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                                                   Exhibit 10.29

                      MATRIDIGM CORPORATION

       PREFERRED STOCK PURCHASE AND PUT OPTION AGREEMENT

INTRODUCTION

    This Preferred Stock Purchase and Put Option Agreement (this "Agreement") 
is made as of December 2, 1996 (the "Effective Date") by and among MatriDigm 
Corporation, a California corporation ("MatriDigm" or the "Company"), Zitel 
Corporation, a California corporation ("Zitel"), and BRC Holdings, Inc., a 
Delaware corporation ("BRC").  Zitel and BRC are referred to herein as the 
"Purchasers".

RECITALS

    A.   The Company has authorized the sale of 1,000,000 shares of its 
Series D Preferred Stock (the "Shares") to the Purchasers on the terms and 
conditions set forth herein, including the commitment of the Purchasers to 
purchase additional authorized shares of Series D, E and/or F Preferred Stock 
of the Company, at the option of the Company, on terms and conditions set 
forth herein.

    B.   The Purchasers desire to purchase the Shares in the amounts and on 
the terms and conditions set forth herein, and the Company desires to issue 
and sell the Shares to the Purchasers on the terms and conditions set forth 
herein.

AGREEMENT

    Based upon the facts and premises set forth above and the 
representations, warranties, and covenants set forth below, the parties 
hereby agree as follows:

    1.   PURCHASE AND SALE OF THE SHARES.

         a.   SALE AND PURCHASE.  Subject to the terms and conditions hereof, 
the Company agrees to issue and sell to each of the Purchasers, and each 
Purchaser hereby agrees to purchase from the Company, five hundred thousand 
(500,000) Shares (for aggregate purchases of one million (1,000,000) Shares), 
at a purchase price of $2.00 per Share (the "Purchase Price"), for an 
aggregate Purchase Price of two million dollars ($2,000,000).

         b.   AUTHORIZATION OF SHARES.  On or prior to the 

                         Exh. 10.29 - Page 1 

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Closing (as defined below), the Company shall have authorized the sale and 
issuance of the Series D, E and F Preferred Stock having the rights 
preferences, privileges and restrictions set forth in the Amended and 
Restated Articles of Incorporation in the form attached hereto as EXHIBIT A 
(the "Restated Articles") and adopted and filed the Restated Articles with 
the Secretary of State of the State of California.

         c.   CLOSING.  The closing of the sale and purchase of the Shares 
under this Agreement (the "Closing") shall take place at such time or place 
as the Company and a majority in interest of the Purchasers mutually agree.  
At the Closing, subject to the terms and conditions hereof, the Company will 
deliver to each Purchaser a certificate representing the Shares purchased by 
that Purchaser, against payment of the Purchase Price for the Shares by or on 
behalf of the Purchaser by wire transfer or check made payable to the order 
of the Company, cancellation of indebtedness or by such other means as shall 
be mutually agreeable to the Purchaser and the Company.

    2.   REPRESENTATIONS, WARRANTIES, AND COVENANTS.

         a.   BY PURCHASER TO THE COMPANY.  Each Purchaser hereby severally 
represents, warrants, and covenants to the Company as of the Effective Date 
and as of the Closing that:

              (i)  Purchaser has total assets in excess of $5,000,000. 
Purchaser is a sophisticated investor in start-up stage companies in the 
Company's industry and has received all necessary information on the basis of 
which Purchaser can make an informed decision to make the investment 
hereunder prior to the execution of this Agreement.  In the case of BRC, the 
Chairman and Chief Executive Officer of BRC is the Chairman of the Board of 
Directors of the Company.  In the case of Zitel, the Chief Executive Officer 
and Chief Financial Officer of Zitel are directors of the Company.  In each 
case, the Purchaser is fully informed as to the business affairs and 
prospects of the Company as a result of such relationship.

              (ii) Purchaser understands that, in reliance upon applicable 
exemptions, the Company has not registered or qualified the Shares and the 
Common Stock issuable upon conversion thereof (the "Underlying Shares") under 
the Federal Securities Act of 1933 (the "1933 Act") or the California 
Corporate Securities Law of 1968 (the "California Law") or the securities 
laws of any other state.  Purchaser understands that in order to fulfill the 
requirements of these exemptions, the 

                         Exh. 10.29 - Page 2

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Company has satisfied certain investment suitability requirements set by the
Company, as indicated by Purchaser's representations made herein.

              (iii)     Purchaser is acquiring the Shares and Underlying 
Shares for Purchaser's own account, for investment only, and not with a view 
to or for sale in connection with any distribution thereof or as a stand-in, 
proxy or nominee for anyone else.

              (iv) Purchaser recognizes that the Company has a limited 
history of operations and earnings, and that there is a high risk of loss of 
Purchaser's entire investment.  Purchaser would have adequate means of 
providing for Purchaser's anticipated needs and contingencies if Purchaser's 
entire investment were lost.  Purchaser recognizes that there is presently no 
public market for the Shares and Underlying Shares, and that it is unlikely 
that any market will exist in the future.  Purchaser has no need for 
liquidity for Purchaser's investment in the Shares and Underlying Shares.  In 
the case of BRC, Purchaser is domiciled in the State of Texas.  In the case 
of Zitel, Purchaser is domiciled in the State of California. 

              (v)  Purchaser has made such independent investigations as 
Purchaser has deemed necessary for the purpose of making the decision to 
invest in the Shares.  Purchaser has had the opportunity to ask questions of 
and receive answers from authorized officers of the Company concerning the 
operations, affairs, and financial condition of the Company.  Purchaser is 
relying solely upon such review, investigations, and answers in making its 
decision to invest in the Company, and has thereby acquired all of the 
information Purchaser considers needed to make an informed decision to so 
invest. 

              (vi) Purchaser is aware that Purchaser's rights to transfer the 
Shares and Underlying Shares are restricted by the 1933 Act, the California 
Law, the Cancellation Right referred to in Sections 4 and 5 of this 
Agreement, the Market Stand-Off and Right of First Refusal referred to in 
Sections 8(b) and 9 of this Agreement, and the absence of a market for the 
Shares and Underlying Shares.  Purchaser understands that the Shares and 
Underlying Shares are considered to be restricted securities by the 
Securities and Exchange Commission under the 1933 Act and by the California 
Corporations Department under the California Law, and may be so considered 
under the laws of the state of Purchaser's domicile, and therefore may not be 
sold without registration under the 1933 Act and qualification under the 
California Law 

                         Exh. 10.29 - Page 3

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and/or registration or qualification under the law of the state of 
Purchaser's domicile, or an opinion of counsel satisfactory to the Company 
that the sale or transfer is exempt from such registration and qualification. 

              (vii)     Purchaser has read the legends set forth below and 
understands and agrees that the certificates representing the Shares and 
Underlying Shares will bear restrictive legends in the forms set forth below 
(except for legends not applicable to the Underlying Shares) in addition to 
any other legends required by applicable law until such legends are no longer 
applicable; and that the Company has made a notation in its records 
concerning the restrictions indicated therein, and will not allow any 
transfer or sale in violation thereof. 

    "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED 
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED ("ACT") IN RELIANCE IN 
PART ON THE EXEMPTION PROVIDED BY RULE 506, OR QUALIFIED UNDER THE CALIFORNIA 
CORPORATE SECURITIES LAW OF 1968, AS AMENDED (THE "CALIFORNIA LAW"), OR 
QUALIFIED OR REGISTERED UNDER THE SECURITIES LAW OF ANY OTHER STATE (THE 
"LAWS").  THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND CONSTITUTE 
RESTRICTED SECURITIES FOR PURPOSES OF RULE 144.  NEITHER SAID SHARES NOR ANY 
INTEREST THEREIN MAY BE TRANSFERRED, SOLD, OR OFFERED FOR SALE IN THE ABSENCE 
OF (1) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT AND 
QUALIFICATION AND/OR REGISTRATION UNDER THE CALIFORNIA LAW AND ANY OTHER 
APPLICABLE LAWS, OR (2) OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE 
CORPORATION THAT SUCH REGISTRATION AND/OR QUALIFICATION IS NOT REQUIRED AS TO 
SAID TRANSFER, SALE, OR OFFER AS A RESULT OF RULE 144 OR OTHERWISE.

    "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE REDEEMABLE AT THE OPTION 
OF THE CORPORATION AND ARE CONVERTIBLE INTO SHARES OF COMMON STOCK BOTH AT 
THE OPTION OF THE HOLDER AT ANY TIME PRIOR TO ANY REDEMPTION AND 
AUTOMATICALLY UPON THE EARLIER TO OCCUR OF CONSUMMATION OF THE SALE OF THE 
CORPORATION'S COMMON STOCK IN A FIRM COMMITMENT UNDERWRITTEN PUBLIC OFFERING, 
THE VOTE OF HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF SERIES D 
PREFERRED STOCK, OR SUCH TIME AS LESS THAN 500,000 SHARES OF SERIES D 
PREFERRED STOCK REMAIN OUTSTANDING.

    "A STATEMENT OF THE RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS 
GRANTED TO OR IMPOSED UPON EACH CLASS OR SERIES AND THE NUMBER OF SHARES IN 
AND DESIGNATION OF EACH CLASS OR SERIES OF SHARES WILL BE FURNISHED TO ANY 
SHAREHOLDER UPON REQUEST AND 

                         Exh. 10.29 - Page 4

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WITHOUT CHARGE FROM THE OFFICE OF THE SECRETARY OF THE CORPORATION AT THE 
PRINCIPAL EXECUTIVE OFFICE OF THE CORPORATION, WHICH AT THE DATE OF ISSUANCE 
OF THIS CERTIFICATE WAS LOCATED AT 47207 BAYSIDE PARKWAY, FREMONT, CALIFORNIA 
94538.

    "THE HOLDER OF RECORD OF THESE SHARES, AND SUCH HOLDER'S AGENTS AND 
ATTORNEYS, MAY BE REQUIRED TO EXECUTE NON-DISCLOSURE STATEMENTS PRIOR TO 
BEING PERMITTED TO INSPECT CERTAIN RECORDS OF THE CORPORATION AS DESCRIBED BY 
ARTICLE 8 OF THE CORPORATION'S BY-LAWS.

    "THE SALE OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE, AS 
WELL AS  THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF, IS 
SUBJECT TO THE TERMS AND CONDITIONS OF A PREFERRED STOCK PURCHASE AND PUT 
OPTION AGREEMENT BY AND BETWEEN THE REGISTERED HOLDER (OR ITS PREDECESSOR IN 
INTEREST) AND THE CORPORATION (THE "AGREEMENT"), INCLUDING A REPURCHASE 
OPTION, A MARKET STAND-OFF AGREEMENT AND A RIGHT OF FIRST REFUSAL.  A COPY OF 
THE AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.  IN 
ADDITION, THE SHARES AND/OR SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION 
THEREOF ARE SUBJECT TO FORFEITURE IN THE EVENT OF FAILURE OF THE REGISTERED 
HOLDER (OR ITS PREDECESSOR IN INTEREST) TO COMPLY WITH THE TERMS OF A PUT 
OPTION RIGHT IN FAVOR OF THE CORPORATION AS SET FORTH IN THE AGREEMENT."

              (viii)    Purchaser has reviewed the federal, state and local 
tax aspects and consequences of this investment to Purchaser's satisfaction 
with Purchaser's own tax advisors, and is not relying upon any statements, 
representations or advice of the Company or any of its agents as to such 
matters.

         b.   BY THE COMPANY TO PURCHASER.  The Company hereby represents and 
warrants to Purchaser, as of the date of the Company's acceptance hereof, 
that:

              (i)  The Company is a corporation duly incorporated, validly 
existing, and in good legal standing under the laws of the State of 
California, and has the corporate power and authority to enter into this 
Agreement and to issue and deliver the Shares and to carry out the 
transactions herein contemplated.

              (ii) The execution, delivery and performance by the Company of 
this Agreement and all related transactions have been duly authorized by all 
necessary corporate action, and this Agreement constitutes a legal, valid and 
binding obligation of the Company, enforceable in accordance with its terms, 
except as 

                         Exh. 10.29 - Page 5

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may be limited by bankruptcy, insolvency or other laws affecting enforcement 
of creditor's rights, or by the application of customary principles of equity 
when equitable remedies are sought.

              (iii)     The capitalization of the Company is as follows:

                   A.   Authorized and Designated Stock.  The Company's 
authorized capital stock consists of 100,000,000 shares of Common Stock and 
30,000,000 shares of Preferred Stock.  Of the Preferred Stock, 9,600,000 are 
designated Series A Preferred Stock; 2,000,000 shares are designated Series B 
Preferred Stock; 1,500,000 are designated Series C Preferred Stock; 5,000,000 
are designated Series D Preferred Stock; 666,666 are designated Series E 
Preferred Stock; 500,000 are designated Series F Preferred Stock; and 
10,733,334 shares remain as yet undesignated by the Board of Directors.  The 
Board of Directors is authorized to determine or alter the rights, 
preferences, privileges and restrictions granted to or imposed upon any 
wholly unissued series of Preferred Stock and to increase or decrease (but 
not below the number of shares then outstanding) the number of shares of any 
such series subsequent to the issuance of share in the series.

                        B.   Outstanding and Reserved Stock.  As of the date 
of this Agreement, there are outstanding 18,520,000 shares of Common Stock; 
9,600,000 shares of Series A Preferred Stock; and 2,000,000 shares of Series 
B Preferred Stock.  6,400,000 shares of Common Stock are reserved for 
issuance upon exercise of options granted or available for grant pursuant to 
the Company's 1996 Stock Option Plan (the "Stock Option Plan"); and 1,500,000 
Shares of Series C Preferred Stock are reserved for issuance upon exercise of 
an outstanding warrant to purchase Series C Preferred Stock.  In addition, an 
employment offer letter dated October 3, 1996 from P.E. Esping to Ken Titow 
offers Mr. Titow to be given a right of first refusal to participate in 
future private stock offerings to the extent of 5% of the offering, which Mr. 
Titow has waived in connection with this Agreement.

              (iv) The Shares, the Option Shares issued upon payment of the 
applicable Put Exercise Price pursuant to exercise of the Put Option under 
Section 4 hereof, if any, and the Underlying Shares, when issued in 
compliance with the provisions of this Agreement, will be validly issued and 
will be fully paid and nonassessable, in that there is no provision of the 
Company's 

                         Exh. 10.29 - Page 6

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Articles of Incorporation or Bylaws or applicable statute authorizing the 
Company to require further payments from the Purchasers as a consequence of 
their mere ownership thereof; provided, however, that the Shares, the Option 
Shares and the Underlying Shares (as defined herein) are subject to 
forfeiture pursuant to Section 5 in the event of failure of the Purchaser to 
comply with the Company's Put Option provided in Section 4 of this Agreement.

              (v)  The execution, delivery and performance of and compliance 
with this Agreement and the issuance of the Shares, the Option Shares and the 
Underlying Shares, have not resulted and will not result in any material 
violation of, or conflict with, or constitute a material default under, the 
Restated Articles or the Bylaws of the Company.

         c.   SURVIVAL.  All representations and warranties made by the 
Company and Purchaser hereunder shall survive the execution of this 
Agreement, and any investigation at any time made by or on behalf of either 
party shall not diminish the party's right to rely upon the other's 
representations and warranties.

    3.   CONFIDENTIALITY OF CORPORATE RECORDS. 

         Purchaser agrees to abide by the provisions of Article 8 of the 
Bylaws of the Company pertaining to confidentiality of corporate records of 
the Company to which Purchaser may obtain access as a shareholder of the 
Company.  The Secretary of the Company will provide Purchaser a copy of the 
Company's Bylaws upon request.

    4.   PUT OPTION.

         a.   GRANT OF OPTION.  In consideration for the right to purchase 
the Shares hereunder, each Purchaser hereby grants the Company the right (the 
"Put Option"), subject to the terms and conditions set forth in this Section 
4, to require each Purchaser to purchase from the Company up to a number, 
determined pursuant to Section 4(d) below, of shares of:  (x) Series F 
Preferred Stock of the Company at the Put Exercise Price of $4.00 per share; 
and (y) Series E Preferred Stock of the Company, at the Put Exercise Price of 
$3.00 per share; and (z) Series D Preferred Stock of the Company at the Put 
Exercise Price of $2.00 per share (in each case, the "Option Shares").

         b.   MANNER OF EXERCISING PUT OPTION.  The Put Option 

                         Exh. 10.29 - Page 7

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shall be exercisable by the Company by delivery to the Purchasers of a Put 
Option Exercise Form, in the form attached hereto as EXHIBIT B, completed and 
duly executed by the Chief Executive Officer and Chief Financial Officer of 
the Company, certifying that the Company has satisfied the conditions set 
forth in Section 4(c), and indicating the number of Option Shares of the 
applicable series of Preferred Stock which the Company intends to sell to the 
Purchasers. Within forty five (45) days after a proper exercise of this Put 
Option, each Purchaser shall pay the Company the applicable Put Exercise 
Price (as specified in 4(a) above).  At the closing of each such exercise of 
the Put Option, the Company shall cause to be issued and delivered to the 
respective Purchasers the stock certificate or certificates for the 
applicable number of Option Shares of the applicable series of Preferred 
Stock.

         c.   EXERCISE CONDITIONS.  The Company's exercise of the Put Option 
is subject to the following conditions:

              (i)  The Put Option shall in each case be exercised by the 
Company with respect to each of the Purchasers simultaneously, in equal 
proportions, in increments of not less than $100,000 total Put Exercise Price 
of Option Shares per each Put Option exercise.

              (ii) The Company shall be entitled to require the Purchasers to 
purchase shares of Series F Preferred Stock at the Put Exercise Price of 
$4.00 per Series F Option Share if, and only if, at the time of the exercise 
of the Put Option:

                   (A)  The Company has satisfied the Performance Criteria 
specified in Section 4(e) (the "Performance Criteria"); and

                   (B)  The Company has already exercised the Put Option to 
the extent of an aggregate investment of $2,000,000, whether in the form of 
(x) Series D Preferred Stock at the Put Exercise Price of $2.00 per Series D 
Option Share, or (y) Series E Preferred Stock at the Put Exercise Price of 
$3.00 per Option Share; and

                   (C)  The aggregate Put Exercise Price theretofore received 
by the Company in previous exercises of the Put Option, combined with the Put 
Exercise Price to be received by the Company upon the instant exercise of the 
Put Option, shall not exceed $4,000,000.

                         Exh. 10.29 - Page 8

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              (iii)     The Company shall be entitled to require the 
Purchasers to purchase shares of Series E Preferred Stock at the Put Exercise 
Price of $3.00 per Series E Option Share if, and only if, at the time of an 
exercise of the Put Option:

                   (A)  The Company has satisfied the Performance Criteria; 
and

                   (B)  The aggregate Put Exercise Price theretofore received 
by the Company in previous exercises of the Put Option, combined with the Put 
Exercise Price to be received by the Company upon the instant exercise of the 
Put Option, shall not exceed $2,000,000.

              (iv) The Company shall be entitled to require the Purchasers to 
purchase shares of Series D Preferred Stock at the Put Exercise Price of 
$2.00 per Series D Option Share if, and only if, at the time of an exercise 
of the Put Option, either:

                   (A)  The aggregate Put Exercise Price theretofore received 
by the Company in previous exercises of the Put Option, combined with the Put 
Exercise Price to be received by the Company upon the instant exercise of the 
Put Option, shall not exceed $4,000,000; or

                   (B)  If the Company has already exercised the Put Option 
to the extent of more than an aggregate investment of $4,000,000, whether in 
the form of Series D, E or F, Preferred Stock, the Company has satisfied the 
Performance Criteria.

              (v)  The representations and warranties of the Company set 
forth in Section 2(b) above shall be true and correct as of the date of each 
exercise of the Put Option, except as certified in writing furnished to each 
Purchaser by an officer of the Company.

         d.   NUMBER OF SHARES SUBJECT TO PUT OPTION.  Each of the Purchasers 
shall purchase one-half of the total number of Option Shares being sold in 
each Put Option exercise.  

              (i)  Subject to adjustment pursuant to clause (iii) below, the 
aggregate dollar value of the Option Shares sold upon exercise of the Put 
Option, at the respective Put Exercise Prices set forth in Section 4(a), 
shall not exceed $8,000,000, and the aggregate dollar value of the Option 
Shares so sold to either Purchaser shall not exceed $4,000,000.  

                         Exh. 10.29 - Page 9

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              (ii) Subject to adjustment pursuant to clause (iii) below, the 
aggregate number of Series F Option Shares sold pursuant to exercise of the 
Put Option shall not exceed 500,000; the aggregate number of Series E Option 
Shares sold pursuant to exercise of the Put Option shall not exceed 666,666; 
the aggregate number of Series D Option Shares sold pursuant to exercise of 
the Put Option under Section 4(c)(iv)(A) shall not exceed 2,000,000; and the 
aggregate number of Series D Option Shares sold pursuant to exercise of the 
Put Option under Section 4(c)(iv)(B) shall not exceed 2,000,000.

              (iii) In the event the Company shall sell any equity 
securities pursuant to Section 7(d) below, the Company shall thereupon 
determine the maximum remaining number of Option Shares of each series that 
would remain available for issuance upon exercise of the Put Option under 
Sections 4(c) and 4(d), but for the operation of this clause 4(d)(iii), but 
taking into account all previous exercises of the Put Option and any other 
changes in circumstance which would preclude satisfaction of a condition for 
exercise of the Put Option under Section 4(c) (the "Pre-Adjustment Maximum 
Number" for each series).  The maximum remaining number of Option Shares of 
each series that remain available for issuance upon exercise of the Put 
Option shall then be determined by multiplying the Pre-Adjustment Maximum 
Number for that series by a fraction equal to (x) the aggregate purchase 
price paid for all equity securities sold pursuant to Section 7(d) (including 
all previous such sales, but not exceeding 750,000), divided by (y) 8,000,000.

         e.   PERFORMANCE CRITERIA.  The conditions of subsections (ii)(A), 
(iii)(A) and (iv)(B) of Section 4(c) shall be satisfied if the Company shall 
have the ability to perform Year 2000 conversions commercially at the rate of 
at least 44 Million Lines of Code ("MLOC") per month, with production cost, 
scan efficiency and fix rate meeting the specifications applicable to the 
month of exercise of the Put Option as set forth in the following table:

Month of        Production Cost   Scan Efficiency   Fix Rate
Exercise        per LOC Less      Greater than:     Greater than:
                than:
January 1997
(or before)     $0.025            0.99900           0.9980
February 1997   $0.023            0.99930           0.9985
March 1997      $0.020            0.99960           0.9990
April 1997      $0.018            0.99990           0.9993
May 1997 (or
 later)         $0.016            0.99993           0.9996

                         Exh. 10.29 - Page 10

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For purposes of this Section 4(e):  

              (i)  "Scan Efficiency" is the conversion rate calculated as 
1.00 minus the average number of "Errors" per line of code.

              (ii) Missing of one date field and misconverting a code 
fragment each are computed as a single "Error".

              (iii) "Fix Rate" is the number of code fragments actually 
fixed, divided by the number of code fragments identified as needing a fix.

         f.   TERMINATION OF PUT OPTION.  The Put Option shall terminate on 
the earlier to occur of:

              (i)  December 31, 1997, or

              (ii)  Merger of the Company with or into any other corporation 
or corporations (other than a wholly owned subsidiary of the Company) or a 
sale of all or substantially all of the assets or business of the Company in 
one or more related transactions (other than a public offering of the 
Company's securities) as a result of which shareholders of the Company 
immediately before the transaction own less than a majority of the voting 
securities of the successor or surviving corporation immediately thereafter; 
or

              (iii) Consummation of a firm commitment or best efforts 
underwritten public offering of the Company's equity registered with the 
Securities and Exchange Commission with gross proceeds to the Company of ten 
million dollars ($10,000,000) or more; or

              (iv) The sale by the Company of any shares of equity securities 
or securities convertible into or exercisable for any equity securities 
(excluding shares of Common Stock sold upon exercise of options granted under 
the Company's 1996 Stock Option Plan and up to 350,000 additional shares of 
Common Stock issuable to Kenneth F. Titow upon exercise of outstanding stock 
options) at a price per share in excess of $4.00 (appropriately adjusted to 
take account of any stock split, stock dividend, combination of shares or the 
like).

    5.   FAILURE TO COMPLY WITH PUT OPTION; ESCROW OF SHARES.

         a.   FORFEITURE OF SHARES AND OPTION SHARES FOR NON-

                         Exh. 10.29 - Page 11

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COMPLIANCE.  In the event any Purchaser fails to comply with the Put Option 
duly exercised by the Company pursuant to Section 4, the non-complying 
Purchaser shall immediately forfeit, and the Company shall have the right to 
immediately cancel (but not to transfer), without further consideration to 
the Purchaser, the Shares purchased by the non-complying Purchaser and any 
Option Shares theretofore purchased by that Purchaser, and any Underlying 
Shares issued upon the conversion thereof (collectively, the "Escrowed 
Shares").  Upon such event:

              (i)  All right of the non-complying Purchaser under this 
Agreement shall cease and terminate, and such Purchasers shall no longer be 
counted for the purpose of obtaining the consent or approval of the 
Purchasers for any matter under this Agreement.

              (ii) The Shares and Option Shares, if any, so canceled shall 
not resume the status of authorized, but unissued shares of Preferred Stock.  
Any Underlying Shares so canceled shall resume the status of authorized but 
unissued shares of Common Stock.

              (iii) The non-complying Purchaser's Proportion shall not 
be reallocated to the other Purchasers, but the Company's Put Option with 
respect to that Proportion shall be nullified.

         b.   ESCROW.  In order to facilitate efficient enforcement by  the 
Company of its right pursuant to Section 5(a) (the "Cancellation Right") to 
cancel Escrowed Shares of a non-complying shareholder, the stock 
certificate(s) representing the Escrowed Shares (the "Certificate(s)") shall 
be deposited with an escrow holder designated by the Company (the "Escrow 
Holder").  The Escrowed Shares may not be sold, pledged, or otherwise 
transferred as long as they remain subject to the Cancellation Right, and any 
transfer or purported transfer in violation thereof shall be null and void, 
except that Purchaser may transfer the Shares to any purchaser of all or 
substantially all of the assets of Purchaser or any Company controlled by or 
under common control with Purchaser (collectively, "Permitted 
Transferee(s)"), provided the Permitted Transferee(s) agree in writing to be 
bound by the Company's Cancellation Right, as well as all other restrictions 
against transfer of the Escrowed Shares as set forth in this Agreement, 
including, without limitation, those contained in the Market Stand-Off and 
Right of First Refusal (as defined in Sections 8(b) and 9 below). The 
Purchaser and any Permitted Transferees, as applicable, are referred to 
collectively as the "Shareholder."
                          Exh. 10.29 - Page 12 

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         c.   TERMINATION OF ESCROW.  Upon exercise by the Company of the 
Cancellation Right, the Escrow shall automatically terminate, and the 
Certificate(s) shall be returned to the Company by the Escrow Holder.  In 
addition, the Company, by written resolution adopted by its Board of 
Directors, may terminate the escrow and direct the Escrow Holder to deliver 
the Certificate(s) to the Shareholder.  Shares so delivered free of escrow 
shall nevertheless remain subject to the Cancellation Right and all other 
restrictions against transfer of the Shares as set forth in this Agreement, 
including, without limitation, those contained in the Market Stand-Off and 
Right of First Refusal. 

         d.   TERMINATION OF CANCELLATION RIGHT.  The Cancellation Right 
shall terminate automatically upon termination of the Put Option, at which 
time the Escrow Holder shall deliver the Certificate(s) for the formerly 
Escrowed Shares free of escrow to the Shareholder.  The formerly Escrowed 
Shares so delivered free of escrow shall remain subject to all other 
restrictions against transfer of the Shares as set forth in this Agreement, 
including, without limitation, those contained in the Market Stand-Off and 
Right of First Refusal.

         e.   SUCCESSION OF ESCROW HOLDER.  The Escrow Holder may resign at 
any time, provided that (i) its duties are undertaken by a successor escrow 
holder, or (ii) the Certificate(s) are deposited with any court of competent 
jurisdiction.  Any bank doing business in California under due legal 
authority is deemed to be a suitable successor.  There shall be applied such 
additional terms of escrow as any such successor Escrow Holder may at its 
discretion require as a condition to its assuming the duties of Escrow 
Holder. The original Escrow Holder is authorized to execute as agent for each 
party an escrow agreement or instructions containing such additional terms.

         f.   INDEMNITY OF ESCROW HOLDER.  The Escrow Holder shall in no 
event be liable for damages to any party resulting from the exercise of its 
duties hereunder, or for any other reason, except gross negligence or willful 
misconduct.  The Company shall pay all fees and expenses of the Escrow Holder 
and shall hold the Escrow Holder harmless against all claims arising out of 
its performance hereunder.

         g.   VOTING RIGHTS.  The Shareholder shall have full voting rights 
and shall be entitled to dividends, if any, with respect to the Escrowed 
Shares while they remain in escrow.

                         Exh. 10.29 - Page 13

<PAGE>

         h.   CUMULATIVE REMEDIES.  The Company's remedies under this Section 
shall not be exclusive but shall be cumulative with other remedies provided 
at law or equity.

    6.   RESERVATION OF UNDERLYING SHARES.  

         The Company will at all times reserve and keep available, solely for 
issuance and delivery upon the conversion of the Series D, E and F Preferred 
Stock, the number of shares of Common Stock issuable from time to time upon 
such conversion.

    7.   RESTRICTION OF SALE OF NEW SECURITIES.  

         The Company covenants and agrees that as long as the Company's Put 
Option remains in effect, the Company shall not sell any shares of equity 
securities or securities convertible into or exercisable for any equity 
securities at a price per share less than $4.00 per share (appropriately 
adjusted to take account of any stock split, stock dividend, combination of 
shares or the like), other than the following:

         a.   Options, and shares of Common Stock issued or issuable upon 
exercise of options, granted under the Company's 1996 Stock Option Plan; and 
up to 350,000 additional shares of Common Stock issuable to Kenneth F. Titow 
upon exercise of an outstanding non-statutory stock option.

         b.   Option Shares issued pursuant to an exercise of the Put Option.

         c.   Option Shares that the Company would have had the right to 
require a Purchaser to purchase upon exercise of the Put Option but for the 
failure of a Purchaser to comply with the Put Option obligation.  Such Option 
Shares shall be sold at the applicable Put Exercise Price.  In addition, 
prior to offering the Option Shares to any third party, the Company shall 
first provide the remaining Purchaser ten (10) days written notice, offering 
that Purchaser the opportunity to purchase such Option Shares.

         d.    Additional equity securities up to an aggregate purchase price 
of $750,000; provided that upon any sale of equity securities pursuant to 
this subsection 7(d), the number of Option Shares that the Company shall have 
the right to require the Purchasers to purchase under the Put Option shall be 
adjusted as provided in Section 4(d)(iii).

                         Exh. 10.29 - Page 14

<PAGE>

    8.   REGISTRATION RIGHTS.

         a.   PIGGYBACK REGISTRATION RIGHTS.

              (i)  NOTICE OF REGISTRATION.  If (but without any obligation to 
do so) the Company proposes to register any of its stock or other securities 
under the federal Securities Act of 1993 ("Act") in connection with the 
public offering of such securities solely for cash (other than (x) a 
registration relating solely to the sale of securities to employees, 
consultants and directors of the Company  pursuant to a stock option, stock 
purchase or similar plan, (y) a registration on any form which does not 
include substantially the same information as would be required to be 
included in a registration statement covering the sale of the Underlying 
Shares, or (z) a registration relating solely to Securities and Exchange 
Commission Rule 145), the Company shall, each such time,

                   (A)  promptly give each Purchaser written notice of the 
registration; and

                   (B)  include in the registration and in any underwriting 
involved therein any of the Underlying Shares specified in a written request 
or requests of a Purchaser made within thirty (30) days after the written 
notice was given by the Company to the Purchaser.

              (ii) UNDERWRITING REQUIREMENTS.  If the registration of which 
the Company gives notice pursuant to Section 8(a)(i) above is for a 
registered public offering involving an underwriting, the Company shall so 
advise each Purchaser as part of the written notice.  In connection with any 
offering involving an underwriting of shares initiated by the Company or by 
other shareholders of the Company having registration rights, the Company 
shall not be required under Section 8(a)(i) to include any of the Purchasers' 
Underlying Shares in the underwriting unless the Purchaser accepts the terms 
of the underwriting as agreed upon between the Company and the underwriters 
selected by it, and then only in such quantity as will not, in the opinion of 
the underwriters, jeopardize the success of the offering by the Company or 
the Company's shareholders demanding such registration, subject to 
apportionment among selling shareholders as provided in the final sentence of 
this Section 8(a)(ii).  If the total amount of securities that all 
shareholders of the Company request to be included in such offering (when 
combined with the securities being offered by the Company or its shareholders 
demanding such 

                         Exh. 10.29 - Page 15

<PAGE>

registration) exceeds the amount of securities that the underwriters 
reasonably believe compatible with the success of the offering, then the 
Company shall be required to include in the offering only that number of 
securities pursuant to piggyback registration rights which the underwriters 
believe will not jeopardize the success of the offering.  The securities so 
included pursuant to piggyback registration rights shall be apportioned among 
the selling shareholders, including the Purchasers, according to the total 
number of securities which each selling shareholder shall have elected to 
include in the registration or in such other proportions as shall mutually be 
agreed to by the selling shareholders.

         b.   "MARKET STAND-OFF" AGREEMENT.  Each Purchaser shall not, to the 
extent requested by the Company, sell or otherwise transfer or dispose of any 
Subject Shares during the period of one hundred eighty (180) days following 
the effective date of a registration statement of the Company filed under the 
Act; provided, however, that this covenant shall apply only to the Company's 
initial registration statement (the "First Registration Statement") and 
registration statements (excluding registration statements relating solely to 
the sale of securities to employees, consultants and directors of the Company 
 pursuant to a stock option, stock purchase or similar plan) filed within 
three (3) years after the effective date of the First Registration Statement, 
and provided that all officers and directors of the Company and other holders 
of registration rights enter into similar agreements.  In order to enforce 
the foregoing covenant, the Company may impose stop-transfer instructions 
with respect to the Subject Shares until the end of the one hundred eighty 
(180) day period.

         c.   TRANSFER.  The rights granted under Section 8(a)(i) may be 
transferred to a transferee of not less than 100,000 Subject Shares who 
agrees to be bound by the restrictions in Section 8(b) or to a third party 
approved by the Company in its sole discretion who likewise agrees.

    9.   RIGHT OF FIRST REFUSAL.

         a.   INITIATION OF RIGHT OF FIRST REFUSAL.  

              (i)  Until the consummation of a firm commitment or best 
efforts underwritten public offering of the Company's equity registered with 
the Securities and Exchange Commission with gross proceeds to the Company of 
five million dollars ($5,000,000) or more, each Purchaser and its respective 

                         Exh. 10.29 - Page 16

<PAGE>

successors and assigns (each a "Shareholder"), shall not sell, pledge, assign 
or otherwise transfer any of the Shareholder's interest in any of the Subject 
Shares to any person without first offering to the Company or its designees 
the right and option to purchase said shares as provided hereinafter in this 
Section 9 (the "Right of First Refusal").

              (ii) Notwithstanding Section 9(a)(i), but subject to Sections 
4, 5 and 8(b) above, Purchaser may sell or transfer any interest in any of 
the Subject Shares to any Permitted Transferee without first offering said 
shares to the Company or its designees, provided any the transferee agrees in 
writing to be bound by the restrictions set forth in this Section 9 and those 
of Sections 4, 5 and 8(b) above.

              (iii) In the event of a pledge, hypothecation of, or the 
granting of an option or other right to purchase the Subject Shares, then the 
Right of First Refusal shall come into existence at the time of any sale or 
transfer of ownership of the shares pursuant to foreclosure under such pledge 
or hypothecation or exercise of such option or right, as the case may be; 
provided, however, that the Shareholder may not pledge or hypothecate or 
grant an option or right to purchase the Subject Shares unless the pledge 
holder or option or right holder, as the case may be, agrees in writing at 
the time of the pledge or grant of the option or right to be bound by the 
Right of First Refusal as contained in this Section 9, and to cause any 
proposed assignee or transferee of such pledge or right of option to execute 
and deliver to the Company a similar writing prior to such assignment or 
transfer.

         b.   MECHANICS.  

              (i)  Any Shareholder desiring to sell any or all of the Subject 
Shares during the term of the Right of First Refusal shall give written 
notice to the Secretary of the Company of the Shareholder's bona fide 
intention to sell the shares pursuant to a bona fide written offer of a third 
party other than the Company (the "Proposed Purchaser").  The notice shall 
include a photocopy of the written offer which shall specify the identity of 
the Proposed Purchaser, the number of shares proposed to be sold (the 
"Offered Shares"), and the price and payment terms of the proposed offer to 
buy the Offered Shares.  The payment terms of the contemplated sale to the 
Proposed Purchaser from the Shareholder (and of the Shareholder to the 
Company) must be expressed in terms of cash, cash equivalents (such as 
certificates of deposit, shares of stock in publicly traded 

                         Exh. 10.29 - Page 17

<PAGE>

companies, and the like) or a promissory note of the Proposed Purchaser 
payable on date(s) specified or ascertained by passage of time.  The Company 
or its designees shall have the right and option to purchase all of the 
Offered Shares, at the price and on the payment terms specified in the 
Shareholder's notice, for a period of sixty (60) days from receipt of said 
notice from the Shareholder; that is, the Shareholder's notice shall 
constitute an irrevocable offer by the Shareholder to sell all of the Offered 
Shares to the Company or its designee(s) at the price and on the payment 
terms specified in the notice for sixty (60) days from the date of the 
Company's receipt of notice.

              (ii) The Company shall exercise its option by giving written 
notice of its election to do so (the "Exercise Notice") to the Shareholder.  
The Company may exercise its option as to any or all of the Offered Shares.

              (iii) The Shareholder shall deliver to the Company a share 
certificate representing those Offered Shares being repurchased by the 
Company within sixty (60) days of the Exercise Notice against payment by the 
Company for the account of Shareholder of the purchase price specified in the 
Exercise Notice.

              (iv) Any Offered Shares for which the Company and its designees 
fail to exercise their option as provided in this section may be sold by the 
Shareholder to the Proposed Purchaser within a period of ninety (90) days 
following the end of the Company's sixty (60)-day option period, provided 
that:  (A) the sale is made at the price and on the payment terms specified 
in the original notice from the Shareholder to the Company or not more 
favorable to the Proposed Purchaser; (B) the Proposed Purchaser delivers a 
written undertaking to the Secretary of the Company to be bound by the 
restrictions on Offered Shares set forth in this Section 9; and (C) the 
Company receives an opinion of counsel reasonably satisfactory to it that the 
sale of the Offered Shares to the Proposed Purchaser complies with applicable 
federal and state corporate securities laws.

              (v)  Upon receipt of the appropriate undertaking from 
Shareholder and Proposed Purchaser as specified in the previous paragraph, 
the Company shall transfer the ownership of record of the Offered Shares to 
the Proposed Purchaser (and reissue the applicable certificate).

              (vi) If within the ninety (90)-day period the Shareholder does 
not enter into an agreement for such a sale of 

                         Exh. 10.29 - Page 18

<PAGE>

Offered Shares to the Proposed Purchaser, which sale is consummated within 
thirty (30) days of the execution of the agreement, the Right of First 
Refusal shall be revived as to the Offered Shares, which thereupon shall not 
be sold or transferred unless the Shareholder first offers the Company the 
right and option to repurchase any and all such Offered Shares in accordance 
with this Section 9.

              (vii) Any transfer or purposed transfer of the Subject 
Shares or any interest therein shall be null and void unless the terms and 
conditions of this Section 9 are observed or are waived by action of the 
Company's Board of Directors.

    10.  MISCELLANEOUS.

         a.   GOVERNING LAW. This Agreement shall be governed by and 
construed in accordance with the laws of the State of California applicable 
to contracts between California residents entered into and to be performed 
entirely within the State of California.

         b.   SUCCESSORS AND ASSIGNS.  Except as provided above, the rights 
of Purchaser under this Agreement may not be assigned without the prior 
express written consent of the Company and any attempted assignment without 
such consent shall be void.  Except as otherwise provided herein, the 
provisions hereof shall inure to the benefit of, and be binding upon, the 
successors, assigns, heirs, executors and administrators of the parties 
hereto.

         c.   ENTIRE AGREEMENT; AMENDMENT.  This Agreement and the other 
documents delivered pursuant hereto or referred to herein constitute the full 
and entire understanding and agreement between the parties with regard to the 
subjects hereof and thereof.  Any term of this Agreement may be amended and 
the observance of any term of this Agreement may be waived (either generally 
or in a particular instance and either retroactively or prospectively), with 
the written consent of the Company and the holders of a majority in interest 
of the Subject Shares initially sold pursuant to this Agreement or upon 
exercise of the Put Option (or issued upon the conversion thereof) that have 
not been resold to the public.  Any amendment or waiver effected in 
accordance with this section shall be binding upon each holder of any such 
Subject Shares at the time outstanding, each future holder of all such 
Subject Shares, and the Company.

         d.   NOTICES, ETC.  All notices and other communications required or 
permitted hereunder shall be in 

                         Exh. 10.29 - Page 19

<PAGE>

writing and shall be effective five (5) days after mailed by first-class, 
registered or certified mail, postage prepaid, or upon delivery if delivered 
by hand, facsimile, telecopy, messenger or a courier delivery service, 
addressed to the respective parties at the addresses set forth below 
accompanying the parties' names on the signature page to this Agreement, or 
at such other addresses as the parties shall provide one another by notice 
pursuant to this section; provided, however, that notices may be sent to any 
Shareholder who has acquired Subject Shares from a Purchaser at the address 
appearing for that person on the stock records of the Company; and each 
Shareholder shall be deemed to have been given notice of any change in the 
address of the Company's principal executive office which occurs while 
Shareholder is a Shareholder of the Company.

         e.   CALIFORNIA CORPORATE SECURITIES LAW.  THE SALE OF THE 
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED 
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE 
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE 
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN 
EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL.  PRIOR TO ACCEPTANCE OF SUCH 
CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE 
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION 
FROM SUCH QUALIFICATION BEING AVAILABLE.

         f.   SEVERABILITY.  If the application of any provision or 
provisions of this Agreement to any particular facts or circumstances shall 
be held invalid or unenforceable by any court of competent jurisdiction, then 
(i) the validity and enforceability of such provision or provisions as 
applied to any other particular facts or circumstances and the validity of 
other provisions of this Agreement shall not in any way be affected or 
impaired thereby and (ii) such provision or provisions shall be reformed 
without further action by the parties hereto to and only to the extent 
necessary to make the same valid and enforceable when applied to such 
particular facts and circumstances.

         g.   SECTION HEADINGS.  The section headings in this Agreement are 
solely for convenience and shall not be considered in its interpretation.  

         g.   VENUE.  Any lawsuit is brought to enforce this Agreement shall 
be brought in Santa Clara County or Alameda County, California and the 
parties hereby irrevocably agree and submit to the personal and subject 
matter jurisdiction and venue of such court.

                         Exh. 10.29 - Page 20

<PAGE>

         h.   COUNTERPARTS.  This Agreement may be executed in counterparts, 
each of which shall be an original, but all of which together shall 
constitute one instrument.

         i.   REMEDIES.  In addition to all other rights it may have under 
this Agreement, the Company shall have the right to enjoin any sale or other 
transfer of the Shares which would violate or cause a breach of the 
Cancellation Right, Right of First Refusal, Market Stand-Off or securities 
laws of the U.S. or any state.  The prevailing party in any litigation or 
arbitration proceeding pertaining to the parties' rights and obligations 
under this Agreement shall be entitled to recover reasonable attorneys' fees.

AUTHORIZED SIGNATURES

    For the purpose of binding the parties to the above Consulting Agreement, 
the parties or their the duly authorized representatives have signed their 
names on the dates indicated.

MATRIDIGM CORPORATION        Address:

                             MATRIDIGM CORPORATION
                             Attention: Chief Executive Officer
By _________________________ 47207 Bayside Parkway
    James T. Brady,          Fremont, CA 94538
    Chief Executive Officer


PURCHASERS:

BRC HOLDINGS, INC.           Address:
                             
                             BRC HOLDINGS, INC.
                             Attention:  Chief Executive Officer
By _________________________ 1111 W. Mockingbird Lane, Ste. 1400
    P.E. Esping              Dallas, TX 75247
    Chief Executive Officer

ZITEL CORPORATION            Address:

                             ZITEL CORPORATION
                             Attention: President
By _________________________ 47211 Bayside Parkway
    Jack H. King,            Fremont, CA 94538
    President 


                         Exh. 10.29 - Page 21

<PAGE>

    DESIGNATION OF ESCROW HOLDER


    MATRIDIGM CORPORATION hereby designates Rosenblum, Parish & Isaacs, P.C. as
the Escrow Holder pursuant to Section 5 of the above Stock Purchase Agreement;
and Rosenblum, Parish & Isaacs, P.C., hereby accepts such appointment pursuant
to the term and conditions set forth in that section.


ROSENBLUM, PARISH & ISAACS, P.C.       MATRIDIGM CORPORATION



By: _________________________          By: 
    _________________________
    Member of the Firm         
    _________________________
                                       Executive Officer





























                         Exh. 10.29 - Page 22

<PAGE>

                               EXHIBIT A

         FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION













































                         Exh. 10.29 - Page 23

<PAGE>

                              EXHIBIT B

                      PUT OPTION EXERCISE FORM


To: ___________________
    ___________________
    ___________________
    ___________________


    Reference is made to that certain Preferred Stock and Put Option 
Agreement dated ______________, 1996, between MatriDigm Corporation (the 
"Company") and the Purchasers named therein (the "Agreement").  Capitalized 
terms used herein without definition shall have the meanings assigned to them 
in the Agreement.

    As holder of the Put Option specified in Section 4 of the Agreement, the 
Company hereby irrevocably elects to exercise the right thereunder to sell to 
______________________ ("Purchaser") ______________________________ shares of 
Series ___ Preferred Stock of the Company at the Put Exercise Price per share 
of $_______, for an aggregate Put Exercise Price of $___________.  

    Each of the officers of the Company executing this Put Option Exercise 
Form hereby attests and certifies that the Company has satisfied all of the 
conditions of this exercise of the Put Option described in the Section 4(c) 
of the Agreement.

    The Company hereby covenants to cause certificates representing the 
Option Shares to be issued promptly following the Purchaser's tendering of 
the Put Exercise Price in full.

Dated: ___________________

MATRIDIGM CORPORATION

By:  _______________________
     Chief Executive Officer


By:  _______________________
     Chief Financial Officer


                         Exh. 10.29 - Page 24