseline, the exact same
                  Products having the same serial number. If the serial number
                  has to change for any reason, Supplier shall, on the `repair
                  tag' originally provided by Nortel Networks, document the
                  following information: old serial number, new serial number
                  and reason(s) for change.
         d)       Supplier shall return any repaired Products with the `repair
                  tag' that was originally provided by Nortel Networks with the
                  defective Products. Supplier shall provide all post-repair
                  information as required on the `repair tag'.
         e)       Supplier shall complete the Same-for-Same process within [*]
                  ([*]) calendar days of having received the defective Product.

15.7     FAST CYCLE FAILURE ANALYSIS

15.7.1   Supplier shall perform a Fast Cycle Failure Analysis ("FCFA") at no
         cost to Nortel Networks on Products which have caused any service
         interruption in the field or as may otherwise be reasonably requested
         by Nortel Networks. Nortel Networks will request a separate RMA number
         for each Product returned for a FCFA. A FCFA shall be performed by
         Supplier in accordance with the following additional requirements:

         a)       FCFA shall include a detailed root cause analysis, using
                  engineering tools such as Environment Stress Screening ("ESS")
                  and any other tools which may be required to determine the
                  cause of the failure.
         b)       Supplier shall track any defective Product by its unique
                  serial number throughout the repair process.
         c)       Supplier shall return, after having repaired and updated the
                  Products to the minimum field baseline, the exact same
                  Products having the same serial number. If the serial number
                  has to change for any reason, Supplier shall, on the `repair
                  tag' originally provided by Nortel Networks, document the
                  following information: old serial number, new serial number
                  and reason(s) for change. This information will also be
                  documented in the FCFA report. The Products shall not be
                  "upgraded" to other than the actual unit release vintage until
                  root cause analysis is completed and the Products successfully
                  pass the complete test cycle. The Products shall not be
                  repaired without completion of the FCFA activity.

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         d)       Supplier shall return the repaired Products with a written
                  report documenting all findings as a result of the FCFA.
         e)       Supplier shall complete the FCFA process within [*] ([*])
                  calendar days of having received the defective Products.
                  Nortel Networks shall provide all available technical
                  information to allow Supplier to understand the circumstances
                  and environmental conditions that led to the failure of the
                  Products.
         f)       Supplier shall inform Nortel Networks of the return Product
                  shipping information as soon as it is available. The shipping
                  information will include, date shipped, carrier, waybill
                  number and any other information that will help Nortel
                  Networks expedite the return of the Products.
         g)       In the event that the results of the FCFA indicate
                  deficiencies with the Product Hardware or Software, then
                  Supplier will modify the Products to eliminate such
                  deficiencies. Such modifications will be implemented in
                  accordance with Section 5 (Product and Process Changes).

15.8     Products found defective within the first [*] ([*]) calendar days
         from their initial utilization at customer site, (referred to as `Dead
         On Arrival' ("DOA") or Early Life Failure ("ELF") shall be returned to
         Supplier along with the RMA documentation. Returned DOA/ELF Products
         shall, at no charge to Nortel Networks, be tested through full
         functional tests and ESS in order to provide a root cause analysis,
         then repaired, re-furbished, upgraded to the latest version or release,
         stamped with the Repair Date and returned to Nortel Networks as new
         Products. Should the DOA/ELF occurrence represent more than
         [*] ([*]) of the Products RR as defined in the Specifications, then
         Supplier shall, in addition to performing root cause analysis,
         implement a corrective plan of action within [*] ([*]) calendar days
         of this occurrence being reported. Supplier will update Nortel Networks
         in writing with the findings of the root cause analysis as well as with
         the corrective plan of action.

15.9     In case of a No Fault Found ("NFF") in respect of Products returned or
         if Nortel Networks requests re-testing of Products reasonably known to
         Nortel Networks as being in good condition, Supplier shall invoice
         Nortel Networks at the Prices specified in Exhibit D for their full
         functional tests and ESS and such Products shall be returned to Nortel
         Networks after the tests are completed, freight collect using Nortel
         Networks' designated carrier. Test turnaround time shall not exceed
         [*] ([*]) calendar days from the date the Product is received at
         Supplier facilities and a Purchase Order number has been received from
         Nortel Networks.

15.10    Should the Product failures classified by Supplier as NFF represent
         more than [*] percent ([*]%) of the Products RR as defined in the
         Specifications, then Supplier shall, in addition to performing a root
         cause analysis, implement a corrective plan of action within [*]
         ([*]) calendar days of this occurrence being reported. Supplier will
         update Nortel Networks in writing with the findings of the root cause
         analysis as well as with the corrective plan of action.

15.11    In the event the Product RRs are higher than the rates set forth in the
         Specifications, Supplier shall reimburse Nortel Networks for extra
         costs it has incurred.

15.12    EMERGENCY REPLACEMENT PRODUCTS

         In emergency situations threatening continuity of service or Nortel
         Networks end-user's in-service date, Supplier shall, at Nortel
         Networks' option, deliver to Nortel Networks or its end-users emergency
         replacement Products within [*] ([*]) hours of Nortel Networks'
         request, which may be conveyed to Supplier by telephone or facsimile.
         All Products supplied under this Section shall be functionally equal or
         better than the vintage of the replaced units and must be backward
         compatible and meet the minimum field baseline. Emergency replacement
         Products shall be delivered via next day service and, for Products not
         under warranty, invoiced at rates then current for Products. Nortel
         Networks agrees to pay such invoices within [*] ([*]) calendar
         days, with no penalty for delays in payment. In addition to above
         [*] ([*]) hour emergency replacement service, Supplier shall
         make available to Nortel Networks at a price premium specified in
         Exhibit D, a 24 hours a day /7 days a week emergency replacement
         service for cases where Nortel Networks cannot deliver from its
         emergency stock. Under this service, Supplier will ship new units to
         the destination designated by Nortel Networks, freight collect using
         Nortel Networks' designated carrier or alternate method agreed between
         the Parties, within the same day, for requests made by 1:00 p.m. PST
         and the next business day for requests made after 1:00 p.m. PST, of
         Nortel Networks' verbal request, such verbal request to be confirmed by
         Nortel Networks in writing and transmitted by facsimile or other means
         of communications, prior to shipment of the units by Supplier. In the
         case of shipment outside of the United States, Supplier shall prepare
         proper export documentation as per Nortel Networks' instructions,
         evidencing Nortel Networks' ownership of the Product; customs clearance
         and duty fees (as applicable) shall be the responsibility of Nortel
         Networks. This emergency service shall be available to Nortel Networks
         through the following Supplier's emergency telephone number:
         1-800-469-4701.

16.      CONTINUING AVAILABILITY OF TECHNICAL ASSISTANCE, REPAIR SERVICES,
         MAINTENANCE, REPLACEMENT AND REPAIR PARTS

16.1     Supplier shall not discontinue the production or sale of any Product
         without having first obtained Nortel Networks' consent in writing, such
         consent not to be unreasonably withheld. In no event shall the Products
         be discontinued until after the expiry of a period of [*] ([*])
         months, or such other period as may be agreed upon by the Parties, from
         Nortel Networks' written consent

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         and Supplier shall accept all Releases and Purchase Orders submitted
         by Nortel Networks within such period for any such affected Products,
         regardless of quantity.

16.2     During, and for a period of [*] ([*]) years after the expiry or
         termination of this Agreement, Supplier agrees to provide Repair
         Services on all Products ordered hereunder and to offer for sale to
         Nortel Networks, functionally equivalent maintenance, replacement and
         repair parts as may be necessary for the continued maintenance of the
         Products, including discontinued Products.

16.3     Supplier, upon supply discontinuance notices from its suppliers, of any
         sole source/critical components incorporated into the Products, shall
         notify Nortel Networks immediately upon receipt of such notice.
         Supplier shall endeavor to have its suppliers provide notices [*] ([*])
         [*] in advance of discontinuance. Supplier and Nortel Networks shall
         determine the quantity of such components to be ordered as last time
         buy to cover for Nortel Networks' spare parts requirements. Supplier
         and Nortel Networks will determine the quantity of such components to
         be ordered as last time buy to cover for spare maintenance, replacement
         and repair parts requirements as described in Section 15 (Repair
         Services). Furthermore, should the unavailability of a component
         require Supplier to develop a replacement product, Supplier will
         jointly decide with Nortel Networks on last time buys for such
         component to ensure continuity of supply until the replacement product
         is approved by Nortel Networks and ready to be manufactured. The
         provisions contained in this Section 16.3 shall be applicable for a
         period of [*] ([*]) years after the expiry or termination of this
         Agreement.

16.4     During, and for a period of [*] ([*]) years after the expiry or
         termination of this Agreement, Supplier agrees to provide technical
         assistance in accordance with Section 17 (Technical Assistance and
         Marketing Support) and Exhibit D hereof.

17.      TECHNICAL ASSISTANCE AND MARKETING SUPPORT

17.1     Technical assistance consists of those services described in this
         Section and in Exhibit H.

17.2     Product training shall be provided by Supplier to Nortel Networks as
         set forth in Exhibit H.

17.3     In addition, Supplier shall provide Nortel Networks with Product
         training documentation and related information material as set forth in
         Exhibit H, Part III.

17.4     All technical assistance rendered during the Product Warranty Period
         shall be provided to Nortel Networks at no charge or as specified in
         Exhibits D OR H. For technical service not specified as free of charge,
         Supplier's current rates applicable to technical assistance are those
         set forth in Exhibit D. Any technical assistance which Supplier shall
         provide to Nortel Networks or its customers shall be pursuant to a
         written request from Nortel Networks' designated personnel, or such
         other individual that Nortel Networks may from time to time designate.
         The availability or performance of technical assistance under this
         Section 17, shall not be construed as altering or affecting Supplier's
         other obligations under this Agreement, including under Sections 6
         (Quality Control and Reliability Requirements, Supply Management and
         Nortel Networks' Audit Rights), 13 (Warranty) and 5 (Product and
         Process Changes).

17.5     Supplier shall provide technical assistance as set forth in Exhibit H
         in order to facilitate the providing by Nortel Networks of technical
         assistance to its customers.

17.6     `First line' technical assistance shall be provided to Nortel Networks
         customers as described in Exhibit H.

17.7     Supplier's failure to provide technical assistance pursuant to good
         commercial practices as required under this Section 17 shall constitute
         a material breach of Supplier's obligations hereunder.

17.8     In order to assist Nortel Networks in its Product related marketing
         activities, Supplier shall provide Nortel Networks with marketing
         support in accordance with Exhibit K.

18.      DOCUMENTATION

18.1     The Product Documentation shall be developed by Supplier in accordance
         with the Specifications, and be made suitable for Nortel Networks'
         customers by including Nortel Networks -specific items such as
         warranty, logos, Product names and drawings. A hard copy and an
         electronic version of the documentation marked "Draft" shall be
         provided to Nortel Networks for review. After two (2) weeks, Nortel
         Networks shall return the draft documentation with comments. These
         comments shall be integrated by Supplier into the Documentation. An
         ordering section shall be provided by Nortel Networks to Supplier in
         both the hard and electronic form for inclusion by Supplier into the
         Documentation. The Documentation shall be ready for release to
         customers by the end of the corresponding Acceptance Program. Updated
         versions of the ordering section shall be provided by Nortel Networks
         as the product line(s) develop(s) and new configurations pass the
         Acceptance Program.

18.2     Supplier shall provide, at no charge to Nortel Networks, for each
         Product delivered one (1) set of the following Product Documentation in
         accordance with the Specifications: all Product descriptions, planning
         guides, operations manuals, installation

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         manuals, and maintenance manuals normally provided by Supplier to
         customers to facilitate their installation, use, and maintenance of
         the Products.

18.3     Supplier shall supply to Nortel Networks, at no additional charge, hard
         and electronic copies of Supplier's Product Documentation (i.e.,
         manuals, application notes and sales collateral) and any technical
         assistance reasonably required by Nortel Networks to adapt such
         Documentation to Nortel Networks' standard format. Supplier shall also
         continue to provide to Nortel Networks, at no additional charge, during
         the Term of this Agreement any updates to Supplier's Product
         Documentation, as soon as they are available.

18.4     Supplier hereby grants to Nortel Networks, at no cost, the right to
         use, copy, modify and translate promotional material, the Product
         Documentation furnished hereunder and other material made generally
         available by Supplier to its end-users and to use such material to
         further Nortel Networks' Product marketing efforts.

18.5     Any modifications to the Product Documentation shall be notified to
         Nortel Networks by Supplier as described in Section 5 (Product and
         Process Changes).

19.      CONFIDENTIAL INFORMATION

19.1     It is expected that the Parties will disclose to each other certain
         business, marketing, technical, scientific or other information of any
         Party, including, without limitation, Specifications and Software
         which, at the time of disclosure, is designated as confidential (or
         like designation), is disclosed in circumstances of confidence, or
         would be understood by the Parties, exercising reasonable business
         judgment, to be confidential information ("CONFIDENTIAL INFORMATION")
         and each Party recognizes the value and importance of the protection of
         the other's Confidential Information. All Confidential Information
         owned or controlled by one Party and disclosed to the other Party shall
         remain solely the property and a trade secret of the disclosing Party,
         and its confidentiality shall be maintained and protected by the other
         Party with the same degree of care used to protect its own proprietary
         and confidential information of a similar nature, but no less than
         reasonable care, to prevent the unauthorized use, dissemination or
         publication of the Confidential Information. Except to the extent
         required or expressly permitted by this Agreement, both Parties agree
         not to duplicate or use in any manner the other's Confidential
         Information or to disclose it to any of their employees not having a
         need to know for the purposes of this Agreement or to any third party.
         The receiving Party's employees having a need to know the Confidential
         Information for the purpose of this Agreement may receive disclosure of
         the Confidential Information provided such employees are bound by
         confidentiality obligations no less stringent than those set forth in
         this Section 19. The confidentiality provisions contained herein shall
         survive the expiration or termination of this Agreement for a period of
         ten (10) years. It is acknowledged by the Parties that a Party intended
         to be the recipient of the Confidential Information will, prior to the
         disclosure by the other Party, be afforded an opportunity to accept or
         to decline receiving such Confidential Information and the
         confidentiality undertakings set forth herein shall not apply in
         respect of information disclosed after a Party has elected not to
         receive such information.

19.2     Confidential Information shall not include information which:

         a)       now is, or hereafter becomes, available to the public through
                  no act or omission of the receiving Party; or
         b)       is documented as being known by the receiving Party prior to
                  its disclosure by the other Party; or
         c)       is independently developed by the receiving Party by persons
                  who have not had access to the Confidential Information and
                  without recourse to any Confidential Information received
                  under this Agreement and is so documented; or
         d)       is lawfully obtained by the receiving Party from a third party
                  or parties without breach of confidentiality obligations or is
                  disclosed hereafter to the receiving Party by a third party
                  who did not acquire the information directly or indirectly
                  from the disclosing Party; or
         e)       is disclosed in response to a valid order of a court or other
                  governmental body or any political subdivision thereof, but
                  only to the extent and for the purpose of such order and only
                  if the receiving Party, to the extent possible, first notifies
                  the disclosing Party, of such order and permits and reasonably
                  assists it in seeking an appropriate protective order.

19.3     Nothing in this Agreement shall be interpreted or construed to limit
         either Party's right to perform or to continue to perform its own
         independent research, development, manufacturing or marketing of any
         type of Products or systems even if such research, development,
         manufacturing or marketing pertains to technology or products similar
         to the Products.

19.4     Prior to the publication or use by a Party hereto of any advertising,
         sales promotions, press releases or other publicity matters relating to
         the Products or this Agreement in which the name or logo of the other
         Party is mentioned or language from which the connection of said name
         can be reasonably inferred or implied, each Party shall obtain, except
         as expressly provided below, the prior written consent of the other
         Party. Terms, conditions and general information of this Agreement
         shall be held in confidence by both Parties and only disclosed as may
         be agreed to by both Parties or as may be required to meet securities
         disclosure or export permit requirements. Neither Party shall make
         public statements or issue publicity or media releases with regard to
         this Agreement or the relationship between the Parties without the
         prior written approval of the other Party, except that, upon prior
         written notice to the other, and otherwise in accordance with this
         Agreement, either Party may disclose only such information about this


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         Agreement as is necessary for public securities disclosure or export
         permit requirements without the prior written consent of the other.
         Prior to filing this Agreement, or any portion thereof, with any state
         or federal governmental entity or any political subdivision thereof,
         the filing Party shall (i) notify the other Party and (ii) with the
         reasonable cooperation of the other Party, seek the maximum extent of
         confidential treatment allowable by applicable law with respect to this
         Agreement.

19.5     Notwithstanding any provision contained herein, Nortel Networks shall
         retain all right, title and interest in and to that part of the
         Specifications and Documentation (including Nortel Networks'
         Confidential Information) solely created by Nortel Networks, if any,
         the Nortel Networks' corporate name, trademarks, logos, color and part
         number (as referred to or described in the Specifications) and all
         trademarks, copyrights, trade secrets and other proprietary rights
         related thereto.

19.6     The Parties acknowledge and agree that a breach of this Agreement may
         result in irreparable and continuing harm to the disclosing Party for
         which there may be no adequate remedy at law. In the event of a breach
         or a threatened or intended breach of this Agreement by the receiving
         Party, the receiving Party hereby consents to the granting of, and the
         disclosing Party shall be entitled to seek, preliminary injunctions
         unilaterally without notice, and final injunctions with notice,
         enjoining and restraining such breach, or threatened or intended
         breach, and to such other rights and remedies as are available at law
         or in equity to the disclosing Party except as expressly set forth
         herein.

20.      INTELLECTUAL PROPERTY RIGHT INFRINGEMENT

20.1     Supplier shall defend and indemnify Nortel Networks and Nortel Networks
         Companies (including their directors, officers, employees and agents)
         against any and all claims brought against Nortel Networks (including,
         without limitation, claims by third parties, distributors, Nortel
         Networks Companies, end users and contractors against Nortel Networks),
         and shall hold Nortel Networks and Nortel Networks Companies harmless
         from all corresponding damages, liabilities, settlements, costs and
         expenses (including attorney's fees) arising out of any claim that the
         use, copying, licensing, sublicensing, sale and/or distribution of any
         Product delivered hereunder or the exercise of any of the rights
         granted in this Agreement infringes any third-party patent, copyright,
         trademark, trade secret or other intellectual property right ("herein
         "INFRINGEMENT CLAIM"). Nortel Networks shall give Supplier prompt
         notice of, and authority to defend or settle, any such Infringement
         Claim and shall give, at Supplier's expense, reasonable information and
         assistance. Supplier will notify Nortel Networks if Supplier is subject
         to any enquiry, allegation, claim or lawsuit in respect of patent,
         copyright, trade secret or other intellectual property right
         infringement regarding any Product delivered hereunder or any part
         thereof.

20.2     When notified of an action or motion that seeks to restrict the use,
         copying, licensing, sublicensing, sale and/or distribution of any
         Product delivered hereunder or the exercise of any of the rights
         granted hereunder, Supplier may, (and in the case of a judgment, order
         or injunction that restricts the use, copying, licensing, sublicensing,
         sale and/or distribution of any Product delivered hereunder or the
         exercise of any of the rights granted hereunder, shall), at its option
         and expense, (a) obtain the right for Nortel Networks , Nortel Networks
         Companies, distributors, end users and contractors to use, copy,
         license, sublicense sell and/or distribute any Product delivered
         hereunder or exercise any of the rights granted hereunder, (b)
         substitute other functionally equivalent product that does not
         infringe, or (c) modify such Product so that it no longer infringes.

20.3     The indemnity obligations under the foregoing provisions shall survive
         the termination or expiration of this Agreement.

20.4     The foregoing indemnification obligations shall not be applicable in
         the event the Infringement Claim arises solely from:

         (a)      compliance of the Product with Nortel Networks' designs; or
         (b)      modification by Nortel Networks of the Product; or
         (c)      use of the Product by Nortel Networks in combination with
                  other products not provided by Supplier provided the
                  infringement arises from such combination and such combination
                  was not authorized by or known to Supplier.

         In the cases specified above in this Section 20.4, Nortel Networks
         shall defend and indemnify Supplier (including their directors,
         officers, employees and agents) against any and all claims brought
         against Supplier and shall hold Supplier harmless from all
         corresponding damages, liabilities, settlements, costs and expenses
         (including attorney's fees) arising out of any such claim. Supplier
         shall give Nortel Networks prompt notice of, and authority to defend or
         settle, any such claim and shall give, at Nortel Networks expense,
         reasonable information and assistance.

20.5     Nothing contained in this Agreement shall be deemed to grant, either
         directly or indirectly or by implication, any license under any patents
         or patent applications of Supplier, except that Nortel Networks shall
         have the normal non-exclusive, royalty-free license to use that which
         is implied, or otherwise arises by operation of law, in the use,
         copying, licensing, sublicensing, sale and/or distribution of the
         Products.

                                    Page 18
<PAGE>

                                      CONFIDENTIAL

21.      HAZARDOUS MATERIALS

21.1     Supplier shall identify and list in a notice forwarded to Nortel
         Networks all of the hazardous or toxic materials which may be contained
         in the Products prior to shipping the Products. For the purposes of
         this Section 21.1, the hazardous and/or toxic materials shall be those
         identified or described by characteristics in the regulations
         promulgated under all applicable laws, rules and regulations of any
         applicable governmental entity including, without limitation, the
         following: the Toxic Substances Control Act, Resource Conservation and
         Recovery Act of 1976, Hazardous Materials Transportation Act,
         Occupational Safety and Health Act of 1970, Comprehensive Environmental
         Response, Compensation and Liability Act of 1980, Consumer Product
         Safety Act, Radiation Control for Health and Safety Act of 1968, Clean
         Air Act, and Clean Water Act.

21.2     Supplier shall periodically, but no less than annually, review the
         pertinent regulations and the materials contained in the Products and
         update the lists of hazardous and/or toxic materials accordingly. Upon
         request by Nortel Networks, Supplier shall also identify such other
         hazardous and/or toxic substances as Nortel Networks may specify.

21.3     Supplier hereby warrants to Nortel Networks that, with the exception of
         the notice referred to above, the Products furnished by Supplier, as
         described in this Agreement, are safe for normal use, are non-toxic,
         present no abnormal hazards to persons or their environment, and may be
         disposed of as normal refuse without special precautions.

21.4     Supplier shall indemnify Nortel Networks for any expenses (including
         the cost of substitute materials, less accumulated depreciation) that
         Nortel Networks may incur by reason of the recall or prohibition
         against continued use or disposal of the Products furnished by
         Supplier, whether such recall or prohibition is directed by Supplier,
         or occurs under compulsion of law. Nortel Networks shall cooperate with
         Supplier to facilitate and minimize the expense of any recall or
         prohibition against use of the Products directed by Supplier or under
         compulsion of law.

21.5     Supplier shall indemnify, defend and hold harmless Nortel Networks from
         any claims, demands, suits, judgments, liabilities, costs and expenses
         (including, without limitation, reasonable attorneys' fees) which
         Nortel Networks may incur under any of the laws, rules and regulations
         referred to in Section 21.1 or any amendment to said statutes by reason
         of Nortel Networks' acquisition, use, sale or disposal of the Products
         furnished by Supplier.

22.      INDEMNITY

22.1     GENERAL

22.1.1   Notwithstanding Section 24.1 of this Agreement, each Party shall
         indemnify and save harmless as "INDEMNITEES" the other and its
         employees, officers and directors from and against any and all fines,
         penalties, losses, costs, damages, injuries, claims, expenses or
         liabilities as a result of injury to, or death of, any person, or
         damage to, or loss or destruction of, any property, arising out of, or
         resulting from, or in connection with, this Agreement or the
         performance of this Agreement and caused by the negligence or willful
         misconduct of the indemnifying Party or a contractor or an agent of the
         indemnifying Party or an employee of any one of them (hereinafter
         individually and collectively "LIABILITIES").

22.1.2   Upon request of an Indemnitee, the other Party shall, at no cost or
         expense to such Indemnitee, defend or settle any suit or other legal
         proceeding asserting a claim for Liabilities, and the other Party shall
         pay any reasonable costs and attorneys' fees that may be incurred by
         such Indemnitee in connection with any such claim, proceeding or suit.

22.1.3   The Indemnitee shall as soon as practicable notify the other Party of
         the assertion of any such claim of which the Indemnitee is aware and
         the other Party shall (a) keep the Indemnitee subject to any such claim
         fully informed as to the progress of such defense, and (b) afford such
         Indemnitee, each at its own expense, an opportunity to participate
         fully with the other Party in the defense or settlement of any such
         claim, but the other Party shall have sole control of any such
         settlement or defense.

22.2     PRODUCT LIABILITY

22.2.1   In addition to, and without limiting the generality of, the provisions
         contained in Section 22.1, Supplier shall indemnify and save harmless,
         except in the excepted cases set forth in Section 20.4 above, Nortel
         Networks and its customers from and against any and all losses, costs,
         damages and liabilities (including, without limitation, reasonable
         attorneys' fees) and amounts agreed upon in settlement or awarded in
         connection with any claim, suit or proceeding which arises from any
         injury or death to persons or loss of or damage to property and which
         is caused by a Product.

22.2.2   Upon request of Nortel Networks, Supplier shall, at no cost or expense
         to Nortel Networks, defend or settle any suit or other legal proceeding
         asserting a claim, suit or proceeding described in Section 22.2.1, and
         Supplier shall pay any reasonable costs and attorneys' fees that may be
         incurred by Nortel Networks and its customers in connection with any
         such claim, proceeding or suit.

                                    Page 19
<PAGE>

                                  CONFIDENTIAL

22.2.3   Nortel Networks shall as soon as practicable notify Supplier of the
         assertion of any such claim, proceeding or suit of which Nortel
         Networks is aware and Supplier shall (a) keep Nortel Networks fully
         informed as to the progress of such defense, and (b) afford Nortel
         Networks, each at its own expense, an opportunity to participate fully
         with Supplier in the defense or settlement of any such claim,
         proceeding or suit, but Supplier shall have sole control of any such
         settlement or defense.

23.      COMPLIANCE WITH LAWS

23.1     At no additional charge to Nortel Networks, Supplier represents and
         warrants that it complies with and shall continue to comply with and
         has obtained and will continue to maintain in effect all licenses and
         permits required by, and Products shall be in conformance with, all
         applicable laws and governmental orders and regulations in effect in
         Canada and the United States at the time of the Delivery Date
         applicable thereto.

24.      CONSEQUENTIAL DAMAGES

24.1     Except in the event of a breach of Section 19 hereof, neither Party
         shall be liable pursuant to this Agreement for any incidental
         consequential, multiple or other indirect damages or for any damages
         for loss of profits or revenues even if such Party has been advised of
         the possibility of such damages, except that (a) Supplier shall pay,
         without limitation, all litigation costs, reasonable attorneys' fees,
         settlement payments and any damages awarded resulting from any suit,
         claim or proceeding as set forth in Section 20 (Intellectual Property
         Right Infringement) and (b) Supplier shall hold Nortel Networks and
         Nortel Networks Companies harmless from any damages Nortel Networks and
         the Nortel Networks Companies have incurred as a result of Supplier's
         breach of the warranty set forth in Section 13.1 i).

25.      INSURANCE

25.1     Supplier shall procure and maintain in full force and effect during the
         period that this Agreement is in effect and for a period of [*] ([*])
         years thereafter, with an insurance company a Comprehensive General
         Liability insurance policy with third party liability coverage
         protecting Nortel Networks and Nortel Networks Companies against any
         loss, liability or expense due to bodily injury, death or property
         damage arising out of this Agreement or Products delivered hereunder,
         to the extent such loss, liability or expense is not due to the
         negligence of Nortel Networks and any Nortel Networks Company. Such
         policy shall have a combined single limit of a minimum of [*]
         Dollars ($[*]), shall provide coverage worldwide and shall not
         be restricted to occurrences in the country of insurer of Supplier.
         Nortel Networks and Nortel Networks Companies shall be additional
         insureds under such insurance policy.

25.2     Nortel Networks may upon sixty (60) calendar days written notice
         increase the foregoing minimum amount in order to comply with Nortel
         Networks' obligations to any customer of any Products provided any such
         increase shall not exceed an amount equal to one hundred percent (100%)
         of the applicable minimum amounts and shall be subject to the
         availability of such insurance.

25.3     Such policy shall be endorsed to be primary insurance and shall provide
         that it will not be cancelled or altered without at least thirty (30)
         calendar days prior written notice to Nortel Networks. Not later than
         ten (10) calendar days following the execution of this Agreement,
         Supplier shall furnish Nortel Networks with a certificate of such
         insurance and evidence that the premiums therefor have been paid.
         Maintenance of such insurance and the performance by Supplier of its
         obligations under this Section 25 shall not relieve Supplier of
         liability under the indemnity provisions set forth in this Agreement.

26.      FORCE MAJEURE

26.1     If the performance of any obligation under this Agreement or a Release
         or Purchase Order is interfered with by reason of any circumstances
         beyond the reasonable control of the Party affected, including, without
         limitation, fire, explosion, power failure, acts of God, war,
         revolution, civil commotion, delays of the other Party in the
         performance of any of its obligations hereunder, acts of the public
         enemy, or any law, order, regulation, ordinance or requirement of any
         government or legal body, and labor difficulties, including without
         limitation, strikes, slowdowns, picketing or boycotts; then the Party
         affected shall be excused from such performance for a period equal to
         the delay resulting from any such causes and such additional period as
         may be reasonably necessary to allow the Party to resume its
         obligations, (and the other Party shall likewise be excused from
         performance of its obligations to the extent such Party's obligations
         relate to the performance which was interfered with). The Party so
         affected shall make reasonable efforts to remove such causes of
         nonperformance; provided, however, in the event any such cause of
         nonperformance extends for more than [*] ([*]) calendar days, Nortel
         Networks shall have the right, without obligation or liability, to
         cancel any Release or Purchase Order affected by such cause.

26.2     Either Party shall notify the other Party in writing within ten (10)
         calendar days after becoming aware of the occurrence of any force
         majeure event which may cause any delay or failure on the part of such
         Party to perform its obligations hereunder.

27.      TERM

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                    Page 20
<PAGE>

                                   CONFIDENTIAL

27.1     This Agreement shall become effective on the Effective Date and shall
         remain in effect for a period of thirty six (36) months and will be
         automatically renewed for successive twelve (12) month period(s) unless
         one Party gives to the other Party a ninety (90) calendar day notice to
         the effect that this Agreement will not be renewed, all such period(s)
         being referred to herein as "TERM", unless and until terminated in
         accordance with this Agreement.

28.      TERMINATION AND CONTINUING RIGHTS

28.1     The Agreement may be terminated upon notice by one Party, at its sole
         discretion, in the event the other Party is affected by any one of the
         following events:

         a)       the institution by one Party of insolvency, receivership or
                  bankruptcy proceedings or any other material proceedings for
                  the settlement of its debts, including, without limitation, a
                  reorganization, a compromise, an arrangement or assignment for
                  the benefit of its creditors; the institution of such
                  proceedings against a Party which such Party has failed to
                  resolve in its favor within twenty (20) calendar days after
                  appropriate services of process; a Party making a general
                  assignment for the benefit of creditors; or a Party's
                  dissolution or ceasing to do business in the normal course; or

         b)       has a substantial part of its assets seized; or

         c)       assigns the Agreement or any part thereof in violation of
                  Section 32.4 (Assignment);

         the affected Party is obliged to immediately give notice to the other
         of the occurrence of any such event.

28.2     The Agreement and/or any Purchase Order or Release may be terminated,
         in whole or in part, by Nortel Networks, upon written notice to
         Supplier, in the event another party acquires a controlling interest in
         Supplier (controlling not necessarily requiring greater than 50%) or a
         majority equity participation in Supplier, without a prior written
         guarantee from such party to Nortel Networks that such party will
         continue to abide by the terms of this Agreement.

28.3     The Agreement and/or any Purchase Order or Release may be terminated,
         in whole or in part by either Party, upon a [*] ([*]) calendar day
         written notice, in the event the other Party fails to execute any one
         of its material obligations hereunder and fails to remedy the default
         within said period of [*] ([*]) calendar days.

28.4     Above termination rights shall be in addition to other termination
         rights contained herein, including under Section 9 (Delivery), and
         shall be without prejudice to the rights or claims one Party may have
         against the other with respect to the performance, nonperformance, or
         breach of such Party's obligations hereunder, and shall not operate so
         as to extinguish any rights or obligations which arose prior to the
         date of termination, and each Party shall have the right to pursue each
         and every available remedy at law and in equity, including, without
         limitation, withholding payments of any amount owed by Nortel Networks
         to Supplier pending resolution of any claims made by Nortel Networks in
         good faith against Supplier.

28.5     In the event this Agreement is terminated by Supplier for default by
         Nortel Networks or for any other reason hereunder, Nortel Networks and
         its customers shall thereafter retain such rights, as may be necessary
         in order to allow Nortel Networks and its customers to provide Product
         support and maintenance to their end-user customers, provided however
         the Products, in respect of which support and maintenance services will
         be provided, have been paid for by Nortel Networks.

28.6     This Agreement may be terminated upon agreement of the Parties to that
         effect.

28.7     Notwithstanding any termination or expiry of this Agreement, any
         provisions of this Agreement which by their nature are intended to
         survive, including but not limited to the provisions of Sections 1
         (Definitions), 5 (Product and Process Changes), 7 (Proprietary
         Components), 10 (Prices and Payments), 13 (Warranty), 16 (Continuing
         Availability of Technical Assistance, Repair Services, Maintenance,
         Replacement and Repair Parts), 19 (Confidential Information), 20
         (Intellectual Property Right Infringement), 22 (Indemnity), 24
         (Consequential Damages), 25 (Insurance) 28 (Termination and Continuing
         Rights), 30 (Manufacturing Escrow and Contingent License) and all
         consequent rights, obligations and liabilities, shall survive the
         termination or expiry of this Agreement.

29.      NOTICES

29.1     Any and all notices or other information to be given by one of the
         Parties to the other hereunder shall be sent by registered or certified
         mail, postage prepaid, return receipt requested or by confirmed fax or
         hand delivery to the other Party at the addresses set forth in Exhibit
         M.

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                    Page 21
<PAGE>

                                   CONFIDENTIAL

29.2     Notices given pursuant to Section 29.1 shall be deemed to have been
         received five (5) Business Days after mailing if given by mail, and one
         business day after sending if given by telecopy and upon delivery if
         given by hand.

29.3     Either Party may change its address at any time by giving fifteen (15)
         Business Days prior written notice to the other Party as provided
         above.

30.      MANUFACTURING ESCROW AND CONTINGENT LICENSE

30.1     To ensure uninterrupted availability of the Product Hardware and
         Product Software and their ongoing maintenance and support, including
         Repair Services, by March 15, 2000, Nortel Networks and Supplier shall
         enter into an escrow agreement ("ESCROW AGREEMENT") with a mutually
         agreeable escrow agent ("ESCROW AGENT").

30.2     The Escrow Agreement shall be in a form and content reasonably
         acceptable to the Parties hereto and shall contain, as a minimum and
         without limitation, the terms and conditions set forth in Exhibit N and
         shall, when executed by all the Parties, be annexed hereto as part of
         Exhibit N.

31.      GOVERNING LAW

31.1     The validity, construction, interpretation and performance of this
         Agreement and the rights and obligations of the Parties and any
         purchase made hereunder shall be governed by the courts and laws of
         Texas except for its rules with respect to the conflict of laws. The
         application of the U.N. Convention on Contracts for the International
         Sale of Goods is specifically excluded from this Agreement.

32.      GENERAL

32.1     SEVERABILITY

         If any of the provisions of this Agreement shall be adjudged invalid or
         unenforceable, such invalidity or unenforceability shall not invalidate
         or render this Agreement unenforceable, but rather this Agreement shall
         be construed as if not containing the particular invalid or
         unenforceable provision or provisions, and the rights and obligations
         of the Parties shall be construed and enforced accordingly, provided
         that, in the event either Nortel Networks or Supplier would not have
         entered into this Agreement without such provision, that Party shall
         have the right to terminate this Agreement upon written notice to the
         other Party.

32.2     TRADE AGREEMENT - PROCEDURES

         Supplier shall assist Nortel Networks in performing all administrative
         actions required to qualify Products for preferential treatment under
         the rules of any applicable trade pursuant to the procedures set out in
         Exhibit L.

32.3     DEBARMENT CERTIFICATE

         At no additional charge to Nortel Networks, Supplier shall comply with
         any applicable import requirements and with any third party
         requirements specifically set forth herein or any document referenced
         herein. In addition, Supplier shall promptly, upon written request of
         Nortel Networks, provide a properly executed certificate in the form
         attached as Exhibit I (as such form may be modified from time to time
         by the United States Rural Utilities Service) and in accordance with
         the requirements specified therein with respect to any Products
         furnished by Supplier and which Nortel Networks provides to a customer
         which requires Nortel Networks to provide a similar certificate.
         Products and services furnished by Supplier shall be in conformance
         with all applicable laws and governmental orders and regulations in
         effect at the time of shipment thereof or the performance of such
         services, including, without limitation, the following United States
         laws and regulations: Veterans Readjustment Assistance Act of 1972,
         Rehabilitation Act of 1973, and the clauses set forth in Federal
         Acquisition Regulation (subject to "Supplier," "Subcontractor" and
         "Contract" used in such clauses meaning Nortel Networks , Supplier and
         Agreement, respectively) 52.219-8, 52.219-9, 52.219-13, 52.220-4,
         52.2221, 52.222-4, 52.222-20, 52.222-26, [subparagraphs b(l)-b(ll)],
         52.222-35 and 52.222-36.

32.4     ASSIGNMENT

         Neither Party shall assign or otherwise transfer all or any part of
         this Agreement or any rights or payments to be made hereunder, or any
         interest herein, without the prior written consent of the other Party,
         not to be unreasonably withheld, except that Nortel Networks may assign
         or subcontract any of its rights or obligations hereunder to any Nortel
         Networks Subsidiary with the reasonable commercial capacity to fulfill
         the terms of this Agreement. Any assignee of this Agreement shall be
         bound to all of the terms and conditions hereof.

                                    Page 22
<PAGE>

                                   CONFIDENTIAL

32.5     WAIVER

         Except as specifically provided for in a waiver signed by duly
         authorized representatives of Nortel Networks and Supplier, failure by
         either Party at any time to require performance by the other Party or
         to claim a breach of or to enforce any provision of this Agreement
         shall not be construed as affecting any subsequent breach or the right
         to require performance with respect thereto or to claim a breach with
         respect thereto and shall not constitute a waiver of such provisions or
         the right of such Party to enforce each and every provision.

32.6     INDEPENDENT CONTRACTORS

         Nortel Networks and Supplier are independent contractors in all
         relationships and actions under and contemplated by this Agreement.
         This Agreement shall not be construed to create or to authorize the
         creation of any employment, partnership or agency relation, or to
         authorize Nortel Networks or Supplier to enter into or make any
         commitment, agreement, representation or warranty binding on the other,
         or to allow one Party to accept service of any legal process addressed
         to, or intended for, the other Party. Nothing contained in this
         Agreement shall limit, in any manner, Nortel Networks' right to enter
         into other agreements with other parties.

32.7     SECTION HEADINGS

         Section headings are inserted herein for convenience only and shall not
         affect the meaning or interpretation of this Agreement or any provision
         hereof.

32.8     ENTIRE AGREEMENT

         This Agreement, including Exhibits A through N attached hereto,
         comprises all the terms, conditions and agreements of the Parties
         hereto with respect to the subject matter herein, and save as expressly
         provided herein, may not be altered or amended except in writing signed
         by authorized representatives of each Party hereto. This Agreement
         cancels and supersedes all prior agreements and communications on the
         said subject matter. This Agreement may not be varied except through a
         document agreed to and signed by both Parties.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day
and year last written below.

SONOMA SYSTEMS                             NORTEL NETWORKS, INC.

By: /s/ Daniel E. Gottleib           By: /s/ Drew O. Goodwin
   ----------------------------         ---------------------------------
            (Signature)                    (Signature)

Name: Daniel E. Gottleib             Name: Drew O. Goodwin
      -------------------------            ------------------------------
            (Print)                        (Print)

Title: Vice President                Title: Vice President, [ILLEGIBLE] Networks
       ------------------------             -----------------------------

Date: Feb 10, 2000                   Date: February 10, 2000
      -------------------------            ------------------------------


                                    Page 23

<PAGE>

                                  CONFIDENTIAL

                                    EXHIBIT A

              PRODUCT LISTS, PART I AND PART II, PRICES, DISCOUNTS,
                  AVAILABILITY DATES AND FCA DELIVERY LOCATIONS

PART I:  PRODUCT LIST:     ACCEPTED PRODUCTS, PRICES AND DISCOUNTS

PART II: PRODUCT LIST:     NON-ACCEPTED PRODUCTS, PRICES, DISCOUNTS AND
                           AVAILABILITY DATES

       The prices set forth herein shall apply to all Purchase Orders or
       Releases and are effective as of February 4, 2000, and shall apply
       regardless of whether or not the product is accepted pursuant to Section
       4 of the Agreement. Prices are based upon aggregate shipments of products
       to Nortel Networks Companies per calendar year. Purchase Orders and
       Releases shall be priced at the designated Nortel price, which represents
       [*] percent ([*]%) off the given List Price. Volume discounts shall
       apply in accordance with the table below. If shipments of products exceed
       [*] ([*]) units in any calendar year, Supplier shall issue
       Nortel Networks a credit equal to the incremental discount from list
       price multiplied by the incremental number of shipped products qualifying
       for such additional discount. Subject to verification by Nortel Networks,
       Supplier shall indicate the product credit to Nortel Networks, if any,
       within thirty (30) days after the end of the calendar year. Nortel
       Networks may utilize the product credit by indicating the amount of such
       credit to be used on a Purchase Order or Release. Any product credits
       remaining at the end of the Term shall be refunded in US dollars in the
       form of a wire transfer within ninety (90) days after the expiration of
       the Term.

<TABLE>
<CAPTION>

                      ----------------------------- --------------------------
                      Quantity                       Discount from List (%)
                      ----------------------------- --------------------------
                      <S>                           <C>
                      0 - [*] units                         [*]%
                      ----------------------------- --------------------------
                      [*] - [*] units                       [*]%
                      ----------------------------- --------------------------
                      Greater than [*] units                [*]%
                      ----------------------------- --------------------------

</TABLE>


PRODUCT CODES, PRICING AND AVAILABILITY:

<TABLE>
<CAPTION>
PRODUCT ID                   DESCRIPTION                                                               LIST        NORTEL
                                                                                                       PRICE       PRICE    AVAIL.
-----------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                                                       <C>         <C>       <C>
                             SONOMA ACCESS  BASE UNITS

8000 SA PII                  SONOMA ACCESS Pentium II Base Unit, with switchable 110/240 VAC power      $4695     $[*]      2/4/00
                             supply for Multi-media applications
8000 DA PII                  SONOMA ACCESS Pentium II Base Unit, with dual switchable 110/240 VAC       $5645     $[*]      2/4/00
                             power supply for Multi-media applications
8000 DD PII                  SONOMA ACCESS Pentium II Base Unit, with dual -48VDC power supplies        $5995     $[*]      2/4/00
                             for Multi-media applications
-----------------------------------------------------------------------------------------------------------------------------------
                             SONOMA ACCESS  SOFTWARE

8000 SW-TLX-4                SONOMA ACCESS TLX-TM- software, V4, high-performance real-time operating   $2000     $[*]      2/4/00
                             system, SNMP agent, Web DCS, and SLIP management software.  V4
                             supports IMA, IP forwarding, CES, FR (Serial Card) and 8000 TRN 2.
-----------------------------------------------------------------------------------------------------------------------------------
                             SONOMA SYSTEMS  NETWORK MANAGEMENT SOFTWARE

HP Openview Basic Package    Free utility that can be downloaded from the Sonoma Systems extranet        Free      N/A        N/A
                             site from Support/All Files/MIBs.  Filename:  OVBASIC.TAR.Z
SONOMAVIEW                   SonomaVIEW Element Management Package                                      $1995     $[*]      2/4/00
Sonoma VIEW Demo             The SonomaVIEW Demo application is available from Sonoma extranet website.  Free      N/A      2/4/00
Application                  This is a full feature application which expires after
                             thirty (30) days of
</TABLE>

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>

                                   CONFIDENTIAL

<TABLE>

<S>                           <C>                                                                       <C>       <C>      <C>
                              installation.
SV UG                         SV User Guide includes both SA/SI navigation/configuration-HARDCOPY        $100      $[*]     2/4/00
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA ACCESS WAN CARDS
                              (INCLUDES DRIVER SOFTWARE LICENSE AND CERTIFICATION)

ATM DS1-4                     4 port T1 ATM UNI card (RJ-45) (1 slot)                                   $4000      $[*]     2/4/00
                              ****REQUIRES V4  SOFTWARE*****
ATM E1-4                      4 port E1 ATM UNI card (RJ-45) (1 slot)                                   $4000      $[*]     2/4/00
                              ****REQUIRES V4  SOFTWARE*****
ATM IMA DS1                   4 port T1 ATM Inverse Multiplexing card (RJ-45) (2 slots)                 $6500      $[*]     2/4/00
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
                              ****T1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
ATM IMA E1                    4 port E1 ATM Inverse Multiplexing card (RJ-45) (2 slots)                 $6500      $[*]     2/4/00
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
                              ****E1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
ATM IMA DS1-8                 8 port T1 ATM Inverse Multiplexing card (RJ-45) (2 slots)                 $9500      $[*]     2/4/00
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
                              ****T1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
ATM IMA E1-8                  8 port E1 ATM Inverse Multiplexing card (RJ-45) (2 slots)                 $9500      $[*]     2/4/00
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
                              ****E1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                         LIST    NORTEL
PRODUCT ID                    DESCRIPTION                                                               PRICE    PRICE      AVAIL.
ENH DS3 ATM                   DS3 GCRA compliant ATM Card, with two BNC connectors, compliant with      $3000      $[*]     2/4/00
                              DSX-3 specifications.
                              *****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH E3 ATM                    E3 GCRA compliant ATM Card, with two BNC connectors                       $3000      $[*]     2/4/00
                              *****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH OC3 ATM MM                OC-3c/STM-1 GCRA compliant ATM Multimode Card, with fiber optic SC        $4000      $[*]     2/4/00
                              connector (0-2Km)
                              *****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH OC3 ATM SM-IR             OC-3c/STM-1 GCRA compliant ATM Single Mode Card, with fiber optic ST      $6000      $[*]     2/4/00
                              connector (0-19Km)
                              *****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH OC3 ATM SM-LR             OC-3c/STM-1 GCRA ATM Long-Reach Single Mode Card, with fiber optic ST     $8000      $[*]     2/4/00
                              connector (12-30Km)
                              *****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA ACCESS LAN CARDS
                              (INCLUDES DRIVER SOFTWARE LICENSE AND CERTIFICATION)

8000 FAST ENET-1              Fast Ethernet Card (10/100Mbps autosensing) with RJ-45 connector (UTP).    $750       $[*]    2/4/00
8000 FAST ENET-4              Four-Port Fast Ethernet Card (10/100Mbps autosensing), with RJ-45         $3000       $[*]    2/4/00
                              connectors
8000 TRN-2                    High Performance Token Ring Card (4/16Mbps autosensing), with DB-9 and    $1200       $[*]    2/4/00
                              RJ-45 connectors.
8000 FDDI-SAS                 FDDI Single-Attach (SAS) Interface Card, with multimode fiber optic SC    $5000       $[*]    2/4/00
                              connector
8000 FDDI-DAS                 FDDI Dual-Attach (DAS) Interface Card, with two multimode fiber optic     $8000       $[*]    2/4/00
                              SC connectors
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA ACCESS MULTISERVICE CARDS
                              (INCLUDES ATM UPLINK, DRIVER SOFTWARE LICENSE AND CERTIFICATION)

CES T1 IMA                    Card set with four T1/E1 Circuit Emulation ports (RJ-45) and four T1      $11000      $[*]    2/4/00
                              ATM IMA uplink ports (RJ45). REQUIRES 3 SLOTS.
                              REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
                              SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
                              FOR EITHER IMA OR UNI
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
</TABLE>

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                    Page 2

<PAGE>

                                  CONFIDENTIAL

<TABLE>

<S>                           <C>                                                                       <C>       <C>      <C>
CES E1 IMA                    Card set with four T1/E1 Circuit Emulation ports (RJ-45) and four E1      $11000    $[*]     2/4/00
                              ATM IMA uplink ports (RJ-45). Requires 3 slots.
                              REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
                              SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
                              FOR EITHER IMA OR UNI
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES T1 IMA-8                  Card set with four T1/E1 Circuit Emulation ports (RJ-45) and eight T1     $14500    $[*]     2/4/00
                              ATM IMA uplink ports (RJ45). REQUIRES 3 SLOTS.
                              REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
                              SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
                              FOR EITHER IMA OR UNI
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES E1 IMA-8                  Card set with four T1/E1 Circuit Emulation ports (RJ-45) and eight E1     $14500    $[*]     2/4/00
                              ATM IMA uplink ports (RJ-45). Requires 3 slots.
                              REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
                              SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
                              FOR EITHER IMA OR UNI
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
-----------------------------------------------------------------------------------------------------------------------------------
PRODUCT ID                    DESCRIPTION                                                               PRICE      CAT      AVAIL.
CES DS3                       Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one DS3      $7500     $[*]     2/4/00
                              ATM uplink with BNC connectors.  REQUIRES 2 SLOTS. REQUIRES V4.X OR
                              GREATER.
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES E3                        Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one E3       $7500     $[*]     2/4/00
                              ATM uplink with two BNC connectors.  REQUIRES 2 SLOTS. REQUIRES V4.X
                              OR GREATER.
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES MM OC3                    Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one          $8500     $[*]     2/4/00
                              OC-3c/STM-1 ATM uplink with fiber optic SC connector (0-2Km).
                              REQUIRES 2 SLOTS. REQUIRES V4.X OR GREATER.
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES SM IR OC3                 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one         $10500     $[*]     2/4/00
                              OC-3c/STM-1 ATM uplink with fiber optic ST connector (0-19Km).
                              REQUIRES 2 SLOTS. REQUIRES V4.X OR GREATER.
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES SM LR OC3                 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one         $12500     $[*]     2/4/00
                              OC-3c/STM-1 ATM uplink with fiber optic ST connector (12-30Km).
                              REQUIRES 2 SLOTS. REQUIRES V4.X OR GREATER.
                              **** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA ACCESS FRAME RELAY CARDS
                              (INCLUDES DRIVER SOFTWARE LICENSE AND CERTIFICATION)

FR UIO                        2 port Universal Serial (RS232, V.35, X.21, RS442/449) for Frame Relay  $4500       $[*]     2/4/00
-----------------------------------------------------------------------------------------------------------------------------------
                               FRAME RELAY CABLES
                               (ALSO USED ON SONOMA INTEGRATOR MODELS THAT INCLUDE FRAME RELAY)
RS-232-DCE                     RS232/EIA530, DCE CBL, 6 FT, DB-25  FEMALE-Provides a DCE interface      $225      $[*]     2/4/00
                               which provides both TXC/RXC to the connecting DTE device.
RS-232-DTE                     RS232/EIA530, DTE CBL, 6 FT, DB-25 MALE-Provides a DTE interface         $225      $[*]     2/4/00
                               which accepts both TXC/RXC from the connecting DCE device.
V.35-DCE                       FRAME RELAY V.35, DCE CBL, 6 FT,  34 PIN FEMALE-Provides a DCE           $250      $[*]     2/4/00
                               interface which provides both TXC/RXC to the connecting DTE device.
V.35-DTE                       FRAME RELAY V.35, DTE CBL, 6 FT, 34 PIN MALE-Provides a DTE interface    $250      $[*]     2/4/00
                               which accepts both TXC/RXC from the connecting DCE device.
X.21-DCE                       FRAME RELAY X.21 DCE CBL, 6 FT, DB-15 FEMALE-Provides a DCE interface    $150      $[*]     2/4/00
                               which provides both TXC/RXC to the connecting DTE device.
X.21-DTE                       FRAME RELAY  X.21 DTE CBL, 6 FT, DB-15 MALE-Provides a DTE interface     $150      $[*]     2/4/00
                               which accepts both TXC/RXC from the connecting DCE device.

RS442/449-DCE                  FRAME RELAY RS442/449 DCE CBL, 6 FT, DB-37 FEMALE-Provides a DCE        $225       $[*]     2/4/00
                               interface which provides both TXC/RXC to the connecting DTE device.
RS442/449-DTE                  FRAME RELAY DTE CBL, RS442/449, 6 FT, DB-37 MALE-Provides a DTE         $225       $[*]     2/4/00
                               interface which accepts both TXC/RXC from the connecting DCE device.
</TABLE>

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                    Page 3
<PAGE>

                                      CONFIDENTIAL

<TABLE>
<CAPTION>
                                                                                                        LIST    NORTEL
PRODUCT ID                    DESCRIPTION                                                              PRICE     PRICE     AVAIL.
-----------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                                                                      <C>      <C>        <C>
                              SONOMA ACCESS SYSTEM OPTIONS:
CABLE MGMT                    Cable Management option for PII Chassis.  Consists of front bezel           $200    $[*]      2/4/00
                              attachment with cable clamps
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA ACCESS  USER DOCUMENTATION:


8000 SUG V4                   Sonoma Access V4 User Guide                                                 $100    $[*]       2/4/00

QS-WEBDCS V3                  Sonoma ACCESS V3 / V4 Quick Start Guide for WebDCS Users                     $15    $[*]       2/4/00

QS-CRAFT V3                   Sonoma ACCESS V3/V4 Quick Start Guide for Craft Interface Users              $15    $[*]       2/4/00

8000 SUG-DISK V4              Sonoma ACCESS V4 User Guide and HTML Help Files on 3.5-inch diskettes        $50    $[*]       2/4/00
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA ACCESS  ACCESSORIES:

PII RM-19                     19" Rackmount kit for Phase II chassis                                      $250    $[*]       2/4/00
PII RM-23                     23" Rackmount kit for Phase II chassis                                      $250    $[*]       2/4/00
PII SAC TRAY                  PII Single A/C power supply and fan tray assembly (switch selectable        $795    $[*]       2/4/00
                              for 110 or 240 VAC)
PII DAC TRAY                  PII Dual A/C power supply and fan tray assembly (switch selectable for     $1595    $[*]       2/4/00
                              110 or 240 VAC)
PII DDC TRAY                  PII Dual D/C power supply and fan tray assembly (-48 VDC)                  $2495    $[*]       2/4/00

</TABLE>


PRODUCT CODES, PRICING AND AVAILABILITY:

<TABLE>
<CAPTION>

PRODUCT ID                    DESCRIPTION                                                           LIST PRICE   NORTEL
                                                                                                                 PRICE       AVAIL.
-----------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                                                                   <C>           <C>        <C>
                              SONOMA INTEGRATOR  BASE UNITS

SI 1110                       SONOMA INTEGRATOR Multiservice Branch Access Device, with               $9000        $[*]      2/4/00
                              autosensing 110/240 VAC power supply.  Includes (4) T1/E1 ports
                              and (1) 10/100 M Ethernet port
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1120                       SONOMA INTEGRATOR Multiservice Branch Access Device, with               $9500        $[*]      2/4/00
                              auto-sensing 110/240 VAC power supply.  Includes (4) T1/E1 ports
                              and (2) 10/100 M Ethernet port
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****

SI 1121                       Sonoma INTEGRATOR Multiservice Branch Access Device, with               $8500        $[*]      3/31/00
                              autosensing 110/240 VAC power supply.  Includes (2) T1/E1 ports
                              and (2) 10/100 M Ethernet ports.
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1119                       Sonoma INTEGRATOR Multiservice Branch Access Device, with               $9500        $[*]      3/31/00
                              autosensing 110/240 VAC power supply. Includes (4)
                              T1/E1 ports, (1) 10/100 M Ethernet port, and 2
                              Frame Relay Universal Serial ports. (Frame Relay
</TABLE>

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                   Page 4
<PAGE>


                                         CONFIDENTIAL

<TABLE>

<S>                           <C>                                                                    <C>          <C>       <C>
                              cable purchased separately.)
                              **FRAME RELAY CABLE PURCHASED SEPARATELY, SEE SONOMA ACCESS FRAME
                                           RELAY CABLES FOR SELECTION**
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1312                       Sonoma INTEGRATOR Multiservice Branch Access Device, with               $9250        $[*]    3/31/00
                              autosensing 110/240/VAC power supply.  Includes (1) DS3 ATM uplink
                              port and (1) 10/100 M Ethernet port
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1313                       Sonoma INTEGRATOR Multiservice Branch Access Device, with               $9250        $[*]    3/31/00
                              autosensing 110/240 VAC power supply.  Includes (1) E3 ATM uplink
                              port and (1) 10/100 M Ethernet port
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1320                       Sonoma INTEGRATOR Multiservice Branch Access Device, with              $10,000       $[*]    3/31/00
                              autosensing 110/240 VAC power supply.  Includes (2) T1/E1 ports,
                              (2) 10/100 M Ethernet ports and (1) DS3 ATM uplink
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1321                       Sonoma INTEGRATOR Multiservice Branch Access Device, with              $10,000       $[*]    3/31/00
                              autosensing 110/240 VAC power supply.  Includes (2) T1/E1 ports,
                              (2) 10/100 M Ethernet ports and (1) E3 ATM uplink
                              *****PRICE INCLUDES SOFTWARE PACKAGE*****
-----------------------------------------------------------------------------------------------------------------------------------
                              SONOMA INTEGRATOR  SOFTWARE

SI SW  V1                     SONOMA INTEGRATOR software, V1.0.  Supports Features & Functions            $1500     $[*]    2/4/00
                              of models SI 1110 and SI 1120. Support for T1/E1
                              UNI or IMA, CES, SNMP agent, Installation Wizard,
                              and SLIP management software, diskettes with user
                              documentation
                              ****INCLUDED AT NO CHARGE WITH PURCHASE OF ANY INTEGRATOR MODEL.
                              USE THIS PRODUCT ID IF ORDERING SOFTWARE SEPARATELY FOR FIELD
                              UPGRADES*****
SI SW V2                      Sonoma INTEGRATOR software V2.0.  Supports all features and                 $1500     $[*]     2/4/00
                              functions included in INTEGRATOR V1.0 (SI SW V1) and supports all
                              Sonoma INTEGRATOR models.
                              ****INCLUDED AT NO CHARGE WITH PURCHASE OF ANY INTEGRATOR MODEL.
                              USE THIS PRODUCT ID IF ORDERING SOFTWARE SEPARATELY FOR FIELD
                              UPGRADES*****

-----------------------------------------------------------------------------------------------------------------------------------

                              SONOMA INTEGRATOR USER DOCUMENTATION

SI QS CRAFT                   SI Quick Start Guide for Craft Interface-HARDCOPY                             $15      $[*]     2/4/00
SI QS                         SI Install Wizard Quick Start Guide-HARDCOPY                                  $15      $[*]     2/4/00
SUG CRAFT                     Includes both SA/SI Craft UI for SI/V1.0 and SA/V4 -HARDCOPY                 $100      $[*]     2/4/00
HW IG-2                       H/W Install guide for SI 1120-HARDCOPY                                        $50      $[*]     2/4/00
HW IG-1                       H/W Install guide for SI 1110-HARDCOPY                                        $50      $[*]     2/4/00

</TABLE>

PART III:     FCA DELIVERY LOCATIONS
NASHVILLE, TN

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                    Page 5

<PAGE>


                                  CONFIDENTIAL


                                    EXHIBIT B

                      SPECIFICATIONS AND ACCEPTANCE PROGRAM

PART I:       SPECIFICATIONS


1.       Document Identification:

<TABLE>
       =================================================== ================================================
<CAPTION>
       Document identification                              Description and specific provisions
       =================================================== ================================================
      <S>                                                  <C>
       Requirement Specifications                           Document Code: NT______ [to be inserted upon
       (RS), in effect from time to time.                   completion of NT document]

       FUNCTIONAL:                                          Date:  Latest version signed and dated by
       -Release Functional Specification for Sonoma         the Parties.
       Access Version 4.
       -Release Functional Specification for Sonoma
       Integrator Version 1.
       -Functional Specification Sonoma View - HP
       OpenView - Advanced Package.

       USER GUIDES:
       -        Sonoma Access & Sonoma Integrator Craft
                User Interface.
       -        Sonoma Access Hardware Installation Guide.
       -        Sonoma Integrator Hardware Installation
                Guide
       -        SonomaView User Guide

       RELEASE NOTES:
       -Product Release Notes Sonoma Access Version 4.1.
       -Product Release Notes Sonoma Integrator Version
       1.0.
       Product Release Notes SonomaView Version 1.0.
       --------------------------------------------------- ------------------------------------------------
</TABLE>

2.     Certification

       Supplier shall use due diligence to pursue the certifications for all
       countries as listed below, and as may be requested by Nortel pending
       future business as soon as new or modified designs have passed Supplier's
       production release milestone, and this without prejudice to Nortel
       Networks' Acceptance Program outlined in Exhibit B, Part II. Supplier and
       Nortel Networks shall arrange for joint submission to the regulatory
       bodies and Nortel Networks shall repay to Supplier the additional costs
       incurred through the joint submissions. All Changes to existing designs
       that could invalidate any one of the certifications shall be discussed
       between Supplier and Nortel Networks as part of the Change Notification
       procedure even if they do not require a production release.

       The list of required certifications is as follows:

       CEMark
       ETSI
       UK Type Approval
       UL / CSA / EN safety
       FCC parts 15 and 101


<PAGE>

                                       CONFIDENTIAL

       Should other certifications be required, they shall be discussed between
       Supplier and Nortel Networks. Supplier shall use its best efforts in
       supporting Nortel Networks' regulatory activities.

       SUPPORT GROUPS:  Supplier's ________ group
                        Nortel Networks OEM Integrity group in _____________
                        Nortel Networks Product Integrity group in __________

PART II:      PRODUCT ACCEPTANCE PROGRAM

1.       In order to verify that the products or modified Products meet the
         applicable Specifications as referenced in Part I above and any other
         reasonable criteria as determined by Nortel Networks, Nortel Networks
         will undertake an Acceptance Program covering verification and product
         integrity testing. Nortel Networks may, at it's option, perform one or
         more of the following for acceptance:
                        i) review Supplier's test reports;
                                   ii) access 3rd party test data from Supplier;
                                   iii) obtain products for testing at Nortel's
                                        facility;
                                   iv) obtain products for testing at Supplier's
                                       facility.

2.     Supplier shall loan to Nortel Networks, at no charge to Nortel Networks,
       the products necessary to perform the Acceptance Program and shall
       provide support to the Nortel Networks group during the testing. Such
       support includes diligence in replacing failed products, availability of
       technically knowledgeable individuals to discuss testing results and
       teaming of at least one Supplier individual with the Nortel Networks
       testing group for all tests to occur on Supplier's premises. Nortel
       Networks shall endeavor to limit as much as possible the products needed
       for the acceptance in terms of number of product(s) and duration of the
       loan by taking into consideration design commonalties with already
       accepted Products.

3.     As a minimum, each new design shall be tested by Nortel Networks at its'
       discretion.

4.     Primeships:

       Nortel Networks ________ group in __________________ is prime for the
       verification testing; Supplier's Engineering department in Marlborough,
       MA is prime for supporting Nortel Networks' Acceptance Program.

PART III:     PRODUCT MARKING

1.     Serial number: bar-coded serial number on rear of unit.

2.     Manufacturing date stamp: Supplier stamps date on rear of unit.

3.     Supplier's model number rear or bottom of unit on ejector tab/latch of
       faceplate.

4.     Bellcore CLEI code, bar-coded (Code 128) and alpha numeric
       (TR-STS-000383) to be placed on the ________ of the Products.

5.     Supplier's PEC code will also be placed on _________.

6.     Repair Date stamp: Bellcore TR-NWT-000078 (issue 3, December 1991),
       section 12.2. The location code for Supplier ("LL") is ___. This will be
       rubber stamped by Supplier ______ in ______ ink.

7.     Product marking and packaging requirements pursuant to this Agreement:

       a)     Nortel Networks Corporate Standard CS152.50 on product integrity;
       b)     Bellcore GR-CORE-1421 and TR-NWT-000063;
       c)     Nortel Networks Corporate Standard 157.0 and Bellcore TR-NWT-870
              on ESD protection;
       d)     Nortel Networks Quality System Procedure EXCESDO1.STL.

       Supplier shall package the Products for shipment in accordance with
       Bellcore's GR-CORE-1421, TR-NWT-000063 and TR-NWT-870 standard packing
       practices, with any modifications specified by Nortel Networks and agreed
       to by Supplier, related to the size and external markings (including
       branding) of the boxes. Supplier shall be responsible for any damage to
       Products including damage caused by packing noncompliant with Bellcore
       requirements.

                                    Page 2
<PAGE>

                                 CONFIDENTIAL

8.     Cables:   [ENTER WHAT WILL BE MARKED ON CABLES, IF APPLICABLE.]

9.     [ENTER ANY OTHER REQUIRED MARKING.]

                                    Page 3
<PAGE>

                                 CONFIDENTIAL


                                    EXHIBIT C

                               DEMAND-PULL PROGRAM

1.       SCOPE

1.1      This Exhibit C sets forth the terms and conditions applicable to the
         ordering of Products pursuant to the Demand-Pull Program.

2.       NORTEL NETWORKS' RESPONSIBILITIES

2.1      Nortel Networks shall, on the first business day of each month (and as
         may be updated from time to time by Nortel Networks) during the Term,
         provide Supplier with a twelve (12) month rolling forecast ("Forecast")
         of its Product requirements, if any. Concurrently with its presentation
         of the first Forecast to Supplier, Nortel Networks shall issue a
         Blanket Purchase Order for the quantity of Products shown for six
         months of such Forecast which Blanket Purchase Order shall be updated
         as required. Releases for Products covered by a Blanket Purchase Order
         issued under this Section will be issued in accordance with Nortel
         Networks' designated purchasing department representative's weekly
         demands.

2.2      Attachment A sets forth the applicable Product stocking requirements
         stated on a Target Finished Goods ("TARGET FG") and Target Work-In
         Process (modules, dies components and parts) ("TARGET WIP") basis,
         (collectively referred to as "TARGET PRODUCTS TOTAL STOCK"). The Target
         Products Total Stock will be jointly established by the Parties in
         writing based on the run rate and agreed upon number of weeks, as
         referred to in Section 3.2 hereof, taking into consideration the
         Supplier's Products manufacturing lead time as well as the unique
         component purchasing lead time, all as stated in Attachments A and B
         hereof. The Target Products Total Stock shall be jointly monitored and
         may be revised by agreement of the Parties in writing as fluctuations
         in the run rate so require and Attachment A updated accordingly. The
         Forecasts shall be used by the Supplier for planning purposes only, and
         Nortel Networks shall not be obligated to purchase any Products covered
         by Forecasts and Blanket Purchase Orders issued by Nortel Networks
         except as expressly set forth in the immediately following paragraph.

2.3      Nortel Networks' obligation to purchase Products under this Agreement
         or otherwise shall be limited to the purchase of the Target Products
         Total Stock as shown in Attachment A as revised from time to time in
         accordance with Section 2.2 hereof as well as for associated quantities
         of unique components inside of the lead times specified in Attachment
         B.

2.4      If the Target Finished Goods is inactive for more than ninety (90)
         days, the Parties shall negotiate towards reaching a mutually
         acceptable agreement in respect of the disposition of the Target
         Products Total Stock or portion thereof.

2.5      It is acknowledged by the Parties that although Products have been
         included in Attachment A, any such Products may, from time to time at
         Nortel Networks' option, be purchased by Nortel Networks otherwise than
         pursuant to the Demand-Pull Program and in such event, Nortel Networks
         will issue Purchase Orders for its requirements for such Products.

3.       THE SUPPLIER'S RESPONSIBILITIES

3.1      Supplier shall manufacture the Target Products Total Stock in
         accordance with the run rate as set forth in Attachment A which may be
         revised as provided hereunder but shall only deliver Products per
         latest written instruction from Nortel Networks.

3.2      Supplier shall maintain Target FG and Target WIP quantities
         representing a maximum of four (4) and eight (8) weeks, respectively,
         of the run rate set forth in Attachment A which may be revised as
         provided hereunder.

3.3      Supplier's manufacturing operations and processes shall be established
         and maintained throughout the Term so as to ensure that Supplier's
         manufacturing capacity may be increased from the then applicable Target
         Product Total Stock, by [*] percent ([*]%) within one (1) month, and
         by [*] percent ([*]%) within two (2) months from Nortel Networks'
         written notice to Supplier that the applicable Target Product Total
         Stock is increased.

3.4      Products ordered pursuant to the Demand-Pull Program shall be delivered
         FCA Delivery Location, within twenty-four (24) hours from Nortel
         Networks' Release(s) communicated to Supplier via facsimile.

3.5      Supplier shall provide to Nortel Networks' designated Purchasing
         Department representative a weekly report of Supplier's Actual Products
         Total Stock status.


<PAGE>

                                     CONFIDENTIAL

4.       CANCELLATION OF THE DEMAND-PULL PROGRAM

4.1      Nortel Networks may terminate the Demand-Pull Program in whole or in
         part by means of a written notice to that effect, forwarded to Supplier
         at least thirty (30) days in advance. Should the Demand-Pull Program be
         terminated, the applicable Blanket Purchase Order will be closed after
         disposition of the Target Product Total Stock in accordance with this
         Section 4. Should the Demand-Pull Program be terminated the applicable
         delivery lead time to the Product affected by the termination will be
         agreed upon by the Parties but shall in no event exceed two (2) weeks
         ARO.

4.2      Nortel Networks' obligation to purchase under this Agreement shall be
         that stated in Section 2.3 hereof.

4.3      Nortel Networks' obligation to purchase under this Agreement shall be
         reduced by the amount of Products that can be purchased by Purchase
         Orders or that may be purchased by other customers of Supplier. In
         addition, Supplier shall use all reasonable endeavors to minimize any
         such costs by, inter alia, returning components to suppliers or
         reducing cancellation costs to suppliers, and such savings will be
         passed on to Nortel Networks.

                                     Page 2
<PAGE>

                                   CONFIDENTIAL


                                   ATTACHMENT A

                                                            WEEK:       ________
<TABLE>
--------------------------------------------------------------------------------------------------------
<CAPTION>
                                    RUN        TARGET       TARGET      ACTUAL    ACTUAL       LEAD
   CPC NO.        DESCRIPTION       RATE       FG STK        WIP        FG STK      WIP        TIME
<S>              <C>               <C>        <C>          <C>         <C>       <C>          <C>
--------------------------------------------------------------------------------------------------------

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</TABLE>

         NORTEL NETWORKS               ______________________________
         APPROVAL:
         DATE:_____________

         ADTRON APPROVAL:              ______________________________
         DATE:___________________

                                                                         Page 3

<PAGE>

                                  CONFIDENTIAL

                                  ATTACHMENT B

                                                                         Page 4

<PAGE>

                                  CONFIDENTIAL


                                    EXHIBIT D

   REPAIR SERVICES RATES, FCA REPAIR LOCATIONS AND TECHNICAL ASSISTANCE RATES

I.     TECHNICAL ASSISTANCE RATES

       1.     TRAINING

              a)     SEE BELOW.

       2.     TECHNICAL ASSISTANCE RATES FOR LEVEL 1 AND LEVEL 2 SUPPORT AS SET
              FORTH IN EXHIBIT H WHEN PURCHASED TOGETHER:

              a)     [*] Dollars ($[*]) per quarter, paid quarterly in advance
                     plus:
              b)     For aggregate unit shipments greater than [*] units, [*]%
                     of Price; or
              c)     For aggregate unit shipments greater than [*] units, [*]%
                     of Price; or
              d)     For aggregate unit shipments greater than [*] units,
                     [*]% of Price.

       3.     TECHNICAL ASSISTANCE RATES FOR LEVEL 1 SUPPORT WHEN ONLY LEVEL 1
              IS PURCHASED:

              a)     [*] Dollars ($[*]) per quarter, paid quarterly in advance
                     plus:
              b)     For aggregate unit shipments greater than [*] units, [*]%
                     of Price.

       4.     TECHNICAL ASSISTANCE RATES FOR LEVEL 2 SUPPORT WHEN ONLY LEVEL 2
              IS PURCHASED:

              a)     [*] Dollars ($[*]) per quarter, paid quarterly in advance
                     plus:
              b)     For aggregate unit shipments greater than [*] units,
                     [*]% of Price; or
              c)     For aggregate unit shipments greater than [*] units, [*]%
                     of Price; or
              d)     For aggregate unit shipments greater than [*] units,
                     [*]% of Price.

       5.     POST TERM TECHNICAL ASSISTANCE (COMPRISED OF LEVEL 2 AND LEVEL 3
              SUPPORT) RATE:

              a)     [*] PERCENT OF PRICE OF INSTALLED BASE.

II.    FCA REPAIR LOCATIONS

       a)     Marina del Rey, CA 90292

III.   REPAIR SERVICES RATES

       1.     EMERGENCY REPLACEMENT SERVICE:  IN ACCORDANCE WITH SECTION 15.12.


       2.     VERIFICATION OR CERTIFICATION TEST

              Nortel Networks may return a Product for operational verification
              tests for a charge to be mutually agreed between the parties.

       3.     OUT OF WARRANTY REPAIRS

              [*] percent ([*]%) of list price; repaired units to be returned
              within ten (10) calendar days of receipt.

       4.     OTHER SERVICES

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                                                         Page 5

<PAGE>

                                    CONFIDENTIAL

<TABLE>
<CAPTION>

Product Code                                   Description

                                                                                                     PRICES
<S>            <C>                                                                                  <C>

TRAIN-6         Training for up to 6 students.  Consists of a three-day session, which takes place   $[*] per day, plus
                at a location agreed to by Sonoma Systems and the Customer. All equipment            travel and out-of-pocket
                and space to be provided by the Customer.                                            expenses
TRAIN-12        Training for 7-12 students. Consists of a three-day session, which takes place at    $[*] per day, plus
                a location agreed to by Sonoma Systems and the Customer. All equipment and           travel and out-of-pocket
                space to be provided by the Customer. ( Requires Two Instructors).                   expenses
INSTALL         Installation provided by Sonoma Systems.  The minimum rate is one day, billed        $[*] per day, plus travel
                in 1/4 day increments.  There is an additional travel time fee of $[*] per hour.     and out-of-pocket
                                                                                                     expenses
CONSULT         Sonoma Systems technical consulting service. The hourly support price for            $[*] per hour; Variable
                consulting is  $[*]/hr. For onsite services, Travel & Expense charges may apply.     travel & expenses may
                Customer P.O. should include a "not to exceed" value.                                apply
</TABLE>

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                                                         Page 6

<PAGE>


                                   CONFIDENTIAL


                                    EXHIBIT E

                   PROCEDURES FOR ORDERS UTILIZING EDI AND TDI
                               (Rev NAESGA_970321)

                                     PART I
                ELECTRONIC DATA INTERCHANGE ("EDI") TRANSMISSION

This Part I of Exhibit E contemplates EDI transmissions of information and
Purchase Orders, Blanket Purchase Orders, Transaction Set 850 Releases or
EDIFACT 2.0 P.O. Releases (collectively, in this Exhibit E, "Orders"),
acknowledgments and invoices. The EDI transactions shall be governed by the
Agreement, as modified by this Part I of Exhibit E. This Part I of Exhibit E
shall not apply to Orders delivered solely in hard copy document form.

EDI transactions shall be made through a third-party computer network with
which the Nortel Networks Companies and Supplier have a services agreement
("Network"). EDI transactions shall be made in accordance with the version of
either 1) the American National Standards Institute ("ANSI") Business Data
Interchange Standards ANSI X12, or 2) Electronic Data Interchange for
Administration, Commerce and Transportation Issue No. 2.0 ("EDIFACT"), which
each Nortel Networks Company then utilizes, inclusive of transaction sets or
comparable EDIFACT electronic messages, data dictionary, data elements and
transmission control. Each party shall be responsible for its respective costs
incurred in sending and receiving EDI transmissions.

Supplier shall access at least once on each business day the Network to
determine whether it has received any Orders (ANSI X12, Transaction Set 850 or
EDIFACT 2.0 ORDERS). A functional Acknowledgment of Receipt of Transmission
(ANSI X12, Transaction Set 997) or an EDIFACT functional Acknowledgment Receipt
of P.O. Message shall be transmitted immediately upon receipt of an EDI Order.
A full Transaction Acknowledgment (ANSI X12, Transaction Set 855 or EDIFACT 2.0
ORDSP) shall be transmitted by Supplier within two (2) Business Days after
transmittal of the functional Acknowledgment of Receipt of Transmission. Each
Order shall contain and each full Transaction Acknowledgment shall confirm the
price, quantity, Product description by part number, FCA Delivery Location,
location to which the invoice shall be rendered for payment, method of
shipment, Delivery Date.

To reschedule, cancel or otherwise change an Order, a Nortel Networks Company
shall transmit a Purchase Order Change (ANSI X12, Transaction Set 860 or
EDIFACT 2.0 ORDCHG) and Supplier shall transmit a Purchase Order Change
Acknowledgment (ANSI X12, Transaction Set 865 or EDIFACT 2.0 ORDSP) to the
appropriate Nortel Networks Company within two (2) Business Days after receipt
by Supplier of the Purchase Order Change.

Any forecast information shall be sent using ANSI X12, Transaction Set 830 with
a quantity status code of "D" shown in the applicable time period field or
EDIFACT 2.0 DELFOR with a delivery plan status indicator of 4. A Transaction
Set 830 Release (ANSI X12, Transaction Set 830 with a quantity status code of
"C" shown in the applicable time period field on such Transaction Set) or
EDIFACT 2.0 DELFOR with a delivery plan status indicator of 1 shall be
transmitted by a Nortel Networks Company to confirm a Delivery Date for
specific quantities of Products covered by a Blanket Purchase Order, where that
Nortel Networks Company requires Supplier to send an Advanced Shipment Notice
(ANSI X12, Transaction Set 856 or EDIFACT 2.0 DESADV) prior to shipment. Upon
receipt of such Transaction Set 830 Release or EDIFACT 2.0 DELFOR, Supplier
shall transmit to the Nortel Networks Company such Advanced Shipment Notice not
less than the number of days agreed upon between the FCA Delivery Location and
Supplier prior to shipment of the quantity of Products covered by such
Transaction Set 830 Release or EDIFACT 2.0 DELFOR.

Each Nortel Networks Company ordering under this Agreement shall access the
Network at least once on each Business Day to determine whether it has received
any "Invoices" (ANSI X12, Transaction Set 810 or EDIFACT 2.0 INVOIC). A
functional Acknowledgment of Receipt of Transmission (ANSI X12, Transaction Set
997 or comparable EDIFACT 2.0 electronic message) shall be transmitted
immediately upon receipt of an Invoice.

A Nortel Networks Company shall not have any liability to Supplier for Orders
or Invoices erroneously transmitted to or received by Supplier due to the
malfunction of or a defect in the Network or other causes beyond a Nortel
Networks Company's reasonable control. If Supplier receives a distorted EDI
transmission, Supplier shall immediately contact the Network to reject the
distorted transmission and request that such transmission be resent. If
Supplier receives an Order by EDI transmission stating a quantity and/or price
significantly higher or lower than the typical quantity and/or Price shown on
Orders issued by that Nortel Networks Company ordering location, Supplier shall
immediately contact such ordering location to confirm the accuracy of the
electronically transmitted Order.


<PAGE>

                                 CONFIDENTIAL

Each Party shall adopt as its signature an electronic identification consisting
of symbol(s) or code(s) which shall be affixed to or contained in each document
transmitted by such Party ("Signatures"). Each Party agrees that its Signature
shall be sufficient to verify that such Party originated and authorized such
document. Each Party shall use reasonable efforts to not disclose the Signature
of the other Party to any unauthorized third party.

Any document properly transmitted pursuant to this Part I of Exhibit E shall be
deemed to be a "writing" or "in writing", and any such document when
containing, or to which there is affixed, a Signature ("Signed Documents")
shall be deemed for all purposes (a) to have been duly authorized and executed
and (b) to constitute an "original" when printed from electronic files or
records established and maintained in the normal course of business. The
Parties agree not to contest the validity or enforceability of Signed Documents
under the provisions of any applicable law relating to whether certain
agreements are to be in writing or signed by the Party to be bound thereby.
Signed Documents, if introduced as evidence on paper in any judicial,
arbitration, mediation or administrative proceedings, shall be admissible as
between the Parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form.




                                     PART II
                 TECHNICAL DATA INTERCHANGE ("TDI") TRANSMISSION

This Part II of Exhibit E contemplates the electronic transmission of various
types of data files, including but not limited to engineering and material
specifications, drawings, computer-aided designs ("CADs"), models, plot and
flat files ("Technical Data Interchange" or "TDI"). The TDI transmissions
between each Nortel Networks Company and Supplier shall be governed by the
Agreement and this Part II of Exhibit E.

TDI transmissions shall be made through a third-party computer network with
which each of the Nortel Networks Companies and Supplier have a services
agreement ("Network"). Each Party shall be responsible for its respective costs
incurred in sending and receiving TDI transmissions.

Supplier shall access the Network at least once on each Business Day to
determine whether it has received any TDI transmissions.

Supplier acknowledges and agrees that a Nortel Networks Company shall not have
any liability for TDI transmissions erroneously transmitted to or received by
Supplier due to a malfunction of or a defect in the Network or other causes
beyond a Nortel Networks Company's reasonable control. If Supplier receives a
distorted TDI transmission, Supplier shall immediately contact the Network to
reject the distorted transmission and request that such transmission be resent.

Supplier shall comply with such security precautions and rules as may be
initiated by the Network to protect TDI transmissions from unauthorized access.
Supplier shall treat each TDI transmission as confidential information under
the applicable provisions of the Agreement.

Each Party shall adopt as its signature an electronic identification consisting
of symbol(s) or code(s) which shall be affixed to or contained in each document
transmitted by such Party ("Signature"). Each Party agrees that its Signature
shall be sufficient to verify that such Party originated such document. Each
Party shall use reasonable efforts to not disclose the Signature of the other
Party to any unauthorized third party.

                                                                        Page 2

<PAGE>

                                  CONFIDENTIAL


                                    EXHIBIT F

                                 MONTHLY REPORTS

1.     Supplier will, upon Nortel's request, provide monthly reports in the
       following areas:
       a)     Repair and Return;
       b)     Baseline Report;
       c)     General Business.

2.     Supplier shall provide a Unit Failure Analysis report on all field
       returned Products and a Component Failure Analysis report on a monthly
       basis to Nortel Networks' Repair Manager, to Nortel Networks' Quality
       Manager and to Nortel Networks' Product Brand Manager. This report which
       will be issued no later than three (3) Business Days after the start of
       every month shall contain the following information:
       a)     The number of Products delivered to Nortel Networks (on a per PEC
              level) in previous month.
       b)     The number of Products returned to Supplier (on a per PEC level)
              in previous month.
       c)     The number of Products delivered to Nortel Networks (on a per PEC
              level) year to date.
       d)     The number of Products returned to Supplier (on a per PEC level)
              year to date.
       e)     The number of Products delivered to Nortel Networks (on a per PEC
              level) to date.
       f)     The number of Products returned to Supplier (on a per PEC level)
              to date.
       g)     Number of replacement devices of current month per PEC code.
       h)     Number of replacement devices cumulative per PEC code.
       i)     Post Repair Information on a per unit basis returned to Supplier
              for repair under the "like-for-like" program for the previous
              month to include the following information:
              - Symptoms of replacement devices per unit;
              - Cumulative In-service time (in months) per PEC code;
              - Annualized replacement rate per PEC code.
       j)     Trend chart in time of replacement rate value (RpR)
       k)     Actual MTBF measurement. Actual annualized MTBF will be calculated
              from the cumulative replacement rate recorded monthly. Based on
              results, additional requirements can be determined upon agreement
              of both Parties.
       l)     On Time service level for 1) Repair and Return 2) Retrofit 3) FCFA
              4) RMA.
       For all occurrences of Product failure in the field, analysis results,
       corrective actions and implementation plan have to be included in the
       monthly report.

3.     From the date the Products will have successfully passed the Acceptance
       Program in accordance with Section 4 of the Agreement, Supplier shall
       provide to Nortel Networks' Repair Manager, to Nortel Networks' Quality
       Manager and to Nortel Networks' Product Brand Manager a monthly "Minimum
       Field Baseline" report indicating the minimum applicable release level
       (number) for the in-service operation of the Products and a "New Product
       Shipped Baseline". The reports shall provide the details of specific
       Product releases for each applicable Software load. The reports shall
       contain aforementioned information for all current and previous releases
       of the Products, and clearly indicate for both Hardware and Software:
       a)     backward and forward compatibility;
       b)     upgradability from any release to any other release;
       c)     the current Product releases.

4.     From the date the Products will have successfully passed the Acceptance
       Program in accordance with Section 4 of the Agreement, Supplier shall
       provide to Nortel Networks' Product Brand Manager a monthly "General
       Business" report which includes the following information:
       a)     Number of Products (on a per PEC level) delivered to Nortel
              Networks in the previous month.
       b)     Total business in dollars on a per PEC level delivered to Nortel
              Networks in the previous month.
       c)     Number of Products (on a per PEC level) delivered year to date to
              Nortel Networks.
       d)     Total business in dollars on a per PEC level delivered year to
              date to Nortel Networks.
       e)     Number of Products (on a per PEC level) delivered to date to
              Nortel Networks.
       f)     Total business in dollars on a per PEC level delivered to date to
              Nortel Networks.
       g)     Total number of shipments that were missed or delivered short by
              Supplier in the previous month.
       h)     Price in effect on a per PEC level in the previous and current
              months.
       i)     Prices paid for Nortel Networks proprietary components in the last
              month.
       j)     Total number of PRS and CSR raised in the previous month against
              the Products and a summary of each problem.
       k)     Total number of calls received from the Nortel Networks Customer
              Service center in the previous month.

5.     In addition to the above, Nortel Networks may, from time to time, request
       that Supplier provides detailed Unit Failure Analysis and Component
       Failure Analysis reports.


<PAGE>

                                    CONFIDENTIAL



                                    EXHIBIT G
                               CHANGE NOTIFICATION
                                    (Example)

                                                                     Page 1 of 2
<TABLE>
<S><C>
--------------------------------------------------------------------------------
1.  SUPPLIER INFORMATION:                       |2. PRODUCT CHANGE NOTICE:
                                    |         1997xxxx

                                                             |   ISSUE:  01

------------------------------------------------|-------------------------------
3.  ISSUE DATE:      |4. PRODUCT IDENTIFICATION:
                     |   MAJOR SYSTEM:
                     |   SUB SYSTEM  :
                     |   HWARE: ?   FWARE: ?   SWARE: ?  PLUGIN: ?

---------------------|----------------------------------------------------------
5.  NEW PROD    RLSE |7. NEW CLEI CODE |6. OLD PROD    RLSE |8. OLD CLEI CODE
    NTxxxxxx    tbd  |   tbd           |   NTxxxxxx    xx   |   xxxxxxxxx

---------------------|-----------------|--------------------|-------------------
9.  ASSOCIATED PRODUCTS OR CHANGES AFFECTED:

--------------------------------------------------------------------------------
10. DRAWING NUMBER:                           |11. CHANGE CLASSIFICATION:
    ADxxxxxx                                  |    A/AC/B.......
----------------------------------------------|---------------------------------
12. CLASSIFICATION SUBSTANTIATION:



--------------------------------------------------------------------------------
13. REASON FOR CHANGE:



--------------------------------------------------------------------------------
14. DESCRIPTION OF CHANGE:


    VERIFICATION PROCEDURES:


    BACKOUT PROCEDURES:


--------------------------------------------------------------------------------
15. EFFECT OF CHANGE:
    Enhanced features and easier installability.
    SAFETY HAZARD: ?   FIRE HAZARD : ?   SRVC AFFCTG: ?   TRANS AFFCTG: ?
    MNTNCE AFFCTG: ?   RELIA AFFCTG: ?   POWR AFFCTG: ?   TRAF  AFFCTG: ?

--------------------------------------------------------------------------------
16. MATERIAL AFFECTED:


--------------------------------------------------------------------------------
17. DOCUMENTATION AFFECTED:

--------------------------------------------------------------------------------


<PAGE>

                                    CONFIDENTIAL



                                                                     Page 2 of 2

--------------------------------------------------------------------------------
18. IMPLEMENTATION DATE:           |19. CHANGE COMPLETION DATE:
    MM/DD/YY                       |    N/A


--------------------------------------------------------------------------------

20. MODIFICATION LOCATION:
    N/A
    TRIALED: N (Field Lab Na)

--------------------------------------------------------------------------------
21. INSTALLATION HOURS AND MATERIAL COST:
    HOURS: N/A
    COST : N/A

--------------------------------------------------------------------------------
22. LOCATION AND QUANTITY OF EQUIPMENT:
    N/A

--------------------------------------------------------------------------------
23. ATTACHMENTS:
    None

--------------------------------------------------------------------------------
24. COMMENTS:

</TABLE>

                                                                        Page 2

<PAGE>

                                  CONFIDENTIAL

                                    EXHIBIT H

                              TECHNICAL ASSISTANCE

I.     TECHNICAL ASSISTANCE BY SUPPLIER/NORTEL NETWORKS

1.     It shall be Nortel Networks' responsibility and cost if Nortel Networks
       elects to provide `first line' (Level 1) technical assistance and support
       to its customers. However, Nortel Networks may purchase Level 1 Support
       for its customers from Supplier at the prices set forth in Exhibit D.
       Level 1 Support shall consist of the following:

       LEVEL 1 SUPPORT:

       a)    Telephone Service Desk
       b)    On site support


       c)    Corrective action and logging
       d)    Product alarm knowledge
       e)    Escalate and report problems

       f)    Communication junction to allow Supplier access to customers' sites
       g)    Log and track problems on Nortel Networks CSR database
       h)    Isolate subsystem faults
       i)    Product temporary system solutions
       j)    Software upgrade loads distribution to customers
       k)    Local spares holding

       l)    Manage return of defective units to Supplier

       m)    Telephone Technical Support in accordance with Section III,
             Paragraph 5(a) of this Exhibit.

I.     LEVEL 2 SUPPORT

         If requested by Nortel Networks, Supplier shall provide, to Nortel
         Networks and to Nortel Networks' customers, twenty-four (24) hours a
         day, seven (7) days a week, "Second line" (Level 2) technical
         assistance which will include the services listed below. Nortel
         Networks may purchase Level 2 Support from Supplier at the price set
         forth in Exhibit D.

       LEVEL 2 SUPPORT:

       a)     Provide assistance at the request of Nortel Networks
       b)     Provide Supplier technical support contacts (24 hours a day in
              accordance with Section III, Paragraph 5(b) of this Exhibit
       c)     Log and track problems using Nortel Networks' PRS system
       d)     Perform in-house simulation and testing
       e)     Provide remote modem access to Nortel Networks' Technical Service
              center
       f)     Deliver Software upgrades and Software builds to Nortel Networks'
              distribution center
       g)     Perform escalation and reporting to Nortel Networks
       h)     Provide Emergency Site Support (at customer/Nortel Networks site)


III.   OTHER TECHNICAL ASSISTANCE BY SUPPLIER

1.     Supplier shall at no cost to Nortel Networks, provide Product training
       information and Documentation         During the Term of the Agreement,
       Supplier shall provide to Nortel Networks, at no charge to Nortel
       Networks, provided that such training is held at Nortel Networks'
       facility, four (4) three (3) day training programs for no more than six
       (6) Nortel Networks technicians per session and training documentation
       on Products such that Nortel Networks' personnel shall be enabled to
       train other Nortel Networks personnel and customers. Supplier warrants
       and shall justify to Nortel Networks that personnel assigned to do the
       training is qualified to do so. Trainees travel, accommodation, and per
       diem expenses will be covered by Nortel Networks.


<PAGE>

                                    CONFIDENTIAL

2.     As Nortel Networks accepts additional Products under this Agreement,
       Supplier shall provide to Nortel Networks' personnel, at no charge to
       Nortel Networks, and at times and places designated by Supplier, training
       and training documentation on such additional Products such that Nortel
       Networks' personnel shall be able to train other Nortel Networks
       personnel and customers.

3.     Any additional training which Nortel Networks may require from Supplier
       for its own benefit or for the benefit of its customers shall be
       requested by Nortel Networks, and carried out by Supplier, at times and
       places and in accordance with prices as agreed upon between Nortel
       Networks and Supplier at the time such training is requested by Nortel
       Networks.

4.     Supplier shall provide to the designated personnel of Nortel Networks the
       technical assistance set out in this Exhibit H in respect of each Product
       manufactured and supplied by Supplier

       a)     at prices set forth in Exhibit D for the Term;

       b)     after the Term, the technical assistance shall be subject to the
              provisions of Section 16 [CONTINUING AVAILABILITY OF REPAIR
              SERVICES] of this Agreement and shall be at the prices set forth
              in Exhibit D.

5.     Telephone access to qualified Supplier's technical personnel shall be
       supplied in accordance with the following structure:

       a)     NON-URGENT TECHNICAL SUPPORT (AT NO CHARGE DURING THE TERM): Pager
              service will be available Monday to Friday between the hours of
              8:00 a.m. and 8:00 p.m. EST (The waiting period for qualified
              technical assistance shall not exceed thirty (30) minutes). At all
              other times, voice-mail service shall be available at the same
              number. The telephone number to reach Supplier's non-urgent
              technical support personnel at all times will be provided by
              Supplier.

       b)     URGENT TECHNICAL SUPPORT (SUPPLIED AS PART OF LEVEL 2 SUPPORT):
              Pager service will be available twenty-four (24) hours a day,
              seven (7) days a week. The telephone number to reach Supplier's
              emergency support personnel at all times will be provided by
              Supplier. The waiting period for qualified technical assistance
              shall not exceed twenty (20) minutes. Supplier's technical
              assistance personnel shall be equipped with mobile or cellular
              phones at all times.

       Supplier shall advise Nortel Networks of any telephone number change for
       this service at least thirty (30) calendar days prior to the change.

6.     During the Term, Supplier shall provide to Nortel Networks at no charge
       the following technical assistance ("Level 3 Support) which shall consist
       of the following services:

       LEVEL 3 SUPPORT:
       a)     Isolate subsystem and design faults (in-house)
       b)     Perform Root Cause Analysis
       c)     Provide Spare Buffer
       d)     Maintain Emergency Spares holding (at Supplier's premises)
       e)     Update Engineering Changes (ECs) on PAS
       f)     Provide design authority support interfaces
       g)     Analyze and resolve design problems (Hardware and Software)
       h)     Prepare patches and modifications
       i)     Incorporate patches into new builds, test perform sanity checks
              and deliver the builds and Hardware to Nortel Networks'
              distribution center
       j)     Provide Product temporary solutions
       k)     In-house simulation
       l)     Database problem solution
       m)     Third party product support
       n)

7.     Notwithstanding any provision set forth in this Exhibit H and/or the
       Agreement, Supplier will provide on-site support and assistance at no
       cost to Nortel Networks in the following cases:

       a)     Where Nortel Networks is unable to resolve a problem through
              normal maintenance activities and technical support is provided
              remotely by Supplier.
       b)     Where Nortel Networks is able to resolve a problem but cannot
              determine the root cause of the problem.
       c)     Where a problem with the Product leads a customer to specifically
              request technical presence.


<PAGE>

                                     CONFIDENTIAL

       d)     Where a problem with the Product exists in the field and
              Supplier's presence is requested by Nortel Networks Senior
              Management.

       However, Nortel Networks will reimburse Supplier for its actual and
       reasonable expenses according to the technical assistance rates as set
       forth in Exhibit D in cases where the problem which initiated the
       requirement for the on-site support is attributed to reasons that are not
       related to a fault or deficiency in the Products.

8.     Any other technical support which Supplier shall provide to Nortel
       Networks or its customers shall be pursuant to a written request from
       Nortel Networks' designated personnel, or such other individual
       designated, from time to time, by Nortel Networks. Such support shall be
       at prices set forth in Exhibit D and on terms and conditions agreed upon
       by the Parties.

9.     Technical assistance support will be provided remotely to Nortel Networks
       and/or to the customer in conjunction with Nortel Networks, but not by
       Supplier alone (unless authorized in writing to do so by Nortel
       Networks).

10.    Supplier will provide Nortel Networks with a template of required
       information to be supplied by Nortel Networks when referring a problem
       for resolution.

11.    Supplier will document all known problems and deficiency (service reports
       [SR] referred by Nortel Networks and discovered by development) with the
       Products in Nortel Networks' PRS database.

12.    Supplier will provide Pager Response Time and Mobilization based on the
       Problem Classification as prescribed in the following table.
<TABLE>
             ==================================================================================================
<CAPTION>
             PROBLEM CLASSIFICATION*             PAGER RESPONSE TIME             MOBILIZATION
             --------------------------------------------------------------------------------------------------
            <S>                                <C>                              <C>
             E1 & E2                             20 minutes                      First available flight
             --------------------------------------------------------------------------------------------------
             E3 & E4                              N/A                            Next working day
             --------------------------------------------------------------------------------------------------
             Non service affecting                N/A                            Scheduled
             ==================================================================================================
</TABLE>
         *Problem Classifications are as defined below:

         The turnaround times for response and closure of SRs are summarized
         below.
<TABLE>
             --------------------------------------------------------------------------------------------------
<CAPTION>
             SR PRIORITY                        SR RESPONSE                       SR CLOSURE
             --------------------------------------------------------------------------------------------------
            <S>                                <C>                              <C>
             E1/E2                              WORK UNTIL CLOSED                 WORK UNTIL CLOSED
             --------------------------------------------------------------------------------------------------
             E3/E4                              30 CALENDAR DAYS                  45 CALENDAR DAYS
             --------------------------------------------------------------------------------------------------
             MJ                                 14 CALENDAR DAYS                  30 CALENDAR DAYS
             --------------------------------------------------------------------------------------------------
             MN                                 42 CALENDAR DAYS                  180 CALENDAR DAYS
             --------------------------------------------------------------------------------------------------
</TABLE>
       The progress of the SR resolution is continually updated in the CSDS
       database. Information concerning the SR is exchanged between the
       Technical Services representative and the customer until an acceptable
       solution is achieved.

13.    Supplier will provide support consistent with the Problem Classification
       Definitions as defined below. Target resolution date is from the date the
       PRS is referred to Supplier.

14.    Problem Classification:

       E1     EMERGENCY OUTAGE/SYSTEM FAIL

       - Resolution Objective = Immediate and continuous
              (on a 24-hour-a-day basis)
       - Escalation = Technical Support Manager
                  (1 hour)
                  Technical Support Director
                  (24 hours)
       - Updates to Nortel Networks = Daily (or as agreed with customer)
       - Written report at point of closure to E3

       E2     POTENTIAL TRAFFIC DEGRADATION OR OUTAGE
       - Resolution Objective = Immediate and continuous
       - Escalation = Technical Support Manager


<PAGE>

                                    CONFIDENTIAL

                  (1 hour)
                  Technical Support Director
                  (24 hours)
       - Updates to Nortel Networks = Daily (or as agreed with customer)
       - Written report at point of closure to E3

       E3     E1 FOLLOW-UP (OPENED INTERNALLY)
       - Target Resolution = 14 calendar days
       - Updates to Nortel Networks = weekly

       E4     E2 FOLLOW-UP (OPENED INTERNALLY)
       - Target Resolution = 14 calendar days
       - Updates to Nortel Networks  = weekly

       MJ     MAJOR-SERIOUS SERVICE AFFECTING INCIDENT OR OPERATIONAL IMPACT
       - Immediate Objective = Fix/workaround within 4 hours
       - Escalation = Technical Support Manager
                  (4 hours)
                  Technical Support Director
                  (24 hours)
       - Target Resolution = 30 calendar days
       - Updates to Nortel Networks = weekly

       MN     MINOR NON-SERVICE AFFECTING QUERY OR SERVICE REQUEST
       - Procedural Deficiencies
       - Documentation Flaws
       - Operational Product Improvement

       13. The following will be the PRIORITY LEVEL DEFINITIONS.

       E1     EMERGENCY OUTAGE/SYSTEM FAIL
              - System or Major System Inoperative
              - Major Loss of Service
              - (Escalation into Nortel Networks and customer management)

       E2     POTENTIAL TRAFFIC DEGRADATION OR OUTAGE
              - Potential/Partial Loss of Service
              - Management System Down/Unavailable
              - Loss of Redundancy/Redundant System

       E3     E1 FOLLOW-UP (NOT RAISED BY CUSTOMER)
              - An E3 is opened after closure of an E1
              - Root Cause Analysis (RCA) performed

       E4     E2 FOLLOW-UP (NOT RAISED BY CUSTOMER)
              - An E4 is opened after closure of an E2
              - Root Cause Analysis (RCA) performed

       MJ     MAJOR-SERIOUS SERVICE AFFECTING INCIDENT OR OPERATIONAL IMPACT
              - Traffic errors
              - Hardware or Software lockups/unusable
              - Any fault that prevents traffic from being put into service

       MN     MINOR OPERATIONAL IMPACT
              - Procedural Deficiencies
              - Documentation Flaws
              - Operational Product Improvement.


<PAGE>

                                  CONFIDENTIAL

                                    EXHIBIT I

                                       RUS

                              DEBARMENT CERTIFICATE

                                   S A M P L E

--------------------------------------------------------------------------------

CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY
EXCLUSION - LOWER TIER COVERED TRANSACTIONS

--------------------------------------------------------------------------------


This certification is required by the regulations implementing Executive Order
12549, Debarment and Suspension, 7 CFR Part 3017, Section 3017.510,
Participants' responsibilities. The regulations were published as Part IV of
the January 30, 1989, FEDERAL REGISTER (pages 4722-4733).

(BEFORE COMPLETING CERTIFICATION, READ INSTRUCTIONS ON REVERSE)

(1)      The prospective lower tier participant certifies, by submission of this
         proposal, that neither it nor its principals is presently debarred,
         suspended, proposed for debarment, declared ineligible, or voluntarily
         excluded from participation in this transaction by any Federal
         department or agency.

(2)      Where the prospective lower tier participant is unable to certify to
         any of the statements in this certification, such prospective
         participant shall attach an explanation to this proposal.

________________________________________________________________________________
Organization Name                      PR/Award Number or Project Name

________________________________________________________________________________
Name and Title of Authorized Representative


________________________________________________________________________________
Signature                                                     Date

________________________________________________________________________________


<PAGE>

                                   CONFIDENTIAL


INSTRUCTIONS FOR CERTIFICATION

1.       By signing and submitting this form, the prospective lower tier
         participant is providing the certification set out on the reverse side
         in accordance with these instructions.

2.       The certification in this clause is a material representation of fact
         upon which reliance was placed when this transaction was entered into.
         If it is later determined that the prospective lower tier participant
         knowingly rendered an erroneous certification, in addition to other
         remedies available to the Federal Government, the department or agency
         with which this transaction originated may pursue available remedies,
         including suspension and/or debarment.

3.       The prospective lower tier participant shall provide immediate written
         notice to the person to which this proposal is submitted if at any time
         the prospective lower tier participant learns that its certification
         was erroneous when submitted or has become erroneous by reason of
         changed circumstances.

4.       The terms "covered transaction", "debarred", "suspended", "ineligible",
         "lower tier covered transaction", "participant", "person", "primary
         covered transaction", "principal", "proposal", and "voluntarily
         excluded", as used in this clause, have the meanings set out in the
         Definitions and Coverage sections of rules implementing Executive Order
         12549. You may contact the person to which this proposal is submitted
         for assistance in obtaining a copy of those regulations.

5.       The prospective lower tier participant agrees by submitting this form
         that, should the proposed covered transaction be entered into, it shall
         not knowingly enter into any lower tier covered transaction with a
         person who is debarred, suspended, declared ineligible, or voluntarily
         excluded from participation in this covered transaction, unless
         authorized by the department or agency with which this transaction
         originated.

6.       The prospective lower tier participant further agrees by submitting
         this form that it will include this clause titled "Certification
         Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion
         - Lower Tier Covered Transactions", without modification, in all lower
         tier covered transactions and in all solicitations for lower tier
         covered transactions.

7.       A participant in a covered transaction may rely upon a certification of
         a prospective participant in a lower tier covered transaction that it
         is not debarred, suspended, ineligible, or voluntarily excluded from
         the covered transaction, unless it knows that the certification is
         erroneous. A participant may decide the method and frequency by which
         it determines the eligibility of its principals. Each participant may,
         but is not required to, check the Non-procurement List.

8.       Nothing contained in the foregoing shall be construed to require
         establishment of a system of records in order to render in good faith
         the certification required by this clause. The knowledge and
         information of a participant is not required to exceed that which is
         normally possessed by a prudent person in the ordinary course of
         business dealings.

9.       Except for transactions authorized under paragraph 5 of these
         instructions, if a participant in a covered transaction knowingly
         enters into a lower tier covered transaction with a person who is
         suspended, debarred, ineligible, or voluntarily excluded from
         participation in this transaction, in addition to other remedies
         available to the Federal Government, the department or agency with
         which this transaction originated may pursue available remedies,
         including suspension and/or debarment.


<PAGE>

                                  CONFIDENTIAL

                                    EXHIBIT J

                              INTENTIONALLY DELETED


<PAGE>

                                  CONFIDENTIAL

                                    EXHIBIT K

                                MARKETING SUPPORT


Nortel Networks may, at its option, request Supplier to provide the following
marketing support at no cost:

1.       Supplier will assist Nortel Networks in providing point-by-point
         responses to RFQs (Request for Quotations) and RFIs (Request for
         Information) with respect to the Products.

2.       Supplier will review and provide feedback on promotional material.

3.       Supplier will make available non-operational demo units which have the
         same "Look" as the final Products.

4.       For a period of six (6) months after the Effective Date, Supplier will,
         upon request of Nortel Networks, make joint sales presentations to
         potential and existing customers of Nortel Networks.

5.       Subject to the confidentiality provisions of the Agreement, Nortel
         Networks and Supplier will mutually agree to a jointly-prepared press
         release to be delivered over the business wire by Nortel Networks; Such
         press release will describe the nature and scope of the Nortel Networks
         - Supplier relationship.

6.       With Nortel Networks prior written approval and subject to the
         confidentiality provisions of the Agreement, Supplier may include a
         summary of Nortel Networks information on its website to include Nortel
         Networks logo, descriptions of the Nortel Networks-Supplier
         relationship, complementary products and customers.

7.       Supplier may be invited to participate in Nortel Networks events to
         include tradeshows, industry forums, sponsored customer events,
         training events and partner pavilions. SONOMA may invite NORTEL to
         participate in SONOMA events to include tradeshows, industry forums,
         sponsored customer events, training events and partner pavilions.

    8.   NORTEL NETWORKS agrees to display SONOMA/rebranded product at industry
         tradeshows where they have a booth presence and such display is
         appropriate.

    9.   Nortel Networks, with input and assistance from SONOMA, will create
         customer collateral and sales tools on any rebranded/resell products,
         to include, but not be limited to, datasheets, brochures,
         presentations, application notes, white papers and customer profiles.


<PAGE>

                                 CONFIDENTIAL

                                    EXHIBIT L

                          TRADE AGREEMENT - PROCEDURES


1.1      Supplier shall perform all administrative actions required to qualify
         Products and maintain qualification for preferential treatment under
         the rules of any applicable trade treaty between Canada, USA and
         Mexico, and any other applicable trade agreements including, without
         limitation, the North American Free Trade Agreement ("NAFTA"). If a
         Product qualifies under any one of these agreements, Supplier shall
         prepare and distribute an Exporter's Certificate of Origin according to
         Sections 1.2 and 1.3 below, whichever applies, and any other documents
         required. Supplier shall respond to the relevant trade agreement's
         Exporter's Certificate of Origin questionnaires and assist each Nortel
         Networks Company in resolving any Product eligibility issues. Supplier
         alone shall bear responsibility for all penalties and costs resulting
         from the relevant trade agreement's Exporter's Certificate of Origin
         subsequently being determined to be invalid.

1.2      If a relevant trade agreement's Exporter's Certificate of Origin is
         prepared for each shipment, Supplier shall (a) retain the original
         relevant trade agreement's Exporter's Certificate of Origin in
         Supplier's files with appropriate backup documentation, (b) attach a
         copy of the Exporter's Certificate of Origin to the customs/shipping
         documents for the qualifying Product, and (c) mark these
         customs/shipping documents with the legend: "Copy of the relevant trade
         agreement's Exporter's Certificate of Origin attached."

1.3      If a blanket relevant trade agreement's Exporter's Certificate of
         Origin is prepared, Supplier shall: (a) retain the original relevant
         trade agreement's Exporter's Certificate of Origin in Supplier's files
         with appropriate backup documentation, (b) mark the customs/shipping
         documents for the qualifying Product with the legend: "Copy of blanket
         relevant trade agreement's Exporter's Certificate of Origin on file at
         Nortel Networks customs offices in Milton, Ontario (Canada) and in
         Tonawanda, NY (USA)," and (c) mail copies of the blanket relevant trade
         agreement's Exporter's Certificate of Origin to the following offices:

         Canada:                                     USA:
         Nortel Networks Corporation                 Nortel Networks Inc.
         Dept. 1560                                  77 Oriskany Drive
         901 Steeles Avenue                          Tonawanda, NY, 14150
         Milton, Ontario, Canada  L9T 4B6            USA


<PAGE>

                                 CONFIDENTIAL

                                   EXHIBIT M

                                    NOTICES


SUPPLIER :                    Sonoma Systems
                              4640 Admiralty Way, Suite 600
                              Marina del Rey, CA 90292

                              Attention: Contracts Manager/Chief Financial
                              Officer
                              Facsimile No: 310 305 2510


NORTEL NETWORKS:              Nortel Networks Corporation
                              8200 Dixie Road, Suite 100
                              Brampton, Ontario
                              Canada L6T 5P6
                              Attention: Vice-President and Deputy General
                              Counsel
         Facsimile No:        (905) 863-8425

         and:                 Nortel Networks Inc.
                              2375B North Glenville
                              Richardson, TX
                              75082

                              Attention: Senior Manager, OEM Product Management
         Facsimile No:        (972) 684 3920


<PAGE>

                                  CONFIDENTIAL

                                    EXHIBIT N

                         ESCROW TERMS AND CONDITIONS AND
                                ESCROW AGREEMENT

1.       ESCROW TERMS AND CONDITIONS

1.1      To ensure uninterrupted availability of the Hardware and Software and
         their ongoing maintenance and support, by March 15, 2000, Nortel
         Networks and Supplier shall enter into an escrow agreement ("ESCROW
         AGREEMENT") with a mutually agreeable escrow agent ("ESCROW AGENT").
         The Escrow Agreement shall be in a form and content reasonably
         acceptable to the Parties hereto and shall contain, as a minimum and
         without limitation, the terms and conditions set forth in this Article
         1 and shall, when executed by all the Parties, be annexed hereto.

1.2      The Escrow Agreement shall provide, inter alia, for the deposit into
         escrow with the Escrow Agent, within twenty (20) calendar days of its
         execution, for storage at such Escrow Agent's premises, of all the
         Hardware Technical Information (as such term is defined in Article
         1.12) and all Software Source Code (as such term is defined in Article
         1.13) as are available and as are used by Supplier (or its
         subcontractors) for the manufacturing of Hardware and the creation of
         the Software and as are reasonably acceptable in form and content to
         Nortel Networks (the "ESCROW MATERIALS").

1.3      Supplier shall update the Escrow Materials as each new release of
         Hardware Technical Information and Software Source Code are created.
         Costs for updating and management of the Escrow Materials shall be for
         the account of Supplier. Supplier will use due care in ensuring the
         completeness and accuracy of the Escrow Materials provided. The Escrow
         Agent fee shall be paid by Nortel Networks.

         Immediately following the Release Date (as such term is defined in
         Article 1.6), at the request of Nortel Networks, Supplier shall either
         verify to Nortel Networks that the Escrow Materials is the most recent
         version of the Hardware Technical Information and Software Source Code
         then being used in Supplier's and its subcontractors' factories in
         their day-to-day operations, or promptly furnish to Nortel Networks
         such most recent version of the Hardware Technical Information and
         Software Source Code.

1.4      Escrow Materials shall remain under seal and unopened unless and until
         Nortel Networks is entitled to exercise its rights under the Escrow
         Agreement. Supplier shall be entitled to examine the Escrow Materials
         at the Escrow Agent's location at any time during normal business
         hours.

1.5      Supplier will provide to Nortel Networks, prior to the deposit of the
         relevant Escrow Materials pursuant to Article 1.2 above, such technical
         assistance, at an agreed upon location, as it reasonably requires to
         allow competent technical employee(s) of Nortel Networks to understand
         the Escrow Materials and to establish the sufficiency of its content.
         All documentation and other material created in the course of such
         technical assistance shall form part of Escrow Materials. Nortel
         Networks, at its option and expense, may request that the completeness
         and accuracy of any Escrow Materials be verified by the Escrow Agent or
         another party reasonably acceptable to the Parties. Such verification
         may be requested once per Escrow Materials deposit to the Escrow Agent.
         Supplier may in its discretion and at its expense designate a
         representative to be present at the verification.

1.6      The Escrow Agreement shall provide that the Escrow Agent will release
         the Escrow Materials to Nortel Networks on a release date ("RELEASE
         DATE") which is five (5) calendar days after the date of Nortel
         Networks' written request for the release of the required Escrow
         Materials accompanied by a declaration from a senior representative of
         Nortel Networks stating the particulars of the reasons for its request
         and confirm that copy of such request and declaration have been
         delivered to Supplier.

1.7      Subject to the provisions contained in Article 1.8, Supplier hereby
         grants to Nortel Networks a [*] worldwide license ("LICENSE") for a
         three (3) year period commencing as of the Release Date covering:

         (a)      the non-exclusive right to use, and to sublicense the use to
                  one or more subcontractors of, the Patent Rights as described
                  in Article 1.11; and/or

         (b)      the non-exclusive right to use and modify Escrow Materials to
                  manufacture or have manufactured the Products; and/or

         (c)      the non-exclusive right to use, and to sublicense the use to
                  one or more subcontractors of, the Escrow Materials to
                  maintain, support and repair the Hardware and to diagnose and
                  correct errors in, and to generally support and maintain, the
                  Software; and

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>

                                CONFIDENTIAL

         (d)      the right to, directly or indirectly, sell and support the
                  Products including those modified hereunder.

1.8      A License shall solely be obtained by Nortel Networks hereunder,

         (a)      subject to the terms and conditions contained in this Article
                  1, and

         (b)      upon the occurrence of any one of the Release Conditions
                  described in Article 1.9 as identified in Nortel Networks'
                  request pursuant to Article 1.6, and

         (c)      effective only from the Release Date, giving effect to the
                  release from escrow of the Escrow Materials, and

         (d)      solely for the purpose of supplying and supporting Products
                  to: (i) existing Nortel Networks customers as of the Release
                  Date and (ii) customers to whom Nortel Networks has offered to
                  sell the Products in response to an RFP or RFQ prior to the
                  Release Date.

         The aforesaid rights shall include the right to communicate relevant
         portion of the Escrow Materials to subcontractors for the purpose of
         the exercise of the rights granted to Nortel Networks herein provided,
         however, that the recipients of the Escrow Materials be advised by
         Nortel Networks at the time, or before such communication, that
         proprietary information is being communicated and that such information
         is to be kept confidential and not used except as permitted hereunder
         and such recipients shall enter into a non-disclosure agreement with
         Nortel Networks .

         The Parties recognize that Nortel Networks, in the exercise of its
         rights hereunder, may make improvements, developments, inventions,
         changes or innovations related to Escrow Materials (hereinafter called
         "IMPROVEMENTS"). Nortel Networks shall have sole ownership of all
         rights in and to the information and intellectual property rights
         comprising Improvements.

         The Parties acknowledge that Supplier shall have sole ownership of all
         rights in and to the information and intellectual property comprising
         Escrow Materials.

1.9      The following shall be the release conditions ("RELEASE CONDITIONS") in
         order for Nortel Networks to have access to the Escrow Materials and to
         exercise the License granted hereunder:

         (a)      the institution by Supplier of insolvency, receivership or
                  bankruptcy proceedings or any other material proceedings for
                  the settlement of its debts, including, without limitation, a
                  reorganization, a compromise, an arrangement or assignment for
                  the benefit of its creditors; or the institution of such
                  proceedings against Supplier, in the event any of the
                  foregoing has not been settled, terminated or dismissed, as
                  the case may be, in Supplier's favor within twenty (20)
                  calendar days after the commencement of any of the foregoing;
                  or

         (b)      Supplier's dissolution or ceasing to do business in the normal
                  course and such event has not been cured, or a plan for the
                  cure thereof has not been implemented, to the reasonable
                  satisfaction of Nortel Networks within sixty (60) days of
                  notice thereof from Nortel Networks; or

         (c)      if a new owner of Supplier refuses to honor the terms of this
                  Agreement as it relates to the manufacture, delivery or
                  support of the Products for Nortel Networks and such event has
                  not been cured, or a plan for the cure thereof has not been
                  implemented, to the reasonable satisfaction of Nortel Networks
                  within sixty (60) days of notice thereof from Nortel Networks;
                  or

         (d)      a Change made to the Products in breach of Supplier's
                  obligations as set forth in Section 5 of the Agreement
                  (Product and Process Change) and such event has not been
                  cured, or a plan for the cure thereof has not been
                  implemented, to the reasonable satisfaction of Nortel Networks
                  within sixty (60) days of notice thereof from Nortel Networks;
                  or

         (e)      Supplier's material failure to comply with the provisions of
                  Section 6.1.1 of the Agreement (ISO 9001 Certification); or

         (f)      Supplier's continuing material breach of the terms and
                  conditions of this Agreement related to Product: (i) delivery,
                  including without limitation delivery of Product in
                  conformance with the Specifications, (ii) repair or (iii)
                  technical assistance and such material breach has not been
                  cured, or a plan for the cure thereof has not been
                  implemented, to the reasonable satisfaction of Nortel Networks
                  within sixty (60) days of notice thereof from Nortel Networks.

1.10     During the period of six (6) months immediately following the Release
         Date, Supplier shall make available to Nortel Networks, reasonable
         technical assistance to facilitate the exercise of the rights granted
         under the License.


<PAGE>

                                      CONFIDENTIAL

         Supplier shall be paid, in return for such services and visits,
         standard fees based on reasonable rates which Supplier establishes from
         time to time for such services and visits for the location from which
         the assistance is being provided, plus reasonable travel and living
         expenses incurred by Supplier personnel for such visits. Such fees
         shall be paid to Supplier by Nortel Networks within thirty (30)
         calendar days of invoicing therefor.

1.11     The License granted under Articles 1.7 and 1.8 hereof shall include the
         worldwide non-exclusive license under the patents and patent rights
         (herein collectively called "PATENT RIGHTS") of Supplier related to the
         Products, existing as of the Release Date or issued or granted or
         acquired during the term of this License; all patent licenses herein
         granted shall commence on the Release Date or when letters patent are
         issued or granted if subsequent hereto, and provided this License is
         not terminated pursuant to this Agreement, shall continue for the
         shortest of the entire term of the respective Patent Rights under which
         they are granted or are in force, or for that part of such terms for
         which Supplier has the right to grant such licenses, or the duration of
         the License.

1.12     For the purpose of this Article 1, "HARDWARE TECHNICAL INFORMATION"
         means that technical information necessary for the manufacture of
         Hardware, including without limitation, all design, technical,
         manufacturing information (including manufacturing processes, drawings
         and specifications including circuit schematics) of assemblies,
         sub-assemblies and parts, sole source and other components and ASICs
         (including the part number, name and location of the supplier)
         associated test requirements and lists of associated manufacturing
         tools and test equipment as well as repair and maintenance
         specifications and test procedures, as are used by Supplier for the
         manufacturing of Products.

1.13     For the purpose of this Article 1, "SOFTWARE SOURCE CODE" means the
         Software items comprised in the Products in source code form including
         all subsequent updates and enhancements thereto as follows: (a) one
         copy of the source code of said Software items in machine readable and
         printed forms, (b) a list of all commercially available development
         tools, editors and compilers necessary to make use of source code of
         said Software items (including name and location of supplier) and
         copies of any of the foregoing items which are proprietary to Supplier,
         and (c) the documentation describing the source code of said Software
         items which is required to assemble, test, support, customize and
         evolve the Products.

1.14     The Parties acknowledge that the Escrow Materials are 'intellectual
         property' within the purview of Section 101 (56) of the United States
         Bankruptcy Code 11 U.S.C. 101-1330 and that the Escrow Agreement is an
         agreement supplementary to this Agreement under Section 365 (n) of such
         Code and that both the Escrow Agreement and the Agreement shall be
         governed by Section 365 (n) of such Code in the event Supplier applies
         for bankruptcy relief.

1.15     The License shall terminate in the event that Nortel Networks breaches
         any material term of the License and such breach is not cured, or a
         plan implemented for the cure of such breach, to the reasonable
         satisfaction of Supplier, within sixty (60) days of receipt of notice
         thereof by Nortel Networks.

1.16     The Escrow Agreement shall terminate at the end of the Term.

                                ESCROW AGREEMENT

A copy of the Escrow Agreement shall be inserted here once it is executed by all
Parties, as stipulated in Section 30 of the Agreement.