Document:

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                                Elastic Networks

                              INTELLECTUAL PROPERTY
                         TRANSFER AND LICENSE AGREEMENT

                                     Between

                           Nortel Networks Corporation

                                       and

                              Elastic Networks Inc.

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                                TABLE OF CONTENTS

Article I         DEFINITIONS                                                  1

Article II        TRANSFER OF RIGHTS                                           6

Article III       GRANT OF RIGHTS UNDER LICENSED PATENTS                       6

Article IV        GRANT OF RIGHTS UNDER LICENSED TECHNICAL INFORMATION         6

Article V         GRANT OF RIGHTS UNDER LICENSED SOFTWARE                      7

Article VI        TIME-LIMITED EXCLUSIVE PATENT LICENSE                        8

Article VII       GRANTBACK LICENSE                                            8

Article VIII      IMPROVEMENTS TO THE LICENSED INTELLECTUAL PROPERTY           9

Article IX        PROVISION OF LICENSED TECHNOLOGY AND TRANSFERRED
                  TECHNOLOGY                                                  10

Article X         GRANT OF RIGHTS UNDER THE LICENSED TRADEMARKS               11

Article XI        THIRD PARTY SOFTWARE LICENSE                                12

Article XII       ROYALTY PAYMENTS AND REPORTING                              13

Article XIII      CONFIDENTIAL INFORMATION                                    15

Article XIV       INFRINGEMENT OF LICENSED INTELLECTUAL PROPERTY              16

Article XV        LIABILITY                                                   16

Article XVI       NOTICES                                                     17

Article XVII      TERM AND TERMINATION                                        18

Article XVIII     ASSIGNMENT OF RIGHTS                                        20

Article XIX       GENERAL                                                     20

SCHEDULE A - ETHERLOOP PRODUCTS
SCHEDULE B - EXCLUSIVE LICENSED PATENTS
SCHEDULE C - LICENSED PATENTS
SCHEDULE D - LICENSED SOFTWARE
SCHEDULE E - LICENSED TECHNICAL INFORMATION
SCHEDULE F - LICENSED TRADEMARKS
SCHEDULE G - THIRD PARTY SOFTWARE
SCHEDULE H - TRANSFERRED SOFTWARE
SCHEDULE I - TRANSFERRED TECHNICAL INFORMATION
SCHEDULE J - TRANSFERRED TRADEMARKS
SCHEDULE K - NORTEL NETWORKS PATENT CROSS-LICENSE AGREEMENTS

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              INTELLECTUAL PROPERTY TRANSFER AND LICENSE AGREEMENT

This AGREEMENT (the "Agreement") entered into with effect as of the 12th day of
May, 1999 (the "Effective Date")

BY AND BETWEEN:

            NORTEL NETWORKS CORPORATION, a corporation organized and existing
            under the laws of Canada, having its executive offices at 8200 Dixie
            Road, Brampton, Ontario, Canada L6T 5P6 (hereinafter referred to as
            "Nortel Networks"), on its own behalf and on behalf of its
            Subsidiaries,

AND:

            ELASTIC NETWORKS INC., a corporation organized and existing under
            the laws of Delaware, with offices located at 6120 Windward Parkway,
            Suite 100, Alpharetta, Georgia, U.S.A. 30005 (hereinafter referred
            to as "Elastic").

WHEREAS Nortel Networks, Nortel Networks Inc. ("NNI", a wholly owned subsidiary
of Nortel Networks) and Elastic (a subsidiary of NNI prior to and immediately
following the Effective Date) have entered into a contribution agreement dated
as of the date hereof (the "Contribution Agreement") for the transfer by NNI to
Elastic of certain assets related to the Elastic Business (as hereinafter
defined); and

WHEREAS Elastic desires to obtain ownership rights in certain intellectual
property belonging to Nortel Networks and to be granted licenses under certain
intellectual property of Nortel Networks and Nortel Networks is willing to grant
such rights and licenses, subject to the terms and conditions hereinafter set
forth;

NOW THEREFORE, in consideration of the mutual promises hereinafter set forth,
the Parties agree as follows:

ARTICLE I DEFINITIONS

1.1 Capitalized terms used herein not otherwise defined have the meaning
ascribed to them in the Contribution Agreement. As used in this Agreement and
the Schedules attached hereto:

      "Administrative Services" shall mean any financial, human resources or
      administrative processes or services, including any computer software used
      in connection therewith, supplied to or on behalf of the Elastic Business
      by any department, division, Subsidiary or Affiliate of Nortel Networks
      external to the Elastic Business, or any third person.

      "Affiliate" shall mean a corporation or company which directly or
      indirectly controls, or is under common control with, or is controlled by,
      a Party. As used in this definition, "control" (including, with its
      correlative meanings, "controlled by" and "under common

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      control with") shall mean the possession, directly or indirectly, of the
      power to direct or cause the direction of management or policies of the
      subject person (whether through ownership of securities or partnership or
      other ownership interests, by contract or otherwise);

      "Confidential Information" shall mean any business, marketing, technical,
      scientific or other information which, at the time of disclosure, is
      designated as confidential (or like designation), is disclosed in
      circumstances of confidence, or would be understood by the Parties,
      exercising reasonable business judgment, to be confidential. Confidential
      Information includes, without limitation, the terms and conditions of this
      Agreement and information included in or related to the Licensed
      Intellectual Property and the Transferred Intellectual Property;

      "Distributor" shall mean a third party which Elastic has sublicensed or
      otherwise authorized to market Licensed Products to End Users;

      "End User" shall mean a third party that buys, leases, sublicenses or
      otherwise receives Licensed Products from Elastic or Distributor, or from
      a third party sublicensee of Elastic, primarily for its own use and not
      for resale;

      "Elastic Business" means the business related to (i) the design, research,
      manufacture and development of Etherloop Devices and associated equipment,
      software applications and services by Elastic on or after the date hereof,
      or by Elastic, Nortel Networks and/or NNI before the date hereof; and (ii)
      the marketing, distribution and licensing of Etherloop Devices and
      associated equipment, software applications and services by Elastic on or
      after the date hereof, or by Elastic, Nortel Networks and/or NNI before
      the date hereof;

      "Etherloop Products" shall mean the products listed in Schedule A;

      "Etherloop Device" shall mean a device or system for communicating
      Ethernet data frames between master and slave modems using burst mode half
      duplex transmission and providing a collision avoidance technique over a
      communications path other than Hybrid Fibre Coaxial Cable (including, but
      not limited to, the Etherloop Products);

      "Excluded Intellectual Property" shall mean Intellectual Property Rights
      relating to Administrative Services.

      "Exclusive Licensed Patents" shall mean the Patents listed in Schedule B
      and any Improvement relating thereto;

      "Improvement" shall mean any invention, development, change, innovation or
      extension;

      "Included Intellectual Property" shall mean collectively the Licensed
      Intellectual Property and the Transferred Intellectual Property;

      "Intellectual Property Rights" means all patent rights, copyrights, mask
      work rights, confidential information rights, trademark, trade name,
      distinguishing guise, trade secret or know-how rights, all rights of
      whatsoever nature in computer software and data, and

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      any other intangible rights or privileges of a nature similar to any of
      the foregoing, in every case in any part of the world and whether or not
      registered. Intellectual Property Rights shall also include all rights in
      any applications and granted registrations for any of the foregoing
      rights;

      "Licensed Intellectual Property" shall mean:

            (i)   the Licensed Patents;

            (ii)  the Exclusive Licensed Patents after the expiry of the
                  exclusivity period as defined in Article VI;

            (iii) the Licensed Software;

            (iv)  the Licensed Technical Information; and

            (v)   the Licensed Trademarks;

      "Licensed Patents" shall mean those Patents owned by Nortel Networks or
      its wholly owned subsidiaries and being used in the Elastic Business as of
      the Effective Date and all Improvements relating thereto, excluding those
      that are Excluded Intellectual Property, and including, without
      limitation, those Patents listed in Schedule C;

      "Licensed Products" shall mean the products manufactured and sold, and
      services provided, by the Elastic Business as of the Effective Date, and
      the products which the business records establish are being designed or
      funded by the Elastic Business as of the Effective Date to be manufactured
      and sold by or on behalf of the Elastic Business, and natural evolutions
      thereof in the field of the Elastic Business, including without limitation
      the Etherloop Products:

      "Licensed Software" shall mean the software and related property,
      including without limitation, copyright in the computer software and
      related documentation owned by Nortel Networks or its wholly owned
      subsidiaries and used in the Elastic Business as of the Effective Date and
      all Improvements relating thereto, excluding that which is Excluded
      Intellectual Property, and including, without limitation, that software
      listed in Schedule D;

      "Licensed Technical Information" shall mean the design of the product and
      all trade secrets embodied in any know-how, manufacturing specifications,
      processing procedures or research and development information owned by
      Nortel Networks or its wholly owned subsidiaries and used in the Elastic
      Business as of the Effective Date and all Improvements relating thereto,
      excluding that which is Excluded Intellectual Property, and including,
      without limitation, the technical information listed in Schedule E;

      "Licensed Trademarks" shall mean the trademarks listed in Schedule F;

      "Net Distributor Revenue" shall mean the amounts received by Elastic as a
      result of the Sale to a Distributor of Licensed Products or from the
      provision by a Distributor to an

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      End User of engineering, installation, maintenance, repair and other
      services relating to Licensed Products, whether comprising a lump sum
      and/or a series of periodic payments, after deducting any OEM Revenues,
      actual trade losses, any reasonable transportation charges or allowances,
      value added taxes or other sales taxes and custom duties imposed upon and
      paid by Elastic directly in respect of such sales, leasing or
      sublicensing, or provision of services or otherwise included in such
      proceeds; provided that where the Licensed Products are Sold to or through
      a Distributor which is a Subsidiary or Affiliate of, or otherwise not at
      arm's length with Elastic, the Net Distributor Revenue shall be the Net
      Distributor Revenue that would be realized in a similar transaction with a
      non-affiliated buyer transacting at arms length;

      "Net End User Revenue" shall mean the amounts received by Elastic as a
      result of the Sale by Elastic to an End User of Licensed Products or from
      the provision by Elastic to an End User of engineering, installation,
      maintenance, repair and other services relating to Licensed Products,
      whether comprising a lump sum and/or a series of periodic payments, after
      deducting any OEM Revenues, actual trade losses, any reasonable
      transportation charges or allowances, value added taxes or other sales
      taxes and custom duties imposed upon and paid by Elastic directly in
      respect of such sales, leasing or sublicensing, or provision of services
      or otherwise included in such proceeds; provided that where Licensed
      Products or the services relating to a Licensed Product are Sold to an End
      User which is a Subsidiary or Affiliate of, or otherwise not at arm's
      length with Elastic, the Net End User Revenue shall be the Net End User
      Revenue that would be realized in a similar transaction with a
      non-affiliated buyer transacting at arms length;

      "Net Sublicensing Revenue" shall mean the amounts received by Elastic as a
      result of the Sale by Elastic to a Sublicensee of the right to make, use,
      copy, modify and sell Licensed Products or to provide engineering,
      installation, maintenance, repair and other services relating to such
      Licensed Products whether comprising a lump sum and/or a series of
      periodic payments, after deducting any OEM Revenues, actual trade losses,
      any reasonable transportation charges or allowances, value added taxes or
      other sales taxes and custom duties imposed upon and paid by Elastic
      directly in respect of the Sale or otherwise included in such proceeds;
      provided that where the Licensed Products are Sold to or through a
      Sublicensee which is a Subsidiary or Affiliate of, or otherwise not at
      arm's length with Elastic, the Net Sublicensing Revenue shall be the Net
      Sublicensing Revenue that would be realized in a similar transaction with
      a non-affiliated buyer transacting at arms length;

      "OEM Revenues" shall mean any revenues received by Elastic for or in
      respect of products or equipment produced by or on behalf of any
      manufacturer other than Elastic;

      "Party" shall mean either Nortel Networks or Elastic;

      "Patent Cross License Agreements" shall means those general corporate
      patent cross-license agreements with third parties entered into by Nortel
      Networks listed in Schedule K;

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      "Patents" shall mean patents, patent applications, continuations.
      continuations in part, divisionals, reissues or reexaminations;

      "QIPO" shall mean a Qualified Initial Public Offering as defined in the
      Amended and Restated Certificate of Incorporation of Elastic Networks Inc.
      dated as of the date hereof;

      "Sale" or "Sales" means every disposition of an item or provision of a
      service, including selling, sublicensing, renting, leasing, lending and
      bartering of an item or service. A Sale is considered to occur when
      revenues are recognized by Elastic for accounting purposes. A Sale exists
      irrespective of the collection of any debt, but is considered canceled if
      money is refunded, "Sold" or "Sell" have a corresponding meaning;

      "Sublicensee" shall mean a third party manufacturer under sublicense from
      Elastic having, subject to the limitations set out herein, the right to
      make, use, copy, modify and sell Licensed Products and to provide
      engineering, installation, maintenance, repair and other services relating
      to such Licensed Products;

      "Subsidiary" shall mean a company in which a Party hereto effectively owns
      or controls, and continues to own or control, directly or indirectly, more
      than fifty percent (50%) of the voting stock or ownership interest
      therein;

      "Third Party Software" shall mean software licensed by Nortel Networks or
      NNI from a third party and which is used in the Elastic Business as of the
      Effective Date, including, without limitation, that software listed in
      Schedule G;

      "TI License Agreement" shall mean the Cooperative Development and License
      Agreement between Texas Instruments Incorporated and NNI dated September
      9, 1998;

      "Transferred Intellectual Property" shall mean:

            (i)   the Transferred Software;

            (ii)  the Transferred Technical Information; and

            (iii) the Transferred Trademarks.

      "Transferred Software" shall mean the software and related property,
      including without limitation, the copyright in the computer software and
      related documentation owned by Nortel Networks and used exclusively in the
      Elastic Business as of the Effective Date listed in Schedule H;

      "Transferred Technical Information" shall mean trade secrets embodied in
      any know-how, manufacturing specifications, processing procedures or
      research and development information owned by Nortel Networks and used
      exclusively in the Elastic Business as of the Effective Date listed in
      Schedule I;

      "Transferred Trademarks" shall mean the trademarks listed in Schedule J.

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ARTICLE II TRANSFER OF RIGHTS

2.1. Subject to the terms and conditions of this Agreement, and subject to the
rights granted under the Patent Cross-License Agreements and the TI License
Agreement. Nortel Networks hereby transfers and assigns all of its right, title
and interest in the Transferred Intellectual Property and the goodwill of the
business associated with the Transferred Trademarks to Elastic.

ARTICLE III GRANT OF RIGHTS UNDER LICENSED PATENTS

3.1. Subject to the terms and conditions of this Agreement and subject to the
rights granted under the TI License Agreement, Nortel Networks hereby grants to
Elastic a non-exclusive, worldwide license under the Licensed Patents, to make,
use, lease, sell, offer to sell and import Licensed Products and to provide
engineering, installation, maintenance, repair and other services relating to
such Licensed Products. Such license shall also include the right to have
Licensed Products made by another manufacturer for the use, lease or sale by
Elastic.

3.2. The Patent license granted herein to Elastic shall include the right to
grant sublicenses to third parties within the scope of the license granted in
Paragraph 3.1.

3.3. The Patent license granted herein to Elastic shall commence on the
Effective Date, or when letters patent are issued or granted if subsequent
thereto, and, provided this Agreement is not terminated pursuant to the
provisions of this Agreement, shall continue for the shortest of the entire term
of the respective Patents under which it is granted, the period during which
such Patents are in force, or the duration of this Agreement.

ARTICLE IV GRANT OF RIGHTS UNDER LICENSED TECHNICAL INFORMATION

4.1. Subject to the terms and conditions of this Agreement and subject to the
rights granted under the TI License Agreement, Nortel Networks hereby grants to
Elastic a non-exclusive, worldwide license under the Licensed Technical
Information for the purpose of designing, developing, using, manufacturing, and
distributing Licensed Products and to provide engineering, installation,
maintenance, repair and other services relating to such Licensed Products. The
aforesaid rights shall include:

      (a)   the right to communicate relevant procurement specifications related
            to the Licensed Technical Information to suppliers in all countries
            of the world reasonably necessary for, and solely for, the
            procurement by Elastic of materials, parts, components and
            assemblies for use in the manufacture and/or installation of the
            Licensed Products;

      (b)   the right to communicate to End Users purchasing the Licensed
            Products such portions of the Licensed Technical Information as are
            reasonably needed by such End Users for operating and maintaining
            the Licensed Products; and

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      (c)   the right to communicate to Distributors such portions of the
            Licensed Technical Information as are reasonably needed by such
            Distributors for distributing Licensed Products;

      (d)   the right to grant sublicenses to third parties under the technical
            information license granted herein within the scope of such license;
            and

      (e)   the right to communicate to Sublicensees such portions of the
            Licensed Technical Information as are reasonably needed by such
            Sublicensees for developing, manufacturing and distributing Licensed
            Products;

provided, however, that the recipients of the Licensed Technical Information be
advised by Elastic, in writing at the time, or before such communication, that
proprietary information is being communicated and that such information is to be
kept confidential and not used except as permitted hereunder, and provided
further, that such recipients undertake, in writing, prior to disclosure, to
respect such confidentiality.

ARTICLE V GRANT OF RIGHTS UNDER LICENSED SOFTWARE

5.1. Subject to the terms and conditions of this Agreement and subject to the
rights granted under the TI License Agreement, Nortel Networks hereby grants to
Elastic a non-exclusive, worldwide license right to use, copy, modify,
sublicense and distribute the Licensed Software solely for the purpose of
designing, developing, using, manufacturing, sublicensing and distributing
Licensed Products and to provide engineering, installation, maintenance, repair
and other services relating to such Licensed Products. The aforesaid rights
shall include:

      (a)   the right to communicate relevant procurement specifications related
            to the Licensed Software to suppliers in all countries of the world
            reasonably necessary for, and solely for, the procurement by Elastic
            of materials, parts, components and assemblies for use in the
            manufacture and/or installation of the Licensed Products; and

      (b)   the right to communicate to End Users purchasing the Licensed
            Products, such portions of the Licensed Software as are reasonably
            needed by such End Users for operating and maintaining the Licensed
            Products;

      (c)   the right to communicate to Distributors such portions of the
            Licensed Software as are reasonably needed by such Distributors for
            distributing Licensed Products;

      (d)   the right to grant sublicenses under the software license granted
            herein to Elastic within the scope of such license; and

      (e)   the right to communicate to Sublicensees such portions of the
            Licensed Software as are reasonably needed by such Sublicensees for
            developing, manufacturing and distributing Licensed Products.

5.2. The software license granted herein shall be subject to the following
conditions:

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      (a)   the recipients of the Licensed Software other than End Users shall
            be advised by Elastic, in writing at the time, or before such
            communication, that proprietary information is being communicated
            and that such information is to be kept confidential and not used
            except as permitted hereunder, and provided further, that such
            recipients undertake, in writing, prior to disclosure, to respect
            such confidentiality; and

      (b)   the right to sublicense software to End Users shall be subject to
            the prior or concurrent execution of a written sublicense agreement
            between Elastic, or its Sublicensee, and each End User whereby the
            End User (i) acquires no right, title or interest in or to such
            software other than the right to use it for the operation and
            maintenance of such devices, products or applications bought or
            leased from Elastic; and (ii) shall hold such software in confidence
            for Nortel Networks and Elastic and shall not, at any time, without
            the prior written consent of Nortel Networks and Elastic, transfer
            such software to any person other than employees of End User with a
            need to know.

ARTICLE VI TIME-LIMITED EXCLUSIVE PATENT LICENSE

6.1. Subject to the terms and conditions of this Agreement and subject to the
rights granted under the Patent Cross License Agreements and the TI License
Agreement, Nortel Networks hereby grants to Elastic an exclusive, time-limited,
non-transferable, worldwide license under the Exclusive License Patents to make,
use, lease, sell, offer to sell and import Licensed Products. Such license shall
also include the right to have Licensed Products made by another manufacturer
for the use, lease or sale by Elastic.

6.2. The patent license granted herein to Elastic shall include the right to
grant sublicenses to third parties within the scope of the license granted in
Paragraph 6.1.

6.3. The license granted under Paragraph 6.1 shall commence upon the Effective
Date and shall terminate five (5) years from the Effective Date, after which
time the Exclusive Licensed Patents shall be deemed to be Licensed Patents as
herein defined.

ARTICLE VII GRANTBACK LICENSE

7.1. Subject to the terms of Section 10.04 of the Contribution Agreement,
Elastic hereby grants to Nortel Networks, its Subsidiaries and Affiliates an
unrestricted, irrevocable, nonexclusive, worldwide, perpetual (or full-term, as
the case may be), fully paid-up license under:

      (a)   the Transferred Intellectual Property other than the Transferred
            Trademarks;

      (b)   the Exclusive Licensed Patent during the period of exclusivity set
            out herein;

      (c)   all Improvements relating to the Transferred Intellectual Property
            other than the Transferred Trademarks; and

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      (d)   all Improvements relating to the Exclusive Licensed Patent during
            the period of exclusivity;

to make, have made, use, lease, offer to sell, sell, and import all products and
to copy, modify and sublicense and distribute relevant material for such
purposes. Such license shall include the right to sublicense such rights to
purchasers and users of such products but not to otherwise sublicense such
rights.

7.2. To the extent of its right to do so and notwithstanding any other provision
of, or licenses granted under, this Agreement, Elastic hereby grants to Nortel
Networks an unrestricted, irrevocable, non-exclusive, worldwide, perpetual (or
full-term, as the case may be), fully paid-up license to make, have made, use,
lease, sell, offer to sell and import all products under Patents:

      (a)   owned, or acquired, by Elastic;

      (b)   resulting from patent applications filed by Elastic;

      (c)   under which Elastic has obtained a license, which includes a right
            to sublicense,

during the period in which Elastic is a Subsidiary of Nortel Networks. Such
license shall include the right to sublicense rights in such patents to Nortel
Networks' Subsidiaries, product purchasers and users, and third parties which
have entered into Patent Cross-License Agreements with Nortel Networks. Nortel
Networks agrees to restrict its use and enjoyment of the license granted under
this Paragraph 7.2 in accordance with the provisions of Section 10.04 of the
Contribution Agreement.

ARTICLE VIII IMPROVEMENTS TO THE LICENSED INTELLECTUAL PROPERTY

8.1. If Elastic invents, develops or otherwise acquires any Improvement relating
to the Licensed Intellectual Property, Elastic shall promptly notify Nortel
Networks in writing giving details of such Improvement and will provide Nortel
Networks, free of charge other than the reasonable cost of providing copies
thereof, any explanations that Nortel Networks may reasonably require concerning
the Improvement including, without limitation, access to copies of information,
data, technology, designs, drawings, prototypes, models, computer materials and
software describing or embodying the Improvements provided such action does not
adversely affect Elastic's ability to obtain patent protection.

8.2. Elastic, to the extent of its legal right so to do, shall grant to Nortel
Networks a royalty free, non-exclusive, unrestricted, perpetual, worldwide
license (with a right to grant sublicenses thereunder) under all Intellectual
Property Rights relating to any Improvements relating to the Licensed
Intellectual Property which Elastic may develop or otherwise acquire to make,
have made, use, lease, offer to sell, sell, and import Other Products and to
copy, modify and sublicense and distribute relevant material for such purposes.

8.3. If the Improvement relating to the Licensed Intellectual Property involves
patentable subject matter, then:

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      (a)   if Elastic files for, or acquires, any patent thereon in an country,
            Elastic shall grant to Nortel Networks a non-exclusive, royalty
            free, unrestricted, full term license (with a right to grant
            sublicenses thereunder) to make, have made, use, lease and sell,
            offer for sale and import under any such patents; or

      (b)   if Elastic intends to file patent application(s) only in certain
            countries, Elastic shall, within such time as will enable Nortel
            Networks to make timely patent applications in other countries,
            provide Nortel Networks, at its request, with all signatures and
            documents necessary for filing applications for and obtaining such
            patents in such other countries, provided Nortel Networks shall file
            such patent applications at its own expense (but with such
            assistance as Elastic may properly give) and Elastic shall be
            granted, if it so requests, a non-exclusive, free, unrestricted,
            full term license (with the right to grant sublicenses) for such
            patents.

8.4. If Elastic transfers or assigns to Nortel Networks or its designee all or
part of its interest in any Improvement pursuant to Paragraph 8.3, the licenses
granted to Elastic relating to the Licensed Intellectual Property pursuant to
this Agreement shall extend to any patent rights in such Improvement.

ARTICLE IX PROVISION OF LICENSED TECHNOLOGY AND TRANSFERRED TECHNOLOGY

9.1. During a period of six (6) months ("Technology Disclosure Period")
commencing on the Effective Date Nortel Networks shall, subject to the terms and
conditions of this Agreement, provide to Elastic the Included Intellectual
Property. The Included Intellectual Property shall be in the form then being
used by the Elastic Business.

9.2. Elastic shall be responsible, during the Technology Disclosure Period, for
ensuring it receives all the Included Intellectual Property it requires to fully
enjoy the rights assigned or licensed to it under this Agreement. Both Parties
shall cooperate fully to ensure this result.

9.3. Any Included Intellectual Property that is reduced to a tangible form and
that is provided by Nortel Networks to Elastic, shall be deemed to have been
transferred to Elastic upon receipt of such tangible reduction by either a
representative of Elastic or a representative of a common carrier designated by
Elastic. Included Intellectual Property that is delivered by Nortel Networks
using photonic and/or electronic communications networks, shall be deemed to
have been transferred to Elastic when such technology is transmitted by Nortel
Networks to Elastic. Where pursuant to the Contribution Agreement, Elastic is to
acquire control of the site located at 6120 Windward Parkway, Suite 100,
Alpharetta, Georgia, U.S.A. 30005 formerly controlled by NNI, Included
Intellectual Property physically present at such site shall be deemed to have
been transferred to Elastic upon transfer to Elastic of control of such site.

9.4. Nortel Networks shall not be obligated to create any new intellectual
property for Elastic under this Agreement.

9.5. Elastic shall not acquire any access rights under this Agreement relating
to any network, database, application, computer and/or system operated by Nortel
Networks and/or its Affiliates.

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ARTICLE X GRANT OF RIGHTS UNDER THE LICENSED TRADEMARKS

10.1. Nortel Networks hereby grants to Elastic a personal, non-transferable,
non-assignable, indivisible, non-exclusive, worldwide right to use the Licensed
Trademarks solely in its marketing programs to identify Elastic as a company
affiliated with Nortel Networks (for example "Elastic Networks, a Nortel
Networks Venture") in such a manner which is not reasonably likely to jeopardize
the validity of the Licensed Trademarks or to damage or detract from Nortel
Networks' goodwill or interest in the Licensed Trademarks. Without limiting the
generality of the foregoing Elastic shall not use the Licensed Trademarks in
association with Licensed Products, or any business activity where Nortel
Networks believes, in its sole discretion, such association could be detrimental
to Nortel Networks' reputation. Nothing in this Agreement shall prevent Elastic
or any of its Affiliates from using the word "Network" or any word similar
thereto, alone or in connection with one or more other words or designs, as a
trademark, service mark, trade name or otherwise, provided that use of such word
when it is included as part of the Licensed Trademarks shall be in accordance
with the provisions of this Article X.

10.2. Nortel Networks further grants to Elastic the perpetual right to represent
publicly that it was once owned by Nortel Networks and a Subsidiary thereof, but
nothing in this Paragraph 10.2 shall expand or extend the rights granted to
Elastic under the Licensed Trademarks as otherwise provided for in this Article
X.

10.3. Elastic shall comply with Nortel Networks' instructions as to the form and
manner in which the Licensed Trademarks will be used pursuant hereto and shall
ensure that all such use is in accordance with applicable legal requirements of
any country in which the Licensed Trademarks are used. Elastic shall submit to
Nortel Networks for prior approval, in the manner in which Nortel Networks shall
direct, all advertising and other material on which the Licensed Trademarks
appear or will appear and any such advertising or other material shall be deemed
to have been approved five (5) business days following receipt by Nortel
Networks unless Elastic is notified to the contrary prior to the expiry of such
five (5) day period. Notwithstanding the foregoing, Elastic shall have no
obligation to submit to Nortel for prior approval, and may use, any such
packaging, advertisement or other material which is substantially similar to any
packaging, advertisement or other material previously approved or deemed
approved under this Paragraph 10.3.

10.4. Elastic acknowledges that the Licensed Trademarks and all goodwill
associated therewith are, and shall remain, the sole property of Nortel Networks
and no rights are conferred upon Elastic with respect to the Licensed Trademarks
except as specifically set forth herein.

10.5. Elastic shall take all reasonable precautions to protect the Licensed
Trademarks from infringement and advise Nortel Networks of any infringement or
apparent infringement as soon as it becomes known to Elastic.

10.6. Elastic shall have the right to use the Licensed Trademarks, as herein
provided, from the Effective Date of this Agreement and continuing for a period
of four (4) years thereafter.

                                                                   Page 11 of 37
<PAGE>

10.7. Nortel Networks shall be entitled to terminate the rights herein granted
to Elastic under the Licensed Trademarks at any time effective upon written
notice to Elastic if, in its reasonable determination, such termination is
necessary in order to protect the Licensed Trademarks from being degraded in
value as a result of the actions of Elastic.

10.8. Unless terminated earlier as provided herein, the licenses granted under
this Article X shall terminate automatically, without notice, on the date on
which Elastic ceases to be a Subsidiary of Nortel Networks.

10.9. Upon termination or expiration of this Agreement and/or upon the
termination of the licenses granted under this Article X, Elastic shall
forthwith discontinue the exercise of the license rights granted hereunder, and
all rights conferred upon Elastic hereunder to the Licensed Trademarks shall
revert to Nortel Networks. Thereafter, within thirty (30) days of receipt of
written request from Nortel Networks, Elastic shall deliver up to Nortel
Networks, or at Nortel Networks' option provide a certificate of destruction of
all materials bearing the Licensed Trademarks.

ARTICLE XI THIRD PARTY SOFTWARE LICENSE

11.1. Nortel Networks and Elastic acknowledge that the Elastic Business may
include use of Third Party Software. Accordingly, Nortel Networks, to the extent
of its legal right so to do, hereby grants to Elastic a sublicense to all rights
Nortel Networks and its Subsidiaries have in Third Party Software. Nothing
herein shall require Nortel Networks to acquire additional rights to sublicense
such rights from a third party.

11.2. The rights granted under this Article XI are subject to Elastic agreeing
to, and Elastic hereby agrees to:

      (a)   observe all the applicable terms and conditions of Nortel Networks'
            agreement with the supplier of each item of such Third Party
            Software (hereinafter "the Supplier");

      (b)   make reports and remittances to Nortel Networks in respect of
            Elastic's use and sublicensing of such Third Party Software in a
            timely manner so as to permit Nortel Networks to satisfy its
            obligations with respect to reports and remittances to such
            Suppliers. Elastic's remittances in this regard shall include all
            amounts owed by Nortel Networks to the Suppliers in respect of
            Elastic's use of such Third Party Software, plus Nortel Networks'
            reasonable charges for copying, transmitting, configuring or
            otherwise making available to Elastic such Third Party Software, and

      (c)   indemnify and hold harmless Nortel Networks and its Subsidiaries
            from any and all claims and liabilities (including reasonable legal
            fees and expenses) arising out of Elastic's use of such Third Party
            Software.

                                                                   Page 12 of 37
<PAGE>

ARTICLE XII ROYALTY PAYMENTS AND REPORTING

12.1. In partial consideration of the rights granted pursuant to Articles III
through IX and Article XI of this Agreement, Elastic shall pay to Nortel
Networks:

      (a)   a royalty of two and one half percent (2.5 %) of Net End User
            Revenue for the term of this Agreement;

      (b)   a royalty of two and one half percent (2.5 %) of Net Distributor
            Revenue for the term of this Agreement; and

      (c)   a royalty of five percent (5.0 %) of Net Sublicensing Revenues for
            the term of this Agreement.

12.2. Within thirty (30) days following the start of each calendar quarter,
commencing with the first calendar quarter in which any Net End User Revenue,
Net Distributor Revenue, or Net Sublicensing Revenues are generated, and
continuing thereafter until all royalties payable hereunder have been reported
and paid, Elastic shall:

      (a)   furnish Nortel Networks with a report certified by an authorized
            official of Elastic, recording:

            (i)   all Licensed Products sold to End Users during the most
                  recently completed calendar quarter;

            (ii)  the Net End User Revenue and Net Distributor Revenue generated
                  on such sales during the most recently completed calendar
                  quarter;

            (iii) the royalties payable on such Net End User Revenue and Net
                  Distributor Revenue;

            (iv)  the Net Sublicensing Revenues generated during the most
                  recently completed calendar quarter for each Sublicensee; and

            (v)   the royalties payable on such Net Sublicensing Revenues; and

      (b)   remit to Nortel Networks payment equal to the total of all royalties
            owing for that period.

12.3. If no Net End User Revenue, Net Distributor Revenue or Net Sublicensing
Revenues have been generated, that fact shall be shown on such report.

12.4. Without prejudice to any other right of Nortel Networks, if any payment
owed to Nortel Networks under this Agreement is not made on the due date, the
amount owed will be deemed to be a loan from Nortel Networks to Elastic owing as
from the date payment was due, and Elastic shall pay interest on the overdue
amount at two percent (2%) over the prime rate established by the Chase
Manhattan Bank, N.A. as published in the Wall Street Journal on the last United
States business day of each month.

                                                                   Page 13 of 37
<PAGE>

12.5. All payments made by Elastic to Nortel Networks under this Agreement shall
be made in US dollars. Elastic shall make all such payments by wire transfer or
in other immediately available funds, as Nortel Networks may direct in writing,
and the costs or fees for the payment will be borne by Elastic.

12.6. All payments required by this Agreement shall be exclusive of taxes, and
Nortel Networks shall be responsible for the payment of all such taxes,
including, but not limited to, all sales, value-added, use, rental receipt,
personal property or other taxes and their equivalents which may be levied or
assessed in connection with this Agreement (excluding only taxes based on
Elastic's net income).

12.7. For a period of three (3) years from the date of Sale, Elastic shall keep,
at its own expense, accurate records using U.S. Generally Accepted Accounting
Principles which set out the quantity, description, and price of the Licensed
Products Sold by Elastic and its Distributors, and all other information
necessary to accurately and completely calculate royalties (such records
hereinafter referred to as "Records").

12.8. Upon ten (10) business day's written notice, Nortel Networks shall have
the right, to be exercised through an independent, certified accounting firm
designated by Nortel Networks and reasonably acceptable to Elastic, to examine
Records of Elastic as necessary to verify the accuracy of Elastic's royalty
payments under this Agreement. This right may be exercised by Nortel Networks
only once in any twelve-month period. An examination of Records relating to
royalties owed for a given calendar quarter may be performed at any time within
two (2) years after the end of such calendar quarter. Such examination shall be
performed at Elastic's major place of business or at any other location
reasonably acceptable to both Parties. The examining accounting firm may make
abstracts or copies of Records solely for its use in performing the examination.
Elastic will be entitled to refuse to provide such examining accounting firm
with Records unless such firm agrees in writing that:

      (a)   it will maintain in confidence all information, abstracts, and
            copies of Records acquired during its examination; and

      (b)   it will not make any use of this material other than to inform
            Nortel Networks of any provable or suspected inaccuracy of Elastic's
            payments under this Agreement, or of any provable or suspected
            inaccuracy in Elastic's books.

12.9. If any examination under Paragraph 12.8 of this Article XII shows that an
overpayment has been made by Elastic, any excess amounts shall be promptly
refunded or credited against future payments.

12.10. If any examination under Paragraph 12.8 of this Article XII shows that an
underpayment has been made by Elastic, Elastic shall be deemed to have loaned
from Nortel Networks an amount of money equal to such underpayment, and shall
promptly pay the underpaid amount, together with interest fees as required
pursuant to Paragraph 12.4 of this Article XII. If the amount of such
underpayment exceeds ten percent (10%) of the amount that should have been paid
during the time period over which such underpayment was made, Elastic shall also
pay to Nortel Networks all reasonable costs of the examination.

                                                                   Page 14 of 37
<PAGE>

12.11. Neither Nortel Networks' right to have others examine pursuant to
Paragraph 12.8 of this Article XII, nor its right to receive adjustment payments
pursuant to Paragraph 12.10 of this Article XII, shall be affected by statements
to the contrary appearing on cheques or otherwise, unless any such right is
expressly waived by Nortel Networks.

12.12. The royalty and reporting obligations set out in this Article XII shall
be payable by Elastic until such time as securities of Elastic are first offered
for sale and sold to the public in a QIPO or on sale of Elastic at a value
greater than or equal to a QIPO; after such time, provided Elastic has paid all
outstanding royalties owing and is not in default under any of the terms of
this Agreement, the licenses granted to Elastic hereunder shall be considered
fully paid-up and royalty free.

ARTICLE XIII CONFIDENTIAL INFORMATION

13.1. For the term of this Agreement and for a period of ten (10) years
thereafter, any Confidential Information of one Party (hereinafter "Disclosing
Party") received by the other Party (hereinafter "Receiving Party") under this
Agreement, shall be used, disclosed, or copied, only for the purposes of, and
only in accordance with, the provisions of this Agreement. The Receiving Party
shall use the same degree of care as it uses to protect its own Confidential
Information of a similar nature, but no less than reasonable care, to prevent
the unauthorized use, disclosure or publication of the Confidential Information.
Without limiting the generality of the foregoing, the Receiving Party shall
only disclose Confidential Information to its employees, contractors, end users
and third party sublicensees who need to obtain access thereto consistent with
such Party's rights under this Agreement. The Receiving Party shall not make or
have made any copies of Confidential Information except those copies that are
necessary for the purposes of this Agreement; and the Receiving Party shall
affix to any copies it makes of the Confidential Information, all proprietary
notices or legends affixed to the Confidential Information as they appear on the
copies of the Confidential Information originally received from Disclosing
Party.

13.2. Neither Party shall be bound by any obligation restricting the disclosure
and use of Confidential Information set forth in this Agreement, that:

      (a)   is necessary to enable Elastic to provide specifications to
            suppliers for the procurement of materials, parts, components and
            assemblies for use in the manufacture, use or sale of Licensed
            Products, or

      (b)   is necessary to enable end users purchasing, sublicensing or
            otherwise acquiring Licensed Products to operate and maintain such
            Licensed Products;

      (c)   was lawfully in the public domain prior to its disclosure, or
            becomes publicly available other than through a breach of this
            Agreement;

      (d)   was disclosed to the Receiving Party by a third party provided such
            third party, or any other party from whom such third party receives
            such information, is not in breach of any confidentiality obligation
            in respect of such information;

                                                                   Page 15 of 37
<PAGE>

      (e)   is disclosed when such disclosure is required pursuant to legal,
            judicial, or administrative proceedings, or otherwise required by
            law, subject to the Receiving Party using reasonable efforts to
            provide prior notice to the Disclosing Party to allow it to seek
            protective or other court orders; or

      (f)   is disclosed, pursuant to a standard confidentiality agreement, to a
            potential purchaser, in connection with a possible acquisition of
            Elastic or substantially all of its assets, through an asset
            transaction, merger, stock transaction or otherwise.

13.3. Within twenty (20) business days of the Disclosing Party's request, the
Receiving Party shall return to the Disclosing Party all Confidential
Information and all copies thereof (or such copies or portion of the
Confidential Information as the Disclosing Party specifies), or, if so directed
by the Disclosing Party, shall immediately destroy such Confidential Information
and all copies thereof (or such copies or portion of the Confidential
Information as the Disclosing Party specifies) and shall certify such
destruction to the Disclosing Party. Each Party shall notify the other Party
immediately upon learning of any unauthorized disclosure of the other Party's
Confidential Information.

ARTICLE XIV INFRINGEMENT OF LICENSED INTELLECTUAL PROPERTY

14.1. Elastic shall promptly give notice in writing to Nortel Networks of any
actual, suspected or threatened infringement by third parties of any Licensed
Intellectual Property.

14.2. Nortel Networks has the right to exercise sole control over legal
proceedings relating to any actual, suspected or threatened infringement by
third parties of any Licensed Intellectual Property. If Nortel Networks
exercises this right, Elastic shall cooperate with Nortel Networks in all
matters relating to such proceedings and provide Nortel Networks with all
support that Nortel Networks may deem necessary in order to pursue any action
relating to such actual, suspected or threatened infringement.

14.3. If Nortel Networks does not exercise its rights pursuant to Paragraph
14.2, the Parties agree to enter into good faith negotiations with regard to the
assignment of the subject Licensed Intellectual Property from Nortel to Elastic
for fair value and including from Elastic an unrestricted grantback license
under any such assigned Licensed Intellectual Property to Nortel and its
Subsidiaries.

ARTICLE XV LIABILITY

15.1. Nothing contained in this Agreement shall be construed as:

      (a)   requiring the filing of any patent or trademark application, the
            securing of any patent or trademark, or the maintaining of any
            patent or trademark in force, provided that Nortel Networks shall
            reasonably cooperate with Elastic in connection with the foregoing
            as applicable to the Transferred Trademarks;

                                                                   Page 16 of 37
<PAGE>

      (b)   a representation or warranty of any kind by Nortel Networks as to
            merchantability, fitness for a particular purpose, validity or scope
            of the Included Intellectual Property or any Improvements relating
            thereto, or whether or not the use of the Included Intellectual
            Property or any Improvements relating thereto will infringe any
            patent or other rights of any other person;

      (c)   an agreement to bring or prosecute actions or suits against third
            parties for infringement;

      (d)   an obligation to furnish any assistance or any manufacturing or
            technical information not constituting Included Intellectual
            Property;

      (e)   except as provided herein, conferring any right to use, in
            advertising, publicity or otherwise, any name, trade name or
            trademark, or any contraction, abbreviation or simulation thereof;

      (f)   conferring by implication, estoppel or otherwise upon either Party
            any license or other right under any patent or other intellectual
            property right, except the licenses and rights expressly granted
            herein; or

      (g)   an obligation on the part of one Party to indemnify the other Party
            for any reason.

15.2. EXCEPT AS EXPRESSLY PROVIDED FOR IN THE CONTRIBUTION AGREEMENT, IN NO
EVENT SHALL NORTEL NETWORKS OR ELASTIC (INCLUDING THEIR SUBSIDIARIES,
AFFILIATES, SHAREHOLDERS, OFFICERS, CONTRACTORS, DIRECTORS, EMPLOYEES AND
AGENTS) BE LIABLE FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY
KIND, INCLUDING WITHOUT LIMITATION, DAMAGES ARISING FROM LOST BUSINESS, LOST
SAVINGS, LOST DATA, AND LOST PROFITS, REGARDLESS OF THE CAUSE AND WHETHER
ARISING IN CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT (INCLUDING NEGLIGENCE),
OR OTHERWISE, EVEN IF THE BREACHING PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.

ARTICLE XVI NOTICES

16.1. Any and all notices or other information to be given by one of the Parties
to the other shall be deemed sufficiently given when forwarded by prepaid
registered or certified first class air mail or by facsimile transmission,
overnight courier or hand delivery to the other Party at the following address:

        If to Elastic:

               6120 Windward Parkway
               Suite 100
               Alpharetta, Georgia
               U.S.A. 30005
               Attention: The Secretary

                                                                   Page 17 of 37
<PAGE>

        If to Nortel Networks:

               Nortel Networks Corporation
               8200 Dixie Road
               Suite 100
               Brampton, Ontario
               Canada L6T 5P6

               Attention: VP & Intellectual Property Law Counsel

and such notices shall be deemed to have been received ten (10) business days
after mailing if sent by mail, and the following business day if sent by
facsimile transmission, overnight courier or delivered by hand.

16.2. The aforementioned address of either Party may be changed to any time by
giving twenty (20) days prior notice to the other Party in accordance with the
foregoing.

16.3. In the event of a generally-prevailing labour dispute or other situation
which will delay or impede the giving of notice by any such means, in either the
country of origin or of destination, the notice shall be given by such specified
mode as will be most reliable and expeditious and least affected by such dispute
or situation.

ARTICLE XVII TERM AND TERMINATION

17.1. This Agreement shall become effective on the Effective Date indicated
above and, subject to Paragraph 12.12 hereof, shall continue in effect unless
terminated as set out in this Agreement.

17.2. In the event of any material breach of this Agreement, the non-breaching
Party may terminate this Agreement by giving sixty (60) days prior written
notice to the other Party, thirty (30) days in the case of failure to meet
payment obligations pursuant to Article XII. This Agreement shall not, however,
terminate under this Paragraph 17.2 if:

      (a)   the other Party has cured the breach prior to the expiration of such
            sixty (60) or thirty (30) day period; or

      (b)   such breach cannot be cured within such sixty (60) day period, the
            other Party has initiated actions to cure such breach within such
            sixty (60) day period, and the other Party thereafter cures such
            breach as soon as reasonably practicable; or

      (c)   in the case of failure to meet any payment obligation, such payment
            obligation is being contested in good faith by the Party obligated
            to make such payment and such contest has not been resolved.

17.3. In the event Elastic:

                                                                   Page 18 of 37
<PAGE>

      (a)   admits in writing its inability to pay its debts generally as they
            become due;

      (b)   commits an act of bankruptcy;

      (c)   is the subject of a petition or assignment in bankruptcy under
            applicable bankruptcy laws or other similar laws, that is not
            discharged in thirty (30) days;

      (d)   files a notice of intention to make a proposal or otherwise seeks a
            reorganization under applicable bankruptcy laws or any other similar
            law or statute of any relevant jurisdiction;

      (e)   makes an assignment for the benefit of its creditors;

      (f)   consents to the appointment of a receiver or receiver-manager of
            itself or of the whole or any substantial part of its property; or

      (g)   enters into an arrangement with or for the general benefit of its
            creditors, Nortel Networks may terminate this Agreement immediately
            upon notice.

17.4. Upon termination of this Agreement:

      (a)   all licenses granted to Elastic under this Agreement shall terminate
            with the exception of:

            (i)   any rights Elastic needs to sell, lease, sublicense or use any
                  Licensed Products whose manufacture was initiated before the
                  termination date; and

            (ii)  any rights Elastic needs in order to continue to maintain such
                  Licensed Products whose manufacture was initiated by Elastic
                  prior to the termination date.

      (b)   Elastic shall, at Nortel Networks' option, destroy or return all
            copies of the parts of Licensed Intellectual Property including all
            Confidential Information relating to the subject matter of Licensed
            Intellectual Property; and

      (c)   Elastic shall pay to Nortel Networks all amounts then invoiced under
            this Agreement but not yet paid.

17.5. Termination of this Agreement shall not entitle Elastic to reimbursement
of any amount previously paid to Nortel Networks.

17.6. Notwithstanding the expiry of the period during which Royalties accrue
hereunder, or any termination hereunder, the provisions of Article I -
Definitions, Article VII - Grant Back License, Article VIII - Improvements to
Licensed Intellectual Property, Article XIII - Confidential Information, Article
XIV - Infringement of Licensed Intellectual Property, Article XV - Liability,
this Article XVII - Term and Termination and Article XIX - General, shall
survive this Agreement, For greater certainty, upon termination:

                                                                   Page 19 of 37
<PAGE>

      (a)   all payment obligations under this Agreement shall survive; and

      (b)   any inconsistency between the terms and conditions of this Article
            XVII, and the terms and conditions of any other Article of this
            Agreement, shall be resolved by deeming the terms and conditions of
            this Article XVII determinative.

ARTICLE XVIII ASSIGNMENT OF RIGHTS

18.1. Elastic shall not assign or transfer this Agreement or any of the rights
or obligations granted hereunder whether by merger, operation of law or
otherwise except in conjunction with the subsequent sale of all or substantially
all of the Elastic Business to the assignee of the Elastic Business provided
that:

      (a)   Elastic shall provide prior written notice to Nortel Networks of any
            such assignment;

      (b)   such assignee shall agree in writing to assume all obligations of
            Elastic hereunder and to comply with the terms of this Agreement;
            and

      (C)   all rights of Elastic and any of its Subsidiaries hereunder shall
            terminate on the effective date of any such assignment.

18.2. Nortel Networks shall have the right to delegate or assign this Agreement
to any of its Subsidiaries without the consent of Elastic; provided that Nortel
Networks has also assigned the Intellectual Property Rights underlying this
Agreement to such Subsidiaries. Notwithstanding any such assignment or
delegation, Nortel Networks shall not be relieved of any of its obligations
hereunder.

ARTICLE XIX GENERAL

19.1. No agency, partnership, joint venture or employment relationship is or
shall be created by virtue of this Agreement.

19.2. A Party shall not be liable, wholly or in part, for non-performance or a
delay in performance of its obligations under this Agreement, if such delay is
due to force majeure or contingencies or causes beyond the reasonable control of
such Party, including but not limited to, flood, wind, hurricane, tornado,
earthquake, explosion, or other similar catastrophe, hostilities, restraint of
rulers or people, civil commotion, act of terrorism, strike, labor dispute,
blockage or embargo or any act of nature, fires, accident, epidemic or
quarantine restrictions.

19.3. The Schedules hereto, as may be modified in accordance with the term and
conditions herein, form part of this Agreement. This Agreement may only be
modified by an instrument in writing mutually agreed upon and executed by each
Party's duly authorized representatives.

19.4. Elastic acknowledges that Licensed Products and Licensed Intellectual
Property may be subject to US export control laws, including the US Export
Administration Act and its associated

                                                                   Page 20 of 37
<PAGE>

regulations, and may be subject to export or import regulations in other
countries. Elastic agrees to comply strictly with all such regulations and
acknowledges that it has the responsibility to obtain such licenses to export,
re-export or import Licensed Products or Licensed Intellectual Property as may
be required after delivery to Elastic.

19.5. The Parties agree that the UN Convention on Contracts for the
International Sale of Goods (Vienna, 1980) shall not apply to this Agreement nor
to any dispute arising out of this Agreement.

19.6. All rights and licenses granted under or pursuant to this Agreement by
Nortel Networks to Elastic are, for all purposes of Section 365(n) of Title 11
of the United States Code ("Title 11"), licenses of rights to "intellectual
property" as defined in Title 11. Nortel Networks agrees that Elastic, as
licensee of such licenses and rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under Title 11. To the extent
permissible under the relevant agreements, Elastic shall succeed to Nortel
Networks as licensee with respect to any third party software Elastic has
sublicensed from Nortel Networks if Nortel Networks rejects the license in a
bankruptcy proceeding.

19.7. In the event that any provision of this Agreement is found to be invalid,
voidable or unenforceable, the Parties agree that such invalidity, voidability
or unenforceabilitv shall affect neither the validity of this Agreement nor the
remaining portions thereof, and that the provision in question shall be deemed
to be replaced with a valid and enforceable provision most closely reflecting
the intent and purpose of the original provision.

19.8. This Agreement constitutes the entire agreement between the Parties and
supersedes all other agreements between the Parties concerning the subject
matter herein.

19.9. This Agreement shall be governed by and construed in accordance with the
laws of the State of Massachusetts (without reference to the conflicts of law
provisions thereof) and the federal laws of the United States of America
applicable therein.

                                                                   Page 21 of 37
<PAGE>

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

NORTEL NETWORKS CORPORATION                ELASTIC NETWORKS INC.

/s/ Michael Pangia
-----------------------------------        -------------------------------------
Authorized Signature                       Authorized Signature

Michael Pangia, Attorney-in-fact           Guy D. Gill, President
-----------------------------------        -------------------------------------
Printed Name and Title                     Printed Name and Title

<PAGE>

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

NORTEL NETWORKS CORPORATION                ELASTIC NETWORKS INC.

                                           /s/ Guy D. Gill
-----------------------------------        -------------------------------------
Authorized Signature                       Authorized Signature

Michael Pangia, Attorney-in-fact           Guy D. Gill, President
-----------------------------------        -------------------------------------
Printed Name and Title                     Printed Name and Title<PAGE>

                               RESELLER AGREEMENT

This Reseller Agreement (the "Agreement") is made and entered into this 17th day
of June, 1999 ("Effective Date") by and between Elastic Networks, Inc.
("Elastic"), a Delaware corporation having its principal offices at 6120
Windward Parkway, Suite 100, Alpharetta, GA 30005-4191, and Darwin Networks (the
"Reseller"), a corporation of the State of Delaware having an office and place
of business at 1000 Ormsby, Suite 135, Louisville, KY.

                                 1. DEFINITIONS.

      The following terms are used in this Agreement with the meanings
thereafter ascribed.

      "Application" means high-speed access connectivity, Internet access and
associated services.

      "Customers" means Customers of Products procured by efforts of Reseller.

      "ECE" or "Elastic Certified Engineer" means an individual certified by
Elastic in accordance with Elastic's then-current program who is responsible for
the configuration and initial administration of the Products and ongoing
customer support.

      "ECI" or "Elastic Certified Installer" means an individual certified by
Elastic in accordance with Elastic's then-current program who is responsible for
the installation and initial configuration of the Products.

      "Hardware" means any physical portion of a Product originally manufactured
by Elastic, including memory circuits and media upon which Software may be
delivered, but excluding Software.

      "Marks" means the trademarks, service marks, trade names, logos, and other
descriptive devices of Elastic associated with the Products.

      "Products" means the Hardware, Software, and other items described on
Exhibit A hereto as amended from time to time to reflect changes in the Product
offered by Elastic.

      "Sell" means the sale of Hardware and other items and the right to grant
licenses to use the Software.

      "Software" shall mean any set of one or more computer programs originally
created by Elastic which is composed of routines, subroutines, concepts,
processes, algorithms, formulas, ideas, or know how, and contained on a magnetic
tape, disc, semiconductor device or other memory device or system memory
consisting of (a) hard wired logic instructions which manipulate data in the
central processor and control input-output operations and errors diagnostic and
recovery routine, (b) instruction sequences in machine-readable code that
control call processing, or other operating function, peripheral equipment or
administration and maintenance functions and (c) associated documentation used
to describe, maintain and use the program.

      "Territory" means the United States and Canada.

                               2. GRANT OF RIGHTS

2.1. Purchase Rights. Reseller may purchase the Hardware and be granted a right
to use the Software pursuant to the Software License set forth in Exhibit B for
its own use within the Territory and consistent with the Application on the
terms and conditions set forth herein provided that any such Products so used by
Reseller are not resold.

2.2. Distribution Rights. Elastic hereby grants to Reseller during the Term a
nonexclusive, nontransferable, and limited right to (a) market, distribute, and
Sell the Hardware; (b) transfer to Customers pursuant to the Software License
set forth in Exhibit B the right to use the Software; and (c) use the Marks to
describe the Products, subject to the provisions of Section 10 hereof, only in
the Territory and consistent with Application.

2.3. Reservation of Rights. Elastic reserves all rights not expressly granted
herein. Except as set forth herein or as required by applicable law, no express
or implied right of any kind is granted to Reseller or any other party.

2.4. Restrictions. Reseller shall not (a) Sell nor enter into any agreement to
Sell the Products outside the Territory, (b) ship, permit delivery of, or
transfer the Products, outside the Territory, or (c) permit use of the Products
in any manner that is inconsistent with the Application without the prior
written consent of Elastic. Reseller shall not, and shall not allow its
employees, its representatives, Customers, or any unauthorized party to, use,
reproduce, disassemble, decompile, modify, or reverse engineer, or create
derivative works based upon, the Products.

                                     3. TERM

3.1. Term. Unless earlier terminated as provided in Section 12 below, this
Agreement shall be effective as of the Effective Date and shall remain in effect
for one (1) year following the Effective Date ("Initial Term"). The Initial Term
and any annual extension/s hereof ("Renewal Term") may be collectively referred
to as the "Term."

3.2. Renewal of Term. Unless earlier terminated as provided in Section 12 below,
the Term of this Agreement shall continue for successive one (1) year terms
following the Initial Term.

                               4. ORDER PROCEDURE

4.1. Order Submission. Reseller shall submit orders to Elastic in accordance
with procedures established by Elastic from time to time and published on
Elastic's web site ("Orders"). All Orders shall be submitted pursuant to, and
shall incorporate all of, the terms and conditions of this Agreement. No Order
shall be binding on Elastic unless accepted in writing or by delivery of
Products in whole or partial fulfillment thereof. Elastic shall have the right
to cancel any Order accepted by Elastic, or to delay the shipment of Products
ordered if Reseller fails to meet payment schedules or other credit or financial
requirements established by Elastic. Elastic reserves the right to vary, change,
or limit the amount or duration of credit to be allowed to Reseller.

4.2 Order Acceptance. Elastic may accept or reject any Order for any reason,
including without limitation, an Order which requires a ship date less than
thirty (30) days after Elastic's receipt of same.

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4.3 Order Cancellation. In the event Reseller cancels all or any part of an
Order within thirty (30) days of the ship date, Reseller shall pay to Elastic a
cancellation charge of ten percent (10%) of the Product price for each Product
that has been cancelled.

4.4 Non-Binding Forecast Of Orders. At or before the beginning of each month
during the Term, using the format in Exhibit E, Reseller shall provide to
Elastic a written non-binding forecast of the quantities of each Product
anticipated to be purchased from Elastic for delivery in each of the following
twelve months ("Forecast"). If at any time Reseller reasonably anticipates any
significant difference between the current Forecast and Reseller's actual
requirement for Products, Reseller will promptly notify Elastic and Elastic will
use its commercially reasonable efforts to meet Reseller's actual requirement
upon such prompt notice.

                                   5. SHIPMENT

5.1. Shipment. Elastic shall ship to Reseller the number of Products specified
in the Order for which Elastic has received a properly completed Order that has
been accepted by Elastic. The date when such Products are shipped is hereinafter
the "Shipment Date."

5.2. Partial Shipment. Reseller shall be responsible for delivering Products to
Customers. The parties agree that (a) any failure to supply all Products ordered
in a single shipment or (b) any partial shipment or delivery of an Order in
installments shall not constitute a breach of this Agreement or give rise to any
remedy or right of or otherwise make Elastic liable or responsible in any manner
to Reseller, any Customer, or any third party.

5.3. Risk of Loss and Title. All Products or other products are shipped F.O.B.,
point of shipment. All risk of loss or destruction of, or damage to, the
Products shall transfer from Elastic to Reseller at the time the Order is
shipped on the Shipment Date. Title to the Hardware shall pass to Reseller upon
Reseller's final payment of the total Price.

                                6. PRICE; PAYMENT

6.1. Price. The price to be paid for the Products by Reseller shall be the
amount in United States Dollars stated in Exhibit A hereto ("Price List").
Elastic shall have the right at its sole discretion at any time to change its
Price List with sixty (60) days written notice to Reseller, and such new prices
shall apply to all shipments made after such notice period.

6.2. Payment Terms. Elastic will invoice Reseller as of the date that a full or
partial shipment is made. Any invoiced amount shall be due and payable thirty
(30) days after the date of the invoice. If an invoice contains one or more
amounts that are disputed, as well as one or more amounts that are not, Reseller
agrees it will not withhold any amount(s) which are not disputed. Elastic
reserves the right to refuse to grant credit to Reseller at any time and for any
reason and to require cash on delivery terms or cash with order terms.

6.3. Taxes and Duties. Elastic shall have no responsibility for the deduction,
withholding, collection, or payment of any and all taxes and duties of any kind,
anywhere, arising out of this Agreement, including but not limited to, sales,
use, and import taxes, levies and charges by federal, state or local government
authorities in the Territory or elsewhere, except for corporate taxes on the
income of Elastic. The payment of any and all taxes applicable to any
transaction under this Agreement is the sole responsibility of Reseller.
Reseller shall complete and execute the BLANKET SALES/USE TAX EXEMPTION
CERTIFICATE included herein as Exhibit C upon execution of this Agreement.

6.4. Interest. On any amounts not paid when due, Elastic shall be entitled to
receive interest at the rate of one and one-half percent (1-1/2%) per month or
the maximum legal amount, whichever is less. Reseller shall reimburse Elastic
for all costs of collection, including reasonable attorneys' fees and court
costs. Time is of the essence in all payment terms.

6.5 Reduction or set-off. Amounts due to Elastic under this Agreement are not
subject to reduction or set-off without the prior written consent of Elastic.

                               7. RESPONSIBILITIES

Reseller shall:

            (a) Use its best efforts to promote the sale of Products throughout
      the Territory for the consistent with Application.

            (b) Provide Customers Level 1, Level 2 and Installation Support
      using either its own ECI and ECE or the services of another organization
      certified by Elastic to provide such support.

            (c) Not make representations concerning the Products that exceed or
      are inconsistent with the marketing materials and technical specifications
      provided to Reseller by Elastic. Reseller has no and shall exercise no
      authority to bind Elastic to any undertaking or performance with respect
      to the Products.

            (d) Comply with all laws and regulations which may govern this
      Agreement and the promotion and sale of the Products.

            (e) Promptly notify Elastic of any and all known or suspected actual
      or attempted infringements of (i) the Products, any component or
      peripheral thereof, or (ii) intellectual property in the Products or the
      Marks.

            (f) Immediately advise Elastic of any changes in standards,
      specifications, and procedures with respect to the Products that may
      become necessary from time to time during the term of this Agreement.
      Elastic shall act in good faith to judge if modifications, revisions, and
      additions in and to the production of the Products are necessary.

                                   8. TRAINING

8.1. Training Sessions. During the term of this Agreement, Elastic will offer
training classes in the installation, maintenance, Level 1 Support, and Level 2
Support ("Training"). Training will initially be conducted in Alpharetta,
Georgia at the principal offices of Elastic or at such other locations as may be
selected by Elastic. Reseller shall be responsible for the cost of Training and
all expenses incurred by Reseller and Reseller's employees incident to Training.
Elastic's charges for training classes and testing shall be posted from time to
time on Elastic's web site.

8.2. Technical Support Designees. Within five (5) days after the date of this
Agreement, Reseller shall designate one (1) or two (2) members of its technical
staff acceptable to Elastic to act as Reseller's sole representatives for
contact with Elastic regarding Training and Reseller's Level 1 Support and Level
2 Support obligations ("Technical Support Designees"). Reseller's failure to
designate and maintain at

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least one (1) competent Technical Support Designee during the Term shall be a
material breach of this Agreement and shall entitle Elastic, at its sole
discretion, to terminate this Agreement in accordance with Section 12.1 hereof.
The parties acknowledge that, on an occasional as-needed basis only, a temporary
Technical Support Designee may be substituted if neither Technical Support
Designee is available.

                               9. PRODUCT WARRANTY

9.1. Limited Warranty. Elastic warrants to Reseller that the Hardware and
Software purchased from Elastic will, for a period of [one (1) year] after the
Shipment Date of the Hardware and Software to Reseller (the "Warranty Period"),
(1) be free from material defects and (2) conform in all material respects to
Elastic's published Product specifications in effect on the date the Hardware
and Software is shipped to Reseller. The sole obligation of Elastic under this
warranty shall be to repair or replace (at the option of Elastic) any Hardware
and Software which contains a defect in material or workmanship or which fails
to conform in all material respects to such Product specifications. Elastic
shall have the right to confirm the existence of a defect or nonconformity by
testing the Hardware and Software. This limited warranty does not apply to items
normally consumed in operation, such as lamps and fuses or to any defect that
has been caused by Reseller or Customers and arises from mishandling, misuse,
neglect, or improper testing or repair. Reseller agrees to comply with Elastic's
then effective return merchandise authorization procedures ("RMA Procedures").
OTHER THAN AS EXPRESSLY SET FORTH IN THIS SECTION 9.1, ELASTIC MAKES NO
WARRANTIES WITH RESPECT TO THE PRODUCTS TO CUSTOMER OR TO RESELLER. THE WARRANTY
IN THIS SECTION 9.1 IS MADE EXPRESSLY IN LIEU OF ANY AND ALL EXPRESS, IMPLIED,
OR STATUTORY WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY AND ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT, AND ALL SUCH OTHER WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.

9.2. Diagnostics and Support.

            (a) Level 1 Support. Reseller shall be responsible for providing or
      purchasing Level 1 Support for each Customer. "Level 1 Support" means the
      ability to: (1) provide general Product information to Customers; (2)
      provide 800 support desk technical support of Products to Customers
      twenty-four (24) hours per day, seven (7) days per week; (3) provide
      general Product configuration and installation support to Customers; (4)
      record and track reported Customer problems relating to Product issues and
      actions taken to correct such problems; (5) distribute software upgrades,
      patches, and new feature releases to Customers as appropriate; (6)
      escalate problems that cannot be resolved by Level 1 Support to Level 2
      Support; and (7) provide Elastic with a monthly summary of reported
      Customer problems and related issues, and resolution status reports in a
      form provided by Elastic. Elastic agrees to provide reasonable assistance
      by fax, email, and telephone to Reseller's Technical Personnel during
      Elastic's normal business hours of 8:30a.m. - 5:00 p.m. Eastern Standard
      Time, excluding weekends and Elastic's holidays.

            (b) Level 2 Support. Reseller shall be responsible for providing or
      purchasing Level 2 Support for each Customer. "Level 2 Support" means the
      ability to: (1) provide assistance to Customers to resolve
      misconfigurations of Products; (2) isolate and simulate complex
      configurations of Customers' networks; (3) identify and isolate subsystem
      faults; (4) perform root cause analysis; (5) provide on-site support as
      may be required by a Customer; (6) simulate Product problems in a lab
      facility to facilitate problem resolution and provide Elastic with
      sufficient information and the steps to reproduce the problem in its lab
      facility; (7) escalate problems that cannot be resolved under Level 2
      Support to Level 3 Support; and (8) provide remote modem access to
      Customer site for Elastic. Elastic agrees to provide reasonable assistance
      by fax, email, and telephone to Reseller's Technical Personnel during
      Elastics' normal business hours of 8:30a.m. - 5:00 p.m. Eastern Standard
      Time, excluding weekends and Elastic's holidays.

            (c) Level 3 Support. At Reseller's request, Elastic shall provide
      Level 3 Support to Reseller for Products. "Level 3 Support" means the
      ability to resolve Product problems and bugs that cannot be prevented,
      diagnosed, or corrected by Level 1 Support or Level 2 Support and are not
      related to installation, configuration, integration, or unintended usage.
      If Elastic determines that Reseller's request for Level 3 support should
      not be included in Level 3 Support, Reseller shall pay Elastic for all
      labor at Elastic's Technical Support Rate as listed in the Exhibit A Price
      List and as amended from time to time upon 60 days written notice to
      Reseller and reimburse Elastic for all material and travel expenses.

9.3. Software Support. Elastic shall make available to Reseller Maintenance
Releases via Elastic's web site for downloading. Elastic shall support each
Major Release for "n"-2 Software releases ("Supported Release"), where "n" is
the Major Software Release currently available. Elastic, in meeting any support
obligations may require a Customer to upgrade to a Supported Release before
Elastic is required to provide such support. Any Software that is not within
"n"-2 Software releases must be upgraded to Elastic' then-current Major Release
to continue to be eligible for support by Elastic. If Reseller or a Customer
chooses not to remain within "n"-2 Major Releases of the currently available
Software, then Elastic may choose to discontinue service support for such
release. "Major Release" shall mean a release of Software that shall be
designated by Elastic as a change in the ones digit of the Software version
number [(x).x]. "Maintenance Release" shall mean an incremental release of
Software by Elastic that repairs post-production Software bugs, and may provide
additional Software features. Maintenance Releases shall be designated by
Elastic as a change in the tenths digit(s) of the Software version number
[x.(x)].

9.4. Elastic Extended Warranty and Maintenance Program. Elastic shall offer an
optional Elastic Extended Warranty and Maintenance Program ("EWMP") for Hardware
and Software. EWMP is offered on a per-Order basis so that it applies to all
Hardware and/or all Software purchased on a particular Order. Annual fees and
program provisions are as follows:

            Hardware: Annual fee is 3% of the total per-Order Hardware price for
      each year of EWMP desired. EWMP extends the standard Section 9.1 Warranty
      Period for up

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      to two additional years. The first year of EWMP may be purchased on the
      original Order or at any time prior to expiration of the standard Warranty
      Period. The second year of EWMP may be purchased on the original Order or
      at any time prior to the expiration of either the standard Warranty Period
      or prior to the expiration of first-year EWMP if this option was selected.

            Software: Annual fee is 12% of the total per-Order Software price
      for each year of EWMP desired. For Software, EWMP extends the standard
      Section 9.1 Warranty Period and entitles Reseller to receive the latest
      Major Releases at no additional cost. The first year of EWMP may be
      purchased on the original Order or at any time prior the expiration of the
      standard Warranty Period. Additional years of EWMP may be purchased at any
      time prior to expiration of the then-current year of EWMP. Elastic may
      choose to discontinue Software EWMP if: 1.) Reseller or its Customer
      chooses not to remain within Supported Releases of the currently available
      Software; and/or .2) Reseller or its Customer chooses not to obtain
      upgraded Hardware required to run such Supported Releases.

      At Elastic's request, Reseller agrees to provide information and
documentation deemed sufficient by Elastic to determine the validity of any
warranty claims or issuance by Reseller of Major Releases to Customers under
EWMP. Such information and documentation may include, but is not limited to,
copies of Customer receipts or other documents showing that EWMP fees were paid
and identifying the Products by name, quantity and serial number to which EWMP
applies. Elastic may refuse EWMP warranty claims and prohibit Reseller from
issuing Major Releases under EWMP if Reseller refuses to supply such information
and documentation upon request by Elastic.

9.5 Services Not Provided Under Limited Warranty or EWMP. Neither the Section
9.1 Limited Warranty nor enrollment in EWMP automatically entitle Reseller to
receive the following: releases of or updates to Software not included on Orders
for which Software EWMP was purchased; customization of, configuration of, or
labor to install Products; on-site Product support; support or replacement of
Product that is altered, modified, mishandled, destroyed, or damaged by natural
causes or damaged during unauthorized use; Services to resolve problems
resulting from Reseller's actions or causes beyond Elastic's control; Services
for non-Elastic software installed on any Product; or Hardware upgrades required
to run new or updated software. If Reseller requests Elastic to perform on-site
diagnostic and remedial maintenance, excluding when necessary under Level 3
Support escalations, Reseller shall pay Elastic for all labor cost at Elastic's
Technical Support Rate as listed in the Exhibit A Price List and as amended from
time to time upon 60 days written notice to Reseller and reimburse Elastic for
all material and travel expenses.

9.6. Limitation of Liability. In no event will Elastic, its subsidiaries, its
associated companies, or its licensors be liable to Reseller under this
Agreement or otherwise, or to any Customer regardless of the form of claim or
action, in an aggregate amount that exceeds the total Price paid to Elastic in
respect of the Products giving rise to the claim or action purchased pursuant to
this Agreement. In no event will Elastic, its subsidiaries, its associated
companies, or its licensors be liable to Reseller or any third party for
special, consequential, exemplary, incidental, or indirect damages or costs
(including legal fees and expenses) or loss of goodwill or profit in connection
with the supply, use or performance of or inability to use the Products or any
services provided hereunder, or in connection with any claim arising from this
Agreement, even if Elastic, its subsidiaries, its associated companies, or its
licensors have been advised of the possibility of such damages or costs. EXCEPT
AS PROVIDED IN THIS SECTION 9, IN NO EVENT WILL ELASTIC, ITS SUCCESSORS OR
ASSIGNS, ITS SUBSIDIARIES, OR ITS AFFILIATES BE LIABLE TO RESELLER OR ANY THIRD
PARTY IN WARRANTY, CONTRACT, NEGLIGENCE, STRICT TORT OR OTHERWISE, REGARDING ANY
DEFECTS IN THE DESIGN, DEVELOPMENT, PRODUCTION, OR PERFORMANCE OF THE PRODUCTS
UNDER THIS AGREEMENT OR OTHERWISE. No action arising out of this Agreement,
regardless of form, may be brought by either party or any other third party more
than two (2) years after the date the cause of action has accrued.

9.7. Prohibitions on Use. The Products are intended for connection to the room
telephone wiring and to the "subscriber" side of the Federal Communications
Commission ("FCC") Part 68 Registered telephone services switch (the PABX). In
no event shall Reseller or Customers directly connect the Products to the
telephone company central office wiring which would require Registration as
"Terminal Equipment" pursuant to 47 Code of Federal Regulations Part 68 of the
FCC Rules.

                                 10. TRADEMARKS

10.1. Ownership. Reseller acknowledges that Elastic is the owner of all right,
title, and interest in and to the Marks. Reseller covenants not to file or
prepare any application for registration of any of the Marks without the prior
approval and direction of Elastic. Reseller agrees not to adopt, use, file for
registration, or register any trademark, service mark, or tradename (with
respect to the Marks or otherwise) without the prior written consent of Elastic.

10.2. No Impairment. Reseller agrees not to commit any acts, directly or
indirectly, which may contest, dispute, or otherwise impair the rights, title,
or interest of Elastic in or to the Marks. Reseller agrees not to claim or
assert any rights, title, or interest in or to the Marks in any way.

10.3. Use of Marks. Reseller will not adopt for use any Marks in any manner
whatsoever, other than as may be specifically authorized in this Agreement.
Reseller shall not use the Marks in conjunction with any other trademarks, trade
names, service marks, logos, or other similar designations without Elastics'
prior written approval. The parties agree that all use by Reseller of the Marks
shall be in such a manner as to inure at all times to the benefit of Elastic,
and shall not in any manner create the impression that the Marks belong to and
are owned by Reseller or any other party. Reseller shall not modify, delete,
remove, alter, cover, or obscure the Marks or the copyright or other proprietary
notices placed on or embedded in the Products, documentation, or any related
materials, whether obtained from Elastic or otherwise.

10.4. Marketing Materials. Reseller shall include the Marks in any literature,
promotional materials, or advertising which it produces or distributes
concerning the Products. Reseller shall provide to Elastic samples of all
literature, promotional materials, and advertising material which contains the
Marks, for review and approval by Elastic prior to first use.

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Reseller will not use any such Marks other than directly with respect to the
promotion and sale of the Products, and shall use such Marks in accordance with
applicable law.

10.5. Other Products and Services. If Reseller offers any other products or
services in connection with the Products, any display or other use of the Marks
must conform the standards set forth herein. All such combinations with the
Marks must be approved in writing by Elastic prior to actual use by Reseller,
and Reseller shall cooperate with Elastic in monitoring the nature and quality
of Reseller's use of the Marks with such products and services.

10.6. Marks of Reseller. Reseller may include its own trademarks, trade names,
service marks, logos and other similar designations in connection with the sale
of the Products; provided, however, all such combinations with the Marks require
Elastic' prior written approval.

                        11. CONFIDENTIALITY AND OWNERSHIP

11.1. Proprietary Information. Each party may disclose to the other party
certain Trade Secrets and Proprietary Information of such party or its
associated companies, suppliers, or customers. For purposes of this Agreement,
"Trade Secrets" means information which: (a) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. "Proprietary
Information" means information, other than Trade Secrets, that is of value to
its owner and is treated as confidential, including but not limited to the terms
and conditions of this Agreement. "Owner" refers to the party disclosing
Proprietary Information hereunder, whether such party is Elastic or Reseller and
whether such disclosure is directly from Owner or through Owner's employees or
agents and "Recipient" refers to the party receiving any Proprietary Information
hereunder, whether such party is Elastic or Reseller and whether such disclosure
was received directly or through Recipient's employees or agents.

11.2. Confidentiality. Recipient agrees to hold Proprietary Information and
Trade Secrets disclosed by Owner in strictest confidence and not to, directly or
indirectly, copy, reproduce, distribute, manufacture, duplicate, reveal, report,
publish, disclose, cause to be disclosed, or otherwise transfer such Proprietary
Information or Trade Secrets to any third party, or utilize such Proprietary
Information or Trade Secrets for any purpose whatsoever other than as expressly
contemplated by this Agreement. With regard to the Trade Secrets, this
obligation shall continue for so long as such information constitutes a trade
secret under applicable law. With regard to the Proprietary Information other
than Trade Secrets, this obligation shall continue for the Term and for a period
of five (5) years thereafter. The foregoing obligations shall not apply if and
to the extent that Recipient establishes that the information communicated was:

            (a) Already known to Recipient, without obligations to keep such
      information confidential, at the time of Recipient's receipt from Owner,
      as evidenced by documents in the possession of Recipient prepared or
      received prior to disclosure of such information;

            (b) Received by Recipient in good faith from a third party lawfully
      in possession thereof and having no obligation to keep such information
      confidential; or

            (c) Publicly known at the time of Recipient's receipt from Owner or
      has become publicly known other than by a breach of this Agreement.

11.3. Ownership. Reseller acknowledges and agrees that Elastic is the sole owner
and shall retain all right, title, and interest in and to the Products and its
Proprietary Information and all localizations, modifications, improvements, and
derivative works, and related written matter and all copies and portions
thereof, including but not limited to all worldwide patents, patent
applications, copyright, trademarks, trade secrets and other intellectual
property rights and interests. Reseller agrees that, except for the limited
license granted under Section 2, it shall not assert any right, title, or
interest therein.

                                 12. TERMINATION

12.1. Termination. Either party may terminate this Agreement effective upon the
expiration of the Initial Term or any Renewal Term by giving ninety (90) days
prior written notice to the other. Elastic may terminate this Agreement upon the
occurrence of any of the following events: (a) Reseller shall not pay when due
any sum owed hereunder and such non-payment continues for more than fifteen (15)
days after written demand by Elastic, (b) Reseller shall breach or fail to
perform any provision of the CONFIDENTIAL DISCLOSURE provisions of this
Agreement, (c) Reseller shall breach or fail to perform any other provisions of
this Agreement and the same is not cured within forty-five (45) days after
notice of such breach or failure has been given to Reseller, or (d) Reseller
shall become insolvent or shall make an assignment for the benefit of its
creditors or there shall be filed by or against Reseller any bankruptcy,
receivership, reorganization, or other like proceeding under any present or
future debtor relief law or law relating to financial institutions. Elastics'
right to terminate this Agreement shall be exercised by a written notice to
Reseller; and the termination of this Agreement shall be effective immediately
upon the giving of such notice. Any termination of this Agreement shall be in
addition to, and not in lieu of, any other rights or remedies available to
Elastic at law or in equity, and all such rights and remedies shall be
cumulative.

12.2. Obligations upon Termination. Upon the expiration or termination of this
Agreement for any reason: (a) Reseller shall immediately return to Elastic all
Elastic property, including but not limited to Proprietary Information of
Elastic; and (b) all invoices and any other moneys due to Elastic by Reseller
shall remain due and payable in accordance with the terms hereof.

12.3. Survival of Terms. Upon termination or expiration of this Agreement: (a)
all provisions which by their nature and context are intended to survive
termination of this Agreement, including without limitation Sections 2.4, 6.3,
9, 10, 11, and
12.4, Elastic will hereafter stand wholly freed and discharged, and Reseller
hereby expressly releases and discharges Elastic of and from any and all
obligations or liability whatsoever, whether arising hereunder or from, or in
connection with, any manner or thing relating to, or in any manner connected
with, the subject matter of this Agreement. The foregoing right of termination
and the additional right of nonrenewal at the end of this term are absolute, and
neither Elastic nor Reseller will be liable to the other because of the
termination or nonrenewal hereof for compensation, reimbursement, or damages on
account of expenditures, investments, leases or commitments in connection with
the business or good will of Elastic or

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Reseller, or for any other reason whatsoever. Reseller will not be relieved,
however, of any obligations for unpaid balances for Products shipped prior to
termination or expiration. The termination of this Agreement will operate as a
cancellation, as of the date thereof, of all orders which have not been shipped
by Elastic to Reseller, thereafter, neither party will be under any obligation
to the other with respect to orders so canceled.

12.4. Indemnification.

      (a) Gross Negligence or Willful Misconduct: Neither party hereto shall be
responsible for gross negligence or willful misconduct of the other, and each
party hereto shall indemnify, defend, and hold harmless the other against any
and all liabilities, damages, losses, costs, and expenses (excluding
consequential, punitive or special damages) to the extent resulting from,
arising out of, or relating to a claim by any third party arising out of such
gross negligence or willful misconduct.

      (b) In addition to any other obligations of indemnity provided in this
Agreement, Reseller agrees to indemnify, defend, and hold harmless Elastic, its
affiliates, and their directors, officers, shareholders, employees and agents
from and against any claims, liabilities, losses, damages, causes of action, or
injuries, together with all costs and expenses, including reasonable attorneys'
fees, to the extent arising out of or resulting from: (a) Any actions or
omissions on the part of Reseller in distributing or marketing the Products; (b)
any statements, claims, representations or warranties made by Reseller relating
to the Products other than as authorized by Elastic in writing or made in
Elastics' own writings; (c) the infringement or claim thereof of any patent,
copyright, trademark, service mark, tradename, trade secret, proprietary and
confidential information right, or any other property right of a third party
arising from the use by Reseller of any symbol, insignia, name or identifying
characteristic identifying the Products other than a Mark; (d) Reseller's
failure to comply fully with all the obligations set forth in this Agreement;
and (e) any failure on Reseller's part to pay any taxes, duties or assessments
due.

                                  MISCELLANEOUS

13.1. Elastic Generated Screens ("EGS") are graphical-user-interface pages that
originate in Elastic Software and appear on the screens of users when Elastic
Software is utilized including without limitation, initial log-in pages and
maintenance screens. EGS may contain Marks, which shall not be removed, altered
or repositioned without prior written permission from Elastic. EGS may not be
altered in any way, except as allowed by Elastic product documentation or other
prior written approval from Elastic. Elastic will specify the guidelines and
restrictions under which such changes may be made, including specification of
which screens or portions of screens may be changed. Elastic reserves the right
to withdraw approval for changes to EGS if Elastic determines its specified
guidelines and restrictions are not followed.

13.2. Entire Agreement. This Agreement and its Exhibits represent the entire
understanding between the parties hereto and supersede all other written or oral
agreements heretofore made by or on behalf of Elastic or Reseller, and may be
changed only by agreements in writing signed by the authorized representatives
of the parties. All future Orders from Reseller to Elastic shall be governed by
the terms and conditions referenced herein and shall become effective upon
acceptance by an authorized Elastic officer. Acknowledgment by Elastic of a
Reseller's or Customer's Order shall not constitute acceptance of any additional
or different terms and conditions entered thereon.

13.3. Force Majeure. Except for obligations of confidentiality and payment,
neither party shall be in default under this Agreement if such default arises,
directly or indirectly, out of causes reasonably beyond the direct control or
foreseeability of such party, including without limitation default by
subcontractors or suppliers, acts of God or of the public enemy, USA or foreign
governmental acts in either a sovereign or contractual capacity, labor, fire,
flood, epidemic, restrictions, strikes, and/or freight embargoes.

13.4. Governing Law. This Agreement has been made, executed and delivered in the
State of Georgia, USA in which state the offices of Elastic are located.
Accordingly, the parties invoke the laws of the State of Georgia, without regard
to the principles of conflicts of law thereof, regarding the protection of their
rights and enforcement of their obligations hereunder and they mutually
stipulate and agree that this Agreement is in all respects (including without
limitation all matters of interpretation, validity, performance and the
consequences of breach) to be exclusively construed, governed and enforced in
accordance with the internal laws (excluding all conflict of laws rules) of the
State of Georgia and any applicable federal laws of the United States of
America, as from time to time amended and in effect. In any civil action by
either party relating to this Agreement, the prevailing party shall recover from
and be reimbursed by the other party for all costs, reasonable attorneys' fees,
and related expenses.

13.5. Headings. The headings used herein are for reference and convenience only
and shall not enter into the interpretation hereof.

13.6. Notices. All notices required by or relating to the Agreement shall be in
writing and shall be sent to the parties to this Agreement at their addresses
set forth herein or to such other address as either party may substitute by
written notice to the other, delivered in person, or by facsimile and confirmed
by international air express courier. All notices shall be deemed delivered upon
the earlier of actual receipt or three (3) days after deposit of such notice
with the international air express courier, properly addressed, postage prepaid.

13.7. Relationship of Parties. Nothing in this Agreement shall constitute or be
deemed to constitute a partnership between the parties hereto or Reseller as
agent of Elastic or its affiliates, for any purpose whatsoever, and Reseller
snail have no authority or power to bind Elastic or its affiliates, or to
contract in the name of or create a liability against Elastic or its affiliates,
in any way or for any purpose.

13.8. Remedies. Reseller acknowledges and agrees that each provision in this
Agreement providing for the protection of copyrights, Proprietary Information,
and other proprietary rights is material to this Agreement. The parties
acknowledge that any threatened or actual breach of copyrights or other
proprietary rights by Reseller shall constitute immediate, irreparable harm to
Elastic, for which money damages would be inadequate compensation and for which
Elastic shall be entitled to equitable remedies awarded by a court of competent
jurisdiction.

                           PROPRIETARY & CONFIDENTIAL

                                                                    PAGE 6 OF 13
<PAGE>

                                             Reseller Agreement No. Darwin061699

13.9. Severability. If any provision herein is declared invalid or
unenforceable, the other provisions shall remain in full force and effect, and
this Agreement shall be deemed to be amended to replace, to the extent legally
possible, the rights and obligations contained in the invalid or unenforceable
provision. Invalidity or unenforceability of any provision is not a failure of
consideration hereunder.

13.10. Transfer and Assignment. The Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their heirs, personal
representatives, successors and assigns provided however, that neither this
Agreement, nor the obligations of Reseller, may be transferred or assigned
without the prior written consent of Elastic, which shall not be unreasonably
withheld. Elastic shall respond to any such request for transfer or assignment
within 30 days.

13.11. Waiver. Failure by either party to enforce at any time any of the
provisions of the Agreement shall not constitute a waiver of such provision nor
in any way affect the validity of the Agreement or any part thereof or the right
of the other party thereafter to enforce the provisions hereof. Elastic retains
the right to offset or retain any amount due or may become due to Reseller for
payment of commissions against amounts due to Elastic under this Agreement.

      13.12. Insurance. During the term of this Agreement, Reseller shall
maintain all insurance and/or bonds required by any applicable law, including
but not limited to workers' compensation insurance as prescribed by the laws of
all states in which work pursuant to this Agreement is performed. During the
first six months of this Agreement, Reseller shall maintain employer's liability
insurance with limits of at least $1 million per occurrence and comprehensive
general liability insurance (including products liability coverage, contractual
liability, advertising liability, and comprehensive automobile liability
coverage) with each coverage having limits of at least $2 million per
occurrence. Such insurance shall name Elastic as an additional insured with a
cross liability endorsement. At the time this Agreement is executed Reseller
shall furnish Elastic with a certificate of insurance evidencing that such
insurance is in effect. This certificate shall also state that Elastic shall be
notified by Reseller's insurance carriers within thirty (30) days of any
cancellation, expiration, material change, or exhaustion of limits with respect
to the aforementioned insurance. Reseller shall require any subcontractors and
agents involved with the performance of work pursuant to this Agreement, to
agree to maintain insurance coverage and to furnish certificates or other
adequate proof thereof to Elastic upon written request. By the start of the
seventh month and for the remaining term of the Agreement, Reseller shall
maintain employer's liability insurance with limits of at least $ 5 million per
occurrence and comprehensive general liability insurance (including products
liability coverage, contractual liability, advertising liability, and
comprehensive automobile liability coverage) with each coverage having limits of
at least $5 million per occurrence. Reseller shall furnish Elastic with a
revised certificate of insurance evidencing that such coverage is in effect and
identifying Elastic as a named insured to be notified as specified above for the
initial coverage.

Exhibits A, B, C and D are attached hereto and made a part hereof.

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

ELASTIC NETWORKS, INC.                       DARWIN NETWORKS

By: /s/ Phillip Griffith 6/30/99             By:
    -----------------------------------         --------------------------------

Phillip Griffith, Vice-President,
Sales and Marketing
---------------------------------------      -----------------------------------
NAME & TITLE PRINTED                         NAME & TITLE PRINTED

      UNTIL EXECUTED BY ELASTIC NETWORKS, INC. IN ALPHARETTA, GEORGIA, USA
        THIS AGREEMENT CONSTITUTES AN OFFER, WHICH EXPIRES JUNE 30, 1999.

                           PROPRIETARY & CONFIDENTIAL

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