Document:

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                                                                    EXHIBIT 10.1

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
has been marked with an asterisk to denote where omissions have been made. The
confidential material has been filed separately with the Commission.

                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                      MEDICAL DISTRIBUTION SOLUTIONS, INC.,

                               NEOFORMA.COM, INC.

                                       AND

                             NEOFORMA LIFELINE, INC.

                                 MARCH 31, 2001

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                            ASSET PURCHASE AGREEMENT

     This Agreement entered into as of March 31, 2001 is by and among Medical
Distribution Solutions, Inc., a Georgia corporation ("MDSI"), Neoforma.com,
Inc., a Delaware corporation ("Neoforma"), and Neoforma LifeLine, Inc., a
Delaware corporation and wholly owned subsidiary of Neoforma ("LifeLine"). MDSI,
Neoforma and LifeLine are referred to collectively herein as the "Parties."

     This Agreement contemplates a transaction in which MDSI will purchase
substantially all of the assets (and assume certain of the liabilities) of
LifeLine in return for cash and the MDSI Note.

     Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.

     1. Basic Transaction.

     (a) Purchase and Sale of Acquired Assets. On and subject to the terms and
conditions of this Agreement, MDSI agrees to purchase from LifeLine and
Neoforma, and LifeLine and Neoforma agree to sell, transfer, convey, and deliver
to MDSI, all of the Acquired Assets at the Closing for the consideration
specified in this Section 1.

     (b) Assumption of Liabilities. On and subject to the terms and conditions
of this Agreement, MDSI agrees to assume and become responsible for all of the
Assumed Liabilities at the Closing. MDSI will not assume or have any
responsibility, however, with respect to any other obligation or liability of
LifeLine or Neoforma not included within the definition of Assumed Liabilities.

     (c) Purchase Price. At the Initial Closing, MDSI agrees to pay to Neoforma
$1.25 million (the "Purchase Price") by delivery of the following:

          (i) cash in the amount of Cash on the Closing Date payable by wire
     transfer or delivery of other immediately available funds; provided, that
     in no event shall MDSI pay Neoforma an aggregate amount greater than
     $500,000 in cash pursuant to this clause; the Acquired Assets will include
     Cash in the amount of $650,000, of which MDSI will wire $500,000 to
     Neoforma; and

          (ii) its promissory note (the "MDSI Note") in the form of Exhibit A
     attached hereto in the principal amount of $750,000.

     (d) The Closings. The initial closing of the transactions contemplated by
this Agreement (the "Initial Closing") shall take place, except for the
assignment of LifeLine's telephone lease, the completion of the Disclosure
Schedule by Neoforma and the provision of Certificates of Good Standing by
Neoforma, on the second business day following the execution of this Agreement
(the "Initial Closing Date"). A subsequent closing ("Subsequent Closing") shall
occur on such date as the telephone lease has been assigned to MDSI, the
Disclosure Schedule is completed and Neoforma provides MDSI with Certificates of
Good Standing.

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     (e) Deliveries at the Closing. At the Initial Closing, (i) LifeLine and
Neoforma, as applicable, will deliver to MDSI a signed original of the
Assignment and Assumption Agreement attached hereto as Exhibit B, Services
Agreement attached hereto as Exhibit C, Covenant Not to Compete Agreement
attached hereto as Exhibit E, Technology Transfer and Waiver Agreement, License
Assignment, Database List associated with Intellectual Property as defined in
Section 2(k); (ii) MDSI will deliver to LifeLine and Neoforma a signed original
of the Services Agreement, Assignment and Assumption Agreement, Promissory Note
and Covenant Not to Compete; and (iii) MDSI will deliver to Neoforma the
consideration specified in Section 1(c). At the Subsequent Closing, LifeLine and
Neoforma will deliver to MDSI assignments for the telephone lease, a completed
Disclosure Schedule and Certificates of Good Standing.

     2. Representations and Warranties of LifeLine and Neoforma. LifeLine and
Neoforma represent and warrant, jointly and severally, to MDSI that the
statements contained in this Section 2 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 2), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
2.

     (a) Organization. Each of LifeLine and Neoforma is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of Delaware. LifeLine is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have a material
adverse effect on the financial condition of LifeLine. LifeLine has full
corporate power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.

     (b) Authorization of Transaction. Each of LifeLine and Neoforma has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of each of
LifeLine and Neoforma, enforceable in accordance with its terms and conditions.

     (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 1), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which either of LifeLine or Neoforma is subject
or any provision of the charter or bylaws of either of LifeLine or Neoforma or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which either of LifeLine or
Neoforma is a party or by which it is bound or to which any of the Acquired
Assets is subject (or result in the imposition of any Security Interest upon any
of the Acquired Assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
or Security Interest would not have a material adverse effect on the financial
condition of

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LifeLine or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. Neither of LifeLine or Neoforma needs to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 1), except where the failure
to give notice, to file, or to obtain any authorization, consent, or approval
would not have a material adverse effect on the financial condition of such
Party or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.

     (d) Brokers' Fees. Neither Neoforma nor LifeLine has any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which MDSI could
become liable or obligated.

     (e) Title. LifeLine has good title to, or a valid leasehold interest in,
the Acquired Assets, including but not limited to, all material tangible assets
used regularly in the conduct of LifeLine's business. Neoforma has good title to
all of the capital stock of LifeLine. All of the issued and outstanding shares
of capital stock of LifeLine have been duly authorized and are validly issued,
fully paid, and nonassessable.

     (f) Financial Statements. Attached hereto as Exhibit D are the following
financial statements (collectively the "Financial Statements"): (i) unaudited
balance sheets and statements of income, as of and for LifeLine's fiscal year
ended December 31, 2000; and (ii) LifeLine's unaudited balance sheets and
statements of income, (the "Most Recent Financial Statements") as of and for the
month ended February 28, 2001 (the "Most Recent Fiscal Month End"). The
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly
LifeLine's financial condition as of such dates and LifeLine's results of
operations for such periods; provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments and lack footnotes and
other presentation items. Neoforma maintains a separate Cash account for
LifeLine (into which Neoforma deposits all of the receipts of LifeLine).

     (g) Events Subsequent to Most Recent Fiscal Month End. Since the Most
Recent Fiscal Month End, there has not been any material adverse change in
LifeLine's financial condition. Without limiting the generality of the
foregoing, since that date neither LifeLine nor Neoforma has engaged in any
practice, taken any action, or entered into any transaction outside the Ordinary
Course of LifeLine's business.

     (h) Legal Compliance. To the knowledge of LifeLine and Neoforma, LifeLine
has complied with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies thereof),
except where the failure to comply would not have a material adverse effect upon
the financial condition of LifeLine.

     (i) Tax Matters.

          (i) LifeLine has filed all Income Tax Returns that it was required to
     file, and has paid all Income Taxes shown thereon as owing, except where
     the failure to file

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     Income Tax Returns or to pay Income Taxes would not have a material adverse
     effect on the financial condition of LifeLine.

          (ii) Section 2(i) of the Disclosure Schedule lists all Income Tax
     Returns filed with respect to LifeLine for taxable periods ended on or
     after March 17, 2000, indicates those Income Tax Returns that have been
     audited, and indicates those Income Tax Returns that currently are the
     subject of audit. LifeLine has delivered to MDSI correct and complete
     copies of all federal Income Tax Returns, examination reports, and
     statements of deficiencies assessed against or agreed to by LifeLine since
     March 17, 2000.

          (iii) Neither of LifeLine nor Neoforma has waived any statute of
     limitations in respect of Income Taxes or agreed to any extension of time
     with respect to an Income Tax assessment or deficiency.

          (iv) Neither LifeLine nor Neoforma are parties to any Income Tax
     allocation or sharing agreement between each other.

          (v) LifeLine has not been a member of an Affiliated Group filing a
     consolidated federal Income Tax Return (other than a group the common
     parent of which was Neoforma).

     (j) Real Property.

          (i) Reserved.

     (k) Intellectual Property. Section 2(k) of the Disclosure Schedule
identifies those Acquired Assets which constitute Intellectual Property, as
defined below. MDSI shall purchase as is and where is all right, title and
interest in, or has the right to use, all patent applications, patents,
trademark applications, trademarks, service marks, trade names, mask works,
copyright applications, copyrights, trade secrets, know-how, technology and
other intellectual property and proprietary rights (the "Intellectual Property")
that are material to or reasonably necessary to the conduct of its business as
presently conducted or proposed to be conducted. All such Intellectual Property
will be transferred by LifeLine and Neoforma at closing. Intellectual Property
does not include Fast Trak and Sales Analysis; in addition. Fast Trak and Sales
Analysis are not part of the Acquired Assets. Neither Neoforma nor LifeLine are
aware of any infringement of any Intellectual Property by any third party.
Section (k) of Disclosure Schedule lists all copyright, mask work and trademark
registrations, applications and claimed rights which are not registered and all
patent and patents application for Intellectual Property owned by LifeLine of
which LifeLine and Neoforma are aware Neither Neoforma nor LifeLine are aware of
any material loss, cancellation, termination or expiration of any such
registration or patent. To the knowledge of LifeLine and Neoforma, LifeLine is
not using any confidential information or trade secrets of any former employer
or any past or present employees. Except as set out in the Disclosure Schedule,
neither Neoforma nor LifeLine has granted any reseller, distributor, sales
representative, original equipment manufacturer, value added reseller,
distributor, or other third party any right to reproduce, manufacturer, sell,
license or distribute any of its products or services in any market segment or
geographic location.

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     (l) Contracts. Section 2(l) of the Disclosure Schedule lists all written or
oral contracts and other agreements to which LifeLine is a party the performance
of which will involve consideration in excess of $10,000. LifeLine has delivered
to MDSI a correct and complete copy of each contract or other agreement listed
in Section 2(l) of the Disclosure Schedule (as amended to date), including all
such agreements with Neoforma.

     (m) Powers of Attorney. To the knowledge of LifeLine and Neoforma, there
are no outstanding powers of attorney executed on behalf of or with respect to
LifeLine.

     (n) Litigation. Section 2(n) of the Disclosure Schedule sets forth each
instance in which LifeLine, or Neoforma solely with respect to LifeLine, (i) is
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction.

     (o) Employee Benefits.

               (A) Reserved.

     (p) Investment. LifeLine (i) understands that the MDSI Note has not been,
and will not be, registered under the Securities Act, or under any state
securities laws, and is being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering, (ii) is
acquiring the MDSI Note solely for LifeLine's own account for investment
purposes, and not with a view to the distribution thereof, (iii) is
sophisticated investor with knowledge and experience in business and financial
matters, (iv) has received certain information concerning MDSI and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding the MDSI Note, (v) is able to bear the
economic risk and lack of liquidity inherent in holding the MDSI Note, and (vi)
is an Accredited Investor.

     (q) Disclaimer of other Representations and Warranties. Except as expressly
set forth in this Section 2, neither LifeLine nor Neoforma makes any
representations or warranties, express or implied, at law or in equity, in
respect of any of LifeLine's assets (including, without limitation, the Acquired
Assets), liabilities or operations, including, without limitation, with respect
to merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed, except that
LifeLine and Neoforma represent and warrant that the Acquired Assets, except for
the Intellectual Property, are in good operable condition. MDSI hereby
acknowledges and agrees that, except to the extent specifically set forth in
this Section 2, MDSI is purchasing the Acquired Assets on an "as-is, where-is"
basis. Without limiting the generality of the foregoing, neither LifeLine nor
Neoforma makes any representations or warranties regarding any assets other than
the Acquired Assets or any liabilities other than the Assumed Liabilities, and
none shall be implied at law or in equity.

     (r) Title To Acquired Assets

     Except as disclosed in Section 2(s) of the Disclosure Schedule and to
Neoforma's knowledge LifeLine has good and marketable title to the Acquired
Assets (including but not limited to those shown on the balance sheet as of the
Most Recent Fiscal Month End included in

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the Financial Statements), free and clear of all liens, charges or encumbrances
(other than (i) liens for taxes not yet due and payable, (ii) liens reflected on
the Financial Statements and (iii) liens which are not material in character,
amount or extent, and which do not materially detract from the value or
materially interfere with the use of the property subject thereto or affected
thereby. To Neoforma's knowledge, the machinery and equipment included in such
assets are in good condition and repair, normal wear and tear excepted, and all
leases of real or personal property to which LifeLine is a party are fully
effective and afford LifeLine peaceful and undisturbed possession of the subject
matter of the lease. To Neoforma's knowledge, LifeLine is not in violation of
any zoning, building, safety or environmental ordinance, regulation or
requirement or other law or regulation applicable to the operation of owned or
leased properties, and LifeLine has not received any notice of such violation
with which it has not complied or had waived. Notwithstanding the foregoing,
Neoforma and LifeLine represent and warrant that they have full right, title,
and interest in and to the Intellectual Property, which is free of any lien or
encumbrance of any kind.

     (s) Absence of Certain Changes

     Since March 17, 2000 and to the best knowledge of Neoforma, Neoforma and
LifeLine have carried on LifeLine's business in the ordinary course
substantially in accordance with the procedures and practices in effect on March
17, 2000, and except as disclosed in Section 2(s) of the Disclosure Schedule,
since March 17, 2000 and the best knowledge of Neoforma there has not been with
respect to Neoforma and LifeLine:

               (a) any material change in the financial condition, properties,
assets (including the Acquired Assets), liabilities, business, results of
operations or prospects;

               (b) any contingent liability incurred thereby as guarantor or
surety with respect to the obligations of others;

               (c) any mortgage, encumbrance or lien placed on any of the assets
or properties thereof;

               (d) any obligation or liability incurred thereby other than in
the ordinary course of business, which obligations or liabilities do not exceed
in the aggregate $50,000;

               (e) any purchase, license, sale or other disposition, or any
agreement or other arrangement for the purchase, license, sale or other
disposition, of any of the properties, assets or goodwill thereof other than in
the ordinary course of business;

               (f) any damage, destruction or loss, whether or not covered by
insurance;

               (g) any declaration, setting aside or payment of any dividend on,
or the making of any other distribution in respect of, the capital stock of
LifeLine, any split, stock dividend, combination or recapitalization of the
capital stock of LifeLine, any direct or indirect redemption, purchase or other
acquisition of the capital stock of LifeLine,

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               (h) any labor dispute or claim of unfair labor practices, any
change in the compensation payable or to become payable to any of its officers,
employees or agents (other than pursuant to existing agreements set out on
Section 2(s) of the Disclosure Schedule or, in the case of non-officers, in the
ordinary course of business consistent with past practice ("Ordinary Course")),
or any bonus payment or arrangement made to or with any of such officers,
employees or agents other than amounts paid pursuant to Employee Plans disclosed
in Section 2(s) of the Disclosure Schedule;

               (i) any loss of key executive, management or development
personnel thereof,

               (j) any payment or discharge of a lien or liability thereof,
which lien or liability was not either (i) shown on the balance sheet as of
December 31, 2000 included in the Financial Statements or (ii) incurred in the
Ordinary Course after December 31, 2000 as disclosed under Section 2.(s)(d)
above;

               (k) any obligation or liability incurred thereby to any of its
officers, directors, shareholders or affiliates, or any loans or advances made
thereby to any of its officers, directors, shareholders or affiliates, except
normal compensation and expense allowances payable to officers;

               (l) any loss on or prior to the date of this Agreement of one or
more material customers or such number of customers which together represent a
material amount of business or any indication that such a loss is, or losses
are, reasonably likely, other than in connection with completion of projects and
normal customer turnover in the Ordinary Course;

               (m) any issuance or sale of any debt or equity securities
(including, but not limited to, stock) thereby or of any options or other rights
to acquire from LifeLine, directly or indirectly, any debt or equity securities
(including but not limited to stock) thereof;

               (n) any written indication or assertion by the other party
thereto of problems with Neoforma and LifeLine's products or services or
performance under a contract, lease, transaction, commitment or other right or
obligation or its desire to so amend, relinquish, terminate or not renew any
such contract, lease, transaction, commitment or other right or obligation;

               (o) to Neoforma's knowledge, any execution, amendment,
relinquishment, termination or non-renewal thereby of, any lease or any written
indication or assertion by the other party thereto of problems with Neoforma and
LifeLine's products or services or performance under such lease, or its desire
to so amend, relinquish, terminate or not renew any such lease;

               (p) any agreement or arrangement made thereby to take any action
which, if taken prior to the date hereof, would have made any representation or
warranty of Neoforma and LifeLine set forth in this Agreement untrue or
incorrect as of the date when made; or

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               (q) any deferral of the payment of any accounts payable outside
the Ordinary Course or in an amount which is material or any discount,
accommodation or other concession made outside the Ordinary Course in order to
accelerate or induce the collection of any receivable.

     (t) Agreements and Commitments

     Except as disclosed in Section 2(t) of the Disclosure Schedule, Neoforma or
LifeLine are not on the date of this Agreement a party or subject to any oral or
written executory agreement, obligation or commitment that is material to
LifeLine, its financial condition, business or prospects, including but not
limited to the following:

               (a) Any contract, commitment, letter agreement, quotation or
purchase order providing for payments by or to LifeLine in an aggregate amount
of (i) $50,000 or more in the Ordinary Course or (ii) $15,000 or more not in the
Ordinary Course;

               (b) Any material license agreement under which Neoforma or
LifeLine is licensor, or under which Neoforma or LifeLine is licensee (except
for standard "shrink wrap" licenses for off-the-shelf software products);

               (c) Any material agreement by Neoforma or LifeLine to encumber,
transfer or sell rights in or with respect to any material item of LifeLine
Intellectual Property;

               (d) Any agreement for the sale or lease of real or personal
property involving more than $15,000 per year;

               (e) Any dealer, distributor, sales representative, original
equipment manufacturer, value added remarketer or other agreement for the
distribution of LifeLine's products;

               (f) Any franchise agreement;

               (g) Any stock redemption or purchase agreement;

               (h) Any joint venture contract or arrangement or any other
agreement that involves a sharing of profits with other persons or the payment
of royalties to any other person other than MDSI;

               (i) Any instrument evidencing indebtedness for borrowed money by
way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee or otherwise, except for trade indebtedness or any
advance to any employee of Neoforma or LifeLine incurred or made in the Ordinary
Course, and except as disclosed in the Financial Statements;

               (j) Any contract containing covenants purporting to limit
LifeLine's freedom to compete in any line of business, market or industry and/or
in any geographic area; or

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               (k) Any contract or commitment for the employment of any officer,
employee or consultant of LifeLine or any other type of contract or
understanding with any officer, employee or consultant of LifeLine that is not
immediately terminable by LifeLine without cost or other liability.

     Except as noted in Section 2(t) of the Disclosure Schedule, all items
referred to above are valid and in full force and effect. To Neoforma and
LifeLine's knowledge, no other party is in breach of or default under any
material term of any such agreement, obligation or commitment nor has such other
party threatened such a breach or default. Neoforma or LifeLine are not a party
to any contract or arrangement that they reasonably expect will have a material
adverse effect on or cause a material adverse change to the properties, assets,
material intellectual property rights, financial condition, operating results,
business or prospects of LifeLine. LifeLine has no liability for renegotiation
of government contracts or subcontracts which are material to LifeLine, its
financial condition, business or prospects.

     (u) Employees

     Except as disclosed in Section 2(u) of the Disclosure Schedule, Neoforma or
LifeLine have no employment contract or consulting agreement currently in effect
that is not terminable at will without penalty or payment of compensation by
Neoforma and LifeLine (other than agreements with the sole purpose of providing
for the confidentiality of proprietary information or assignment of inventions).

     Neoforma and LifeLine (a) have never been and are not now subject to a
union organizing effort, (b) have never been and are not now subject to any
collective bargaining agreement with respect to any of its employees, (c) have
never been and are not now subject to any other material contract, written or
oral, with any trade or labor union, employees' association or similar
organization or (d) have no current labor disputes. Neoforma and LifeLine have
good labor relations, and have no knowledge of any facts indicating that the
consummation of the transactions provided for herein (other than any
contemplated reductions in force associated therewith) will have a material
adverse effect on LifeLine's labor relations, and have no knowledge that any of
LifeLine's key development or other employees intend to leave its employ.

     Section 2(u) of the Disclosure Schedule contains a list of all employment
and consulting agreements, all severance agreements, pension, retirement,
disability, medical, dental or other health plans, life insurance or other death
benefit plans, profit sharing, deferred compensation agreements, stock, option,
bonus or other incentive plans, vacation, sick, holiday or other paid leave
plans, severance plans or other similar employee benefit plans maintained by
Neoforma and LifeLine or any trade or business which is treated as a single
employer with Neoforma and LifeLine within the meaning of Code Section 414(b),
(c), (m) or (o) (each an " ERISA Affiliate") (the "Employee Plans").

     To the knowledge of Neoforma, no employee of LifeLine is in violation of
any term of any employment contract, patent or trade secret disclosure agreement
or non-competition agreement or any other contract or agreement, or any
restrictive covenant, relating to the right of any such employee to be employed
by LifeLine or to use trade secrets or proprietary information

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of others, and the employment of any employee of LifeLine does not subject
LifeLine to any material liability to any third party.

     Except as disclosed in Section 2(u) of the Disclosure Schedule, LifeLine is
not a party to any (a) agreement with any employee of Neoforma or LifeLine (i)
the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving Neoforma or LifeLine in
the nature of any of the transactions contemplated by this Agreement (ii)
providing any term of employment or compensation guarantee or (iii) providing
severance benefits or other benefits after the termination of employment of such
employee regardless of the reason for such termination of employment other than
as required by law, or (b) agreement or plan, including, without limitation, any
stock option plan, stock appreciation rights plan or stock purchase plan, any of
the benefits of which will be materially increased, or the vesting of benefits
of which will be materially accelerated, by the occurrence of any of the
transactions contemplated by this Agreement. Neoforma or LifeLine are not
obligated to make any parachute payment, as defined in Section 28OG(b)(2) of the
Code, nor will any parachute payment be deemed to have occurred, as a result of
the transactions contemplated by this Agreement.

     A list of all employees, officers and consultants of LifeLine and their
current base compensation and benefits as of the date of this Agreement is
disclosed on Section 2(u) of the Disclosure Schedule.

     All contributions due from Neoforma and LifeLine with respect to any of the
Employee Plans have been made or accrued on the Financial Statements.

     (v) Disclosure

     This Agreement, its exhibits and schedules, any of the certificates or
documents to be delivered by Neoforma and LifeLine to MDSI under this Agreement,
taken together, do not contain any untrue statement of a material fact.

     (w) Books and Records

     To the best knowledge of Neoforma, the books, records and accounts of
LifeLine (a) are in all material respects true and complete, (b) have been
maintained in accordance with reasonable business practices on a basis
consistent with prior years, (c) are stated in reasonable detail and accurately
and fairly reflect the transactions and dispositions of the assets of LifeLine
and (d) accurately and fairly reflect the basis for the Financial Statements.

     (x) Insurance

     LifeLine maintains the insurance coverage disclosed on Section 2(x) of the
Disclosure Schedule which it believes to be reasonably prudent for similarly
sized and similarly situated business. Section 2(u) sets forth all claims made
under such insurance policies since March 17, 2000 and the premiums that apply
with respect to such insurance policies as of the date of this Agreement.
Neoforma and LifeLine has not changed insurance carriers since March 17, 2000.

     (y) Warranties, Guaranties and Indemnities

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     Except as disclosed in Section 2(y) of the Disclosure Schedule, or in the
agreements or contract listed herein, and to the knowledge of Neoforma, LifeLine
has not provided to its customers (i) any warranties, guarantees or indemnities
regarding the services and products it provides to such customers; or (ii)
rights to obtain refunds with respect to such services except for rights that
are customary in the industry and do not expose LifeLine to any material risk of
liability.

     (z) Environmental

     To the knowledge of Neoforma, during the period that LifeLine has leased or
owned its properties or leased, owned or operated any facilities, there have
been no disposals, releases or threatened releases of Hazardous Materials (as
defined below) on, from or under any such properties or facilities that would
expose LifeLine to any material legal liability or otherwise have a Material
Adverse Effect. Neither Neoforma nor LifeLine have any knowledge of any
presence, disposals, releases or threatened releases of Hazardous Materials on,
from or under any of such properties or facilities, which may have occurred
prior to LifeLine having taken possession of any of such properties or
facilities which might reasonably be expected to have a Material Adverse Effect.
For purposes of this Agreement, the terms "disposal," "release", and threatened
release" have the definitions assigned thereto by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., as amended (CERCLA). For the purposes of this Section
2.21, Hazardous Materials mean any hazardous or toxic substance, material or
waste which is or becomes prior to the Closing Date, regulated under, or defined
as a hazardous substance", pollutant", "contaminant", "toxic chemical",
"hazardous material", "toxic substance or "hazardous chemical" under (i) CERCLA;
(ii) the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section
11001 et seq.; (iii) the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; (iv) the Toxic Substances Control Act, 15 U.S.C., Section
2601 et seq.; (v) the Occupational Safety and Health Act of 1970, 29 U.S.C.
Section 651 et seq.; (vi) regulations promulgated under any of the above
statutes; or (vii) any other applicable federal, state or local statute,
ordinance, rule or regulation that has a scope or purpose similar to those
identified above.

     To the knowledge of Neoforma, none of the properties or facilities
currently leased or owned by LifeLine or any properties or facilities previoNFLy
leased or owned by LifeLine is in violation in any material respect of any
federal, state or local law, ordinance, regulation or order relating to
industrial hygiene or to the environmental conditions on, under or about such
properties or facilities, including, but not limited to, soil and ground water
condition.

     To the knowledge of Neoforma, during LifeLine's occupancy of any properties
or facilities owned or leased at any time by LifeLine, neither LifeLine, nor to
LifeLine's knowledge, any third party, has used, generated manufactured,
released or stored on, under or about such properties and facilities or
transported to or from such properties and facilities any Hazardous Materials
that would expose LifeLine to any material legal liability or otherwise have a
material adverse effect.

     To the knowledge of Neoforma, during the time that LifeLine has owned or
leased the properties and facilities currently occupied by it or any properties
and facilities previously occupied by LifeLine, there has been no material
litigation, proceeding or administrative action brought or threatened against
LifeLine, or any material settlement reached

                                       11
<PAGE>   13

by LifeLine with, any party or parties alleging the presence, disposal, release
or threatened release of any Hazardous Materials on, from or under any of such
properties or facilities.

     To the knowledge of Neoforma, during LifeLine's occupancy of any properties
or facilities owned or leased at any time by LifeLine, to the best knowledge of
LifeLine, no Hazardous Materials have been transported from such premises to any
site or facility now listed or proposed for listing on the National Priorities
List, at 40 C.F.R. Part 300, or any list with a similar scope or purpose
published by any state authority.

     (aa) Government Contracts

     To the knowledge of Neoforma, there has been no act or omission that
relates to the marketing, licensing or selling to any Government Contract Party
(as defined below) of any of LifeLine technical data, computer software,
products and services and that has led to or is reasonably likely to lead to,
either before or after the Closing Date, any material adverse effect to any of
LifeLine's rights in and to its technical data, computer software, products and
services. There is currently no dispute between LifeLine and any Government
Contract Party. For purposes of this Section 2(aa), the term "Government
Contract Party means any independent or executive agency, division, subdivision,
audit group or procuring office of the federal, state, county, local or
municipal government, including any prime contractor of the federal government
and any higher level subcontractor of a prime contractor of the federal
government, and including any employees or agents thereof, in each case acting
in such capacity.

     (bb) Customer Relationships

     To the knowledge of Neoforma, LifeLine has good commercial working
relationships with its customers. Except as disclosed in Section 2(bb) of the
Disclosure Schedule and to the knowledge of Neoforma, no customer accounting for
more than 10% of LifeLine's revenues in fiscal 2000 (a "Material Customer ")
has, from March 17, 2000 to the date of this Agreement, canceled or otherwise
terminated its relationship with LifeLine, decreased or limited materially the
amount of product or services ordered from LifeLine, or threatened to take any
such action other than in the Ordinary Course upon completion of customer
projects.

     (cc) Product and Service Quality

     To the knowledge of Neoforma, all products manufactured, sold, licensed,
leased or delivered by LifeLine and all services provided by LifeLine, to
customers on or prior to the Closing Date conform to applicable contractual
commitments, express warranties, product specifications and quality standards in
all material respects, and LifeLine has no material liability (and there is no
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against LifeLine giving rise
to any liability) for replacement or repair thereof or other damages in
connection therewith. All material complaints received since the end of 1999
from customers regarding LifeLine's services or any information supplied by or
published by LifeLine are summarized in Section 2(cc) of the Disclosure
Schedule.

     3. Representations and Warranties of MDSI. MDSI represents and warrants to
LifeLine and Neoforma that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement

                                       12
<PAGE>   14

throughout this Section 3), except as set forth in the Disclosure Schedule. The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3.

     (a) Organization of MDSI. MDSI is a corporation duly organized, validly
existing, and in good standing under the laws of Georgia.

     (b) Authorization of Transaction. MDSI has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of MDSI, enforceable in accordance with
its terms and conditions.

     (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 1), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which MDSI is subject or any provision of its
charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
MDSI is a party or by which it is bound or to which any of its assets is
subject. MDSI does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement (including the assignments and assumptions referred to in Section
1).

     (d) Brokers' Fees. MDSI has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Neoforma or LifeLine could become
liable or obligated.

     4. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.

     (a) General. Each of the Parties will use its reasonable best efforts to
take all action and to do all things necessary, proper or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6).

     (b) Notices and Consents. LifeLine will give (and Neoforma will cause
LifeLine to give) any notices to third parties, and LifeLine will use its
reasonable best efforts (and Neoforma will cause LifeLine to use its reasonable
best efforts) to obtain any third party consents, that MDSI reasonably may
request in connection with the matters referred to in Section 2(c). Each of the
Parties will give any notices to, make any filings with, and use its reasonable
best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the matters referred to
in Section 2(c) and 3(c).

                                       13
<PAGE>   15
     (c) Operation of Business. LifeLine will not, and Neoforma will not cause
or permit LifeLine to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business.

     (d) Full Access. LifeLine will permit representatives of MDSI to have full
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of LifeLine, to all premises, properties, personnel,
books, records (including tax records), contracts and documents of or pertaining
to LifeLine. MDSI will treat and hold as such any Confidential Information it
receives from either of Neoforma or LifeLine in the course of the reviews
contemplated by this Section 4(d), will not use any of the Confidential
Information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, will return to LifeLine all tangible
embodiments (and all copies) of the Confidential Information which are in its
possession.

     (e) Notice of Developments.

          (i) Neoforma or LifeLine may elect at any time to notify MDSI of any
     development causing a breach of any of its representations and warranties
     in Sections 2(f)-(o). Unless MDSI has the right to terminate this Agreement
     pursuant to Section 8(a)(ii) by reason of the development and exercises
     that right within the period of ten (10) business days referred to in
     Section 8(a)(ii), the written notice pursuant to this Section 4(e)(i) will
     be deemed to have amended the Disclosure Schedule, to have qualified the
     representations and warranties contained in Section 2, and to have cured
     any misrepresentation or breach of warranty that otherwise might have
     existed hereunder by reason of the development.

          (ii) Each Party will give prompt written notice to the other Party of
     any material adverse development causing a breach of any of its own
     representations and warranties in Sections 2(a)-(e) and 3. No disclosure by
     any Party pursuant to this Section 4(e)(ii), however, shall be deemed to
     amend or supplement the Disclosure Schedule or to prevent or cure any
     misrepresentation or breach of warranty.

     (f) Exclusivity. Neoforma will not (and will not cause or permit LifeLine
to) solicit, initiate, or encourage the submission of any proposal or offer from
any Person relating to the acquisition of all or substantially all of the
capital stock or assets of LifeLine (including any acquisition structured as a
merger, consolidation, or share exchange).

     5. Additional Agreements and Post-Closing Covenants. The Parties agree as
follows with respect to the period following the Closing.

     (a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as the other Party reasonably may
request, all the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 7).

     (b) Litigation Support. In the event and for so long as any Party actively
is contesting or defending against any third party action, suit, proceeding,
hearing, investigation, charge,

                                       14
<PAGE>   16

complaint, claim, or demand in connection with (i) any transaction contemplated
under this Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving
LifeLine, the other Party will cooperate with the contesting or defending Party
and its counsel in the contest or defense, make available its personnel, and
provide such testimony and access to its books and records as shall be necessary
in connection with the contest or defense, all at the sole cost and expense of
the contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under Section 7).

     (c) Transition. Neither Neoforma nor LifeLine will not take any action that
is designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of LifeLine from maintaining the
same business relationships with MDSI after the Closing as it maintained with
LifeLine prior to the Closing.

     (d) Covenant Not to Compete. At Closing, both Neoforma and LifeLine will
enter into the Covenant Not to Compete attached hereto as Exhibit E, wherein
both Neoforma and LifeLine will be banned from competing against MDSI in select
markets for five (5) years from Closing. The parties agree that separate
consideration was or will be given for this agreement.

     (e) MDSI Note. MDSI Note will be imprinted with a legend substantially in
the following form:

     "This Note was originally issued on March 31, 2001, and has not been
     registered under the Securities Act of 1933, as amended."

     (f) Employment Matters.

          (i) Neoforma and LifeLine will, and Neoforma will cause LifeLine to,
     terminate all of their employees and agents engaged in LifeLine's business
     as of the Closing Date except for those employees or agents set forth in
     the Disclosure Schedule (the "Retained Employees"). Except for the Retained
     Employees, MDSI shall either hire all of the persons employed by Neoforma
     or LifeLine engaged in LifeLine's Business as of the Closing Date or
     reimburse LifeLine for all accrued vacation and severance payments made to
     such employees not hired by MDSI who are not Retained Employees. Employees
     hired by MDSI as permanent employees effective on or after the Closing Date
     shall be referred to herein as a "Transferred Employee".

          (ii) MDSI shall assume the liability for accrued vacations of
     Transferred Employees as of the Closing Date, including, without
     limitation, any liability for vacations earned, vested and awarded to
     Transferred Employees prior to the Closing Date and unused as of the
     Closing Date.

     6. Conditions to Obligation to Close.

     (a) Conditions to Obligation of MDSI. The obligation of MDSI to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

                                       15
<PAGE>   17

          (i) the representations and warranties set forth in Section 2 shall be
     true and correct in all material respects at and as of the Closing Date;

          (ii) Neoforma and LifeLine shall have performed and complied with all
     of their covenants hereunder in all material respects through the Closing;

          (iii) there shall not be any injunction, judgment, order, decree,
     ruling, or charge in effect preventing consummation of any of the
     transactions contemplated by this Agreement;

          (iv) the relevant parties shall have entered into all agreements
     specified herein, including but not limited to the Services Agreement and
     the Covenant Not to Compete as set forth in the Exhibits attached hereto;
     and

          (v) all actions to be taken by Neoforma and LifeLine in connection
     with consummation of the transactions contemplated hereby and all
     certificates, opinions, instruments, and other documents required to effect
     the transactions contemplated hereby will be reasonably satisfactory in
     form and substance to MDSI.

          (vii) There shall not have been any material adverse change in the
     financial condition of Neoforma, LifeLine, or the Acquired Assets except
     for changes in accord with the Ordinary Course of LifeLine's business;

          (viii) There shall be no order, decree, or ruling by any court or
     governmental agency in effect that would prohibit or render illegal the
     transactions provided for in this Agreement.

          (ix) There shall have been obtained at or prior to the Closing Date
     such permits or authorizations, and there shall have been taken such other
     action, as may be required to consummate the transaction contemplated
     herein by any regulatory authority having jurisdiction over the parties and
     the actions herein proposed to be taken.

          (x) MDSI shall have received all written consents, assignments,
     waivers, authorizations or other certificates necessary to provide for the
     continuation in full force and effect of any and all contracts and leases
     of LifeLine.

          (xi) No litigation or proceeding shall be threatened or pending which
     will have the probable effect of enjoining or preventing the consummation
     of any of the transactions provided for in this Agreement or which could
     reasonably be expected to have a material adverse effect on Neoforma or
     LifeLine.

          (xii) Each of Neoforma and LifeLine shall produce (a) a certificate of
     good standing from the State of Delaware;

          (xiii) Any resignations of officers or directors of LifeLine requested
     by MDSI shall have been tendered to MDSI in writing.

     MDSI may waive any condition specified in this Section 6(a) if it executes
a writing so stating at or prior to the Closing.

                                       16
<PAGE>   18

     (b) Conditions to Obligation of Neoforma and LifeLine. The obligation of
each of Neoforma and LifeLine to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:

          (i) the representations and warranties set forth in Section 3 shall be
     true and correct in all material respects at and as of the Closing Date;

          (ii) MDSI shall have performed and complied with all of its covenants
     hereunder in all material respects through the Closing;

          (iii) there shall not be any injunction, judgment, order, decree,
     ruling, or charge in effect preventing consummation of any of the
     transactions contemplated by this Agreement;

          (iv) the relevant parties shall have entered into all agreements
     specified herein, including but not limited to the Services Agreement,
     Promissory Note, Assignment and Assumption Agreement and the Covenant Not
     to Compete as set forth in the Exhibits attached hereto, and the same shall
     be in full force and effect; and

          (v) all actions to be taken by MDSI in connection with consummation of
     the transactions contemplated hereby and all certificates, opinions,
     instruments, and other documents required to effect the transactions
     contemplated hereby will be reasonably satisfactory in form and substance
     to Neoforma and LifeLine.

     Neoforma and LifeLine may waive any condition specified in this Section
6(b) if they execute a writing so stating at or prior to the Closing.

     7. Remedies for Breaches of this Agreement; Indemnification.

     (a) Survival of Representations and Warranties. All of the representations
and warranties of the Parties contained in this Agreement shall survive the
Closing and continue in full force and effect for a period of two years from the
Closing Date.

     (b) Indemnification Provisions for Benefit of MDSI.

          (i) In the event either Neoforma or LifeLine breaches any of their
     representations, warranties, and covenants contained in this Agreement,
     and, if there is an applicable survival period pursuant to Section 7(a),
     provided that MDSI makes a written claim for indemnification against
     Neoforma or LifeLine, as applicable, pursuant to Section 9(g) within such
     survival period, then Neoforma and LifeLine jointly and severally agree to
     indemnify, defend and hold MDSI harmless from and against the entirety of
     any Adverse Consequences MDSI shall suffer through and after the date of
     the claim for indemnification (but excluding any Adverse Consequences MDSI
     shall suffer after the end of any applicable survival period) caused
     proximately by the breach.

          (ii) Neoforma and LifeLine jointly and severally agree to indemnify,
     defend and hold MDSI harmless from and against the entirety of any Adverse
     Consequences such Party shall suffer caused proximately by (A) any
     liability of LifeLine which is not

                                       17
<PAGE>   19

     an Assumed Liability, and (B) the operation of LifeLine's business by
     Neoforma and/or LifeLine and the ownership, operation or use of the
     Acquired Assets prior to the Closing Date.

     (c) Indemnification Provisions for Benefit of Neoforma.

          (i) In the event MDSI breaches any of its representations, warranties,
     and covenants contained in this Agreement and provided that either Neoforma
     or LifeLine makes a written claim for indemnification against MDSI pursuant
     to Section 9(g) within such survival period, then MDSI agrees to indemnify
     such Party from and against the entirety of any Adverse Consequences such
     Party shall suffer through and after the date of the claim for
     indemnification (but excluding any Adverse Consequences such Party shall
     suffer after the end of any applicable survival period) caused proximately
     by the breach.

          (ii) MDSI agrees to indemnify Neoforma and LifeLine from and against
     the entirety of any Adverse Consequences such Party shall suffer caused
     proximately by (A) any liability of LifeLine which is an Assumed Liability
     or (B) the operation of LifeLine's business by MDSI or MDSI's ownership,
     operation or use of the Acquired Assets on or after the Closing Date.

     (d) Matters Involving Third Parties.

          (i) If any third party shall notify any Party (the "Indemnified
     Party") with respect to any matter (a "Third Party Claim") which may give
     rise to a claim for indemnification against the other Party (the
     "Indemnifying Party") under this Section 7, then the Indemnified Party
     shall promptly (and in any event within five (5) business days after
     receiving notice of the Third Party Claim) notify the Indemnifying Party
     thereof in writing.

          (ii) The Indemnifying Party will have the right at any time to assume
     and thereafter conduct the defense of the Third Party Claim with counsel of
     its choice reasonably satisfactory to the Indemnified Party; provided,
     however, that the Indemnifying Party will not consent to the entry of any
     judgment or enter into any settlement with respect to the Third Party Claim
     without the prior written consent of the Indemnified Party (not to be
     withheld unreasonably) unless the judgment or proposed settlement involves
     only the payment of money damages and does not impose an injunction or
     other equitable relief upon the Indemnified Party.

          (iii) Unless and until the Indemnifying Party assumes the defense of
     the Third Party Claim as provided in Section 7(d)(ii), however, the
     Indemnified Party may defend against the Third Party Claim in any manner it
     reasonably may deem appropriate.

          (iv) In no event will the Indemnified Party consent to the entry of
     any judgment or enter into any settlement with respect to the Third Party
     Claim without the prior written consent of the Indemnifying Party (not to
     be withheld unreasonably).

                                       18
<PAGE>   20

     (e) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits in determining Adverse Consequences for
purposes of this Section 7. All indemnification payments under this Section 7
shall be deemed adjustments to the Purchase Price.

     (f) Other Indemnification Provisions. The indemnification provisions in
this Section 7 are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of representation,
warranty, or covenant.

     8. Termination.

     (a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

          (i) the Parties may terminate this Agreement by mutual written consent
     at any time prior to the Closing;

          (ii) MDSI may terminate this Agreement by giving written notice to
     Neoforma and LifeLine at any time prior to the Closing in the event (A)
     either Neoforma or LifeLine has within the then previous ten (10) business
     days given MDSI any notice pursuant to Section 4(e)(i) and (B) the
     development that is the subject of the notice has had a material adverse
     effect upon the financial condition of LifeLine;

          (iii) MDSI may terminate this Agreement by giving written notice to
     Neoforma or LifeLine at any time prior to the Closing if either Neoforma or
     LifeLine has breached any material representation, warranty, or covenant
     contained in this Agreement (in any material respect, MDSI has notified
     Neoforma and LifeLine of the breach, and the breach has continued without
     cure for a period of thirty (30) days after the notice of breach; and

          (iv) either Neoforma or LifeLine may terminate this Agreement by
     giving written notice to MDSI at any time prior to the Closing if MDSI has
     breached any material representation, warranty, or covenant contained in
     this Agreement in any material respect, such Party has notified MDSI of the
     breach, and the breach has continued without cure for a period of thirty
     (30) days after the notice of breach.

     (b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8(a), all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to the other Party (except for any
liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in Section 4(d) shall survive termination.

     9. Miscellaneous.

     (a) Press Releases and Public Announcements. No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading

                                       19
<PAGE>   21

agreement concerning its publicly traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).

     (b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

     (c) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.

     (d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party ; provided, however, that MDSI may (i) assign any or all of
its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases MDSI nonetheless shall remain responsible for the
performance of all of its obligations hereunder).

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

     (f) Headings. The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

     (g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered, certified or electronic mail,
return receipt requested, postage prepaid (if applicable), and addressed to the
intended recipient as set forth below:

     If to Neoforma or LifeLine:

         Neoforma.com, Inc.
         3061 Zanker Road
         San Jose, California  95134
         Telephone: 408-468-4244
         Fax: 408-468-4045
         Attention: Stephen K. Phillips, General Counsel
         E-mail: steve.phillips@neoforma.com

     If to MDSI:

                                       20
<PAGE>   22

         Medical Distribution Solutions, Inc.
         6825 Jimmy Carter Boulevard, Suite 1290
         Norcross, Georgia 30071
         Telephone: 800.536.5312
         Fax: 770.446.7722
         Attention:  Chris Kelly, President
         E-mail: ckelly@mdsi.org

     with a copy to:

         Brennan, Steil, Basting and MacDougall, S.C.
         One East Milwaukee Street (53545)
         P.O. Box 1148
         Janesville, WI  53547-1148
         Telephone: 608.756.4141
         Fax: 608.756.9000
         Attention: Jonathan W. Groessl
         E-mail: jgroessl@bsbmlaw.com

         with a copy to:

             The George Messina Group, LLC
             One Parker Place
             Janesville, WI  53545
             Telephone: 608.756.1710
             Fax: 608.756.8506
             Attention: George P. Messina
             E-mail: george@messinagroup.com with a copy to:

     Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex or ordinary mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.

     (h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.

     (i) Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by the Parties. No
waiver by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default,

                                       21
<PAGE>   23

misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.

     (j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

     (k) Expenses. Each Party will bear its own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.

     (l) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.

     (m) Incorporation of Exhibits and Schedules. The Exhibits, Schedules, and
other documents referred to in Section 1(e) in this Agreement are incorporated
herein by reference and made a part hereof.

     (n) Bulk Transfer Laws. MDSI acknowledges that Neoforma and LifeLine will
not comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement. Neoforma and
LifeLine jointly and severally agree to indemnify, defend, and hold MDSI
harmless from and against any liability arising from their failure to comply
with any such bulk transfer laws.

     10. Definitions.

     "Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.

     "Acquired Assets" means all of the right, title, and interest in and to all
of the assets that LifeLine possesses and has the right to transfer, including
all of LifeLine's (a) real property, leaseholds and subleaseholds therein,
improvements, fixtures, and fittings thereon, and easements, rights-of-way, and
other appurtenants thereto (such as appurtenant rights in and to public
streets), (b) tangible personal property (such as machinery, equipment,
inventories of raw materials and supplies, manufactured and purchased parts,
goods in process and finished goods, furniture, automobiles, trucks, tractors,
trailers, tools, jigs, and dies), (c) Intellectual Property (as defined in
Section 2(k) above), Databases (as defined in Section 2(dd) above), goodwill
associated therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions,
(d) leases, subleases, and rights thereunder, (e) agreements, contracts,
indentures, mortgages, instruments, Security Interests, guaranties, other
similar arrangements, and rights thereunder, (f) accounts, notes, and other
receivables,

                                       22
<PAGE>   24

(g) securities, (h) claims, deposits, prepayments, causes of action, choses in
action, rights of recovery, rights of set off, and rights of recoupment
(including any such item relating to the payment of taxes), (i) franchises,
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental agencies, (j)
books, records, ledgers, files, documents, correspondence, lists, plats,
architectural plans, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other printed or
written materials and (k) all Cash; provided, however, that the Acquired Assets
shall not include (x) the corporate charter, qualifications to conduct business
as a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, seals, minute
books, stock transfer books, blank stock certificates, and other documents
relating to the organization, maintenance, and existence of LifeLine as a
corporation or (y) any of the rights of LifeLine under this Agreement (or under
any side agreement between LifeLine on the one hand and MDSI on the other hand
entered into on or after the date of this Agreement).

     "Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including court costs and
reasonable attorneys' fees and expenses.

     "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

     "Affiliated Group" means any affiliated group within the meaning of Section
1504 of the Code or any similar group defined under a similar provision of
state, local, or foreign law.

     "Assumed Liabilities" means all liabilities relating to "Deferred Income"
of LifeLine as set forth in the Financial Statements and the accrued vacation
liabilities referred to in Section 5(f) above; provided, however, that the
Assumed Liabilities shall not include (x) any liability of LifeLine for unpaid
taxes (with respect to LifeLine or otherwise) for periods prior to the Closing,
(ii) any liability of Neoforma or LifeLine for any Income Taxes arising because
LifeLine is transferring the Acquired Assets, or (iii) any liability or
obligation of LifeLine under this Agreement (or under any side agreement between
LifeLine on the one hand and MDSI on the other hand entered into on or after the
date of this Agreement) or (y) any other liability of any kind or type of
Neoforma or LifeLine.

     "Cash" means cash and cash equivalents (including marketable securities and
short term investments) calculated in accordance with GAAP applied on a basis
consistent with the preparation of the Financial Statements.

     "Closing" has the meaning set forth in Section 1(d).

     "Closing Date" has the meaning set forth in Section 1(d).

     "COBRA" means Section 4980B of the Code or similar state law.

     "Code" means the Internal Revenue Code of 1986, as amended.

                                       23
<PAGE>   25

     "Confidential Information" means any information concerning the businesses
and affairs of LifeLine that is not already generally available to the public.

     "Continuees" has the meaning set forth in Section 5(f)(v).

     "Disclosure Schedule" has the meaning set forth in Section 2.

     "Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan, (b) Employee Pension Benefit Plan, (c) any Multiemployer Plan,
or (d) Employee Welfare Benefit Plan.

     "Employee Pension Benefit Plan" has the meaning set forth in Section 3(2)
of ERISA.

     "Employee Welfare Benefit Plan" has the meaning set forth in Section 3(1)
of ERISA.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "Financial Statements" has the meaning set forth in Section 2(f).

     "GAAP" means United States generally accepted accounting principles as in
effect from time to time.

     "Income Tax" means any federal, state, local, or foreign income tax,
including any interest, penalty, or addition thereto.

     "Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto.

     "Indemnified Party" has the meaning set forth in Section 7(d).

     "Indemnifying Party" has the meaning set forth in Section 7(d).

     "knowledge" means actual knowledge without independent investigation.

     "MDSI" has the meaning set forth in the preface.

     "MDSI Note" has the meaning set forth in Section 1(c).

     "Most Recent Financial Statements" has the meaning set forth in Section
2(f).

     "Most Recent Fiscal Month End" has the meaning set forth in Section 2(f).

     "Multiemployer Plan" has the meaning set forth in Section 4001(a)(3) of
ERISA.

     "Neoforma" has the meaning set forth in the preface.

     "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

                                       24
<PAGE>   26

     "Party" has the meaning set forth in the preface.

     "Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).

     "Purchase Price" has the meaning set forth in Section 1(c).

     "Retained Employees" has the meaning set forth in Section 5(f)(i).

     "Securities Act" means the Securities Act of 1933, as amended.

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

     "Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.

     "Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.

     "Third Party Claim" has the meaning set forth in Section 7(d)..

     "Transferred Employees" has the meaning set forth in Section 5(f)(i).

     "LifeLine" has the meaning set forth in the preface.

                                     ******

                                       25
<PAGE>   27
     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.

                                   MEDICAL DISTRIBUTION SOLUTIONS, INC.

                                   /s/  Chris Kelly
                                   ------------------------
                                   By:   Chris Kelly
                                   Title: President

                                   NEOFORMA.COM, INC.

                                   /s/    Daniel A. Eckert
                                   ------------------------
                                   By: Daniel A. Eckert
                                   Title: President

                                   NEOFORMA LIFELINE, INC.

                                   /s/    Daniel A. Eckert
                                   ------------------------
                                   By: Daniel A. Eckert
                                   Title: President

<PAGE>   28

                                    EXHIBIT A

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

 This Note was originally issued on March 31, 2001 and has not been registered
                 under the Securities Act of 1933, as amended.
--------------------------------------------------------------------------------

                                      NOTE

                                                                  March 31, 2001
$750,000.00                                                    Norcross, Georgia

     The undersigned, for value received, promises to pay to the order of
NEOFORMA.COM, INC. ("Neoforma") the amount of Seven Hundred Fifty Thousand
Dollars ($750,000.00), such principal amount to be payable in the amount of One
Hundred Fifty Thousand Dollars ($150,000.00) on April 1, 2003, Two Hundred
Twenty Five Thousand Dollars ($225,000) on April 1, 2004, and Three Hundred
Seventy Five Thousand Dollars on April 1, 2005.

     No interest shall be payable by the undersigned on the unpaid principal
amount of this Note from the date hereof until this Note is paid in full.

     This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Asset Purchase Agreement, dated as of March 31,
2001, among the undersigned, Neoforma and Neoforma Lifeline, Inc., as amended or
otherwise modified from time to time.

     This Note is made under and governed by the laws of the State of Delaware
excluding that body of law pertaining to conflict of laws.

                                 MEDICAL DISTRIBUTION SOLUTIONS, INC.

                                 ------------------------------------
                                 Name:
                                 Title:

                                       27
<PAGE>   29

                                    EXHIBIT B

                               SERVICES AGREEMENT

This Services Agreement ("Agreement") is entered into as of March 31, 2001
("Effective Date") by and between Neoforma.com, Inc. ("Neoforma"), a Delaware
corporation with headquarters at 3061 Zanker Road, San Jose, CA 95134 and
Medical Distribution Solutions, Inc., a Georgia corporation ("MDSI") with
respect to the following.

                                  R E C I T A L

     MDSI desires to provide, and Neoforma desires to have MDSI provide various
     news, magazine and advertising services as an independent contractor to
     Neoforma.

     NOW, THEREFORE, the parties agree as follows:

     1. Services.

          (a) Performance. MDSI agrees to use its best efforts to perform the
services (the "Services") described in detail on Exhibit A to this Agreement
(the "Project Description") during the term of this Agreement.

          (b) Payment. As sole compensation for the performance of the Services,
Neoforma will pay MDSI the fees stated in the Project Description. Any expenses
incurred by MDSI in performing the Services will be the sole responsibility of
MDSI. Neoforma will pay each such invoice no later than thirty (30) days after
its receipt on services exceeding $100,000 in any given year.

     2. Relationship of Parties.

          (a) Independent MDSI. MDSI is an independent contractor and is not an
agent or employee of, and has no authority to bind, Neoforma by contract or
otherwise. MDSI will determine, in MDSI's sole discretion, the manner and means
by which the Services are accomplished, subject to the requirement that MDSI
shall at all times comply with applicable law. Neoforma has no right or
authority to control the manner or means by which the Services are accomplished.

          (b) Employment Taxes and Benefits. MDSI will report as revenue all
compensation received by MDSI pursuant to this Agreement.

     3. Neoforma Confidential Information. MDSI acknowledges that MDSI will
acquire information and materials from Neoforma and knowledge about the
business, products, programming techniques, experimental work, customers,
clients and suppliers of Neoforma and that all such knowledge, information and
materials acquired, the existence, terms and conditions of this Agreement, and
the Designs and Materials, are and will be the trade secrets and confidential
and proprietary information of Neoforma (collectively "Neoforma

                                       28
<PAGE>   30

Confidential Information"). Neoforma Confidential Information will not include,
however, any information which is or becomes part of the public domain through
no fault of MDSI or that Neoforma regularly gives to third parties without
restriction on use or disclosure. MDSI agrees to hold all such Neoforma
Confidential Information in strict confidence, not to disclose it to others or
use it in any way, commercially or otherwise, except in performing the Services,
and not to allow any unauthorized person access to it, during the term of this
Agreement and for three years after its expiration or termination. MDSI shall
take all action reasonably necessary and satisfactory to protect the
confidentiality of the Neoforma Confidential Information including, without
limitation, implementing and enforcing operating procedures to minimize the
possibility of unauthorized use or copying of the Neoforma Confidential
Information.

     4. MDSI Confidential Information. Neoforma acknowledges that Neoforma will
acquire information and materials from MDSI and knowledge about the business,
products, programming techniques, experimental work, customers, clients and
suppliers of MDSI and that all such knowledge, information and materials
acquired, the existence, terms and conditions of this Agreement, and the Designs
and Materials, are and will be the trade secrets and confidential and
proprietary information of MDSI (collectively " MDSI Confidential Information").
MDSI Confidential Information will not include, however, any information which
is or becomes part of the public domain through no fault of Neoforma or that
MDSI regularly gives to third parties without restriction on use or disclosure.
Neoforma agrees to hold all such MDSI Confidential Information in strict
confidence, not to disclose it to others or use it in any way, commercially or
otherwise, except in performing the Services, and not to allow any unauthorized
person access to it, during the term of this Agreement and for three years after
its expiration or termination. Neoforma shall take all action reasonably
necessary and satisfactory to protect the confidentiality of the MDSI
Confidential Information including, without limitation, implementing and
enforcing operating procedures to minimize the possibility of unauthorized use
or copying of the MDSI Confidential Information.

     5. Indemnification by MDSI. MDSI shall indemnify Neoforma and hold it
harmless from and against all claims, damages, losses and expenses, including
court costs and reasonable fees and expenses of attorneys, expert witnesses and
other professionals, arising out of or resulting from, and, at Neoforma's
option, MDSI will defend Neoforma against:

          (a) any action by a third party against Neoforma that is based on any
claim that any Services performed under this Agreement, or their results,
infringe a patent, copyright or other proprietary right or violate a trade
secret; and

          (b) any action by a third party against Neoforma that is based on any
negligent act or omission or willful conduct of MDSI and which results in: (i)
any bodily injury, sickness, disease or death; (ii) any injury or destruction to
tangible or intangible property (including computer programs and data) or any
loss of use resulting therefrom; or (iii) any violation of any statute,
ordinance, or regulation.

     6. Indemnification by Neoforma. Neoforma shall indemnify MDSI and hold it
harmless from and against all claims, damages, losses and expenses, including
court costs and reasonable fees and expenses of attorneys, expert witnesses and
other professionals, arising out of or resulting from, and, at MDSI 's option,
Neoforma will defend MDSI against:

                                       29
<PAGE>   31

          (a) any action by a third party against MDSI that is based on any
claim that any Services performed under this Agreement, or their results,
infringe a patent, copyright or other proprietary right or violate a trade
secret; and

          (b) any action by a third party against MDSI that is based on any
negligent act or omission or willful conduct of Neoforma and which results in:
(i) any bodily injury, sickness, disease or death; (ii) any injury or
destruction to tangible or intangible property (including computer programs and
data) or any loss of use resulting therefrom; or (iii) any violation of any
statute, ordinance, or regulation.

     7. Termination and Expiration.

          (a) Breach. Either party may terminate this Agreement in the event of
a breach by the other party to this Agreement if such breach continues uncured
for a period of thirty (30) days after written notice.

          (b) Term. The term of this Agreement shall commence upon the Effective
Date and continue thereafter for five years, unless sooner terminated pursuant
to Section 6(a).

          (c) Automatic. This Agreement terminates automatically, with no
further action of either party, if either party is adjudicated bankrupt, files a
voluntary petition of bankruptcy, makes a general assignment for the benefit of
creditors, is unable to meet its obligations in the normal course of business or
if a receiver is appointed on account of either party's insolvency.

          (d) No Election of Remedies. The election by either party to terminate
this Agreement in accordance with its terms shall not be deemed an election of
remedies, and all other remedies provided by this Agreement or available at law
or in equity shall survive any termination.

     8. Effect of Expiration or Termination. Upon the expiration or termination
of this Agreement for any reason:

          (a) each party will be released from all obligations to the other
arising after the date of expiration or termination, except that expiration or
termination of this Agreement will not relieve either party of its obligations
under Sections 2(b), 3, 4, 5, 8, 9(b) and 10, nor will expiration or termination
relieve MDSI or Neoforma from any liability arising from any breach of this
Agreement;

          (b) MDSI will promptly notify Neoforma of all Neoforma Confidential
Information, including but not limited to the Designs and Materials, in MDSI's
possession and, at the expense of MDSI and in accordance with Neoforma's
instructions, will promptly deliver to Neoforma all such Neoforma Confidential
Information; and

          (c) Neoforma will promptly notify MDSI of all MDSI Confidential
Information, including but not limited to the Designs and Materials, in
Neoforma's possession and, at the expense of Neoforma and in accordance

                                       30
<PAGE>   32

with MDSI's instructions, will promptly deliver to MDSI all such MDSI
Confidential Information

     9. Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND
IN CONNECTION WITH THIS AGREEMENT, EVEN IF A PARTY HAS BEEN INFORMED IN ADVANCE
OF THE POSSIBILITY OF SUCH DAMAGES.

     10. Covenants.

          (a) Pre-existing Obligations. each party represents and warrants that
it is not under any pre-existing obligation inconsistent with the provisions of
this Agreement.

          (b) Solicitation of Employment. Because of the trade secret subject
matter of Neoforma's business, each party agrees that it will not solicit the
services of any of the employees, contractors, suppliers or customers of the
other party during the term of this Agreement and for six (6) months thereafter.

     11. General.

          (a) Assignment. Neither party may not assign its rights or delegate
its duties under this Agreement either in whole or in part without the prior
written consent of the other party. Any attempted assignment or delegation
without such consent will be void.

          (b) Equitable Remedies. Because the Services are personal and unique
and because each party will have access to the Confidential Information of the
other, either party will have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief without
prejudice to any other rights and remedies that it may have for a breach of this
Agreement. If Neoforma files for bankruptcy or is declared insolvent, MDSI shall
have the right to offset any amounts owed by Neoforma against the Note dated
March 31, 2001 made by MDSI to LifeLine. If MDSI files for bankruptcy or is
declared insolvent, Neoforma shall have the right terminate this Agreement and
cease all payments hereunder except for payments due to MDSI for services
already furnished.

          (c) Attorneys' Fees. If any action is necessary to enforce the terms
of this Agreement, the substantially prevailing party will be entitled to
reasonable attorneys' fees, costs and expenses in addition to any other relief
to which such prevailing party may be entitled.

          (d) Governing Law; Severability. This Agreement will be governed by
and construed in accordance with the laws of the State of California excluding
that body of law pertaining to conflict of laws. If any provision of this
Agreement is for any reason found to be unenforceable, the remainder of this
Agreement will continue in full force and effect.

          (e) Notices. Any notices under this Agreement will be sent by
certified or registered mail, return receipt requested, to the address specified
below or such other address as the party specifies in writing. Such notice will
be effective upon its mailing as specified.

                                       31
<PAGE>   33

          (f) Complete Understanding; Modification. This Agreement, together
with Exhibit A, constitutes the complete and exclusive understanding and
agreement of the parties and supersedes all prior understandings and agreements,
whether written or oral, with respect to the subject matter hereof. Any waiver,
modification or amendment of any provision of this Agreement will be effective
only if in writing and signed by the parties hereto.

     IN WITNESS WHEREOF, the parties have signed this Agreement as of the
Effective Date.

COMPANY:                                                  MDSI:

By:                                     By:
   -----------------------------------     -----------------------------------

Title:
      --------------------------------

                                       32
<PAGE>   34

                                    EXHIBIT A

                               Project Description

1. MDSI shall provide Neoforma with services that shall initially include: (a) a
customized version of the *, (b) a premium medical content service (*), with
specifics to be mutually agreed upon in good faith by the parties, (c)
advertising space at rates agreed upon by MDSI and Neoforma. Neoforma may
request other services in lieu of these services, upon receipt of written
consent from MDSI.

2. Neoforma shall make the first payment of * for the initial year's services on
April 1, 2001 or on the Closing of the Asset Purchase Agreement between the
parties, whichever is later. Neoforma shall make its second and subsequent
annual payments on January 1, 2002, and on each of January 1, 2003, 2004 and
2005. Neoforma's payments shall be allocated annually as follows:

     (a) *: *

     (b) Premium content service: *

     (c) Advertising: * less amounts for the * and * (e.g., *)

provided, that Neoforma may change the allocation between premium content
service and advertising in its reasonable discretion * annually upon three
months prior notice to MDSI Neoforma may request changes to customized services,
such as the * and the premium content service, semi-annually and to
non-customized services, such as advertising, quarterly, but shall continue to
purchase * worth of * as specified above.

3. Neoforma may purchase additional services from MDSI (i.e. in excess of the
annual * commitment) at mutually agreeable rates.

4. MDSI shall pay Neoforma * of the subscription revenue generated from sales of
the premium medical content service and * of the revenue generated from sales of
any other MDSI products or services by Neoforma or through Neoforma distribution
channels.

* Confidential treatment requested.

                                       33<PAGE>   1
                                                                   Exhibit 10.11

                    TURNSTONE SYSTEMS, INC. AND ALCATEL S.A.
                             OEM PURCHASE AGREEMENT

Supplier's Name:
Turnstone Systems, Inc.
2220 Central Expressway
Santa Clara, CA 95050

This Agreement is made by and between Alcatel SA ("Alcatel" or "Company") having
an office at 54, rue la Boetie, 75008 Paris, France for the ALCATEL group of
companies as per hereto attached Appendix G and Turnstone Systems, Inc.
("Turnstone" or "Supplier") having an office at 2220 Central Expressway, Santa
Clara, CA 95050 (hereinafter individually a "Party" and collectively the
"Parties"). Company agrees to purchase and Supplier agrees to sell in accordance
with the terms and conditions stated in this Agreement and any attachments to
this Agreement.

WHEREAS "Alcatel Group" means (i) any company in which Alcatel owns directly or
indirectly at least 50% of the stock with entitlement to vote for directors or
persons performing a function similar to that of director, or (ii) any
non-corporate entity where Alcatel owns directly or indirectly at least fifty
percent (50%) of the equity in each case of which Alcatel informs Turnstone in
writing requesting the company to be added to the Appendix G via mutually agreed
Appendices signed.

WHEREAS, Company wishes to purchase MATERIALs of Supplier's (design and)
manufacture for resale to Company's customers, and

WHEREAS, Supplier desires to sell such materials to Company for resale to
Company's customers,

THEREFORE, the parties agree as follows

         AGREEMENT EFFECTIVE PERIOD
         The term of this Agreement shall commence on June 1, 2001, and shall,
         except as otherwise provided in this Agreement, continue for a period
         of 3 years. Parties shall after each full year of the three year term
         have the right to terminate this Agreement by giving the other Party 90
         days prior written notice.
<PAGE>   2
                                                                               2

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
TERRITORY                                                                     4
MATERIAL                                                                      4
OPTION TO EXTEND                                                              4
PRICE AND DISCOUNTS                                                           4
COST REDUCTION                                                                5
TERMS OF PAYMENT                                                              5
FORECASTS                                                                     5
FOB                                                                           5
FREIGHT CLASSIFICATION                                                        5
PREFERRED PARTNER; NON-EXCLUSIVE MARKET RIGHTS                                5
SPECIFICATIONS OR DRAWINGS                                                    6
ASSIGNMENT BY SUPPLIER                                                        6
ASSIGNMENT BY COMPANY                                                         7
BANKRUPTCY AND TERMINATION FOR FINANCIAL INSECURITY                           7
CFC PACKAGING                                                                 7
CHOICE OF LAW                                                                 8
COMPLIANCE WITH LAWS                                                          8
CONTINUING AVAILABILITY                                                       8
DEFAULT                                                                       8
ELECTRONIC DATA INTERCHANGE                                                   9
EPIDEMIC CONDITION                                                            9
EXPORT CONTROL                                                               11
FORCE MAJEURE                                                                11
GOVERNMENT CONTRACT PROVISIONS                                               11
HEAVY METALS IN PACKAGING                                                    12
IDENTIFICATION                                                               12
IMPLEADER                                                                    12
INDEMNITY                                                                    12
LIMITATION OF LIABILITY                                                      14
INFRINGEMENT                                                                 14
INSIGNIA                                                                     14
INSURANCE                                                                    15
INVOICING FOR GOODS                                                          15
INVOICING FOR STOCKS                                                         15
JURISDICTION                                                                 15
LICENSES                                                                     16
MARKING                                                                      16
MONTHLY ORDER AND SHIPMENT REPORTS                                           16
NON DISCLOSURE AGREEMENT                                                     16
NON WAIVER                                                                   17
NOTICES                                                                      17
OPERATING SYSTEM SOFTWARE                                                    17
OZONE DEPLETING CHEMICALS                                                    18
OZONE DEPLETING SUBSTANCES LABELING                                          19
POINT OF SALE INFORMATION                                                    19
MATERIAL CHANGES                                                             19
MATERIAL CONFORMANCE REVIEWS                                                 20
MATERIAL DOCUMENTATION                                                       20
PURCHASE ORDERS                                                              21
REGISTRATION AND RADIATION STANDARDS                                         21
INSPECTION OF MATERIAL                                                       22
RELEASES VOID                                                                22
REPAIRS NOT COVERED UNDER WARRANTY                                           22
REPAIR PROCEDURES                                                            23
RIGHT OF ENTRY                                                               23
SAFETY CERTIFICATION                                                         23
SECTION HEADINGS                                                             24
</TABLE>
<PAGE>   3
                                                                               3

<TABLE>
<S>                                                                          <C>
SERVICES                                                                     24
SEVERABILITY                                                                 24
SHIPPING                                                                     24
SHIPPING INTERVAL                                                            24
STORAGE OF PAID FOR STOCK                                                    25
SUPPLIER'S INFORMATION                                                       26
SURVIVAL OF OBLIGATIONS                                                      27
TAXES                                                                        27
TECHNICAL SUPPORT                                                            27
TERMINATION OF PURCHASE ORDER                                                27
TIMELY PERFORMANCE  & PENALTY FOR LATE DELIVERY                              28
TITLE AND RISK OF LOSS                                                       28
TOXIC SUBSTANCES AND MATERIAL HAZARDS                                        28
TRAINING                                                                     29
PRODUCT MANAGEMENT MEETINGS                                                  29
ROADMAPS                                                                     30
SALES AND MARKETING MEETINGS                                                 30
EXCHANGE OF EQUIPMENT                                                        31
OSS INTEGRATION                                                              31
USE OF INFORMATION                                                           31
VARIATION IN QUANTITY                                                        32
WARRANTY                                                                     32
ENTIRE AGREEMENT                                                             33
APPENDIX A - TURNSTONE PRICE GUIDE                                           36
APPENDIX B - PRODUCT SPECIFICATIONS                                          37
APPENDIX C - MONTHLY ORDER SHIPMENT REPORTS                                  38
APPENDIX D - NON DISCLOSURE AGREEMENT                                        39
APPENDIX E - COMPREHENSIVE PRODUCT MAINTENANCE TERMS                         40
APPENDIX F - TRAINING                                                        52
APPENDIX G - ALCATEL UNITS                                                   61
</TABLE>
<PAGE>   4
                                                                               4

1.       TERRITORY

                  Supplier grants Company the non-exclusive, non-transferable,
         world-wide right to market, distribute and sell the Materials to
         Company's customers.

2.       MATERIAL

                  "MATERIAL" as used in this Agreement shall mean all supplier
         products that are listed in APPENDIX A and all products that might be
         added to this Appendix A attached and made a part of this Agreement.
         Such MATERIAL is hereby offered for sale by Supplier and may be
         purchased by Company in accordance with the terms, conditions and
         specifications stated in this Agreement. This Agreement is a
         non-commitment agreement and MATERIAL shall be furnished by Supplier on
         an as-ordered basis. "Specification(s)" as used in this Agreement shall
         mean all of the specifications made part of this Agreement.

3.       OPTION TO EXTEND

                  Company shall have the right to extend the period specified in
         the section "AGREEMENT EFFECTIVE PERIOD" for up to twelve (12) months
         by giving Supplier at least ninety (90) business days prior written
         notice.

                  Within ten (10) business days of the date of Company's notice
         to extend the period, Supplier shall notify Company in writing whether
         Supplier proposes to revise the price(s) under this Agreement. If the
         parties fail to agree on the revised price(s) within twenty (20)
         business days after the date of Supplier's notice, Company's notice of
         extension shall be considered withdrawn and prices for outstanding
         orders or orders placed during the term of this Agreement shall not be
         revised.

4.       PRICE AND DISCOUNTS

                  Prices and discounts shall be based on cumulative purchase
         volume as shown in APPENDIX A. Prices and discounts as listed in
         APPENDIX A shall remain in effect during the term of this Agreement.
         Supplier agrees not to quote discounts greater than [***]% for the
         CX100/CX40 product family to [***] provided that Company continues to
         actively and in good faith promote and competitively sell Supplier
         products to these accounts. The CX100/CX40 product family includes all
         test heads and other common equipment cards for those systems, but
         excludes the SX500 Smart Splitter products. Company understands that
         quotes have been issued to [***] prior to this OEM, that may have to be
         honored, which do not adhere to this maximum discount. However, these
         quoted discounts will be limited to the equipment quoted previously,
         and will not be extended on new quotes.

                  During the effective term of this Agreement, in the event
         Supplier and Company are marketing MATERIALs to the same prospective
         customer account, Supplier and Company

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                                                                               5

         shall work together in good faith to jointly present the most
         competitive proposal for MATERIALs to such customer account.

5.       COST REDUCTION

                  Both parties shall endeavor to reduce the costs of MATERIALs
         furnished under this Agreement. If design, labor or material cost
         reductions result from Company initiated changes or the sharing by
         Supplier of other Company supplier agreements, [***] percent ([***]%)
         of the cost reduction(s) shall be passed onto Company in the form of
         reduced prices, except that if the cost reduction results from Supplier
         initiated changes, Supplier shall furnish to Company a complete list of
         expenses that Supplier incurred in effecting said cost reduction, if
         any. Supplier shall be entitled to receive the benefits of the cost
         reduction for the time period required to recover its implementation
         expenses.

6.       TERMS OF PAYMENT

                  Net thirty (30) business days from the date of invoice of the
         MATERIAL.

7.       FORECASTS

                  Company shall provide Supplier with a twelve (12) month
         non-binding forecast submitted to Supplier by the fifth (5th) business
         day of each calendar month. Such forecast shall be used by Supplier for
         planning purposes only and shall not be deemed a commitment by Company
         to purchase the MATERIAL shown in the forecast.

8.       FOB

                  The MATERIAL shall be shipped FOB Supplier's location (or such
         other Supplier's location as may be designated by Supplier). Company
         shall select the carrier(s) and provide the name(s) of the carrier(s)
         and Company's account number(s) with said carriers to Supplier within
         thirty (30) days of execution of this Agreement.

9.       FREIGHT CLASSIFICATION

                  MATERIAL purchased under this Agreement shall be shipped to
         Company or Company's customers subject to freight charges appropriate
         for goods classified as Data Communication Products. Supplier shall
         indicate on the bill of lading that Company's contract rates apply.

10.      PREFERRED PARTNER; NON-EXCLUSIVE MARKET RIGHTS

                  Company shall publicly designate Supplier and shall at all
         times refer Supplier to all of Company's clients as Company's preferred
         loop management partner. The Parties shall issue a mutually agreed upon
         press release within 30 days announcing such designation.

                  This Agreement neither grants to Supplier an exclusive right
         or privilege to sell to Company any or all MATERIALs of the type
         described in the MATERIAL section which

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                                                                               6

         Company may require, nor requires the purchase of any MATERIAL or other
         MATERIALs from Supplier by Company. Therefore, Company may contract
         with other manufacturers and suppliers for the procurement of
         comparable MATERIALs. In addition, Company shall, at its sole
         discretion, decide the extent to which Company will market advertise,
         promote, support or otherwise assist in further offerings of the
         MATERIAL.

                  Purchases by Company under this Agreement shall neither
         restrict the right of Company to cease purchasing nor require Company
         to continue any level of such purchases.

11.      SPECIFICATIONS OR DRAWINGS

                  All Supplier's technical specifications, certifications and
         product definitions are included by reference and further defined in
         APPENDIX B. Supplier shall manufacture MATERIAL in accordance with
         Specifications, so that MATERIAL conforms to such Specifications.

                  In accordance with the notification requirements outlined in
         Section "MATERIAL CHANGES," Supplier shall provide Company with at
         least thirty (30) business days prior written notice of any change to
         be made by Supplier in the MATERIAL furnished pursuant to said
         Specifications under this Agreement. Changes in Specifications shall in
         no event apply to material already ordered.

                  If Company, in its sole discretion, does not agree to the
         change proposed by Supplier, Company may submit a Modification Request
         to address the change. If the Company's Modification Request is not an
         acceptable solution, then in addition to all other rights and remedies
         at law or equity or otherwise, and without any cost to or liability or
         obligation of Company, Company shall have the right to terminate this
         Agreement and to terminate any or all purchase orders for MATERIAL
         affected by such change.

                  Supplier shall continue to supply MATERIAL to Company pursuant
         to the Specifications for the term of the Agreement. If Supplier is
         unable to continue to thus supply or discontinues manufacture of
         MATERIAL, Company shall be entitled to one (1) year's advance notice,
         provided (i) the discontinuance is at Supplier's election and (ii)
         there has been a reasonable amount of purchases during the period
         preceding Supplier's notice of discontinuance. Additionally, and if
         requested by Company, Company and Supplier shall endeavor to develop an
         alternative method of provisioning MATERIAL or Parts, which may include
         licensing Manufacturing Rights to Company, subject to mutual agreement
         between Company and Supplier.

12.      ASSIGNMENT BY SUPPLIER

                  Supplier shall not assign any right or interest under this
         Agreement (excepting solely for moneys due or to become due) without
         the prior written consent of Company, provided however, no such consent
         shall be required in connection with the sale of all or substantially
         all of the assets of Supplier related to MATERIAL or in connection with
         any merger,

<PAGE>   7
                                                                               7

         reorganization or sale of Supplier. Supplier shall be responsible to
         Company for all Work performed by Supplier's subcontractor(s) at any
         tier. In the event of an assignment by Supplier, Company may terminate
         this Agreement or an order, in whole or in part, by written notice to
         Supplier. In such case, Company's liability shall be limited to payment
         of the amount due for work performed and/or MATERIAL provided by
         Supplier up to and including date of termination.

13.      ASSIGNMENT BY COMPANY

                  Company shall have the right to assign this Agreement or an
         order and to assign its rights and delegate its duties under this
         Agreement or an order either in whole or in part at any time and
         without Supplier's consent to (i) any present or future associated
         entity of Company; (ii) the, successors and assigns of Company or its
         present or future associated entities; or (iii) any other entity
         resulting from the sale, reorganization or other transfer of all or
         part of the assets of Company or any associated entity. Company shall
         give Supplier written notice of any assignment and delegation. The
         assignment and delegation shall not affect any rights or duties that
         Supplier or Company may then or thereafter have as to equipment,
         software, services or materials ordered by Company prior to the
         effective date of the assignment and delegation. Upon acceptance of the
         assignment and delegation and assumption of the duties under this
         Agreement or an order, Company shall be released and discharged, to the
         extent of the assignment and delegation, from all further duties under
         this Agreement or the order as to equipment, software, services or
         materials so assigned.

14.      BANKRUPTCY AND TERMINATION FOR FINANCIAL INSECURITY

                  Either party may terminate this Agreement by notice in
         writing:

                  (i)      if the other party makes an assignment for the
                           benefit of creditors (other than solely an assignment
                           of monies due); or:

                  (ii)     if the other party evidences an inability to pay
                           debts as they become due, unless adequate assurance
                           of such ability to pay is provided within thirty (30)
                           days of such notice.

                  If a proceeding is commenced under any provision of the United
         States Bankruptcy Code, voluntary or involuntary, by or against either
         party, and this Agreement has not been terminated, the non-debtor party
         may file a request with the bankruptcy court to have the court set a
         date within sixty (60) days after the commencement of the case, by
         which the debtor party will assume or reject this Agreement, and the
         debtor party shall cooperate and take whatever steps necessary to
         assume or reject the Agreement by such date.

15.      CFC PACKAGING

                  Supplier warrants that all packaging materials furnished under
         this Agreement and all packaging associated with MATERIAL furnished
         under this Agreement were not

<PAGE>   8
                                                                               8

         manufactured using and do not contain chlorofluorocarbons. "Packaging"
         means all bags, wrapping, boxes, cartons and any other packing
         materials used for packaging. Supplier shall indemnify and hold Company
         harmless for any liability, fine or penalty incurred by Company to any
         third party or governmental agency arising out of Company's good faith
         reliance upon said warranty.

16.      CHOICE OF LAW

                  This Agreement and all transactions under it shall be governed
         by the laws of the State of California excluding its choice of laws
         rules and excluding the Convention for the International Sale of Goods.
         Supplier agrees to submit to the jurisdiction of any court wherein an
         action is commenced against Company based on a claim for which Supplier
         has agreed to indemnify Company under this Agreement.

17.      COMPLIANCE WITH LAWS

                  Each Party and all persons furnished by each Party shall
         comply at their own expense with all applicable laws, ordinances,
         regulations and codes, including the identification and procurement of
         required permits, certificates, licenses, insurance, approvals and
         inspections in performance under this Agreement.

18.      CONTINUING AVAILABILITY

                  Supplier shall offer for sale to Company, during the term of
         this Agreement MATERIAL conforming to the Specifications set forth in
         this Agreement. Supplier further shall offer for sale to Company,
         during the term of this Agreement and until [***] ([***]) years after
         the expiration of this Agreement, maintenance, replacement, and repair
         parts ("Parts") which are functionally equivalent and identical in form
         and fit for the MATERIAL covered by this Agreement. The price for the
         MATERIAL and Parts shall be the price set forth in Supplier's then
         current agreement with Company for said MATERIAL or Parts or, if no
         such agreement exists, at a price agreed upon by Company and Supplier.
         If the parties fail to agree on a price, the price shall be a
         reasonably competitive price for said MATERIAL or Parts at the time for
         delivery. The MATERIAL and Parts shall be warranted as set forth in the
         "WARRANTY" section of this Agreement. The term "Parts" is included in
         the term "MATERIAL."

                  In the event Supplier fails to supply such MATERIAL or Parts
         and Supplier is unable to obtain another source of supply for Company,
         then Company and Supplier shall endeavor to develop an alternative
         method of provisioning MATERIAL or Parts, which may include
         manufacturing rights to Company. At that time, both parties shall
         mutually determine necessary measures required for Company to obtain
         MATERIAL under this license.

19.      DEFAULT

                  If either party shall be in breach or default of any of the
         terms, conditions or covenants of this Agreement or of any purchase
         order, and if such breach or default shall

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                                                                               9

         continue for a period of ten (10) days after the giving of written
         notice to the party in breach thereof by the party not in breach, then,
         in addition to all other rights and remedies which the party not in
         breach may have at law or equity or otherwise, the party not in breach
         shall have the right to cancel this Agreement and/or any purchase
         orders without any charge to or obligation or liability of the party
         not in breach.

20.      ELECTRONIC DATA INTERCHANGE

                  If requested by Company, Supplier shall use commercially
         reasonable efforts to implement EDI at Supplier's sole expense.

21.      EPIDEMIC CONDITION

                  If during the term of this Agreement and for six (6) months
         after the last shipment date of MATERIAL under this Agreement Company
         notifies Supplier that an "Epidemic Condition" has occurred, Supplier
         shall prepare and propose a Corrective Action Plan ("CAP") with respect
         to such MATERIAL within five (5) working days of such notification,
         addressing implementation and procedure milestones for remedying such
         Epidemic Condition(s). An extension of this time-frame is permissible
         upon mutual written agreement of the parties.

                  Upon notification of the Epidemic Condition to Supplier,
         Company shall have the right to postpone all or part of the shipments
         of unshipped MATERIAL, by giving written notice of such postponement to
         Supplier, pending correction of the Epidemic Condition. Such
         postponement shall temporarily relieve Supplier of its shipment
         liability and Company of its shipment acceptance liability. Should
         Supplier not agree to the existence of an Epidemic Condition or should
         Company not agree to the CAP, then Company shall have the right to
         suspend all or part of its unshipped orders without liability to
         Company or Supplier until such time as a mutually acceptable solution
         is reached.

                  An Epidemic Condition will be considered to exist when one or
         more of the following conditions occur:

                  (1) Failure reports or statistical samplings show that
         MATERIAL shipped contain a potential safety hazard (such as personal
         injury or death, fire, explosion, toxic emissions, etc.), or exhibit a
         highly objectionable symptom (such as emissions of smoke, loud noises,
         deformation of housing) or other disconcerting symptoms of this type.

                  (2) Reliability plots of relevant data indicate that the
         MATERIAL has actual Mean Time Between Failures (MTBF) of less than 80%
         of the MTBF specified by Supplier. The MTBF parameter of MATERIAL is
         defined as the total operating or power-on time of any population under
         observation ("T"), in hours, divided by the total number of critical
         failures ("n") that have occurred during the observed period. A
         critical failure is defined as a failure to operate per the
         requirements of the Technical Specification. The total operating
<PAGE>   10
                                                                              10

         time of a population is the summation of operating time of individual
         units in that population. MTBF is expressed as MTBF = T/n. An Epidemic
         Condition shall exist when data derived from populations being tracked
         confirms the condition with 80% confidence.

                  (3) MATERIAL Dead on Arrival (DOA) failures exceed the
         Epidemic DOA failure rate which is defined as 1.2 x DOA specified in
         the section of this Agreement entitled MATERIAL CONFORMANCE REVIEW.

                  Only major functional and visual/mechanical/appearance defects
         are considered for determining Epidemic Condition. MATERIAL could be
         either sampled or, a Company's option, 100% audited at Company
         warehouses, factories or Company's customers' locations. If MATERIAL is
         sampled, the data must have 80% or better statistical confidence.

                  For the purpose of this Agreement, functional DOA shall be
         defined as any MATERIAL that during the test, installation or upon its
         first use fails to operate as expected or specified.
         Visual/mechanical/appearance DOA is defined as any MATERIAL containing
         one or more major defects that would make the MATERIAL unfit for use or
         installation.

                  An Epidemic Condition shall not include failures due to
         customer misapplication, utilization of parts not approved by Supplier,
         or chain failures induced by internally or externally integrated
         subassemblies.

                  In the event that Supplier develops a remedy for the defect(s)
         that caused the Epidemic Condition and Company agrees in writing that
         the remedy is acceptable Supplier shall:

         (a) Incorporate the remedy in the affected MATERIAL in accordance with
         CAP.

         (b) Ship all subsequent MATERIAL incorporating the required
         modification correcting the defect(s) at no additional charge to
         Company; and

         (c) Repair and/or replace MATERIAL that caused the Epidemic Condition.
        In the event that Company incurs costs due to such repair and/or
        replacement, including but not limited to labor and shipping costs,
        Supplier shall reimburse Company for such costs. Supplier shall bear
        risk of in transit loss and damage for such repaired and/or replaced
        MATERIAL.

                  Supplier and Company shall mutually agree in writing as to the
         remedy's implementation schedule. Supplier shall use its best efforts
         to implement the remedy in accordance with the agreed-upon schedule.

                  If Supplier is unable to develop a mutually agreeable remedy,
         or does not adequately take into account the business interests of
         Company, as reasonably agreed by the parties,
<PAGE>   11
                                                                              11

         Company may (1) develop and implement such remedy and, in such case,
         implementation costs and risk of in-transit loss and damage shall be
         allocated between the parties as set forth in this section, and/or (2)
         cancel postponed orders without liability and return all MATERIAL
         affected by such Epidemic Condition for full refund, payable by
         Supplier within thirty (30) business days after receipt of returned
         MATERIAL (with risk of loss or in-transit damage borne by Supplier)
         and/or (3) terminate this Agreement without further liability.

22.      EXPORT CONTROL

                  Supplier will not use, distribute, transfer or transmit any
         MATERIALs, software or technical information (even if incorporated into
         other MATERIALs) provided under this Agreement except in compliance
         with U.S. export laws and regulations (the "Export Laws"). Supplier
         will not, directly or indirectly, export or re-export the following
         items to any country which is in the then current list of prohibited
         countries specified in the applicable Export Laws: (a) software or
         technical data disclosed or provided to Supplier by Company or
         Company's subsidiaries or affiliates; or (b) the direct MATERIAL of
         such software or technical data. Supplier agrees to promptly inform
         Company in writing of any written authorization issued by the U.S.
         Department of Commerce office of export licensing to export or
         re-export any such items referenced in (a) or (b). The obligations
         stated above in this clause will survive the expiration, cancellation
         or termination of this Agreement or any other related agreement.

23.      FORCE MAJEURE

                  Neither party shall be held responsible for any delay or
         failure in performance of any part of this Agreement to the extent such
         delay or failure is caused by fire, flood, strike, civil, governmental,
         or military authority, act of God, or other similar causes beyond its
         control and without the fault or negligence of the delayed or non
         performing party or its subcontractors. Supplier's liability for loss
         or damage to Company's MATERIAL in Supplier's possession or control
         shall not be modified by this section. When a party's delay or
         nonperformance continues for a period of at least fifteen (15) days,
         the other party may terminate, at no charge, this Agreement or an order
         under the Agreement.

24.      GOVERNMENT CONTRACT PROVISIONS

                  The following provisions regarding equal opportunity, and all
         applicable laws, rules, regulations and executive orders specifically
         related thereto, including applicable provisions and sections from the
         Federal Acquisition Regulation and all supplements thereto are
         incorporated in this Agreement as they apply to work performed under
         specific U.S. Government contracts: 41 CFR 60-1.4, Equal Opportunity;
         41 CFR 60-1.7, Reports and Other Required Information; 41 CFR 60-1.8,
         Segregated Facilities; 41 CFR 60-250.4, Affirmative Action For Disabled
         Veterans and Veterans of the Vietnam Era (if in excess of $10,000); and
         41 CFR 60-741.4, Affirmative Action for Disabled Workers (if in excess
         of $2,500), wherein the terms "contractor" and "subcontractor" shall
         mean "Supplier". In addition, orders placed under this Agreement
         containing a notation that the material or
<PAGE>   12
                                                                              12

         services are intended for use under Government contracts shall be
         subject to such other Government provisions printed, typed or written
         thereon, or on the reverse side thereof, or in attachments thereto.

25.      HEAVY METALS IN PACKAGING

                  Supplier warrants to Company that no lead, cadmium, mercury or
         hexavalent chromium have been intentionally added to any packaging or
         packaging component (as defined under applicable laws) to be provided
         to Company under this Agreement and that packaging materials were not
         manufactured using and do not contain chlorofluorocarbons. Supplier
         further warrants to Company that the sum of the concentration levels of
         lead, cadmium, mercury and hexavalent chromium in the package or
         packaging component provided to Company under this Agreement does not
         exceed 100 parts per million. Upon request, Supplier shall provide to
         Company Certificates of Compliance certifying that the packaging and/or
         packaging components provided under this Agreement are in compliance
         with the requirements set forth above in this section.

26.      IDENTIFICATION

                  Supplier shall not, without Company's prior written consent,
         engage in publicity related to this Agreement, or make public use of
         any Identification in any circumstances related to this Agreement.
         Notwithstanding the foregoing, Company and Supplier agree to issue a
         mutually acceptable press release regarding this Agreement as soon as
         reasonably possible following execution of this Agreement. Company
         consents to Supplier's disclosure of this Agreement as may be required
         by federal and state securities laws and regulations. Supplier shall
         request confidential treatment of any such disclosure of this
         Agreement. "Identification" means any semblance of any trade name,
         trademark, service mark, insignia, symbol, logo, or any other
         designation, or drawing of Company or its affiliates. Supplier shall
         remove or obliterate any Identification prior to any use or disposition
         of any MATERIAL rejected or not purchased by Company.

27.      IMPLEADER

                  Supplier shall not implead or bring an action against Company
         based on any claim by any person for personal injury or death to an
         employee of Company for which Company has previously paid or is
         obligated to pay worker's compensation benefits to such employee or
         claimant and for which such employee or claimant could not otherwise
         bring legal action against Company.

28.      INDEMNITY

                  At Company's request, Supplier agrees to indemnify, defend and
         hold harmless Company, its affiliates, employees, successors and
         assigns (all referred to as "Company") from and against any losses,
         damages, claims, fines, penalties and expenses (including reasonable
         attorney's fees) that arise out of or result from: (i) injuries or
         death to persons or damage to property, including theft, in any way
         arising out of or caused or alleged to have
<PAGE>   13
                                                                              13

         been caused by the services performed by, or MATERIAL provided by
         Supplier; or (ii) any failure of Supplier to perform its obligations
         under this Agreement. Notwithstanding the foregoing, Supplier's duty of
         indemnification pursuant to this article does not arise for loss or
         injury caused by:

         (i) gross negligence, misuse, abuse of, or accident to the MATERIAL;

         (ii) gross negligence by a person other than Supplier or under
         Supplier's authority;

         (iii) improper or inadequate operation, maintenance, or repair by a
         person other than Supplier or under Supplier's authority not in
         accordance with this Agreement;

         (iv) modification to MATERIAL by Company or a third party in a manner
         not authorized in writing by Supplier and not in accordance with this
         Agreement.

         Supplier's obligations pursuant to this article are further subject to
         the conditions that Company:

         (i) gives Supplier timely notice of any claim or threatened or actual
         suit or action;

         (ii) gives Supplier sole control of the defense and settlement of such
         action, claim or suit and related settlement negotiations; provided
         that Supplier may not make any admission of liability on the Company's
         behalf, without Company's prior written consent and further provided
         that such control shall continue only for so long as Supplier is
         defending such claim, suit or action in good faith; and

         (iii) reasonably cooperates in the defense and settlement of such
         claim, suit or action at Supplier's sole expense.

         At Supplier's request, Company agrees to indemnify, defend and hold
         harmless Supplier, its affiliates, employees, successors and assigns
         (all referred to as "Supplier") from and against any losses, damages,
         claims, fines, penalties and expenses (including reasonable attorney's
         fees) that arise out of or result from: (1) injuries or death to
         persons or damage to property, including theft, in any way arising out
         of or caused or alleged to have been caused by the negligence of
         Company (including all associated persons as included above); (2)
         product liability claims arising out of the use of parts or services
         not provided by Supplier but which were combined or operated with the
         MATERIAL; (3) any warranty issued by Company in excess of that provided
         by Supplier pursuant to this Agreement; or (4) any failure of Company
         to perform its obligations under this Agreement. Notwithstanding the
         foregoing, Company's indemnification pursuant to this article does not
         arise for loss or injury caused by gross negligence by Supplier or a
         person under Supplier's authority. Company's obligations pursuant to
         this article are further subject to the conditions that Supplier:

         (i) gives Company timely notice of any claim or threatened or actual
         suit or action;
<PAGE>   14
                                                                              14

         (ii) gives Company sole control of the defense and settlement of such
         action, claim or suit and related settlement negotiations; provided
         that Company may not make any admission of liability on the Supplier's
         behalf, without Supplier's prior written consent and further provided
         that such control shall continue only for so long as Company is
         defending such claim, suit or action in good faith; and

         (iii) reasonably cooperates in the defense and settlement of such
         claim, suit or action.

29.      LIMITATION OF LIABILITY

                  NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR LOST PROFITS,
         CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES EVEN
         IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                  These limitations of liability shall not apply to the Parties
         obligations under the clauses INFRINGEMENT, USE OF INFORMATION or
         SUPPLIER'S INFORMATION or to any liability arising from or related to
         any personal injury (including death) or damage to tangible property
         caused by Supplier in causing its obligations hereunder.

30.      INFRINGEMENT

                  Supplier shall indemnify and save harmless Company, its
         affiliates and their customers, officers, directors, employees (all
         referred to in this section as "Company") from and against any losses,
         damages, liabilities, fines, penalties, and expenses (including
         reasonable attorneys' fees) that arise out of or result from any and
         all claims (i) of infringement of any patent, copyright, trademark or
         trade secret right, or other intellectual property right, private
         right, or any other proprietary or personal interest, and (ii) related
         to the subject matter of this Agreement or performance under or in
         contemplation of it (an Infringement Claim). If the Infringement Claim
         arises solely from Supplier's adherence to Company's written
         instructions regarding services or tangible or intangible goods
         provided by Supplier (Items) and if the Items are not (i) commercial
         items available on the open market or the same as such items, or (ii)
         items of Supplier's designated origin, design or selection, Company
         shall indemnify Supplier. Company or Supplier (at Company's request)
         shall defend or settle, at its own expense any demand, action or suit
         on any Infringement Claim for which it is indemnitor under the
         preceding provisions and each shall timely notify the other of any
         assertion against it or any Infringement Claim and shall cooperate in
         good faith with the other to facilitate the defense of any such Claim.

31.      INSIGNIA

                  Upon Company's written request, "Insignia", including certain
         trademarks, trade names, insignia, symbols, decorative designs or
         packaging designs of Company, or evidences of Company's inspection will
         be properly affixed by Supplier to the MATERIAL furnished or its
         packaging. Such Insignia will not be affixed, used or otherwise
         displayed on the MATERIAL furnished or in connection therewith without
         written approval by Company.
<PAGE>   15
                                                                              15

         The manner in which such Insignia will be affixed must be approved in
         writing by Company in accordance with standards established by Company.
         Company shall retain all right, title and interest in any and all
         packaging designs, finished artwork and separations furnished to
         Supplier. This section does not reduce or modify Supplier's obligations
         under the "IDENTIFICATION" and "USE OF INFORMATION" section.

32.      INSURANCE

                  Supplier shall maintain insurance with a reputable insurance
         company in an amount reasonably sufficient to cover all of its
         obligations under this Agreement and in no event less than that
         required by California state law. Upon Company's request, Supplier
         shall furnish to Company a certificate of insurance evidencing that
         such insurance is in effect. The certificate shall also state that
         Company shall be notified by Supplier's insurance carrier(s) within
         thirty (30) days of any cancellation or material change in such policy.
         Supplier shall in such event furnish a new certificate in the event of
         cancellation or expiration of any insurance evidencing that replacement
         coverage is in effect.

33.      INVOICING FOR GOODS

                  Supplier shall: (i) render original invoice, or as otherwise
         specified in this Agreement, showing Agreement and order number,
         through routing and weight, (ii) render separate invoices for each
         shipment within twenty-four (24) hours after shipment, and (iii) mail
         invoices with copies of bills of lading and shipping notices to the
         address shown on this Agreement or order. If prepayment of
         transportation charges is authorized, Supplier shall include the
         transportation charges from the F.O.B. point to the destination as a
         separate item on the invoice stating the name of the carrier used.

34.      INVOICING FOR STOCKS

                  If Company requests for reasons other than covered by Section
         "FORCE MAJEURE", that shipment be postponed beyond the date shown on a
         purchase order, Supplier may invoice Company as of the original
         scheduled delivery date for MATERIAL manufactured under this Agreement,
         if it has been inspected and approved by Company's designated quality
         organization (provided inspection has been specified in this Agreement
         or in an order issued under this Agreement).

35.      JURISDICTION

                  Supplier agrees that any action or legal proceeding arising
         out of this Agreement shall be brought only in a court of competent
         jurisdiction in the United States of America and Supplier expressly
         submits to, and accepts the jurisdiction of, any such court in
         connection with such action or proceeding and Supplier further consents
         to the enforcement of any judgment against it arising therefrom in any
         jurisdiction in which it has or shall have any assets.
<PAGE>   16
                                                                              16

36.      LICENSES

                  No Licenses, express or implied, under any patents are granted
         by either Party to the other Party under this Agreement or order.

37.      MARKING

                  All MATERIAL furnished under this Agreement shall be marked
         for identification purposes in accordance with the specifications to be
         provided pursuant to this Agreement and as follows:

         (a) with Supplier, vendor code number, model/serial number; and

         (b) with month and year of manufacture; and

         (c) Common Language Equipment Identification (CLEI) Note: Common
         Language and CLEI are trademarks of Bell Communications Research; and

         (d) Company Apparatus code, serial, or model numbers; and

         (e) Warranty Eligibility System (WES) tracking information; and

         (f) Underwriters Laboratories and Federal Communications Commission
         markings as appropriate.

         (g) CE Marking

                  In addition, Supplier agrees to add any other identification
         which might be requested in writing by Company. Charges, if any for
         such additional identification marking shall be as agreed upon by
         Supplier and Company prior to the implementation of any change. This
         Section does not reduce or modify Supplier's obligations under Section
         26 IDENTIFICATION.

38.      MONTHLY ORDER AND SHIPMENT REPORTS

                  Company shall render monthly order and shipment reports on or
         before the tenth working day of the succeeding month containing the
         information required on report form APPENDIX C. These forms will be
         furnished by Supplier.

39.      NON DISCLOSURE AGREEMENT

                  Whereas Company and Supplier each expect to disclose to the
         other party certain information concerning MATERIALs, business and
         strategies which are considered confidential and proprietary and which
         neither party wants to disclose to others, they have entered into a Non
         Disclosure Agreement. A copy of the Non Disclosure Agreement is
<PAGE>   17
                                                                              17

         attached hereto and made a part hereof, as APPENDIX D. This section
         does not reduce or modify Supplier's obligations under Section "USE OF
         INFORMATION."

40.      NON WAIVER

                  The failure of either party at any time to enforce any right
         or remedy available to it under this Agreement or otherwise with
         respect to any breach or failure by the other party shall not be
         construed to be a waiver of such right or remedy with respect to any
         other breach or failure by the other party.

41.      NOTICES

                  Any notice given or demanded which under the terms of this
         Agreement or under any statute must or may be given or made by Supplier
         or Company shall be in writing and shall be given or made by confirmed
         facsimile, or similar communication or by certified or registered mail
         addressed to the respective parties as follows

         To Company:       Alcatel Bell N.V.
                           Francis Wellesplein 1
                           B-2018 Antwerpen
                           Belgium
                           Attn: Patrick Hellemans

                                        -OR-

         To Supplier:      Turnstone Systems, Inc.
                           2220 Central Expressway
                           Santa Clara, CA 95050
                           Attn: Contracts Administration

                  Such notice or demand shall be deemed to have been given or
         made when sent by facsimile, or other communication or when deposited,
         postage prepaid in the U.S. mail.

                  The above addresses may be changed at any time by giving prior
         written notice as above provided.

42.      OPERATING SYSTEM SOFTWARE

                  The term MATERIAL includes any software (operating program in
         machine readable form and related documentation) and storage media
         therefor normally embedded in the MATERIAL. Title to the software,
         including copyright, shall remain in Supplier. The party having title
         to the MATERIAL shall have title to the software storage media. For the
         life of the MATERIAL listed in this Agreement, Supplier grants to
         Company and any subsequent purchaser, lessee or other end user
         (referred to collectively in this section as "end user") a
         non-exclusive license to use said software on the MATERIAL on which it
         was delivered.
<PAGE>   18
                                                                              18

         Company and any subsequent end user may copy the software for use on
         such MATERIAL with which it was originally delivered and for archival
         purposes, but shall not knowingly reproduce either the original
         software for distribution to others. Procedures for software revisions
         that include, but are not limited to upgrades, updates and fixes are
         stated in Appendix E: "Comprehensive Product Maintenance".

43.      OZONE DEPLETING CHEMICALS

                  Supplier hereby warrants that it is aware of international
         agreements and pending legislation in several nations, including the
         United States, which would limit, ban and/or tax importation of any
         MATERIAL containing, or produced using ozone depleting chemicals
         ("ODCs"), including chloroflurocarbons, halons and certain chlorinated
         solvents. Supplier hereby warrants that the MATERIAL furnished to
         Company will conform to all applicable requirements established
         pursuant to such agreements, legislation and regulations, and the
         MATERIAL furnished to Company will be able to be imported and used
         lawfully (and without additional taxes associated with ODCs not
         reported to Company by Supplier as set forth in this section) under all
         such agreements, legislation and requirements. Supplier also warrants
         that it is currently reducing, or if Supplier is not the manufacturer
         of the MATERIAL, is currently causing the manufacturing vendor to
         reduce and will, in an expeditious manner, eliminate, or, as
         applicable, have its manufacturing vendor eliminate the use of ODCs in
         the manufacture of the MATERIAL.

                  If the MATERIAL furnished by Supplier under this Agreement is
         manufactured outside the United States, Supplier shall, upon execution
         of this Agreement, and at any time that new MATERIALs are added to this
         Agreement or changes are made to the MATERIAL furnished under this
         Agreement, complete, sign and return to Company the attached ODC
         Content Certification. The ODC Content Certification must be signed by
         Supplier's facility manager, corporate officer or his delegate.

                  The term "ODC content" on the ODC Content Certification means
         the total pounds of ODC used directly in the manufacture of each unit
         of MATERIAL. This includes all ODCs used in the manufacturing and
         assembly operations for the MATERIAL plus all ODCs used by Supplier's
         vendors and any other vendors in producing components or other
         MATERIALs incorporated into the MATERIAL sold to Company.

                  Supplier is responsible to obtain information on the ODC
         content of all components and other MATERIALs acquired to manufacture
         the MATERIAL and to incorporate such information into the total ODC
         content reported to Company. Provided however, that Supplier should not
         include in the ODC content those components or other MATERIALs which
         are manufactured in the United States. Supplier hereby warrants to
         Company that all information furnished by Supplier on the ODC Content
         Certification is complete and accurate and that Company may rely on
         such information for any purpose, including but not limited to
         providing reports to government agencies or otherwise complying with
         applicable laws.
<PAGE>   19
                                                                              19

         Supplier shall defend, indemnify and hold Company harmless of and from
         any claims, demands, suits, judgments, liabilities, fines, penalties,
         costs and expenses (including additional ODC taxes as provided for in
         paragraph one of this section and reasonable attorney's fees) which
         Company may incur under any applicable federal, state, or local laws or
         international agreements, and any and all amendments thereto by reason
         of Company's use of reliance on the information furnished to Company by
         Supplier on the ODC Content Certification or by reason of Supplier's
         breach of this section. Supplier shall cooperate with Company in
         responding to any inquiry concerning the use of ODCs to manufacture the
         MATERIAL or components thereof and to execute without additional charge
         any documents reasonably required to certify the absence or quantity of
         ODCs used to manufacture the MATERIAL or components thereof.

44.      OZONE DEPLETING SUBSTANCES LABELING

                  Supplier warrants and certifies that all MATERIAL and other
         MATERIALs, including packaging and packaging components, provided to
         Company under this Agreement have been accurately labeled, in
         accordance with the requirements of 40 CFR, Part 82 entitled
         "Protection of Stratospheric Ozone, Subpart E- The Labeling of
         MATERIALs Using Ozone Depleting Substances."

45.      POINT OF SALE INFORMATION

                  Company agrees to provide Supplier monthly written reports of
         the areas where Company has sold Supplier MATERIAL and the respective
         quantities that are sold per area for the purposes of Supplier
         compensating Supplier's sales personnel. Supplier shall compensate its
         salespeople for Company's sales of Supplier products to their accounts
         on at least the same or substantially similar terms as if they had sold
         the same products directly. Company will compensate its salespeople on
         sales of Supplier products in a manner similar to the compensation
         received on other OEM products.

46.      MATERIAL CHANGES

                  Supplier shall provide Company with at least thirty (30) days,
         prior written notice of any change proposed to be made in accordance
         with this Agreement, or in the Specification and documentation covered
         by this Agreement that would impact upon: (i) reliability, (ii)
         requirements of the Specification, or (iii) form, fit or function (as
         defined below).

                  The only exception will be in those cases where an extremely
         hazardous or unsatisfactory condition requires immediate action. In
         such cases, verbal notification shall be made, followed by Supplier's
         immediate written confirmation.

                  Supplier shall submit changes to the following address:

         To Company:       Alcatel Bell N.V.
                           Francis Wellesplein 1
<PAGE>   20
                                                                              20

                           B-2018 Antwerpen
                           Belgium
                           Attn: Patrick Hellemans

                  If, as mutually agreed by Company and Supplier, sufficient
         changes have been made to warrant a MATERIAL re-qualification, such
         re-qualification will be performed at no cost to Company unless
         otherwise agreed. MATERIAL shall be in accordance with the latest
         information stated or referenced in the Specification.

                  If the plan for MATERIAL Change is not accepted by Company, in
         addition to all other rights and remedies at law or equity or
         otherwise, and without any cost to or liability or obligation of
         Company, Company shall have the right to terminate this Agreement and
         to terminate any or all orders for MATERIAL affected by such change.
         Notwithstanding the above, Supplier shall continue to provide the
         current MATERIAL for a period of twelve (12) months from the date the
         change is effective.

47.      MATERIAL CONFORMANCE REVIEWS

                  Supplier shall, utilizing documented procedures specified
         herein, make such tests and inspections as are necessary to insure that
         MATERIAL meets all technical requirements of the MATERIAL
         specification. Supplier shall provide, without charge, any production
         testing facilities and personnel required to inspect the MATERIAL under
         Quality Program Specification (QPS) No. 40.030, as changed from time to
         time with Supplier's written approval. Company reserves the right to
         inspect MATERIAL prior to shipment from Supplier or Supplier's
         subcontractor(s). Such inspection shall be conducted by Company's
         Engineering and Environmental Technologies (EE&T) organization
         utilizing a 0.65% Acceptability Level (AQL) sampling plan as described
         in QPS 40.030. If MATERIAL fails inspection, Supplier agrees to pay for
         all re-inspection costs. Inspection requirements may be waived only by
         written notification from Company's Engineering and Environmental
         Technologies (EE&T) organization. In the event that any or all work
         under this Agreement is subcontracted to another Supplier, Company
         reserves the right to conduct the aforementioned inspections at the
         subcontractors facilities.

48.      MATERIAL DOCUMENTATION

                  Supplier shall furnish, at no charge, MATERIAL documentation,
         and any succeeding changes thereto, as described in the Technical
         Specification. Company may use, reproduce, reformat, modify and
         distribute such MATERIAL documentation, subject in each instance to
         Supplier's prior review and written approval, which approval shall not
         be unreasonably withheld.

                  Company shall reproduce Supplier's copyright notice contained
         in any documentation reproduced without change by Company. For
         documentation, which is reformatted or
<PAGE>   21
                                                                              21

         modified by Company, Company shall have the right to place only
         Company's own copyright notice on the reformatted or modified
         documentation. It is the intent of the parties that Company's copyright
         notice shall be interpreted to protect the underlying copyright rights
         of Supplier to the documentation to the extent such underlying rights
         are owned by Supplier.

49.      PURCHASE ORDERS

                  Purchase orders issued under this Agreement shall be sent to
         the following address:

                                    Turnstone Systems, Inc.
                                    2220 Central Expressway
                                    Santa Clara, CA 95050
                                    FAX: (408) 907-1406
                                    Attn.: Customer Service

                  Purchase orders shall specify: (i) description of MATERIAL,
         inclusive of any numerical/alphabetical identification referenced in
         the price list in this Agreement, (ii) delivery date, (iii) applicable
         price, (iv) location to which the MATERIAL is to be shipped and (v)
         location to which invoices shall be sent for payment.

50.      REGISTRATION AND RADIATION STANDARDS

                  When MATERIAL furnished under this Agreement is subject CE
         rules or ETSI Rules and Regulations, as may be amended from time to
         time (hereinafter "CE Rules"), Supplier warrants that such MATERIAL
         complies with the registration, certification, type-acceptance and/or
         verification standards of the CE rules including, but not limited to,
         all labeling, customer instruction requirements, and the suppression of
         radiation to specified levels. Supplier shall also establish periodic
         on-going compliance retesting and follow a Quality Control program,
         submitted by Company, to assure that MATERIAL shipped complies with the
         applicable CE rules. Supplier shall indemnify and save Company harmless
         from any liability, fines, penalties, claims or demands (including the
         costs, expenses and reasonable attorney's fees on account thereof) that
         may be made because of Supplier's noncompliance with the applicable CE
         rules. Supplier shall defend Company, at Company's request, against
         such liability, claim or demand.

                   In addition, should MATERIAL which is subject the CE rules,
         during use generate harmful interference to radio communications,
         Supplier shall provide the Company information relating to methods of
         suppressing such interference and pay the cost of suppressing such
         interference or, at the option of Company, accept the return of the
         MATERIAL and refund to Company the price paid for the MATERIAL less a
         reasonable amount for depreciation, if applicable.

                  To the extent that MATERIAL furnished under this Agreement is
         also subject to CE rules governing the use of the MATERIAL as a
         component in a system as identified in
<PAGE>   22
                                                                              22

         Supplier's Technical Specifications, Company shall be responsible for
         compliance with the applicable CE rules governing the system. Supplier
         shall fully cooperate with Company, by providing technical support and
         information, and, upon written request from Company, shall modify
         MATERIAL to enable Company to ensure ongoing compliance with the CE
         rules. Company shall pay any increase in Supplier's costs and/or
         expenses resulting from Company's request to modify MATERIAL to enable
         Company to comply with the CE rules.

                  Nothing in this section shall be deemed to diminish or
         otherwise limit Supplier's obligations under the "WARRANTY" section or
         any other section of this Agreement.

51.      INSPECTION OF MATERIAL

                  Company may perform a visual and functional inspection of
         MATERIAL received prior to acceptance or rejection, and may refuse to
         accept MATERIAL which does not conform to the specifications of this
         Agreement. If, after [***] ([***]) calendar days from the date of
         delivery by Supplier, Company has not rejected MATERIAL by providing
         written notice to Supplier, it will be deemed accepted by Company. For
         purposes of this provision, functional and visual inspection shall have
         the same meaning as in paragraph 21 herein; i.e., confirmation that the
         MATERIAL does not contain one or more major defects that would make the
         MATERIAL unfit for use or installation, or that, during test, the
         MATERIAL operates as specified.

                  Company may only reject MATERIAL which has failed the above
         visual and/or functional inspection. Company's sole remedies upon
         rejection of MATERIAL are: (1) return rejected MATERIAL for full credit
         at the price charged plus delivery charges; or (2) have rejected
         MATERIAL replaced by Supplier at the purchase price stipulated in this
         Agreement. Supplier shall incur all transportation costs and assume
         in-transit risk of loss and damage of all MATERIAL returned under this
         provision to Supplier.

52.      RELEASES VOID

                  Neither party shall require (i) waivers or releases of any
         personal rights or (ii) execution of documents which conflict with the
         terms of this Agreement, from employees, representatives or customers
         of the other in connection with visits to its premises and both parties
         agree that no such releases, waivers or documents shall be pleaded by
         them or third persons in any action or proceeding.

53.      REPAIRS NOT COVERED UNDER WARRANTY

                  In addition to repairs provided for in section 18 Supplier
         shall provide repair service on all MATERIAL ordered under this
         Agreement during the term of this Agreement. MATERIAL to be repaired
         under this section will be returned to a location designated by
         Supplier, and unless otherwise agreed upon by Supplier and Company,
         Supplier shall ship the repaired MATERIAL which meets the
         Specifications set forth in the "SPECIFICATIONS OR DRAWINGS" section
         and all other Specifications within 10 business days of receipt of the

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<PAGE>   23
                                                                              23

         defective or non-conforming MATERIAL. With the concurrence and
         scheduling of Company, repair may be made by Supplier on site.

                  If MATERIAL is returned to Supplier for repair as provided for
         in this section and is determined to be beyond repair as defined in
         section 18, Supplier shall so notify Company. If requested by Company,
         Supplier will sell to Company a replacement at the price set forth in
         Supplier's then current agreement with Company for said MATERIAL or, if
         no such agreement exists, at a price agreed upon by Supplier and
         Company. If the parties fail to agree on a price, the price shall be a
         reasonably competitive price for such MATERIAL at the time for
         delivery. Further, if requested by Company, Supplier shall take the
         necessary steps to dispose of the unrepairable MATERIAL and pay to
         Company the salvage value, if any. Replacement and repaired MATERIAL
         shall be warranted as set forth in the "WARRANTY" section.

                  This Agreement does not grant Supplier an exclusive privilege
         to repair any or all of the MATERIAL purchased under this Agreement for
         which Company may require repair; and Company may perform the repairs
         or contract with others for these services.

                  All transportation costs of and in transit risk of loss and
         damage to MATERIAL returned to Supplier for repair under this section
         will be borne by Company and all transportation costs of and in transit
         risk of loss and damage to such repaired or replacement MATERIAL
         returned to Company will be borne by Company.

                  Repairs performed under this section will be charged on a Time
         and Materials basis as according to Supplier's then current Time and
         Material charges.

54.      REPAIR PROCEDURES

                  Repair Procedures are fully stated in Appendix E.

55.      RIGHT OF ENTRY

                  Each party shall have the right to enter the premises of the
         other party during standard business hours with respect to the
         performance of this Agreement, including an inspection or a Quality
         Review, subject to all plant rules and regulations, clearances,
         security regulations and procedures as applicable. Each party shall
         provide safe and proper facilities for such purpose. No charge shall be
         made for such visits. It is agreed that prior notification will be
         given when access is required.

56.      SAFETY CERTIFICATION

                  All safety certifications applicable to the Supplier MATERIAL
         are listed in Appendix B.
<PAGE>   24
                                                                              24

57.      SECTION HEADINGS

                  The headings of the sections in this Agreement are inserted
         for convenience only and are not intended to affect the meaning or
         interpretation of this Agreement.

58.      SERVICES

                  Visits by Supplier's representatives or its suppliers'
         representatives for inspection, adjustment or other similar purposes in
         connection with MATERIAL purchased under this Agreement shall for all
         purposes be deemed "Work under this Agreement" and shall be at no
         charge to Company unless otherwise agreed in writing between the
         parties.

59.      SEVERABILITY

                  If any of the provisions of this Agreement shall be invalid or
         unenforceable, such invalidity or unenforceability shall not invalidate
         or render unenforceable the entire Agreement, but rather the entire
         Agreement shall be construed as if not containing the particular
         invalid or unenforceable provision or provisions, and the rights and
         obligations of Supplier and Company shall be construed and enforced
         accordingly.

60.      SHIPPING

                  Supplier shall: (i) ship the MATERIAL covered by this
         Agreement or order complete unless instructed otherwise, (ii) ship to
         the destination designated in the Agreement or order, (iii) ship
         according to routing instructions given by Company, (iv) place the
         Agreement and order number on all subordinate documents, (v) enclose a
         packing memorandum with each shipment and, when more than one package
         is shipped, identify the package containing the memorandum; and (vi)
         mark the order number on all packages and shipping papers. Adequate
         protective packing shall be furnished at no additional charge. Shipping
         and routing instructions may be furnished or altered by Company without
         a writing. If Supplier does not comply with the terms of the FOB
         section of the Agreement or order or with Company's shipping or routing
         instructions, Supplier authorizes Company to deduct from any invoice of
         Supplier (or to charge back to Supplier), any increased cost incurred
         by Company as a result of Supplier's noncompliance.

61.      SHIPPING INTERVAL

                  The delivery schedule applicable to each purchase order will
         be agreed upon by Supplier and Company and set forth in the purchase
         order. (Note: Supplier has indicated that MATERIAL can usually be
         shipped an average of [***] after receipt of Company's purchase order
         for forecasted demand; however, in no event shall the delivery interval
         exceed [***] after receipt of purchase order, even when Company has not
         provided a forecast).

                  If Supplier exceeds the above maximum interval then in
         addition to all other rights and remedies at law or equity or
         otherwise, and without any liability or obligation of Company, Company
         shall have the right to: (a) cancel such purchase order, or (b) extend
         such delivery date to a later date, subject, however, to the right to
         cancel as in (a) preceding if

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<PAGE>   25
                                                                              25

         delivery is not made or performance is not completed on or before such
         extended delivery date. If Company elects to extend such delivery date,
         Supplier shall absorb the difference between the charges to ship normal
         transportation and the charges to ship premium overnight.

                  If a purchase order is canceled by Company pursuant to the
         above, Company shall have the right to retain or return any or all
         MATERIAL received by or paid for by Company under such purchase order.
         Within fifteen (15) business days of Supplier's receipt of returned
         MATERIAL, Supplier shall reimburse Company for the costs of shipping
         the MATERIAL returned to Supplier and for any amounts, including
         shipping costs, previously paid by Company for the MATERIAL. Company
         shall pay for any MATERIAL it retains at the prices set forth in
         APPENDIX A, less applicable discounts which shall be applied on the
         basis of the quantity specified in the purchase order.

                  If, during the course of this Agreement, Supplier determines
          that Supplier will no longer be able to ship within the above
          interval, Supplier shall immediately notify Company's buyer to that
          effect. Supplier shall also notify Company's buyer, as soon as it
          becomes apparent, if Supplier is unable to meet the delivery date for
          an order. However, nothing contained in this paragraph shall waive
          Company's rights as set forth above in this section.

62.      STORAGE OF PAID FOR STOCK

                  Subject to the section "OPERATING SYSTEM SOFTWARE", Company
         has and shall have at all times all right, title and interest in all
         MATERIAL invoiced to Company in accordance with the section "INVOICING
         FOR STOCKS". Such MATERIAL shall be referred to in this section as
         "Company Property." Supplier shall store such Company Property without
         cost to Company at Supplier's A-Plus Manufacturing Corp., 2381 Bering
         Drive, San Jose, CA 95131 facility and ship such Company Property as
         ordered by Company. In addition, Supplier shall:

                  (i) Be responsible for the safekeeping of the Company
         Property, assume all risks of loss or damage to the same and be liable
         for the full actual value of such Company Property. In case of removal
         of all or any part of the Company Property from one building to
         another, Supplier's responsibility for loss or damage shall continue
         and Supplier shall give Company at least ten (10) days advance notice
         in writing of the removal, except when the removal is required to
         comply with Company's shipping orders or to protect the Company
         Property from loss or damage.

                  (ii) Store the Company Property safely, indoors in protected
         areas approved by Company. Store the Company Property segregated from
         other property in sections of Supplier's plant marked Property of
         Company.
<PAGE>   26
                                                                              26

                  (iii) Deliver the Company Property only to Company or
         Company's designated customers in accordance with Company's orders or
         upon Company's demand, FOB Supplier's plant without additional charge
         for removal, packing, or crating.

                  (iv) Supplier shall not allow any security interest, lien, tax
         lien or other encumbrance (collectively referred to as "encumbrance")
         to be placed on any Company Property. Supplier shall give Company
         immediate written notice should any third party attempt to place or
         place an encumbrance on such Company Property. Supplier shall indemnify
         and hold Company harmless from any such encumbrance. Supplier shall, at
         Company's request, promptly execute a "protective notice" UCC-1 form
         and all other documents reasonably necessary to enable Company to
         protect its interest in such Company Property. This Agreement shall
         constitute the security agreement required by the UCC of the
         appropriate state.

                  (v) Company may inspect, inventory, and authenticate the
         account of the Company Property during Supplier's normal business
         hours. Supplier shall provide Company access to the premises where all
         such Company Property is located.

                  The obligations assumed by Supplier with respect to the
         Company Property are for the protection of Company's property. If
         Supplier defaults in carrying out Supplier's obligations under this
         Agreement, then, at no cost to Company and upon twenty-four (24) hours
         notice to Supplier, Company may cancel this Agreement in whole or in
         part or withdraw all or any part of the Company Property, or both.
         Supplier shall, at Company's option, return to Company or hold for
         Company's disposition any or all of such Company Property in Supplier's
         possession.

63.      SUPPLIER'S INFORMATION

                  Company shall view as Supplier's property any document, print,
         tape, disc, tool, or other tangible information-conveying or
         performance-aiding article owned or controlled by Supplier and
         identified by Supplier as proprietary/confidential either in writing or
         orally. The aforementioned material and information may be identified
         by Supplier as proprietary/confidential verbally and shall be followed
         up by written notice from Supplier to Company. Company shall, at no
         charge to Supplier, and as Supplier directs, destroy or surrender to
         Supplier promptly at its request any such article or any copy of such
         Information. Company shall keep Information confidential and use it
         only in performing under this Agreement and obligate its employees,
         subcontractors and others working for it to do so, provided that the
         foregoing shall not apply to information previously known to Company
         free of obligation, or made public through no fault imputable to
         Company.
<PAGE>   27
                                                                              27

64.      SURVIVAL OF OBLIGATIONS

                  The obligations of the parties under this Agreement which by
         their nature would continue beyond the termination, cancellation or
         expiration of this Agreement shall survive termination, cancellation or
         expiration of this Agreement.

65.      TAXES

                  Company shall reimburse Supplier only for the following tax
         payments with respect to transactions under this Agreement unless
         Company advises Supplier than an exemption applies: state and local
         sales and use taxes, as applicable. Taxes payable by Company shall be
         billed as separate items on Supplier's invoices and shall not be
         included in Supplier's prices. Company shall have the right to have
         Supplier contest any such taxes that Company deems improperly levied at
         Company's expense and subject to Company's direction and control.

66.      TECHNICAL SUPPORT

                  Technical Support is fully elaborated in Appendix E

                  Company shall be entitled to ongoing technical support,
         including field service and assistance and technical support in the
         development of customer proposals, provided, however, that the
         availability or performance of this technical support service shall not
         be construed as altering or affecting Supplier's obligations as set
         forth in the WARRANTY Section or elsewhere provided for in this
         Agreement.

                  It is the intent of this Agreement that the Supplier shall
         provide initial training and ongoing occasional updates.. Charges for
         field service technical support, will be based on Supplier's then
         current standard charges for such services.

67.      TERMINATION OF PURCHASE ORDER

                  Company may at any time terminate any portion or the total
         quantity of any purchase order(s) placed under this Agreement.
         Company's liability to Supplier with respect to such termination shall
         be limited to (i) Supplier's purchase price of all components for the
         MATERIAL (not usable in Supplier's other operations or salable to
         Supplier's other customers), plus (ii) the actual costs incurred by
         Supplier in procuring and manufacturing MATERIAL (not usable in
         Supplier's other operations or salable to Supplier's other customers)
         in process as of the date of giving notice of termination, less (iii)
         any salvage value thereof. However, no such termination charges will be
         invoiced if, within sixty (60) days of notice of termination, MATERIAL
         equivalent in kind to that being terminated is ordered by Company. If
         requested, Supplier shall substantiate such cost and price with proof
         satisfactory to Company.
<PAGE>   28
                                                                              28

68.      TIMELY PERFORMANCE  & PENALTY FOR LATE DELIVERY

                  If Supplier has knowledge that anything prevents or threatens
         to prevent the timely performance of the Work under this Agreement,
         Supplier shall immediately notify Company's Representative thereof and
         include all relevant information concerning the delay or potential
         delay.

                  In the event that shipment of any Supplier MATERIAL is delayed
         after an agreed upon shipment date, after a [***] grace period, Company
         shall be entitled to claim for liquidated damages of [***] ([***])
         percent per week with a maximum of [***] ([***]) percent of the value
         of the MATERIAL. In the event that shipment of any Supplier MATERIAL is
         delayed by more than [***] ([***]) weeks, then Company shall have the
         right to cancel such order without any obligation to pay any damages or
         compensation of whatever nature relating to such cancellation.

69.      TITLE AND RISK OF LOSS

                  Title (other than software) and risk of loss and damage to
         MATERIAL including software purchased by Company under this Agreement
         or an order issued pursuant to this Agreement shall vest in Company
         when the MATERIAL has been delivered at the FOB point. If this
         Agreement or an order issued pursuant to this Agreement calls for
         additional services including, but not limited to, unloading,
         installation, or testing to be performed after delivery, Supplier shall
         retain title and risk loss and damage to the MATERIAL until the
         additional services have been performed. If Supplier is authorized to
         invoice Company for MATERIAL prior to shipment or prior to the
         performance of additional services, title to MATERIAL (other than
         software) shall vest in Company upon payment of the invoice, but risk
         of loss and damage shall pass to Company when the additional services
         have been performed.

70.      TOXIC SUBSTANCES AND MATERIAL HAZARDS

                  Supplier hereby warrants to Company that, except as expressly
         stated elsewhere in this Agreement, all MATERIAL furnished by Supplier
         as described in this Agreement is safe for its foreseeable use, is not
         defined as a hazardous or toxic substance or material under applicable
         federal, state or local law, ordinance, rule, regulation or order
         (hereinafter collectively referred to as "law" or "laws"), and presents
         no abnormal hazards to persons or the environment. Supplier also
         warrants that it has no knowledge of any federal, state or local law,
         that prohibits the disposal of the MATERIAL as normal refuse without
         special precautions except as expressly stated elsewhere in this
         Agreement. Supplier also warrants that where required by law, all
         MATERIAL furnished by Supplier is either on the EPA Chemical Inventory
         compiled under Section 8 (a) of the Toxic Substance Control Act, or is
         the subject of an EPA-approved pre manufacture notice under 40 CFR Part
         720. Supplier further warrants that all MATERIAL furnished by Supplier
         complies with all use restrictions, labeling requirements and all other
         health and safety requirements imposed under federal, state, or local
         laws. Supplier further warrants that, where required by law, it shall
         provide to

------------
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>   29
                                                                              29

         Company, prior to delivery of the MATERIAL, a Material Safety Data
         Sheet which complies with the requirements of the Occupational Safety
         and Health Act of 1970 and all rules and regulations promulgated
         thereunder.

                  Supplier shall defend, indemnify and hold Company harmless for
         any expenses (including, but not limited to, the cost of substitute
         material, less accumulated depreciation) that Company may incur by
         reason of the recall or prohibition against continued use or disposal
         of MATERIAL furnished by Supplier as described in its Agreement whether
         such recall or prohibition is directed by Supplier or occurs under
         compulsion of law. Company shall cooperate with Supplier to facilitate
         and minimize the expense of any recall or prohibition against use or
         disposal of MATERIAL directed by Supplier or under compulsion of law.

                  Supplier further shall defend, indemnify and hold Company
         harmless of and from any claims, demands, suits, judgments,
         liabilities, costs and expenses (including reasonable attorney's fees)
         which Company may incur under any applicable federal, state or local
         laws, and any and all amendments thereto, including but not limited to
         the Comprehensive Environmental Response, Compensation and Liability
         Act of 1980; the Consumer MATERIAL Safety Act of 1972; the Toxic
         Substance Control Act; Fungicide, Rodenticide Act; the Occupational
         Safety and Health Act; and the Atomic Energy Act; and any and all
         amendments to all applicable federal, state, or local laws, by reason
         of Company's acquisition, use, distribution or disposal of MATERIAL
         furnished by Supplier under this Agreement.

71.      TRAINING

                  Supplier will provide instructional Source Material, at no
         charge, that can be used by Company to generate Customer Training
         materials. Supplier will provide two (2) train-the-trainer courses, at
         no charge, for Company's personnel at a level mutually agreed upon so
         that Company will be able to effectively market and support Supplier's
         MATERIAL. Additional courses will be made available to Company at
         Supplier's rates as listed in Appendix A. The training will include,
         but not be limited to the MATERIAL's features, competitive information,
         target markets and selling strategies, tendering and pre-sales training
         , TAC Support as well as technical aspects of the MATERIAL to enable
         Company to properly configure Supplier's MATERIAL to operate with
         Company's MATERIALs and provide technical support.

72.      PRODUCT MANAGEMENT MEETINGS
                 Supplier and Company shall have biannual product management
         meetings to discuss (not limited to):

         - Product changes
         - Roadmaps
<PAGE>   30
                                                                              30

         - Technology changes
         - R&D co-operation initiatives
         - Action plans and partnership agreement implementation issues
         - Supplier and Company shall do best efforts to make sure that the
           Crossworks Software is interoperable with Alcatel Test Access.
         - Cost improvements whereby the price of Supplier MATERIAL may
           decrease.

73.      ROADMAPS

              Supplier shall keep Company informed of ongoing development work
         (i.e. Product roadmaps) planned for the Materials covered in this
         Agreement. Company in turn, will keep Supplier appraised of ongoing
         development work on Company's broadband access products relevant to the
         copper loop management solution and that might affect the Supplier
         solution.

           Supplier undertakes to provide additional information to give Company
         the opportunity to comment on and possibility to influence the
         roadmaps, future plans and possible "Manufacturer Discontinue"
         decisions concerning the Products. Company undertakes to provide
         additional information to give Supplier the opportunity to comment on
         and possibility to influence the roadmaps, future plans and possible
         decisions concerning Company's products. Discussion pertaining to
         product development work shall take place on a quarterly basis

74.    SALES AND MARKETING MEETINGS

                   Company and Supplier shall have quarterly sales and marketing
         meetings in mutually agreed time and locations. Every other meeting
         should be arranged jointly with product management meetings. The
         meetings shall include, but are not limited to discussions on the
         following issues:

                  - Commercial roadmaps
                  - Customer case review
                  - Review of reference list
                  - Action plans to tackle major customer cases
                  - Pricing (customer specific pricing in quarterly meetings,
                    generic pricing semi-annually)
                  - Forecast of Company purchases and future opportunities

                  Parties agree that the initial primary focus of the joint
         marketing and OEM activities will be on the combination of the 7300
         product with the CX100 and applicable management software. Supplier's
         smart splitter solutions initially will not be joint marketed by
         Supplier and Company to the accounts stated in Section 4 unless
         specific customer requirements dictate a demand for this type of
         solution - e.g., the account is deploying or being quoted the 7300 SL
         product, or shows an interest in enhancing their current A1000
         deployment with
<PAGE>   31
                                                                              31

         metallic test access. This OEM Agreement does not preclude Supplier
         from independently promoting its smart splitter solution to any
         account.

75.      EXCHANGE OF EQUIPMENT

                   Company and Supplier shall exchange four of their respective
         systems free of charge for the purposes of cooperative development,
         integration testing, sales and marketing demonstrations, and post sales
         support. Supplier will provide initial training for Company sales,
         marketing, and support personnel. Additional training or training for
         mutual customers can be purchased from Supplier at standard rates. Both
         parties agree to make their development and support personnel available
         as reasonably required for integration, development and support
         activities. The following individuals are designated as primary points
         of contact to ensure orderly communications:

                   Turnstone:                  Alcatel:
                   Jeff Aaron                  Josh Bailey
                   Partner Marketing           Strategic Marketing
                   408-907-1522                919-850-6796
                   jaaron@turnstone.com        Joshua.C.Bailey@usa.alcatel.com

76.      OSS INTEGRATION

                  Supplier agrees to work with Company to integrate its loop
         management tools with Company's Service and Network Management
         Platforms. Both parties agree to create a prototype or demo for the
         purposes of proving interoperability and demonstrating software
         integration. Additional integration work will be performed in
         conjunction with specific customer requirements.

                  Both Supplier and Company commit to providing the appropriate
         technical resources required for any joint development work. Both
         Supplier and Company commit to providing the appropriate resources for
         ongoing support and maintenance of materials that are jointly developed
         by parties, and commit to performing future development work as
         required by customers and mutually agreed upon by both parties.

77.      USE OF INFORMATION

                  Supplier shall view as Company's property any idea, data,
         program, technical, business or other intangible information, however
         conveyed, and any document, print, tape, disc, tool, or other tangible
         information-conveying or performance-aiding article owned or controlled
         by Company, and provided to, or acquired by, Supplier under or in
         contemplation of this Agreement (Information). Supplier shall, at no
         charge to Company, and as Company directs, destroy or surrender to
         Company promptly at its request any such article or any copy of such
         Information. Supplier shall keep Information confidential and use it
         only in performing under this Agreement and obligate its employees,
         subcontractors and others
<PAGE>   32
                                                                              32

         working for it to do so, provided that the foregoing shall not apply to
         information previously known to Supplier free of obligation, or made
         public through no fault imputable to Supplier. The use of information
         will further be governed by the Non Disclosure Agreement in Appendix D.

78.      VARIATION IN QUANTITY

                  Company assumes no liability for MATERIAL produced, processed
         or shipped in excess of the amount specified in this Agreement or in an
         order issued pursuant to this Agreement.

79.      WARRANTY

                  Supplier warrants to Company that MATERIAL furnished will be
         new, free from defects in design, material and workmanship and will
         conform to and perform in accordance with the Specifications. These
         warranties shall continue for a period of twelve (12) months from the
         date of acceptance by Company, but in no event more than 13 months from
         the date of shipment, with respect to hardware products and three (3)
         months from the date of acceptance by Company with respect to software
         products.

                  Supplier also warrants to Company that services will be
         performed in a first class, workmanlike manner. In addition, if
         MATERIAL furnished contains one or more manufacturer's warranties,
         Supplier hereby assigns such warranties to Company. Supplier warrants
         that at the time of delivery to Company such MATERIAL shall be free of
         any security interest or any other lien or any other encumbrance
         whatsoever. All warranties shall survive inspection, acceptance and
         payment.

                  Defective or non-conforming MATERIAL will be returned to
         Supplier for repair or replacement, at no cost to Company, with risk of
         in-transit loss and damage borne by Supplier and freight paid by
         Supplier. Unless otherwise agreed upon by Supplier and Company,
         Supplier shall complete repairs and ship the repaired MATERIAL within
         ten (10) business days of receipt of defective or non- conforming
         MATERIAL, or at Company's option, ship replacement MATERIAL within ten
         (10) business days after verbal notification is given Supplier by
         Company. Supplier shall bear the risk of in-transit loss and damage and
         shall prepay and bear that cost of freight for shipments to Company of
         repaired or replaced MATERIAL.

                  If MATERIAL returned to Supplier for repair as provided for in
         this section is determined to be beyond repair, Supplier shall promptly
         so notify Company and, unless otherwise agreed to in writing by
         Supplier and Company, Supplier shall ship replacement MATERIAL without
         charge within ten (10) business days of such notification.

                  Replacement MATERIAL shall be warranted as set forth above in
         this "WARRANTY" section. Any MATERIAL which is repaired, modified, or
         otherwise
<PAGE>   33
                                                                              33

         serviced by Supplier shall be warranted as provided in this "WARRANTY"
         section for the remainder of the warranty period (based upon the date
         repair, modification or other service is completed and accepted by
         Company) or ninety (90) business days after the MATERIAL is returned to
         a Customer, whichever is later.

                  If Supplier is unable to find any defect or nonconformity, the
         material will be returned to Company at Company's expense.

                  EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN THIS
         AGREEMENT, SUPPLIER MAKES NO OTHER WARRANTIES REGARDING THE MATERIAL,
         ANY SOFTWARE INCORPORATED THEREIN OR ANY SERVICES PROVIDED THEREWITH
         AND HEREBY DISCLAIMS ANY AND ALL SUCH OTHER WARRANTIES, EXPRESS, OR
         IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
         MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, WHICH ARE HEREBY
         EXCLUDED. SUPPLIER'S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO A
         REFUND OF THE COMPANY'S PURCHASE PRICE OR REPAIR OF THE MATERIAL. IN NO
         EVENT SHALL SUPPLIER BE LIABLE FOR THE COST OF PROCUREMENT OF
         SUBSTITUTE GOODS BY THE COMPANY OR FOR ANY SPECIAL, CONSEQUENTIAL OR
         INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.

80.      ENTIRE AGREEMENT

                  This Agreement shall incorporate the typed or written
         provisions on Company's orders issued pursuant to this Agreement and
         shall constitute the entire agreement between the parties with respect
         to the subject matter of this Agreement and the order(s) and shall not
         be modified or rescinded, except by a writing signed by Supplier and
         Company. Printed provisions on the reverse side of Company's orders
         (except as specified otherwise in this Agreement) and all provisions on
         Supplier's forms shall be deemed deleted. Estimates or forecasts
         furnished by Company shall not constitute commitments. The provisions
         of this Agreement supersede all contemporaneous oral agreements and all
         prior oral and written communications, and understandings of the
         parties with respect to the subject matter of this Agreement.
<PAGE>   34
                                                                              34

ATTACHMENTS - The following Attachments are hereby made part of the Agreement:

Appendix A  Turnstone Price Guide
Appendix B  Copper CrossConnect CX100 and Smart Splitter SX500 User's Guide (w/
            specifications)
Appendix C  Monthly Order and Shipment Reports
Appendix D  Non-Disclosure Agreement
Appendix E  Comprehensive Product Maintenance
Appendix F  Training
Appendix G  Alcatel UNITS
<PAGE>   35
                                                                              35

         IN WITNESS WHEREOF the Parties hereto have executed this Agreement in
two (2) original copies by their duly authorised representatives on the earliest
date written below,

ALCATEL S.A.                                  TURNSTONE SYSTEMS INC.

Name     : Patrick Hellemans                  Name     : Richard N. Tinsley

Title    : Purchasing Officer                 Title    : President and CEO

Signature: /s/ Patrick Hellemans              Signature: /s/ Richard N. Tinsley

Date     : June 1, 2001                       Date     : June 1, 2001

Name     :Wendy Wilmouth

Title    :Corporate Purchasing Manager "OEM/Resale" HW&SW

Signature :/s/ Wendy Wilmouth
Date     : June 1, 2001

Name     :Alain Page-Lecuyer

Title    :Director Corporate HW/SW & Services

Signature : /s/ Alain Page-Lecuyer

Date     : June 1, 2001

Name     :Raymond Polle

Title    :Vice President Corporate Procurement & Sourcing

Signature : /s/ Raymond Polle

Date     : June 1, 2001
<PAGE>   36
                                                                              36

                       APPENDIX A - TURNSTONE PRICE GUIDE

                         QUOTATION REF: ALCATEL_PRICING

[TURNSTONE LOGO]        [ALCATEL LOGO]

Rene GEYS
Alcatel
Product Manager - DSL Access Carrier Internetworking Division
De Villermontstraat 38
B-2550 - Kontich

                          UNIT VOLUME PRICING DISCOUNTS

<TABLE>
<CAPTION>
                                                                       ------------------------------
                                                                                [***] UNITS
                                                                                   [***]%
                                                                       ------------------------------
      PART                                                              LIST
QTY  NUMBER                      DESCRIPTION               CLEI CODE    PRICE     DISCOUNT  NET PRICE
---------------------------------------------------------  ----------  ------------------------------
<S>  <C>     <C>                                           <C>         <C>        <C>       <C>
                                  Hardware
 1   600000  Copper CrossConnect 23" Base System           SLMXELCCRA  $6,595.00   [***]%    $[***]
 1   600001  Copper CrossConnect 19" Base System           SLMXEKBCRA  $6,295.00   [***]%    $[***]
 0    TBD    CX40                                          Tbd         $3,995.00   [***]%    $[***]
 1   600003  L140 Line Card - 25 subscribers/25 xconnects  SLL2DD0CAA  $3,395.00   [***]%    $[***]
 1   600048  L150 Line Card - 25 subscribers               SLL4MN0DAA  $3,995.00   [***]%    $[***]
 1   600056  L155 Line Card - 25 subscribers/BILS          SLL4MP0DAA  $4,995.00   [***]%    $[***]
 1   600046  P150 Processor Card                           SLPQ0G9DAB  $8,795.00   [***]%    $[***]
 1   600026  M101 Card - 6 Port Ethernet hub               SLL28D0CAA  $2,495.00   [***]%    $[***]
 1   600032  M120 - 8 port Terminal Server                 SLL3D80CAA  $3,495.00   [***]%    $[***]
 1   600070  M120 Octopus Cable                            TBD           $295.00   [***]%    $[***]
 1   600054  M121 - 8 port (RJ45) Terminal Server          SLL4EF0DAA  $3,495.00   [***]%    $[***]
 1   600034  X165 CrossConnect Linecard                    SLL3CC0CAA  $3,195.00   [***]%    $[***]
 1   600076  D230 - ADSL Service Verification Card         SLTSKM0HAA  $6,995.00   [***]%    $[***]
 1   600038  S108 POTS Splitter Line Card                  SLL3DD0CAA  $1,400.00   [***]%    $[***]
 1   600069  S112-12 port POTS Splitter Card (SCX)         TBD         $1,795.00   [***]%    $[***]
 1   600061  C10-Clock Distribution Card (BRI)             TBD         $2,395.00   [***]%    $[***]
 1   600060  T100-TDR Card                                 TBD         $4,295.00   [***]%    $[***]

 1   600063  SX500 23" Chassis - Smart Splitter            VAM3BB0BRA  $6,895.00   [***]%    $[***]
 1   600064  SP50 Controller Card                          VAC2V3FJAA  $1,295.00   [***]%    $[***]
 1   600065  SL24-24 port Splitter Line Card               VAC2U4FJAA  $2,295.00   [***]%    $[***]
 1    TBD    MA25 - 25 port Metallic Access Card           TBD         $1,395.00   [***]%    $[***]
 1   600068  SX500-19" Chassis - Smart Splitter            TBD         $5,895.00   [***]%    $[***]
 1   600074  SX500-19" Front-Cabling Panel                 TBD         $3,695.00   [***]%    $[***]
 1   600075  SX500-23" Front-Cabling Panel                 TBD         $4,595.00   [***]%    $[***]

 1    TBD    SCX200-23" Chassis                            TBD         $4,995.00   [***]%    $[***]
 1    TBD    SCX200-19" Chassis                            TBD         $4,295.00   [***]%    $[***]
 1    TBD    SCL12-12-port Smart Splitter Card (SCX)       TBD         $1,795.00   [***]%    $[***]
                                                                       ------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                           ------------------------------  ------------------------------
                                                                  [***]-[***] UNITS                [***]+ UNITS
                                                                        [***]%                        [***]%
                                                           ------------------------------  ------------------------------
      PART                                                   LIST                            LIST
QTY  NUMBER                      DESCRIPTION                 PRICE    DISCOUNT  NET PRICE    PRICE    DISCOUNT  NET PRICE
---------------------------------------------------------  ------------------------------  ------------------------------
<S>  <C>     <C>                                           <C>        <C>       <C>        <C>        <C>       <C>
                                  Hardware
 1   600000  Copper CrossConnect 23" Base System           $6,595.00    [***]%    $[***]   $6,595.00   [***]%     $[***]
 1   600001  Copper CrossConnect 19" Base System           $6,295.00    [***]%    $[***]   $6,295.00   [***]%     $[***]
 0    TBD    CX40                                          $3,995.00    [***]%    $[***]   $3,995.00   [***]%     $[***]
 1   600003  L140 Line Card - 25 subscribers/25 xconnects  $3,395.00    [***]%    $[***]   $3,395.00   [***]%     $[***]
 1   600048  L150 Line Card - 25 subscribers               $3,995.00    [***]%    $[***]   $3,995.00   [***]%     $[***]
 1   600056  L155 Line Card - 25 subscribers/BILS          $4,995.00    [***]%    $[***]   $4,995.00   [***]%     $[***]
 1   600046  P150 Processor Card                           $8,795.00    [***]%    $[***]   $8,795.00   [***]%     $[***]
 1   600026  M101 Card - 6 Port Ethernet hub               $2,495.00    [***]%    $[***]   $2,495.00   [***]%     $[***]
 1   600032  M120 - 8 port Terminal Server                 $3,495.00    [***]%    $[***]   $3,495.00   [***]%     $[***]
 1   600070  M120 Octopus Cable                              $295.00    [***]%    $[***]     $295.00   [***]%     $[***]
 1   600054  M121 - 8 port (RJ45) Terminal Server          $3,495.00    [***]%    $[***]   $3,495.00   [***]%     $[***]
 1   600034  X165 CrossConnect Linecard                    $3,195.00    [***]%    $[***]   $3,195.00   [***]%     $[***]
 1   600076  D230 - ADSL Service Verification Card         $6,995.00    [***]%    $[***]   $6,995.00   [***]%     $[***]
 1   600038  S108 POTS Splitter Line Card                  $1,400.00    [***]%    $[***]   $1,400.00   [***]%     $[***]
 1   600069  S112-12 port POTS Splitter Card (SCX)         $1,795.00    [***]%    $[***]   $1,795.00   [***]%     $[***]
 1   600061  C10-Clock Distribution Card (BRI)             $2,395.00    [***]%    $[***]   $2,395.00   [***]%     $[***]
 1   600060  T100-TDR Card                                 $4,295.00    [***]%    $[***]   $4,295.00   [***]%     $[***]

 1   600063  SX500 23" Chassis - Smart Splitter            $6,895.00    [***]%    $[***]   $6,895.00   [***]%     $[***]
 1   600064  SP50 Controller Card                          $1,295.00    [***]%    $[***]   $1,295.00   [***]%     $[***]
 1   600065  SL24-24 port Splitter Line Card               $2,295.00    [***]%    $[***]   $2,295.00   [***]%     $[***]
 1    TBD    MA25 - 25 port Metallic Access Card           $1,395.00    [***]%    $[***]   $1,395.00   [***]%     $[***]
 1   600068  SX500-19" Chassis - Smart Splitter            $5,895.00    [***]%    $[***]   $5,895.00   [***]%     $[***]
 1   600074  SX500-19" Front-Cabling Panel                 $3,695.00    [***]%    $[***]   $3,695.00   [***]%     $[***]
 1   600075  SX500-23" Front-Cabling Panel                 $4,595.00    [***]%    $[***]   $4,595.00   [***]%     $[***]

 1    TBD    SCX200-23" Chassis                            $4,995.00    [***]%    $[***]   $4,995.00   [***]%     $[***]
 1    TBD    SCX200-19" Chassis                            $4,295.00    [***]%    $[***]   $4,295.00   [***]%     $[***]
 1    TBD    SCL12-12-port Smart Splitter Card (SCX)       $1,795.00    [***]%    $[***]   $1,795.00   [***]%     $[***]
                                                           ------------------------------  ------------------------------
</TABLE>

PLEASE NOTE THAT 1 UNIT IS ANY OF THE FOLLOWING:           1 X CX100 CHASSIS
                                                           1 X CX40 CHASSIS
                                                           1 X SX500 CHASSIS
                                                           1 X SCX200 CHASSIS

   BOTH PARTIES AGREE TO DISCUSS PRICING AS REQUIRED ON A CASE BY CASE BASIS.

<TABLE>
<CAPTION>
               PART                                                                    LIST         EXTENDED
  QTY         NUMBER                          DESCRIPTION                              PRICE       LIST PRICE   DISCOUNT   NET PRICE
------------------------------------------------------------------------------------------------------------------------------------
<S>           <C>         <C>                                                       <C>            <C>          <C>        <C>
                                      SOFTWARE AND DOCUMENTATION
   1          600030      CrossWorks LMS Software                                   $50,000.00     $50,000.00    [***]%     $[***]
   1          600049      CrossWorks API Server Software                            $50,000.00     $50,000.00    [***]%     $[***]
   1          600043      CrossWorks Interactive Voice Response (IVR) Platform      $30,000.00     $30,000.00    [***]%     $[***]
   1          600031      CrossWorks LMS - User's Guide                                $100.00        $100.00    [***]%     $[***]
   1          600041      CrossWorks LMS - Installation and Administration Guide          $100        $100.00    [***]%     $[***]
   1          600050      CrossWorks API Server - User's Guide                            $100        $100.00    [***]%     $[***]
   1           TBD        Additional Dialogic Cards for CrossWorks IVR Platform          $0.00          $0.00    [***]%     $[***]
   1          600044      CrossWorks IVR - User's Guide                                $100.00        $100.00    [***]%     $[***]
   1          600066      SX500 - User Guide                                           $100.00        $100.00    [***]%     $[***]
</TABLE>

                         ****TURNSTONE CONFIDENTIAL****

---------------
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>   37
                                                                              37

  APPENDIX B - COPPER CROSSCONNECT CX100 AND SMART SPLITTER SX500 USER'S GUIDE
                               (W/SPECIFICATIONS)

An electronic copy of the Copper CrossConnect CX100 and Smart Splitter SX500
User's Guide will be accessible by Alcatel through Turnstone's customer service
Internet Web site.
<PAGE>   38
                                                                              38

                   APPENDIX C - MONTHLY ORDER SHIPMENT REPORTS

Turnstone is currently in process of obtaining a template to for purposes of
Alcatel submitting Customer Shipment information for purposes of appropriate
compensation for Turnstone personnel.
<PAGE>   39
                                                                              39

                      APPENDIX D - NON DISCLOSURE AGREEMENT

Copies of the NDA in place between Turnstone and Alcatel are available upon
request.
<PAGE>   40
                                                                              40

              APPENDIX E - COMPREHENSIVE PRODUCT MAINTENANCE TERMS

         Company and Supplier agree that the following terms and conditions
shall govern the provisioning of maintenance and support services by Company to
Supplier with respect to Supplier's Products.

SECTION 1.  DEFINITIONS

         "Hardware" means all Supplier-produced hardware, including, but not
         exclusive to, chassis-based systems and slot cards, purchased by
         Company from Supplier or one of its authorized agents and for which
         Company is current on its purchase price payment obligations.

         "Application Software" means all Supplier-produced software that is
         provided by Supplier to be used with Hardware.

         "Embedded Software" means all Supplier-produced software that is
         embedded in the Hardware.

         "Software" means all Supplier-produced software, including, but not
         limited to, Embedded Software and Application Software, purchased by
         Company from Supplier or one of its authorized agents and for which
         Company is current on its purchase price payment obligations.

         "Product(s)" means all Hardware and Software.

         "Update" means a Software release containing error corrections and
         enhancements that is made commercially available by Supplier and
         generally indicated by a change in the release number and any
         corrections and updates to the associated documentation.

SECTION 2.  SOFTWARE MAINTENANCE

         2.1 Software Updates. Supplier shall provide Company e-mail
         notification of Updates to Software as they become available. The
         contents of all Updates shall be decided upon by Supplier in its sole
         discretion. Company may obtain Updates either through delivery of a
         machine-readable copy pursuant to instructions contained in the release
         notification or by downloading the Updates from Supplier's customer
         care web site. Supplier will provide Updates for Products that are
         covered under maintenance. Company shall have the right to reasonably
         request maintenance releases.
<PAGE>   41
                                                                              41

         2.2 Supported Software. Supplier's Software support obligations
         hereunder shall extend to the current production release and the prior
         production release only.

         2.3 Error Corrections. For Software that is covered under maintenance,
         Supplier shall use its reasonable efforts to correct any reproducible
         programming error in the Software attributable to Supplier with a level
         of effort commensurate with the severity of the error, provided that
         Supplier shall have no obligation to correct all errors in the
         Software. Upon identification of any programming error, Company shall
         notify Supplier of such error and shall provide Supplier with enough
         information to reproduce the error. Supplier shall not be responsible
         for correcting any errors not attributable to Supplier. Supplier shall
         only be responsible for errors that are reproducible by Supplier on
         unmodified Software as delivered to Company.

SECTION 3.  EXTENDED WARRANTY FOR HARDWARE AND SOFTWARE

         3.1 Limited Warranty. The terms of Supplier's Hardware and Embedded
         Software warranty is attached as Attachment B hereto. The terms of the
         Application Software warranty is attached as Attachment C hereto. By
         purchasing maintenance and support hereunder, Company verifies that
         Company has read and understands such warranties.

         3.2 Extended Warranty. All Products covered under maintenance shall be
         considered under warranty, which will effectively extend Product
         warranty coverage past Supplier's standard 1-year limited Hardware
         warranty period and 90-day limited Software warranty period as outlined
         in Attachments B and C.

SECTION 4.  RETURN MATERIAL AUTHORIZATION

         4.1 Return Material Authorization. Before returning any Product,
         Company must contact Supplier customer support and obtain an RMA number
         by calling the designated support telephone number or logging a request
         via Supplier's customer care web site. If Supplier's customer support
         verifies that the Product is likely to be defective, Supplier will
         issue Company a Return Material Authorization (RMA) number, which
         allows Company to return the defective unit to Supplier for repair or
         replacement.

         4.2 Shipping. Supplier cannot accept any Product without an RMA number
         on the package. Company must deliver the defective Product along with
         the RMA number to Supplier. If Company ships the Product, Company
         assumes the risk of damage or loss in transit. Company must use the
         original container (or the equivalent) and pay the shipping charge.
         Supplier will provide Company with the shipping address at the time of
         RMA issuance.
<PAGE>   42
                                                                              42

         4.3 Repair or Replace. Supplier may replace or repair the Product with
         either a new or reconditioned Product. Supplier warrants the repaired
         or replaced Product to be free from material defects in accordance with
         the original warranty for a period of the greater of (i) ninety (90)
         days from the return shipping date; or (ii) the period of time
         remaining on the maintenance coverage term, whichever is applicable.

         4.4 Advance Replacement. Supplier will ship an advance replacement unit
         via next-business-day delivery in the continental United States.
         Company has 30 days to return the defective unit after the replacement
         has been shipped. If the defective unit is not returned within this
         time, Supplier will invoice Company for the full list price of the
         replacement unit.

         4.5 Company Breach. Notwithstanding anything to the contrary herein, if
         Supplier properly invoices Company for replacement unit(s) and Company
         breaches its payment obligations for such replacement units, Supplier
         may stop providing RMA and advance replacement units hereunder without
         any penalty until such breach is cured.

SECTION 5.  COMPANY SUPPORT

         5.1 Support. Supplier will provide Company with technical support by
         both World Wide Web and telephone. Such support will include:

                  a. Assistance related to questions on the installation and
                     operational use of the Product(s);

                  b. Assistance in identifying and verifying the causes of
                     suspected errors in the Product(s); and

                  c. Providing workarounds for identified Product errors or
                     malfunctions, where reasonably available to Supplier.

         5.2 Company Care Web Site. Supplier will provide Company with an
         authorized account to access Supplier's customer care web site.
         Supplier will make available the following services through its
         customer care web site:

                  a. Software Updates that can be downloaded by Company;

                  b. Documentation for Products;

                  c. Issuing trouble reports identified by Company through
                     Supplier's customer care web site;

                  d. Issuing suggestions for enhancements through Supplier's
                     customer care web site.

         Supplier shall provide Company with online accounts to Supplier's WWW
         online service. These accounts shall allow Company to access the WWW
         and ftp servers with access to bug
<PAGE>   43
                                                                              43

         lists, trouble ticket system, call tracking system, technical tips and
         other product related information and documentation.

         5.3 Telephone Support. Telephone support shall include:

                  (a) Direct Hotline Support. During regular business hours
                      Monday through Friday, Company may contact Supplier
                      customer support directly through either local regional
                      contact numbers to be supplied by Supplier or by calling
                      1-877-8COPPER, extension 1599 or 1-408-907-1599.

                  (b) 24/7 Dispatch Service. On a 24/7, 365-day basis, a live
                      operator will be available at the above contact numbers,
                      and Company may request that the operator immediately
                      alert a Supplier customer support person via pager. Pages
                      will generally be returned by Supplier customer support
                      within 30 minuets.

         5.4 Recertification Services. The obligations of Supplier hereunder
         only extend to Products purchased by Company directly from Supplier or
         one of its authorized agents. If Company acquires Supplier products
         other than from Supplier or one of its authorized agents and wish such
         products to be covered, Company must notify Supplier and provide to
         Supplier a list of such products together with their unique Supplier
         serial identification numbers. Supplier in its sole discretion may
         elect to recertify such products and charge Company a recertification
         fee, in which case such products shall then be deemed to have been
         purchased from Supplier and covered under maintenance.

         5.5 Escalation Process. Company and its end customer shall jointly
         assess the impact of Product issues and assign priorities according to
         the issue priority definitions below. Supplier shall escalate issues
         according to the following Supplier problem prioritization guidelines:

         CRITICAL          System is unusable or inoperative, causing critical
                           impact to network operation

         MAJOR             System is operating but at a significantly reduced
                           level of performance.

         MINOR             System is operating but at slightly reduced level of
                           performance.

         COSMETIC/
         FEATURE
         REQUESTS          System operates normally
<PAGE>   44
                                                                              44

<TABLE>
<CAPTION>
                                  ESCALATION
         SEVERITY TIME FRAME      TECH LEVEL     MANAGEMENT LEVEL
         -------------------      ----------     ----------------
<S>                               <C>            <C>
         CRITICAL Immediate       Level 2 TAC    Director of Technical Services
                                  Level 3 TAC

                  4 hours                        VP Customer Support
                                                 VP Engineering

         MAJOR    Immediate       Level 2 TAC

                  1 hour          Level 3 TAC

                  2 hours                        Director of Technical Services

                  3 hours                        VP Customer Support

                  4 hours                        VP Engineering

         MINOR    24 hours        Level 2 TAC

                  72 Hours        Level 3 TAC
</TABLE>

         5.6 Service Levels. Provided that Company has met its obligations
         hereunder, Supplier shall use its best efforts to provide issue
         resolution services according to the following service level
         requirements. The requirement is to provide as a minimum a workaround
         solution within the time frame identified to manage the failure
         situation until the permanent solution is implemented. Elapsed time
         shall be measured from the time Supplier acknowledges the issue, or
         thirty (30) minutes following notification by Company, whichever is
         shorter.
<PAGE>   45
                                                                              45

<TABLE>
<CAPTION>
           -----------------------------------------------------------------
               IMPACT OF ISSUE TO COMPANY          SERVICE LEVEL REQUIREMENT
               --------------------------          -------------------------
<S>                                                <C>
                     CRITICAL                           Within 4 hours
                                                         95% of cases
           -----------------------------------------------------------------
                        MAJOR                           Within 24 hours
                                                          95 % of cases
           -----------------------------------------------------------------
                         MINOR                           Within 48 hours
                                                          95 % of cases
           -----------------------------------------------------------------
              All calls to Supplier TAC
           must be acknowledged by Supplier            Within 30 minutes
            and assigned a trouble ticket                 95 % of cases
           -----------------------------------------------------------------
</TABLE>

         5.7 Emergency Call-Out Services. Supplier agrees to use commercially
         reasonable efforts to provide Company with emergency call-out services.
         Emergency call-out service provides recovery assistance for emergencies
         24 hours a day, 7 days a week. Typically, the emergency service is
         needed when there is a serious system malfunction that Company is
         unable to manage and which requires on-site service support. In these
         instances, a Supplier systems engineer may be required to physically
         visit the Company customer site.

         Emergency call-out service shall only be requested by Company in the
         event that Company is unable to resolve the issue after assistance from
         Supplier TAC and after Company support personnel has first attempted to
         troubleshoot the issue at the customer site. Before requesting such
         service, Company shall first obtain a written call-out request from its
         customer and provide a copy of such request to Supplier. After
         receiving the request, Supplier, Company and the Company customer shall
         mutually agree upon a schedule for the Supplier systems engineer to
         visit the customer site.

         Company agrees to pay Supplier a rate of $[***] per day plus reasonable
         travel, hotel and per diem expenses associated with the provisioning of
         any emergency call out services. Payment terms shall be as provided in
         the main Agreement. If the Emergency Call-Out Service is required
         because of a shown HW/SW failure in Supplier MATERIAL, Company shall
         not pay the fee mentioned here above.

SECTION 6.  TRAINING

         6.1. Training. The obligations of Company and Supplier with respect to
         training are set forth in Appendix F.

SECTION 7.  COMPANY RESPONSIBILITIES

         7.1 End Customer Assistance. End customers shall initially report all
         Supplier Product issues to the Company. Company shall provide certified
         Supplier-trained

------------
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>   46
                                                                              46

         support engineers to assist its end customers with defining, diagnosing
         and resolving reported problems with Supplier Products. Company shall
         make every effort to resolve reported issues prior to escalating them
         to Supplier's technical assistance center.

         7.2 Supplier Assistance. Company shall promptly provide Supplier
         network access to the appropriate install sites and configuration
         information for the related network equipment so that Supplier has a
         reasonable opportunity to diagnose and resolve Product issues within
         agreed upon service levels. Upon request, Company shall also provide
         reasonable access to all necessary personnel to answer questions about
         any problems reported by Company regarding the Products. Company shall
         promptly implement all Updates and error corrections provided by
         Supplier hereunder.

         7.3 Company Training. Company and Supplier shall mutually agree upon
         appropriate numbers of certified Supplier-trained engineers to support
         each geographical region where the Products may be deployed.

         7.4 Contact People. Company shall appoint a number of individuals
         within Company's organization, as mutually agreed upon between Company
         and Supplier, to serve as primary contacts between Company and Supplier
         and to receive support through Supplier's customer care organization.
         Company shall ensure that its contact persons are properly trained in
         the operation and usage of the Products.

SECTION 8.  MAINTENANCE TERM AND FEES

         8.1 Comprehensive Product Maintenance Term and Fees. The maintenance
         coverage term and the maintenance fees which Company agrees to pay
         Supplier are set forth in Attachment A.

SECTION 9.  MISCELLANEOUS

         9.1 Product Obsolescence.

                  a. Rights. Supplier shall have the right to declare any
                     Product(s) obsolete and no longer supported by Supplier,
                     subject to the terms hereunder.

                  b. Notice Period. Supplier shall not discontinue manufacture
                     of any Products supplied to the Company without giving at
                     least six (6) months written notice of its intention to do
                     so.

                  c. Continued Support. The responsibilities of Supplier to
                     provide maintenance services with respect to any of the
                     Products shall remain in force for a period of one (1) year
                     after the Product has been made obsolete; provided that (i)
                     the Company has paid Supplier for maintenance hereunder and
                     (ii) Company has continuously purchased
<PAGE>   47
                                                                              47

                     maintenance from Supplier since the first commercial
                     shipment of Product from Supplier to Company. In case
                     Company has long-term support contracts with its customers,
                     Company shall inform Supplier of the terms of such
                     contracts, and Supplier and Company shall work together in
                     good faith and use their reasonable best efforts to ensure
                     that Company can successfully fulfill its obligations under
                     such contracts.
<PAGE>   48
                                                                              48

ATTACHMENT A

                COMPREHENSIVE PRODUCT MAINTENANCE - TERM AND FEES

         Supplier shall offer and Company shall purchase comprehensive product
     maintenance on a 12-month coverage term basis. The fees for each such
     12-month coverage term shall equal [***]% of the aggregate purchase price
     paid by Company for the Supplier Products to be covered.

         The first 12-month coverage term shall begin on the date of the first
     shipment of Product from Supplier to Company or Company's designee. A
     coverage term may be extended prior to expiration for additional 12-month
     periods upon mutual agreement of Supplier and Company.

------------
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>   49
                                                                              49

ATTACHMENT B

               LIMITED WARRANTY FOR PRODUCTS AND EMBEDDED SOFTWARE

1.       Limited Warranty

Supplier warrants that under normal use and conditions the components of the
Products and Software listed below will, for the appropriate duration listed
below (each, a "Warranty Period"), be free from Material Defects. For purposes
of the hardware warranty, "Material Defect" means any defect in Supplier's
Product that is a substantial nonconformity from the published specifications
for such Product, and with respect to the Embedded Software warranty, such
defect can be reproduced by Supplier.

         Hardware: The Warranty Period for any hardware delivered is one (1)
         year from the date of purchase from Supplier.

         Embedded Software: The Warranty Period for the Embedded Software
         delivered is ninety (90) days from the date of purchase from Supplier.

Company's sole remedy and Supplier's sole responsibility under this warranty
shall be the repair or replacement of the Product, or component, or Embedded
Software as described below in "Returning a Defective Product (RMA)". This
warranty does not cover replacement of Products or Embedded Software damaged by
improper or unauthorized repair, abuse, misuse, neglect, alteration, disaster,
improper installation or improper testing. For further warranty information call
the number below.

2.       Returning a Defective Product (RMA)

Before returning any Product or Embedded Software, Company must contact Supplier
customer support and obtain an RMA number by calling 1-877-8COPPER in California
USA or by email communication to the following email address:
support@turnstone.com.

If Supplier customer support verifies that the Product or Embedded Software is
likely to be defective, Supplier will issue an RMA number to place on the outer
package in which the Product or Embedded Software will be shipped. Supplier
cannot accept any Product or Embedded Software without an RMA number on the
package. Company must deliver the Product or Embedded Software along with the
RMA number to Supplier. If Company ships the Product or Embedded Software,
Company assumes the risk of damage or loss in transit. Company must use the
original container (or the equivalent) and pay the shipping charge.

Supplier may replace or repair the Product or Embedded Software with either a
new or reconditioned Product or Embedded Software. Supplier warrants the
repaired or replaced Product or Embedded Software to be free from Material
Defects for a period of the greater of (i) ninety (90) days from the
<PAGE>   50
                                                                              50

return shipping date; or (ii) the period of time remaining on the original one
(1) year or ninety (90) day warranty as applicable.

WARRANTIES EXCLUSIVE: THE ABOVE WARRANTY IS IN LIEU OF ANY OTHER WARRANTY,
WHETHER EXPRESS, IMPLIED OR STATUTORY INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE
OR ANY WARRANTY ARISING OUT OF ANY COURSE OF DEALING OR INDUSTRY CUSTOM.
<PAGE>   51
                                                                              51

ATTACHMENT C

                    LIMITED WARRANTY FOR APPLICATION SOFTWARE

Supplier warrants that for a period of 90 days from the date of purchase (a) the
Application Software will perform substantially in accordance with the
accompanying Documentation and (b) the media on which the Application Software
is recorded is substantially free from defects in materials and workmanship.

Supplier's sole obligation under this limited warranty shall be at Supplier's
discretion to (a) use reasonable efforts to correct reproducible errors in the
Application Software, (b) replace defective media which is returned to Supplier
or (c) refund the purchase price paid for the Application Software. Any
replacement Application Software will be warranted for the remainder of the
original warranty period or 30 days, whichever is longer.

This warranty gives Company specific legal rights and Company has other rights
which vary from jurisdiction to jurisdiction.

WARRANTIES EXCLUSIVE: EXCEPT FOR THE FOREGOING EXPRESS WARRANTY THE APPLICATION
SOFTWARE IS PROVIDED "AS IS". SUPPLIER MAKES NO WARRANTY THAT THE APPLICATION
SOFTWARE WILL WORK IN CONJUNCTION WITH ANY HARDWARE OR APPLICATION SOFTWARE
PRODUCTS PROVIDED BY THIRD PARTIES, THAT USE OF THE APPLICATION SOFTWARE WILL BE
UNINTERRUPTED OR ERROR FREE, OR THAT ALL DEFECTS IN THE APPLICATION SOFTWARE
WILL BE CORRECTED. SUPPLIER HEREBY DISCLAIMS ANY OTHER WARRANTY, WHETHER
EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
MERCHANTABILITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR ANY
WARRANTY ARISING OUT OF ANY PROPOSAL, SPECIFICATION, OR SAMPLE.
<PAGE>   52
                                                                              52

                              APPENDIX F - TRAINING

COMPANY TRAINING

As long as Company continuously purchases maintenance and support coverage for
its Supplier products pursuant to the terms set forth in Appendix E hereto,
Supplier commits to provide the following types of training programs to Company
personnel:

         - Sales Training

         - Technical Training

         - Periodic Technical Refreshers

         - Train the Trainer (Technical)

Furthermore, Company shall have access to all courseware regarding the courses
mentioned here below both in hardcopy as in electronic version for internal use.
For all other uses Company must obtain prior written consent from Supplier.

SALES TRAINING
Supplier shall provide training to enable Company to effectively market and sell
Supplier equipment and services.

TECHNICAL TRAINING
Supplier shall provide training to enable Company technical staff to understand
the theory of operation, and to independently install, configure, test, manage
and troubleshoot Supplier equipment.

TECHNICAL REFRESHER
Supplier shall provide periodic training as necessary to inform Company
technical staff of developments in Supplier products and to enhance knowledge
acquired in initial technical courses.

TRAIN THE TRAINER (TECHNICAL)
Supplier shall provide training to enable Company trainers to deliver Supplier
technical courses to Company employees and Company customers. The Supplier
Trainer Program gives instructors the skills they need to educate Company
employees and customers as well as the technical skills to become proficient in
Supplier products. This instructor led program includes lab intensive exercises,
which gives the instructor candidates hands on time using the Copper
CrossConnect CX100, SX500 Smart Splitter and CrossWorks LMS. After reaching an
acceptable level of proficiency on the Supplier products, the attendees will be
tested on their instructor abilities in teaching Supplier's courses to the class
for evaluation and demonstration. Once students have successfully completed this
course they will be certified as Supplier Technical Trainers, which will allow
them to deliver training on Supplier products.

PRICING FOR COMPANY TRAINING
<PAGE>   53
                                                                              53

Upon Company's request, Supplier will provide at Supplier's facilities (or at
Company's facilities if Supplier is reimbursed by Company for reasonable related
travel, hotel and per diem expenses) up to 10 training sessions of a maximum of
80 hours in the aggregate to Company sales and technical personnel free of
charge. The 80 hours of free training must be used during, and shall expire
after, the first twelve months following the execution of the main Agreement.
Any additional training will be provided to Company at the pricing set forth
below:

<TABLE>
<CAPTION>
CERTIFICATION                                          PRICE
NUMBER          CERTIFICATION NAME                     (PER STUDENT) *     LIST PRICE *    OEM PRICE *     DURATION
-------------   ----------------------------------     ---------------     ------------    -----------     --------
<S>             <C>                                    <C>                 <C>             <C>             <C>
OEM-CXC01       Copper CrossConnect CX100              $1,000              $12,000         $[***]          2 days
                Certification
-------------   ----------------------------------     ---------------     ------------    -----------     --------
OEM-CWC01       CrossWorks LMS Certification           $  750              $ 9,000         $[***]          2 days
-------------   ----------------------------------     ---------------     ------------    -----------     --------
OEM-SXC01       SX500 Smart Splitter Certification     $  550              $ 6,600         $[***]          2 days
-------------   ----------------------------------     ---------------     ------------    -----------     --------
OEM-LAC01       Loop Analysis Certification            $1,500              $18,000         $[***]          1.5 days
-------------   ----------------------------------     ---------------     ------------    -----------     --------
OEM-IMC01       Installation and Maintenance           $  500              $ 6,000         $[***]          1 day
                Certification
-------------   ----------------------------------     ---------------     ------------    -----------     --------
OEM-EMC01       Element Management Certification       $1,200              $14,400         $[***]          2 days
-------------   ----------------------------------     ---------------     ------------    -----------     --------
TBD             Supplier Trainer Program **            $4,300                  N/A         $[***]          8.5 days
-------------   ----------------------------------     ---------------     ------------    -----------     --------
</TABLE>

-------------
* Price is based on 12 students per class (except for the Supplier Trainer
Program, which is based on a class of up to six students) and on training been
conducted at Supplier's facilities. For training to be conducted at Company's
facilities, Supplier shall be reimbursed by Company for reasonable related
travel, hotel and per diem expenses.

** The Supplier Trainer Program is based on a class of up to six students from
Company. In addition to providing the trainer teaching skills curriculum it will
also include the curriculum for the following certifications:

   -  Loop Analysis
   -  CX100 Copper CrossConnect
   -  SX500 Smart Splitter
   -  CrossWorks LMS

CANCELLATION

------------
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>   54
                                                                              54

In the event Company cancels or reschedules a training course less than fourteen
(14) calendar days prior to the date of such course, Company shall compensate
Supplier with an amount equal to 50% of the fees for such training course plus
any nonrefundable travel or hotel expenses incurred by Supplier in anticipation
of such course. In the event Company cancels or reschedules a training course
less than seven (7) calendar days prior to such event, Company shall compensate
Supplier with an amount equal to 100% of the fees for such training course plus
any nonrefundable travel or hotel expenses incurred by Supplier in anticipation
of such course. Other than the above, Company shall have no further liability
for canceling or rescheduling a training course.

COURSE DESCRIPTIONS

The following course descriptions may be updated from time to time to include
additional courses that may be offered by Supplier to Company.

COPPER CROSSCONNECT CX100 CERTIFICATION

The Copper CrossConnect CX100 from Supplier is the first in a new class of
carrier equipment that facilitates management of copper infrastructure for
digital services. The CX100 is deployed in central offices, between the outside
plant pairs connecting through the Main Distribution Frame (MDF) and the loop
terminating access equipment, such as DSLAMs. Sitting in line with up to 550
copper loops, the CX100 transparently connects loop-side pairs to corresponding
equipment-side pairs at the metallic layer. Through software control, the CX100
can remotely perform comprehensive loop testing and qualification on any of
these copper pairs, testing either towards the subscriber or back towards the
access equipment. The Copper CrossConnect CX100 also enables service providers
to remotely change copper connectivity as needed, such as moving a subscriber's
loop to an alternative equipment port. This provides a cost-effective solution
for automated protection switching of DSLAM line cards and service changes,
without requiring a visit to the central office.

The CX100 Copper CrossConnect Certification was designed for students that would
like to become technically proficient in this product. This specially designed
curriculum is ideal for companies developing their own training program on
Supplier products for internal use and for partners (resellers) of Supplier
products. Students that successfully complete the courses listed below will
obtain the Copper CrossConnect CX100 Certification.

Target Audience:   Reselling Partners of Supplier Products & Supplier Customers

Duration:          2 Days               Prerequisites:    None

INSTALLATION AND MAINTENANCE OF THE COPPER CROSSCONNECT CX100
The Installation and Maintenance of the Copper CrossConnect CX100 module
provides an introduction to the design and technical specification of the Copper
CrossConnect CX100 and a
<PAGE>   55
                                                                              55

comprehensive period of instruction for the installation and maintenance of the
Copper CrossConnect CX100.

ADMINISTERING THE COPPER CROSSCONNECT CX100
Administration of the Copper CrossConnect CX100 Course will focus on the
administration of the CX100 as a local machine. Topics covered will be initial
configuration, software transfer, SNMP management, security, and equipment
inventory as well as other administrative functions.

PROVISIONING THE COPPER CROSSCONNECT CX100
This period of instruction will teach students how to specify system parameters
for various flavors of xDSL technology. These parameters will allow engineers to
specify the conditions of the local loop for which xDSL will be provisioned on.
Topics covered will be setting system parameters, the CX100 Command Line
Interface, and xDSL operational guidelines.

MANAGING COPPER CONNECTIONS IN THE COPPER CROSSCONNECT CX100
The Managing Copper Connections will teach students how to manage
strait-through, cross-connections, and loop-back connections in the CX100.
Topics covered are the types of connections, viewing connections, and the CX100
Command Line Interface.

CROSSWORKS LMS CERTIFICATION
CrossWorks Back Office Automation Software is a software suite that works in
conjunction with the Copper CrossConnect CX100 and the Smart Splitter SX500 to
allow service providers to readily automate physical layer management of the
copper loop. CrossWorks provides key capabilities, such as loop qualification
and testing, spectral analysis and network management through a variety of
interfaces including a web-based GUI and standard industry APIs. This
certification course is designed to give students the knowledge and tools needed
to successfully install and configure the CrossWorks LMS Server. Students that
successfully complete the courses listed below will obtain the CrossWorks LMS
Certification.

Target Audience: Reselling Partners of Supplier Products & Supplier Customers

Duration:        1 1/2 Days      Prerequisites:    Windows NT/2000 & Sun Solaris

INSTALLATION & ADMINISTRATION OF CROSSWORKS LMS- WINDOWS NT/ 2000
This course covers a step-by-step procedure on the installation of Supplier's
CrossWorks LMS on Windows NT/ 2000 operating system. Topics covered will be
installation requirements, data base set-up for CrossWorks LMS, and the
installation procedures.

INSTALLATION & ADMINISTRATION OF CROSSWORKS LMS- SUN SOLARIS
This course covers a step-by-step procedure on the installation of Supplier's
CrossWorks LMS on the Sun Solaris platform. Topics covered will be installation
requirements, data base set-up for CrossWorks LMS, and the installation
procedures.
<PAGE>   56
                                                                              56

CROSSWORKS LMS MANAGEMENT
The CrossWorks LMS Management module focuses on using the CrossWorks Software
suite for the system administration from a network of CX100s to the individual
CX100. Topics covered are the administration tasks of a CX100 network using the
CrossWorks LMS, such as software upgrades, view alarms, and system inventories.

SX500 SMART SPLITTER CERTIFICATION
The Smart Splitter SX500 from Supplier is a high-density splitter platform that
enables complete loop management for residential DSL services. With residential
services, DSL is typically deployed over existing phone lines, leveraging
splitters in the central office. Service providers have faced a number of
operational challenges in this environment, including the fact that splitter
electronics prevent many useful tests from being performed from certain points
in the network and limitations of POTS testing solutions to deal with DSL
services. The SX500 is a unique new product that solves many of the operational
challenges service providers face, increasing the speed and efficiency of
deploying DSL services. By integrating standards compliant splitters with
metallic test access, the SX500 enables full visibility to copper pairs on all
sides of the splitter in a cost effective manner. The SX500 enables service
providers to perform accurate loop qualification and testing in an automated
fashion, and easily integrate this solution into their existing OSS systems. The
SX500 provides an open TL1 interface that can be accessed by any testing
platform, including Supplier's Copper CrossConnect CX100. By providing complete
visibility on all sides of the Central Office based splitter, the SX500 reduces
unnecessary truck rolls and allows network operators to easily segment network
problems. The SX500 has a carrier-class, robust hardware architecture including
hot-swappable cards and make-before-break connectors.

The SX500 Smart Splitter Certification was designed for students that would like
to become technically proficient in this product. This specially designed
curriculum is ideal for companies developing their own training program on
Supplier products for internal use and for partners (resellers) of Supplier
products. Students that successfully complete the courses listed below will
obtain the SX500 Smart Splitter Certification.

Target Audience:  Reselling Partners of Supplier Products & Supplier Customers

Duration:         1 Day                     Prerequisites: None

INSTALLATION AND MAINTENANCE OF THE SX500 SMART SPLITTER
The Installation and Maintenance module provides an introduction to the design
and technical specification of the SX500 Smart Splitter and comprehensive
instructions for the installation and maintenance of the SX500 Smart Splitter.

OPERATION OF THE SX500 SMART SPLITTER
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This course describes the methods for communication and interfacing with the
SX500 Smart Splitter. Topics covered in this course will be the TL1 Protocol,
configuration and operation, and Interoperability of the SX500 with the CX100
Copper CrossConnect.

LOOP ANALYSIS CERTIFICATION
One of the most fundamental features of the Copper CrossConnect is its ability
to provide loop qualification and testing. The system is filled with advanced
testing capabilities, ranging from fundamental loop characteristics to wideband
spectral waveform analysis. The Copper CrossConnect provides an ideal tool for
DSL service rollout, reducing or eliminating the need for extraneous truck
rolls. This certification will provide students with in-depth periods of
instruction and intensive lab exercises on fault isolation on the local loop.
Students that successfully complete the courses listed below will obtain the
Loop Analysis Certification.

Duration:         2 -1/2 Days   Prerequisites:  Basic Electronics, Understanding
                                                of xDSL

Target Audience:  Students planning to attend the Loop Testing Course and
                  personnel responsible for the acceptance, provisioning, and
                  maintenance of the local loop.

LOOP THEORY
These modules provide an overview of the outside plant (OSP) including
terminology, the outside plant structure from the central office to the customer
premise, cables and wiring. Upon completion of these modules, the participants
should be able to demonstrate knowledge of basic outside plant terms and the
outside cable plant architecture, which is important to understanding testing
procedures and the application of Supplier products.

LOOP TESTING
The Loop Testing Course focuses on the concepts of testing for circuits and the
results of those tests. The emphasis will be on the results of the tests as that
is crucial information for the participants. Upon completion of the Loop Testing
Course, the participants should be able to demonstrate a clear ability to
conduct tests, interpret the results, and in some cases, determine alternative
services.

LOOP ANALYSIS
The Loop Analysis course builds on the fundamentals taught in the Loop Theory
and Loop Testing course. Loop Analysis further explains and explores both test
results and the analysis of the local loop.

INSTALLATION AND MAINTENANCE CERTIFICATION
Supplier's Installation and Maintenance certification is developed for
technicians conducting the physical installation and maintenance of the Copper
CrossConnect CX100 and the SX500 Smart Splitter. This certification program will
walk students through a curriculum, which will result in being certified on the
installation and maintenance of Supplier hardware. This course is designed to
give students "the hands on experience" on Supplier's hardware giving them the
ability to successfully install the CX100 Copper CrossConnect and SX500 Smart
Splitter. Students that
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successfully complete these courses listed below will obtain the Installation
and Maintenance Certification.

Target Audience:  Personnel Responsible for the Installation and Maintenance of
                  Supplier Hardware

Duration:         1 Day      Prerequisites: Working Knowledge of the CO Plant

INSTALLATION AND MAINTENANCE OF THE SX500 SMART SPLITTER
The Installation and Maintenance module provides an introduction to the design
and technical specification of the SX500 Smart Splitter and comprehensive
instructions for the installation and maintenance of the SX500 Smart Splitter.

INSTALLATION AND MAINTENANCE OF THE COPPER CROSSCONNECT CX100
The Installation and Maintenance of the Copper CrossConnect CX100 module
provides an introduction to the design and technical specification of the Copper
CrossConnect CX100 and a comprehensive period of instruction for the
installation and maintenance of the Copper CrossConnect CX100.

ELEMENT MANAGEMENT CERTIFICATION
The Element Management Certification program is a customized curriculum
developed for technicians working in a network element management environment.
This program familiarizes students with the Copper CrossConnect CX100 and the
SX500 Smart Splitter. Students will learn how to manage the Supplier Network via
Command Line Interface (CLI) and by using Supplier's CrossWorks software suite.
Students that successfully complete the courses listed below will obtain the
Element Management Certification.

Target Audience:  Technicians that are responsible for network element
                  management and configuration.

Duration:         2 Days       Prerequisites: Understanding of LAN/ WAN Concepts

Optional Course:  Operation of the SX500 Smart Splitter
Duration:         -1/2 Day

ADMINISTERING THE COPPER CROSSCONNECT CX100
Administration of the Copper CrossConnect CX100 Course will focus on the
administration of the CX100 as a local machine. Topics covered will be initial
configuration, software transfer, SNMP management, security, and equipment
inventory as well as other administrative functions.

PROVISIONING THE COPPER CROSSCONNECT CX100
This period of instruction will teach students how to specify system parameters
for various flavors of xDSL technology. These parameters will allow engineers to
specify the conditions of the local loop for which xDSL will be provisioned on.
Topics covered will be setting system parameters, the CX100 Command Line
Interface, and xDSL operational guidelines.
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MANAGING COPPER CONNECTIONS IN THE COPPER CROSSCONNECT CX100
The Managing Copper Connections will teach students how to manage
strait-through, cross-connections, and loop-back connections in the CX100.
Topics covered are the types of connections, viewing connections, and the CX100
Command Line Interface.

OPERATION OF THE SX500 SMART SPLITTER (OPTIONAL)
This course describes the methods for communication and interfacing with the
SX500 Smart Splitter. Topics covered in this course will be the TL1 Protocol,
configuration and operation, and Interoperability of the SX500 with the CX100
Copper CrossConnect.

CROSSWORKS LMS MANAGEMENT
The CrossWorks LMS Management module focuses on using the CrossWorks Software
suite for the system administration from a network of CX100s to the individual
CX100. Topics covered are the administration tasks of a CX100 network using the
CrossWorks LMS, such as software upgrades, view alarms, and system inventories.

SUPPLIER TRAINER PROGRAM
The Supplier Trainer program gives instructors the skills they need to educate
and deliver Supplier Certifications to users of Supplier products as well as the
technical skills to become proficient in Supplier products. This instructor led
program includes lab intensive exercises, which gives the instructor candidates
hands on time using the Copper CrossConnect CX100, SX500 Smart Splitter, and
CrossWorks LMS. After reaching an acceptable level of proficiency on Supplier
products, the attendees will be tested on their instructor abilities in teaching
Supplier's courses to the class for evaluation and demonstration. Once students
have successfully completed this course they will be certified as Supplier
Technical Trainers, which will allow them to deliver training on Supplier
products to Company employees and end customers. This program includes
instructor skills training as well as the curriculum for the following
certifications:

Section        Loop Analysis

Section        CX100 Copper CrossConnect

Section        SX500 Smart Splitter

Section        CrossWorks LMS

Target Audience:           Supplier's OEM Partners

Duration:                  8.5  Days

Prerequisites:             Windows NT/2000 & Sun
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TRAINING FACILITIES

The addresses of Supplier's training facilities are listed below:

North America:    Turnstone Systems, Inc.
                  2220 Central Expressway
                  Santa Clara, CA  95050

Europe:           Turnstone International (UK) Limited
                  400 Thames Valley Park Drive
                  Thames Valley Park
                  Reading  RG6 1PT UK

                  or such other location to be mutually agreed upon

Asia-Pacific:     Location to be mutually agreed upon
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                            APPENDIX G: ALCATEL UNITS

ALCATEL BELL N.V.
FRANCIS WELLESPLEIN 1
B-2018 ANWERPEN
BELGIUM

ALCATEL USA
2912 WAKE FOREST ROAD
RALEIGH, NC 27609
USA

OTHER ALCATEL UNITS, CAN BY MUTUAL AGREEMENT BE ADDED TO THIS LIST

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]