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                                                                EXHIBIT 10.12

                             EMPLOYMENT AGREEMENT

     This Agreement ("Agreement") is made and entered into this 12th day of
May, 1999, by and between Elastic Networks Inc., a Delaware corporation
("Elastic"), with its principal place of business at 6120 Windward Parkway,
Suite 100, Alpharetta, Georgia 30005 and Guy D. Gill, an individual residing
at 1015 Lonsdale Court, Alpharetta, Georgia 30022 ("Executive").

                                 WITNESSETH:

     WHEREAS, Elastic shall employ employees to conduct its business on the
Commencement Date;

     WHEREAS, conditioned upon the closing of the Private Placement, Elastic
desires to employ the Executive during the Term under the terms and
conditions set forth in this Agreement;

     WHEREAS, the Executive desires to accept employment with Elastic during
the Term on the terms and conditions set forth in this Agreement;

     WHEREAS, it is a condition precedent to the closing of the agreements
related to the Private Placement that Elastic and the Executive enter into
this Agreement;

     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the Executive and Elastic agree as follows:

1.   Definitions.

     For purposes of this Agreement, the following terms shall have the
     meanings set forth below:

     (a) "Acquisition Event" shall mean: (i) any merger or consolidation which
         results in the voting securities of Elastic outstanding immediately
         prior thereto representing immediately thereafter (either by remaining
         outstanding or by being converted into voting securities of the
         surviving or acquiring entity) less than 50% of the combined voting
         power of the voting securities of Elastic or such surviving or
         acquiring entity outstanding immediately after such merger or
         consolidation; (ii) any sale of all or substantially all of the assets
         of Elastic; or (iii) the complete liquidation of Elastic.
         Notwithstanding the foregoing, the election of any Purchaser (as
         defined in the Right of First Offer Agreement) to sell its Shares (as
         defined in the Right of First Offer Agreement) to Nortel Networks Inc.
         pursuant to Section 6 of the Right of First Offer Agreement, and the
         purchase of any such Shares by Nortel Networks Inc., shall not be
         deemed to be an Acquisition Event.

     (b) "Agreement" shall have the meaning set forth in the preamble hereto.

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(a)  "Award" shall mean Options, restricted stock, or other stock based awards
     under the Plan.

(d)  "Board" shall mean the Board of Directors of Elastic.

(e)  "Cause" shall mean (i) the Executive's material breach of this Agreement,
     which includes, but is not limited to, a breach of Sections 9 or 10 of this
     Agreement or any sub-section thereof, (ii) a good faith finding by the
     Board of the Executive's dishonesty, fraud, malfeasance, gross negligence
     or willful misconduct with respect to Elastic or any Co-Employer, (iii) the
     Executive's continued failure to satisfactorily perform his duties with the
     Company, to follow the lawful direction (consistent with the Executive's
     duties) of the Board or to follow the established and lawful policies,
     procedures and rules of Elastic or any Co-Employer (other than any such
     failure resulting from incapacity due to mental or physical illness or
     injury that is certified by a physician satisfactory to Elastic); or (iv)
     Executive's indictment for (or similar finding of probable cause with
     respect to the Executive's commission of) or conviction of, or the
     Executive's entry of a pleading of guilty or nolo contendere to, a crime
     involving moral turpitude or a felony (other than an offense based solely
     on a traffic violation). With respect to clauses (ii) and (iii) above,
     prior to terminating the Executive for Cause as provided in Section 8(a)(1)
     hereof, the Board shall deliver a written notice to the Executive stating
     in reasonable detail the facts and circumstances regarding the Executive's
     offense or failure and provide the Executive with sixty calendar (60) days
     to correct such offense or failure; PROVIDED, HOWEVER, that no such notice
     shall be required, and the Board may immediately terminate the Executive
     for Cause, if the Board in good faith determines that the Executive's
     offense or failure is or is likely to be immediately or materially
     injurious to Elastic or the Co-Employer or Executive has previously
     received a written notice of an offense or failure under clause (ii) or
     (iii) above in the twelve (12) month period immediately preceding the
     occurrence of the offense or failure at issue. The Executive shall not
     participate in the Board's determinations regarding Cause with respect to
     the Executive even if the Executive is a member of the Board.

(f)  "Code" shall mean the Internal Revenue Code of 1986, as amended and any
     regulations promulgated thereunder.

(g)  "Co-Employer" shall mean that third party, if any, which pursuant to an
     agreement with Elastic, provides certain human resources and payroll
     services with respect to Elastic employees and, with regard to such
     services, is viewed as the employer of Elastic employees.

(h)  "Commencement Date" shall mean the day immediately following closing of
     Private Placement.

(i)  "Developments" shasll have the meaning set forth in Section 10(b)(l) of
     this Agreement.

(j)  "Disability" shall mean the inability of the Executive to perform the
     duties set forth in Section 3 of this Agreement because of an illness or
     accidental injury for a period of one hundred eighty (180) calendar days,
     whether or not consecutive, during any three hundred sixty (360) calendar
     day period, as certified by a physician satisfactory to Elastic and the
     Executive. If Elastic and the Executive do not agree on a physician, the
     Executive and Elastic shall each

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         select a physician and those two (2) physicians shall together select
         a third physician, whose determination as to disability shall be
         binding on all parties.

    (k)  "Elastic" shall have the meaning set forth in the preamble to this
         Agreement.

    (l)  "Elastic's Affiliates" shall mean any individual or entity that
         directly or indirectly, through one or more intermediaries,
         controls, is controlled by or is under common control with Elastic.
         For purposes of this definition, "control" means the power to
         direct the management and policies of another, whether through the
         ownership of voting securities, by contract or otherwise.

    (m)  "Employment Period" shall mean the Term and any period immediately
         following the Term during which Elastic and the Executive have
         mutually agreed to continue the Executive's employment.

    (n)  "Entity" shall mean a corporation, partnership, limited liability
         company, trust, joint venture, association, organization, sole
         proprietorship or entity in any other form.

    (o)  "Executive" shall have the meaning set forth in the preamble to this
         Agreement.

    (p)  "Good Reason" shall mean (i) the assignment of the Executive, without
         the Executive's consent, to a principal place of work which
         increases the Executive's commuting distance from his residence to
         his principal place of work by fifty (50) miles or more; (ii) the
         assignment to the Executive of job duties that are inconsistent
         with the Executive's position as set forth on Schedule A or a
         substantial adverse alteration of the Executive's position,
         reporting relationship or duties as set forth on Schedule A without
         the Executive's consent; or (iii) a reduction of the Executive's
         annual base salary then in effect without the Executive's consent;
         PROVIDED, however, that "Good Reason" shall not include any event
         or circumstance that occurs more than one hundred twenty (120)
         calendar days prior to Elastic's receipt of the Executive's written
         notice of his intention to terminate for Good Reason as established
         in Section 8, below, a reduction in the Executive's base salary
         that is applied to all or substantially all Elastic employees or a
         reduction or suspension in base salary that occurs as a result of
         the Executive's receipt of disability payments under a fringe
         benefit plan in which he participates as an Elastic employee.
         Notwithstanding the occurrence of any event or circumstance set
         forth in clauses (i) through (iii), above, such occurrence shall
         not be deemed to constitute Good Reason if, while the Executive is
         employed during the Notice Period, such event or circumstance has
         been fully corrected and the Executive has been reasonably
         compensated or any losses or damages resulting therefrom (provided
         that such right of correction by Elastic shall only apply to the
         first notice of termination for Good Reason given by the Executive).

    (q)  "Notice Period" shall mean the ninety (90) calendar day period
         immediately following the date on which Elastic receives the
         Executive's written notice of his intent to terminate employment
         under Section 8(b) of this Agreement.

    (r)  "Options" shall mean those options granted by the Board under the
         Plan for the purchase of shares of Elastic common stock.

    (s)  "Plan" shall mean the Elastic Networks Inc. 1999 Stock Incentive
         Plan.

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     (t)  "Private Placement" shall mean the first sale of Elastic securities to
          any  person or entity other than the Nortel Networks Inc.,
          specifically excluding any issuance of Elastic securities or any right
          to acquire Elastic securities granted to employees, vendors or
          consultants.

     (u)  "Proprietary Information" shall have the meaning set forth in Section
          10(a)(l).

     (v)  "Right of First Offer Agreement" shall mean the Right of First Offer
          and Co-Sale Agreement, dated as of May 1999, and as amended from time
          to time by and among Elastic, Nortel Networks Inc. and the persons and
          entities listed on Exhibit A thereto.

     (w)  "Severance Period" shall mean the shorter of the following periods:
          (i) the eighteen (18) month period immediately following the
          Executive's termination of employment and (ii) the period immediately
          following the Executive's termination through the fourth anniversary
          of the Commencement Date, PROVIDED, however, that such Severance
          Period shall in no event be less than the twelve (12) month period
          immediately following the Executive's termination of employment.

2.   Term.

     Conditioned upon (i) the closing of the Private Placement, (ii) the
     Executive's status as an active employee of Nortel Networks Inc. as of the
     closing of the Private Placement, (iii) the Executive providing
     documentation required by the Immigration Reform and Control Act of 1986
     and (iv) the Executive's completion of employment forms required by any
     Co-Employer, Elastic hereby agrees, as the sole employer or jointly with a
     Co-Employer, to employ the Executive, and the Executive hereby accepts
     employment with Elastic, upon the terms and conditions set forth in this
     Agreement, for the Term. If the Executive and Elastic desire to continue
     the Executive's employment after the Term, such employment shall be upon
     terms and conditions mutually agreed upon by Elastic and the Executive.

3.   Duties.

     The Executive shall have the job, duties and reporting relationship set
     forth in Schedule A. Except as otherwise provided in this Section 3, the
     Executive shall devote his full working time, attention, skill, knowledge,
     experience and energies to the performance of his duties set forth on
     Schedule A. Notwithstanding the preceding sentence, the Executive shall not
     be prohibited from engaging in activities from time to time on his behalf
     or on the behalf of non-profit organizations or industry associations,
     provided that such activities do not interfere with the performance of his
     duties or obligations under this Agreement. With the consent of the Board,
     the Executive may serve on the boards of directors or trustees of other
     companies or organizations and devote a reasonable amount of working time
     to such approved activities. The Executive shall abide by, and comply with,
     all rules, policies and procedures of Elastic and any Co-Employer and all
     applicable laws and regulations including, but not limited to, those
     relating to antitrust. The Executive's principal place of work shall be
     6120 Windward Parkway, Suite 100, Alpharetta, Georgia

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     30005, until such time as the Board (or any other individual or entity to
     whom the Executive reports), in its or his discretion, designates another
     location as the Executive's principal place of work.

4.   Compensation.

     (a)  BASE SALARY. The Executive shall receive the annual base salary set
          forth in Schedule B, which shall be payable in installments in
          accordance with such payroll schedule as is then in effect with
          respect to all Elastic executive employees.

     (b)  DEDUCTIONS. Elastic or the Co-Employer, as applicable, is authorized
          to deduct from the Executive's compensation such sums as may be
          required to be deducted or withheld under the provisions of any
          applicable law now in effect or hereafter put into effect,
          including, but not limited to, social security, unemployment and
          income tax withholding, and such other deductions permitted by
          Elastic or the Co-Employer which the Executive may authorize from
          time to time.

5.   Plan Incentives.

     (a)  INITIAL AWARD. Subject to the Board's adoption of the Plan, which
          shall be substantially similar to Draft Stock Incentive Plan that
          is attached hereto as Schedule C, the Executive shall be eligible
          to participate in the Plan. Conditioned upon the Board's approval
          and in accordance with the terms and conditions of the Plan,
          effective on the Commencement Date the Executive shall be granted
          an Option(s) to purchase a number of shares of Elastic common stock
          that is equal to Five Percent (5%) of the sum of the number of
          shares of Elastic common and preferred stock issued and outstanding
          on the grant date plus the number of shares of Elastic common stock
          authorized for grant under the Plan, with an exercise price to be
          determined by the Board. The vesting, rights and obligations with
          respect to such Option(s) shall be determined by the Board in
          accordance with the Plan and shall be set forth in appropriate
          option agreements which shall be substantially similar to the Draft
          Incentive Stock Option Agreement and Draft NonStatutory Stock
          Option Agreement attached hereto as Schedules D and E,
          respectively. Notwithstanding anything in the preceding sentence to
          the contrary, the outstanding Option(s) granted to the Executive
          pursuant to this Section 5(a) shall (i) upon the occurrence of an
          Acquisition Event, be assumed or an equivalent option or award
          substituted by the successor corporation or a parent or subsidiary
          of the successor corporation, provided that any such Options
          substituted for Incentive Stock Options shall satisfy, in the
          determination of the Board, the requirements of Section 424(a) of
          the Code, unless the successor corporation refuses to assume or
          substitute for the Option(s), in which case the Executive shall
          have the right to exercise the Option(s) in full, including with
          respect to shares of Common Stock as to which it would not
          otherwise be exercisable, and such Option(s) shall be exercisable
          for a period of not less than forty-five (45) days from the date on
          which the Board gives the Executive written notice that such
          Option(s) are fully exercisable and shall terminate upon the
          expiration of such period; and (ii) upon Elastic's termination of
          the Executive's employment without Cause, as provided in Section
          8(a)(2) hereof, or the Executive's termination of his employment
          for Good Reason, as provided in Section 8(b)(2) hereof, be
          immediately exercisable in full.

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     (b)  PERFORMANCE BASED AWARDS. The Executive shall be eligible to receive
          additional Awards under the Plan at the sole discretion of the Board.
          The Executive shall not participate in decisions to grant Awards to
          the Executive under the Stock Plan even if the Executive is a member
          of the Board.

     (c)  AMENDMENT OF THE PLAN. Notwithstanding anything to the contrary in
          this Agreement, the Board may amend, suspend or terminate the Plan or
          any portion thereof at any time except as otherwise provided by
          applicable law.

6.   Fringe Benefits.

     (a)  FRINGE BENEFITS OTHER THAN VACATION. The Executive shall be
          eligible to participate in the fringe benefit plans and programs
          generally made available by Elastic or, if applicable, the
          Co-Employer, to Elastic executive employees in accordance with the
          terms of those plans and programs. Elastic shall make contributions
          for the Executive's participation in such fringe benefit plans and
          programs as it generally makes for its other executive employees.
          Except as otherwise provided by law, Elastic or the Co-Employer, as
          applicable, has the right to modify, add to or eliminate any or all
          of its fringe benefit plans or programs at any time and for any
          reason.

     (b)  VACATION. The Executive shall be entitled to five (5) weeks
          (twenty-five (25) business days) of paid vacation for each year of
          the Term, to be taken at such time as may be approved by the Board
          or its designee. The Executive shall accrue such annual vacation on
          a prorata basis each month starting with the Commencement Date.
          Accrual of paid vacation shall cease once the Executive has accrued
          five (5) weeks of paid vacation and shall not resume until the
          accrued vacation is reduced by reason of vacation taken by the
          Executive.

     (c)  COUNTRY CLUB MEMBERSHIP. During the Term the Executive shall retain
          the membership in Country Club of the South that he held as an
          employee of Nortel Networks Inc., and Elastic shall reimburse the
          Executive for the annual dues and assessments of such membership. Upon
          the expiration of the Term, the Executive shall assign or return such
          membership to Elastic, as determined by Elastic.

7.   Reimbursement of Expenses.

     (a)  BUSINESS EXPENSES. Elastic shall reimburse the Executive for expenses
          incurred by the Executive in carrying out those duties set forth in
          Section 3 of this Agreement in accordance with Elastic's policies and
          procedures relating to expense reimbursement of executive employees.

     (b)  FINANCIAL AND ESTATE PLANNING, TAX ASSISTANCE AND AUTOMOBILE EXPENSE.
          Elastic shall reimburse the Executive for expenses incurred by the
          Executive for personal financial and estate planning and tax
          assistance services and automobile operating expenses, including
          automobile insurance, property taxes, fuel and maintenance expenses,
          up to a total of Ten Thousand Dollars ($10,000) for each year of the
          Term; PROVIDED, HOWEVER, that reimbursement for such automobile
          operating expenses shall not exceed Two Thousand Four Hundred Dollars
          ($2,400) for each year of the Term and reimbursement for personal
          financial and estate planning and tax assistance services shall be
          conditioned upon Executive's submission of appropriate receipts
          documenting the Executive's payment for such services.

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     (c)  ATTORNEY'S FEES WITH RESPECT TO THIS AGREEMENT. Elastic shall
          reimburse the Executive for one hundred percent (100%) of the
          reasonable expenses incurred by the Executive for the services of an
          attorney with respect to the review of this Agreement upon the
          Executive's submission of appropriate receipts documenting the
          Executive's payment for such services.

8.   Employment Termination.

     (a)  BY ELASTIC. Elastic shall have the right to terminate the employment
          of the Executive at any time during the Term, including, without
          limitation, for Cause or without Cause.

          (1)  If Elastic terminates the employment of the Executive upon the
               occurrence of the expiration of the Term on the fourth
               anniversary of the Commencement Date, the death or Disability
               of the Executive or with Cause, Elastic shall pay to the
               Executive, or, in the event of the Executive's death, the
               estate of the Executive, the compensation and benefits
               ordinarily payable to him under this Agreement through and
               until the last day of his actual employment by Elastic.

          (2)  If Elastic terminates the employment of the Executive without
               Cause, subject to the conditions set forth below, Elastic shall
               pay the Executive a lump sum amount which is equal to the sum of
               (i) the Executive's base salary, in effect on his termination
               date (or, if higher, the highest base salary in effect at any
               time during the six (6) months prior to his termination date)
               calculated for the Severance Period, (ii) the expense the
               Executive incurs during the Severance Period to continue those
               health and life insurance benefits offered under the Consolidated
               Omnibus Budget Reconciliation Act of 1985 and benefit conversion
               options, respectively, less contributions the Executive would
               have made for such coverage as an Elastic employee and (iii) a
               bonus payment in an amount equal to the target bonus for the
               Executive at one hundred percent (100%) performance on all
               factors under the bonus plan in which the Executive is
               participating, if any, as of his employment termination date,
               multiplied by a fraction, the numerator of which is the
               Executive's calendar months of participation as an active
               employee under such plan and the denominator of which is the term
               of such plan in calendar months. The foregoing payment shall be
               conditioned upon the Executives execution of a Settlement
               Agreement with Elastic, the form of which shall be determined by
               the Board and shall contain, at a minimum, the Executive's (x)
               release of all claims against Elastic and Elastic's Affiliates,
               (y) obligation to notify Elastic of his employment by any person
               or Entity during the Severance Period and (z) agreement to repay
               that portion of the foregoing lump sum amount relating to any
               part of the Severance Period during which the Executive is
               employed by Elastic or any of Elastic's Affiliates or is in
               breach of any provisions of this Agreement that survive the
               termination of this Agreement or relating to the continuation
               of the Executive's health or life insurance benefits on or after
               the Executive terminates such benefits or the Executive's
               employment by an Entity or person offering Executive comparable
               benefits or benefits that would result in the termination of the
               Executive's opportunity to continue Elastic health benefits under
               the Consolidated Omnibus Budget Reconciliation Act of 1985.

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     (b)  BY EXECUTIVE. The Executive shall have the right to terminate his
          employment with Elastic during the Term for any reason, including,
          without limitation for Good Reason or for other than Good Reason:
          PROVIDED, however, that the Executive shall give Elastic ninety
          (90) calendar days prior written notice of his intention to
          terminate his employment and shall continue his employment during
          all or such part of the Notice Period as determined by the Board.
          In order to terminate for Good Reason, the Executive must also
          state in such written notice the facts and circumstances giving
          rise to Good Reason in reasonable detail.

          (1)  If the Executive terminates his employment with Elastic for
               other than Good Reason and satisfies the conditions set forth
               in Section 8(b), above, Elastic shall pay the Executive the
               compensation and benefits ordinarily payable to him under this
               Agreement through and until the last day of his actual
               employment by Elastic and his base salary only with respect to
               any portion of the Notice Period remaining following the last
               day of his actual employment.

          (2)  If the Executive terminates his employment with Elastic for
               Good Reason and satisfies the conditions set forth in Section
               8(b), above, Elastic shall pay the Executive the compensation
               and benefits ordinarily payable to him under this Agreement
               through and until the last day of his actual employment by
               Elastic. Additionally, Elastic shall pay the Executive the
               lump sum amount that would be payable to the Executive under
               Section 8(a)(2) above as if Elastic terminated the Executive's
               employment without Cause, conditioned upon the Executive's
               execution of a Settlement Agreement as described in Section
               8(a)(2) above.

9.   Restrictive Covenants.

     (a)  During the Employment Period and for a period of one (1) year after
          the termination or expiration thereof, the Executive shall not
          directly or indirectly:

          (1)  as an owner, partner, officer, director, employee, consultant,
               contractor, joint venturer, investor, lender or shareholder
               (other than as the holder of not more than one percent (1%) of
               the total outstanding stock of a publicly held company),
               participate or obtain interest in the ownership, management,
               operation or control of any Entity or person competitive with
               the business of Elastic or those Elastic Affiliates that
               Elastic controls in the United States without the written
               permission of Elastic; or

          (2)  recruit, solicit or induce, or attempt to induce, any employee,
               consultant or contractor of Elastic or Elastic's Affiliates to
               terminate their employment with, or otherwise cease their
               relationship with, Elastic or Elastic's Affiliates; or

          (3)  solicit, divert or take away, or attempt to divert or to take
               away, the business or patronage of any of the clients,
               customers or accounts, or prospective clients, customers or
               accounts, of Elastic or Elastic's Affiliates which were
               contacted, solicited or served by the Executive during the
               Employment Period.

     (b)  If any restriction set forth in this Section 9 is found by any
          court of competent jurisdiction to be unenforceable because it
          extends for too long a period of time,

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          in too broad a geographic area or over too great a range of
          activities, it shall be interpreted to extend only over the maximum
          period of time, geographic area or range of activities as to which
          it may be enforceable.

     (c)  The Executive recognizes, understands and agrees that this
          Agreement is entered into in connection with the spin-off of
          Elastic and is a condition to the provision of financing of certain
          investors. The Executive further recognizes, understands and agrees
          that the geographic area specified in Section 9(a)(1) is reasonable
          in light of the national and international scope of Elastic's
          business, the expected expansion of Elastic's business during the
          Employment Period and the Executive's expected ownership, as result
          of Options(s) issued pursuant to Section 5(a) of this Agreement, of
          a number of shares of Elastic common stock equal to Five Percent
          (5%) of the sum of the number of shares of Elastic common and
          preferred stock issued and outstanding on the grant date plus the
          number of shares of Elastic common stock authorized for grant under
          the Plan. The Executive further recognizes, understands and agrees
          that the foregoing limitations are properly required for the
          adequate protection of Elastic's legitimate business interests and
          do not preclude the Executive from pursuing his livelihood. The
          Executive further recognizes, understands and agrees that the
          consideration provided in this Agreement, including, but not
          limited to, any payment provided pursuant to Section 8 of this
          Agreement, is sufficient consideration for the foregoing
          limitations.

10.  Proprietary Information and Developments.

     (a)  PROPRIETARY INFORMATION.

          (1)  The Executive agrees that all information and know-how,
               whether or not in writing, of a private, secret or
               confidential nature concerning the business or financial
               affairs of Elastic, any of Elastic's Affiliates, Nortel
               Networks Inc. or Nortel Networks Corporation is and shall be
               the exclusive property of Elastic, Elastic's Affiliates, Nortel
               Networks Inc. or Nortel Networks Corporation, as applicable,
               such information and know-how, including, but not limited to,
               inventions, products, processes, methods, techniques,
               formulas, compositions, compounds, projects, developments,
               plans, research data, clinical data, financial data, personnel
               data, computer programs, and customer and supplier lists
               (collectively, "Proprietary Information"). The Executive shall
               not disclose any Proprietary Information to others outside
               Elastic, Elastic's Affiliates, Nortel Networks Inc. or Nortel
               Networks Corporation or use the same for any unauthorized
               purposes without written approval by an officer of Elastic,
               either during or after the Employment Period, unless and until
               such Proprietary Information has become public knowledge
               without fault by the Executive or as otherwise required by law.

          (2)  The Executive agrees that all files, letters, memoranda,
               reports, records, data, sketches, drawings, laboratory
               notebooks, program listings, or other written, photographic,
               or other tangible material containing Proprietary Information,
               whether created by the Executive or others, which shall come
               into his custody or possession, shall be and are the exclusive
               property of Elastic, Elastic's Affiliates, Nortel Networks
               Inc. or Nortel Networks Corporation, as applicable, to be used
               by the Executive only in the performance of his duties for
               Elastic. The Executive agrees to deliver to

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               Elastic upon the expiration of the Employment Period such
               material containing Proprietary Information.

          (3)  The Executive agrees that his obligation not to disclose or
               use information, know-how and records of the types set forth
               in paragraphs (1) and (2) above, also extends to such types of
               information, know-how, records and tangible property of
               customers of Elastic, Elastic's Affiliates, Nortel Networks
               Inc. or Nortel Networks Corporation or suppliers to Elastic or
               Elastic's Affiliates or other third parties who may have
               disclosed or entrusted the same to Elastic, Elastic's
               Affiliates, Nortel Networks Inc. or Nortel Networks
               Corporation or to the Executive in the course of Elastic's
               business.

     (b)  DEVELOPMENTS

          (1)  The Executive shall make full and prompt disclosure to Elastic
               of all inventions, improvements, discoveries, methods,
               developments, software, and works of authorship, whether
               patentable or not, which are created, made, conceived or
               reduced to practice by the Executive or under his direction or
               jointly with others during the Employment Period, whether or
               not during normal working hours or on the premises of Elastic
               or Elastic's Affiliates (collectively, "Developments").

          (2)  The Executive agrees to assign and does hereby assign to
               Elastic (or any Entity designated by Elastic) all his right,
               title and interest in and to all Developments and all related
               patents, patent applications, copyrights and copyright
               applications. The Executive also hereby waives all claims to
               moral rights in any Developments. However, this Section
               10(b)(2) shall not apply to Developments which do not relate
               to the present or planned business or research and development
               of Elastic or Elastic's Affiliates and which are made and
               conceived by the Executive not during normal working hours, not
               on the premises of Elastic or Elastic's Affiliates and not
               using the tools, devices, equipment of Elastic or Elastic's
               Affiliates or Proprietary Information.

          (3)  The Executive agrees to cooperate fully with Elastic or
               Elastic's Affiliates, both during and after the Employment
               Period, with respect to the procurement, maintenance and
               enforcement of copyrights and patents (both in the United
               States and foreign countries) relating to Developments. The
               Executive shall sign all papers, including, without
               limitation, copyright applications, patent applications,
               declarations, oaths, formal assignments, assignment of
               priority rights, and powers of attorney, which Elastic or
               Elastic's Affiliates may deem necessary or desirable in order
               to protect their rights and interests in any Development.

     (c)  OTHER AGREEMENT. The Executive hereby represents that he is not
          bound by the terms of any agreement with any previous employer,
          other than Elastic's Affiliates, or other party to refrain from
          using or disclosing any trade secret or confidential or proprietary
          information in the course of his employment with Elastic or to
          refrain from competing, directly or indirectly, with the business
          of such previous employer or any other party. The Executive further
          represents that his performance of all the terms of this Agreement
          and as an employee of Elastic does not and will not breach any
          agreement, other than agreements with Elastic's Affiliates, to keep
          in confidence proprietary information, knowledge or

                                        10

<PAGE>

          data acquired by him in confidence or in trust prior to his
          employment with Elastic.

11.  Breach of Covenants by the Executive.

     The restrictions contained in Sections 9 and 10 of this Agreement are
     necessary for the protection of the business and goodwill of Elastic or
     Elastic's Affiliates and are considered by the Executive to be
     reasonable for such purpose. The Executive agrees that any breach of
     Sections 9 and 10 shall cause Elastic or Elastic's Affiliates
     substantial and irrevocable damage and therefore, in the event of any
     such breach, in addition to such other remedies which may be available,
     Elastic or Elastic's Affiliates shall have the right to seek specific
     performance and injunctive relief.

12.  Survival of Certain Provisions after the Term.

     Subject to the terms and conditions contained in this Agreement, the
     provisions of Sections 8, 9, 10 and 11 shall survive and continue after
     the Term as provided in such Sections.

13.  Indemnification.

     During the Term, Elastic shall indemnify the Executive as provided under
     the Bylaws of Elastic.

14.  Miscellaneous.

     (a)  The waiver by either party of a breach of any provision of this
          Agreement shall not operate or be construed as a waiver of any
          subsequent breach by either party.

     (b)  Any notice required or permitted to be given under this Agreement
          shall be sufficient if in writing sent by certified mail to the
          Executive's residence as it appears on the records of Elastic in
          the case of the Executive or to the address set forth above with
          respect to Elastic, or to such other address as either party may
          hereafter specify in writing to the other.

     (c)  This agreement shall be binding upon and inure to the benefit of
          both parties and their respective successors and assigns, including
          Elastic's Affiliates and any corporation with which or into which
          Elastic may be merged or which may succeed to its assets or
          business, provided, however, that the obligations of the Executive
          are personal and shall not be assigned by him.

     (d)  This Agreement constitutes the entire agreement between the parties
          relating to the subject matter of this Agreement and there are no
          representations, warranties, covenants or obligations except as set
          forth in this Agreement. This Agreement supersedes all prior and
          contemporaneous agreements, understandings, negotiations, and
          discussions, written or oral, of the parties hereto, relating to
          the subject matter of this Agreement. Nothing in this Agreement is
          intended or shall be construed to confer upon or to give any person
          other than the parties hereto any rights or remedies under or by
          reason of this Agreement except as specifically set forth herein.

     (e)  This Agreement may be amended only in writing executed by the
          parties hereto.

                                       11

<PAGE>

     (f)  No delay or omission by Elastic in exercising any right under this
          Agreement shall operate as a waiver of that or any other right. A
          waiver or consent given by Elastic on any one occasion shall be
          effective only in that instance and shall not be construed as a bar
          or waiver of any right on any other occasion.

     (g)  The enumeration and headings contained in this Agreement are for
          convenience of reference only and are not intended to have any
          substantive significance in interpreting this Agreement.

     (h)  If any provision of this Agreement shall be held to be illegal,
          invalid or unenforceable, such provision shall be enforced to the
          maximum extent permissible so as to effect the intent of the
          parties, and the validity, legality and enforceability of the
          remaining provisions shall not in any way be affected or
          impaired thereby. If necessary to effect the intent of the parties,
          the parties shall negotiate in good faith to amend this Agreement
          to replace the unenforceable language with enforceable language
          which as closely as possible reflects such intent.

     (i)  This Agreement shall be interpreted and enforced in accordance with
          the laws of the State of Georgia, except for its rules with respect
          to the conflict of laws.

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

Elastic Networks Inc.                       Executive

By: /s/ Guy Gill                             /s/ Guy Gill
   -------------------------------           -----------------------------

Title: President
   -------------------------------

Date:  May 12, 1999                          Date: May 12, 1999
   -------------------------------           -----------------------------

                                             /s/ Kevin Elop

                                       12

<PAGE>

                                  SCHEDULE A

                     POSITION/DUTIES/REPORTING RELATIONSHIP

Executive's Position:       Chief Executive Officer and such additional
                            titles as the Board may assign from time to time.

Reports to:                 The Board.

Duties:                     Those duties customary to the position of Chief
                            Executive Officer in similar privately held or
                            public corporations, as applicable, and such other
                            duties as the Board may assign from time to time.

<PAGE>

                                  SCHEDULE B

                                 Compensation

ANNUAL BASE SALARY: Two Hundred Sixty Thousand Dollars ($260,000)

The Executive's annual base salary stated above shall be subject to increase
or decrease from time to time as determined in the sole discretion of the
Board; provided that any reduction in the Executive's annual base salary
shall be subject to the applicable provisions of Section 1(p).<PAGE>

                                                             Exhibit 10.13

                             EMPLOYMENT AGREEMENT

     This Agreement ("Agreement") is made and entered into this 12th day of
May, 1999, by and between Elastic Networks, Inc., a Delaware corporation
("Elastic"), with its principal place of business at 6120 Windward Parkway,
Suite 100, Alpharetta, Georgia 30005, and Phillip L. Griffith, an individual
residing at 3795 Redcoat Way, Alpharetta, Georgia 30022 ("Executive").

                                  WITNESSETH:

     WHEREAS, Elastic shall employ employees to conduct its business on the
Commencement Date:

     WHEREAS, conditioned upon the closing of the Private Placement, Elastic
desires to employ the Executive during the Term under the terms and
conditions set forth in this Agreement;

     WHEREAS, the Executive desires to accept employment with Elastic during
the Term on the terms and conditions set forth in this Agreement;

     WHEREAS, it is a condition precedent to the closing of the agreements
related to the Private Placement that Elastic and the Executive enter into
this Agreement;

     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the Executive and Elastic agree as follows:

1.   Definitions.

     For purposes of this Agreement, the following terms shall have the
meanings set forth below:

     (a) "Acquisition Event" shall mean: (1) any merger or consolidation
         which results in the voting securities of Elastic outstanding
         immediately prior thereto representing immediately thereafter
         (either by remaining outstanding or by being converted into voting
         securities of the surviving or acquiring entity) less than 50% of
         the combined voting power of the voting securities of Elastic or
         such surviving or acquiring entity outstanding immediately after
         such merger or consolidation; (ii) any sale of all or substantially
         all of the assets of Elastic; or (iii) the complete liquidation of
         Elastic. Notwithstanding the foregoing, the election of any
         Purchaser (as defined in the Right of First Offer Agreement) to sell
         its shares (as defined in the Right of First Offer Agreement) to
         Nortel Networks, Inc. pursuant to Section 6 of the Right of First
         Offer Agreement, and the purchase of any such Shares by Nortel
         Networks Inc., shall not be deemed to be an Acquisition Event.

     (b) "Agreement" shall have the meaning set forth in the preamble hereto.

                                       1

<PAGE>

     (c) "Award" shall mean Options, restricted stock, or other stock based
         awards under the Plan.

     (d) "Board" shall mean the Board of Directors of Elastic

     (e) "Cause" shall mean (i) the Executive's material breach of this
         Agreement, which includes, but is not limited to, a breach of
         Sections 9 or 10 of this Agreement or any sub-section thereof,
         (ii) a good faith finding by the Board of the Executive's
         dishonesty, fraud, malfeasance, gross negligence or willful
         misconduct with respect to Elastic or any Co-Employer, (iii) the
         Executive's continued failure to satisfactorily perform his duties
         with the Company to follow the lawful direction (consistent with the
         Executive's duties) of the Board or to follow the established and
         lawful policies, procedures and rules of Elastic or any Co-Employer
         (other than any such failure resulting from incapacity due to mental
         or physical illness or injury that is certified by a physician
         satisfactory to Elastic); or (iv) Executive's indictment for (or
         similar  finding of probable cause with respect to the Executive's
         commission of) or conviction of or the Executive's entry of a
         pleading of guilty or nolo contendere to, a crime involving moral
         turpitude or a felony (other than an offense based solely on a
         traffic violation.) With respect to clauses (ii) and (iii) above,
         prior to terminating the Executive for Cause as provided in Section
         8(a)(1) hereof, the Board shall deliver a written notice to the
         Executive stating in reasonable detail the facts and circumstances
         regarding the Executive's offense or failure and provide the
         Executive with sixty calendar (60) days to correct such offense or
         failure; PROVIDED, HOWEVER, that no such notice shall be required,
         and the Board may  immediately terminate the Executive for Cause,
         if the Board in good faith determines that the Executive's offense or
         failure is or is likely to be immediately or materially injurious to
         Elastic or the Co-Employer or Executive has previously received a
         written notice of an offense or failure under clause (ii) or (iii)
         above in the twelve (12) month period immediately preceding the
         occurrence of the offense or failure at issue. The Executive shall
         not participate in the Board's determinations regarding Cause with
         respect to the Executive even if the Executive is a member of the
         Board.

     (f) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
         any regulations promulgated thereunder.

     (g) "Co-Employer" shall mean that third party, if any, which pursuant to
         an agreement with Elastic, provides certain human resources and
         payroll services with respect to Elastic employees and, with regard
         to such services, is viewed as the employer of Elastic employees.

     (h) "Commencement Date" shall mean the day immediately following closing
         of Private Placement.

     (i) "Developments" shall have the meaning set forth in Section 10(b)(1)
         of this Agreement.

     (j) "Disability" shall mean the inability of the Executive to perform
         the duties set forth in Section 3 of this Agreement because of an
         illness or accidental injury for a period of one hundred eighty
         (180) calendar days, whether or not consecutive, during any three
         hundred sixty (360) calendar day period, as certified by a physician
         satisfactory to Elastic and the Executive. If Elastic and the
         Executive do not agree on a physician, the Executive and Elastic
         shall each

                                        2

<PAGE>

         select a physician and those two (2) physicians shall together select
         a third physician, whose determination as to disability shall be
         binding on all parties.

     (k) "Elastic" shall have the meaning set forth in the preamble to this
         Agreement.

     (l) "Elastic's Affiliates" shall mean any individual or entity that
         directly or indirectly, through one or more intermediaries,
         controls, is controlled by or is under common control with Elastic.
         For purposes of this definition, "control" means the power to direct
         the management and policies of another, whether through the
         ownership of voting securities, by contract or otherwise.

     (m) "Employment Period" shall mean the Term and any period immediately
         following the Term during which Elastic and the Executive have
         mutually agreed to continue the Executive's employment.

     (n) "Entity" shall mean a corporation, partnership, limited liability
         company, trust, joint venture, association, organization, sole
         proprietorship or entity in any other form.

     (o) "Executive" shall have the meaning set forth in the preamble to this
         Agreement.

     (p) "Good Reason" shall mean (i) the assignment of the Executive,
         without the Executive's consent, to a principal place of work which
         increases the Executive's commuting distance from his residence to
         his principal place of work by fifty (50) miles or more; (ii) the
         assignment to the Executive of job duties that are inconsistent with
         the Executive's position as set forth on Schedule A or a substantial
         adverse alteration of the Executive's position, reporting
         relationship or duties as set forth on Schedule A without the
         Executive's consent; or (iii) a reduction of the Executive's annual
         base salary then in effect other than in conjunction with the
         implementation of an incentive compensation plan, as described in
         Schedule B, or without the Executive's consent; PROVIDED, however,
         that "Good Reason" shall not include any event or circumstance that
         occurs more than one hundred twenty (120) calendar days prior to
         Elastic's receipt of the Executive's written notice of his intention
         to terminate for Good Reason as established in Section 8, below, a
         reduction in the Executive's base salary that is applied to all or
         substantially all Elastic employees or a reduction or suspension in
         base salary that occurs as a result of the Executive's receipt of
         disability payments under a fringe benefit plan in which he
         participates as an Elastic employee. Notwithstanding the occurrence
         of any event or circumstance set forth in clauses (i) through (iii),
         above, such occurrence shall not be deemed to constitute Good Reason
         if, while the Executive is employed during the Notice Period, such
         event or circumstance has been fully corrected and the Executive has
         been reasonably compensated for any losses or damages resulting
         therefrom (provided that such right of correction by Elastic shall
         only apply to the first notice of termination for Good Reason given
         by the Executive).

     (q) "Notice Period" shall mean the ninety (90) calendar day period
         immediately following the date on which Elastic receives the
         Executive's written notice of his intent to terminate employment
         under Section 8(b) of this Agreement.

     (r) "Options" shall mean those options granted by the Board under the
         Plan for the purchase of shares of Elastic common stock.

                                       3

<PAGE>

     (s)  "Plan" shall mean the Elastic Networks Inc. 1999 Stock Incentive
          Plan.

     (t)  "Private Placement" shall mean the first sale of Elastic
          securities to any person or entity other than Nortel Networks Inc.,
          specifically excluding any issuance of Elastic securities or any
          right to acquire Elastic securities granted to employees, vendors
          or consultants.

     (u)  "Proprietary Information" shall have the meaning set forth in
          Section 10(a)(1) of this Agreement.

     (v)  "Right of First Offer Agreement" shall mean the Right of First
          Offer and Co-Sale Agreement, dated as of May 1999, and as amended
          from time to time, by and among Elastic, Nortel Networks Inc. and
          the persons and entities listed on Exhibit A thereto.

     (w)  "Severance Period" shall mean the twelve (12) month period
          immediately following the Executive's termination of employment.

     (x)  "Term" shall mean the period commencing on the Commencement Date
          and ending on the fourth anniversary of the Commencement Date,
          unless terminated sooner in accordance with the provisions of
          Section 8 of this Agreement.

2.   Term.

     Conditioned upon (i) the closing of the Private Placement, (ii) the
     Executive's status as an active employee of Nortel Networks Inc. as of
     the closing of the Private Placement, (iii) the Executive providing
     documentation required by the Immigration Reform and Control Act of
     1986 and (iv) the Executive's completion of employment forms required by
     any Co-Employer, Elastic hereby agrees, as the sole employer or jointly
     with a Co-Employer, to employ the Executive, and the Executive hereby
     accepts employment with Elastic, upon the terms and conditions set forth
     in this Agreement, for the Term. If the Executive and Elastic desire to
     continue the Executive's employment after the Term, such employment
     shall be upon terms and conditions mutually agreed upon by Elastic and
     the Executive.

3.   Duties.

     The Executive shall have the job, duties and reporting relationship set
     forth in Schedule A. Except as otherwise provide in this Section 3, the
     Executive shall devote his full working time, attention, skill,
     knowledge, experience and energies to the performance of his duties set
     forth on Schedule A. Notwithstanding the preceding sentence, the
     Executive shall not be prohibited from engaging in activities from time
     to time on his own behalf or on the behalf of non-profit organizations
     or industry associations, provided that such activities do not interfere
     with the performance of his duties or obligations under this Agreement.
     With the consent of the Board, the Executive may serve on the boards of
     directors or trustees of other companies or organizations and devote a
     reasonable amount of working time to such approved activities. The
     Executive shall abide by, and comply with, all rules, policies and
     procedures of Elastic and any Co-Employer and all applicable laws and
     regulations including, but not limited to, those relating to antitrust.
     The Executive's principal place of work shall be 6120 Windward Parkway,
     Suite 100, Alpharetta, Georgia 30005, until such time as the Board (or any
     other individual or entity to whom the Executive reports), in its or his
     discretion, designates another location as the Executive's principal
     place of work.

                                       4

<PAGE>

4.    Compensation.

      (a) BASE SALARY. The Executive shall receive the annual base salary set
          forth in Schedule B, which shall be payable in installments in
          accordance with such payroll schedule as is then in effect with
          respect to all Elastic executive employees.

     (b)  DEDUCTIONS. Elastic or the Co-Employer, as applicable, is
          authorized to deduct from the Executive's compensation such sums as
          may be required to be deducted or withheld under the provisions of
          any applicable law now in effect or hereafter put into effect,
          including, but not limited to, social security, unemployment and
          income tax withholding, and such other deductions permitted by
          Elastic or the Co-Employer which the Executive may authorize from
          time to time.

5.   Plan Incentives.

     (a)  INITIAL AWARD. Subject to the Board's adoption of the Plan, which
          shall be substantially similar to Draft Stock Incentive Plan that
          is attached hereto as Schedule C, the Executive shall be eligible
          to participate in the Plan. Conditioned upon the Board's approval
          and in accordance with the terms and conditions of the Plan,
          effective on the Commencement Date the Executive shall be granted
          an Option(s) to purchase a number of shares of Elastic common stock
          that is equal to One Percent (1%) of the sum of the number of
          shares of Elastic common and preferred stock issued and outstanding
          on the grant date plus the number of shares of Elastic common stock
          authorized for grant under the Plan, with an exercise price to be
          determined by the Board. The vesting, rights and obligations with
          respect to such Option(s) shall be determined by the Board in
          accordance with the Plan and shall be set forth in appropriate
          option agreements which shall be substantially similar to the Draft
          Incentive Stock Option Agreement and Draft NonStatutory Stock
          Option Agreement attached hereto as Schedules D and E, respectively.
          Notwithstanding anything in the preceding sentence to the contrary,
          the outstanding Option(s) granted to the Executive pursuant to this
          Section 5(a) shall (i) upon the occurence of an Acquisition Event,
          be assumed or an equivalent option or award substituted by the
          successor corporation or a parent or subsidiary of the successor
          corporation, provided that any such Options substituted for
          Incentive Stock Options shall satisfy, in the determination of the
          Board, the requirements of Section 424(a) of the Code, unless the
          successor corporation refuses to assume or substitute for the
          Options(s), in which case the Executive shall have the right to
          exercise the Option(s) in full, including with respect to shares of
          Common Stock as to which it would not otherwise be exercisable, and
          such Options(s) shall be exercisable for a period of not less than
          forty-five (45) days from the date on which the Board gives the
          executive written notice that such Option(s) are fully exercisable
          and shall terminate upon the expiration of such period; and (ii)
          upon Elastic's termination of the Executive's employment without
          Cause, as provided in Section 8(a)(2) hereof, or the Executive's
          termination of his employment for Good Reason, as provided in
          Section 8(b)(2) hereof, be immediately exercisable in full.

     (b)  PERFORMANCE BASED AWARDS. The Executive shall be eligible to
          receive additional Awards under the Plan at the sole discretion of
          the Board. The Executive shall not participate in decisions to
          grant Awards to the Executive under the Stock Plan even if the
          Executive is a member of the Board.

                                        5

<PAGE>

     (c)  AMENDMENT OF THE PLAN. Notwithstanding anything to the contrary in
          this Agreement, the Board may amend, suspend or terminate the Plan
          or any portion thereof at any time, except as otherwise provided by
          applicable law.

6.   Fringe Benefits.

     (a)  FRINGE BENEFITS OTHER THAN VACATION. The Executive shall be
          eligible to participate in the fringe benefit plan and programs
          generally made available by Elastic or, if applicable, the
          Co-Employer, to Elastic executive employees in accordance with the
          terms of those plans and programs. Elastic shall make contributions
          for the Executive's participation in such fringe benefit plans and
          programs as it generally makes for its other executive employees.
          Except as otherwise provided by law, Elastic or the Co-Employer, as
          applicable, has the right to modify, add to or eliminate any or all
          of its fringe benefit plans or programs at any time and for any
          reason.

     (b)  VACATION. The Executive shall be entitled to three (3) weeks
          (fifteen (15) business days) of paid vacation for each year of the
          Term, to be taken at such time as may be approved by the Board or
          its designee or the individual or entity to whom the Executive
          reports. The Executive shall accrue such annual vacation on a
          prorata basis each month starting with the Commencement Date.
          Accrual of paid vacation shall cease once the Executive has accrued
          three (3) weeks of paid vacation and shall not resume until the
          accrued vacation is reduced by reason of vacation by the Executive.

7.   Reimbursement of Expenses.

     (a)  BUSINESS EXPENSES. Elastic shall reimburse the Executive for
          expenses incurred by the Executive in carrying out those duties set
          forth in Section 3 of this Agreement in accordance with Elastic's
          policies and procedures relating to expense reimbursement of
          executive employees.

     (b)  FINANCIAL AND ESTATE PLANNING AND TAX ASSISTANCE. Elastics shall
          reimburse the Executive for expenses incurred by the Executive for
          personal financial and estate planning and tax assistance services
          up to a total of Five Thousand Dollars ($5,000) for each year of
          the Term upon the Executive's submission of appropriate receipts
          documenting the Executive's payment for such services.

     (c)  ATTORNEY'S FEES WITH RESPECT TO THIS AGREEMENT. Elastic shall
          reimburse the Executive for one hundred percent (100%) of the
          reasonable expenses incurred by the Executive for the services of
          an attorney with respect to the review of this Agreement upon the
          Executive's submission of appropriate receipts documenting the
          Executive's payment for such services.

8.   Employment Termination.

     (a)  BY ELASTIC. Elastic shall have the right to terminate the
          employment of the Executive at any time during the Term, including,
          without limitation, for Cause or without Cause.

          (1)  If Elastic terminates the employment of the Executive upon the
               occurrence of the expiration of the Term on the fourth
               anniversary of the Commencement Date, the death or
               Disability of the Executive or with Cause, Elastic shall pay
               to the Executive, or, in the event of the

                                        6

<PAGE>

             Executive's death, the estate of the Executive, the compensation
             and benefits ordinarily payable to him under this Agreement through
             and until the last day of his actual employment by Elastic.

         (2) If Elastic terminates the employment of the Executive
             without Cause, subject to the conditions set forth below, Elastic
             shall pay the Executive a lump sum amount which is equal to the sum
             of (i) the Executive's base salary in effect on his termination
             date (or, if higher, the highest base salary in effect at any time
             during the six (6) months prior to his termination date) calculated
             for the Severance Period, (ii) the expense the Executive incurs
             during the Severance Period to continue those health and life
             insurance benefits offered under the Consolidated Omnibus Budget
             Reconciliation Act of 1985 and benefit conversion options,
             respectively, less contributions the Executive would have made for
             such coverage as an Elastic employee and (iii) a bonus payment in
             an amount equal to the target bonus for the Executive at one
             hundred (100%) performance on all factors under the bonus plan in
             which the Executive is participating, if any, as of his employment
             termination date, multiplied by a fraction, the numerator of which
             is the Executive's calendar months of participation as an active
             employee under such plan and the denominator of which is the term
             of such plan in calendar months. The foregoing payment shall be
             conditioned upon the Executive's execution of a Settlement
             Agreement with Elastic, the form of which shall be determined by
             the Board and shall contain, at a minimum, the Executive's (x)
             release of all claims against Elastic and Elastic's Affiliates,
             (y) obligation to notify Elastic of his employment by any person
             or Entity during the Severance Period and (z) agreement to repay
             that portion of the foregoing lump sum amount relating to any part
             of the Severance Period during which the Executive is employed by
             Elastic or any of Elastic's Affiliates or is in breach of any
             provisions of this Agreement that survive the termination of this
             Agreement or relating to the continuation of the Executive's health
             or life insurance benefits on or after the Executive terminates
             such benefits or the Executive's employment by an Entity or person
             offering Executive comparable benefits or benefits that would
             result in the termination of the Executive's opportunity to
             continue Elastic health benefits under the Consolidated Omnibus
             Budget Reconciliation Act of 1985.

     (b) BY EXECUTIVE. The Executive shall have the right to terminate
         his employment with Elastic during the Term for any reason, including,
         without limitation, for Good Reason or for other than Good Reason;
         PROVIDED, however, that the Executive shall give Elastic ninety (90)
         calendar days prior written notice of his intention to terminate his
         employment and shall continue his employment during all or such part of
         the Notice Period as determined by the Board. In order to terminate for
         Good Reason, the Executive must also state in such written notice the
         facts and circumstances giving rise to Good Reason in reasonable
         detail.

         (1) If the Executive terminates his employment with Elastic
             for other than Good Reason and satisfies the conditions set forth
             in Section 8(b), above, Elastic shall pay the Executive the
             compensation and benefits ordinarily payable to him under this
             Agreement through and until the last day of his actual employment
             by Elastic and his base salary only with respect to any portion of
             the Notice Period remaining following the last day of his actual
             employment.

                                      7

<PAGE>

         (2) If the Executive terminates his employment with Elastic
             for Good Reason and satisfies the conditions set forth in Section
             8(b), above, Elastic shall pay the Executive the compensation and
             benefits ordinarily payable to him under this Agreement through and
             until the last day of his actual employment by Elastic.
             Additionally, Elastic shall pay the Executive the lump sum amount
             that would be payable to the Executive under Section 8(a)(2) above
             as if Elastic terminated the Executive's employment without Cause,
             conditioned upon the Executive's execution of a Settlement
             Agreement as described in Section 8(a)(2) above.

9.  Restrictive Covenants.

     (a) During the Employment Period and for a period of one (1)
         year after the termination or expiration thereof, the Executive shall
         not directly or indirectly:

         (1) as an owner, partner, officer, director, employee,
             consultant, contractor, joint venturer, investor, lender or
             shareholder (other than as the holder of not more than one percent
             (1%) of the total outstanding stock of a publicly held company),
             participate in, direct, control or manage the sales or marketing
             operations, functions or activities of any Entity or person
             competitive with the business of Elastic or those Elastic
             Affiliates that Elastic controls in the United States without the
             written permission of Elastic; or

         (2) recruit, solicit or induce, or attempt to induce, any
             employee, consultant or contractor of Elastic or Elastic's
             Affiliates to terminate their employment with, or otherwise cease
             their relationship with, Elastic or Elastic's Affiliates; or

         (3) solicit, divert or take away, or attempt to divert or
             to take away, the business or patronage of any of the clients,
             customers or accounts, or prospective clients, customers or
             accounts, of Elastic or Elastic's Affiliates which were contacted,
             solicited or  served by the Executive during the Employment Period.

     (b) If any restriction set forth in this Section 9 is found by
         any court of competent jurisdiction to be unenforceable because it
         extends for too long a period of time, in too broad a geographic area
         or over too great a range of activities, it shall be interpreted to
         extend only over the maximum period of time, geographic area or range
         of activities as to which it may be enforceable.

     (c) The Executive recognizes, understands and agrees that this
         Agreement is entered into in connection with the spin-off of Elastic
         and is a condition to the provision of financing of certain investors.
         The Executive further recognizes, understands and agrees that the
         geographic area specified in Section 9(a)(1) is reasonable in light
         of the national and international scope of Elastic's business, the
         expected expansion of Elastic's business during the Employment Period
         and the Executive's expected ownership, as a result of Option(s)
         issued pursuant to Section 5(a) of this Agreement, of a number of
         shares of Elastic common stock equal to One Percent (1%) of the sum
         of the number of shares of Elastic common and preferred stock issued
         and outstanding on the grant date plus the number of shares of
         Elastic common stock authorized for grant under the Plan. The
         Executive further recognizes, understands and agrees that the
         foregoing limitations are properly required for the adequate
         protection of Elastic's

                                        8

<PAGE>

               legitimate business interests and do not preclude the
               Executive from pursuing his livelihood. The Executive further
               recognizes, understands and agrees that the consideration
               provided in this Agreement, including, but not limited to, any
               payment provided pursuant to Section 8 of this Agreement, is
               sufficient consideration for the foregoing limitations.

     10.  Proprietary Information and Developments.

          (a)  PROPRIETARY INFORMATION

               (1)  The Executive agrees that all information and know-how,
                    whether or not in writing, of a private, secret or
                    confidential nature concerning the business or financial
                    affairs of Elastic, any of Elastic's Affiliates, Nortel
                    Networks Inc. or Nortel Networks Corporation is and shall
                    be the exclusive property of Elastic, Elastic's
                    Affiliates, Nortel Networks Inc. or Nortel Networks
                    Corporation, as applicable, such information and know-how
                    including, but not limited to, inventions, products,
                    processes, methods, techniques, formulas, compositions,
                    compounds, projects, developments, plans, research data,
                    clinical data, financial data, personnel data, computer
                    programs, and customer and supplier lists (collectively,
                    "Proprietary Information."). The Executive shall not
                    disclose any Proprietary Information to others outside
                    Elastic, Elastic's Affiliates, Nortel Networks Inc. or
                    Nortel Networks Corporation or use the same for any
                    unauthorized purposes without written approval by an
                    officer of Elastic, either during or after the
                    Employment Period, unless and until such Proprietary
                    Information has become public knowledge without fault by
                    the Executive or as otherwise required by law.

               (2)  The Executive agrees that all files, letters, memoranda,
                    reports, records, data, sketches, drawings, laboratory
                    notebooks, program listings, or other written,
                    photographic, or other tangible material containing
                    Proprietary Information, whether created by the Executive
                    or others, which shall come into his custody or
                    possession, shall be and are the exclusive property of
                    Elastic, Elastic's Affiliates, Nortel Networks Inc. or
                    Nortel Networks Corporation, as applicable, to be used by
                    the Executive only in the performance of his duties for
                    Elastic. The Executive agrees to deliver to Elastic upon
                    the expiration of the Employment Period such material
                    containing Proprietary Information.

               (3)  The Executive agrees that his obligation not to disclose
                    or use information, know-how and records of the types set
                    forth in paragraphs (1) and (2) above, also extends to
                    such types of information, know-how, records and tangible
                    property of customers of Elastic, Elastic's Affiliates,
                    Nortel Networks Inc. or Nortel Networks Corporation or
                    suppliers to Elastic or Elastic's Affiliates or other
                    third parties who may have disclosed or entrusted the
                    same to Elastic, Elastic's Affiliates, Nortel Networks
                    Inc. or Nortel Networks Corporation or to the Executive
                    in the course of Elastic's business.

          (b)  DEVELOPMENT

               (1)  The Executive shall make full and prompt disclosure to
                    Elastic of all inventions, improvements, discoveries,
                    methods, developments, software and works of authorship,
                    whether patentable or not, which are created

                                       9
<PAGE>

                 made conceived or reduced to practice by the Executive or
                 under his direction or jointly with others during the
                 Employment Period, whether or not during normal working
                 hours or on the premises of Elastic or Elastic's Affiliates
                 (collectively, "Developments").

           (2)   The Executive agrees to assign and does hereby assign to
                 Elastic (or any Entity designated by Elastic) all his right,
                 title and interest in and to all Developments and all
                 related patents, patent applications, copyrights and
                 copyright applications.  The Executive also hereby waives
                 all claims to moral rights in any Developments.  However,
                 this Section 10(b)(2) shall not apply to Developments which
                 do not relate to the present or planned business or research
                 and development of Elastic or Elastic's Affiliates and which
                 are made and conceived by the Executive not during normal
                 working hours, not on the premises of Elastic or Elastic's
                 Affiliates and not using the tools, devices, equipment of
                 Elastic or Elastic's Affiliates or Proprietary Information.

           (3)   The Executive agrees to cooperate fully with Elastic or
                 Elastic's Affiliates, both during and after the Employment
                 Period, with respect to the procurement, maintenance and
                 enforcement of copyrights and patents (both in the United
                 States and foreign countries) relating to Developments.  The
                 Executive shall sign all papers, including, without
                 limitation, copyright applications, patent applications,
                 declarations, oaths, formal assignments, assignment of
                 priority rights, and powers of attorney, which Elastic or
                 Elastic's Affiliates may deem necessary or desirable in
                 order to protect their rights and interests in any
                 Development.

      (c)  OTHER AGREEMENTS.  The Executive hereby represents that he is not
           bound by the terms of any agreement with any previous employer,
           other than Elastic's Affiliates, or other party to refrain from
           using or disclosing any trade secret or confidential or
           proprietary information in the course of his employment with
           Elastic or to refrain from competing, directly or indirectly,
           with the business of such previous employer or any other party.
           The Executive further represents that his performance of all the
           terms of this Agreement and as an employee of Elastic does not and
           will not breach any agreement, other than agreements with
           Elastic's Affiliates, to keep in confidence proprietary
           information, knowledge or data acquired by him in confidence or in
           trust prior to his employment with Elastic.

11.  Breach of Covenants by the Executive.

     The restrictions contained in Sections 9 and 10 of this Agreement are
     necessary for the protection of the business and goodwill of Elastic or
     Elastic's Affiliates and are considered by the Executive to be
     reasonable for such purpose.  The Executive agrees that any breach of
     Sections 9 or 10 shall cause Elastic or Elastic's Affiliates substantial
     and irrevocable damage and therefore, in the event of any such breach,
     in addition to such other remedies which may be available, Elastic or
     Elastic's Affiliates shall have the right to seek specific performance
     and injunctive relief.

12.  Survival of Certain Provisions after the Term.

     Subject to the terms and conditions contained in this Agreement, the
     provisions of Sections 8, 9, 10 and 11 shall survive and continue after
     the Term as provided in such Sections.

                                      10
<PAGE>

13.  Indemnification.

     During the Term, Elastic shall indemnify the Executive as provided under
     the Bylaws of Elastic.

14.  Miscellaneous.

     (a)  The waiver by either party of a breach of any provision of this
          Agreement shall not operate or be construed as a waiver of any
          subsequent breach by either party.

     (b)  Any notice required or permitted to be given under this Agreement
          shall be sufficient if in writing sent by certified mail to the
          Executive's residence as it appears on the records of Elastic in
          the case of the Executive or to the address set forth above with
          respect to Elastic, or to such other address as either party may
          hereafter specify in writing to the other.

     (c)  This Agreement shall be binding upon and inure to the benefit of
          both parties and their respective successors and assigns, including
          Elastic's Affiliates and any corporation with which or into which
          Elastic may be merged or which may succeed to its assets or business,
          provided, however, that the obligations of the Executive are personal
          and shall not be assigned by him.

     (d)  This Agreement constitutes the entire agreement between the parties
          relating to the subject matter of this Agreement and there are no
          representations, warranties, covenants or obligations except as set
          forth in this Agreement.  This Agreement supersedes all prior and
          contemporaneous agreements, understandings, negotiations, and
          discussions, written or oral, of the parties hereto, relating to the
          subject matter of this Agreement.  Nothing in this Agreement is
          intended or shall be construed to confer upon or to give any person
          other than the parties hereto any rights or remedies under or by
          reason of this Agreement except as specifically set forth herein.

     (e)  This Agreement may be amended only in writing executed by the
          parties hereto.

     (f)  No delay or omission by Elastic in exercising any right under this
          Agreement shall operate as a waiver of that or any other right.
          A waiver or consent given by Elastic on any one occasion shall be
          effective only in that instance and shall not be construed as a bar
          or waiver of any right on any other occasion.

     (g)  The enumeration and headings contained in this Agreement are for
          convenience of reference only and are not intended to have any
          substantive significance in interpreting this Agreement.

     (h)  If any provision of this Agreement shall be held to be illegal,
          invalid or unenforceable, such provision shall be enforced to the
          maximum extent permissible so as to effect the intent of the parties,
          and the validity, legality and enforceability of the remaining
          provisions shall not in any way be affected or impaired thereby.
          If necessary to effect the intent of the parties, the parties shall
          negotiate in good faith to amend this Agreement to replace the
          unenforceable language with enforceable language which as closely as
          possible reflects such intent.

                                       11
<PAGE>

     (i) This Agreement shall be interpreted and enforced in accordance with
         the laws of the State of Georgia, except for its rules with respect
         to the conflict of laws.

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

Elastic Networks Inc.                       Executive

By: /s/  Guy Gill                           /s/  Phillip L. Griffith
  -----------------------------             ----------------------------------

Title:  President
       ------------------------

Date:  May 12, 1999                         Date:   May 12,1999
     ---------------------------                   ---------------------------

                                     12
<PAGE>

                                  SCHEDULE A

                     POSITION/DUTIES/REPORTING RELATIONSHIP

Executive's Position:  Vice President, Sales and Marketing or such other
                       title as the Chief Executive Officer, Board or such
                       other individual or entity to whom the Executive
                       reports may assign from time to time.

Reports to:            Chief Executive Officer or such other individual or
                       entity as may be designated from time to time.

Duties:                Management of all aspects of Elastic's sales and
                       marketing operations, functions and activities and
                       such other duties as the Chief Executive Officer or
                       such other individual or entity to whom the Executive
                       reports may assign from time to time.

<PAGE>

                                  SCHEDULE B

                                 Compensation

ANNUAL BASE SALARY: One Hundred Eighty Thousand Three Hundred Dollars
($180,300)

The Executive's annual base salary stated above shall be subject to increase
or decrease from time to time as determined in the sole discretion of the
Chief Executive Officer, the Board or other individual or entity to whom the
Executive reports; provided that any reduction in the Executive's annual base
salary shall be subject to the provisions of Section 1(p). An incentive
compensation plan may be implemented with respect to the Executive and such
incentive compensation plan may result in a decrease in the Executive's
annual base salary.

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