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

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        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 [***] ("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 [***] 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
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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
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        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.

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        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.

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        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
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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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        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 10.14

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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                      MATERIALS AND MANUFACTURING AGREEMENT

                                 BY AND BETWEEN

                             ARROW ELECTRONICS, INC.

                                       AND

                           ACCELERATED NETWORKS, INC.

                                      DATED

                                 MARCH 15, 1999

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<PAGE>   2

                MATERIALS AND MANUFACTURING MANAGEMENT AGREEMENT
                             BOARD ASSEMBLY (ACTIVE)

               This Agreement is entered into as of 15 MARCH, 1999, by and
between ACCELERATED NETWORKS, INC. ("Customer") with its principal place of
business at 301 Science Drive, Moorpark, CA 93021 and the SEMICONDUCTOR GROUP of
Arrow Electronics, Inc. ("Arrow") with its principal place of business at 25 Hub
Drive, Melville, New York 11747-3509.

        The Customer and Arrow hereby agree as follows:

        1. WORK, ENGINEERING CHANGE ORDERS, ATTRITION KITS, MANUFACTURING YIELD,
           PAYMENT, PRICE, TAXES AND SUBCONTRACTORS

        1.1 WORK. Arrow agrees to use reasonable commercial efforts to perform
the work ("Work") pursuant to purchase orders or changes to purchase orders
issued by Customer and accepted by Arrow. Work shall mean to procure components
and other supplies ("Components") and to engage a subassembly house (the
"Subcontractor") to manufacture or assemble products ("Products") pursuant to
detailed, written specifications ("Specifications") for each such Product which
are provided by Customer and accepted by Arrow and to deliver such Products to a
Customer designated location. For each Product or revision thereof,
Specifications shall include but not be limited to bill of materials,
schematics, assembly drawings, test specifications, current revision number, and
a Customer approved Subcontractor and vendor list. All printed circuit boards
(PCBs) to be provided hereunder are listed in APPENDIX 1 hereto, and will amend
from time to time as mutually agreed upon.

        1.2 ENGINEERING CHANGE ORDERS. Any engineering change order or other
change that results in any revision to the Specifications for any Product
("ECO") must be in writing, signed and dated by Customer. Arrow will make a
reasonable best effort to acknowledge receipt of, and impact of and to sign and
return a copy of the revised Specifications to Customer within forty-eight (48)
hours of receipt by Arrow of such written notice. In the event that the price,
or delivery schedule, or both, are affected by the ECO(s), Arrow shall make a
reasonable best effort to notify Customer within forty-eight (48) hours as to
the impact of any such changes and shall provide Customer with the date when any
such ECO will become effective. Components that are affected by any ECO shall be
treated in accordance with Section 4.3 hereof. Arrow shall not take action on
any ECO from Customer until Customer has indicated in writing to Arrow that such
request is acceptable to Customer.

        1.3 INTENTIONALLY OMITTED (NOT APPLICABLE).

        1.4 MANUFACTURING YIELD. As part of the manufacturing process there will
be completed Products that the test procedures and equipment or
manufacturability will not "yield" as good. After review of the test procedures,
the supplied test equipment, and manufacturability by the Subcontractor, this
"yield" loss is not expected to exceed [***] of the total Products produced. The
Subcontractor will use available troubleshooting techniques and equipment, but
after due diligence the defective Products within this percentage will be
shipped

--------------------
*** 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.

                                       1
<PAGE>   3

separately from the "good" Products, marked as "Assembly Rejects" and invoiced
to the Customer at the contracted pricing. Product loss due to manufacturing or
handling errors or losses greater than the above percentage will be the
responsibility of the Subcontractor. After Customer's receipt and review of
these Assembly Rejects, if the defect was due to material defects or
manufacturing process errors the Customer's account will be credited for the
invoiced Product price.

        1.5 PAYMENT. Terms of payment shall be [***] from the date of invoice,
payable in U.S. Dollars.

        1.6 PRICE. Price for the Work shall be as agreed upon by Arrow and
Customer from time to time as set forth in purchase orders issued by Customer
and accepted by Arrow. Preliminary prices shall be as set forth in Appendix 1,
attached hereto, and made a part hereof. Arrow agrees to review pricing as set
forth in Appendix 1, with Customer, every ninety (90) days during the term of
this Agreement. Price reductions or increases (if applicable) shall be
negotiated on a case by case basis. In the event the parties are unable to
mutually agree on any such price change(s), within a thirty (30) day period from
notification thereof, unless otherwise mutually agreed, any such item(s) shall
be removed from Appendix 1, within the terms of this Agreement.

        1.7 TAXES. Customer shall be responsible for payment of all taxes
relating to the sale of the Products including but not limited to any license
fees and sales taxes.

        1.8 SUBCONTRACTORS. The Work may be performed, in whole or in part, by
third parties selected by Arrow and approved by Customer.

        2. COMPONENTS, WARRANTY AND RETURNS

        2.1 COMPONENTS. All Components, other materials and equipment required
in connection with the Work acquired or supplied by Arrow will be in compliance
with the Specifications, except Components, other materials or equipment which
are supplied by Customer ("Customer Components"). Arrow shall bear the risk of
loss for Customer Components while in Arrow's care and custody, while
Subcontractor shall bear the risk of loss for Customer Components while in its
care and custody.

        2.2 WARRANTY. Seller warrants to Buyer that Products purchased hereunder
will conform to the applicable manufacturer's specifications for such Products
and that any value-added work performed by Seller of such Products will conform
to the applicable Buyer's specifications relating to such work. Seller makes no
other warranty, express or implied, with respect to the Products. IN PARTICULAR,
SELLER MAKES NO WARRANTY RESPECTING THE MERCHANTABILITY OF THE PRODUCTS OR THEIR
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE OR RESPECTING

--------------------
*** 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

INFRINGEMENT. However, Seller will transfer to Buyer whatever transferable
warranties and indemnities Seller receives from the manufacturer of the
Products. With respect to Products which do not meet applicable manufacturer's
specifications and with respect to value-added work by Seller which does not
meet applicable Buyer's specifications, Seller's liability is limited (at
Seller's election) to (1) refund of Buyer's purchase price paid for such
Products (without interest), (2) repair of such Products, or (3) replacement of
such Products; provided, however, that such Products must be returned to Seller,
if Seller is unable to repair or replace despite diligent efforts, Seller shall
refund Buyer's purchase price paid for such Products (without interest) along
with acceptable evidence of purchase, within twenty (20) days from date of
delivery, transportation charges prepaid. NEITHER PARTY SHALL IN ANY EVENT BE
ENTITLED TO, AND NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES OF ANY NATURE INCLUDING, WITHOUT BEING LIMITED TO, LOSS
OF PROFIT, PROMOTIONAL OR MANUFACTURING EXPENSE, OVERHEAD, INJURY TO REPUTATION
OR LOSS OF CUSTOMERS. A PARTIES' RECOVERY FROM THE OTHER FOR ANY CLAIM SHALL NOT
EXCEED THE PURCHASE PRICE FOR THE PRODUCTS IRRESPECTIVE OF THE NATURE OF THE
CLAIM, WHETHER IN CONTRACT, TORT, WARRANTY, OR OTHERWISE. THE FOREGOING
LIMITATIONS SHALL NOT APPLY TO EITHER PARTIES INDEMNITY OBLIGATIONS OR BREACH OF
CONFIDENTIALITY UNDER SECTION 8 HEREUNDER.

        The attached A-Plus Manufacturing warranty statement (APPENDIX 4) is
incorporated by reference, and made a part hereof.

        2.3 RETURNS. Customer may return to Arrow any Product that does not
comply with the above warranty, provided that: (i) Customer obtains a return
material authorization ("RMA") from Arrow prior to returning the Product; (ii)
the Product is returned within applicable warranty period; and (iii) the product
deficiency is identified and attached to the Product. Any Product so returned to
Arrow shall be promptly repaired or replaced, or the purchase price therefor
refunded or credited price paid, at Arrow's option. Product determined to be
defect free after inspection will be returned to Customer and Customer will be
responsible for any inspection charges from Subcontractor. This shall be
Customer's sole and exclusive remedy for any breach of any warranty provided in
this Agreement. Seller agrees to make a reasonable best effort to replace
non-conforming material within ten (10) business days of return, freight
prepaid.

        3. LICENSE

        3.1 GRANT. Customer grants to Arrow, with the right to sublicense to the
Subcontractor or any replacement therefor, a license under any copyright,
patent, trade secret or other proprietary right necessary or useful for the
manufacture or assembly of the Products, solely for the purpose of performing
the Work pursuant to purchase orders issued by the Customer.

        3.2 OWNERSHIP. Customer represents and warrants that: (i) it owns the
entire right, title and interest to the Customer Components; (ii) the
performance of the Work does not infringe the proprietary rights of any third
party; and (iii) the Customer has the right and power to

                                       3
<PAGE>   5

enter into this Agreement. Customer agrees to indemnify Arrow and hold Arrow
harmless from and against any and all claims, losses, liabilities, damages,
expenses and costs (including attorneys' fees and court costs) that result from
a breach or alleged breach of any of these representations and warranties or
other obligations contained in this Agreement, or incurred in the settlement or
avoidance of any such claim.

        4. PURCHASE ORDER COMMITMENTS, SCHEDULE AND QUANTITY CHANGES,
           CANCELLATION, MINIMUM ORDER QUANTITY AND SAFETY STOCK

        4.1 PURCHASE ORDER COMMITMENTS. Customer will issue a purchase order
once per calendar month which specifies all Work to be completed within a
minimum of a 60 day period commencing on the date of the purchase order.
Included with each purchase order shall be a 90 day non-binding forecast
covering the period of beyond the aforementioned 60 day firm requirement. Each
purchase order shall reference the applicable Specifications.

        4.2 SCHEDULE AND QUANTITY CHANGES. Any change by Customer in the
quantity of Products or delivery date as contained in a purchase order shall be
subject to the prior written approval of Arrow except, however, Customer may
reschedule delivery of Products to a date no later than [***] beyond the
originally scheduled delivery date. Any change by Customer in the scheduled
delivery date to a date in excess of [***] from the originally scheduled
delivery date shall be deemed to be a cancellation unless otherwise agreed to by
Arrow in writing. Customer may not change the quantity of Products or delivery
date of Products within [***] of the scheduled delivery date. Customer shall be
liable for any additional costs or expenses incurred by Arrow as a result of any
change in the quantity of Products or delivery date by Customer.

        4.3 CANCELLATION. Except with respect to Components of Products which
have been previously identified to Customer as long lead time Components ("Long
Lead Time Components") listed in APPENDIX 2 or custom Components ("Custom
Components") listed in APPENDIX 3, Customer may cancel delivery of Products with
written notice at least 60 days prior to the scheduled delivery date without
cost or penalty. If Customer cancels delivery of Products less than 60 days
prior to the scheduled delivery date, or if the affected Components are Long
Lead Time Components or Custom Components, Arrow shall make reasonable
commercial efforts to: (i) return the affected Components to their manufacturer
(the "Supplier") or otherwise utilize any such Components; or (ii) cancel
Arrow's orders for such Components. Customer is not obligated to pay Arrow for
Components that are returned or Components on order which are canceled at no
cost to Arrow. In the event Arrow cannot return Components to their Supplier,
otherwise utilize or cancel future orders, Arrow will ship completed Products
and affected Components to Customer and Customer shall pay: (i) for all Products
that are in Arrow's or Subcontractor's possession as of the cancellation date
that have been produced for the canceled order; and (ii) Customer's resale price
of all of the affected Components. Customer authorizes

--------------------
*** 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.

                                       4
<PAGE>   6

Arrow to bill these charges within sixty (60) days of the effective date of
Customer's cancellation. Should Customer fail to place an order for any Product
for any continuous period of 60 days, the Components of such Product shall be
considered canceled and shall be treated in accordance with this Section 4.3.
Further, in the event that Arrow shall have actually purchased any Customer
Components from Customer, and any such Customer Components shall not have been
repurchased by Customer hereunder within sixty (60) days of their purchase by
Arrow, such Customer Components shall be considered canceled and Customer
authorizes Arrow to bill Customer Arrow's purchase price plus a management fee
of [***] for same.

        4.4 MINIMUM ORDER QUANTITY. Upon termination of this Agreement,
completion of any purchase order, or cessation of Customer's demand for any
Component, Customer shall pay Customer's resale price for all Excess Components.
Excess Components shall mean those Components specified by Customer which: (i)
are in Arrow's or Subcontractor's possession on the referenced date of
termination, completion or cessation of demand; (ii) were procured by Arrow as a
result of minimum order quantities for such Components established by their
Supplier; and (iii) cannot be returned to their Supplier or otherwise utilized
to fulfill any other Customer purchase order. Once each month Arrow shall
provide Customer with a listing of all such goods.

        4.5 SAFETY STOCK. Arrow shall maintain a stock ("Safety Stock") of
Products in an amount which is mutually determined, in writing, by Arrow and
Customer. Such Safety Stock of Products will involve the assembly of Products
separate from those Products assembled for the purpose of fulfilling Customer's
purchase orders. Upon termination of the Agreement, or cessation of Customer's
demand for any Product, Arrow shall deliver, and Customer shall accept delivery
of and pay for, such Safety Stock.

        5. SHIPPING

               Products will be shipped F.O.B. Subcontractor's facility, which
shall constitute delivery hereunder, with title and risk of loss or damage to
pass to Customer upon shipment. No single shipment shall exceed [***] in total
unless Customer has been notified Manager of Purchasing at least three (3)
business days prior to shipment. Products are deemed accepted by Customer unless
Customer notifies, Arrow within fifteen (15) days of delivery of Product
shortage, damage, or non-conformance.

        6. TERM AND TERMINATION

        6.1 TERM. This Agreement shall begin upon the date hereof and shall
continue in force for a initial twelve (12) month period, unless otherwise
terminated as provided for hereunder. This Agreement may be extended for
additional twelve (12) month terms by the mutual written consent of the parties
hereto

--------------------
*** 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.

                                       5
<PAGE>   7

        6.2 TERMINATION. This Agreement may be terminated by either party, in
whole or in part, with or without cause, upon sixty (60) days prior written
notice to the other party. The provisions of Section 4.3 hereof shall apply as
of the effective date of any termination. Termination of this Agreement shall
not affect the obligations of either party that exist as of the date of
termination.

        6.3 TERMINATION FOR DEFAULT. This agreement may be terminated
immediately for cause by either party in the event the other party; (i) shall
become insolvent; (ii) ceases to function as a going concern, or; (iii) fails to
perform any of its material obligations hereunder so as to be in default and
fails within thirty (30) days cure after prior written notice thereof.

        7. LIABILITY LIMITATION

        NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, NEITHER PARTY WILL BE
LIABLE UNDER ANY SECTION OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES, LOST PROFITS, LOST BUSINESS, OR COST OF
PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES.

        8. CONFIDENTIALITY

        It is understood and agreed that the terms of this Agreement are
confidential, and no news release, advertisement or public announcement, or
denial or confirmation of the same, concerning any part of the subject matter of
this Agreement shall be made by either party hereto without the prior written
consent of the other party in each instance. Further, the parties hereto
acknowledge that, during the term hereof, they may become aware of confidential,
secret or proprietary information pertaining to the other party and its
operations (including, without limitation, information with respect to bidding,
pricing, suppliers and customers, or lists thereof, research, development and
engineering, and internal operations, inventory control, data processing,
technical data, and other procedures and systems) and that disclosure of such
information would materially and adversely affect the affected party. Each party
hereto agrees to maintain such confidentiality and secrecy and not to disclose
any such information to any person, firm or other entity, or to utilize the same
in any manner or form, except as may be expressly required by the terms and
conditions of this Agreement, or is required to be disclosed by judicial or
legal proceeding. Notwithstanding anything to the contrary, the confidentiality
provisions set forth in this Section 8 shall survive any termination of this
Agreement. Information extracted from a secured and encrypted area on either
parties Internet/Intranet web site, shall be considered confidential information
under the terms of this Agreement.

        9. MISCELLANEOUS

        9.1 GOVERNING LAW, DISPUTE RESOLUTION. This Agreement shall in all
respects be governed by and construed in accordance with the laws of the State
of California, excluding that body of laws known as conflict of laws. The
prevailing party in any legal action

                                       6
<PAGE>   8

or proceeding to enforce this Agreement shall be entitled to recover from the
non-prevailing party its reasonable attorneys' fees, and related costs and
disbursements, incurred in connection with such proceeding or the enforcement of
this Agreement. Both parties agree to waive trial by jury.

        9.2 FORCE MAJEURE. Nonperformance under this Agreement will be excused,
and neither party will bear any resulting liability to the other, to the extent
that such performance is rendered commercially impracticable or delayed by an
act of God or any other cause beyond the reasonable control of the nonperforming
party. The time for performance shall be extended for the time period lost by
reason of the delay, provided such delay shall not exceed sixty (60) days, or
this Agreement has been terminated as provided for in sub-section 6.3 hereunder.

        9.3 RELATIONSHIP OF PARTIES. The parties are and shall be independent
contractors to one another, and nothing herein shall be deemed to cause this
Agreement to create an agency, partnership, joint venture or any other
relationship between the parties.

        9.4 ASSIGNABILITY. Customer may not assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without Arrow's
prior written approval, which shall not be unreasonably withheld.

        9.5 NOTICES. Notices or other communications under this Agreement shall
be in writing and shall be effective when delivered personally or by overnight
courier, or mailed, postage prepaid, by certified or registered mail to each
party at the address set forth below (or to such other address as either party
may from time to time provide the other):

        Arrow Electronics, Inc.             Accelerated Networks, Inc.
        Semiconductor Group                 301 Science Drive
        25 Hub Drive                        Moorpark, CA 93021
        Melville, NY 11747
                                            Attention:  Manager of Purchasing
        Attention: Contracts Group                      Chief Financial Officer

        9.6 ENTIRE AGREEMENT; AMENDMENT; SEVERABILITY; AND WAIVER. This
Agreement represents the entire agreement between the parties concerning the
subject matter hereof, and may not be modified except in a writing signed by
both parties. This Agreement supersedes all proposals or quotations, oral or
written, and all negotiations, conversations, or discussions between or among
the parties relating to the subject matter of this Agreement. When interpreting
this Agreement precedence shall be given to the respective parts in the
following descending order: (i) this Agreement; (ii) any exhibits to this
Agreement; and (iii) if purchase orders are used to release Product, those
portions of the purchase order that are not pre-printed. Any waiver of any
provision of this Agreement must be in writing and signed by the party alleged
to have waived such provision, and any single waiver shall not operate to waive
subsequent or other defaults. The unenforceability of any provision of this
Agreement shall not affect the remaining provisions or any portions thereof.

                                       7
<PAGE>   9

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the day and year
first above written.

ACCELERATED NETWORKS, INC.                ARROW ELECTRONICS, INC.
                                          ON BEHALF OF ITS SEMICONDUCTOR GROUP:

By:      /s/ Frederic T. Boyer             By:     /s/ A. Streber
    ---------------------------------          --------------------------------

Name:    Frederic T. Boyer                 Name:   A. Streber
      -------------------------------            ------------------------------

Title::  Chief Financial Officer           Name:   President
        -----------------------------            ------------------------------

Date:   March 25, 1999                     Date:   April 1, 1999
      -------------------------------            ------------------------------

                                       8
<PAGE>   10

                                   APPENDIX I

                TO ACCELERATED NETWORKS, INC./ARROW/SEMICONDUCTOR

                MATERIALS AND MANUFACTURING MANAGEMENT AGREEMENT
                 BOARD ASSEMBLY (ACTIVE) DATED MARCH 15TH, 1999

                                       UNIT PRICE      MINIMUM RELEASE
    PCB#              DESCRIPTION         (USS)             QUANTITY
------------          -----------       ----------      ---------------

460-0003-001           COMBO CARD         [***]              [***]

--------------------
*** 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.

<PAGE>   11

                                   APPENDIX 2

                TO ACCELERATED NETWORKS, INC./ARROW/SEMICONDUCTOR

                MATERIALS AND MANUFACTURING MANAGEMENT AGREEMENT
                  BOARD ASSEMBLY (ACTIVE) DATED MARCH 15TH 1999

                            LONG LEAD TIME COMPONENTS

<TABLE>
<CAPTION>
ACCELERATED P/N           MFG             MFG P/N                    LEADTIME
---------------           ---             -------                    --------
<S>                       <C>             <C>                        <C>
001-00070-0641            SEEQ            LQ80224                    [***]

000-00002-0241            Dallas          DS1687-3                   [***]

000-00003-0321            MSYSTEMS        MD2200DO8 (WAS 8PB)        [***]

100-00020-1052            AVX             1206YG105ZA                [***]

101-00805-1046            AVX             08055G104MA                [***]

101-00805-1052            AVX             0805YG105MA                [***]
</TABLE>

--------------------
*** 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.

<PAGE>   12

                                   APPENDIX 3

                TO ACCELERATED NETWORKS, INC./ARROW/SEMICONDUCTOR

                MATERIALS AND MANUFACTURING MANAGEMENT AGREEMENT
                  BOARD ASSEMBLY (ACTIVE) DATED MARCH 15TH 1999

CUSTOM COMPONENTS

<TABLE>
<CAPTION>
ACCELERATED P/N          MFG              MFG P/N                  LEADTIME      NC/NR - Y/N
---------------          ---              -------                  --------      -----------
<S>                      <C>              <C>                      <C>           <C>
001-00068-3884           Lucent           LUC4ABO1388              [***]              Y

083-00001-001            Vicor            VI-JNO-EX-F3             [***]              Y

141-00010-0140           AMP              5-179010-6               [***]              Y

161-00001-0032           AMP              822273-1                 [***]              Y

060-00002-16665          Abracon          ACHL-16.667mhz           [***]              Y

023-002-0065             IDEA             G1831B/3EG               [***]              Y

062-0002-0025            Epliptek         EC11OOHSTS-25.OOOMG      [***]              Y

023-00001-0023           IERC             603-14/Q3                [***]              Y

140-00045-0008           AMP              406549-4                 [***]              Y

023-00001-0023           Lumex            5ML-LX120GG              [***]              Y

101-00603-1041           Kemet            C0603C104M8              [***]              Y

121-01206-0R12           Dale             WSL1206-.12              [***]              Y

140-00016-0002           Samtec           DW-02-16-L-S-300         [***]              Y
</TABLE>

--------------------
*** 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.

<PAGE>   13

                                   APPENDIX 4

                TO ACCELERATED NETWORKS, INC./ARROW/SEMICONDUCTOR

                MATERIALS AND MANUFACTURING MANAGEMENT AGREEMENT
                  BOARD ASSEMBLY (ACTIVE) DATED MARCH 15TH 1999

                        MANUFACTURING SERVICES AGREEMENT

                        WARRANTY FOR ACCELERATED NETWORKS

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

This Agreement effective as of this 18th day of March, 1999, by and between
A-Plus Manufacturing Corporation with offices at 2381 Bering Drive, Milpitas, CA
95131 ("Subcontractor") and Arrow Electronics, Inc., North American Component
Operations, with offices at 25 Hub Drive, Melville, NY 11747 ("Contractor").

"A-Plus Manufacturing Corporation warrants to Contractor and/or its Customer
that all products/services provided by it: (a) shall be of good quality and
workmanship and free from workmanship defects, (b) shall conform to all
specifications, drawings, description furnished, specified or adopted by Buyer
for a period of fifteen (15) months from the date of shipment."

IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as
of the date set forth above.

Arrow Electronics, Inc.               A-Plus Manufacturing Corporation
     (Contractor)                             (Subcontractor)

By:     /s/ A. Streber                By:     /s/ Bill Yee
    --------------------------            --------------------------------------

Name:   A. Streber                    Name:   Bill Yee
      ------------------------              ------------------------------------
(Typed or Printed)                    (Typed or Printed)

Title:  President                     Title:  Senior V.P. of Operation
       -----------------------               -----------------------------------

Date:   4/1/99                        Date:   March 18, 1999
      ------------------------              ------------------------------------

<PAGE>   14

ACCELERATED NETWORKS, INC.
       (Customer)

By:     /s/ Frederic T. Boyer

Name:   Frederic T. Boyer
      -----------------------------------
(Typed or Printed)

Title:  Chief Financial Officer
       ----------------------------------
Date:   March 25, 1999
      -----------------------------------

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