Document:

EXHIBIT 10.28

        STRATEGIC DEVELOPMENT AND MARKETING AGREEMENT BETWEEN FIRST DATA
                       RESOURCES INC. AND VALUESTAR, INC.

This STRATEGIC  DEVELOPMENT AND MARKETING  AGREEMENT  ("Agreement")  is made and
entered into as of November 1, 2000 (the "Effective  Date") by and between First
Data  Resources  Inc., a Delaware  corporation,  having  offices at 10825 Farnam
Drive  C-42,  Omaha,  NE 68154  (hereinafter  referred  as "FDR") and  ValueStar
Incorporated,  a  California  corporation  having  offices  at 360 22nd  Street,
Oakland, CA 94612 (hereinafter referred as "VLST").

                                   BACKGROUND

A.       ValueStar is a company providing ratings of local service companies and
         cardholder  benefits.  ValueStar  has  created  a  cardholder  benefits
         program  known as ValueStar  Benefits,  the current  terms of which are
         described more fully in Schedule A.

B.       FDR is a provider of data processing,  electronic  commerce and payment
         services to credit card issuers and other clients.

C.       Each of VLST and FDR desire to enter into a strategic  development  and
         marketing  relationship  where FDR will  assist VLST in  marketing  the
         ValueStar  Benefits to credit card issuers who obtain services from FDR
         ("Issuers").

The parties, therefore, agree as follows:

         1.  Strategic  Development  &  Marketing.  FDR shall assist VLST in the
strategic  development of relationships with, and the marketing of the ValueStar
Benefits to Issuers.  Initially,  FDR and ValueStar  shall  jointly  develop and
agree upon a VLST/FDR Issuer Marketing Plan (the "Marketing  Plan") within sixty
days of the date  hereof.  The  Marketing  Plan will  provide  for,  among other
things, the following activities by FDR and VLST:

                  (a) FDR and VLST will jointly  identify  Issuer  prospects for
         sales calls, develop a project plan to prioritize Issuer prospects, and
         determine  which  sales  calls will be made by VLST alone or jointly by
         FDR and VLST.

                  (b) FDR will,  among other marketing  activities,  *****.  FDR
         acknowledges  that it may incur costs in carrying  out its  obligations
         hereunder and that each party shall bear its own costs.

         PORTIONS OF THIS  EXHIBIT  DENOTED  HEREIN BY ***** HAVE BEEN  OMMITTED
         (BASED UPON A REQUEST FOR  CONFIDENTIAL  TREATMENT) AND HAVE BEEN FILED
         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
         24B-2.

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                  (c) VLST will  provide  ongoing  training  to  designated  FDR
         personnel  regarding  the  ValueStar  program and  services  (including
         product and service updates),  as reasonably  requested by FDR; provide
         appropriate  sales materials as necessary to allow FDR to carry out its
         responsibilities   under  the   Marketing   Plan;   and  ensure  timely
         availability  of  appropriate  VLST  personnel to  participate in sales
         calls and other Issuer meetings or calls scheduled by FDR.

         2.  Cooperation.  Subject to  contractual  confidentiality  and privacy
obligations,  both parties agree to share information about inquiries  regarding
the ValueStar Benefits,  to provide all necessary materials reasonably requested
by the other party in a timely manner,  and to cooperate in the joint  marketing
efforts.  During the term hereof,  neither party shall  disparage the personnel,
products and/or services of the other party.

         3.  VLST  Responsibilities.   (a)  VLST  will  attempt  to  enter  into
agreements with Issuers  substantially in the form set forth in Schedule B. VLST
will notify FDR of any material changes in the standard Issuer contract form set
forth in Schedule B.

                  (b) VLST shall be solely responsible for contract negotiation,
         program  implementation and ongoing  maintenance and support (including
         first line and second line  customer  support)  for  Issuers.  At FDR's
         request,  VLST  will  include  FDR in the  implementation  team  for an
         Issuer. In all cases, VLST will provide FDR with updated implementation
         timelines and project plans for each Issuer implementation.

                  (c)  VLST  understands   that  the  information,   access  and
         assistance  provided by FDR to VLST under this  Agreement is solely for
         the purpose of facilitating  the sale of ValueStar  Benefits to Issuers
         and VLST will not use it for any other purpose.

         4.       Compensation.  *****

         5. Term and  Termination.  (a) The term of this agreement shall be five
years from the date hereof.  Notwithstanding the foregoing,  the Agreement shall
be  automatically  renewed  at the end of this  term for a period  of two  years
unless  either party  notifies the other in writing no later than 120 days prior
to expiration date.

         (b)      The agreement may be terminated:

                  (i)      by either party if the ValueStar/First  Data Merchant
                           Services  Agreement dated September 29, 2000, expires
                           or is terminated for any reason;

                  (ii)     by FDR if VLST  fails  to pay any  amount  due to FDR
                           under this  Agreement  within 30 days  after  written
                           notice to VLST of its failure to pay the amount;

         PORTIONS OF THIS  EXHIBIT  DENOTED  HEREIN BY ***** HAVE BEEN  OMMITTED
         (BASED UPON A REQUEST FOR  CONFIDENTIAL  TREATMENT) AND HAVE BEEN FILED
         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
         24B-2.

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<PAGE>

                  (iii)    by either  party if the other  party is  notified  in
                           writing  of a  material  breach  of  its  obligations
                           hereunder and such breach remains  uncured for thirty
                           (30) days.  "Material  breach"  shall include (but is
                           not limited  to) failure by VLST to perform  services
                           substantially  in  accordance  with Schedule A or any
                           Issuer agreement,  failure by VLST to comply with any
                           Program  Privacy Policy as defined in Schedule B, and
                           failure by either  party to perform  its  obligations
                           under Section 1.

                  (iv)     by  either  party if the  other  party is  dissolved,
                           becomes  insolvent,  generally  fails  to  pay  or is
                           unable generally to pay its debts as they become due;
                           makes a general  assignment to or arrangement with or
                           for the benefit of its  creditors;  or is the subject
                           of a petition in bankruptcy, any action under federal
                           or  state  law  for the  relief  of  debtors,  or the
                           appointment of an administrator, receiver, custodian,
                           or similar official for the wind up of its business.

                  (v)      By VLST *****

         6.  Confidentiality.  (a) In connection  with this  Agreement,  certain
confidential and proprietary information ("Confidential  Information") regarding
each party to this Agreement (such party a "disclosing  party") may be disclosed
to the other party to this  Agreement  (such party a  "recipient"  or  recipient
party") in order to carry out their respective  obligations under the Agreement.
Such  Confidential   Information  includes  any  data  or  information  that  is
competitively  sensitive  material  and  not  generally  known  to  the  public,
including,  but  not  limited  to,  products  planning  information,   marketing
strategies,  plans,  finance,  operations,   customer  relationships,   customer
profiles,  sales  estimates,  business plans, and internal  performance  results
relating to past,  present or future  business  activities of a party;  personal
financial  information  regarding consumer  customers of a party,  including all
information   related  to  or  used  in  connection  with  financial   accounts,
applications  for accounts or marketing of such accounts;  and the terms of this
Agreement.  Except as required by law or expressly  authorized  by prior written
consent of the disclosing party, the recipient party shall:

         (i)      limit access to any Confidential Information received by it to
                  its  employees  and  agents  who  have  a  need  to  know  the
                  information  in  connection  with  evaluation of any potential
                  business   transaction,   and  only  for  use  in   connection
                  therewith;

         (ii)     advise  its   employees   and  agents  having  access  to  the
                  Confidential Information of the proprietary nature thereof and
                  of the obligations set forth in this Agreement;

         PORTIONS OF THIS  EXHIBIT  DENOTED  HEREIN BY ***** HAVE BEEN  OMMITTED
         (BASED UPON A REQUEST FOR  CONFIDENTIAL  TREATMENT) AND HAVE BEEN FILED
         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
         24B-2.

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<PAGE>

         (iii)    take  appropriate  action by instruction or agreement with its
                  employees  and  agents  having  access  to  the   Confidential
                  Information to fulfill its obligations under this Agreement;

         (iv)     safeguard all Confidential  Information received by it using a
                  reasonable  degree of care,  but not less than that  degree of
                  care used by it in safeguarding its own similar information or
                  material;

         (v)      use all  Confidential  Information  received  by it solely for
                  purposes of performing  its  obligations  under this Agreement
                  and for no other purpose whatsoever; and

         (vi)     not disclose any  Confidential  Information  received by it to
                  third parties.

         (b) Upon the request of the disclosing party, the recipient party shall
surrender (or confirm the destruction or nonrecoverable  erasure of computerized
data) all memoranda,  notes, drawings,  manuals, records, and other documents or
materials (and all copies of same,  including  "copies" that have been converted
to computerized media in the form of image, data or word processing files either
manually  or by image  capture)  including  the  Confidential  Information.  The
obligations of confidentiality  and restriction on use in this section shall not
apply to any Confidential Information that:

         (i)      was in the public  domain prior to the date of this  Agreement
                  or  subsequently  came into the public domain through no fault
                  of the recipient; or

         (ii)     was  lawfully  received  by the  recipient  party from a third
                  party  free of any  obligation  of  confidence  to such  third
                  party; or

         (iii)    was already in the lawful possession of the recipient prior to
                  receipt thereof,  directly or indirectly,  from the disclosing
                  party; or

         (iv)     is  subsequently  and  independently  developed by  employees,
                  consultants  or agents of the recipient  without  reference to
                  the Confidential Information disclosed under this Agreement.

         (c) This  Agreement  does not confer any right,  license,  interest  or
title in, to or under the  Confidential  Information to the recipient.  Title to
the  Confidential  Information  shall remain solely in the disclosing  party. If
either party violates this section of the Agreement,  then the other party shall
be entitled,  if it so elects,  to institute  and prosecute  proceedings  in any
court of competent jurisdiction to obtain equitable relief to enforce its rights
hereunder.  VLST and FDR agree  that  money  damages  would not be a  sufficient

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<PAGE>

remedy  for  breach  of  their  respective   obligations   under  this  section.
Accordingly,  each party agrees that in an action for equitable  remedies  under
this  Agreement,  the  disclosing  party  shall  not be  required  to prove  the
inadequacy or insufficiency of monetary damages as a remedy.  Each party further
agrees  to  waive  any  requirement  for a bond  in  connection  with  any  such
injunctive or other equitable relief.

         7. Press  Release.  Neither  party shall make a press  release or other
public statement (including marketing materials) regarding this Agreement or the
parties' relationship without first obtaining the prior written approval of such
release or statement from the other party.  Notwithstanding the foregoing, it is
the parties' intent to issue a mutually agreed-upon press release within 30 days
of the Effective Date in which the parties describe the Program and its launch.

         8.  Indemnification.  Each party shall  indemnify and hold harmless the
other and its directors,  officers,  employees,  agents and affiliates  from and
against  any and  all  third  party  claims,  liabilities,  losses  and  damages
(including  reasonable attorney fees, expert witness fees, expenses and costs of
settlement) arising out of or with respect to this Agreement, to the extent that
the claim,  liability,  loss or damage is caused by, relates to or arises out of
(a) the breach by the  indemnifying  party of any of its  duties or  obligations
under this Agreement; (b) the breach by VLST of any of its duties or obligations
under  agreements with Issuers;  or (c) the negligence or willful  misconduct of
the  indemnifying  party in connection with the activities  contemplated by this
agreement or by VLST in connection with its agreements with Issuers.

         9. Insurance. VLST shall maintain insurance coverage of the type and in
the  amounts  reasonably  satisfactory  to  FDR.  Prior  to  execution  of  this
Agreement,  VLST will  provide  FDR proof of  current  insurance  coverages  and
amounts,  and will notify FDR of any material changes  subsequently made in such
coverages and amounts.

         10. Dispute  Resolution.  The parties will resolve any dispute  arising
out of or relating to this Agreement in a binding  arbitration  conducted  under
the auspices of the American  Arbitration  Association.  This  Agreement  (a) is
deemed to have been made in Oakland, California and (b) shall be construed under
California law.

         11.  Audit  Rights.  FDR will have the right (at its own expense and at
reasonable times with reasonable  notice), no more than twice per calendar year,
to audit VLST, and VLST shall provide full  cooperation in connection  with such
audits and will provide such access to such properties, records and personnel as
FDR may reasonably  require for such purpose.  In the event an audit discovers a
significant discrepancy (meaning greater than 5% adverse to FDR), VLST shall pay
the reasonable expenses of the audit.

         12.  Relationship.  The parties will perform all services  hereunder as
independent contractors.  Nothing contained in this Agreement shall be deemed to
create any association, partnership, joint venture, or relationship of principal
and agent or master and servant between the parties.  Neither this Agreement nor
any provisions  set forth herein is intended to, or shall,  create any rights in
or confer any benefits upon any person other than the parties hereto.

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<PAGE>

         13.  Severability.  This Agreement shall be deemed to be severable and,
if any provision is determined to be void or unenforceable,  then that provision
will be deemed severed and the remainder of the Agreement will remain in effect.

         14.  Expenses.  Each  party  shall  bear  its own  costs  and  expenses
(including  all legal,  accounting,  investment  banking  and other  costs) with
respect to this transaction.

         15. Notices. All notices,  requests and other communications  hereunder
shall be in  writing  and shall be deemed  delivered  at the time of  receipt if
delivered  by hand or, if mailed,  three (3) days after  mailing  registered  or
certified mail, return receipt requested, with postage prepaid, to the President
of the receiving  party at the address for the receiving  party set forth in the
introductory  paragraph  hereto, if such has been changed by notice to the other
given as provided  above,  then to the last address so designated.  Facsimile or
email shall not be notice acceptable under this section.

Agreed and Accepted by:

First Data  Resources Inc.                           ValueStar, Inc.

/s/ Jeff Price                                       /s/ Jim Stein
------------------------------------                 --------------
Signed:                                              Signed:

Jeff Price                                           Jim Stein
------------------------------------                 ---------------
Name:                                                Name:

Senior Vice President                                CEO
------------------------------------                 ---------------
Title:                                               Title:

11/1/00                                              11/1/00
---------------------------                          ---------------
Date                                                 Date:

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<PAGE>

                                   Schedule A

                           ValueStar Benefits Program

                             Description of Services

ValueStar is America's leading rating  organization of local service  companies.
It maintains a database of local service  businesses in the United  States.  Its
information  includes the results of ValueStar's ratings and research on company
license history and status,  insurance coverage,  credit history, legal history,
complaint history and customer satisfaction.

ValueStar has created a cardholder  benefits program titled ValueStar  Benefits.
Though the specific  benefits offered within the ValueStar  Benefits are subject
to change,  the  current  benefits  contain  three major  elements.  Cardholders
receive  these three  benefits  by using the card of an issuing  bank with which
ValueStar  has  agreed to honor,  and  charging  to that  card the  services  of
ValueStar  Authorized  merchants who have earned a positive  rating by ValueStar
and  signed  an  agreement  to abide by  ValueStar's  Customer  Bill of  Rights,
complaint  resolution  process and other terms.  Cardholders  are notified after
each transaction with ValueStar Authorized companies that they will activate the
ValueStar  mediation  services,  the  ValueStar  money-back  guarantee  and earn
ValueStar Rating Points by responding to a short customer  satisfaction  survey.
Those  Cardholders that respond to this survey are deemed Eligible for ValueStar
Benefits.

The three elements of ValueStar Benefits are as follows:

         1) ValueStar is the guarantor of a money-back  satisfaction  program on
the services of the merchant up to a limit of $500.00.

         Eligible  Cardholders may contact  ValueStar to realize the benefits of
this program anytime within 6 months of the transaction date. The Cardholder may
make  their  request  via  toll  free  phone  number,  fax,  email,  mail or web
applications.  ValueStar  will  acknowledge  its receipt of the request within 1
business day.  ValueStar will then contact the merchant and attempt to mediate a
service-based  solution that the Cardholder finds  acceptable.  ValueStar has 10
business days to mediate a solution that is satisfactory  to the Cardholder.  If
there is no solution that the Cardholder  finds  acceptable,  then (and provided
that the  Cardholder has not delayed in responding to  ValueStar's  efforts,  in
which case,  each day delay is added to the time  allotment  for  resolution)  a
guarantee payment from ValueStar to the Cardholder is authorized.  The guarantee
check is mailed to the  Cardholder  within 5 business  days of the date that the
guarantee is authorized.

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         2)       ValueStar-funded reward points (ValueStar Rating Points)

         Eligible Cardholders earn reward points, which are funded by ValueStar.
ValueStar  is prepared  to operate the  ValueStar  Rating  Point  program in its
entirety (awards, redemption, statements, customer care) through its partnership
with  Netcentives,  which has several  existing  redemption  channels  including
airlines,  charities  and  select  retailers.  Issuers  may also  choose to have
rewards credited to an existing Issuer promotion or reward system.

         3) The ability for  Cardholders to rate their  satisfaction  with these
ValueStar  Authorized companies and thus gain greater clout, while providing the
merchant with more motivation to deliver quality service to that Cardholder.

         ValueStar is a leader in customer  satisfaction  research. It continues
to conduct its phone  surveys of customer  satisfaction  with service  companies
throughout the US. In addition,  it may also utilize direct mail, email, and web
applications  to collect this data.  The data are used to arrive at an aggregate
satisfaction  score for each merchant and only those with an aggregate  score of
85 or higher out of 100 are allowed to earn the ValueStar Top-Rated symbol.

         ValueStar Authorized companies agree to pay *****

         PORTIONS OF THIS  EXHIBIT  DENOTED  HEREIN BY ***** HAVE BEEN  OMMITTED
         (BASED UPON A REQUEST FOR  CONFIDENTIAL  TREATMENT) AND HAVE BEEN FILED
         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
         24B-2.

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<PAGE>

                                   Schedule B

                        ValueStar Sample Issuer Agreement

*****

         PORTIONS OF THIS  EXHIBIT  DENOTED  HEREIN BY ***** HAVE BEEN  OMMITTED
         (BASED UPON A REQUEST FOR  CONFIDENTIAL  TREATMENT) AND HAVE BEEN FILED
         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
         24B-2.STOCK SUBSCRIPTION AGREEMENT

         THIS STOCK SUBSCRIPTION AGREEMENT (the "Agreement") is made and entered
into on this _______ day of ______________, 2000, by and between Agate
Technologies, Inc., a Delaware corporation ("AGATE" or the "Company") and
________________________, a resident of the State of ________________ (the
"Purchaser").

                                    RECITALS

A.       AGATE is in the process of selling approximately 2,000,000 units (the
         "Units").

B.       Having had an opportunity to discuss the Company's business and
         prospects with the principals, officers, and/or representatives of
         AGATE, the Purchaser has expressed an interest in purchasing the Units
         of AGATE and AGATE has expressed an interest in selling such Units, on
         the terms and conditions set forth in this Agreement.

C.       If and when accepted by AGATE, this Agreement shall constitute a
         subscription for Units in the amount set forth herein. Each part of
         this Agreement must be completed by the Purchaser and, by his or her
         execution below, he or she acknowledges and understands that the
         Company is relying upon the accuracy and completeness of this document
         in complying with its obligations under applicable securities laws.

                                    AGREEMENT

         NOW, THEREFORE, in exchange for the consideration and mutual covenants
and agreements set forth in this Agreement, the parties hereto hereby represent,
warrant and agree as follows:

1.       PURCHASE OF UNITS. Purchaser agrees to purchase, and AGATE agrees to
         sell, units of AGATE, each unit to contain one share of Common Stock
         ("Share") and one warrant ("Warrant") to acquire an additional share of
         common stock, at an exercise price of $1.00, payable within six months
         of the date of purchase of the unit (the Warrant and Share together
         comprising the "Unit"). The price, per Unit, is $1.00. The minimum
         purchase required by an individual investor is 5,000 Units ($5,000).
         However, the Company reserves the right, at its sole discretion, to
         waive such minimum investment requirement, and further reserves the
         right to reject any subscription for any reason.

2.       METHOD OF SUBSCRIPTION. The Purchaser understands that before his or
         her subscription for the Units will be accepted, he or she must have
         completed, executed, acknowledged, sworn to (where required) and
         delivered to the Company, the following:

         a.       This Subscription Agreement; and

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         b.       Cash, check, wire transfer or other form of certified funds
                  payable to the order of "Agate Technologies, Inc." in the
                  amount of $1.00 for each Unit subscribed.

         The Purchaser further agrees that this subscription is and shall be
         irrevocable, but the obligations hereunder will terminate if this
         subscription is not accepted by the Company in whole or in part, by the
         Closing Date, October 31, 2000 (unless extended by the Company). The
         Purchaser understands that the Company will notify him or her whether
         this subscription has been accepted or rejected, in whole or in part,
         within ten (10) days after delivery to the Company or the Closing Date,
         whichever is first. If this subscription is rejected by the Company,
         all funds and documents tendered by the Purchaser shall be returned
         promptly, without interest or deduction. It is understood that the
         Company shall have the sole discretion of determining which of the
         subscriptions should be rejected.

3.       THE UNITS. Each Unit consists of one common share, $0.0001 par value,
         and one Warrant to acquire a common share at a purchase price of $1.00.
         Any shares will have voting rights equal to all other outstanding
         common shares of stock of the Company. The shares of Common Stock
         issuable upon purchase of Units (and/or exercise of Warrants) in this
         Offering, when issued in accordance with the terms of the Offering,
         will be fully paid and non-assessable.

4.       PROCEEDS OF SALE. Purchaser acknowledges and agrees that Purchaser is
         acquiring Units of AGATE, that AGATE is the seller of such Units and
         that the proceeds of the sale are accordingly being paid to AGATE. All
         money paid by Purchaser to acquire AGATE Units shall be deposited into
         the bank accounts of AGATE and shall thereafter be available to AGATE
         to use for the purposes of AGATE.

5.       STOCK RESTRICTIONS. The securities being sold under this Agreement are
         being issued pursuant to private offering exemptions from registration
         under the federal securities laws and qualification under state
         securities laws. Therefore, the securities being issued under this
         Agreement are restricted and not freely tradable and will not be freely
         tradable unless such restrictions lapse and the stock is subsequently
         registered or otherwise becomes transferable in compliance with certain
         securities regulations, such as Rule 144 under the Securities Act of
         1933, as amended (the "Act"), further described at paragraph
         5(a)(viii).

6.       REPRESENTATIONS AND WARRANTIES OF PURCHASER. In agreeing to purchase
         the Units of AGATE as described in this Agreement, the Purchaser hereby
         represents and warrants to AGATE that:

         a.       INVESTMENT REPRESENTATIONS.

                  i.       The Purchaser is experienced in evaluating and
                           investing in highly speculative companies such as
                           AGATE.

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<PAGE>

                  ii.      Prior to entering into this Agreement, the Purchaser
                           had a pre-existing relationship with AGATE, and/or
                           their principals, officers, directors, agents and/or
                           representatives.

                  iii.     The Purchaser has had an opportunity to discuss
                           AGATE's business, management and financial affairs
                           with AGATE's management and has had the opportunity
                           to inspect AGATE's books and records. The Purchaser
                           has made his or her own independent investigation of
                           AGATE and has been furnished with such information
                           relating to AGATE as the Purchaser has requested. The
                           Purchaser hereby represents that the Purchaser has
                           had a reasonable time to review and investigate all
                           matters and information which the Investor believes
                           might be material to his or her investment in AGATE's
                           securities, and that the Purchaser is aware that
                           AGATE is relying on the accuracy of such
                           representations in agreeing to offer the Units to the
                           Purchaser at this time.

                  iv.      In making his or her decision to purchase the Units
                           pursuant to this Agreement, the Purchaser has relied
                           solely upon the information furnished or made
                           available by AGATE described in this Agreement and on
                           the Purchaser's own analysis and due diligence.

                  v.       The Purchaser understands that no federal or state
                           agency has passed upon an investment in the Units or
                           made any finding or determination as to the
                           advisability or fairness of an investment in the
                           Units.

                  vi.      The Purchaser understands that the Purchaser must
                           bear the economic risk of investment in the Units for
                           an indefinite period of time, as the Units have not
                           been registered under the Act and, therefore, cannot
                           be sold unless they are either subsequently
                           registered under the Act or an exemption from such
                           registration is available.

                  vii.     The Purchaser understands that there can be no
                           assurance that AGATE will be able to fulfill its
                           Business Plan or achieve its goals with the proceeds
                           raised under this exempt private offering, that it
                           may be necessary for AGATE to raise additional
                           investment capital or that AGATE will be successful
                           in raising such additional capital should such a need
                           arise. Accordingly, the Purchaser understands that an
                           investment in the Units of AGATE bears a high degree
                           of risk, is speculative and may result in the entire
                           loss of the Purchaser's investment.

                  viii.    The Purchaser understands that he or she may not
                           resell the Units if he or she is deemed to have
                           engaged in a distribution of the Units or otherwise
                           deemed to be an underwriter thereof, unless he or she
                           registers the sale with

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<PAGE>

                           the Securities and Exchange Commission. Purchaser is
                           further aware of the provisions of Rule 144
                           promulgated under the Act ("Rule 144"), which sets
                           forth the conditions under which a seller of
                           "restricted securities," as that term is defined in
                           the Rule, shall be deemed not to be engaged in a
                           distribution of such securities and therefore not an
                           underwriter thereof. Purchaser understands and
                           acknowledges that the Units are "restricted
                           securities," as defined in Rule 144, and that the
                           sale of the Units by Purchaser may not be made except
                           in compliance with Rule 144. Rule 144 includes, but
                           is not limited to, the following conditions: (1)
                           sales of restricted securities may not be made (a)
                           less than one year after such purchaser has purchased
                           and paid for the security to be sold, subject to
                           volume limitations and other conditions of the Rule,
                           or (b) by non-affiliates, not less than two years
                           after the securities to be sold have been purchased
                           and paid for; (2) sales must be made through a
                           "broker's transaction;" and (3) AGATE must satisfy
                           certain current public information requirements under
                           the Rule. AGATE presently does satisfy the current
                           public information requirements of Rule 144.

                  ix.      The Purchaser is acquiring the Shares for investment
                           for the Purchaser's own account and not with the view
                           to, or for resale in connection with, any
                           distribution thereof. The Purchaser understands that
                           the Units have not been registered under the Act by
                           reason of one or more exemptions from the
                           registration provisions of the Act, which requires,
                           among other things, the bona fide nature of the
                           Purchaser's investment intent as expressed herein.

                  x.       The Purchaser is authorized and otherwise duly
                           qualified to purchase and hold the Shares, and has
                           his or her principal residence or place of business
                           at the address designated by the Purchaser at the end
                           of this Agreement.

                  xi.      The Purchaser represents that the Purchaser is an
                           "Accredited Investor" under the Act by virtue of
                           having (PLEASE INITIAL WHERE APPLICABLE):

                  __________        An individual net worth, or joint net worth
                                    with the Purchaser's spouse, in excess of $
                                    1,000,000; or

                  __________        An individual net income in excess of
                                    $200,000 in each of the two most recent
                                    years, or joint net income with the
                                    Purchaser's spouse in excess of $300,000 in
                                    each of those years, and a reasonable
                                    expectation of reaching the same income
                                    level in the current year; or

                                       4

<PAGE>

                  __________        A bank or savings and loan association
                                    acting in either its individual or a
                                    fiduciary capacity; any broker/dealer
                                    registered pursuant to Section 15 of the
                                    Securities Exchange Act of 1934, as amended;
                                    an insurance company; an investment company
                                    registered under the Investment Company Act
                                    of 1940 or a business development company as
                                    defined in that Act; a Small Business
                                    Investment Partnership licensed by the U.S.
                                    Small Business Administration; an employee
                                    benefit plan within the meaning of the
                                    Employee Retirement Income Security Act of
                                    1974, so long as the decision to invest in
                                    the Partnership is being made by a fiduciary
                                    which is either a bank, savings and loan
                                    association, insurance company or registered
                                    investment advisor, or if the employee
                                    benefit plan has total assets in excess of
                                    $5,000,000 at the date hereof, or is a
                                    self-directed plan, with investment
                                    decisions made solely by persons that are
                                    accredited investors; or a private business
                                    development company as defined in Section
                                    202(a)(22) of the Investment Advisors Act of
                                    1940; or a corporation, partnership or other
                                    entity in which all of the equity owners
                                    qualify as accredited investors under any
                                    one or more of the previous categories.

                  xii.     The Purchaser hereby indemnifies and holds harmless
                           AGATE and any of AGATE's officers, employees,
                           shareholders, agents, directors or control persons
                           ("Indemnified Persons") who was or is a party or is
                           threatened to be made a party to any pending or
                           threatened action, suit or proceeding arising from
                           any misrepresentation or omission of material facts
                           by the Purchaser, including without limitation the
                           information in this Agreement, against losses,
                           liabilities or expenses of the Indemnified Persons
                           (including attorneys' fees, judgments, fines and
                           amounts paid in settlement) actually incurred by such
                           person or entity in connection with such action, suit
                           or proceeding.

                  xiii.    If the Purchaser is more than one person, the
                           obligations of the Purchaser shall be joint and
                           several and the representations and warranties herein
                           contained shall be deemed to be made by and be
                           binding upon each such person and his or her heirs,
                           executors, administrators, successors and assigns.

         b.       FURTHER LIMITATIONS ON DISPOSITION. Without in any way
                  limiting the representations set forth above, the Purchaser
                  further agrees not to make any disposition of all or any
                  portion of the Units, including any distribution to any
                  partners of the Purchaser, unless and until there is then in
                  effect a Registration Statement under the Act covering such
                  proposed disposition and such disposition is made in
                  accordance with such Registration Statement; or Purchaser
                  delivers to AGATE an opinion of legal counsel that is
                  acceptable, in the sole discretion of AGATE, that such
                  disposition will not require registration of such Units under
                  the Act.

                                       5

<PAGE>

         c.       LEGENDS. It is understood that the certificate(s) representing
                  the Units may bear one or all of the following restrictive
                  legends:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
                  TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE
                  DISPOSED OF EXCEPT IN ACCORDANCE WITH THAT ACT AND THE RULES
                  AND REGULATIONS PROMULGATED THEREUNDER";

                  "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
                  SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
                  STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
                  ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
                  SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO
                  RULE 144 OF SUCH ACT";

                  "THE Units REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
                  PURSUANT TO THAT CERTAIN STOCK SUBSCRIPTION AGREEMENT DATED
                  _________________ BETWEEN THE COMPANY AND THE ISSUEE WHICH
                  RESTRICTS THE TRANSFERABILITY OF THESE Units";

                  and/or such other legend or legends as AGATE and its counsel
                  deem necessary or appropriate.

         d.       ACKNOWLEDGMENT OF RISK FACTORS. The Purchaser acknowledges
                  that an investment in the Units of AGATE is highly speculative
                  and subject to significant risks. Therefore, the Purchaser
                  represents that he or she has the financial capability of
                  bearing the loss of the Purchaser's entire investment in the
                  Units. In addition to the investment risks discussed in other
                  sections of this Agreement, the Purchaser represents and
                  warrants that he or she acknowledges and understands the
                  following risk factors associated with AGATE and the purchase
                  of its Units.

7.       REPRESENTATIONS AND WARRANTIES OF AGATE. In agreeing to sell the Units
         to the Purchaser, AGATE hereby represents and warrants to the
         Purchaser:

         a.       AUTHORIZATION. All corporate action on the part of AGATE, its
                  officers, directors and shareholders necessary for the
                  authorization, execution and delivery of this Agreement, the
                  performance of all obligations of AGATE hereunder, including
                  the issuance, sale and delivery of the Units, has been taken
                  or will be taken prior to the Closing. Upon execution and
                  delivery, this Agreement will be a valid and binding
                  obligation of AGATE enforceable in accordance with its terms,
                  except as may be limited by applicable bankruptcy, insolvency,
                  reorganization, moratorium or other

                                       6

<PAGE>

                  laws of general application relating to or affecting
                  enforcement of creditors' rights and by general equitable
                  principles.

         b.       GOVERNMENTAL CONSENTS. No consent, approval, order or
                  authorization of, or registration, qualification, designation,
                  declaration or filing with, any federal, state or local
                  governmental authority on the part of AGATE is required in
                  connection with the valid execution and delivery of this
                  Agreement, or the offer, sale or issuance of securities of
                  AGATE hereunder, except such as has already been obtained or
                  as is not required to be obtained prior to the Closing.

         c.       COMPLIANCE WITH OTHER INSTRUMENTS. AGATE is not and shall not
                  be in violation or default of any provision of (i) their
                  Articles of Incorporation or Bylaws, as amended and in effect
                  on and as of the date of the Closing, or (ii) any material
                  contract, agreement or instrument to which it is a party or by
                  which it is bound or, to its knowledge, may be bound or (iii)
                  any federal, state or local judgment, writ, decree, order,
                  statute, rule or governmental regulation applicable to AGATE.
                  The execution, delivery and performance of this Agreement and
                  the consummation of the transactions contemplated hereby will
                  not result in any such violation or contravene or constitute,
                  with or without the passage of time and giving of notice,
                  either a default under any such provision or result in the
                  creation or imposition of any lien, charge or encumbrance upon
                  any assets of AGATE.

         d.       CORPORATE DOCUMENTS. The Articles of Incorporation and Bylaws
                  of AGATE will be provided or made available to the Purchaser,
                  upon request, for review and approval prior to the Closing.

         e.       SECURITIES LAWS. Based in part upon the representations of the
                  Purchaser, the issuance, sale and delivery of the Units
                  pursuant to the terms of this Agreement shall be exempt from
                  the registration requirements of Section 5 of the "Act" by
                  virtue of Sections 3 and 4(2) thereof.

         f.       PERFORMANCE. AGATE shall have materially performed and
                  complied with all material agreements, obligations and
                  conditions contained in this Agreement that are required to be
                  performed or complied with by it on or before each Closing.

         g.       PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
                  in connection with the transactions contemplated hereby and
                  all documents and instruments incident thereto shall be
                  reasonably satisfactory in form and substance to the
                  Purchaser. The Purchaser shall have received all such
                  counterparts, originals and certified or other copies of such
                  documents as the Purchaser may reasonably request.

         The foregoing representations and warranties of AGATE contained shall
         be true on and as of the date of Closing with the same effect as though
         such representations and warranties had

                                       7

<PAGE>

         been made on and as of the date of such Closing.

8.       MISCELLANEOUS PROVISIONS.

         a.       ENTIRE AGREEMENT. This Agreement embodies the entire agreement
                  and understanding between the parties hereto with respect to
                  the subject matter hereof and supersedes all prior agreements
                  and understandings relating to such subject matter.

         b.       ASSIGNABILITY. This Subscription Agreement is neither
                  transferrable nor assignable by the Purchaser.

         c.       NOTICES. All notices, consents and other communications
                  hereunder shall be in writing and shall be deemed given when
                  delivered personally, by facsimile, with receipt confirmed,
                  provided that an original counterpart is promptly mailed by
                  registered or certified mail, five days after being mailed by
                  registered or certified mail, postage prepaid, or when
                  received by the addressee, if sent by Express Mail, Federal
                  Express, United Parcel Service, DHL or other express delivery
                  or courier service, in each case to the appropriate address or
                  facsimile number of the parties at their respective addresses
                  set forth below, or to such other address or facsimile number
                  for a party as shall be specified by like notice (provided
                  that notices of a change of address or facsimile number shall
                  be effective only upon receipt):

                  i.       If to Agate:

                           Agate Technologies, Inc.
                           519 Montagues Expressway
                           Milpitas, California 95035
                           Facsimile: (408) 956-7956
                           Attn: Shirley Ooi, Chief Financial Officer

                           Or such other address which AGATE may designate as a
                           business address.

                  ii.      If to the Purchaser:

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

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

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

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

                           Or such other address that the Purchaser may
                           designate as a business address.

                                       8

<PAGE>

         d.       MODIFICATIONS. The provisions of this Agreement may be waived,
                  altered, amended or repealed, in whole or in part, only upon
                  the written consent of all parties to this Agreement.

         e.       GOVERNING LAW. This Agreement shall be governed by and
                  construed in accordance with the laws of the State of
                  California with venue for the resolution of any claims or
                  disputes arising hereunder to be in the Superior Court of the
                  State of California for the County of Los Angeles.

         f.       SUCCESSORS. Anything in this Agreement to the contrary
                  notwithstanding, this Agreement shall be binding upon, and
                  shall inure to the benefit of, the heirs, successors or
                  assigns of AGATE and the Purchaser.

         g.       FURTHER ASSURANCES. Each of the parties hereto agrees that,
                  during the term of this Agreement, such party will take such
                  reasonable actions and shall execute such additional documents
                  and instruments as may be necessary and appropriate to give
                  effect to the purposes and the provisions of this Agreement.

         h.       REMEDIES. The parties hereto shall have all remedies for
                  breach of this Agreement available to them provided by law or
                  equity. Without limiting the generality of the foregoing, the
                  parties agree that, in addition to all other rights and
                  remedies available at law or in equity, the parties shall be
                  entitled to obtain specific performance of the obligations of
                  each party to this Agreement and immediate injunctive relief
                  and that in the event any action or proceeding is brought in
                  equity to enforce the same, no Unitholder will proffer, as a
                  defense, that there is an adequate remedy at law.

         i.       ATTORNEY'S FEES. Should any dispute arise between the parties
                  to this Agreement regarding the rights, remedies or relief
                  afforded by this Agreement, then, in addition to the relief
                  the prevailing party may be awarded by a court or arbitrator,
                  that party shall also be entitled to actual attorneys' fees
                  incurred by him or her.

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

         k.       SUBSEQUENT EVENTS. Subsequent to the date of the Company's
                  latest SEC filing, the Company has completed a private
                  placement of $107,250, in exchange for 214,500 shares (12
                  Sep.); borrowed a total of $327,500 in the form of short term
                  loans from officers for operating capital (25 Sep); and
                  tentatively engaed the services of a new VP for Business
                  Development, Mr. Jim Plant, and Mr. Koh Hee Chang as Chief
                  Technology Officer. Vincent Ooi has resigned in anticipation
                  of Mr. Plant's hiring.

                                       9

<PAGE>

9.       AMOUNT OF SUBSCRIPTION.

         a.       Number of Units of the Company              ________________

         b.       Total Capital Contribution
                  ($5,000 minimum, per Investor)              $  ______________

10.      FORM OF OWNERSHIP FOR UNITS. The undersigned elects to hold title to
         the Units subscribed for herein as follows (check one):

         [ ]  Individual Ownership
                  (one signature required)

         [ ]  Community Property
                  (one signature required if interest held in one name (i.e.,
                  managing spouse), two signatures required if Units held in
                  both names)

         [ ]  Tenants in Common
                  (both parties must sign)

         [ ]  Joint Tenants with Right of Survivorship (both parties must sign)

         [ ]  Trust
                  (include name of trust, name of trustee, date trust was formed
                  and a copy of the Trust Agreement or other authorization)

         [ ]  Partnership
                  (include a copy of the Statement of Partnership or Partnership
                  Agreement authorizing signature)

         [ ]  Corporation
                  (include certified corporate resolution authorizing signature)

         [ ]  Qualified Retirement Plan (or IRA)

--------------------------------------------------------------------------------
(Print the exact name (registration) Subscriber desires on account) // Soc. Sec.
# or Tax I.D. #

SOCIAL SECURITY OR TAXPAYER I.D. NUMBER MUST APPEAR ABOVE OR WITHHOLDING
PROVISIONS WILL BE IMPOSED UPON THE COMPANY.

(If a trust, date trust established and name of trustee:
__________________________________)

                                       10

<PAGE>

(Note: Investors should seek the advice of an attorney in deciding in which of
the above forms to take ownership of the Units. Different forms of ownership can
have varying gift tax, estate tax, income tax and other consequences, depending
on the state of the Purchaser's domicile and his or her particular personal
circumstances.)

         IN WITNESS WHEREOF, subject to acceptance by the Company, the
undersigned has completed and executed this Subscription Agreement as of the day
and year first above written.

PURCHASER #1                                    PURCHASER #2

-----------------------------                   -----------------------------
Signature                                       Signature

-----------------------------                   -----------------------------
Name (Please Print)                             Name (Please Print)

-----------------------------                   -----------------------------
Address                                         Address

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

-----------------------------                   -----------------------------
E-mail                                          E-mail

-----------------------------                   -----------------------------
Telephone Number                                Telephone Number

A copy of this Subscription Agreement will be returned to you when countersigned
below. The Company has accepted this Subscription this _______ day of
______________, 2000.

                                        AGATE TECHNOLOGIES, INC.

                                        By:____________________________________
                                           Shirley Ooi, Chief Financial Officer

                                       11

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