Document:

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                                                                   EXHIBIT 10.13

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED
PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE
ASTERISKS ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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                       PRODUCT PURCHASE AND SALE AGREEMENT

                                 BY AND BETWEEN

                         FIRSTWORLD COMMUNICATIONS, INC.

                                       AND

                           ACCELERATED NETWORKS, INC.

                                      DATED

                                 AUGUST 1, 1999

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[ACCELERATED NETWORKS LOGO]

                       PRODUCT PURCHASE AND SALE AGREEMENT

        This Product Purchase and Sale Agreement ("Agreement"), effective as of
August 1, 1999 (the "Effective Date'), is made by and between ACCELERATED
NETWORKS, INC., a California corporation with its principal place of business at
301 Science Drive, Moorpark CA 93021 ("Seller") and FIRSTWORLD COMMUNICATIONS,
INC., a Delaware corporation with its principal place of business at 7100 East
Belleview Avenue, Suite 210, Greenwood Village, Colorado 80211 ("Customer").
Customer and Seller are also referred to collectively as the "Parties". The
Parties agree as follows:

        WHEREAS, Seller desires to supply to Customer and Customer desires to
purchase from Seller the products described herein, pursuant to the terms and
conditions contained herein.

        NOW, THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties intending to be lawfully bound agree as
follows:

        1. TERM

        The Agreement shall commence on the Effective Date and shall continue in
force for an initial period of eighteen (18) months unless earlier terminated as
provided for in Section 13 ("Initial Term"). Thereafter this Agreement shall
continue on a month-to-month term unless a party provides written notice to the
other party 60 days of its termination.

        2. SCOPE

        The terms and conditions of this Agreement shall apply to all
transactions occurring during the Term whereby products or Services are provided
by Seller to Customer. Customer as used herein shall mean FirstWorld
Communications, Inc. or any of its wholly owned subsidiaries.

        Customer understands and agrees that all Products, provided by Seller to
Customer pursuant to this Agreement and to the Exhibits listed below shall be
for Customer's internal use in the United Sates only.

       Exhibit A    Products
       Exhibit B    FirstWorld Communications National Price List
       Exhibit C    End-User Software License

                                                                               1
<PAGE>   3

        3. PURCHASE OF PRODUCTS

        3.1 Annual Purchase

        In consideration for Seller's discounts, allowances, credits, and
incentives as set forth in Section 3.2 of this Agreement or any Schedule or
Exhibit ("Attachments") to this Agreement; Customer intends to purchase from
Seller an aggregate of $10 Million ("Purchase Objective") for Products purchased
during the Initial Term of this Agreement.

        3.2 Discounts

        From the Effective Date up to and through February 1, 2001, Customer
shall receive a purchase discount of [***] from the list prices set forth in
Exhibit B of all Products purchased by Customer from Seller. In the event
Customer has not achieved an aggregate purchase of $10 Million in Products on or
before February 1, 2001, Customer shall not be eligible for any future
discounts. Forfeiture of future discounts after February 1, 2001 shall be
Seller's sole and exclusive remedy for Customer's failure to meet its Purchase
Objective. Failure to attain the Purchase Objective shall not be a default or
breach of this Agreement.

        3.3 Pricing

        Prices are exclusive of all taxes, customs duties or similar tariffs and
fees, shipping and insurance charges which Seller may be required to pay or
collect upon the sale or delivery of the Products or upon collection of the
sales price, all of which shall be Customer's responsibility.

        4. ORDERS AND PAYMENT

        4.1 Customer shall submitted purchase orders by fax to the following
address:

                      Accelerated Networks, Inc.
                      301 Science Drive
                      Moorpark, California 93021
                      Attn: Sales Administration
                      Fax: (805) 553-9690

        4.2 Cancellation and Rescheduling

        Customer may cancel delivery of Products pursuant to a purchase order
without charge upon written notice to Seller not less than one hundred and
eighty (180) days prior to the scheduled delivery date. Customer will be
responsible for payment of 75% (seventy-five percent) of the amount of any
portion of a purchase order that is cancelled less than one hundred and eighty
(180) days prior to the scheduled delivery date. Customer may reschedule, or
extend the date of, delivery of Products pursuant to a purchase order without
charge upon written notice

---------------------
        *** Confidential Treatment has been requested for certain redacted
provisions of this agreement. The redacted provisions are identified by three
asterisks, enclosed by brackets and underlined. The confidential portion has
been filed separately with the Securities and Exchange Commission.

                                                                               2
<PAGE>   4

to Seller not less than sixty (60) days prior to the scheduled delivery date.
This reschedule of delivery of Products by Seller can only be done one (1) time
per purchase order and the revised delivery date cannot be greater than sixty
(60) days from the originally scheduled date of delivery.

        4.3 Payment

        Payment for Products (including transportation charges and taxes, if
applicable) will be due as follows:

               To Accompany Purchase Order                      [***]

               Upon Delivery                                    [***]

               Within thirty (30) days of Seller's invoice      [***]
               date after delivery

        All payments shall be made in U.S. dollars in the United States.

        5. DELIVERY AND ACCEPTANCE

        5.1 Delivery

        Products are delivered FOB Seller's plant or other place of shipment.
Shipments will be made to the delivery address specified on Customer's purchase
order. In the absence of a specified delivery address, delivery will be made to
Customer's facility in Greenwood Village, Colorado, or any other standard
location designated by Customer. Shipping arrangements will be mutually agreed
upon by the Parties prior to delivery. Seller shall use its commercially
reasonable efforts to fill (by full or partial shipment) Customer's purchase
orders for Products within sixty (60) days of receiving purchase order. If
Seller cannot fill Customer's purchase order, in which said purchase order falls
within the range of quarterly forecasts (as set forth in Section 7 herein)
within 60 days for reasons other than those as described in Section 17.5 herein,
Customer may cancel purchase order without penalty and Seller will apply
cancelled purchase order's value toward Purchase Objective.

        5.2 Inspection and Acceptance of Deliveries

        Customer shall have the right to visually inspect all Products ordered
pursuant to this Agreement for a period of ten (10) days following delivery. If
the delivered Product(s) fails to conform to the applicable purchase order or
release, in whole or in part, Customer may reject the delivery and Customer
shall promptly return the rejected Product(s) to Seller at Seller's risk and
expense. Upon receipt of the rejected Product(s), Seller will promptly ship
replacement Product(s) to Customer.

---------------------
        *** Confidential Treatment has been requested for certain redacted
provisions of this agreement. The redacted provisions are identified by three
asterisks, enclosed by brackets and underlined. The confidential portion has
been filed separately with the Securities and Exchange Commission.

                                                                               3
<PAGE>   5

        5.3 Pre-shipment Review

        If reasonably requested by Customer, a representative of Customer may
participate, to the extent applicable, in Seller's preshipment configuration,
prestaging and inspection of Product at Seller's facility.

        6. SOFTWARE LICENSE

        6.1 License Grant

        Seller grants Customer, subject to the terms and conditions set forth in
this Agreement, a non-exclusive, non-transferable, non-sublicensable license to
(i) use the software comprising any Product (including software contained in
firmware embedded in a Product) ("Software") and (ii) at Customer's option, to
distribute the Software as incorporated and/or embedded within a Product to
Customer's end-user customers in conjunction with Customer's product and service
offerings. All copies of the Software are licensed and not sold. As between the
Parties, Seller retains all title to (except as expressly licensed by Seller),
and rights (including all intellectual property and proprietary rights anywhere
in the world) and interest in the Software. Seller shall use commercially
reasonable efforts to deliver Seller's standard End User Software License
Agreement ("End User License Agreement") included in the Product package
delivered to the end user.

        6.2 License Restrictions

        Customer shall not, nor permit others to, (i) copy, modify or create any
derivative work of the Software or include the Software in any other software,
(ii) delete, alter. or obscure any copyright or other notice or proprietary
legend appearing in the Software or on any documentation, media, master or
package materials for the Software provided by Seller or (iii) reverse assemble,
decompile, reverse engineer or otherwise attempt to derive the source code (or
the underlying ideas, structure, sequence, organization or algorithms) from the
Software (each, a "Misuse"). Customer shall have no liability to Seller or any
other party for an end-user's Misuse of the Software, unless Customer has actual
knowledge of an end-user's Misuse and fails to promptly take corrective action.

        7. MONTHLY MEETINGS AND QUARTERLY FORECASTS

        Seller and Customer shall each designate at least one representative to
serve as a liaison with the other party (each, a "Representative"). The
Representatives shall meet, either in person or by telephone, to discuss in good
faith matters relating to this Agreement including Product delivery schedules,
joint marketing activities, sales training needs, price changes and new Product
features and enhancements, and Purchase Objective levels. Customer shall provide
seller with quarterly product forecasts. Such forecasts will contain, but are
not necessarily limited to, requested products and quantities, projected
shipping dates, and shipping locations. Quarterly forecasts shall commence and
be in effect beginning with Q3, 1999, and shall continue for the term of this
contract. Such meetings shall take place on a monthly basis at a mutually agreed
upon location. Each party shall bear its own costs incurred in attending or
participating in such meetings.

                                                                               4
<PAGE>   6

        8. SELLER'S WARRANTY

        8.1 Product Warranty

        Seller warrants to Customer: (i) For a period of one (1) year from the
date of shipment that the hardware Products will be free from material defects
in materials and workmanship, (ii) for a period of ninety (90) days from the
date of shipment, the Software will perform substantially in accordance with
applicable specifications identified in the user manual of the then current
release and (iii) services performed by Seller hereunder will be performed in a
professional and workmanlike manner and in accordance with current industry
standards. Seller's warranty does not extend to any Product that (a) is modified
or altered, (b) is not maintained to Seller's maintenance recommendations, (c)
is operated in a manner other than that specified by Seller, (d) has its serial
number removed or altered or (e) is treated with abuse, negligence or other
improper treatment (including, without limitation, use outside the recommended
environment).

        8.2 Remedies

        Products delivered to Customer by Seller hereunder which do not comply
with the warranty in Section 8.1 above and are returned to Seller during the
applicable warranty period will be repaired or replaced at Seller's option, at
no cost to Customer. If Seller cannot, or determines that it is not practical
to, repair or replace a returned Product, the price paid by Customer for such
Product will be credited and applied to future orders.

        8.3 Disclaimer

        SELLER MAKES NO WARRANTIES (OTHER THAN AS EXPRESSLY PROVIDED IN SECTION
8.1 ABOVE) WITH RESPECT TO THE PRODUCTS, THE SOFTWARE OR ANY SERVICES AND
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. FURTHER,
SELLER DOES NOT WARRANT THE USE, OR THE RESULTS OF THE USE, OF THE PRODUCTS OR
THAT ANY SOFTWARE WILL BE ERROR-FREE.

        8.4 Year 2000 Compliance Warranty

        Seller represents and warrants (the "Year 2000 Warranty) that (a) all
calendar date-related processing by the Products of date data or of any system
date will not cause the Products to cease to operate substantially in accordance
with their specifications, (b) all data fields for the date data contained in
the Products are four-digit fields capable of indicating century and millennium,
and (c) that Seller has verified through its testing procedures that no change
in the system date (including the change from the year 1999 to the year 2000)
will cause the Products to cease to operate substantially in accordance with
their specifications. Notwithstanding any provision to the contrary set forth in
this Agreement, Seller makes no representation or warranty with respect to the
Products operating in conjunction with any computer software, computer firmware,
computer hardware, or any combination of the foregoing supplied by third
parties.

                                                                               5
<PAGE>   7

        9. CUSTOMER'S REPRESENTATIONS AND WARRANTIES

        Customer represents, warrants and covenants that: (i) it shall comply
with good business practices and all laws and regulations relevant to this
Agreement or the subject matter hereof, (ii) it shall use the then current names
used by Seller for the Products, provided that all advertisements, promotional
materials, packaging and anything else bearing any trademark of Seller's shall
identify Seller as the trademark owner and shall be subject to Seller's prior
written approval and (iii) it shall comply with all export laws, restrictions,
national security controls and regulations of the United States or other
applicable foreign agency or authority, and not to export or re-export, or allow
the export or re-export of any Product or Proprietary Information of Seller or
any direct product thereof in violation of any such restrictions, laws or
regulations, or without all required licenses and proper authorizations, any
Group D:I or E:2 country (or national of such country) specified in the then
current U.S. Export Administration Regulations (or any successor supplement or
regulations).

        10. LIMITATION OF LIABILITY

        NEITHER PARTY WELL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR (I) ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE AMOUNTS
PAID TO IT (IN THE CASE OF SELLER) OR (IN THE CASE OF CUSTOMER) PAID OR OWED BY
IT HEREUNDER DURING THE TWELVE (12) MONTH PERIOD PRIOR TO DATE THE CAUSE OF
ACTION AROSE OR (II) ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS OR
LOST DATA OR (III) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR
SERVICES. THE LIMITATIONS OF THIS SECTION 10 SHALL NOT APPLY TO ANY BREACH OF
SECTION 6.2 OR 13.

        11. INDEMNIFICATION

        Seller hereby agrees to defend, indemnify and hold harmless Customer
from and against any third party claims, action, demands, costs or expenses
arising from (i) infringement by the Products as and in the form delivered to
Customer of any United States patent, trademark, copyright or other intellectual
property right of any third party or (ii) the Products' failure to perform in
accordance with the Product Warranty set forth in Section 8.1, provided that
Customer (a) promptly notifies Seller in writing of any such claim, action or
demand, (b) permits Seller to have sole control and authority in the
investigation, defense and settlement of such claim, action or demand and (c)
provides Seller with reasonable assistance and cooperation in connection with
the investigation, defense and settlement thereof and Seller agrees to reimburse
Customer for out-of-pocket expenses incurred in providing such cooperation and
assistance. Seller shall have no obligation with respect to any settlement that
it does not approve in writing. Customer shall permit Seller to replace or
modify any affected Product so to avoid infringing, so long as the replacement
or modification has substantially the equivalent functionality as set forth in
the design specifications, or to procure the right for Customer to continue use
of such Products. If neither of such alternatives is reasonably practicable, the
infringing Products shall be returned to Seller and Seller's sole liability
hereunder, in addition to Seller's obligations to defend, indemnify and hold
harmless set forth in this Section 11, shall be to refund amounts paid

                                                                               6
<PAGE>   8

therefor by Customer. Seller shall have no obligation hereunder for or with
respect to claims, actions, or demands alleging infringement that arise by (i)
reason of combination of noninfringing, Product with any other product, system
or process not supplied by Seller; (ii) Products modified after delivery to
Customer without Seller's prior written consent; (iii) Products not supplied by
Seller; and (iv) Customer's continued use of infringing Products after being
notified of the alleged infringement and after being provided with modifications
that would have avoided the alleged infringement. The foregoing states Seller's
entire liability with respect to infringement of any intellectual property
rights by any Product.

        12. RELATIONSHIP OF PARTIES

        Customer expressly acknowledges that it is an independent contractor in
the performance of this Agreement, and is solely liable for all labor and
related expenses in connection with this Agreement. Customer will not have, and
will not represent that it has, any power, right or authority to bind Seller, or
to assume or create any obligation or responsibility, express or implied, on
behalf of Seller.

        13. PROPRIETARY INFORMATION

        The Parties acknowledge that in the course of performing their duties
under this Agreement, each may obtain confidential and proprietary information
of the other ("Proprietary Information"). Such Proprietary Information may
include, but is not limited to, trade secrets, know-how, inventions, techniques,
processes, programs, schematics, software source code, data, customer lists,
financial information, and sales and marketing plans. Each party shall at all
times keep in trust and confidence all Proprietary Information of the other
party and, during the term of this Agreement and for five (5) years after its
termination, shall not use such Proprietary Information other than in the course
of performing its duties under this Agreement nor shall it disclose any such
Proprietary Information to any third party without the written consent of the
other. Upon termination or expiration of this Agreement or upon the request of
the disclosing party, each party shall promptly return all manifestations of the
other's Proprietary Information in its possession.

        14. TERMINATION

        14.1 Termination for Cause

        This Agreement may be terminated by either party for cause immediately
by written notice upon the occurrence of any of the following events: (i) if the
other ceases to do business, or otherwise terminates its business operations;
provided, however, that the acquisition of all or substantially all of a party's
stock, assets or business shall not be grounds for termination of this
Agreement; or (ii) if the other breaches any material provision of this
Agreement and fails to cure such breach within thirty (30) days of written
notice describing the breach; provided, however, that a breach of the
obligations set forth in Section 6.2 or 13 and shall be grounds for immediate
termination of this Agreement by the non-breaching party; or (iii) if the other
becomes insolvent or seeks protection under any bankruptcy, receivership, trust
deed, creditors arrangement, composition or comparable proceeding, or if any
such proceeding is instituted against the other (and not, dismissed within
ninety (90) days).

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<PAGE>   9

        14.2 Effect of Termination

        Upon any termination or expiration of this Agreement, all pending
purchase orders for release of Products shall be cancelled as of the effective
date of termination or expiration, all sums payable to Seller shall be due and
payable on the effective date of termination or expiration and all licenses
granted to Customer under this Agreement shall immediately terminate, and
Customer shall discontinue all use and distribution of the Products. Upon an
end-user acquiring a copy of the Software incorporated and/or contained in a
Product, the end-user shall be entitled to use that copy of the Software,
subject to the terms and conditions of the End-User License Agreement.

        15. PUBLICITY

        The Parties shall announce this Agreement and the establishment of the
relationship between Customer and Seller under this Agreement pursuant to a
joint press release to be mutually agreed upon prior to issuance. The Parties
agree to submit to each other for approval all press releases relating to this
Agreement and to not publish any press release which mentions the parties
relationship without prior approval of the other party, which approval shall not
be unreasonably withheld.

        16. ASSIGNMENT

        This Agreement shall be binding upon and insure to the benefit of the
parties hereto and their respective permitted successors and assigns. Neither
party may assign its rights or obligations hereunder without the prior written
consent of the other which consent shall not be unreasonably withheld,
conditioned or delayed, provided that no consent shall be required in connection
with an assignment to an entity controlling, controlled by or under common
control with such party, or to an entity that succeeds to all, or substantially
all, of the party's assets whether by merger, sale or otherwise.

        17. MISCELLANEOUS

        17.1 No Waiver

        A waiver by either party of any provision of this Agreement or breach,
in any one instance, shall not be construed as a waiver of any other provision
or subsequent breach thereof.

        17.2 Notices

        Notices under this Agreement shall be in writing and delivered by
certified or registered mail, return receipt requested, or by nationally
recognized overnight courier service next day delivery, or personal deliver, to
the addresses as specified in the first paragraph of this Agreement. Such notice
shall be effective on the date of receipt or refusal thereof by the receiving
party.

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        17.3 Governing Law

        This Agreement shall be governed and construed under California law
without regard to conflicts of law provisions.

        17.4 Severability

        If any provision of this Agreement is held by a court of competent
jurisdiction to be illegal, invalid or unenforceable, that provision shall be
limited or eliminated to the minimum extent necessary so that this Agreement
shall otherwise remain in full force and effect and enforceable.

        17.5 Force Majeure

        A party shall not be liable for non-performance or delay in performance
(other than of payment or confidentiality obligations) caused by any event
reasonably beyond the control of such party including, but not limited to wars,
hostilities, revolutions, riots, civil commotion, national emergency, strikes,
lockouts or other labor disputes or shortages or inability to obtain material or
equipment, unavailability of supplies, compliance with laws or regulation
(including, without limitation, those related to infringement), epidemics, fire,
flood, earthquake, force of nature, explosion, embargo, or any Act of God, or
any law, proclamation, regulation, ordinance or other act or order of any court,
government or governmental agency.

        17.6 Entire Agreement; Amendment

        This Agreement, including all Attachments to this Agreement, constitutes
the entire agreement between the parties relating to the subject matter hereof
and all prior or simultaneous proposals, negotiations, representations,
conversations, discussions and agreements, whether written or oral, among the
parties and all past dealing or industry custom. This Agreement may not be
amended except by a writing signed by the Parties.

        17.7 Counterparts

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

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        IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of the Effective Date.

ACCELERATED NETWORKS, INC.               FIRSTWORLD COMMUNICATIONS, INC.

By:      /s/ Suresh Nihalani             By:    /s/ Doug Kramer
         ---------------------------           ---------------------------------

Name:    Suresh Nihalani                 Name:    Doug Kramer
         ---------------------------           ---------------------------------

Title:   President & CEO                 Title:   Chief Technology Officer
         ---------------------------           ---------------------------------

Date:    8/5/99                          Date:    8/4/99
         ---------------------------           ---------------------------------

                                                                              10<PAGE>   1

                                                                  EXHIBIT 10.25

                      DIRECTOR'S INDEMNIFICATION AGREEMENT

     THIS DIRECTOR'S INDEMNIFICATION AGREEMENT is made and entered into this ___
day of __________________ 2000 between Accelerated Networks, Inc., a Delaware
corporation ("Corporation"), and ____________________ ("Director"),

                                    RECITALS:

     A. Director, as a member of the Board of Directors of the Company, performs
a valuable service in such capacity for the Company;

     B. The stockholders of the Company have adopted Bylaws (the "Bylaws")
providing for the indemnification of the officers, directors, agents and
employees of the Company to the maximum extent authorized by Section 145 of the
Delaware General Corporation Law, as amended (the "Delaware Law");

     C. The Bylaws and the Delaware Law, by their non-exclusive nature, permit
contracts between the Company, its officers and the members of its Board of
Directors with respect to indemnification of such persons;

     D. In accordance with the authorization as provided by the Delaware Law,
the Company has purchased and presently maintains or will shortly hereafter
purchase and thereafter maintain, a policy or policies of directors and officers
liability insurance ("D & O Insurance"), covering certain liabilities which may
be incurred by its directors and officers in their performance as directors or
officers of the Company;

     E. As a result of developments affecting the terms, scope and availability
of D & O Insurance, there exists general uncertainty as to the extent of
protection afforded members of the Board of Directors and officers of the
Company by such D & O Insurance and by statutory and Bylaw indemnification
provisions; and

     F. In order to induce Director to continue to serve as a member of the
Board of Directors of the Company, the Company has determined and agreed to
enter into this contract with Director.

     NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:

     1. INDEMNITY OF DIRECTOR. Corporation hereby agrees to hold harmless and
indemnify Director to the fullest extent authorized or permitted by the
provisions of the Delaware Law, as may be amended from time to time, and by the
Bylaws as they exist on the date hereof

     2. ADDITIONAL INDEMNITY. Subject only to the exclusions set forth in
Section 3 hereof, Corporation hereby further agrees to hold harmless and
indemnify Director:
<PAGE>   2

          a. against any and all expenses (including attorneys' fees), witness
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by Director in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of Corporation) to which
Director is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that Director is, was or at any time becomes a
director, officer, employee or agent of Corporation, or is or was serving or at
any time serves at the request of Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise; and

          b. otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusivity provisions of Section 6 of Article
VII of the Bylaws of the Corporation.

     3. LIMITATIONS ON ADDITIONAL INDEMNITY.

     No indemnity pursuant to Section 2 hereof shall be paid by Corporation for
any of the following:

          a. except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which Director is indemnified
pursuant to Section 1 hereof or pursuant to any D & O Insurance purchased and
maintained by Corporation;

          b. in respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;

          c. on account of any suit in which judgment is rendered against
Director for an accounting of profits made from the purchase or sale by Director
of securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;

          d. on account of Director's conduct which is finally adjudged to have
been knowingly fraudulent or deliberately dishonest, or to constitute willful
misconduct;

          e. on account of Director's conduct which is the subject of an action,
suit or proceeding described in Section 7(c)(ii) hereof;

          f. on account of any action, claim or proceeding (other than a
proceeding referred to in Section 8(b) hereof) initiated by Director unless such
action, claim or proceeding was authorized in the specific case by action of the
Board of Directors; or

          g. if a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in this respect,
both Corporation and Director have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication).

                                       2
<PAGE>   3

     4. CONTRIBUTION. If the indemnification provided in Sections 1 and 2 hereof
is unavailable by reason of a court decision described in Section 3(g) hereof
based on grounds other than any of those set forth in paragraphs (b) through (f)
of Section 3 hereof, then in respect of any threatened, pending or completed
action, suit or proceeding in which Corporation is jointly liable with Director
(or would be if joined in such action, suit or proceeding), Corporation shall
contribute to the amount of expenses (including reasonable attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
and paid or payable by Director in such proportion as is appropriate to reflect
(i) the relative benefits received by Corporation on the one hand and Director
on the other hand from the transaction from which such action, suit or
proceeding arose, and (ii) the relative fault of Corporation on the one hand and
of Director on the other in connection with the events which resulted in such
expenses, judgments, fines or settlement amounts, as well as any other relevant
equitable considerations. The relative fault of Corporation on the one hand and
of Director on the other shall be determined by reference to, among other
things, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent the circumstances resulting in such expenses,
judgments, fines or settlement amounts. Corporation agrees that it would not be
just and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.

     5. CONTINUATION OF OBLIGATIONS. All agreements and obligations of
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Director shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Director was a director of Corporation or serving in any other capacity referred
to herein.

     6. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days after
receipt by Director of notice of the commencement of any action, suit or
proceeding, Director will, if a claim in respect thereof is to be made against
Corporation under this Agreement, notify Corporation of the commencement
thereof; but the omission so to notify Corporation will not relieve it from any
liability which it may have to Director otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Director
notifies Corporation of the commencement thereof:

          a. Corporation will be entitled to participate therein at its own
expense;

          b. except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
Director. After notice from Corporation to Director of its election so as to
assume the defense thereof, Corporation will not be liable to Director under
this Agreement for any legal or other expenses subsequently incurred by Director
in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Director shall have the right to
employ its counsel in such action,

                                       3
<PAGE>   4

suit or proceeding but the fees and expenses of such counsel incurred after
notice from Corporation of its assumption of the defense thereof shall be at the
expense of Director unless (i) the employment of counsel by Director has been
authorized by Corporation, (ii) Director shall have reasonably concluded, based
on the advice of counsel, that there may be a conflict of interest between
Corporation and Director in the conduct of the defense of such action or (iii)
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of Director's separate
counsel shall be at the expense of Corporation. Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above; and

          c. Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall be permitted to settle any action
except that it shall not settle any action or claim in any manner which would
impose any penalty or limitation on Director without Director's written consent.
Neither Corporation nor Director will unreasonably withhold its consent to any
proposed settlement.

     7. ADVANCEMENT AND REPAYMENT OF EXPENSES.

          a. In the event that Director employs his own counsel pursuant to
Section 6(b)(i) through (iii) above, Corporation shall advance to Director,
prior to any final disposition of any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative, any and
all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding within ten (10)
days after receiving copies of invoices presented to Director for such expenses;
and

          b. Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
it shall be ultimately determined by a final judicial decision (from which there
is no right of appeal) that Director is not entitled, under provisions of
Delaware Law, the Bylaws, this Agreement or otherwise, to be indemnified by
Corporation for such expenses.

          c. Notwithstanding the foregoing, Corporation shall not be required to
advance such expenses to Director if Director (i) commences any action, suit or
proceeding as a plaintiff unless such advance is specifically approved by a
majority of the Board of Directors or (ii) is a party to an action, suit or
proceeding brought by Corporation and approved by a majority of Corporation's
Board of Directors which alleges willful misappropriation of corporate assets by
Director, disclosure of confidential information in violation of Director's
fiduciary or contractual obligations to Corporation, or any other willful and
deliberate breach in bad faith of Director's duty to Corporation or its
stockholders.

     8. ENFORCEMENT.

          a. Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on Corporation hereby in
order to induce

                                       4
<PAGE>   5

Director to continue as a director of Corporation, and acknowledges that
Director is relying upon this Agreement in continuing in such capacity.

          b. In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, Corporation shall reimburse Director for all of Director's reasonable
fees and expenses in bringing and pursuing such action.

     9. SUBROGATION. In the event of payment under this agreement, Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Director, who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable Corporation
effectively to bring suit to enforce such rights.

     10. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Director by this
Agreement shall not be exclusive of any other right which Director may have or
hereafter acquire under any statute, provision of Corporation's Articles or
Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to
action in Director's official capacity and as to action in another capacity
while a member of the Board of Directors.

     11. SURVIVAL OF RIGHTS. The rights conferred on Director by this Agreement
shall continue after Director has ceased to be a director, officer, employee or
other agent of Corporation and shall inure to the benefit of Director's heirs,
executors and administrators.

     12. SEVERABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof or the obligation of Corporation to indemnify the
Director to the fullest extent provided by the Bylaws or the Delaware Law.

     13. GOVERNING LAW; VENUE AND JURISDICTION. This Agreement shall be
interpreted and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law provisions thereof. The Company and
Director hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Court of Chancery of the State of Delaware (the "Delaware Court"),
and not in any other State or federal court in the United States of America or
any court in any other country, (ii) consent to submit to the exclusive
jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) waive any objection
to the laying of venue of any such action or proceeding in the Delaware Court,
and (iv) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Delaware Court has been brought in an
improper or otherwise inconvenient forum.

     14. BINDING EFFECT. This Agreement shall be binding upon Director and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Director, his heirs, personal representatives and assigns and to the benefit of
Corporation, its successors and assigns.

                                       5
<PAGE>   6

     15. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

     16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings of the parties relating
thereto.

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<PAGE>   7

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

                                             Accelerated Networks, Inc.

                                             By:
                                                -------------------------------
                                                Suresh Nihalani
                                                Its Chief Executive Officer

                                             DIRECTOR

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

                                             Name:
                                                  -----------------------------

                                       7

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