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                                                    DRAFT OF SEPTEMBER 25, 2000

                              ELASTIC NETWORKS INC.

                               7,800,000 SHARES(1)

                                  COMMON STOCK

                             UNDERWRITING AGREEMENT

                                                                  _____ __, 2000

CHASE SECURITIES INC.
FleetBoston Robertson Stephens Inc.
UBS Warburg LLC
  c/o Chase Securities Inc.
  One Bush Street
  San Francisco, CA 94104

Ladies and Gentlemen:

         Elastic Networks Inc., a Delaware corporation (herein called the
Company), proposes to issue and sell 6,800,000 shares of its authorized but
unissued Common Stock, $0.01 par value (herein called the Common Stock), and the
stockholder of the Company named in Schedule II hereto (herein called the
Selling Securityholder) proposes to sell an aggregate of 1,000,000 shares of
Common Stock of the Company (said 7,800,000 shares of Common Stock being herein
called the Underwritten Stock). The Company and the Selling Securityholder
propose to grant to the Underwriters (as hereinafter defined) an option to
purchase up to 1,170,000 additional shares of Common Stock (herein called the
Option Stock and, with the Underwritten Stock, herein collectively called the
Stock). The Common Stock is more fully described in the Registration Statement
and the Prospectus hereinafter mentioned.

         The Company and the Selling Securityholder severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent and
warrant that you have been authorized by each of the other Underwriters to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.

         1. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission (herein called the Commission) a registration statement
on Form S-1 (No. 333-40500), including the related preliminary prospectus, for
the registration under the Securities Act

--------

         (1)      Plus an option to purchase from the Company and the Selling
Securityholder up to 1,170,000 additional shares to cover over-allotments.

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of 1933, as amended (herein called the Securities Act) of the Stock. Copies of
such registration statement and of each amendment thereto, if any, including the
related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of the Commission) heretofore filed by the Company with
the Commission have been delivered to you.

         The term Registration Statement as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of such amendment)
such prospectus as so supplemented or amended. The term Preliminary Prospectus
as used in this Agreement shall mean each preliminary prospectus included in
such registration statement prior to the time it becomes effective.

         2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDER.

                  (a) The Company hereby represents and warrants as follows:

                           (i)      The Company has been duly incorporated and
                  is validly existing as a corporation in good standing under
                  the laws of the jurisdiction of its incorporation, has full
                  corporate power and authority to own or lease its properties
                  and conduct its business as described in the Registration
                  Statement and the Prospectus and as being conducted, and is
                  duly qualified as a foreign corporation and in good standing
                  in all jurisdictions in which the character of the property
                  owned or leased or the nature of the business transacted by it
                  makes qualification necessary (except where the failure to be
                  so qualified would not have a material adverse effect on the
                  business, properties, financial condition or results of
                  operations of the Company).

                           (ii)     The Registration Statement has become
                  effective (other than any Rule 462(b) registration statement
                  to be filed by the Company after the date hereof); any Rule
                  462(b) registration statement filed after the effectiveness of
                  this Agreement will become effective no later than 7:00 p.m.,
                  San Francisco time, on the date of this Agreement; and no stop
                  order suspending the effectiveness of the Registration
                  Statement is in effect, and no proceedings for such purpose
                  are pending before or threatened by the Commission.


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                           (iii)    The Registration Statement and the
                  Prospectus comply, and on the Closing Date (as hereinafter
                  defined) and any later date on which Option Stock is to be
                  purchased, the Prospectus will comply, in all material
                  respects, with the provisions of the Securities Act and the
                  Securities Exchange Act of 1934, as amended (herein called the
                  Exchange Act), and the rules and regulations of the Commission
                  thereunder; on the Effective Date, the Registration Statement
                  did not contain any untrue statement of a material fact and
                  did not omit to state any material fact required to be stated
                  therein or necessary in order to make the statements therein
                  not misleading; and, on the Effective Date the Prospectus did
                  not, and on the Closing Date and any later date on which
                  Option Stock is to be purchased will not, contain any untrue
                  statement of a material fact or omit to state any material
                  fact necessary in order to make the statements therein, in the
                  light of the circumstances under which they were made, not
                  misleading; PROVIDED, HOWEVER, that none of the
                  representations and warranties in this subparagraph (iii)
                  shall apply to statements in, or omissions from, the
                  Registration Statement or the Prospectus made in reliance upon
                  and in conformity with information herein or otherwise
                  furnished in writing to the Company by or on behalf of the
                  Underwriters or the Selling Securityholder for use in the
                  Registration Statement or the Prospectus.

                           (iv)     Since the respective dates as of which
                  information is given in the Registration Statement and the
                  Prospectus, there has not been any materially adverse change
                  in the business, properties, financial condition or results of
                  operations of the Company, whether or not arising from
                  transactions in the ordinary course of business, other than as
                  set forth in the Registration Statement and the Prospectus,
                  and since such dates, except in the ordinary course of
                  business, the Company has not entered into any material
                  transaction not referred to in the Registration Statement and
                  the Prospectus.

                           (v)      The authorized capital stock of the Company
                  conforms to the description thereof contained in the
                  Registration Statement and the Prospectus. All of the
                  outstanding shares of capital stock of the Company (including,
                  without limitation, the Stock to be sold by the Selling
                  Securityholder) have been duly authorized and validly issued,
                  are fully paid and non-assessable, conform to the description
                  of the capital stock of the Company contained in the
                  Registration Statement and the Prospectus and are not subject
                  to any preemptive or similar rights. There are no preemptive
                  or similar rights to subscribe for or to purchase any
                  securities of the Company.

                           (vi)     The Stock is duly and validly authorized, is
                  (or, in the case of shares of the Stock to be sold by the
                  Company, will be, when issued and sold to the Underwriters as
                  provided herein) duly and validly issued, fully paid and
                  nonassessable and conforms to the description thereof in the
                  Prospectus. No further approval or authority of the
                  stockholders or the Board of Directors of the Company will be
                  required for the transfer and sale of the Stock to be sold by
                  the


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                  Selling Securityholder or the issuance and sale of the Stock
                  to be sold by the Company as contemplated herein.

                           (vii)    Prior to the Closing Date, the Stock to be
                  issued and sold by the Company, and the Stock to be sold by
                  the Selling Securityholder, will be authorized for listing by
                  the Nasdaq National Market, upon official notice of issuance.
                  The form of certificate evidencing the Stock complies in all
                  material respects with the applicable requirements of law, the
                  Company's Certificate of Incorporation and bylaws and the
                  Nasdaq National Market.

                           (viii)   No order preventing or suspending the use of
                  any Preliminary Prospectus has been issued by the Commission.
                  Each Preliminary Prospectus filed as part of the Registration
                  Statement as originally filed or as part of any amendment
                  thereto, or filed pursuant to Rule 424 under the Securities
                  Act, complied when so filed in all material respects with the
                  Securities Act, and did not contain an untrue statement of a
                  material fact or omit to state any material fact necessary in
                  order to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading;
                  provided, however, that none of the representations and
                  warranties set forth in this subparagraph shall apply to
                  statements in, or omissions from, any Preliminary Prospectus
                  made in reliance upon and in conformity with information
                  herein or otherwise furnished in writing to the Company by or
                  on behalf of the Underwriters for use in such Preliminary
                  Prospectus.

                           (ix)     There are no outstanding subscriptions,
                  rights, warrants, options, calls, convertible securities,
                  commitments of sale or liens granted or issued by the Company
                  relating to or entitling any person to purchase or otherwise
                  to acquire any shares of the capital stock of the Company,
                  except as disclosed in the Registration Statement and the
                  Prospectus.

                           (x)      The Company has no subsidiaries and owns no
                  equity interests in any other person or entity, other than the
                  300,000 shares of Series A Preferred Stock of Everest
                  Broadband Networks, Inc. owned by the Company.

                           (xi)     The Company is not in violation of its
                  Certificate of Incorporation or bylaws, each as amended, or in
                  default in the performance of any obligation, agreement,
                  covenant or condition contained in any indenture, loan
                  agreement, mortgage, lease or other agreement or instrument
                  that is material to the Company and to which the Company is a
                  party or by which the Company or its property is bound.

                           (xii)    None of the execution, delivery or
                  performance of this Agreement by the Company, the compliance
                  by the Company with any provision hereof or the consummation
                  of the transactions contemplated hereby or by the Registration
                  Statement and the Prospectus will (A) require any consent,
                  approval, authorization or other order of, or qualification
                  with, any court or governmental


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                  body or agency (except such as have been obtained and such as
                  may be required under the securities or Blue Sky laws of the
                  various states), (B) conflict with or constitute a breach of
                  any of the terms or provisions of, or a default under, the
                  Certificate of Incorporation or bylaws of the Company, each as
                  amended, or any indenture, loan agreement, mortgage, lease or
                  other agreement or instrument that is material to the Company,
                  to which the Company is a party or by which the Company or its
                  property is bound, (C) violate or conflict with any applicable
                  law or any rule, regulation, judgment, order or decree of any
                  court or any governmental body or agency having jurisdiction
                  over the Company or its property or (D) result in the
                  suspension, termination or revocation of any Authorization (as
                  defined below) of the Company, or any other impairment of the
                  rights of the holder of any such Authorization.

                           (xiii)   No Authorization or other action by, or
                  notice to or filing with, any court, governmental authority,
                  regulatory body or other person is required for the execution,
                  delivery or performance of this Agreement, the compliance by
                  the Company with the provisions hereof or the consummation of
                  the transactions contemplated hereby or by the Registration
                  Statement and the Prospectus, except such as have been
                  obtained and such as may be required under state securities or
                  Blue Sky laws in connection with the offer, sale and
                  distribution of the Stock by the Underwriters.

                           (xiv)    There are no legal or governmental
                  proceedings pending or threatened to which the Company is or
                  could be a party or to which any of its property is or could
                  be subject that are required to be described in the
                  Registration Statement or the Prospectus and are not so
                  described; nor are there any statutes, rules, regulations,
                  laws, orders, decrees, judgments, contracts, instruments or
                  other documents or agreements that are required to be
                  described in the Registration Statement or the Prospectus or
                  to be filed as exhibits to the Registration Statement that are
                  not so described or filed as required. Without limiting the
                  generality of the foregoing sentence, the Company has no
                  reason to believe that any legal or governmental proceedings
                  will be instituted against it and, to the best knowledge of
                  the Company, there exists no basis for any legal or
                  governmental proceedings to be instituted against it.

                           (xv)     The Company has not violated any foreign,
                  federal, state or local statute, rule, regulation, law, order,
                  decree or judgment (including, without limitation, any such
                  statute, rule, regulation, law, order, decree or judgment
                  relating to the protection of human health and safety, the
                  environment or hazardous or toxic substances or wastes,
                  pollutants or contaminants (hereinafter called Environmental
                  Laws), any provisions of the Employee Retirement Income
                  Security Act of 1974, as amended (hereinafter called ERISA),
                  or any provisions of the Foreign Corrupt Practices Act or the
                  rules and regulations promulgated thereunder), except for such
                  violations which, singly or in the aggregate, would not have a
                  material adverse effect on the business, properties, financial
                  condition or results of operations of the Company.


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                           (xvi)    The Company has such permits, licenses,
                  consents, exemptions, franchises, authorizations and other
                  approvals (each, hereinafter called an Authorization) of, and
                  has made all filings with and notices to, all governmental or
                  regulatory authorities and self-regulatory organizations and
                  all courts and other tribunals, including, without limitation,
                  under any applicable Environmental Laws, as are necessary to
                  own, lease, license and operate its properties and to conduct
                  its business, except where the failure to have any such
                  Authorization or to make any such filing or notice would not,
                  singly or in the aggregate, have a material adverse effect on
                  the business, properties, financial condition or results of
                  operations of the Company. Each such Authorization is valid
                  and in full force and effect and the Company is in compliance
                  with all the terms and conditions thereof and with the rules
                  and regulations of the authorities and governing bodies having
                  jurisdiction with respect thereto; and no event has occurred
                  (including, without limitation, the receipt of any notice from
                  any authority or governing body) which allows or, after notice
                  or lapse of time or both, would allow, revocation, suspension
                  or termination of any such Authorization or results or, after
                  notice or lapse of time or both, would result in any other
                  impairment of the rights of the holder of any such
                  Authorization; and such Authorizations contain no restrictions
                  that are burdensome to the Company; except where such failure
                  to be valid and in full force and effect or to be in
                  compliance, the occurrence of any such event or the presence
                  of any such restriction would not, singly or in the aggregate,
                  have a material adverse effect on the business, properties,
                  financial condition or results of operations of the Company.

                           (xvii)   There are no costs or liabilities
                  (contingent or otherwise) associated with Environmental Laws
                  (including, without limitation, any capital or operating
                  expenditures required for clean-up, closure of properties or
                  compliance with Environmental Laws or any Authorization, any
                  related constraints on operating activities and any potential
                  liabilities to third parties) or ERISA which would, singly or
                  in the aggregate, have a material adverse effect on the
                  business, properties, financial condition or results of
                  operations of the Company.

                           (xviii)  This Agreement has been duly authorized,
                  executed and delivered by the Company.

                           (xix)    Deloitte & Touche LLP are independent public
                  accountants with respect to the Company as required by the
                  Securities Act.

                           (xx)     The financial statements included in the
                  Registration Statement and the Prospectus (and any amendment
                  or supplement thereto), together with related schedules and
                  notes, present fairly the financial position, results of
                  operations and changes in financial position of the Company on
                  the basis stated therein at the respective dates or for the
                  respective periods to which they apply; such statements and
                  related schedules and notes have been prepared in accordance
                  with generally accepted accounting principles consistently
                  applied throughout the periods involved, except as disclosed
                  therein; all adjustments necessary for a fair


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                  presentation of results for such periods have been made; the
                  selected financial information included in the Registration
                  Statement and the Prospectus (and any amendment or supplement
                  thereto) present fairly the information shown therein and have
                  been compiled on a basis consistent with the financial
                  statements presented therein; the supporting schedules, if
                  any, included in the Registration Statement present fairly in
                  accordance with generally accepted accounting principles the
                  information required to be stated therein; and the other
                  financial and statistical information and data set forth in
                  the Registration Statement and the Prospectus (and any
                  amendment or supplement thereto) are, in all material
                  respects, accurately presented and prepared on a basis
                  consistent with such financial statements and the books and
                  records of the Company. No other financial statements,
                  supporting schedules or other financial information (whether
                  pro forma financial statements or otherwise) are required to
                  be included in the Registration Statement or the Prospectus.
                  As of the date of the Prospectus, the Company is not engaged
                  in substantive discussions with any third party with respect
                  to, or obligated to complete, any acquisitions for which
                  disclosure of pro forma financial information in the
                  Prospectus is required by the Securities Act.

                           (xxi)    The Company is not and, after giving effect
                  to the offering and sale of the Stock and the application of
                  the proceeds thereof as described in the Prospectus, will not
                  be, an "investment company" as such term is defined in the
                  investment Company Act of 1940, as amended.

                           (xxii)   Except as disclosed in the Registration
                  Statement and the Prospectus, there are no contracts,
                  agreements or understandings between the Company and any
                  person granting such person the right to require the Company
                  to file a registration statement under the Securities Act with
                  respect to any securities of the Company or to include any
                  securities of the Company in any registration statement of the
                  Company. Neither the filing of the Registration Statement nor
                  the offering or sale of the Stock as contemplated by this
                  Agreement gives rise to any rights for or relating to the
                  registration of any securities of the Company, except for such
                  rights which have been waived or satisfied by the inclusion of
                  shares of Common Stock in the offering of Stock contemplated
                  hereby.

                           (xxiii)  The Company has good and marketable title in
                  fee simple to all real property and good and marketable title
                  to all personal property owned by it which is material to the
                  business of the Company, in each case free and clear of all
                  liens, encumbrances, equities, security interests, defects,
                  adverse interests and claims whatsoever, except such as are
                  described in the Prospectus or such as do not materially
                  affect the value of such property and do not interfere with
                  the use made and proposed to be made of such property by the
                  Company; and any real property and buildings held under lease
                  by the Company are held by it under valid, subsisting and
                  enforceable leases with such exceptions as are not material
                  and do not interfere with the use made and proposed to be made
                  of such property and buildings by the Company, in each case
                  except as described in the Prospectus.


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                           (xxiv)   The Company owns or possesses, or can
                  acquire on reasonable terms, all patents, patent rights,
                  licenses, inventions, domain names, computer programs,
                  computer code, communications protocols, copyrights, other
                  software, know-how (including, without limitation, trade
                  secrets and other unpatented and/or unpatentable proprietary
                  or confidential information, systems or procedures),
                  trademarks, service marks and trade names (hereinafter called
                  Intellectual Property) currently employed by it in connection
                  with the business now operated by it except (A) where the
                  failure to own or possess or otherwise be able to acquire such
                  Intellectual Property would not, singly or in the aggregate,
                  have a material adverse effect on the business, properties,
                  financial condition or results of operations of the Company or
                  (B) as disclosed in the Registration Statement and the
                  Prospectus. There are no legal or governmental proceedings
                  pending or threatened relating to any Intellectual Property
                  that are required to be described in the Registration
                  Statement or the Prospectus and are not so described; there
                  are no contracts or other documents relating to any
                  Intellectual Property required to be filed as an exhibit to
                  the Registration Statement or required to be described in the
                  Registration Statement or the Prospectus that are not so filed
                  or described as required. The expiration of any Intellectual
                  Property owned or employed by the Company will not, singly or
                  in the aggregate, have a material adverse effect on the
                  business, properties, financial condition or results of
                  operations of the Company.

                           (xxv)    The Company is not infringing or otherwise
                  violating any Intellectual Property of others nor has it
                  received any notice of infringement of or conflict with
                  asserted rights of others with respect to any Intellectual
                  Property, except for any such infringement, violation or
                  conflict which (A) would not, singly or in the aggregate, have
                  a material adverse effect on the business, properties,
                  financial condition or results of operations of the Company or
                  (B) is disclosed in the Registration Statement and the
                  Prospectus. There are no legal or governmental proceedings
                  pending or threatened relating to any Intellectual Property
                  which, singly or in the aggregate, would have a material
                  adverse effect on the business, properties, financial
                  condition or results of operations of the Company.

                           (xxvi)   The Company is insured by insurers of
                  recognized financial responsibility against such losses and
                  risks and in such amounts as are prudent and customary in the
                  businesses in which it is engaged; and the Company (A) has not
                  received notice from any insurer or agent of such insurer that
                  substantial capital improvements or other material
                  expenditures will have to be made in order to continue such
                  insurance and (B) has no reason to believe that it will not be
                  able to renew its existing insurance coverage as and when such
                  coverage expires or to obtain similar coverage from similar
                  insurers at a cost that would not, singly or in the aggregate,
                  have a material adverse effect on the business, properties,
                  financial condition or results of operations of the Company.


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                           (xxvii)  No relationship, direct or indirect, exists
                  between or among the Company on the one hand, and the
                  directors, officers, stockholders, customers or suppliers of
                  the Company on the other hand, which is required by the
                  Securities Act to be described in the Registration Statement
                  or the Prospectus and which is not so described.

                           (xxviii) There is no (A) significant unfair labor
                  practice complaint, grievance or arbitration proceeding
                  pending or threatened against the Company before the National
                  Labor Relations Board or any state or local labor relations
                  board, (B) strike, labor dispute, slowdown or stoppage pending
                  or threatened against the Company or (C) union representation
                  question existing with respect to the employees of the
                  Company, except for such actions specified in clause (A), (B)
                  or (C) above, which, singly or in the aggregate, would not
                  have a material adverse effect on the business, properties,
                  financial condition or results of operations of the Company.
                  To the best of the Company's knowledge, no collective
                  bargaining organizing activities are taking place with respect
                  to the Company.

                           (xxix)   The Company maintains a system of internal
                  accounting controls sufficient to provide reasonable assurance
                  that (A) transactions are executed in accordance with
                  management's general or specific authorizations; (B)
                  transactions are recorded as necessary to permit preparation
                  of financial statements in conformity with generally accepted
                  accounting principles and to maintain asset accountability;
                  (C) access to assets is permitted only in accordance with
                  management's general or specific authorization; and (D) the
                  recorded accountability for assets is compared with the
                  existing assets at reasonable intervals and appropriate action
                  is taken with respect to any differences.

                           (xxx)    All material tax returns required to be
                  filed by the Company in any jurisdiction have been filed,
                  other than those filings being contested in good faith, and
                  all material taxes, including, without limitation, withholding
                  taxes, penalties and interest, assessments, fees and other
                  charges due pursuant to such returns or pursuant to any
                  assessment received by the Company have been paid, other than
                  those being contested in good faith and for which adequate
                  reserves have been provided.

                           (xxxi)   The Company has complied and is in
                  compliance with all foreign, federal, state and local
                  statutes, executive orders, proclamations, regulations, rules,
                  directives, decrees, ordinances and similar provisions having
                  the force or effect of law and all judicial and administrative
                  orders rulings, determinations and common law concerning the
                  importation of merchandise, the export or reexport of
                  products, services and technology, and the terms and conduct
                  of international transactions applicable to the Company in
                  connection with the conduct of the business of the Company
                  (including, without limitation, as the same relates to record
                  keeping requirements) (herein called International Trade Laws
                  and Regulations), except for such non-compliance which, singly
                  or in the aggregate,


                                       9
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                  would not have a material adverse effect on the business,
                  financial condition or results of operations of the Company;
                  the Company has not made or provided any false statement or
                  omission to any agency of any federal, state or local
                  government, purchasers of products, or foreign government or
                  foreign agency, in connection with the exportation of
                  merchandise (including, without limitation, with respect to
                  export licenses, exceptions and other export authorizations
                  and any filings required for or related to exportation of any
                  item), the importation of merchandise or other approvals
                  required by a foreign government or agency or any other
                  requirement relating to any International Trade Laws and
                  Regulations.

                           (xxxii)  The Company has not offered, or caused the
                  Underwriters to offer, any Stock to any person pursuant to the
                  Directed Share Program (as defined below) with the intent to
                  unlawfully influence (A) a customer or supplier of the Company
                  to alter the customer's or supplier's level or type of
                  business with the Company or (B) a trade journalist or
                  publication to write or publish favorable information about
                  the Company or its products. As used herein, Directed Share
                  Program means the offer and sale of Stock described in the
                  paragraph under the caption "Underwriting" in the Prospectus.

                           (xxxiii) All sales of the Company's securities prior
                  to the date hereof were at all relevant times duly registered
                  under the Securities Act and applicable foreign securities
                  laws and state securities or Blue Sky laws or were exempt from
                  the registration requirements of the Securities Act and
                  applicable foreign and state securities laws, or if such
                  securities were not registered or exempt in compliance with
                  the Securities Act and applicable foreign and state securities
                  laws, any private rights of action for rescission or damages
                  arising from the failure to register any such securities are
                  timebarred by applicable statutes of limitations or equitable
                  principles, including laches.

                           (xxxiv)  Each certificate signed by any officer of
                  the Company and delivered to the Underwriters or counsel for
                  the Underwriters shall be deemed to be a representation and
                  warranty by the Company to the Underwriters as to the matters
                  covered thereby.

                  (b) The Selling Securityholder hereby represents and warrants
         as follows:

                           (i)      The Selling Securityholder has been duly
                  incorporated and is validly existing as a corporation in good
                  standing under the laws of its jurisdiction of incorporation.

                           (ii)     The Selling Securityholder has, and on the
                  Closing Date and on any later date on which Option Stock is
                  purchased will have, good and marketable title to all the
                  shares of Stock to be sold by such Selling Securityholder
                  hereunder, free and clear of all liens, encumbrances,
                  equities, security interests and claims whatsoever, with full
                  right and authority to deliver the same hereunder, and that
                  upon the delivery of and payment for such shares of the Stock
                  hereunder, the


                                       10
<PAGE>

                  several Underwriters will receive good and marketable title
                  thereto, free and clear of all liens, encumbrances, equities,
                  security interests and claims whatsoever.

                           (iii)    The Selling Securityholder has, and on the
                  Closing Date and any later date on which Option Stock is
                  purchased will have, full legal right, power and authority,
                  and all authorization and approval required by law, to enter
                  into this Agreement and to sell, assign, transfer and deliver
                  the Stock to be sold by the Selling Securityholder in the
                  manner provided herein and therein.

                           (iv)     This Agreement has been duly authorized,
                  executed and delivered by or on behalf of the Selling
                  Securityholder.

                           (v)      None of the execution, delivery or
                  performance of this Agreement, the compliance by the Selling
                  Securityholder with the provisions hereof or the consummation
                  of the transactions contemplated hereby will (A) require any
                  consent, approval, authorization or other order of, or
                  qualification with, any court or governmental body or agency
                  (except such as have been obtained and such as may be required
                  under the securities or Blue Sky laws of the various states),
                  (B) conflict with or constitute a breach of any of the terms
                  or provisions of, or a default under, the Articles of
                  Incorporation or Bylaws of the Selling Securityholder or
                  any indenture, loan agreement, mortgage, lease or other
                  agreement or instrument that is material to the Selling
                  Securityholder or (C) violate or conflict with any applicable
                  law or any rule, regulation, judgment, order or decree of any
                  court or any governmental body or agency having jurisdiction
                  over the Selling Securityholder or its property.

                           (vi)     The Selling Securityholder has reviewed the
                  Registration Statement and Prospectus and, although the
                  Selling Securityholder has not independently verified the
                  accuracy or completeness of all the information contained
                  therein, nothing has come to the attention of the Selling
                  Securityholder that would lead the Selling Securityholder to
                  believe that on the Effective Date, the Registration Statement
                  contained any untrue statement of a material fact or omitted
                  to state any material fact required to be stated therein or
                  necessary in order to make the statements therein not
                  misleading; and, on the Effective Date the Prospectus
                  contained and, on the Closing Date and any later date on which
                  Option Stock is to be purchased, contains any untrue statement
                  of a material fact or omitted or omits to state any material
                  fact necessary in order to make the statements therein, in the
                  light of the circumstances under which they were made, not
                  misleading.

                           (vii)    Each certificate signed by or on behalf of
                  the Selling Securityholder and delivered to the Underwriters
                  or counsel for the Underwriters shall be deemed to be a
                  representation and warranty by the Selling Securityholder to
                  the Underwriters as to the matters covered thereby.

         3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.


                                       11
<PAGE>

                  (a) On the basis of the representations and warranties and
         subject to the terms and conditions herein set forth, the Company
         agrees to issue and sell 6,800,000 shares of the Underwritten Stock to
         the several Underwriters, the Selling Securityholder agrees to sell to
         the several Underwriters the number of shares of the Underwritten Stock
         set forth in Schedule II opposite the name of the Selling
         Securityholder, and each of the Underwriters agrees to purchase from
         the Company and the Selling Securityholder the respective aggregate
         number of shares of Underwritten Stock set forth opposite its name in
         Schedule I. The price at which such shares of Underwritten Stock shall
         be sold by the Company and the Selling Securityholder and purchased by
         the several Underwriters shall be $___ per share. The obligation of
         each Underwriter to the Company and the Selling Securityholder shall be
         to purchase from the Company and the Selling Securityholder that number
         of shares of the Underwritten Stock which represents the same
         proportion of the total number of shares of the Underwritten Stock to
         be sold by each of the Company and the Selling Securityholder pursuant
         to this Agreement as the number of shares of the Underwritten Stock set
         forth opposite the name of such Underwriter in Schedule I hereto
         represents of the total number of shares of the Underwritten Stock to
         be purchased by all Underwriters pursuant to this Agreement, as
         adjusted by you in such manner as you deem advisable to avoid
         fractional shares. In making this Agreement, each Underwriter is
         contracting severally and not jointly; except as provided in paragraphs
         (b) and (c) of this Section 3, the agreement of each Underwriter is to
         purchase only the respective number of shares of the Underwritten Stock
         specified in Schedule I.

                  (b) If for any reason one or more of the Underwriters shall
         fail or refuse (otherwise than for a reason sufficient to justify the
         termination of this Agreement under the provisions of Section 8 or 9
         hereof) to purchase and pay for the number of shares of the Stock
         agreed to be purchased by such Underwriter or Underwriters, the Company
         or the Selling Securityholder shall immediately give notice thereof to
         you, and the non-defaulting Underwriters shall have the right within 24
         hours after the receipt by you of such notice to purchase, or procure
         one or more other Underwriters to purchase, in such proportions as may
         be agreed upon between you and such purchasing Underwriter or
         Underwriters and upon the terms herein set forth, all or any part of
         the shares of the Stock which such defaulting Underwriter or
         Underwriters agreed to purchase. If the non-defaulting Underwriters
         fail so to make such arrangements with respect to all such shares and
         portion, the number of shares of the Stock which each non-defaulting
         Underwriter is otherwise obligated to purchase under this Agreement
         shall be automatically increased on a pro rata basis to absorb the
         remaining shares and portion which the defaulting Underwriter or
         Underwriters agreed to purchase; PROVIDED, HOWEVER, that the
         non-defaulting Underwriters shall not be obligated to purchase the
         shares and portion which the defaulting Underwriter or Underwriters
         agreed to purchase if the aggregate number of such shares of the Stock
         exceeds 10% of the total number of shares of the Stock which all
         Underwriters agreed to purchase hereunder. If the total number of
         shares of the Stock which the defaulting Underwriter or Underwriters
         agreed to purchase shall not be purchased or absorbed in accordance
         with the two preceding sentences, the Company and the Selling
         Securityholder shall have the right, within 24 hours next succeeding
         the 24-hour period above referred to, to make arrangements with other
         underwriters or


                                       12
<PAGE>

         purchasers satisfactory to you for purchase of such shares and portion
         on the terms herein set forth. In any such case, either you or the
         Company and the Selling Securityholder shall have the right to postpone
         the Closing Date determined as provided in Section 5 hereof for not
         more than seven business days after the date originally fixed as the
         Closing Date pursuant to said Section 5 in order that any necessary
         changes in the Registration Statement, the Prospectus or any other
         documents or arrangements may be made. If neither the non-defaulting
         Underwriters nor the Company and the Selling Securityholder shall make
         arrangements within the 24-hour periods stated above for the purchase
         of all the shares of the Stock which the defaulting Underwriter or
         Underwriters agreed to purchase hereunder, this Agreement shall be
         terminated without further act or deed and without any liability on the
         part of the Company or the Selling Securityholder to any non-defaulting
         Underwriter and without any liability on the part of any non-defaulting
         Underwriter to the Company or the Selling Securityholder. Nothing in
         this paragraph (b), and no action taken hereunder, shall relieve any
         defaulting Underwriter from liability in respect of any default of such
         Underwriter under this Agreement.

                  (c) On the basis of the representations, warranties and
         covenants herein contained, and subject to the terms and conditions
         herein set forth, the Company and the Selling Securityholder grant an
         option to the several Underwriters to purchase, severally and not
         jointly, up to 1,170,000 shares in the aggregate of the Option Stock
         from the Company and the Selling Securityholder at the same price per
         share as the Underwriters shall pay for the Underwritten Stock. Said
         option may be exercised only to cover over-allotments in the sale of
         the Underwritten Stock by the Underwriters and may be exercised in
         whole or in part at any time (but not more than once) on or before the
         thirtieth day after the date of this Agreement upon written or
         telegraphic notice by you to the Company setting forth the aggregate
         number of shares of the Option Stock as to which the several
         Underwriters are exercising the option. Delivery of certificates for
         the shares of Option Stock, and payment therefor, shall be made as
         provided in Section 5 hereof. The number of shares of the Option Stock
         to be purchased by each Underwriter shall be the same percentage of the
         total number of shares of the Option Stock to be purchased by the
         several Underwriters as such Underwriter is purchasing of the
         Underwritten Stock, as adjusted by you in such manner as you deem
         advisable to avoid fractional shares.

         4. OFFERING BY UNDERWRITERS.

                  (a) The terms of the initial public offering by the
         Underwriters of the Stock to be purchased by them shall be as set forth
         in the Prospectus. The Underwriters may from time to time change the
         public offering price after the closing of the initial public offering
         and increase or decrease the concessions and discounts to dealers as
         they may determine.

                  (b) The information set forth in the last paragraph on the
         front cover page and under "Underwriting" in the Registration
         Statement, any Preliminary Prospectus and the Prospectus relating to
         the Stock filed by the Company (insofar as such information relates to
         the Underwriters) constitutes the only information furnished by the
         Underwriters to the Company for inclusion in the Registration
         Statement, any Preliminary Prospectus, and


                                       13
<PAGE>

         the Prospectus, and you on behalf of the respective Underwriters
         represent and warrant to the Company that the statements made therein
         are correct.

         5. DELIVERY OF AND PAYMENT FOR THE STOCK.

                  (a) Delivery of certificates for the shares of the
         Underwritten Stock and the Option Stock (if the option granted by
         Section 3(c) hereof shall have been exercised not later than 7:00 A.M.,
         San Francisco time, on the date two business days preceding the Closing
         Date), and payment therefor, shall be made at the office of Jones, Day,
         Reavis & Pogue, 3500 SunTrust Plaza, 303 Peachtree Street, N.E.,
         Atlanta, Georgia 30308 at 7:00 a.m., San Francisco time, on the
         [fourth] business day after the date of this Agreement, or at such time
         on such other day, not later than seven full business days after such
         [fourth] business day, as shall be agreed upon in writing by the
         Company, the Selling Securityholder and you. The date and hour of such
         delivery and payment (which may be postponed as provided in Section
         3(b) hereof) are herein called the Closing Date.

                  (b) If the option granted by Section 3(c) hereof shall be
         exercised after 7:00 a.m., San Francisco time, on the date two business
         days preceding the Closing Date, delivery of certificates for the
         shares of Option Stock, and payment therefor, shall be made at the
         office of Jones, Day, Reavis & Pogue, 3500 SunTrust Plaza, 303
         Peachtree Street, N.E., Atlanta, Georgia 30308, at 7:00 a.m., San
         Francisco time, on the third business day after the exercise of such
         option.

                  (c) Payment for the Stock purchased from the Company shall be
         made to the Company or its order, and payment for the Stock purchased
         from the Selling Securityholder shall be made to the Custodian, for the
         account of the Selling Securityholder, in each case by one or more
         certified or official bank check or checks in same day funds. Such
         payment shall be made upon delivery of certificates for the Stock to
         you for the respective accounts of the several Underwriters against
         receipt therefor signed by you. Certificates for the Stock to be
         delivered to you shall be registered in such name or names and shall be
         in such denominations as you may request at least one business day
         before the Closing Date, in the case of Underwritten Stock, and at
         least one business day prior to the purchase thereof, in the case of
         the Option Stock. Such certificates will be made available to the
         Underwriters for inspection, checking and packaging at the offices of
         Lewco Securities Corporation, 2 Broadway, New York, New York 10004 on
         the business day prior to the Closing Date or, in the case of the
         Option Stock, by 3:00 p.m., New York time, on the business day
         preceding the date of purchase.

         It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholder for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
date on which Option Stock is purchased for the account of such Underwriter. Any
such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.


                                       14
<PAGE>

         6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING SECURITYHOLDER.
Each of the Company and the Selling Securityholder respectively covenants and
agrees as follows:

                  (a) The Company will (i) prepare and timely file with the
         Commission under Rule 424(b) a Prospectus containing information
         previously omitted at the time of effectiveness of the Registration
         Statement in reliance on Rule 430A and (ii) not file any amendment to
         the Registration Statement or supplement to the Prospectus of which you
         shall not previously have been advised and furnished with a copy or to
         which you shall have reasonably objected in writing or which is not in
         compliance with the Securities Act or the rules and regulations of the
         Commission.

                  (b) The Company will promptly notify each Underwriter in the
         event of (i) the request by the Commission for amendment of the
         Registration Statement or for supplement to the Prospectus or for any
         additional information, (ii) the issuance by the Commission of any stop
         order suspending the effectiveness of the Registration Statement, (iii)
         the institution or notice of intended institution of any action or
         proceeding for that purpose, (iv) the receipt by the Company of any
         notification with respect to the suspension of the qualification of the
         Stock for sale in any jurisdiction or (v) the receipt by it of notice
         of the initiation or threatening of any proceeding for such purpose.
         The Company and the Selling Securityholder will make every reasonable
         effort to prevent the issuance of such a stop order and, if such an
         order shall at any time be issued, to obtain the withdrawal thereof at
         the earliest possible moment.

                  (c) The Company will (i) on or before the Closing Date,
         deliver to you a signed copy of the Registration Statement as
         originally filed and of each amendment thereto filed prior to the time
         the Registration Statement becomes effective and, promptly upon the
         filing thereof, a signed copy of each post-effective amendment, if any,
         to the Registration Statement (together with, in each case, all
         exhibits thereto unless previously furnished to you) and will also
         deliver to you, for distribution to the Underwriters, a sufficient
         number of additional conformed copies of each of the foregoing (but
         without exhibits) so that one copy of each may be distributed to each
         Underwriter, (ii) as promptly as possible deliver to you and send to
         the several Underwriters, at such office or offices as you may
         designate, as many copies of the Prospectus as you may reasonably
         request and (iii) thereafter from time to time during the period in
         which a prospectus is required by law to be delivered by an Underwriter
         or dealer, likewise send to the Underwriters as many additional copies
         of the Prospectus and as many copies of any supplement to the
         Prospectus and of any amended prospectus, filed by the Company with the
         Commission, as you may reasonably request for the purposes contemplated
         by the Securities Act.

                  (d) If at any time during the period in which a prospectus is
         required by law to be delivered by an Underwriter or dealer any event
         relating to or affecting the Company, or of which the Company shall be
         advised in writing by you, shall occur as a result of which it is
         necessary, in the opinion of counsel for the Company or of counsel for
         the Underwriters, to supplement or amend the Prospectus in order to
         make the Prospectus not misleading in the light of the circumstances
         existing at the time it is delivered to a


                                       15
<PAGE>

         purchaser of the Stock, the Company will forthwith prepare and file
         with the Commission a supplement to the Prospectus or an amended
         prospectus so that the Prospectus as so supplemented or amended will
         not contain any untrue statement of a material fact or omit to state
         any material fact necessary in order to make the statements therein, in
         the light of the circumstances existing at the time such Prospectus is
         delivered to such purchaser, not misleading. If, after the initial
         public offering of the Stock by the Underwriters and during such
         period, the Underwriters shall propose to vary the terms of offering
         thereof by reason of changes in general market conditions or otherwise,
         you will advise the Company in writing of the proposed variation, and,
         if in the opinion either of counsel for the Company or of counsel for
         the Underwriters such proposed variation requires that the Prospectus
         be supplemented or amended, the Company will forthwith prepare and file
         with the Commission a supplement to the Prospectus or an amended
         prospectus setting forth such variation. The Company authorizes the
         Underwriters and all dealers to whom any of the Stock may be sold by
         the several Underwriters to use the Prospectus, as from time to time
         amended or supplemented, in connection with the sale of the Stock in
         accordance with the applicable provisions of the Securities Act and the
         applicable rules and regulations thereunder for such period.

                  (e) Prior to the filing thereof with the Commission, the
         Company will submit to you, for your information, a copy of any
         post-effective amendment to the Registration Statement and any
         supplement to the Prospectus or any amended prospectus proposed to be
         filed.

                  (f) The Company will cooperate, when and as requested by you,
         in the qualification of the Stock for offer and sale under the
         securities or blue sky laws of such jurisdictions as you may designate
         and, during the period in which a prospectus is required by law to be
         delivered by an Underwriter or dealer, in keeping such qualifications
         in good standing under said securities or blue sky laws; PROVIDED,
         HOWEVER, that the Company shall not be obligated to file any general
         consent to service of process or to qualify as a foreign corporation in
         any jurisdiction in which it is not so qualified. The Company will,
         from time to time, prepare and file such statements, reports, and other
         documents as are or may be required to continue such qualifications in
         effect for so long a period as you may reasonably request for
         distribution of the Stock.

                  (g) During a period of five years commencing with the date
         hereof, the Company will furnish to you, and to each Underwriter who
         may so request in writing, copies of all periodic and special reports
         furnished to stockholders of the Company and of all information,
         documents and reports filed with the Commission (including, without
         limitation, any information required by Rule 463 of the Securities
         Act).

                  (h) Not later than the 45th day following the end of the
         fiscal quarter first occurring after the first anniversary of the
         Effective Date, the Company will make generally available to its
         security holders an earnings statement in accordance with Section 11(a)
         of the Securities Act and Rule 158 thereunder.


                                       16
<PAGE>

                  (i) The Company and the Selling Securityholder jointly and
         severally agree to pay all costs and expenses incident to the
         performance of their obligations under this Agreement, including all
         costs and expenses incident to (i) the preparation, printing and filing
         with the Commission and the National Association of Securities Dealers,
         Inc. ("NASD") of the Registration Statement, any Preliminary Prospectus
         and the Prospectus, (ii) the furnishing to the Underwriters of copies
         of any Preliminary Prospectus and of the several documents required by
         paragraph (c) of this Section 6 to be so furnished, (iii) the printing
         of this Agreement and related documents delivered to the Underwriters,
         (iv) the preparation, printing and filing of all supplements and
         amendments to the Prospectus referred to in paragraph (d) of this
         Section 6, (v) the furnishing to you and the Underwriters of the
         reports and information referred to in paragraph (g) of this Section 6
         and (vi) the printing and issuance of stock certificates, including the
         transfer agent's fees. The Selling Securityholder will pay any transfer
         taxes incident to the transfer to the Underwriters of the shares the
         Stock being sold by the Selling Securityholder.

                  (j) The Company and the Selling Securityholder jointly and
         severally agree to reimburse you, for the account of the several
         Underwriters, for blue sky fees and related disbursements (including
         reasonable counsel fees and disbursements and cost of printing
         memoranda for the Underwriters) paid by or for the account of the
         Underwriters or their counsel in qualifying the Stock under state
         securities or blue sky laws and in the review of the offering by the
         NASD.

                  (k) The provisions of paragraphs (i) and (j) of this Section
         are intended to relieve the Underwriters from the payment of the
         expenses and costs which the Company and the Selling Securityholder
         hereby agree to pay and shall not affect any agreement which the
         Company and the Selling Securityholder may make, or may have made, for
         the sharing of any such expenses and costs.

                  (l) The Company and the Selling Securityholder hereby agree
         that, without the prior written consent of Chase Securities Inc. on
         behalf of the Underwriters, the Company or the Selling Securityholder,
         as the case may be, will not, for a period of 180 days following the
         commencement of the public offering of the Stock by the Underwriters,
         directly or indirectly, (i) sell, offer, contract to sell, make any
         short sale, pledge, sell any option or contract to purchase, purchase
         any option or contract to sell, grant any option, right or warrant to
         purchase or otherwise transfer or dispose (a "Transfer") of any shares
         of Common Stock or any securities convertible into or exchangeable or
         exercisable for or any rights to purchase or acquire Common Stock or
         (ii) enter into any swap or other agreement that transfers, in whole or
         in part, any of the economic consequences or ownership of Common Stock,
         whether any such transaction described in clause (i) or (ii) above is
         to be settled by delivery of Common Stock or such other securities, in
         cash or otherwise. The foregoing sentence shall not apply to (A) the
         Stock to be sold to the Underwriters pursuant to this Agreement, (B)
         shares of Common Stock issued by the Company upon the exercise of
         options granted under the stock option plan of the Company (the "Option
         Plan") or upon the exercise of warrants outstanding as of the date
         hereof, all as described in the notes to the table under the caption
         "Capitalization" in the Preliminary Prospectus, (C) options to purchase
         Common Stock


                                       17
<PAGE>

         granted under the Option Plan, and (D) with respect to the Selling
         Securityholder, a Transfer to any subsidiary of which the Selling
         Securityholder owns, directly or indirectly, 100% of the voting capital
         stock or any parent corporation which owns, directly or indirectly,
         100% of the voting capital stock of the Selling Securityholder,
         provided that any such transferee executes a "lock-up" agreement
         substantially similar to those entered into by Nortel Networks,
         Inc. pursuant to Section 9(j) hereof.

                  (m) If at any time during the 25-day period after the
         Registration Statement becomes effective any rumor, publication or
         event relating to or affecting the Company shall occur as a result of
         which in your opinion the market price for the Stock has been or is
         likely to be materially affected (regardless of whether such rumor,
         publication or event necessitates a supplement to or amendment of the
         Prospectus), the Company will, after written notice from you advising
         the Company to the effect set forth above, forthwith prepare, consult
         with you concerning the substance of and disseminate a press release or
         other public statement, reasonably satisfactory to you, responding to
         or commenting on such rumor, publication or event.

                  (n) The Company is familiar with the Investment Company Act of
         1940, as amended, and has in the past conducted its affairs, and will
         in the future conduct its affairs, in such a manner to ensure that the
         Company was not and will not be an "investment company" or a company
         "controlled" by an "investment company" within the meaning of the
         Investment Company Act of 1940, as amended, and the rules and
         regulations thereunder.

         7.   INDEMNIFICATION AND CONTRIBUTION.

                  (a) Subject to the provisions of paragraph (f) of this Section
         7, the Company and the Selling Securityholder jointly and severally
         agree to indemnify and hold harmless each Underwriter and each person
         (including each partner or officer thereof) who controls any
         Underwriter within the meaning of Section 15 of the Securities Act from
         and against any and all losses, claims, damages or liabilities, joint
         or several, to which such indemnified parties or any of them may become
         subject under the Securities Act, the Exchange Act, or the common law
         or otherwise, and the Company and the Selling Securityholder jointly
         and severally agree to reimburse each such Underwriter and controlling
         person for any legal or other expenses (including, except as otherwise
         hereinafter provided, reasonable fees and disbursements of counsel)
         incurred by the respective indemnified parties in connection with
         defending against any such losses, claims, damages or liabilities or in
         connection with any investigation or inquiry of, or other proceeding
         which may be brought against, the respective indemnified parties, in
         each case arising out of or based upon (i) any untrue statement or
         alleged untrue statement of a material fact contained in the
         Registration Statement (including the Prospectus as part thereof and
         any Rule 462(b) registration statement) or any post-effective amendment
         thereto (including any Rule 462(b) registration statement), or the
         omission or alleged omission to state therein a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading, or (ii) any untrue statement or alleged untrue statement of
         a material fact contained in any Preliminary Prospectus or


                                       18
<PAGE>

         the Prospectus (as amended or as supplemented if the Company shall have
         filed with the Commission any amendment thereof or supplement thereto)
         or the omission or alleged omission to state therein a material fact
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading; PROVIDED,
         HOWEVER, that (1) the indemnity agreements of the Company and the
         Selling Securityholder contained in this paragraph (a) shall not apply
         to any such losses, claims, damages, liabilities or expenses if such
         statement or omission was made in reliance upon and in conformity with
         information furnished as herein stated or otherwise furnished in
         writing to the Company by or on behalf of any Underwriter for use in
         any Preliminary Prospectus or the Registration Statement or the
         Prospectus or any such amendment thereof or supplement thereto, (2) the
         indemnity agreement contained in this paragraph (a) with respect to any
         Preliminary Prospectus shall not inure to the benefit of any
         Underwriter from whom the person asserting any such losses, claims,
         damages, liabilities or expenses purchased the Stock which is the
         subject thereof (or to the benefit of any person controlling such
         Underwriter) if at or prior to the written confirmation of the sale of
         such Stock a copy of the Prospectus (or the Prospectus as amended or
         supplemented) was not sent or delivered to such person and the untrue
         statement or omission of a material fact contained in such Preliminary
         Prospectus was corrected in the Prospectus (or the Prospectus as
         amended or supplemented) unless the failure is the result of
         noncompliance by the Company with paragraph (c) of Section 6 hereof,
         and (3) the Selling Securityholder shall only be liable under this
         paragraph with respect to (A) information pertaining to the Selling
         Securityholder furnished by or on behalf of the Selling Securityholder
         expressly for use in any Preliminary Prospectus or the Registration
         Statement or the Prospectus or any such amendment thereof or supplement
         thereto or (B) facts that would constitute a breach of any
         representation or warranty of the Selling Securityholder set forth in
         Section 2(b) hereof. The indemnity agreements of the Company and the
         Selling Securityholder contained in this paragraph (a) and the
         representations and warranties of the Company and the Selling
         Securityholder contained in Section 2 hereof shall remain operative and
         in full force and effect regardless of any investigation made by or on
         behalf of any indemnified party and shall survive the delivery of and
         payment for the Stock.

                  (b) Each Underwriter severally agrees to indemnify and hold
         harmless the Company, each of its officers who signs the Registration
         Statement on his own behalf or pursuant to a power of attorney, each of
         its directors, each other Underwriter and each person (including each
         partner or officer thereof) who controls the Company or any such other
         Underwriter within the meaning of Section 15 of the Securities Act, and
         the Selling Securityholder from and against any and all losses, claims,
         damages or liabilities, joint or several, to which such indemnified
         parties or any of them may become subject under the Securities Act, the
         Exchange Act, or the common law or otherwise and to reimburse each of
         them for any legal or other expenses (including, except as otherwise
         hereinafter provided, reasonable fees and disbursements of counsel)
         incurred by the respective indemnified parties in connection with
         defending against any such losses, claims, damages or liabilities or in
         connection with any investigation or inquiry of, or other proceeding
         which may be brought against, the respective indemnified parties, in
         each


                                       19
<PAGE>

         case arising out of or based upon (i) any untrue statement or alleged
         untrue statement of a material fact contained in the Registration
         Statement (including the Prospectus as part thereof and any Rule 462(b)
         registration statement) or any post-effective amendment thereto
         (including any Rule 462(b) registration statement) or the omission or
         alleged omission to state therein a material fact required to be stated
         therein or necessary to make the statements therein not misleading or
         (ii) any untrue statement or alleged untrue statement of a material
         fact contained in the Prospectus (as amended or as supplemented if the
         Company shall have filed with the Commission any amendment thereof or
         supplement thereto) or the omission or alleged omission to state
         therein a material fact necessary in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading, if such statement, omission or alleged omission was
         made in reliance upon and in conformity with information furnished as
         herein stated or otherwise furnished in writing to the Company by or on
         behalf of such indemnifying Underwriter for use in the Registration
         Statement or the Prospectus or any such amendment thereof or supplement
         thereto. The indemnity agreement of each Underwriter contained in this
         paragraph (b) shall remain operative and in full force and effect
         regardless of any investigation made by or on behalf of any indemnified
         party and shall survive the delivery of and payment for the Stock.

                  (c) Each party indemnified under the provision of paragraphs
         (a) and (b) of this Section 7 agrees that, upon the service of a
         summons or other initial legal process upon it in any action or suit
         instituted against it or upon its receipt of written notification of
         the commencement of any investigation or inquiry of, or proceeding
         against, it in respect of which indemnity may be sought on account of
         any indemnity agreement contained in such paragraphs, it will promptly
         give written notice (herein called the Notice) of such service or
         notification to the party or parties from whom indemnification may be
         sought hereunder. No indemnification provided for in such paragraphs
         shall be available to any party who shall fail so to give the Notice if
         the party to whom such Notice was not given was unaware of the action,
         suit, investigation, inquiry or proceeding to which the Notice would
         have related and was prejudiced by the failure to give the Notice, but
         the omission so to notify such indemnifying party or parties of any
         such service or notification shall not relieve such indemnifying party
         or parties from any liability which it or they may have to the
         indemnified party for contribution or otherwise than on account of such
         indemnity agreement. Any indemnifying party shall be entitled at its
         own expense to participate in the defense of any action, suit or
         proceeding against, or investigation or inquiry of, an indemnified
         party. Any indemnifying party shall be entitled, if it so elects within
         a reasonable time after receipt of the Notice by giving written notice
         (herein called the Notice of Defense) to the indemnified party, to
         assume (alone or in conjunction with any other indemnifying party or
         parties) the entire defense of such action, suit, investigation,
         inquiry or proceeding, in which event such defense shall be conducted,
         at the expense of the indemnifying party or parties, by counsel chosen
         by such indemnifying party or parties and reasonably satisfactory to
         the indemnified party or parties; PROVIDED, HOWEVER, that (i) if the
         indemnified party or parties reasonably determine that there may be a
         conflict between the positions of the indemnifying party or parties and
         of the indemnified party or parties in conducting the defense of such
         action, suit, investigation,

                                       20
<PAGE>

         inquiry or proceeding or that there may be legal defenses available
         to such indemnified party or parties different from or in addition
         to those available to the indemnifying party or parties, then
         counsel for the indemnified party or parties shall be entitled to
         conduct the defense to the extent reasonably determined by such
         counsel to be necessary to protect the interests of the indemnified
         party or parties and (ii) in any event, the indemnified party or
         parties shall be entitled to have counsel chosen by such indemnified
         party or parties participate in, but not conduct, the defense. If,
         within a reasonable time after receipt of the Notice, an
         indemnifying party gives a Notice of Defense and the counsel chosen
         by the indemnifying party or parties is reasonably satisfactory to
         the indemnified party or parties, the indemnifying party or parties
         will not be liable under paragraphs (a) through (c) of this Section
         7 for any legal or other expenses subsequently incurred by the
         indemnified party or parties in connection with the defense of the
         action, suit, investigation, inquiry or proceeding, except that (A)
         the indemnifying party or parties shall bear the legal and other
         expenses incurred in connection with the conduct of the defense as
         referred to in clause (i) of the proviso to the preceding sentence
         and (B) the indemnifying party or parties shall bear such other
         expenses as it or they have authorized to be incurred by the
         indemnified party or parties. If, within a reasonable time after
         receipt of the Notice, no Notice of Defense has been given, the
         indemnifying party or parties shall be responsible for any and all
         legal or other expenses incurred by the indemnified party or parties
         in connection with the defense of the action, suit, investigation,
         inquiry or proceeding.

                  (d) If the indemnification provided for in this Section 7 is
         unavailable or insufficient to hold harmless an indemnified party under
         paragraph (a) or (b) of this Section 7, then each indemnifying party,
         in lieu of indemnifying such indemnified party, shall contribute to the
         amount paid or payable by such indemnified party as a result of the
         losses, claims, damages or liabilities referred to in paragraph (a) or
         (b) of this Section 7 (i) in such proportion as is appropriate to
         reflect the relative benefits received by each indemnifying party from
         the offering of the Stock or (ii) if the allocation provided by clause
         (i) above is not permitted by applicable law, in such proportion as is
         appropriate to reflect not only the relative benefits referred to in
         clause (i) above but also the relative fault of each indemnifying party
         in connection with the statements or omissions that resulted in such
         losses, claims, damages or liabilities, or actions in respect thereof,
         as well as any other relevant equitable considerations. The relative
         benefits received by the Company and the Selling Securityholder on the
         one hand and the Underwriters on the other shall be deemed to be in the
         same respective proportions as the total net proceeds from the offering
         (before deducting expenses) of the Stock received by the Company and
         the Selling Securityholder and the total underwriting discount received
         by the Underwriters, as set forth in the table on the cover page of the
         Prospectus, bear to the aggregate public offering price of the Stock.
         Relative fault shall be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a material fact or
         the omission or alleged omission to state a material fact relates to
         information supplied by each indemnifying party and the parties'
         relative intent, knowledge, access to information and opportunity to
         correct or prevent such untrue statement or omission.


                                       21

<PAGE>

         The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.

         Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).

                  (e) Neither the Company nor the Selling Securityholder will,
         without the prior written consent of each Underwriter, settle or
         compromise or consent to the entry of any judgment in any pending or
         threatened claim, action, suit or proceeding in respect of which
         indemnification may be sought hereunder (whether or not such
         Underwriter or any person who controls such Underwriter within the
         meaning of Section 15 of the Securities Act or Section 20 of the
         Exchange Act is a party to such claim, action, suit or proceeding)
         unless such settlement, compromise or consent includes an unconditional
         release of such Underwriter and each such controlling person from all
         liability arising out of such claim, action, suit or proceeding.

                  (f) The liability of the Selling Securityholder under the
         Selling Securityholder's representations and warranties contained in
         paragraph (b) of Section 2 hereof and under the indemnity and
         reimbursement agreements contained in the provisions of this Section 7
         and Section 11 hereof shall be limited to an amount equal to the
         initial public offering price of the stock sold by the Selling
         Securityholder to the Underwriters, less underwriting discounts and
         commissions with respect to such stock. The Company and the Selling
         Securityholder may agree, as among themselves and without limiting the
         rights of the Underwriters under this Agreement, as to the respective
         amounts of such liability for which they each shall be responsible.

         8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholder if after the


                                       22
<PAGE>

date of this Agreement trading in the Common Stock shall have been suspended, or
if there shall have occurred (i) the engagement in hostilities or an escalation
of major hostilities by the United States or the declaration of war or a
national emergency by the United States on or after the date hereof, (ii) any
outbreak of hostilities or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
calamity, crisis or change in economic or political conditions in the financial
markets of the United States would, in the Underwriters' reasonable judgment,
make the offering or delivery of the Stock impracticable, (iii) suspension of
trading in securities generally or a material adverse decline in value of
securities generally on the New York Stock Exchange, the American Stock Exchange
or The Nasdaq Stock Market, or limitations on prices (other than limitations on
hours or numbers of days of trading) for securities on either such exchange or
system, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of, or commencement of any
proceeding or investigation by, any court, legislative body, agency or other
governmental authority which in the Underwriters' reasonable opinion materially
and adversely affects or will materially or adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this Agreement
shall be terminated pursuant to this Section 8, there shall be no liability of
the Company or the Selling Securityholder to the Underwriters and no liability
of the Underwriters to the Company or the Selling Securityholder; PROVIDED,
HOWEVER, that in the event of any such termination the Company and the Selling
Securityholder agree to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the Company
and the Selling Securityholder under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.

         9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Securityholder of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:

                  (a) The Registration Statement shall have become effective;
         and no stop order suspending the effectiveness thereof shall have been
         issued and no proceedings therefor shall be pending or threatened by
         the Commission.

                  (b) The legality and sufficiency of the sale of the Stock
         hereunder and the validity and form of the certificates representing
         the Stock, all corporate proceedings and other legal matters incident
         to the foregoing, and the form of the Registration Statement and of the
         Prospectus (except as to the financial statements contained therein),
         shall have been approved at or prior to the Closing Date by Jones, Day,
         Reavis & Pogue, counsel for the Underwriters.

                  (c) You shall have received from Hunton & Williams, counsel
         for the Company, an opinion addressed to the Underwriters and dated the
         Closing Date, covering the


                                       23
<PAGE>

         matters set forth in Annex A and Annex B hereto, and from Nicholas
         J. DeRoma, Chief Legal Officer of the Selling Securityholder, an
         opinion addressed to the Underwriters and dated the Closing Date,
         covering the matters set forth in Annex C hereto, and if Option
         Stock is purchased at any date after the Closing Date, additional
         opinions from each such counsel, addressed to the Underwriters and
         dated such later date, confirming that the statements expressed as
         of the Closing Date in such opinions remain valid as of such later
         date.

                  (d) You shall be satisfied that (i) as of the Effective Date,
         the statements made in the Registration Statement and the Prospectus
         were true and correct and neither the Registration Statement nor the
         Prospectus omitted to state any material fact required to be stated
         therein or necessary in order to make the statements therein,
         respectively, not misleading, (ii) since the Effective Date, no event
         has occurred which should have been set forth in a supplement or
         amendment to the Prospectus which has not been set forth in such a
         supplement or amendment, (iii) since the respective dates as of which
         information is given in the Registration Statement in the form in which
         it originally became effective and the Prospectus contained therein,
         there has not been any material adverse change or any development
         involving a prospective material adverse change in or affecting the
         business, properties, financial condition or results of operations of
         the Company, whether or not arising from transactions in the ordinary
         course of business, and, since such dates, except in the ordinary
         course of business, the Company has not entered into any material
         transaction not referred to in the Registration Statement in the form
         in which it originally became effective and the Prospectus contained
         therein, (iv) the Company has no material contingent obligations which
         are not disclosed in the Registration Statement and the Prospectus, (v)
         there are not any pending or known threatened legal proceedings to
         which the Company is a party or of which property of the Company is the
         subject which are material and which are not disclosed in the
         Registration Statement and the Prospectus, (vi) there are not any
         franchises, contracts, leases or other documents which are required to
         be filed as exhibits to the Registration Statement which have not been
         filed as required, (vii) the representations and warranties of the
         Company herein are true and correct in all material respects as of the
         Closing Date or any later date on which Option Stock is to be
         purchased, as the case may be, and (viii) there has not been any
         material change in the market for securities in general or in
         political, financial or economic conditions from those reasonably
         foreseeable as to render it impracticable in your reasonable judgment
         to make a public offering of the Stock, or a material adverse change in
         market levels for securities in general (or those of companies in
         particular) or financial or economic conditions which render it
         inadvisable to proceed.

                  (e) You shall have received on the Closing Date and on any
         later date on which Option Stock is purchased a certificate, dated the
         Closing Date or such later date, as the case may be, and signed by the
         President and the Chief Financial Officer of the Company, stating that
         the respective signers of said certificate have carefully examined the
         Registration Statement in the form in which it originally became
         effective and the Prospectus contained therein and any supplements or
         amendments thereto, and that the statements included in clauses (i)
         through (vii) of paragraph (d) of this Section 9 are true and correct.


                                       24
<PAGE>

                  (f) You shall have received from Deloitte & Touche LLP, a
         letter or letters, addressed to the Underwriters and dated the Closing
         Date and any later date on which Option Stock is purchased, confirming
         that they are independent public accountants with respect to the
         Company within the meaning of the Securities Act and the applicable
         published rules and regulations thereunder and based upon the
         procedures described in their letter delivered to you concurrently with
         the execution of this Agreement (herein called the Original Letter),
         but carried out to a date not more than three business days prior to
         the Closing Date or such later date on which Option Stock is purchased
         (i) confirming, to the extent true, that the statements and conclusions
         set forth in the Original Letter are accurate as of the Closing Date or
         such later date, as the case may be, and (ii) setting forth any
         revisions and additions to the statements and conclusions set forth in
         the Original Letter which are necessary to reflect any changes in the
         facts described in the Original Letter since the date of the Original
         Letter or to reflect the availability of more recent financial
         statements, data or information. The letters shall not disclose any
         change, or any development involving a prospective change, in or
         affecting the business or properties of the Company which, in your sole
         judgment, makes it impractical or inadvisable to proceed with the
         public offering of the Stock or the purchase of the Option Stock as
         contemplated by the Prospectus.

                  (g) You shall have received from Deloitte & Touche LLP, a
         letter stating that their review of the Company's system of internal
         accounting controls, to the extent they deemed necessary in
         establishing the scope of their examination of the Company's financial
         statements for the year ended December 31, 1999, did not disclose any
         weakness in internal controls that they considered to be material
         weaknesses.

                  (h) You shall have been furnished evidence in usual written or
         telegraphic form from the appropriate authorities of the several
         jurisdictions, or other evidence satisfactory to you, of the
         qualification referred to in paragraph (f) of Section 6 hereof.

                  (i) Prior to the Closing Date, the Stock to be issued and sold
         by the Company and the Stock to be sold by the Selling Securityholder
         shall have been duly authorized for listing by the Nasdaq National
         Market upon official notice of issuance.

                  (j) On or prior to the Closing Date, you shall have received
         from [all] stockholders of the Company (other than the Selling
         Securityholder) agreements, in form reasonably satisfactory to Chase
         Securities Inc., stating that without the prior written consent of
         Chase Securities Inc. on behalf of the Underwriters, such person or
         entity will not, for a period of 180 days following the commencement of
         the public offering of the Stock by the Underwriters, directly or
         indirectly, (i) sell, offer, contract to sell, make any short sale,
         pledge, sell any option or contract to purchase, purchase any option or
         contract to sell, grant any option, right or warrant to purchase or
         otherwise transfer or dispose of any shares of Common Stock or any
         securities convertible into or exchangeable or exercisable for or any
         rights to purchase or acquire Common Stock or (ii) enter into any swap
         or other agreement that transfers, in whole or in part, any of the
         economic consequences or ownership of Common Stock, whether any such
         transaction described in clause (i) or (ii) above is to be settled by
         delivery of Common Stock or such other


                                       25
<PAGE>

         securities, in cash or otherwise; provided, however, that this
         restriction shall not apply to the sale of Stock by the Selling
         Securityholder to the Underwriters pursuant to this Agreement.

         In addition, you shall have received on the Closing Date and on any
later date on which Option Stock is purchased, such additional documents
(including, without limitation, opinions of counsel, letters, certificates and
agreements) as you may reasonably request. All the agreements, opinions,
certificates and letters mentioned above or elsewhere in this Agreement shall be
deemed to be in compliance with the provisions hereof only if Jones, Day, Reavis
& Pogue, counsel for the Underwriters, shall be satisfied that they comply in
form and scope.

         In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholder. Any such termination shall be without
liability of the Company or the Selling Securityholder to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Securityholder; PROVIDED, HOWEVER, that (i) in the event of such termination,
the Company and the Selling Securityholder agree to indemnify and hold harmless
the Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholder under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company or the Selling
Securityholder to perform any agreement herein, to fulfill any of the conditions
herein, or to comply with any provision hereof other than by reason of a default
by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the transactions contemplated hereby.

         10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDER. The obligation of the Company and the Selling Securityholder to
deliver the Stock shall be subject to the conditions that (a) the Registration
Statement shall have become effective and (b) no stop order suspending the
effectiveness thereof shall be in effect and no proceedings therefor shall be
pending or threatened by the Commission.

         In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholder by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Securityholder to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Securityholder; PROVIDED, HOWEVER, that in the event of any such termination the
Company and the Selling Securityholder jointly and severally agree to indemnify
and hold harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Securityholder
under this Agreement, including all costs and expenses referred to in paragraphs
(i) and (j) of Section 6 hereof.

         11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement (and subject, in the case of the
Selling Securityholder, to the provisions of paragraph (f) of Section 7), the
Company and the Selling Securityholder hereby


                                       26
<PAGE>

jointly and severally agree to reimburse on a quarterly basis the Underwriters
for all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 7 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; PROVIDED,
HOWEVER, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.

         12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Securityholder and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholder and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.

         13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing and, if to the Underwriters, shall be mailed or
delivered to Chase Securities Inc., One Bush Street, San Francisco, California
94104; and if to the Company, shall be mailed or delivered to it at its office,
6120 Windward Parkway, Suite 100, Alpharetta, Georgia 30005, Attention: Chief
Executive Officer; and if to the Selling Securityholder, shall be mailed or
delivered to the Selling Securityholder in care of Law Department, 8200 Dixie
Road, Suite 100, Dept. 0019, Brampton, Ontario, Canada L6T 5P6.

         14. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or the Selling Securityholder or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
PROVIDED, HOWEVER, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraphs (l), (m) and (n) of Section 6 hereof shall be
of no further force or effect.

         This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


                                       27
<PAGE>

         This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.

         Please sign and return to the Company and to the Selling Securityholder
in care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholder and the several Underwriters in accordance with its terms.

                                          Very truly yours,

                                          ELASTIC NETWORKS INC.


                                          By:___________________________________
                                             Name:
                                             Title:

                                          SELLING SECURITYHOLDER:

                                          Nortel Networks Limited


                                          By:___________________________________
                                             Name:
                                             Title:


                                          By:___________________________________
                                             Name:
                                             Title:

The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.

CHASE SECURITIES INC.
FleetBoston Robertson Stephens Inc.
UBS Warburg LLC

By:__________________________________
      Managing Director

Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.

<PAGE>

                                   SCHEDULE I

                                  UNDERWRITERS

<TABLE>
<CAPTION>
UNDERWRITERS                                                       NUMBER OF SHARES TO BE PURCHASED
------------                                                       --------------------------------
<S>                                                                <C>
Chase Securities Inc..........................................
FleetBoston Robertson Stephens Inc............................
UBS Warburg LLC...............................................









Total.........................................................                         7,800,000
                                                                                       =========
</TABLE>


                                   SCHEDULE I
<PAGE>

                                   SCHEDULE II

                             SELLING SECURITYHOLDER

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING SECURITYHOLDER                          NUMBER OF SHARES TO BE SOLD
------------------------------------------                          ---------------------------
<S>                                                            <C>
Nortel Networks Limited                                        1,000,000 Shares of Underwritten Stock
8200 Dixie Road
Brampton, Ontario
Canada  L6T 5P6                                                    585,000 Shares of Option Stock











Total.........................................................              1,585,000
                                                                   ===========================
</TABLE>


                                  SCHEDULE II
<PAGE>

                                     ANNEX A

            MATTERS TO BE COVERED IN THE OPINION OF HUNTON & WILLIAMS
                             COUNSEL FOR THE COMPANY

                           (i)      The Company has been duly incorporated and
                  is validly existing as a corporation in good standing under
                  the laws of Delaware, is duly qualified as a foreign
                  corporation and in good standing in each state of the United
                  States of America in which its ownership or leasing of
                  property requires such qualification, except where the failure
                  to be so qualified and in good standing would not, in the
                  aggregate, have a material adverse effect on the business,
                  prospects, properties, operation, condition (financial or
                  otherwise) or results of operations of the Company, and has
                  full corporate power and authority to own or lease its
                  properties and conduct its business as described in the
                  Prospectus;

                           (ii)     the authorized capital stock of the Company
                  consists of 25,000,000 shares of Preferred Stock, $0.01 par
                  value, of which there are no outstanding shares, and
                  100,000,000 shares of Common Stock, $.01 par value, of which
                  there are             outstanding shares (including the
                  Underwritten Stock plus the number of shares of Option Stock
                  issued on the date hereof); proper corporate proceedings have
                  been taken validly to authorize such authorized capital
                  stock; all of the outstanding shares of such capital stock
                  (including the Underwritten Stock and the shares of Option
                  Stock issued, if any) have been duly and validly issued and
                  are fully paid and nonassessable; any Option Stock purchased
                  after the Closing Date, when properly issued and delivered to
                  and fully paid for by the Underwriters as provided in the
                  Underwriting Agreement, will be duly and validly issued and
                  be fully paid and nonassessable; and no preemptive rights of,
                  or rights of refusal in favor of, stockholders exist with
                  respect to the Stock, or the issue and sale thereof, pursuant
                  to the Certificate of Incorporation or Bylaws of the Company
                  and, to the knowledge of such counsel, there are no
                  contractual preemptive rights that have not been waived,
                  rights of first refusal or rights of co-sale which exist with
                  respect to the Stock being sold by the Selling Securityholder
                  or the issue and sale of the Stock;

                           (iii)    the Registration Statement has become
                  effective under the Securities Act and, to such counsel's
                  knowledge, no stop order suspending the effectiveness of the
                  Registration Statement or suspending or preventing the use of
                  the Prospectus is in effect and no proceedings for that
                  purpose have been instituted or are pending or contemplated by
                  the Commission;

                           (iv)     the Registration Statement and the
                  Prospectus (except as to the financial statements and
                  schedules and other financial data contained therein, as to
                  which such counsel need express no opinion) comply as to form
                  in all material respects with the requirements of the
                  Securities Act, the Exchange Act and with the rules and
                  regulations of the Commission thereunder;


                                   ANNEX A-1
<PAGE>

                           (v)      such counsel is of the opinion that the
                  Registration Statement (except as to the financial statements
                  and schedules and other financial data contained or
                  incorporated by reference therein, as to which such counsel
                  need not express any opinion or belief) at the Effective Date
                  did not contain any untrue statement of a material fact or
                  omitted to state a material fact required to be stated therein
                  or necessary to make the statements therein not misleading, or
                  that the Prospectus (except as to the financial statements and
                  schedules and other financial data contained or incorporated
                  by reference therein, as to which such counsel need not
                  express any opinion or belief) as of its date or at the
                  Closing Date (or any later date on which Option Stock is
                  purchased), contained or contains any untrue statement of a
                  material fact or omitted or omits to state a material fact
                  necessary in order to make the statements therein, in light of
                  the circumstances under which they were made, not misleading;

                           (vi)     the information required to be set forth in
                  the Registration Statement in answer to Items 9, 10 (insofar
                  as it relates to such counsel) and 11(c) of Form S-1 is to
                  such counsel's knowledge accurately and adequately set forth
                  therein in all material respects or no response is required
                  with respect to such Items and to such counsel's knowledge the
                  description of the Company's stock option plan and the options
                  granted and which may be granted thereunder set forth in the
                  Prospectus accurately and fairly presents in all material
                  respects the information required to be shown with respect to
                  said plan and options to the extent required by the Securities
                  Act and the rules and regulations of the Commission
                  thereunder;

                           (vii)    such counsel does not know of any
                  franchises, contracts, leases, documents or legal proceedings,
                  pending or threatened, which in the opinion of such counsel
                  are of a character required to be described in the
                  Registration Statement or the Prospectus or to be filed as
                  exhibits to the Registration Statement, which are not
                  described and filed as required;

                           (viii)   the Underwriting Agreement has been duly
                  authorized, executed and delivered by the Company and
                  constitutes a valid and binding obligation of the Company
                  and of the Selling Securityholder, enforceable against the
                  Company and the Selling Securityholder in accordance with
                  its terms, except as may be limited or otherwise affected
                  by (a) bankruptcy, insolvency, reorganization, moratorium or
                  other laws affecting the rights of creditors generally, and
                  (b) principles of equity, whether considered at law or in
                  equity;

                           (ix)     the issue and sale by the Company of the
                  shares of Stock as contemplated by the Underwriting Agreement
                  will not conflict with, or result in a breach of, the
                  Certificate of Incorporation or Bylaws of the Company or any
                  agreement or instrument known to such counsel to which the
                  Company is a party or any applicable law or regulation, or to
                  such counsel's knowledge, any order, writ, injunction or
                  decree, of any jurisdiction, court or governmental
                  instrumentality applicable to the Company;


                                   ANNEX A-2
<PAGE>

                           (x)      all holders of securities of the Company
                  having rights to the registration of shares of Common Stock,
                  or other securities, because of the filing of the Registration
                  Statement by the Company, have waived such rights or such
                  rights have expired;

                           (xi)     no consent, approval, authorization or order
                  of any court or governmental agency or body is required for
                  the consummation of the transactions contemplated in the
                  Underwriting Agreement, except such as have been obtained
                  under the Securities Act, the Exchange Act and such as may be
                  required under state securities or blue sky laws in connection
                  with the purchase and distribution of the Stock by the
                  Underwriters provided that, to the extent the foregoing
                  relates to the stock to be sold by the Selling Securityholder
                  and is based upon factual matters, such counsel may rely
                  solely upon certificates of the Selling Securityholder which
                  certificates have been delivered to the Underwriters;

                           (xii)    the Stock transferred and sold by the
                  Selling Securityholder and issued and sold by the Company is
                  duly authorized for listing by the Nasdaq National Market upon
                  official notice of issuance; and

                           (xiii)    valid title to the shares of Stock sold
                  by the Selling Securityholder under the Underwriting
                  Agreement, free and clear of all liens, encumbrances,
                  equities, security interests and claims, has been
                  transferred to the Underwriters who have severally
                  purchased such shares of Stock under the Underwriting
                  Agreement, assuming for the purpose of this opinion that
                  the Underwriters purchased such Stock in good faith without
                  notice of any claims in conflict with this opinion
                  paragraph.

                                   ANNEX A-3
<PAGE>

                                     ANNEX B

              MATTERS TO BE COVERED IN THE OPINION OF HUNTON & WILLIAMS
                         PATENT COUNSEL FOR THE COMPANY

         Such counsel are generally familiar with the technology used by the
Company in its business and the manner of its use thereof and have read the
Registration Statement and the Prospectus, including particularly the portions
of the Registration Statement and the Prospectus referring to patents, trade
secrets, trademarks, service marks and other proprietary information or
materials and:

                           (i)      to the best of such counsel's knowledge,
                  based on information made available to such counsel after
                  reasonable inquiry, such counsel have no reason to believe
                  that the Registration Statement or the Prospectus (A) contains
                  any untrue statement of a material fact with respect to
                  patents, trade secrets, trademarks, service marks or other
                  proprietary information or material owned or used by the
                  Company, or the manner of its use thereof, or any allegation
                  on the part of any person that the Company is infringing any
                  patents, trade secrets, trademarks, service marks or other
                  proprietary rights of any such person or (B) omits to state
                  any material fact relating to patents, trade secrets,
                  trademarks, service marks or other proprietary information or
                  materials owned or used by the Company, or the manner of its
                  use thereof, or any allegation of which such counsel have
                  knowledge, that is required to be stated in the Registration
                  Statement or the Prospectus or is necessary to make the
                  statements therein not misleading;

                           (ii)     to the best of such counsel's knowledge,
                  based on information made available to such counsel after
                  reasonable inquiry, and except as provided in subsection (vi)
                  below, there are no legal or governmental proceedings pending
                  relating to patent rights, trade secrets, trademarks, service
                  marks or other proprietary information of the Company, and to
                  the best of such counsel's knowledge no such proceedings are
                  threatened or contemplated by governmental authorities or
                  others;

                           (iii)    to the best of such counsel's knowledge,
                  based on information made available to such counsel after
                  reasonable inquiry, such counsel do not know of any contracts
                  or other documents, relating to the Company's patents, trade
                  secrets, trademarks, service marks or other proprietary
                  information of a character required to be filed as an exhibit
                  to the Registration Statement or required to be described in
                  the Registration Statement or the Prospectus that are not
                  filed or described as required;

                           (iv)     to the best of such counsel's knowledge,
                  based on information made available to such counsel after
                  reasonable inquiry and except as provided in subsection (vi)
                  below, the Company is not, and has not been accused of,
                  infringing or otherwise violating any patents, trade secrets,
                  trademarks, service


                                   ANNEX B-1
<PAGE>

                  marks or other proprietary information of others, and to the
                  best of such counsel's knowledge, based on information made
                  available to such counsel after reasonable inquiry, the
                  Company has not notified such counsel of any allegations of
                  infringement by others of any of the Company's patents, trade
                  secrets, trademarks, service marks or other proprietary
                  information which in the judgment of such counsel could affect
                  materially the use thereof by the Company; and

                           (v)      to the best of such counsel's knowledge,
                  based on information provided to such counsel after
                  reasonable inquiry, no third party has raised a claim that the
                  Company fails to own or possess sufficient licenses under any
                  patents, trade secrets, trademarks, service marks or other
                  proprietary information owned or possessed by that third party
                  that the third party claims to be necessary to conduct the
                  business now being or proposed to be conducted by the Company
                  as described in the Prospectus.

                           (vi)     A third party has filed a Notice of
                  Opposition in the United States Patent and Trademark Office,
                  contending that one of the trademarks and service marks used
                  by the Company should be denied registration on the ground
                  that the mark is confusingly similar to a mark allegedly owned
                  by that third party. The Company intends to defend the
                  opposition proceeding vigorously.


                                   ANNEX B-2
<PAGE>

                                     ANNEX C

           MATTERS TO BE COVERED IN THE OPINION OF NICHOLAS J. DEROMA,
             THE CHIEF LEGAL OFFICER OF THE SELLING SECURITYHOLDER

(i) The Selling Securityholder is validly existing as a corporation in good
standing under the laws of Canada;

(ii) the Underwriting Agreement has been duly authorized, executed and delivered
by the Selling Securityholder; and

(iii) the Selling Securityholder has full legal right and authority to enter
into the Underwriting Agreement and to sell, transfer and deliver in the manner
provided for in the Underwriting Agreement the shares of Stock sold by the
Selling Securityholder.



                                   ANNEX C-1