Document:

<PAGE>

                                                                    EXHIBIT 10.5

================================================================================

               AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
                            ALTEON WEBSYSTEMS, INC.

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   Page
                                                                                                                   ----
<S>                                                                                                                <C>
1         ACCOUNTING AND OTHER TERMS.............................................................................    4
-         --------------------------

2         LOAN AND TERMS OF PAYMENT..............................................................................    4
-         -------------------------
          2.1    Credit Extensions...............................................................................    4
          2.2    Overadvances....................................................................................    5
          2.3    Interest Rate, Payments.........................................................................    5
          2.4    Fees............................................................................................    6

3         CONDITIONS OF LOANS....................................................................................    6
-         -------------------
          3.1    Conditions Precedent to Initial Credit Extension................................................    6
          3.2    Conditions Precedent to all Credit Extensions...................................................    6

4         CREATION OF SECURITY INTEREST..........................................................................    7
-         -----------------------------
          4.1    Grant of Security Interest......................................................................    7

5         REPRESENTATIONS AND WARRANTIES.........................................................................    7
-         ------------------------------
          5.1    Due Organization and Authorization..............................................................    7
          5.2    Collateral......................................................................................    7
          5.3    Litigation......................................................................................    7
          5.4    No Material Adverse Change in Financial Statements..............................................    7
          5.5    Solvency........................................................................................    8
          5.6    Regulatory Compliance...........................................................................    8
          5.7    Subsidiaries....................................................................................    8
          5.8    Full Disclosure.................................................................................    8

6         AFFIRMATIVE COVENANTS..................................................................................    8
-         ---------------------
          6.1    Government Compliance...........................................................................    8
          6.2    Financial Statements, Reports, Certificates.....................................................    9
          6.3    Inventory; Returns..............................................................................    9
          6.4    Taxes...........................................................................................    9
          6.5    Insurance.......................................................................................    9
          6.6    Primary Accounts................................................................................    9
          6.7    Financial Covenants.............................................................................   10
          6.8    Further Assurances..............................................................................   10

7         NEGATIVE COVENANTS.....................................................................................   10
-         ------------------
          7.1    Dispositions....................................................................................   10
          7.2    Changes in Business, Ownership, Management or Business Locations................................   10
          7.3    Mergers or Acquisitions.........................................................................   10
          7.4    Indebtedness....................................................................................   10
          7.5    Encumbrance.....................................................................................   11
          7.6    Distributions; Investments......................................................................   11
          7.7    Transactions with Affiliates....................................................................   11
          7.8    Subordinated Debt...............................................................................   11
          7.9    Compliance......................................................................................   11

8         EVENTS OF DEFAULT......................................................................................   11
-         -----------------
          8.1    Payment Default.................................................................................   11
          8.2    Covenant Default................................................................................   11
          8.3    Material Adverse Change.........................................................................   12
          8.4    Attachment......................................................................................   12
</TABLE>

                                       2
<PAGE>

<TABLE>
<S>                                                                                                                  <C>
          8.5    Insolvency......................................................................................    12
          8.6    Other Agreements................................................................................    12
          8.7    Judgments.......................................................................................    12
          8.8    Misrepresentations..............................................................................    12

9         BANK'S RIGHTS AND REMEDIES.............................................................................    12
-         --------------------------
          9.1    Rights and Remedies.............................................................................    12
          9.2    Power of Attorney...............................................................................    13
          9.3    Accounts Collection.............................................................................    13
          9.4    Bank Expenses...................................................................................    13
          9.5    Bank's Liability for Collateral.................................................................    14
          9.6    Remedies Cumulative.............................................................................    14
          9.7    Demand Waiver...................................................................................    14

10        NOTICES................................................................................................    14
-         -------

11        CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER.............................................................    14
-         -------------------------------------------

12        GENERAL PROVISIONS.....................................................................................    14
-         ------------------
          12.1   Successors and Assigns..........................................................................    14
          12.2   Indemnification.................................................................................    15
          12.3   Time of Essence.................................................................................    15
          12.4   Severability of Provision.......................................................................    15
          12.5   Amendments in Writing, Integration..............................................................    15
          12.6   Counterparts....................................................................................    15
          12.7   Survival........................................................................................    15
          12.8   Confidentiality.................................................................................    15
          12.9   Effect of Amendment and Restatement.............................................................    16
          12.10  Attorneys' Fees, Costs and Expenses.............................................................    16

13        DEFINITIONS............................................................................................    16
-         -----------
          13.1   Definitions.....................................................................................    16
</TABLE>

                                       3
<PAGE>

       This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated December 8,
1999, between SILICON VALLEY BANK ("Bank"), whose address is 3003 Tasman Drive,
Santa Clara, California 95054 and ALTEON WEBSYSTEMS, INC. ("Borrower"), whose
address is 50 Great Oaks Blvd., San Jose, California 95119.

                                   RECITALS

       A.   Bank and Borrower are parties to that certain Loan and Security
Agreement dated March 20, 1998, as amended (collectively, the "Original
Agreement").

       B.   Borrower and Bank desire in this Agreement to set forth their
agreement with respect to a working capital and equipment line  loan and to
amend and restate in its entirety without novation the Original Agreement in
accordance with the provisions herein.

                                   AGREEMENT

       The parties agree as follows:

1      ACCOUNTING AND OTHER TERMS
       --------------------------

       Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation," in this or any Loan Document.

2      LOAN AND TERMS OF PAYMENT
       -------------------------

2.1    Credit Extensions.

       Borrower will pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit Extensions.

2.1.1  Revolving Advances.

       (a) Bank will make Advances not exceeding (i) the lesser of (A) the
Committed Revolving Line or (B) the Borrowing Base, minus (ii) the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit), minus (iii) the outstanding Equipment Advances.  Amounts borrowed under
this Section may be repaid and reborrowed without penalty or premium during the
term of this Agreement.

       (b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 3:00 p.m. Pacific time on the Business Day the Advance is to be
made.  Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B.  Bank will credit Advances to
Borrower's deposit account.  Bank may make Advances under this Agreement based
on instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become
due.  Bank may rely on any telephone notice given by a person whom Bank believes
is a Responsible Officer or designee. Borrower will indemnify Bank for any loss
Bank suffers due to such reliance unless caused by Bank's gross negligence or
intentional misconduct.

       (c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances are immediately payable.

                                       4
<PAGE>

2.1.2  Letters of Credit Sublimit.

       Bank will issue or have issued Letters of Credit for Borrower's account
not exceeding (i) the lesser of the Committed Revolving Line or the Borrowing
Base minus (ii) the outstanding principal balance of the Advances; however, the
face amount of outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit) may not exceed $1,500,000. Each Letter of Credit will have an
expiry date of no later than 180 days after the Revolving Maturity Date, but
Borrower's reimbursement obligation will be secured by cash on terms acceptable
to Bank at any time after the Revolving Maturity Date if the term of this
Agreement is not extended by Bank. Borrower agrees to execute any further
documentation in connection with the Letters of Credit as Bank may reasonably
request.

2.1.3  Equipment Advances Sublimit.

       (a) Through March 23, 2000 (the "Equipment Availability End Date"), Bank
will make advances ("Equipment Advance" and, collectively, "Equipment Advances")
not exceeding the lesser of (A) the Committed Revolving Line or (B) the
Borrowing Base, minus (ii) the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit), minus (iii) the
outstanding Advances.  The Equipment Advances may only be used to finance
Equipment and may not exceed 100% of the equipment invoice excluding taxes,
shipping, warranty charges, freight discounts and installation expense.
Notwithstanding the foregoing, the purpose of the initial Equipment Advance
shall be to pay off all current outstanding Obligations under the Committed
Equipment Line as described in the Original Agreement (the "Initial Equipment
Advance").

       (b) Interest accrues from the date of each Equipment Advance at the rate
in Section 23. Equipment Advances are payable in 36 equal monthly installments
of principal, plus accrued interest, beginning on the last day of each month
following the subject Equipment Advance and ending the 36 month following the
subject Equipment Advance. On March 23, 2003 (the "Equipment Maturity Date") all
remaining outstanding Equipment Advances and all interest accrued but not paid
shall be due and payable. Equipment Advances when repaid may not be reborrowed.
Notwithstanding the terms and conditions contained in this paragraph, the
Initial Equipment Advance shall continue to amortize under the terms of the
Original Agreement, without interruption, but shall in all other respects be
subject to the terms and conditions of this Agreement.

       (c) To obtain an Equipment Advance, Borrower must notify Bank (the notice
is irrevocable) by facsimile no later than 3:00 p.m. Pacific time 1 Business Day
before the day on which the Equipment Advance is to be made.  The notice in the
form of Exhibit B (Payment/Advance Form) must be signed by a Responsible Officer
or designee and include a copy of the invoice for the Equipment being financed.

2.2    Overadvances.

       If Borrower's Obligations under Section 211, 212 and 2.1.3 exceed the
lesser of either (i) the Committed Revolving Line or (ii) the Borrowing Base,
Borrower must immediately pay Bank the excess.

2.3    Interest Rate, Payments.

       (a) Interest Rate.  (i) Advances accrue interest on the outstanding
principal balance at a per annum rate of 0.75 percentage points above the Prime
Rate; and (ii) Equipment Advances accrue interest on the outstanding principal
balance at a per annum rate of 0.75 percentage points above the Prime Rate.
During and after an Event of Default, Obligations accrue interest at 5 percent
above the rate effective immediately before the Event of Default. The interest
rate

                                       5
<PAGE>

increases or decreases when the Prime Rate changes. Interest is computed on a
360 day year for the actual number of days elapsed.

       (b) Payments.  Interest due on the Committed Revolving Line is payable on
the 22nd of each month.  Interest due on the Equipment Advances is payable on
the 23rd of each month.  Bank may debit any of Borrower's deposit accounts
including Account Number ______________________________________ for principal
and interest payments owing or any amounts Borrower owes Bank.  Bank will
promptly notify Borrower when it debits Borrower's accounts.  These debits are
not a set-off.  Payments received after 12:00 noon Pacific time are considered
received at the opening of business on the next Business Day.  When a payment is
due on a day that is not a Business Day, the payment is due the next Business
Day and additional fees or interest accrue.

2.4    Fees.

       Borrower will pay:

       (a) Facility Fee. A fully earned, non-refundable Facility Fee of $60,000,
less the Good Faith Deposit described below, for the Committed Revolving Line
due on the Closing Date; and

       (b) Bank Expenses. All Bank Expenses (including reasonable attorneys'
fees and reasonable expenses) incurred through and after the date of this
Agreement, are payable when due.

       (c) Good Faith Deposit.  Borrower has paid to Bank a Good Faith Deposit
of $10,000 to initiate Banks due diligence review process. Any portion of the
deposit not utilized to pay expenses, will be applied on a pro rata basis to the
Facility Fee, above.

3      CONDITIONS OF LOANS
       -------------------

3.1    Conditions Precedent to Initial Credit Extension.

       Bank's obligation to make the initial Credit Extension is subject to the
condition precedent that it receive the agreements, documents and fees it
requires.

       Prior to the initial Credit Extension (other than the Initial Equipment
Advance), Bank shall audit Borrower's Collateral with results satisfactory to
Bank.

3.2    Conditions Precedent to all Credit Extensions.

       Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:

       (a) timely receipt of any Payment/Advance Form; and

       (b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective date of each
Credit Extension and no Event of Default may have occurred and be continuing, or
result from the Credit Extension. Each Credit Extension is Borrower's
representation and warranty on that date that the representations and warranties
of Section 5 remain true.

                                       6
<PAGE>

4      CREATION OF SECURITY INTEREST
       -----------------------------

4.1    Grant of Security Interest.

       Borrower grants Bank a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and performance
of each of Borrower's duties under the Loan Documents.  Except for Permitted
Liens, any security interest will be a first priority security interest in the
Collateral.  Bank may place a "hold" on any deposit account pledged as
Collateral. If this Agreement is terminated, Bank's lien and security interest
in the Collateral will continue until Borrower fully satisfies its Obligations.

5      REPRESENTATIONS AND WARRANTIES
       ------------------------------

       Borrower represents and warrants as follows:

5.1    Due Organization and Authorization.

       Borrower and each Subsidiary is duly existing and in good standing in its
state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified, except where the failure to do so could
not reasonably be expected to cause a Material Adverse Change.

       The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's formation documents, nor
constitute an event of default under any material agreement by which Borrower is
bound.  Borrower is not in default under any agreement to which or by which it
is bound in which the default could reasonably be expected to cause a Material
Adverse Change.

5.2    Collateral.

       Borrower has good title to the Collateral, free of Liens except Permitted
Liens.  The Accounts are bona fide, existing obligations, and the service or
property has been performed or delivered to the account debtor or its agent for
immediate shipment to and unconditional acceptance by the account debtor.
Borrower has no notice of any actual or imminent Insolvency Proceeding of any
account debtor whose accounts are an Eligible Account in any Borrowing Base
Certificate.  All Inventory is in all material respects of good and marketable
quality, free from material defects.

5.3    Litigation.

       Except as shown in the Schedule, there are no actions or proceedings
pending or, to the knowledge of Borrower's Responsible Officers, threatened by
or against Borrower or any Subsidiary  in which a likely adverse decision could
reasonably be expected to cause a Material Adverse Change.

5.4    No Material Adverse Change in Financial Statements.

       All consolidated financial statements for Borrower, and any Subsidiary,
delivered to Bank fairly present in all material respects Borrower's
consolidated financial condition and Borrower's consolidated results of
operations.  There has not been any material deterioration in Borrower's
consolidated financial condition since the date of the most recent financial
statements submitted to Bank.

                                       7
<PAGE>

5.5    Solvency.

       The fair salable value of Borrower's assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; the Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.

5.6    Regulatory Compliance.

       Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act.  Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations T and U of the Federal Reserve Board of Governors).  Borrower has
complied in all material respects with the Federal Fair Labor Standards Act.
Borrower has not violated any laws, ordinances or rules, the violation of which
could reasonably be expected to cause a Material Adverse Change.  None of
Borrower's or any Subsidiary's properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally.  Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted, except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change.

5.7    Subsidiaries.

       Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.

5.8    Full Disclosure.

       No written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading.  It
being recognized by Bank that the projections and forecasts provided by Borrower
in good faith and based upon reasonable assumptions are not viewed as facts and
that actual results during the period or periods covered by such projections and
forecasts may differ from the projected and forecasted results.

6      AFFIRMATIVE COVENANTS
       ---------------------

       Borrower will do all of the following:

6.1    Government Compliance.

       Borrower will maintain its and all Subsidiaries' legal existence and good
standing in its jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to
cause a material adverse effect on Borrower's business or operations.  Borrower
will comply, and have each Subsidiary comply, with all laws, ordinances and
regulations to which it is subject, noncompliance with which could have a
material adverse effect on Borrower's business or operations or would reasonably
be expected to cause a Material Adverse Change.

                                       8
<PAGE>

6.2    Financial Statements, Reports, Certificates.

       (a) Borrower will deliver to Bank: (i) as soon as available, but no later
than 30 days after the last day of each month, a company prepared consolidated
balance sheet and income statement covering Borrower's consolidated operations
during the period, in a form and certified by a Responsible Officer reasonably
acceptable to Bank; (ii) as soon as available, but no later than 90 days after
the last day of Borrower's fiscal year, audited consolidated financial
statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified
public accounting firm reasonably acceptable to Bank; (iii) a prompt report of
any legal actions pending or threatened against Borrower or any Subsidiary that
could reasonably be expected to result in damages or costs to Borrower or any
Subsidiary of $100,000 or more; and (iv) budgets, sales projections, operating
plans or other financial information Bank reasonably requests.

       (b) Within 30 days after the last day of each month (or within 5 days
after the 1/st/ and 15/th/ of each month if Borrower's outstanding Credit
Extensions exceed $6,000,000), Borrower will deliver to Bank a Borrowing Base
Certificate signed by a Responsible Officer in the form of Exhibit C, with aged
listings of accounts receivable and accounts payable.

       (c) Within 30 days after the last day of each month, Borrower will
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit D.

       (d) Bank has the right to audit Borrower's Collateral at Borrower's
expense, but the audits will be conducted no more often than once every year
unless an Event of Default has occurred and is continuing.

6.3    Inventory; Returns.

       Borrower will keep all Inventory in good and marketable condition, free
from material defects.  Returns and allowances between Borrower and its account
debtors will follow Borrower's customary practices as they exist at execution of
this Agreement.  Borrower must promptly notify Bank of all returns, recoveries,
disputes and claims, that involve more than $50,000.

6.4    Taxes.

       Borrower will make, and cause each Subsidiary to make, timely payment of
all material federal, state, and local taxes or assessments unless contested in
good faith with adequate reserves in accordance with GAAP and will deliver to
Bank, on demand, appropriate certificates attesting to the payment.

6.5    Insurance.

       Borrower will keep its business and the Collateral insured for risks and
in amounts, as Bank may reasonably request. Insurance policies will be in a
form, with companies, and in amounts that are customary for companies in
Borrower's industry. All property policies will have a lender's loss payable
endorsement showing Bank as an additional loss payee and all liability policies
will show the Bank as an additional insured and provide that the insurer must
give Bank at least 20 days notice before canceling its policy. At Bank's
request, Borrower will deliver certified copies of policies and evidence of all
premium payments. Proceeds payable under any policy will, at Bank's option, be
payable to Bank on account of the Obligations.

6.6    Primary Accounts.

       Borrower will maintain its primary depository and operating accounts with
Bank.

                                       9
<PAGE>

6.7    Financial Covenants.

       Borrower will maintain as of the last day of each month:

          (i) Quick Ratio.  A ratio of Quick Assets to Current Liabilities
(including all Obligations owing to Bank) of at least 1.50 to 1.00.

          (ii) Tangible Net Worth.  Beginning month ended June 30, 1999, a
Tangible Net Worth of at least $10,000,000 plus 80% of monthly net profits,
without netting for losses, plus 80% of any new equity greater than $15,000,000.

6.8    Further Assurances.

       Borrower will execute any further instruments and take further action as
Bank reasonably requests to perfect or continue Bank's security interest in the
Collateral or to effect the purposes of this Agreement.

7      NEGATIVE COVENANTS
       ------------------

       Borrower will not do any of the following without Bank's prior written
consent, which will not be unreasonably withheld:

7.1    Dispositions.

       Convey, sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, other than Transfers (i) of Inventory in the ordinary
course of business; (ii) of non-exclusive licenses and similar arrangements for
the use of the property of Borrower or its Subsidiaries in the ordinary course
of business; or (iii) of worn-out or obsolete Equipment.

7.2    Changes in Business, Ownership, Management or Business Locations.

       Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower or reasonably related
thereto or have a material change in its ownership or management (other than the
sale of Borrower's equity securities in a public offering or to venture capital
investors approved by Bank) of greater than 25%. Borrower will not, without at
least 30 days prior written notice, relocate its chief executive office or add
any new offices or business locations.

7.3    Mergers or Acquisitions.

       Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this
Agreement and (ii) result in a decrease of more than 25% of Tangible Net Worth.
A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

7.4    Indebtedness.

       Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

                                       10
<PAGE>

7.5    Encumbrance.

       Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
any Collateral not to be subject to the first priority security interest granted
here, subject to Permitted Liens.

7.6    Distributions; Investments.

       Except as permitted by Section 7.3, directly or indirectly acquire or own
any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so.  Pay any dividends or
make any distribution or payment or redeem, retire or purchase any capital
stock.

7.7    Transactions with Affiliates.

       Directly or indirectly enter or permit any material transaction with any
Affiliate except transactions that are in the ordinary course of Borrower's
business, on terms less favorable to Borrower than would be obtained in an arm's
length transaction with a non-affiliated Person.

7.8    Subordinated Debt.

       Make or permit any payment on any Subordinated Debt, except under the
terms of the Subordinated Debt, or amend any provision in any document relating
to the Subordinated Debt without Bank's prior written consent.

7.9    Compliance.

       Become an "investment company" or a company controlled by an "investment
company," under the Investment Company Act of 1940 or undertake as one of its
important activities extending credit to purchase or carry margin stock, or use
the proceeds of any Credit Extension for that purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, if the violation
could reasonable be expected to have a material adverse effect on Borrower's
business or operations or would reasonably be expected to cause a Material
Adverse Change, or permit any of its Subsidiaries to do so.

8      EVENTS OF DEFAULT
       -----------------

       Any one of the following is an Event of Default:

8.1    Payment Default.

       If Borrower fails to pay any of the Obligations within 3 days after their
due date.  During the additional period the failure to cure the default is not
an Event of Default (but no Credit Extension will be made during the cure
period);

8.2    Covenant default.

       If Borrower does not perform any obligation in Section 6 or violates any
covenant in Section 7 or does not perform or observe any other material term,
condition or covenant in this Agreement, any Loan Documents, or in any agreement
between Borrower and Bank and as to any default under a term, condition or
covenant that can be cured, has not cured the default within 10 days after it
occurs, or if the default cannot be cured within 10 days or cannot be cured
after Borrower's attempts within 10 day period, and the default may be cured
within a reasonable

                                       11
<PAGE>

time, then Borrower has an additional period (of not more than 30 days) to
attempt to cure the default. During the additional time, the failure to cure the
default is not an Event of Default (but no Credit Extensions will be made during
the cure period);

8.3    Material Adverse Change.

       (i) If there occurs a material impairment in the perfection or priority
of the Bank's security interest in the Collateral or in the value of such
Collateral (other than normal depreciation) which is not covered by adequate
insurance or (ii) if the Bank determines, based upon information available to it
and in its reasonable judgment, that there is a reasonable likelihood that
Borrower will fail to comply with one or more of the financial covenants in
Section 6 during the next succeeding financial reporting period.

8.4    Attachment.

       If any material portion of Borrower's assets is attached, seized, levied
on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower's assets by any government agency and not paid within 10 days
after Borrower receives notice.  These are not Events of Default if stayed or if
a bond is posted pending contest by Borrower (but no Credit Extensions will be
made during the cure period);

8.5    Insolvency.

       If Borrower becomes insolvent or if Borrower begins an Insolvency
Proceeding or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);

8.6    Other Agreements.

       If there is a default in any agreement between Borrower and a third party
that gives the third party the right to accelerate any Indebtedness exceeding
$100,000 or that could cause a Material Adverse Change;

8.7    Judgments.

       If a money judgment(s) in the aggregate of at least $50,000 is rendered
against Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied); or

8.8    Misrepresentations.

       If Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document.

9      BANK'S RIGHTS AND REMEDIES
       --------------------------

9.1    Rights and Remedies.

       When an Event of Default occurs and continues Bank may, without notice or
demand, do any or all of the following:

                                       12
<PAGE>

       (a) Declare all Obligations immediately due and payable (but if an Event
of Default described in Section 85 occurs all Obligations are immediately due
and payable without any action by Bank);

       (b) Stop advancing money or extending credit for Borrower's benefit under
this Agreement or under any other agreement between Borrower and Bank;

       (c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that is commercially reasonable or that
Bank considers advisable;

       (d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower will
assemble the Collateral if Bank requires and make it available as Bank
reasonably designates. Bank may enter premises where the Collateral is located,
take and maintain possession of any part of the Collateral, and pay, purchase,
contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Borrower grants Bank a license
to enter and occupy any of its premises, without charge, to exercise any of
Bank's rights or remedies;

       (e) Apply to the Obligations any (i) balances and deposits of Borrower it
holds, or (ii) any amount held by Bank owing to or for the credit or the account
of Borrower;

       (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral; and

       (g) Dispose of the Collateral according to the Code.

9.2    Power of Attorney.

       Effective only when an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as its lawful attorney to:  (i) endorse Borrower's
name on any checks or other forms of payment or security; (ii) sign Borrower's
name on any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower's insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines reasonable; and
(v) transfer the Collateral into the name of Bank or a third party as the Code
permits.  Bank may exercise the power of attorney to sign Borrower's name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred.  Bank's
appointment as Borrower's attorney in fact, and all of Bank's rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully
repaid and performed and Bank's obligation to provide Credit Extensions
terminates.

9.3    Accounts Collection.

       When an Event of Default occurs and continues, (a) Bank may notify any
Person owing Borrower money of Bank's security interest in the funds and verify
the amount of the Account, and (b) Borrower must collect all payments in trust
for Bank and, if requested by Bank, immediately deliver the payments to Bank in
the form received from the account debtor, with proper endorsements for deposit.

9.4    Bank Expenses.

       If Borrower fails to pay any amount or furnish any required proof of
payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 65, and take any action under the
policies Bank deems prudent.  Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then

                                       13
<PAGE>

applicable rate and secured by the Collateral. No payments by Bank are deemed an
agreement to make similar payments in the future or Bank's waiver of any Event
of Default.

9.5    Bank's Liability for Collateral.

       If Bank complies with reasonable banking practices and Section 9-207 of
the Code, it is not liable for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other person. Borrower bears all risk of loss, damage or destruction of the
Collateral when in Borrower's or any other party's control and possession.

9.6    Remedies Cumulative.

       Bank's rights and remedies under this Agreement, the Loan Documents, and
all other agreements are cumulative.  Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank's exercise of one right or remedy is
not an election, and Bank's waiver of any Event of Default is not a continuing
waiver. Bank's delay is not a waiver, election, or acquiescence. No waiver is
effective unless signed by Bank and then is only effective for the specific
instance and purpose for which it was given.

9.7    Demand Waiver.

       Borrower waives demand, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

10     NOTICES
       -------

       All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile to the addresses set forth at the beginning of
this Agreement.  A party may change its notice address by giving the other party
written notice.

11     CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
       ------------------------------------------

       California law governs the Loan Documents without regard to principles of
conflicts of law.  Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Santa Clara County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12     GENERAL PROVISIONS
       ------------------

12.1   Successors and Assigns.

       This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any
rights under it without Bank's prior written consent which may be granted or
withheld in Bank's discretion. Bank has the right,

                                       14
<PAGE>

without the consent of or notice to Borrower, to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits under this Agreement.

12.2   Indemnification.

       Borrower will indemnify, defend and hold harmless Bank and its officers,
employees, and agents against: (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except with respect to (a) and (b) above for losses caused by Bank's gross
negligence or willful misconduct.

12.3   Time of Essence.

       Time is of the essence for the performance of all obligations in this
Agreement.

12.4   Severability of Provision.

       Each provision of this Agreement is severable from every other provision
in determining the enforceability of any provision.

12.5   Amendments in Writing, Integration.

       All amendments to this Agreement must be in writing and signed by
Borrower and Bank. This Agreement represents the entire agreement about this
subject matter, and supersedes prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement merge into this
Agreement and the Loan Documents.

12.6   Counterparts.

       This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.

12.7   Survival.

       All covenants, representations and warranties made in this Agreement
continue in full force while  any Obligations remain outstanding.  The
obligations of Borrower in Section 122 to indemnify Bank will survive until all
statutes of limitations for actions that may be brought against Bank have run.

12.8   Confidentiality.

       In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank's subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans, (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank's
examination or audit and (v) as Bank considers appropriate in exercising
remedies under this Agreement.  Confidential information does not include
information that either: (a) is in the public domain or in Bank's possession
when disclosed to Bank, or becomes part of the public domain after disclosure to
Bank; or (b) is disclosed to Bank by a third party, if Bank does not know that
the third party is prohibited from disclosing the information.

                                       15
<PAGE>

12.9   Effect of Amendment and Restatement.

       This Agreement is intended to and does completely amend and restate,
without novation, the Original Agreement. All credit extensions or loans
outstanding under the Original Agreement are and shall continue to be
outstanding under this Agreement. All security interests granted under the
Original Agreement are hereby confirmed and ratified and shall continue to
secure all Obligations under this Agreement.

12.10  Attorneys' Fees, Costs and Expenses.

       In any action or proceeding between Borrower and Bank arising out of the
Loan Documents, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other reasonable costs and expenses incurred, in addition to
any other relief to which it may be entitled.

13     DEFINITIONS
       -----------

13.1   Definitions.

       In this Agreement:

       "Accounts" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and  all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

       "Advance" or "Advances" is a loan advance (or advances) under the
Committed Revolving Line.

       "Affiliate" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

       "Bank Expenses" are all audit fees and expenses and reasonable costs and
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

       "Borrower's Books" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

       "Borrowing Base" is 80% of Eligible Accounts plus, as determined by Bank
from Borrower's most recent Borrowing Base Certificate.

       "Business Day" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed.

       "Closing date" is the date of this Agreement.

       "Code" is the California Uniform Commercial Code.

       "Collateral" is the property described on Exhibit A.
                                                 ---------

       "Committed Revolving Line" is an Advance of up to $12,000,000.

                                       16
<PAGE>

       "Contingent Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

       "Credit Extension" is each Advance, Equipment Advance, Letter of Credit,
or any other extension of credit by Bank for Borrower's benefit.

       "Current Liabilities" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.

       "Eligible Accounts" are Accounts in the ordinary course of Borrower's
business that meet all Borrower's representations and warranties in Section 5;
but Bank may change eligibility standards by giving Borrower prior written
---
notice.  Unless Bank agrees otherwise in writing, Eligible Accounts will not
include:

       (a) Accounts that the account debtor has not paid within 90 days of
       invoice date;

       (b) Accounts for an account debtor, 50% or more of whose Accounts have
       not been paid within 90 days of invoice date;

       (c) Credit balances over 90 days from invoice date;

       (d) Accounts for an account debtor, including Affiliates, whose total
       obligations to Borrower exceed 25% of all Accounts, for the amounts that
       exceed that percentage, unless the Bank approves in writing except for
       those certain Accounts from Sun Microsystems, Inc., Fuji Xerox, NEC and
       IBM, for which the percentage shall be 35% ;

       (e) Accounts for which the account debtor does not have its principal
       place of business in the United States except for Accounts in which the
       account debtor is Fuji Xerox and NEC;

       (f) Accounts for which the account debtor is a federal, state or local
       government entity or any department, agency, or instrumentality;

       (g) Accounts for which Borrower owes the account debtor, but only up to
       the amount owed (sometimes called "contra" accounts, accounts payable,
       customer deposits or credit accounts);

       (h) Accounts for demonstration or promotional equipment, or in which
       goods are consigned, sales guaranteed, sale or return, sale on approval,
       bill and hold, or other terms if account debtor's payment may be
       conditional;

       (i) Accounts for which the account debtor is Borrower's Affiliate,
       officer, employee, or agent;

                                       17
<PAGE>

       (j) Accounts in which the account debtor disputes liability or makes any
       claim and Bank believes there may be a basis for dispute (but only up to
       the disputed or claimed amount), or if the Account Debtor is subject to
       an Insolvency Proceeding, or becomes insolvent, or goes out of business;

       (k) Accounts for which Bank reasonably determines  collection to be
       doubtful.

       "Equipment" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

       "Equipment Advance" is defined in Section 213.

       "Equipment Availability End Date" is defined in Section 213.

       "Equipment Maturity Date" is defined in Section 213.

       "ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.

       "GAAP" is generally accepted accounting principles.

       "Indebtedness" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

       "Insolvency Proceeding" are proceedings by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

       "Inventory" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

       "Investment" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.

       "Letter of Credit" is defined in Section 212.

       "Lien" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

       "Loan Documents" are, collectively, this Agreement, the Negative Pledge
Agreement dated of even date herewith between Bank and Borrower, any note, or
notes or guaranties executed by Borrower or Guarantor, and any other present or
future agreement between Borrower and/or for the benefit of Bank in connection
with this Agreement, all as amended, extended or restated.

       "Material Adverse Change" is defined in Section 83.

       "Obligations" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including cash management services,
letters of credit and foreign

                                       18
<PAGE>

exchange contracts, if any and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
Bank.

       "Original Agreement" has the meaning set forth in recital paragraph A.

       "Permitted Indebtedness" is:

       (a)  Borrower's indebtedness to Bank under this Agreement or any other
Loan Document;

       (b)  Indebtedness existing on the Closing Date and shown on the Schedule;

       (c)  Subordinated Debt;

       (d)  Indebtedness to trade creditors incurred in the ordinary course of
business;

       (e)  Indebtedness secured by Permitted Liens;

       (f)  Other Indebtedness of Borrower, not exceeding $50,000 in the
aggregate outstanding at any time; and

       (g)  Extensions, renewals, refundings, refinancings, modifications,
amendments and restatements of any of the items of Permitted Indebtedness (a)
through (e) above, provided that the principal amount thereof is not increased
or the terms thereof are not modified to impose more burdensome terms upon
Borrower.

       "Permitted Investments" are:

       (a)  Investments shown on the Schedule and existing on the Closing Date;

       (b)  (i)  marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard & Poor's
Corporation or Moody's Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than 1 year after issue; and

       (c)  other Investments aggregating not in excess of $50,000 at any time

       "Permitted Liens" are:

       (a) Liens existing on the Closing Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;

       (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
                                                   --
any of Bank's security interests;

       (c) Purchase money Liens (i) on Equipment acquired or held by Borrower or
its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the
                                          --
property and  improvements and the proceeds of the equipment;

       (d) Leases or subleases and licenses or sublicenses granted in the
ordinary course of Borrower's business and any interest or title of a lessor,
licensor or under any lease or license, if the leases, subleases, licenses and
                                        --
sublicenses  permit granting Bank a security interest;

                                       19
<PAGE>

       (e) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
                                                            ---
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

       "Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

       "Prime Rate" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

       "Quick Assets" is, on any date, the Borrower's consolidated, unrestricted
cash, cash equivalents, net billed accounts receivable and investments with
maturities of fewer than 12 months determined according to GAAP.

       "Responsible Officer" is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.

       "Revolving Maturity Date" is September 22, 2000.

       "Schedule" is any attached schedule of exceptions.

       "Subordinated Debt" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (and identified as subordinated by Borrower and Bank).

       "Subsidiary" is for any Person, or any other business entity of which
more than 50% of the voting stock or other equity interests is owned or
controlled, directly or indirectly, by the Person or one or more Affiliates of
the Person.

       "Tangible Net Worth" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (i) any amounts attributable to (a)
                              -----
goodwill, (b) intangible items such as unamortized debt discount and expense,
Patents, trade and service marks and names, Copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities.
                      ---

       "Total Liabilities" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

BORROWER:

Alteon Websystems, Inc.

By:____________________________________

Title:_________________________________

                                       20
<PAGE>

BANK:

SILICON VALLEY BANK

By:____________________________________

Title:_________________________________

                                       21
<PAGE>

                                   EXHIBIT A
                                   ---------

       The Collateral consists of all of Borrower's right, title and interest in
and to the following:

       All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

       All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;

       All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

       All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

       All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower's Books relating to the foregoing;

       All copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing; and

       All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.

       Notwithstanding the foregoing, the Collateral shall not be deemed to
include any copyrights, copyright applications, copyright registration and like
protection in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; any patents, patent
applications and like protections including without limitation improvements,
divisions, continuations, renewals, reissues, extensions and continuations-in-
part of the same, trademarks, servicemarks and applications therefor, whether
registered or not, and the goodwill of the business of Borrower connected with
and symbolized by such trademarks, any trade secret rights, including any rights
to unpatented inventions, know-how, operating manuals, license rights and
agreements and confidential information, now owned or hereafter acquired; or any
claims for damage by way of any past, present and future infringement of any of
the foregoing (collectively, the "Intellectual Property"), except that the
Collateral shall include the proceeds of all the Intellectual Property that are
accounts, (i.e. accounts receivable) of Borrower, or general intangibles
consisting of rights to payment, if a judicial authority (including a U.S.
Bankruptcy Court) holds that a security interest in the underlying Intellectual
Property is necessary to have a security interest in such accounts and general
intangibles of Borrower that are proceeds of the Intellectual Property, then the
Collateral shall automatically, and effective as of the Closing Date, include
the Intellectual Property to the extent necessary to permit perfection of Bank's
security interest in such accounts and general intangibles of Borrower that are
proceeds of the Intellectual Property.
<PAGE>

                                   EXHIBIT B
                                   ---------

                  LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

             DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.

TO: CENTRAL CLIENT SERVICE DIVISION               DATE:_________________________

FAX#:  (408) 496-2426                             TIME:_________________________

________________________________________________________________________________

FROM:  Alteon Websystems, Inc.
       -------------------------------------------------------------------------
                            CLIENT NAME (BORROWER)

REQUESTED BY:___________________________________________________________________
                           AUTHORIZED SIGNER'S NAME

AUTHORIZED SIGNATURE:___________________________________________________________

PHONE NUMBER:___________________________________________________________________

FROM ACCOUNT # ______________    TO ACCOUNT #___________________________________

REQUESTED TRANSACTION TYPE               REQUESTED DOLLAR AMOUNT
--------------------------               -----------------------

PRINCIPAL INCREASE (ADVANCE)             $______________________________________
PRINCIPAL PAYMENT (ONLY)                 $______________________________________
INTEREST PAYMENT (ONLY)                  $______________________________________
PRINCIPAL AND INTEREST (PAYMENT)         $______________________________________

OTHER INSTRUCTIONS:_____________________________________________________________

________________________________________________________________________________

All Borrower's representations and warranties in the Amended and Restated Loan
and Security Agreement are true, correct and complete in all material respects
on the date of the telephone request for and Advance confirmed by this Borrowing
Certificate; but those representations and warranties expressly referring to
another date shall be true, correct and complete in all material respects as of
that date.

________________________________________________________________________________
________________________________________________________________________________
                                 BANK USE ONLY

TELEPHONE REQUEST:
-----------------

The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.

-------------------------------                 --------------------------------
     Authorized Requester                                  Phone #

--------------------------------                --------------------------------
     Received By (Bank)                                    Phone #

                    ---------------------------------------
                          Authorized Signature (Bank)

________________________________________________________________________________
<PAGE>

<TABLE>
<CAPTION>
                                   EXHIBIT C
                          BORROWING BASE CERTIFICATE
______________________________________________________________________________________________________________________
<S>                                                                    <C>                       <C>
Borrower: Alteon Websystems, Inc.                                          Bank:                 Silicon Valley Bank
                                                                                                 3003 Tasman Drive
                                                                                                 Santa Clara, CA 95054

Commitment Amount: $12,000,000
______________________________________________________________________________________________________________________

ACCOUNTS RECEIVABLE
 1.       Accounts Receivable Book Value as of ______                                                $___________
 2.       Additions (please explain on reverse)                                                      $___________
 3.       TOTAL ACCOUNTS RECEIVABLE                                                                  $___________

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
 4.       Amounts over 90 days due                                     $___________
 5.       Balance of 50% over 90 day accounts                          $___________
 6.       Credit balances over 90 days                                 $___________
 7.       Concentration Limits*                                        $___________
 8.       Foreign Accounts**                                           $___________
 9.       Governmental Accounts                                        $___________
10.       Contra Accounts                                              $___________
11.       Promotion or Demo Accounts                                   $___________
12.       Intercompany/Employee Accounts                               $___________
13.       Other (please explain on reverse)                            $___________
14.       TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                                                       $___________
15.       Eligible Accounts (#3 minus #14)                                                           $___________
16.       LOAN VALUE OF ACCOUNTS (80% of #15)                                                        $___________
* 35% for Sun Microsystems, Inc., Fuji Xerox, NEC and IBM
** Except for Fuji Xerox and NEC

BALANCES
17.       Maximum Loan Amount                                          $___________
18.       Total Funds Available [Lesser of #17 or #16]                                               $___________
19.       Present balance owing on Line of Credit                      $___________
20.       Outstanding under Sublimits (LC and Equipment Advances)      $___________
21.       RESERVE POSITION (#18 minus #19 and #20)                                                   $___________
</TABLE>

The undersigned represents and warrants that this is true, complete and correct,
and that the information in this Borrowing Base Certificate complies with the
representations and warranties in the Amended and Restated Loan and Security
Agreement between the undersigned and Silicon Valley Bank.

COMMENTS:
                                                 ______________________________
                                                          BANK USE ONLY
                                                          ---- --- ----

                                                     Rec'd By: ____________
                                                               Auth. Signer
                                                     Date: ________________
Altteon Websystems, Inc
                                                     Verified: ____________
                                                               Auth. Signer
By:___________________________                       Date: ________________
       Authorized Signer
                                                     ______________________
                                                 _______________________________
<PAGE>

                                   EXHIBIT D
                            COMPLIANCE CERTIFICATE

TO:       SILICON VALLEY BANK
          3003 Tasman Drive
          Santa Clara, CA 95054

FROM:     ALTEON WEBSYSTEMS, INC.

       The undersigned authorized officer of Alteon Websystems, Inc.
("Borrower") certifies that under the terms and conditions of the Amended and
Restated Loan and Security Agreement between Borrower and Bank (the
"Agreement"), (i) Borrower is in complete compliance for the period ending
_______________ with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all
material respects on this date. Attached are the required documents supporting
the certification. The Officer certifies that these are prepared in accordance
with Generally Accepted Accounting Principles (GAAP) consistently applied from
one period to the next except as explained in an accompanying letter or
footnotes. The Officer acknowledges that no borrowings may be requested at any
time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date
this certificate is delivered.

 Please indicate compliance status by circling Yes/No under "Complies" column.

<TABLE>
<CAPTION>
     Reporting Covenant                               Required                                             Complies
     ------------------                               --------                                             --------
     <S>                                              <C>                                                 <C>
     Monthly financial statements + CC                Monthly within 30 days                              Yes     No
     Annual (Audited)                                 FYE within 90 days                                  Yes     No
     A/R & A/P Agings*                                Monthly within 20 days                              Yes     No
     Borrowing Base Certificate*                      Monthly within 30 days                              Yes     No
     *Within 5 days after the 1/st/ and 15/th/ of each month if Borrower's Credit Extensions excess $6,000,000.

<CAPTION>
     Financial Covenant                               Required                      Actual                 Complies
     ------------------                               --------                      ------                 --------
     <S>                                              <C>                          <C>                    <C>
     Maintain on a Monthly Basis:
      Minimum Quick Ratio**                           1.50:1.00                    _____:1.00             Yes     No
      Minimum Tangible Net Worth                      $10,000,000***               $_________             Yes     No
</TABLE>

     **Defined as a ratio of Quick Assets to Current Liabilities (including all
Obligations owing to Bank).
     ***Plus 80% of monthly net profits, without netting for losses, plus 80%
any new equity greater than $15,000,000.

Comments Regarding Exceptions: See Attached
                                           ------------------------------------
                                                       BANK USE ONLY

                                           Received by:________________________
                                                         AUTHORIZED SIGNER
Sincerely,

                                           Date:_______________________________
Alteon Websystems, Inc.
                                           Verified:___________________________
                                                         AUTHORIZED SIGNER
__________________________________
Signature
                                           Date:_______________________________
__________________________________
Title                                      Compliance Status:      Yes     No
                                           ------------------------------------
__________________________________
Date
<PAGE>

                              SILICON VALLEY BANK

                      PRO FORMA INVOICE FOR LOAN CHARGES

BORROWER:           Alteon Websystems, Inc.

LOAN OFFICER:       Pete Lopez

DATE:               September 23, 1999

                    Revolving Loan Fee    $60,000.00
                    Credit Report              35.00
                    Documentation Fee         750.00
                    Legal Fee                 250.00

                    Previously Paid        10,000.00

                    TOTAL FEE DUE         $51,035.00
                    -------------         ==========

Please indicate the method of payment:

        { } A check for the total amount is attached.

        { } Debit DDA # __________________ for the total amount.

        { } Loan proceeds

Borrower:

By:________________________________
   (Authorized Signer)

___________________________________
Silicon Valley Bank          (Date)
Account Officer's Signature
<PAGE>

                           NEGATIVE PLEDGE AGREEMENT

     This Negative Pledge Agreement is made as of September 23, 1999 by and
between Alteon Websystems, Inc. ("Borrower") and Silicon Valley Bank ("Bank").

In connection with, among other documents, the Loan and Security Agreement (the
"Loan Documents") being concurrently executed herewith between Borrower and
Bank, Borrower agrees as follows:

     1.   Borrower shall not sell, transfer, assign, mortgage, pledge, lease,
          grant a security interest in, or encumber any of Borrower's
          intellectual property, including, without limitation, the following:

          a.   Any and all copyright rights, copyright applications, copyright
               registrations and like protections in each work or authorship and
               derivative work thereof, whether published or unpublished and
               whether or not the same also constitutes a trade secret, now or
               hereafter existing, created, acquired or held;

          b.   All mask works or similar rights available for the protection of
               semiconductor chips, now owned or hereafter acquired;

          c.   Any and all trade secrets, and any and all intellectual property
               rights in computer software and computer software products now or
               hereafter existing, created, acquired or held;

          d.   Any and all design rights which may be available to Borrower now
               or hereafter existing, created, acquired or held;

          e.   All patents, patent applications and like protections including,
               without limitation, improvements, divisions, continuations,
               renewals, reissues, extensions and continuations-in-part of the
               same, including without limitation the patents and patent
               applications;

          f.   Any trademark and servicemark rights, whether registered or not,
               applications to register and registrations of the same and like
               protections, and the entire goodwill of the business of Borrower
               connected with and symbolized by such trademarks, including
               without limitation;

          g.   Any and all claims for damages by way of past, present and future
               infringements of any of the rights included above, with the
               right, but not the obligation, to sue for and collect such
               damages for said use or infringement of the intellectual property
               rights identified above;

          h.   All licenses or other rights to use any of the Copyrights,
               Patents, Trademarks or Mask Works, and all license fees and
               royalties arising from such use to the extent permitted by such
               license or rights; and

          i.   All amendments, extensions, renewals and extensions of any of the
               Copyrights, Trademarks, Patents, or Mask Works; and

          j.   All proceeds and products of the foregoing, including without
               limitation all payments under insurance or any indemnity or
               warranty payable in respect of any of the foregoing;

          Notwithstanding the foregoing, Borrower may license its Intellectual
          Property on a non-exclusive basis in the ordinary course of Borrower's
          business.

     2.   It shall be an event of default under the Loan Documents between
          Borrower and Bank if there is a breach of any term of this Negative
          Pledge Agreement.

<PAGE>

3.   Capitalized terms used but not otherwise defined herein shall have the same
     meaning as in the Loan Documents.

BORROWER:

Alteon Websystems, Inc.

By:__________________________
Name:________________________
Title:_______________________

BANK:

SILICON VALLEY BANK

By:__________________________
Name:________________________
Title:_______________________

                                       2
<PAGE>

                        CORPORATE BORROWING RESOLUTION

BOrrower: Alteon Websystems, Inc.           Bank:  Silicon Valley Bank
          50 Great Oaks Blvd.                      3003 Tasman Drive
          San Jose, Ca 95119                       Santa Clara, Ca 95054-1191

I, the Secretary or Assistant Secretary of Alteon Websystems, Inc. ("Borrower"),
CERTIFY that Borrower is a corporation existing under the laws of the State of
Delaware.

I certify that at a meeting of Borrower's Directors (or by other authorized
corporate action) duly held the following resolutions were adopted.

It is resolved that any one of the following officers of Borrower, whose name,
title and signature is below:

     NAMES                      POSITIONS                ACTUAL SIGNATURES
     -----                      ---------                -----------------

_____________________  _________________________  _____________________________

_____________________  _________________________  _____________________________

_____________________  _________________________  _____________________________

_____________________  _________________________  _____________________________

may act for Borrower and:

     Borrow Money.  Borrow money from Silicon Valley Bank ("Bank").

     Execute Loan Documents.  Execute any loan documents Bank requires,
     including but not limited to a Negative Pledge Agreement with respect to
     Borrower's Intellectual Property.

     Grant Security.  Grant Bank a security interest in any of Borrower's
     assets.

     Negotiate Items.  Negotiate or discount all drafts, trade acceptances,
     promissory notes, or other indebtedness in which Borrower has an interest
     and receive cash or otherwise use the proceeds.

     Letters of Credit.  Apply for letters of credit from Bank.

     Foreign Exchange Contracts.  Execute spot or forward foreign exchange
     contracts.

     Issue Warrants.  Issue warrants for Borrower's stock.

     Further Acts.  Designate other individuals to request advances, pay fees
     and costs and execute other documents or agreements (including documents or
     agreement that waive Borrowers right to a jury trial) they think necessary
     to effectuate these Resolutions.

Further resolved that all acts authorized by these Resolutions and performed
before they were adopted are ratified. These Resolutions remain in effect and
Bank may rely on them until Bank receives written notice of their revocation.

I certify that the persons listed above are Borrower's officers with the titles
and signatures shown following their names and that these resolutions have not
been modified are currently effective.
<PAGE>

CERTIFIED TO AND ATTESTED BY:

X ______________________________________________
  *Secretary or Assistant Secretary

X ______________________________________________
*NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, this resolution should
also be signed by a second Officer or Director of Borrower.

                                       2THE TIREX CORPORATION

                               EXECUTIVE AGREEMENT

         THIS EXECUTIVE  AGREEMENT (the "Agreement") is made and entered into as
of this 26th day of February 1999 by and among:

                                 The Tirex Corporation
                                 740 St. Maurice, Suite 201
                                 Montreal, Quebec
                                 Canada H3C 1L5
                                                             (the "Corporation")

                                 Michael Ash
                                 310 Montee Sabourin
                                 St. Bruno PQ
                                 J3V 4P6

                                                               (the "Executive")

         WHEREAS, The Tirex Corporation (the "Corporation"),  is a publicly-held
Delaware   corporation,   the   common   stock  of  which  is   traded   in  the
over-the-counter  market in the  United  States  and  quoted  on the  electronic
bulletin  board of the  National  Association  of  Securities  Dealers (the "OTC
Bulletin Board").

         WHEREAS,  The  Corporation  desires to employ the  Executive  as a Vice
President  of the  Corporation  and the  Executive  is  willing  to accept  such
employment by the  Corporation,  on the terms and subject to the  conditions set
forth in this Agreement.

         WHEREAS,  The Corporation is in very early stages of development,  with
very limited  assets,  income,  operations,  and financial  resources on hand to
finance  the  development  of their  technology  and the  commencement  of their
commercial  operations.  Their future  financial  prospects  and  positions  are
therefore highly  contingent and, as at the date hereof,  impossible to predict.
Based upon the  foregoing,  the  Corporation's  Board of Directors  believe that
unregistered shares of the Corporation's common stock, which cannot be sold into
the public market for an extended  period of time,  may  reasonably be deemed to

<PAGE>

have a value which  reflects  the  Corporation's  poor  financial  position  and
uncertain  future,  and  can  reasonably  be  expected  to be  saleable  by  the
Corporation, in arm's length transactions, for approximately fifty percent (50%)
of the current market value of the publicly traded stock of the Corporation,  or
for substantially less.

         NOW THEREFORE, IT IS AGREED AS FOLLOWS:

1.       DEFINITIONS

         For the purposes of this  Agreement the following  terms shall have the
following meanings:

         1.0  THE  "CORPORATION"  shall  mean  the  Corporation  and  all  other
corporations,  partnerships,  or other entities, now or in the future controlled
by the Corporation, jointly and severally.

         1.1  "CHANGE IN CONTROL"  shall mean (i) the time that the  Corporation
first  determines  that any person and all other persons who  constitute a group
(within the meaning of Section  13(d)(3) of the Securities  Exchange Act of 1934
("Exchange Act") have acquired direct or indirect  beneficial  ownership (within
the meaning of Rule 13d-3 under the  Exchange  Act) of twenty  percent  (20%) or
more of the  Corporation's  outstanding  securities,  unless a  majority  of the
"Continuing  Directors",  as that term is defined in Paragraph 1.3, approves the
acquisition  not later than ten (10) business days after the  Corporation  makes
that determination,  or (ii) the first day on which a majority of the members of
the Corporation's Board of Directors are not "Continuing Directors."

         1.2 "CONTINUING DIRECTORS" shall mean, as of any date of determination,
any member of the Board of Directors of the  Corporation who (i) was a member of
that Board of  Directors  on January  19,  1995,  (ii) has been a member of that
Board  of  Directors  for the  two  years  immediately  preceding  such  date of
determination,  or (iii) was  nominated  for election or elected to the Board of
Directors  with the  affirmative  vote of the  greater of (x) a majority  of the
Continuing  Directors  who  were  members  of the  Board  at the  time  of  such
nomination or election or (y) at least four Continuing Directors.

         1.3 "EFFECTIVE DATE"  shall mean January 4, 1999.

                                       2
<PAGE>

         .4 "TERMINATION FOR CAUSE" shall mean termination by the Corporation of
the  Executive's  employment  by reason of the  Executive's  willful  dishonesty
towards,   fraud  upon,  or  deliberate  injury  or  attempted  injury  to,  the
Corporation  or by reason of the  Executive's  willful  material  breach of this
Agreement   which  has   resulted  in  material   injury  to  the   Corporation.
Notwithstanding  the foregoing,  the Executive  shall not be deemed to have been
terminated for Cause without (i) Written  notice to the Executive  setting forth
the reasons for the  Corporation's  intention  to terminate  for Cause,  (ii) an
opportunity on not less than 20 days written notice from the  Corporation to the
Executive for the Executive,  together with his counsel,  to be heard before the
full Board of Directors of the Corporation,  and (iii) delivery to the Executive
of a Notice of  Termination as defined in Paragraph 6.9 hereof from the Board of
Directors  finding that,  following such hearing  before the Board,  in the good
faith opinion of such Board, the Executive was guilty of conduct set forth above
and specifying the particulars thereof in detail.

         1.5  "TERMINATION  FOR 'GOOD  REASON'"  shall mean  termination  by the
Executive of the  Executive's  employment by the  Corporation  because of: (i) a
"Change in Control",  as defined in Paragraph 1.1, above,  (ii) a failure by the
Corporation to comply with any material  provision of this  Agreement  which has
not been cured within ten (10) days after notice of such  noncompliance has been
given by the  Executive  to the  Corporation,  (iii)  the  determination  by the
Executive that because of changes in the composition or policies of the Board of
Directors  of the  Corporation,  or of other events or  occurrences  of material
effect, that the Executive can no longer properly and effectively  discharge his
responsibilities  as a  Vice  President  of the  Corporation  after  giving  the
Corporation not less than thirty (30) days prior written notice of the effective
date of such termination,  or (iv) any purported  termination of the Executive's
employment which is not effected pursuant to a Notice of Termination  satisfying
the  requirements of Paragraph 6.9 hereof (and for purposes of this agreement no
such purported termination shall be effective).

         1.6  "TERMINATION  OTHER THAN FOR CAUSE" shall mean  termination by the
Corporation of the Executive's  employment by the  Corporation  (other than in a
Termination for Cause).

         1.7 "TERMINATION  UPON A CHANGE IN CONTROL" shall mean a termination by
the  Corporation of the Executive's  employment with the Corporation  within 120
days following a "Change in Control", as that term is defined in Paragraph 1.1.

         1.8 "VOLUNTARY  TERMINATION" shall mean termination by the Executive of
the Executive's  employment by the Corporation other than (i) Termination Upon a
Change in Control or (ii)  Termination for Good Reason,  and (iv) termination by
reason of the Executive's death or disability as described in Paragraphs 6.4 and
6.5.

                                       3
<PAGE>
2.       EMPLOYMENT

         During the term of this Agreement,  the Executive agrees to be employed
by the Corporation and to serve as Secretary,  Treasurer and Chief Financial and
Accounting  Officer  of  the  Corporation  or in  such  other  positions  as the
Corporation shall require,  and the Corporation  agrees to employ and retain the
Executive in such capacities.

3.       DUTIES AND RESPONSIBILITIES

         3.1 TIME AND REPORTING OBLIGATIONS. The Executive shall devote his full
time, energy, and skills to the affairs of the Corporation, reporting solely and
exclusively  to Terence C. Byrne,  the  President  and Chief  Executive  Officer
thereof, or such other person as Mr. Byrne shall designate.

         3.2 DUTIES. The Executive's duties and responsibilities  shall include,
but may not be limited to the normal duties and  responsibilities  of the office
or offices set forth in Section 2, above.

         3.3  OTHER  ACTIVITIES.  The  Executive  hereby  acknowledges  that the
Corporation  reserves  the  right to  review  with  the  Executive  his  present
directorships and any other positions held by him in business organizations, and
the Executive  agrees to terminate his  participation  in such  positions if the
Corporation  shall  determine,  in a particular  case, that there is a potential
material  conflict with the  Corporation's  best interests.  Any future proposed
directorships and/or positions in or with other business  organizations shall be
subject  to review  by the  board of  directors  of the  Corporation,  providing
however,  that such board shall not  prohibit  any such  activities  unless such
potential  material conflicts with the Executive's duties as a Vice President of
the Corporation shall exist.

4.       TERM OF EMPLOYMENT

         4.1 TERM.  The term of employment  of the Executive by the  Corporation
shall be for a period of three  years  beginning  with the  Effective  Date (the
"Initial Term"),  unless  terminated  earlier pursuant to Section 6. At any time
prior to the expiration of the Initial Term, the  Corporation  and the Executive
may by mutual written  agreement  extend the  Executive's  employment  under the
terms of this  Agreement  for such  additional  periods as they  shall  mutually
agree.

5.       SALARY, BENEFITS AND BONUS COMPENSATION

         5.1 SIGNING BONUS.  In  consideration  of the  Executive's  agreeing to
discontinue, as expeditiously as practicable in a reasonable and orderly manner,
his  other  business  activities  in order to enter  into  this  agreement,  the
Corporation will issue to the Executive,  upon execution of this Agreement,  one
million (1,000,000) shares of the common stock of the Corporation.

         5.2 ANNUAL  SALARY.  As payment for the  services to be rendered by the
Executive  as  provided  in  Section  3, the  Corporation  agrees  to pay to the
Executive an annual salary  ("Salary"),  beginning as of the Effective  Date, at

                                       4
<PAGE>

the rate of one hundred twenty-five thousand United States dollars (US $125,000)
per annum payable in 26 equal  bi-weekly  installments  subject to annual review
and increase, as the board of directors shall determine.

         5.3 COMPENSATION  SHARES IN LIEU OF CASH PAYMENTS.  Notwithstanding the
requirements  of Paragraph 5.2, above,  the Executive and the Corporation  agree
and acknowledge that:

         5.3.1 From time to time, during the foreseeable future, the Corporation
may not have available the financial resources to pay to the Executive, in cash,
the full amount of the Salary; In such event, with the consent of the Executive,
the obligations of the  Corporation  with respect to any unpaid amount of Salary
will be satisfied by the issuance to the Executive of shares of the common stock
of the Corporation  ("Compensation  Shares"),  which  Compensation  Shares shall
constitute compensation pursuant to the terms of this Executive Agreement.

         5.3.2  All  Compensation  Shares  will  be  issued  to and  held by the
Executive  pursuant  to the  terms of a stock  restriction  agreement,  on terms
mutually agreeable to the parties.

         5.3.3 All  Compensation  Shares  will be issued to the  Executive  at a
value equal to fifty percent (50%) of the average of the high and low bid prices
of the  Corporation's  common  stock,  during the period when such  Compensation
Shares were earned, as traded in the  over-the-counter  market and quoted in the
OTC  Electronic  Bulletin Board or such other public market in the United States
in which the common stock of the Corporation shall then be traded.

         5.3.4 From time to time, all or part of the Compensation  Shares may be
registered  by the  Corporation  under a  Registration  Statement  on Form  S-8,
including a Re-offer  Prospectus,  as and at such time as the board of directors
of the Corporation or the executive committee thereof shall determine.

         5.4 BONUSES. the Executive shall be eligible to receive a discretionary
bonus for each year (or portion  thereof)  during the term of this Agreement and
any  extensions  thereof,  with  the  actual  amount  of any  such  bonus  to be
determined  in the sole  discretion  of the Board of  Directors  based  upon its
evaluation of the  Executive's  performance  during such year.  All such bonuses
shall be reviewed  annually by the  Compensation  Committee,  if any shall be in
existence.

         5.5  ADDITIONAL  BENEFITS.  During  the  term  of this  Agreement,  the
Executive shall be entitled to the following fringe benefits:

                  (a)      EXECUTIVE  BENEFITS.  The Executive shall be eligible
                           to participate in such of the Corporation's  benefits
                           and deferred  compensation plans as are now generally
                           available  or  later  made  generally   available  to
                           executive officers of, including, without limitation,
                           the  Corporation's  Stock Option Plan, profit sharing
                           plans,  annual  physical  examinations,   dental  and
                           medical plans,  personal  catastrophe  and disability
                           insurance,  financial planning,  retirement plans and
                           supplementary executive retirement plans, if any. For

                                       5
<PAGE>

                           purposes of establishing  the length of service under
                           any benefit plans or programs of the Corporation, the
                           Executive's  employment  with  will be deemed to have
                           commenced on the Effective Date.

                  (b)      VACATION.   The   Executive   shall  be  entitled  to
                           reasonable  vacation time during each year during the
                           term of this Agreement and any extensions thereof, in
                           an amount to be determined by the mutual agreement of
                           the  Executive  and  the  board  of  director  of the
                           Corporation,  provided however that such amount shall
                           be a minimum of three weeks per year.

                  (c)      CAR ALLOWANCE.  The Executive shall receive a monthly
                           car allowance of two hundred fifty  Canadian  dollars
                           (Cdn $500).

         5.6 REIMBURSEMENT FOR EXPENSES.  During the term of this Agreement, the
Corporation shall reimburse the Executive for reasonable and properly documented
out-of-pocket  business and/or entertainment  expenses incurred by the Executive
in connection with his duties under this Agreement.

6.       TERMINATION

         6.1 TERMINATION FOR CAUSE. Termination For Cause may be effected by the
Corporation in accordance  with the procedures set forth in Paragraph 1.5 at any
time  during  the term of this  Agreement  and  shall  be  effected  by  written
notification to the Executive in accordance with Paragraph 6.9, below.  Upon the
effectiveness  of a Termination For Cause,  the Executive shall promptly be paid
all accrued salary,  bonus  compensation  to the extent earned,  vested deferred
compensation (other than pension plan or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
the  Corporation  in which the Executive is a participant  to the full extent of
the  Executive's  rights  under  such  plans,   accrued  vacation  pay  and  any
appropriate  business  expenses incurred by the Executive in connection with his
duties hereunder, all to the date of termination, but the Executive shall not be
paid any other compensation or reimbursement of any kind.

         6.2 TERMINATION OTHER THAN FOR CAUSE.  Notwithstanding anything else in
this Agreement, the Corporation may effect a Termination Other Than For Cause at
any time upon giving written notice to the Executive of such  termination.  Upon
the  effectiveness of any Termination  Other Than For Cause, the Executive shall
promptly be paid all accrued  salary,  bonus  compensation to the extent earned,
vested  deferred  compensation  (other than pension plan or profit  sharing plan
benefits  which  will be paid in  accordance  with  the  applicable  plan),  any
benefits  under any plans of in which the Executive is a participant to the full
extent  of the  Executive's  rights  under  such  plans  (including  accelerated
vesting,  if any, of awards  granted to the  Executive  under the  Corporation's
stock option plan),  accrued vacation pay and any appropriate  business expenses
incurred by the Executive in connection  with his duties  hereunder,  all to the
date of  termination,  and all severance  compensation  as provided in Paragraph
6.1.

                                       6
<PAGE>

         6.3 TERMINATION FOR GOOD REASON.  Notwithstanding anything else in this
Agreement,  the Executive  may effect a Termination  for Good Reason at any time
upon giving written notice to the Corporation of such  termination in accordance
with the  provisions  of Paragraph  6.9 hereof.  Upon the  effectiveness  of any
Termination  for Good Reason the  Executive  shall  promptly be paid all accrued
salary,  bonus compensation to the extent earned,  vested deferred  compensation
(other than pension plan or profit  sharing plan benefits  which will be paid in
accordance with the applicable  plan),  any benefits under any plans of in which
the  Executive is a  participant  to the full extent of the  Executive's  rights
under such plans (including  accelerated  vesting,  if any, of awards granted to
the  Executive  under's  stock  option  plan),  accrued  vacation  pay  and  any
appropriate  business  expenses incurred by the Executive in connection with his
duties hereunder, all to the date of termination, and all severance compensation
as provided in Paragraph 6.1.

         6.4  TERMINATION BY REASON OF  DISABILITY.  If, during the term of this
Agreement,  the  Executive  fails to perform his duties under this  Agreement on
account  of  illness  or  physical  or mental  incapacity,  and such  illness or
incapacity  continues for a period of more than twelve (12) consecutive  months,
the  Corporation  shall have the right to terminate the  Executive's  employment
hereunder by written  notification to the Executive and payment to the Executive
of all accrued salary, bonus compensation to the extent earned,  vested deferred
compensation (other than pension plan or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
in which the  Executive is a participant  to the full extent of the  Executive's
rights  under such plans,  accrued  vacation  pay and any  appropriate  business
expenses incurred by the Executive in connection with his duties hereunder,  all
to the date of  termination,  with the exception of medical and dental  benefits
which shall continue through the expiration of this Agreement, but the Executive
shall not be paid any other compensation or reimbursement of any kind.

         6.5 DEATH.  In the event of the  Executive's  death  during the term of
this Agreement, the Executive's employment shall be deemed to have terminated as
of the last day of the month during  which his death occurs and the  Corporation
shall promptly pay to his estate or such beneficiaries as the Executive may from
time to time  designate all accrued  salary,  bonus  compensation  to the extent
earned,  vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance  with the applicable  plan),  any
benefits  under any plans of in which the Executive is a participant to the full
extent of the Executive's rights under such plans,  accrued vacation pay and any
appropriate  business  expenses incurred by the Executive in connection with his
duties  hereunder,  all to the date of termination,  but the Executive's  estate
shall not be paid any other compensation or reimbursement of any kind.

         6.6 VOLUNTARY TERMINATION. In the event of a Voluntary Termination, the
Corporation  shall promptly pay all accrued  salary,  bonus  compensation to the
extent earned,  vested deferred  compensation (other than pension plan or profit
sharing  plan  benefits  which will be paid in  accordance  with the  applicable
plan),  any benefits  under any plans of in which the Executive is a participant

                                       7
<PAGE>

to the full extent of the Executive's rights under such plans,  accrued vacation
pay  and  any  appropriate  business  expenses  incurred  by  the  Executive  in
connection with his duties  hereunder,  all to the date of  termination,  but no
other compensation or reimbursement of any kind.

         6.7 TERMINATION UPON A CHANGE IN CONTROL. In the event of a Termination
Upon the  effectiveness of a Change in Control,  the Executive shall immediately
be paid all accrued  salary,  bonus  compensation  to the extent earned,  vested
deferred  compensation  (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable  plan),  any benefits under
any plans of in which the Executive is a  participant  to the full extent of the
Executive's rights under such plans (including  accelerated  vesting, if any, of
any awards granted to the Executive under the Corporation's  Stock Option Plan),
accrued  vacation  pay and any  appropriate  business  expenses  incurred by the
Executive  in  connection  with  his  duties  hereunder,  all  to  the  date  of
termination, and all severance compensation as provided in Paragraph 6.1.

         6.8 NOTICE OF TERMINATION.  The Corporation may effect a termination of
this  Agreement  pursuant to the  provisions  of this Section upon giving thirty
(30) days' written  notice to the Executive of such  termination.  The Executive
may effect a termination  of this  Agreement  pursuant to the provisions of this
Section upon giving thirty (30) days' written notice to the  Corporation of such
termination.

7.       SEVERANCE COMPENSATION

         7.1 SEVERANCE  COMPENSATION IN THE EVENT OF: TERMINATION OTHER THAN FOR
CAUSE  PURSUANT  TO  PARAGRAPH  6.2;  TERMINATION  FOR GOOD  REASON  PURSUANT TO
PARAGRAPH  6.3; OR  TERMINATION  UPON A CHANGE IN CONTROL  PURSUANT TO PARAGRAPH
6.7. In the event that, after the expiration of one-year from the Effective date
of this Agreement,  the  Executive's  employment is terminated in a termination:
Other Than for Cause  pursuant to  Paragraph  6.2;  for Good Reason  pursuant to
Paragraph  6.3; or a Change in Control  pursuant to Paragraph 6.7, the Executive
shall be paid the following as severance compensation:

         7.1.1 For  terminations  which occur during the second year of the term
of this  Agreement:  fifty  percent (50%) of the amount of the annual Salary (at
the rate payable at the time of such  termination),  for a period of twelve (12)
months from the date of such  termination.  The Executive shall also be entitled
to accelerated  vesting of any awards  granted to the Executive  under any Stock
Option Plan, stock option  agreement,  or any other employee benefit plan or any
agreement  entered into in  connection  therewith at the time of grant or award.
The Executive shall continue to accrue retirement benefits and shall continue to
enjoy any benefits under any plans of in which the Executive is a participant to
the extent of fifty  percent  (50%) of the  Executive's  pre-termination  rights
under such plans,  including  any  perquisites  provided  under this  Agreement,
though the twelve months following such termination, provided, however, that the
benefits  under  any such  plans of in which  the  Executive  is a  participant,
including  any  such  perquisites,  shall  cease  upon  re-employment  by a  new
employer.  By way of additional  severance  compensation,  the Corporation shall
issue to the Executive within five (5) business days of the date of termination,

                                       8
<PAGE>

a number of shares of the common stock of the Corporation equal to the number of
shares of such common stock,  if any,  which the Executive  shall have forfeited
under the terms of any Stock Restriction Agreement.

         7.1.2 For terminations which occur during the third year of the term of
this  Agreement:  one hundred  percent (100%) of the amount of the annual Salary
(at the rate  payable at the time of such  termination),  for a period of twelve
(12)  months  from the date of such  termination.  The  Executive  shall also be
entitled to accelerated vesting of any awards granted to the Executive under any
Stock Option Plan, stock option agreement, or any other employee benefit plan or
any  agreement  entered  into in  connection  therewith  at the time of grant or
award.  The Executive  shall  continue to accrue  retirement  benefits and shall
continue to enjoy any  benefits  under any plans of in which the  Executive is a
participant to the full extent of the Executive's  pre-termination  rights under
such plans, including any perquisites provided under this Agreement,  though the
twelve months following such termination,  provided,  however, that the benefits
under any such plans of in which the Executive is a  participant,  including any
such perquisites,  shall cease upon  re-employment by a new employer.  By way of
additional severance compensation,  the Corporation shall issue to the Executive
within five (5) business days of the date of termination,  a number of shares of
the common stock of the Corporation equal to the number of shares of such common
stock,  if any, which the Executive  shall have forfeited under the terms of any
Stock Restriction Agreement.

         7.1.3 For  terminations  which occur after the  expiration of the first
three years of the initial term of this  Agreement,  including any extensions of
such term: two hundred percent (200%) of the amount of the annual Salary (at the
rate  payable  at the time of such  termination),  for a period of  twelve  (12)
months from the date of such  termination.  The Executive shall also be entitled
to accelerated  vesting of any awards  granted to the Executive  under any Stock
Option Plan, stock option  agreement,  or any other employee benefit plan or any
agreement  entered into in  connection  therewith at the time of grant or award.
The Executive shall continue to accrue retirement benefits and shall continue to
enjoy any benefits under any plans of in which the Executive is a participant to
the full  extent of the  Executive's  pre-termination  rights  under such plans,
including  any  perquisites  provided  under this  Agreement,  though the twelve
months following such termination,  provided,  however,  that the benefits under
any such plans of in which the  Executive is a  participant,  including any such
perquisites,  shall  cease  upon  re-employment  by a new  employer.  By  way of
additional severance compensation,  the Corporation shall issue to the Executive
within five (5) business days of the date of termination,  a number of shares of
the common stock of the Corporation equal to the number of shares of such common
stock,  if any, which the Executive  shall have forfeited under the terms of any
Stock Restriction Agreement.

         7.1.4  Notwithstanding the provisions of Subparagraphs 7.1.1 and 7.1.2,
above,  or Paragraph 7.2,  below,  if the basic cause of termination  shall be a
Change in Control,  as that term is defined in  Paragraph  1.1,  above:  (i) the
Executive shall be paid, as severance  compensation,  two hundred percent (200%)
of the  amount of the  annual  Salary  (at the rate  payable at the time of such
termination),  for a  period  of  twelve  (12)  months  from  the  date  of such
termination;  and (ii) the Executive may in the Executive's sole discretion,  by
delivery of a notice to the  Corporation  within  thirty  (30) days  following a
Termination Upon a Change in Control,  elect to receive from Compensation a lump
sum severance  payment by bank cashier's check equal to the present value of the

                                       9
<PAGE>

flow of cash payments that would otherwise be paid to the Executive  pursuant to
this Paragraph. In addition, the Corporation shall, on request of the Executive,
immediately  take  steps to  register  any or all  Compensation  Shares or other
unregistered  shares of the  common  stock of the  Corporation  then held by the
Executive,  of issuable to him in accordance with the provisions of this Section
7, with the Securities  and Exchange  Commission  under a Form S-8  registration
statement  filed with the United States  Securities and Exchange  Commission and
effective  under the United States  Securities Act of 1933, as Amended,  or such
other  Form  of  registration  statement  as  shall  then  be  available  to the
Corporation including without limitation Forms S-1 and SB-2.

         7.1.5 In the event that the  Executive  shall be  entitled  to any cash
payments  pursuant  to  this  Section  7 and  the  Corporation  shall  not  have
sufficient  cash resources  available  therefor,  the Executive  shall be issued
shares of the Common Stock of the Corporation in lieu of such cash payments,  in
whole or in part, as the parties hereto shall mutually agree.

         7.2 NO SEVERANCE  COMPENSATION UPON OTHER TERMINATION.  In the event of
Termination:  (i) for any reason  during the first year  following the Effective
Date of this  Agreement;  (ii)  For  Cause  pursuant  to  Paragraph  6.1;  (iii)
termination  by  reason  of the  Executive's  Disability  or Death  pursuant  to
Paragraphs 6.4 or 6.5; or (iv) Voluntary  Termination  pursuant to Paragraph 6.6
hereof,  neither the  Executive  nor his estate shall not be paid any  severance
compensation.

8.       PAYMENT OBLIGATIONS

         the Corporation's  obligation to pay the Executive the compensation and
to make  the  arrangements  provided  herein  shall  be  unconditional,  and the
Executive shall have no obligation whatsoever to mitigate damages hereunder.  If
litigation  after a Change in Control  shall be brought to enforce or  interpret
any provision  contained  herein,  the  Corporation,  to the extent permitted by
applicable  law and the  Corporation's  Articles  of  Incorporation  and Bylaws,
hereby indemnifies the Executive for the Executive's  reasonable attorneys' fees
and disbursements incurred in such litigation.

9.       CONFIDENTIALITY

         The Executive agrees that all confidential and proprietary  information
relating  to the  business  of the  Corporation  shall  be kept and  treated  as
confidential both during and after the term of this Agreement,  except as may be
permitted  in  writing  by the  Corporation's  Board  of  Directors  or as  such
information  is within the  public  domain or comes  within  the  public  domain
without any breach of this Agreement.

10.      WITHHOLDINGS

         All  compensation  and  benefits to the  Executive  hereunder  shall be
reduced by all federal,  state,  local and other  withholdings and similar taxes
and payments required by applicable law.

                                       10
<PAGE>

11.      INDEMNIFICATION

         In addition to any rights to  indemnification to which the Executive is
entitled to under the Corporation's  Articles of Incorporation  and Bylaws,  the
Corporation shall indemnify the Executive at all times during and after the term
of this  Agreement  to the maximum  extent  permitted  under  Delaware  Business
Corporation  Law or any  successor  provision  thereof and any other  applicable
state law,  and shall pay the  Executive's  expenses in  defending  any civil or
criminal action, suit, or proceeding in advance of the final disposition of such
action,  suit  or  proceeding,  to  the  maximum  extent  permitted  under  such
applicable state laws.

12.      NOTICES

         Any  notices  permitted  or  required  under  this  Agreement  shall be
delivered by hand, certified mail, or recognized overnight courier, in all cases
with written  proof of receipt  required,  addressed to the parties as set forth
below and shall be deemed given upon receipt to the Corporation at:

                                            The Tirex Corporation
                                            740 St. Maurice Suite, 201
                                            Montreal, Quebec H3C 1L5

addressed to the Executive at:

                                             Michael Ash
                                             310 Montee Sabourin
                                             St. Bruno PQ
                                             J3V 4P6

or at any other address as any party may, from time to time, designate by notice
given in compliance with this Paragraph.

13.      LAW GOVERNING

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

                                       11
<PAGE>

14.      GENERAL

         14.1 TITLES AND CAPTIONS.  All section titles or captions  contained in
this  Agreement  are for  convenience  only and shall not be deemed  part of the
context nor effect the interpretation of this Agreement.

         14.2 ENTIRE AGREEMENT. This Agreement contains the entire understanding
between  and among the  parties  and  supersedes  any prior  understandings  and
agreements among them respecting the subject matter of this Agreement.

         14.3 AGREEMENT BINDING. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.

         14.4  ATTORNEY  FEES.  In the event an  arbitration,  suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal  therefrom,  it is agreed that the prevailing  party shall be entitled to
reasonable  attorneys fees to be fixed by the  arbitrator,  trial court,  and/or
appellate court.

         14.5  COMPUTATION  OF TIME. In computing any period of time pursuant to
this  Agreement,  the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday,
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday,  Sunday,  or legal  holiday,  in which event the period
shall  run  until the end of the next day  thereafter  which is not a  Saturday,
Sunday, or legal holiday.

         14.6  PRONOUNS AND PLURALS.  All  pronouns and any  variations  thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or plural
as the identity of the person or persons may require.

         14.7  PRESUMPTION.  This Agreement or any section  thereof shall not be
construed  against any party due to the fact that said  Agreement or any section
thereof was drafted by said party.

         14.8 FURTHER  ACTION.  The parties hereto shall execute and deliver all
documents,  provide all  information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.

         14.9  PARTIES IN INTEREST.  Nothing  herein shall be construed to be to
the benefit of any third party,  nor is it intended that any provision  shall be
for the benefit of any third party.

         14.10  SAVINGS  CLAUSE.  If any  provision  of this  Agreement,  or the
application  of such  provision  to any  person or  circumstance,  shall be held
invalid,  the remainder of this Agreement,  or the application of such provision
to persons  or  circumstances  other than those as to which it is held  invalid,
shall not be affected thereby.

                                         THE TIREX CORPORATION

                                         By /s/ TERENCE C. BYRNE
                                           -------------------------------------
                                           Terence C. Byrne, Chairman and CEO

                                           /s/ MICHAEL ASH
                                           -------------------------------------
                                               Michael Ash

                                       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}]]