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                                                                    EXHIBIT 10.9

                    THIRD AMENDED INVESTORS' RIGHTS AGREEMENT

     This Third Amended Investors' Rights Agreement (this "AGREEMENT") is made
and entered into as of October 16, 1999 by and among Chaparral Network Storage,
Inc., a Delaware corporation (the "COMPANY"), and the individuals and entities
listed on Exhibit A attached hereto (the "INVESTORS").

     A. Certain of the Investors are party to that certain First Amended
Investors' Rights Agreement dated as of March 31, 1999 (the "FIRST AMENDED
AGREEMENT") and that certain Second Amended Investors' Rights Agreement dated as
of August 13, 1999 (the "SECOND AMENDED AGREEMENT").

     B. The Company has sold to certain other of the Investors (the "NEW
INVESTORS") shares of the Company's Series A Preferred Stock and/or Series C
Preferred Stock on the terms and conditions set forth in purchase agreements
between the Company and each New Investor (the "PURCHASE AGREEMENTS").

     C. It is a condition to the New Investors' obligations to enter into the
Purchase Agreements that this Agreement be executed by the parties hereto.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:

     1. INFORMATION RIGHTS.

        1.1 Financial Information. The Company covenants and agrees that,
     commencing on the date of this Agreement, for so long as any Investor holds
     shares of Series A Preferred Stock, Series B Preferred Stock or Series C
     Preferred Stock and/or shares of Common Stock of the Company ("COMMON
     STOCK") issued upon the conversion of such shares of Series A Preferred
     Stock or Series B Preferred Stock or Series C Preferred Stock ("CONVERSION
     STOCK") the Company will:

            (a) Annual Reports. Furnish to such Investor, as soon as practicable
        and in any event within 120 days after the end of each fiscal year of
        the Company, a consolidated Balance Sheet as of the end of such fiscal
        year, a consolidated Statement of Income and a consolidated Statement of
        Cash Flows of the Company and its subsidiaries for such year, setting
        forth in each case in comparative form the figures from the Company's
        previous fiscal year (if any), all prepared in accordance with generally
        accepted accounting principles and practices and audited by an
        independent certified public accounting firm; and

            (b) Quarterly Reports. Furnish to such Investor as soon as
        practicable, and in any case within forty-five (45) days after the end
        of each fiscal quarter of the Company (except the last quarter of the
        Company's fiscal year), quarterly unaudited financial statements,
        including an unaudited Balance Sheet, an unaudited Statement of Income
        and an unaudited Statement of Cash Flows, together with a comparison to
        the Company's operating plan and budget and statements of the Chief
        Financial Officer of the Company explaining any significant differences
        in the statements from the Company's operating plan and budget for the
        period and stating that such statements fairly present the consolidated
        financial position and consolidated financial results of the Company for
        the fiscal quarter covered.

            Each Investor agrees to hold all information received pursuant to
     this Section in confidence, and not to use or disclose any of such
     information to any third party, except to the extent such information may
     be made publicly available by the Company.

        1.2 Inspection Rights. The Company shall permit each Investor holding
     shares of Series A Preferred Stock, Series B Preferred Stock or Series C
     Preferred Stock and/or shares of Conversion Stock, or any combination
     thereof, at such Investor's expense, to visit and inspect the Company's
     properties, to examine its books of account and records and to discuss the
     Company's affairs, finances and accounts with its officers, all at such
     reasonable times as may be requested by such Investor. Each Investor agrees
     to hold all information received from such inspections in confidence, and
     not to use or disclose any of such information to any third party, except
     to the extent such information may be made publicly available by the
     Company.

        1.3 Board Rights. The Company shall permit Adaptec to have one (1)
     representative attend all meetings of the Company's Board of Directors in a
     non-voting observer capacity and to receive any communications directed to
     members of the Board of Directors in their capacity as such. The Investors
     agree to hold all information received from such meetings in confidence,
     and not to use or disclose any of such information to any third party,
     except to the extent such information may be made publicly available by the
     Company.

        1.4 Termination of Certain Rights. The Company's obligations under
     Sections 1.1, 1.2 and 1.3 above will terminate upon the closing of the
     Company's initial public offering of Common Stock pursuant to an

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     effective registration statement filed under the U.S. Securities Act of
     1933, as amended (the "SECURITIES ACT"), in which the gross proceeds raised
     for the Company's account (calculated before deduction of underwriters'
     discounts and omissions) exceeds $15,000,000 at a price greater than $2.20
     per share of Common Stock (such price to be proportionally adjusted to
     reflect stock splits, stock dividends and the like).

     2. REGISTRATION RIGHTS.

        2.1 Definitions. For purposes of this Section 2:

            (a) Registration. The terms "REGISTER," "REGISTRATION" and
        "REGISTERED" and refer to a registration effected by preparing and
        filing a registration statement in compliance with the Securities Act,
        and the declaration or ordering of effectiveness of such registration
        statement.

            (b) Registrable Securities. The term "REGISTRABLE SECURITIES" means:
        (i) all the shares of Common Stock of the Company issued or issuable
        upon the conversion of any shares of Series A Preferred Stock, Series B
        Preferred Stock or Series C Preferred Stock that are now owned or may
        hereafter be acquired by the Investors or the Investors' permitted
        successors and assigns and (ii) any shares of Common Stock of the
        Company issued as (or issuable upon the conversion or exercise of any
        warrant, right or other security which is issued as) a dividend or other
        distribution with respect to, or in exchange for or in replacement of,
        all such shares of Common Stock described in clause (i) of this
        subsection (b); excluding in all cases, however, any Registrable
        Securities sold by a person in a transaction in which rights under this
        Section 2 are not assigned in accordance with this Agreement or any
        Registrable Securities sold to the public or sold pursuant to Rule 144
        promulgated under the Securities Act.

            (c) Registrable Securities Then Outstanding. The number of shares of
        "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the number of
        shares of Common Stock which are Registrable Securities and (i) are then
        issued and outstanding or (ii) are then issuable pursuant to the
        exercise or conversion of then outstanding and then exercisable options,
        warrants or convertible securities.

            (d) Holder. For purposes of this Section 2 and Sections 3 and 4
        hereof, the term "HOLDER" means any person owning of record Registrable
        Securities that have not been sold to the public or pursuant to Rule 144
        promulgated under the Securities Act or any assignee of record of such
        Registrable Securities to whom rights under such Sections have been duly
        assigned in accordance with this Agreement; provided, however, that for
        purposes of this Agreement, a record holder of the Warrant or shares of
        Series A Stock, Series B Stock or Series C Stock convertible into such
        Registrable Securities shall be deemed to be the Holder of such
        Registrable Securities; and provided, further, that the Company shall in
        no event be obligated to register the Warrant or shares of Series A
        Stock, Series B Stock, or Series C Stock and that Holders of Registrable
        Securities will not be required to convert the Warrant or their shares
        of Series A Stock, Series B Stock or Series C Stock into Common Stock in
        order to exercise the registration rights granted hereunder, until
        immediately before the closing of the offering to which the registration
        relates.

            (e) Form S-3. The term "FORM S-3" means such form under the
        Securities Act as is in effect on the date hereof or any successor
        registration form under the Securities Act subsequently adopted by the
        SEC which permits inclusion or incorporation of substantial information
        by reference to other documents filed by the Company with the SEC.

            (f) SEC. The term "SEC" or "COMMISSION" means the U.S. Securities
        and Exchange Commission.

            (g) Series A Stock. The term "SERIES A STOCK" shall mean the
        Company's Series A Preferred Stock, par value $0.001 per share.

            (h) Series B Stock. The term "SERIES B STOCK" shall mean the
        Company's Series B Preferred Stock, par value $0.001 per share.

            (i) Series C Stock. The term "SERIES C STOCK" shall mean the
        Company's Series C Preferred Stock, par value $0.001 per share.

        2.2 Demand Registration.

            (a) Request by Holders. If the Company shall receive at any time
        after six (6) months after the effective date of the Company's initial
        public offering of its securities pursuant to a registration filed under
        the Securities Act, a written request from the Holders of at least
        two-thirds of the Registrable Securities then outstanding that the
        Company file a registration statement under the Securities Act covering
        the registration of Registrable Securities pursuant to this Section 2.2,
        then the

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        Company shall, within twenty (20) days after the receipt of such written
        request, give written notice of such request ("REQUEST NOTICE") to all
        Holders, and effect, as soon as practicable, the registration under the
        Securities Act of all Registrable Securities which Holders request to be
        registered and included in such registration by written notice given by
        such Holders to the Company within twenty (20) days after receipt of the
        Request Notice, subject only to the limitations of this Section 2;
        provided that the Registrable Securities requested by all Holders to be
        registered pursuant to such request must be at least twenty-five percent
        (25%) of all Registrable Securities then outstanding.

            (b) Underwriting. If the Holders initiating the registration request
        under this Section 2.2 ("INITIATING HOLDERS") intend to distribute the
        Registrable Securities covered by their request by means of an
        underwriting, then they shall so advise the Company as a part of their
        request made pursuant to this Section 2.2 and the Company shall include
        such information in the written notice referred to in subsection 2.2(a).
        In such event, the right of any Holder to include his Registrable
        Securities in such registration shall be conditioned upon such Holder's
        participation in such underwriting and the inclusion of such Holder's
        Registrable Securities in the underwriting (unless otherwise mutually
        agreed by a majority in interest of the Initiating Holders and such
        Holder) to the extent provided herein. All Holders proposing to
        distribute their securities through such underwriting shall enter into
        an underwriting agreement in customary form with the managing
        underwriter or underwriters selected for such underwriting by the
        Company. Notwithstanding any other provision of this Section 2.2, if the
        underwriter(s) advise(s) the Company in writing that marketing factors
        require a limitation of the number of securities to be underwritten then
        the Company shall so advise all Holders of Registrable Securities that
        would otherwise be registered and underwritten pursuant hereto, and the
        number of Registrable Securities that may be included in the
        underwriting shall be reduced as required by the underwriter(s) and
        allocated among the Holders of Registrable Securities on a pro rata
        basis according to the number of Registrable Securities then outstanding
        held by each Holder requesting registration (including the Initiating
        Holders); provided, however, that the number of shares of Registrable
        Securities to be included in such underwriting and registration shall
        not be reduced unless all other securities of the Company are first
        entirely excluded from the underwriting and registration. Any
        Registrable Securities excluded and withdrawn from such underwriting
        shall be withdrawn from the registration.

            (c) Maximum Number of Demand Registrations. The Company is obligated
        to effect only two (2) such registrations pursuant to this Section 2.2.

            (d) Deferral. Notwithstanding the foregoing, if the Company shall
        furnish to Holders requesting the filing of a registration statement
        pursuant to this Section 2.2, a certificate signed by the President or
        Chief Executive Officer of the Company stating that in the good faith
        judgment of the Board of Directors of the Company, it would be seriously
        detrimental to the Company and its stockholders for such registration
        statement to be filed and it is therefore essential to defer the filing
        of such registration statement, then the Company shall have the right to
        defer such filing for a period of not more than one hundred twenty (120)
        days after receipt of the request of the Initiating Holders; provided,
        however, that the Company may not utilize this right more than once in
        any twelve (12) month period.

            (e) Expenses. All expenses incurred in connection with a
        registration pursuant to this Section 2.2, including without limitation
        all registration and qualification fees, printers' and accounting fees,
        fees and disbursements of counsel for the Company, and the reasonable
        fees and disbursements of one counsel for the selling Holders (but
        excluding underwriters' discounts and commissions), shall be borne by
        the Company. Each Holder participating in a registration pursuant to
        this Section 2.2 shall bear such Holder's proportionate share (based on
        the total number of shares sold in such registration other than for the
        account of the Company) of all discounts, commissions or other amounts
        payable to underwriters or brokers in connection with such offering.
        Notwithstanding the foregoing, the Company shall not be required to pay
        for any expenses of any registration proceeding

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        begun pursuant to this Section 2.2 if the registration request is
        subsequently withdrawn at the request of the Holders of a majority of
        the Registrable Securities to be registered, unless the Holders of a
        majority of the Registrable Securities then outstanding agree to forfeit
        their right to one (1) demand registration pursuant to this Section 2.2
        (in which case such right shall be forfeited by all Holders of
        Registrable Securities); provided, further, however, that if at the time
        of such withdrawal, the Holders have learned of a material adverse
        change in the condition, business, or prospects of the Company not known
        to the Holders at the time of their request for such registration and
        have withdrawn their request for registration with reasonable promptness
        after learning of such material adverse change, then the Holders shall
        not be required to pay any of such expenses and shall retain their
        rights pursuant to this Section 2.2.

        2.3 Piggyback Registrations. The Company shall notify all Holders of
     Registrable Securities in writing at least thirty (30) days prior to filing
     any registration statement under the Securities Act for purposes of
     effecting a public offering of securities of the Company (including, but
     not limited to, registration statements relating to secondary offerings of
     securities of the Company, but excluding registration statements relating
     to any registration under Section 2.2 or Section 2.4 of this Agreement or
     to any employee benefit plan or a corporate reorganization) and will afford
     each such Holder an opportunity to include in such registration statement
     all or any part of the Registrable Securities then held by such Holder.
     Each Holder desiring to include in any such registration statement all or
     any part of the Registrable Securities held by such Holder shall, within
     twenty (20) days after receipt of the above-described notice from the
     Company, so notify the Company in writing, and in such notice shall inform
     the Company of the number of Registrable Securities such Holder wishes to
     include in such registration statement. If a Holder decides not to include
     all of its Registrable Securities in any registration statement thereafter
     filed by the Company, such Holder shall nevertheless continue to have the
     right to include any Registrable Securities in any subsequent registration
     statement or registration statements as may be filed by the Company with
     respect to offerings of its securities, all upon the terms and conditions
     set forth herein.

            (a) Underwriting. If a registration statement under which the
        Company gives notice under this Section 2.3 is for an underwritten
        offering, then the Company shall so advise the Holders of Registrable
        Securities. In such event, the right of any such Holder's Registrable
        Securities to be included in a registration pursuant to this Section 2.3
        shall be conditioned upon such Holder's participation in such
        underwriting and the inclusion of such Holder's Registrable Securities
        in the underwriting to the extent provided herein. All Holders proposing
        to distribute their Registrable Securities through such underwriting
        shall enter into an underwriting agreement in customary form with the
        managing underwriter or underwriter(s) selected for such underwriting.
        Notwithstanding any other provision of this Agreement, if the managing
        underwriter determine(s) in good faith that marketing factors require a
        limitation of the number of shares to be underwritten, then the managing
        underwriter(s) may exclude shares (including Registrable Securities)
        from the registration and the underwriting, and the number of shares
        that may be included in the registration and the underwriting shall be
        allocated, first, to stockholders exercising any demand registration
        rights, second to the Company, and third, to each of the Holders
        requesting inclusion of their Registrable Securities in such
        registration statement on a pro rata basis based on the total number of
        Registrable Securities then held by each such Holder; provided however,
        that the right of the underwriters to exclude shares (including
        Registrable Securities) from the registration and underwriting as
        described above shall be restricted so that: (i) the number of
        Registrable Securities included in any such registration is not reduced
        below twenty-five percent (25%) of the shares included in the
        registration, except for a registration relating to the Company's
        initial public offering or an offering solely by stockholders of the
        Company exercising demand registration rights, from which all
        Registrable Securities may be excluded, and (ii) all shares that are not
        Registrable Securities and are held by persons who are employees or
        directors of the Company (or any subsidiary of the Company) shall first
        be excluded from such registration and underwriting before any
        Registrable Securities are so excluded. If any Holder disapproves of the
        terms of any such underwriting, such Holder may elect to withdraw
        therefrom by written notice to the Company and the underwriter,
        delivered at least twenty (20) days prior to the effective date of the
        registration statement. Any Registrable Securities excluded or withdrawn
        from such underwriting shall be excluded and withdrawn from the
        registration. For any Holder that is a partnership or corporation, the
        partners, retired partners and stockholders of such Holder, or the
        estates and family members of any such partners and retired partners and
        any trusts for the benefit of any of the foregoing persons shall be
        deemed to be a single "Holder," and any pro rata reduction with respect
        to such "Holder" shall be based upon the aggregate amount of shares
        carrying registration rights owned by all entities and individuals
        included in such "Holder," as defined in this sentence.

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            (b) Expenses. All expenses incurred in connection with a
        registration pursuant to this Section 2.3 (excluding underwriters' and
        brokers' discounts and commissions), including, without limitation all
        federal and "blue sky" registration and qualification fees, printers'
        and accounting fees, fees and disbursements of counsel for the Company
        and reasonable fees and disbursements of one counsel for the selling
        Holders shall be borne by the Company.

        2.4 Form S-3 Registration. In case the Company shall receive from any
     Holder or Holders of at least twenty-five percent (25%) of all Registrable
     Securities then outstanding a written request or requests that the Company
     effect a registration on Form S-3 and any related qualification or
     compliance with respect to all or a part of the Registrable Securities
     owned by such Holder or Holders, then the Company will:

            (a) Notice. Promptly give written notice of the proposed
        registration and the Holder's or Holders' request therefor, and any
        related qualification or compliance, to all other Holders of Registrable
        Securities; and

            (b) Registration. As soon as practicable, effect such registration
        and all such qualifications and compliances as may be so requested and
        as would permit or facilitate the sale and distribution of all or such
        portion of such Holder's or Holders' Registrable Securities as are
        specified in such request, together with all or such portion of the
        Registrable Securities of any other Holder or Holders joining in such
        request as are specified in a written request given within twenty (20)
        days after receipt of such written notice from the Company; provided,
        however, that the Company shall not be obligated to effect any such
        registration, qualification or compliance pursuant to this Section 2.4:

                (i) if Form S-3 is not available for such offering;

                (ii) if the Holders, together with the holders of any other
            securities of the Company entitled to inclusion in such
            registration, propose to sell Registrable Securities and such other
            securities (if any) at an aggregate price to the public of less than
            $1,000,000;

                (iii) if the Company shall furnish to the Holders a certificate
            signed by the President or Chief Executive Officer of the Company
            stating that in the good faith judgment of the Board of Directors of
            the Company, it would be seriously detrimental to the Company and
            its stockholders for such Form S-3 Registration to be effected at
            such time, in which event the Company shall have the right to defer
            the filing of the Form S-3 registration statement no more than once
            during any twelve month period for a period of not more than 120
            days after receipt of the request of the Holder or Holders under
            this Section 2.4;

                (iv) if the Company has, within the twelve (12) month period
            preceding the date of such request, already effected two (2)
            registrations on Form S-3 for the Holders pursuant to this Section
            2.4; or

                (v) in any particular jurisdiction in which the Company would be
            required to qualify to do business or to execute a general consent
            to service of process in effecting such registration, qualification
            or compliance.

            (c) Expenses. Subject to the foregoing, the Company shall file a
        Form S-3 registration statement covering the Registrable Securities and
        other securities so requested to be registered pursuant to this Section
        2.4 as soon as practicable after receipt of the request or requests of
        the Holders for such registration. The Company shall pay all expenses
        incurred in connection with each registration requested pursuant to this
        Section 2.4, (excluding underwriters' or brokers' discounts and
        commissions), including without limitation all filing, registration and
        qualification, printers' and accounting fees and the reasonable fees and
        disbursements of one counsel for the selling Holder or Holders and
        counsel for the Company.

            (d) Not Demand Registration. Form S-3 registrations shall not be
        deemed to be demand registrations as described in Section 2.2 above.

        2.5 Obligations of the Company. Whenever required to effect the
     registration of any Registrable Securities under this Agreement, the
     Company shall, as expeditiously as reasonably possible:

            (a) Prepare and file with the SEC a registration statement with
        respect to such Registrable Securities and use reasonable, diligent
        efforts to cause such registration statement to become effective, and,
        upon the request of the Holders of a majority of the Registrable
        Securities registered thereunder, keep such registration statement
        effective for up to ninety (90) days.

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            (b) Prepare and file with the SEC such amendments and supplements to
        such registration statement and the prospectus used in connection with
        such registration statement as may be necessary to comply with the
        provisions of the Securities Act with respect to the disposition of all
        securities covered by such registration statement.

            (c) Furnish to the Holders such number of copies of a prospectus,
        including a preliminary prospectus, in conformity with the requirements
        of the Securities Act, and such other documents as they may reasonably
        request in order to facilitate the disposition of the Registrable
        Securities owned by them that are included in such registration.

            (d) Use reasonable, diligent efforts to register and qualify the
        securities covered by such registration statement under such other
        securities or Blue Sky laws of such jurisdictions as shall be reasonably
        requested by the Holders, provided that the Company shall not be
        required in connection therewith or as a condition thereto to qualify to
        do business or to file a general consent to service of process in any
        such states or jurisdictions.

            (e) In the event of any underwritten public offering, enter into and
        perform its obligations under an underwriting agreement, in usual and
        customary form, with the managing underwriter(s) of such offering. Each
        Holder participating in such underwriting shall also enter into and
        perform its obligations under such an agreement.

            (f) Notify each Holder of Registrable Securities covered by such
        registration statement at any time when a prospectus relating thereto is
        required to be delivered under the Securities Act of the happening of
        any event as a result of which the prospectus included in such
        registration statement, as then in effect, includes an untrue statement
        of a material fact or omits to state a material fact required to be
        stated therein or necessary to make the statements therein not
        misleading in the light of the circumstances then existing.

            (g) Furnish, at the request of any Holder requesting registration of
        Registrable Securities, on the date that such Registrable Securities are
        delivered to the underwriters for sale, if such securities are being
        sold through underwriters, or, if such securities are not being sold
        through underwriters, on the date that the registration statement with
        respect to such securities becomes effective, (i) an opinion, dated as
        of such date, of the counsel representing the Company for the purposes
        of such registration, in form and substance as is customarily given to
        underwriters in an underwritten public offering and reasonably
        satisfactory to a majority in interest of the Holders requesting
        registration, addressed to the underwriters, if any, and to the Holders
        requesting registration of Registrable Securities and (ii) a "comfort"
        letter dated as of such date, from the independent certified public
        accountants of the Company, in form and substance as is customarily
        given by independent certified public accountants to underwriters in an
        underwritten public offering and reasonably satisfactory to a majority
        in interest of the Holders requesting registration, addressed to the
        underwriters, if any, and to the Holders requesting registration of
        Registrable Securities.

        2.6 Furnish Information. It shall be a condition precedent to the
     obligations of the Company to take any action pursuant to Sections 2.2, 2.3
     or 2.4 that the selling Holders shall furnish to the Company such
     information regarding themselves, the Registrable Securities held by them,
     and the intended method of disposition of such securities as shall be
     required to timely effect the registration of their Registrable Securities.

        2.7 Delay of Registration. No Holder shall have any right to obtain or
     seek an injunction restraining or otherwise delaying any such registration
     as the result of any controversy that might arise with respect to the
     interpretation or implementation of this Section 2.

        2.8 Indemnification. In the event any Registrable Securities are
     included in a registration statement under Sections 2.2, 2.3 or 2.4:

            (a) By the Company. To the extent permitted by law, the Company will
        indemnify and hold harmless each Holder, the partners, officers and
        directors of each Holder, any underwriter (as defined in the Securities
        Act) for such Holder and each person, if any, who controls such Holder
        or underwriter within the meaning of the Securities Act or the
        Securities Exchange Act of 1934, as amended, (the "1934 ACT"), against
        any losses, claims, damages, or liabilities (joint or several) to which
        they may become subject under the Securities Act, the l934 Act or other
        federal or state law, insofar as such losses, claims, damages, or
        liabilities (or actions in respect thereof) arise out of or are based
        upon any of the following statements, omissions or violations
        (collectively, "VIOLATIONS" and, individually, a "VIOLATION"):

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                (i) any untrue statement or alleged untrue statement of a
            material fact contained in such registration statement, including
            any preliminary prospectus or final prospectus contained therein or
            any amendments or supplements thereto;

                (ii) the omission or alleged omission to state therein a
            material fact required to be stated therein, or necessary to make
            the statements therein not misleading, or

                (iii) any violation or alleged violation by the Company of the
            Securities Act, the 1934 Act, any federal or state securities law or
            any rule or regulation promulgated under the Securities Act, the
            1934 Act or any federal or state securities law in connection with
            the offering covered by such registration statement; and the Company
            will reimburse each such Holder, partner, officer or director,
            underwriter or controlling person for any legal or other expenses
            reasonably incurred by them, as incurred, in connection with
            investigating or defending any such loss, claim, damage, liability
            or action; provided however, that the indemnity agreement contained
            in this subsection 2.8(a) shall not apply to amounts paid in
            settlement of any such loss, claim, damage, liability or action if
            such settlement is effected without the consent of the Company
            (which consent shall not be unreasonably withheld), nor shall the
            Company be liable in any such case for any such loss, claim, damage,
            liability or action to the extent that it arises out of or is based
            upon a Violation which occurs in reliance upon and in conformity
            with written information furnished expressly for use in connection
            with such registration by such Holder, partner, officer, director,
            underwriter or controlling person of such Holder.

            (b) By Selling Holders. To the extent permitted by law, each selling
        Holder will indemnify and hold harmless the Company, each of its
        directors, each of its officers who have signed the registration
        statement, each person, if any, who controls the Company within the
        meaning of the Securities Act, any underwriter and any other Holder
        selling securities under such registration statement or any of such
        other Holder's partners, directors or officers or any person who
        controls such Holder within the meaning of the Securities Act or the
        1934 Act, against any losses, claims, damages or liabilities (joint or
        several) to which the Company or any such director, officer, controlling
        person, underwriter or other such Holder, partner or director, officer
        or controlling person of such other Holder may become subject under the
        Securities Act, the 1934 Act or other federal or state law, insofar as
        such losses, claims, damages or liabilities (or actions in respect
        thereto) arise out of or are based upon any Violation, in each case to
        the extent (and only to the extent) that such Violation occurs in
        reliance upon and in conformity with written information furnished by
        such Holder expressly for use in connection with such registration; and
        each such Holder will reimburse any legal or other expenses reasonably
        incurred by the Company or any such director, officer, controlling
        person, underwriter or other Holder, partner, officer, director or
        controlling person of such other Holder in connection with investigating
        or defending any such loss, claim, damage, liability or action;
        provided, however, that the indemnity agreement contained in this
        subsection 2.8(b) shall not apply to amounts paid in settlement of any
        such loss, claim, damage, liability or action if such settlement is
        effected without the consent of the Holder, which consent shall not be
        unreasonably withheld; and provided further, that the total amounts
        payable in indemnity by a Holder under this Section 2.8(b) in respect of
        any Violation shall not exceed the net proceeds received by such Holder
        in the registered offering out of which such Violation arises.

            (c) Notice. Promptly after receipt by an indemnified party under
        this Section 2.8 of notice of the commencement of any action (including
        any governmental action), such indemnified party will, if a claim in
        respect thereof is to be made against any indemnifying party under this
        Section 2.8, deliver to the indemnifying party a written notice of the
        commencement thereof and the indemnifying party shall have the right to
        participate in, and, to the extent the indemnifying party so desires,
        jointly with any other indemnifying party similarly noticed, to assume
        the defense thereof with counsel mutually satisfactory to the parties;
        provided, however, that an indemnified party shall have the right to
        retain its own counsel, with the fees and expenses to be paid by the
        indemnifying party, if representation of such indemnified party by the
        counsel retained by the indemnifying party would be inappropriate due to
        actual or potential conflict of interests between such indemnified party
        and any other party represented by such counsel in such proceeding. The
        failure to deliver written notice to the indemnifying party within a
        reasonable time of the commencement of any such action, if prejudicial
        to its ability to defend such action, shall relieve such indemnifying
        party of any liability to the indemnified party under this Section 2.8,
        but the omission so to deliver written notice to the indemnifying party
        will not relieve it of any liability that it may have to any indemnified
        party otherwise than under this Section 2.8.

                                  CONFIDENTIAL                      Page 7 of 14

<PAGE>   8

             (d) Defect Eliminated in Final Prospectus. The foregoing indemnity
        agreements of the Company and Holders are subject to the condition that,
        insofar as they relate to any Violation made in a preliminary prospectus
        but eliminated or remedied in the amended prospectus on file with the
        SEC at the time the registration statement in question becomes effective
        or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b)
        (the "FINAL PROSPECTUS"), such indemnity agreement shall not inure to
        the benefit of any person if a copy of the Final Prospectus was
        furnished to the indemnified party and was not furnished to the person
        asserting the loss, liability, claim or damage at or prior to the time
        such action is required by the Securities Act.

             (e) Contribution. In order to provide for just and equitable
        contribution to joint liability under the Securities Act in any case in
        which either (i) any Holder exercising rights under this Agreement, or
        any controlling person of any such Holder, makes a claim for
        indemnification pursuant to this Section 2.8 but it is judicially
        determined (by the entry of a final judgment or decree by a court of
        competent jurisdiction and the expiration of time to appeal or the
        denial of the last right of appeal) that such indemnification may not be
        enforced in such case notwithstanding the fact that this Section 2.8
        provides for indemnification in such case, or (ii) contribution under
        the Securities Act may be required on the part of any such selling
        Holder or any such controlling person in circumstances for which
        indemnification is provided under this Section 2.8; then, and in each
        such case, the Company and such Holder will contribute to the aggregate
        losses, claims, damages or liabilities to which they may be subject
        (after contribution from others) in such proportion so that such Holder
        is responsible for the portion represented by the percentage that the
        public offering price of its Registrable Securities offered by and sold
        under the registration statement bears to the public offering price of
        all securities offered by and sold under such registration statement,
        and the Company and other selling Holders are responsible for the
        remaining portion; provided, however, that, in any such case, (A) no
        such Holder will be required to contribute any amount in excess of the
        public offering price of all such Registrable Securities offered and
        sold by such Holder pursuant to such registration statement; and (B) no
        person or entity guilty of fraudulent misrepresentation (within the
        meaning of Section 11(f) of the Securities Act) will be entitled to
        contribution from any person or entity who was not guilty of such
        fraudulent misrepresentation.

             (f) Survival. The obligations of the Company and Holders under this
        Section 2.8 shall survive the completion of any offering of Registrable
        Securities in a registration statement, and otherwise.

        2.9 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
     shall not, to the extent requested by the Company or an underwriter of
     securities of the Company, sell or otherwise transfer or dispose of any
     Registrable Securities or other shares of stock of the Company then owned
     by such Holder (other than to donees or partners of the Holder who agree to
     be similarly bound) for up to one hundred eighty (180) days following the
     effective date of a registration statement of the Company filed under the
     Securities Act; provided, however, that:

             (a) such agreement shall be applicable only to the first such
        registration statement of the Company which covers securities to be sold
        on its behalf to the public in an underwritten offering but not to
        Registrable Securities sold pursuant to such registration statement; and

             (b) all officers and directors of the Company then holding Common
        Stock of the Company enter into similar agreements.

        In order to enforce the foregoing covenant, the Company shall have the
     right to place restrictive legends on the certificates representing the
     shares subject to this Section and to impose stop transfer instructions
     with respect to the Registrable Securities and such other shares of stock
     of each Holder (and the shares or securities of every other person subject
     to the foregoing restriction) until the end of such period.

        2.10 Rule 144 Reporting. With a view to making available the benefits of
     certain rules and regulations of the Commission which may at any time
     permit the sale of the Registrable Securities to the public without
     registration, after such time as a public market exists for the Common
     Stock of the Company, the Company agrees to:

             (a) Make and keep public information available, as those terms are
        understood and defined in Rule 144 under the Securities Act, at all
        times after the effective date of the first registration under the
        Securities Act filed by the Company for an offering of its securities to
        the general public;

             (b) Use reasonable, diligent efforts to file with the Commission in
        a timely manner all reports and other documents required of the Company
        under the Securities Act and the 1934 Act (at any time after it has
        become subject to such reporting requirements); and

                                  CONFIDENTIAL                      Page 8 of 14

<PAGE>   9

             (c) So long as a Holder owns any Registrable Securities, to furnish
        to the Holder forthwith upon request a written statement by the Company
        as to its compliance with the reporting requirements of said Rule 144
        (at any time after ninety (90) days after the effective date of the
        first registration statement filed by the Company for an offering of its
        securities to the general public), and of the Securities Act and the
        1934 Act (at any time after it has become subject to the reporting
        requirements of the 1934 Act), a copy of the most recent annual or
        quarterly report of the Company, and such other reports and documents of
        the Company as a Holder may reasonably request in availing itself of any
        rule or regulation of the Commission allowing a Holder to sell any such
        securities without registration (at any time after the Company has
        become subject to the reporting requirements of the 1934 Act).

        2.11 Termination of the Company's Obligations. The Company shall have no
     obligations pursuant to Sections 2.2 through 2.4 with respect to any
     request or requests for registration made by any Holder on a date more than
     five (5) years after the closing date of the Company's initial public
     offering. Notwithstanding anything to the contrary contained in Section 2.2
     or 2.4, if any Holder is eligible to sell Registrable Securities pursuant
     Rule 144(k) or any successor provision under the Securities Act (an
     "Excluded Holder"), the Registrable Securities of such Excluded Holder
     shall be disregarded in determining the requisite percentage of Registrable
     Securities that are required to initiate a registration pursuant to Section
     2.2 or 2.4 (i.e., a registration under Section 2.2 must be initiated by
     persons holding at least two-thirds of the Registrable Securities held by
     all Holders who are not Excluded Holders and a registration under Section
     2.4 must be initiated by persons holding at least 25% of the Registrable
     Securities held by all Holders who are not Excluded Holders). After a
     registration has been requested pursuant to Section 2.2 or 2.4, as the case
     may be, by the requisite percentage of shares held by Holders who are not
     Excluded Holders, all Holders (including Excluded Holders) shall be
     entitled to include their Registrable Securities in such registration
     subject to the terms and conditions of this Agreement.

        2.12 Limitations on Subsequent Registration Rights. From and after the
     date of this Agreement, the Company shall not, without the prior written
     consent of the Holders of a majority of the Registrable Securities then
     outstanding, enter into any agreement with any holder or prospective holder
     of any securities of the Company which would allow such holder or
     prospective holder (a) to include such securities in any registration filed
     under Section 2.2 hereof, unless under the terms of such agreement, such
     holder or prospective holder may include such securities in any such
     registration only to the extent that the inclusion of his securities will
     not reduce the amount of the Registrable Securities of the Holders which is
     included, or (b) to make a demand registration which could result in such
     registration statement being declared effective prior to the earlier of
     either of the dates set forth in subsection 2.2(a), or within one hundred
     twenty (120) days of the effective date of any registration effected
     pursuant to Section 2.2.

     3. PRE-EMPTIVE RIGHTS.

        3.1 General. Each Holder (as defined in Section 2.1(d)) and any party to
     whom such Holder's rights under this Section 3 have been duly assigned in
     accordance with Section 4.1(b) (each such Holder or assignee being
     hereinafter referred to as a "RIGHTS HOLDER") has the right of first
     refusal to purchase such Rights Holder's Pro Rata Share (as defined below),
     of all (or any part) of any "New Securities" (as defined in Section 3.2)
     that the Company may from time to time issue after the date of this
     Agreement. A Rights Holder's "PRO RATA SHARE" for purposes of this right of
     first refusal is the ratio of (a) the number of Registrable Securities as
     to which such Rights Holder is the Holder (and/or is deemed to be the
     Holder under Section 2.1(d)), to (b) a number of shares of Common Stock of
     the Company equal to the sum of (i) the total number of shares of Common
     Stock of the Company then outstanding plus (ii) the total number of shares
     of Common Stock of the Company into which all then outstanding shares of
     Preferred Stock of the Company are then convertible.

        3.2 New Securities. "NEW SECURITIES" shall mean any Common Stock or
     Preferred Stock of the Company, whether now authorized or not, and rights,
     options or warrants to purchase such Common Stock or Preferred Stock, and
     securities of any type whatsoever that are, or may become, convertible or
     exchangeable into such Common Stock or Preferred Stock; provided, however,
     that the term "New Securities" does not include:

             (a) up to 5,000,000 shares of the Company's Common Stock (and/or
        options or warrants therefor) issued to employees, officers, directors,
        contractors, advisors or consultants of the Company pursuant to
        incentive agreements or plans approved by the Board of Directors of the
        Company;

             (b) any shares of Series A Stock, Series B Preferred Stock or
        Series C Preferred Stock set forth in Exhibit A hereto (the "ISSUED
        PREFERRED STOCK");

             (c) any securities issuable upon conversion of or with respect to
        any then outstanding shares of Series A Stock, Series B Stock or Series
        C Stock of the Company or Common Stock or other securities issuable upon
        conversion thereof;

                                  CONFIDENTIAL                      Page 9 of 14

<PAGE>   10

             (d) any securities issuable upon exercise of any options, warrants
        or rights to purchase any securities of the Company outstanding on the
        date of this Agreement ("WARRANT SECURITIES") and any securities
        issuable upon the conversion of any Warrant Securities or upon the
        exercise or conversion of any securities, if such securities were first
        offered to the Rights Holders hereunder;

             (e) shares of the Company's Common Stock or Preferred Stock issued
        in connection with any stock split or stock dividend;

             (f) securities offered by the Company to the public pursuant to a
        registration statement filed under the Securities Act;

             (g) up to 125,000 shares of the Company's Common Stock or Preferred
        Stock (and/or options or warrants therefor) issued or issuable to
        parties providing the Company with equipment leases, real property
        leases, loans, credit lines, guaranties of indebtedness, cash price
        reductions or similar financing such number of shares being subject to
        proportional adjustment to reflect subdivisions, combinations and stock
        dividends affecting the number of outstanding shares of such stock; or

             (h) securities issued pursuant to the acquisition of another
        corporation or entity by the Company by consolidation, merger, purchase
        of all or substantially all of the assets, or other reorganization in
        which the Company acquires, in a single transaction or series of related
        transactions, all or substantially all of the assets of such other
        corporation or entity or fifty percent (50%) or more of the voting power
        of such other corporation or entity or fifty percent (50%) or more of
        the equity ownership of such other entity.

        3.3 Procedures. In the event that the Company proposes to undertake an
     issuance of New Securities, it shall give to each Rights Holder written
     notice of its intention to issue New Securities (the "NOTICE"), describing
     the type of New Securities and the price and the general terms upon which
     the Company proposes to issue such New Securities. Each Rights Holder shall
     have ten (10) days from the date of mailing of any such Notice to agree in
     writing to purchase such Rights Holder's Pro Rata Share of such New
     Securities for the price and upon the general terms specified in the Notice
     by giving written notice to the Company and stating therein the quantity of
     New Securities to be purchased (not to exceed such Rights Holder's Pro Rata
     Share). If any Rights Holder fails to so agree in writing within such ten
     (10) day period to purchase such Rights Holder's full Pro Rata Share of an
     offering of New Securities (a "NONPURCHASING HOLDER"), then such
     Nonpurchasing Holder shall forfeit the right hereunder to purchase that
     part of his Pro Rata Share of such New Securities that he did not so agree
     to purchase and the Company shall promptly give each Rights Holder who has
     timely agreed to purchase his full Pro Rata Share of such offering of New
     Securities (a "PURCHASING HOLDER") written notice of the failure of any
     Nonpurchasing Holder to purchase such Nonpurchasing Rights Holder's full
     Pro Rata Share of such offering of New Securities (the "OVERALLOTMENT
     NOTICE"). Each Purchasing Holder shall have a right of overallotment such
     that such Purchasing Holder may agree to purchase a portion of the
     Nonpurchasing Holders' unpurchased Pro Rata Shares of such offering on a
     pro rata basis according to the relative Pro Rata Shares of the Purchasing
     Rights Holders, at any time within five (5) days after receiving the
     Overallotment Notice.

        3.4 Failure to Exercise. In the event that the Rights Holders fail to
     exercise in full the right of first refusal within such ten (10) plus five
     (5) day period, then the Company shall have 120 days thereafter to sell the
     New Securities with respect to which the Rights Holders' rights of first
     refusal hereunder were not exercised, at a price and upon general terms not
     materially more favorable to the purchasers thereof than specified in the
     Company's Notice to the Rights Holders. In the event that the Company has
     not issued and sold the New Securities within such 120-day period, then the
     Company shall not thereafter issue or sell any New Securities without again
     first offering such New Securities to the Rights Holders pursuant to this
     Section 3.

        3.5 Termination. This right of first refusal shall terminate (a)
     immediately before the closing of the first underwritten sale of Common
     Stock of the Company to the public pursuant to a registration statement
     filed with, and declared effective by, the SEC under the Securities Act,
     covering the offer and sale of Common Stock to the public at an offering
     price of at least $2.20 per share (such offering price being subject to
     proportional adjustment to reflect subdivisions, combinations, stock
     dividends and similar transactions affecting the number of outstanding
     shares of Common Stock) for an aggregate gross public offering price
     (calculated before deduction of underwriters' discounts and commissions) of
     at least $15,000,000 or (b) upon (i) the acquisition of all or
     substantially all the assets of the Company or (ii) an acquisition of the
     Company by another corporation or

                                  CONFIDENTIAL                     Page 10 of 14

<PAGE>   11

     entity by consolidation, merger or other reorganization in which the
     holders of the Company's outstanding voting stock immediately prior to such
     transaction own, immediately after such transaction, securities
     representing less than fifty percent (50%) or more of the voting power of
     the corporation or other entity surviving such transaction.

        3.6 Waiver. Each Rights Holder hereby confirms its waiver of any right
     of first refusal it may have had to purchase such Rights Holder's Pro Rata
     Share of the Issued Preferred Stock.

     4. ASSIGNMENT AND AMENDMENT.

        4.1 Assignment. Notwithstanding anything herein to the contrary:

             (a) Information Rights. The rights of an Investor under Section 1.1
        or 1.2 or 1.4 hereof may be assigned only to (i) a party who acquires
        from an Investor (or an Investor's permitted assigns) at least 500,000
        shares of Series A Stock, Series B Stock or Series C Stock subject to
        this Agreement and/or 250,000 shares (on an as-converted basis) of
        Registrable Securities issued upon conversion thereof or (ii) a partner,
        member or stockholder of an Investor who acquires at least 100,000
        shares of Series A Stock, Series B Stock, or Series C Stock subject to
        this Agreement and/or 50,000 shares (on an as-converted basis) of
        Registrable Securities issued upon conversion.

             (b) Registration Rights; Refusal Rights. The registration rights of
        a Holder under Section 2 hereof and the rights of first refusal of a
        Rights Holder under Section 3 hereof may be assigned only to (i) a party
        who acquires at least 500,000 shares of Series A Stock, Series B Stock
        or Series C Stock subject to this Agreement and/or 250,000 shares (on an
        as-converted basis) of Registrable Securities issued upon conversion
        thereof or (ii) any partner, member or shareholder of an Investor or
        permitted transferee thereof; provided, however that no party may be
        assigned any of the foregoing rights unless the Company is given written
        notice by the assigning party at the time of such assignment stating the
        name and address of the assignee and identifying the securities of the
        Company as to which the rights in question are being assigned; and
        provided further that any such assignee shall receive such assigned
        rights subject to all the terms and conditions of this Agreement,
        including without limitation the provisions of this Section 4.

        4.2 Amendment of Rights. Any provision of this Agreement may be amended
     and the observance thereof may be waived (either generally or in a
     particular instance and either retroactively or prospectively), only with
     the written consent of the Company and Investors (and/or any of their
     permitted successors or assigns) holding shares of Series A Stock, Series B
     Stock, Series C Stock and/or Conversion Stock representing and/or
     convertible into a majority of all the Investors' Shares (as defined
     below). As used herein, the term "INVESTORS' SHARES" shall mean the shares
     of Common Stock then issuable upon conversion of all then outstanding
     shares of Series A Stock, Series B Stock and Series C Stock subject to this
     Agreement plus all then outstanding shares of Conversion Stock that were
     issued upon the conversion of any shares of Series A Stock, Series B Stock
     or Series C Stock subject to this Agreement. Any amendment or waiver
     effected in accordance with this Section 4.2 shall be binding upon each
     Investor, each Holder, each permitted successor or assignee of such
     Investor or Holder and the Company.

     5. GENERAL PROVISIONS.

        5.1 Notices. Any notice, request or other communication required or
     permitted hereunder shall be in writing and shall be deemed to have been
     duly given if personally delivered or if deposited in the U.S. mail by
     registered or certified mail, return receipt requested, postage prepaid, as
     follows:

            (a) if to the Investors, at the addresses set forth on Exhibit A.

            (b) if to the Company, at 1951 S. Fordham Street, Longmont, Colorado
                90503.

        Any party hereto (and such party's permitted assigns) may by notice so
     given change its address for future notices hereunder. Notice shall
     conclusively be deemed to have been given when personally delivered or when
     deposited in the mail in the manner set forth above.

        5.2 Entire Agreement. This Agreement, together with all the Exhibits
     hereto, constitutes and contains the entire agreement and understanding of
     the parties with respect to the subject matter hereof and supersedes any
     and all prior negotiations, correspondence, agreements, understandings,
     duties or obligations between the parties respecting the subject matter
     hereof.

        5.3 Governing Law. This Agreement shall be governed by and construed
     exclusively in accordance with the internal laws of the State of Colorado
     as applied to agreements among Colorado residents entered into and to be
     performed entirely within Colorado, excluding that body of law relating to
     conflict of laws and choice of law.

                                  CONFIDENTIAL                     Page 11 of 14

<PAGE>   12

        5.4 Severability. If one or more provisions of this Agreement are held
     to be unenforceable under applicable law, then such provision(s) shall be
     excluded from this Agreement and the balance of this Agreement shall be
     interpreted as if such provision(s) were so excluded and shall be
     enforceable in accordance with its terms.

        5.5 Third Parties. Nothing in this Agreement, express or implied, is
     intended to confer upon any person, other than the parties hereto and their
     successors and assigns, any rights or remedies under or by reason of this
     Agreement.

        5.6 Successors And Assigns. Subject to the provisions of Section 4.1,
     the provisions of this Agreement shall inure to the benefit of, and shall
     be binding upon, the successors and permitted assigns of the parties
     hereto.

        5.7 Captions. The captions to sections of this Agreement have been
     inserted for identification and reference purposes only and shall not be
     used to construe or interpret this Agreement.

        5.8 Counterparts. This Agreement may be executed in counterparts, each
     of which shall be deemed an original, but all of which together shall
     constitute one and the same instrument.

        5.9 Costs And Attorneys' Fees. In the event that any action, suit or
     other proceeding is instituted concerning or arising out of this Agreement
     or any transaction contemplated hereunder, the prevailing party shall
     recover all of such party's costs and attorneys' fees incurred in each such
     action, suit or other proceeding, including any and all appeals or
     petitions therefrom.

        5.10 Adjustments for Stock Splits, Etc. Wherever in this Agreement there
     is a reference to a specific number of shares of Common Stock or Preferred
     Stock of the Company of any class or series, then, upon the occurrence of
     any subdivision, combination or stock dividend of such class or series of
     stock, the specific number of shares so referenced in this Agreement shall
     automatically be proportionally adjusted to reflect the affect on the
     outstanding shares of such class or series of stock by such subdivision,
     combination or stock dividend.

        5.11 Aggregation of Stock. All shares held or acquired by affiliated
     entities or persons shall be aggregated together for the purpose of
     determining the availability of any rights under this Agreement.

        5.12 Arbitration Any disputes between the Company and the Investors with
     respect to this Agreement shall be settled by binding, final arbitration in
     accordance with the commercial arbitration rules of the American
     Arbitration Association then in effect (the "AAA Rules"). Any arbitration
     proceeding shall be conducted in Denver, CO. The following arbitration
     provisions shall govern over any conflicting rules which may now or
     hereafter be contained in the AAA Rules. Any judgment upon the award
     rendered by the arbitrator may be entered in any court having jurisdiction
     over the subject matter thereof. The arbitrator shall have the authority to
     grant any equitable and legal remedies that would be available.

             (a) Any such arbitration shall be conducted before a single
        arbitrator who shall be compensated for his or her services at a rate to
        be determined by the parties or by the American Arbitration Association,
        but based upon reasonable hourly or daily consulting rates for the
        arbitrator in the event the parties are not able to agree upon his or
        her rate of compensation.

             (b) The AAA Rules for the selection of the arbitrator shall be
        followed.

             (c) Each party to such arbitration shall each advance an equal
        portion of the initial compensation to be paid to the arbitrator in any
        such arbitration and an equal portion of the costs of transcripts and
        other normal and regular expenses of the arbitration proceedings;
        provided, however, that the arbitrator shall have the discretion to
        grant to the prevailing party in any arbitration an award of attorneys'
        fees and costs, and all costs of arbitration.

             (d) The parties shall be entitled to conduct discovery proceedings
        in accordance with the provisions of the Federal Rules of Civil
        Procedure, subject to any limitation imposed by the arbitrator.

             (e) For any claim submitted to arbitration, the burden of proof
        shall be as it would be if the claim were litigated in a judicial
        proceedings.

             (f) Upon the conclusion of any arbitration proceeding hereunder,
        the arbitrator shall render findings of fact and conclusions of law and
        a written opinion setting forth the basis and reasons for any decision
        reached by him or her and shall deliver such documents to each party to
        this Agreement along with a signed copy of the award.

                                  CONFIDENTIAL                     Page 12 of 14

<PAGE>   13

             (g) The arbitrator chosen in accordance with these provisions shall
        not have the power to alter, amend or otherwise affect the terms of
        these arbitration provisions or the provisions of this Agreement.

             (h) The parties acknowledge that, except as specifically provided
        in this Agreement, no other action need be taken by either party before
        proceeding directly in accordance with the provisions of this Section.

             (i) The arbitration provisions set forth in this Section 5.12 are
        intended by the parties to be exclusive for all purposes and applicable
        to each and every controversy, dispute and/or claim in any manner
        arising out of or relating to this Agreement, the meaning, application
        and/or interpretation of this Agreement, any breach hereof and/or any
        voluntary or involuntary termination of this Agreement with or without
        cause, including, without limitation, any such controversy, dispute
        and/or claim which, if pursued through any state or federal court or
        administrative agency, would arise at law, in equity and/or pursuant to
        statutory, regulatory and/or common law rules, regardless of whether any
        such dispute, controversy and/or claim would arise in and/or from
        contract, tort or any other legal and/or equitable theory or basis. The
        prevailing party in any action instituted pursuant to this Section
        5.13(i), or in any appeal from any arbitration conducted pursuant to
        this Section 5.13, shall be entitled to recover from the other party its
        reasonable attorneys' fees and other expenses incurred in such
        litigation.

        5.13 Effectiveness; Termination of the Original Agreement This Agreement
     shall become effective upon its execution by (a) holders of at least a
     majority of the Registrable Securities as defined in the Second Amended
     Agreement, (b) the Company and (c) the New Investors. Upon effectiveness of
     this Agreement, the First Amended Agreement and the Second Amended
     Agreement shall be terminated and shall be of no further force or effect.

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

                                       THE COMPANY:

                                       CHAPARRAL NETWORK STORAGE, INC.,
                                       a Delaware corporation

                                       /s/ Gary L. Allison
                                       -----------------------------------------
                                       Gary L. Allison, Chairman & CEO

                                       THE  INVESTORS:

                                       Adaptec, Inc.,
                                       a Delaware corporation

                                       By: /s/ Robert Kraiss
                                          --------------------------------------
                                          Name
                                          Title:

                                       /s/ Gary L. Allison
                                       -----------------------------------------
                                       Gary L. Allison

                                       /s/ William R. Childs
                                       -----------------------------------------
                                       William R. Childs

                                       /s/ Haim Brill
                                       -----------------------------------------
                                       Haim Brill

                                       /s/ F. Grant Saviers
                                       -----------------------------------------
                                       F. Grant Saviers

                                       /s/ Robert Graham
                                       -----------------------------------------
                                       Robert Graham

                                  CONFIDENTIAL                     Page 13 of 14

<PAGE>   14

                                       Harvest Storage Technology Partners LLC,
                                       a Delaware limited liability company

                                       By: /s/ Robert Harvey
                                          --------------------------------------
                                          Name   Robert Harvey
                                          Title: Manager

                                       Woodcarvers LLC,
                                       a Delaware limited liability company

                                       By: /s/ Robert Harvey
                                          --------------------------------------
                                          Name   Robert Harvey
                                          Title: Manager

                                       /s/ Sam Coleman
                                       -----------------------------------------
                                       Sam Coleman

                                       /s/ Frank Bigelow
                                       -----------------------------------------
                                       Frank Bigelow

                                       The Linde Company

                                       By: /s/ Ian Linde
                                          --------------------------------------
                                          Name   Ian Linde
                                          Title: Partner

                                       Ohio Valley Venture Fund L.P.
                                       OSF Ltd, its general partner

                                       By: /s/ Karl Elderkin
                                          --------------------------------------
                                       Name:Karl Elderkin
                                       Title: President

                                       -----------------------------------------
                                       Jeff Jensen

                                  CONFIDENTIAL                     Page 14 of 14<PAGE>   1
                                                                   EXHIBIT 10.10

                   FOURTH AMENDED INVESTORS' RIGHTS AGREEMENT

         This Fourth Amended Investors' Rights Agreement (this "AGREEMENT") is
made and entered into as of March 1, 2000, by and among Chaparral Network
Storage, Inc., a Delaware corporation (the "COMPANY"), and the individuals and
entities listed on Exhibit A attached hereto (the "INVESTORS").

         A. The Investors are party to that certain First Amended Investors'
Rights Agreement dated as of March 31, 1999 (the "FIRST AMENDED AGREEMENT") that
certain Second Amended Investors' Rights Agreement dated as of August 13, 1999
(the "SECOND AMENDED AGREEMENT") and that certain Third Amended Investors'
Rights Agreement dated as of October 16, 1999 (the "THIRD AMENDED AGREEMENT").

         B. The Investors desire to amend the Third Amended Agreement in certain
respects.

         NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:

         1. INFORMATION RIGHTS.

                  1.1 Financial Information. The Company covenants and agrees
         that, commencing on the date of this Agreement, for so long as any
         Investor holds shares of Series A Preferred Stock, Series B Preferred
         Stock or Series C Preferred Stock and/or shares of Common Stock of the
         Company ("COMMON Stock") issued upon the conversion of such shares of
         Series A Preferred Stock or Series B Preferred Stock or Series C
         Preferred Stock ("CONVERSION STOCK") the Company will:

                           (a) Annual Reports. Furnish to such Investor, as soon
                  as practicable and in any event within 120 days after the end
                  of each fiscal year of the Company, a consolidated Balance
                  Sheet as of the end of such fiscal year, a consolidated
                  Statement of Income and a consolidated Statement of Cash Flows
                  of the Company and its subsidiaries for such year, setting
                  forth in each case in comparative form the figures from the
                  Company's previous fiscal year (if any), all prepared in
                  accordance with generally accepted accounting principles and
                  practices and audited by an independent certified public
                  accounting firm; and

                           (b) Quarterly Reports. Furnish to such Investor as
                  soon as practicable, and in any case within forty-five (45)
                  days after the end of each fiscal quarter of the Company
                  (except the last quarter of the Company's fiscal year),
                  quarterly unaudited financial statements, including an
                  unaudited Balance Sheet, an unaudited Statement of Income and
                  an unaudited Statement of Cash Flows, together with a
                  comparison to the Company's operating plan and budget and
                  statements of the Chief Financial Officer of the Company
                  explaining any significant differences in the statements from
                  the Company's operating plan and budget for the period and
                  stating that such statements fairly present the consolidated
                  financial position and consolidated financial results of the
                  Company for the fiscal quarter covered.

                           Each Investor agrees to hold all information received
         pursuant to this Section in confidence, and not to use or disclose any
         of such information to any third party, except to the extent such
         information may be made publicly available by the Company.

                  1.2 Inspection Rights. The Company shall permit each Investor
         holding shares of Series A Preferred Stock, Series B Preferred Stock or
         Series C Preferred Stock and/or shares of Conversion Stock, or any
         combination thereof, at such Investor's expense, to visit and inspect
         the Company's properties, to examine its books of account and records
         and to discuss the Company's affairs, finances and accounts with its
         officers, all at such reasonable times as may be requested by such
         Investor. Each Investor agrees to hold all information received from
         such inspections in confidence, and not to use or disclose any of such
         information to any third party, except to the extent such information
         may be made publicly available by the Company.

                  1.3 Board Rights. The Company shall permit Adaptec to have one
         (1) representative attend all meetings of the Company's Board of
         Directors in a non-voting observer capacity and to receive any
         communications directed to members of the Board of Directors in their
         capacity as such. The Investors agree to hold all information received
         from such meetings in confidence, and not to use or disclose any of
         such information to any third party, except to the extent such
         information may be made publicly available by the Company.

                  1.4 Termination of Certain Rights. The Company's obligations
         under Sections 1.1, 1.2 and 1.3 above will terminate upon the closing
         of the Company's initial public offering of Common Stock pursuant to an
         effective registration statement filed under the U.S. Securities Act of
         1933, as amended (the "SECURITIES ACT"), in which the gross proceeds
         raised for the Company's account (calculated before deduction of
         underwriters'

                                  CONFIDENTIAL                      Page 1 of 14
<PAGE>   2

         discounts and omissions) exceeds $15,000,000 at a price greater than
         $2.20 per share of Common Stock (such price to be proportionally
         adjusted to reflect stock splits, stock dividends and the like).

                  2.       REGISTRATION RIGHTS.

                  2.1      Definitions.  For purposes of this Section 2:

                           (a) Registration. The terms "REGISTER,"
                  "REGISTRATION" and "REGISTERED" and refer to a registration
                  effected by preparing and filing a registration statement in
                  compliance with the Securities Act, and the declaration or
                  ordering of effectiveness of such registration statement.

                           (b) Registrable Securities. The term "REGISTRABLE
                  SECURITIES" means: (i) all the shares of Common Stock of the
                  Company issued or issuable upon the conversion of any shares
                  of Series A Preferred Stock, Series B Preferred Stock or
                  Series C Preferred Stock that are now owned or may hereafter
                  be acquired by the Investors or the Investors' permitted
                  successors and assigns and (ii) any shares of Common Stock of
                  the Company issued as (or issuable upon the conversion or
                  exercise of any warrant, right or other security which is
                  issued as) a dividend or other distribution with respect to,
                  or in exchange for or in replacement of, all such shares of
                  Common Stock described in clause (i) of this subsection (b);
                  excluding in all cases, however, any Registrable Securities
                  sold by a person in a transaction in which rights under this
                  Section 2 are not assigned in accordance with this Agreement
                  or any Registrable Securities sold to the public or sold
                  pursuant to Rule 144 promulgated under the Securities Act.

                           (c) Registrable Securities Then Outstanding. The
                  number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING"
                  shall mean the number of shares of Common Stock which are
                  Registrable Securities and (i) are then issued and outstanding
                  or (ii) are then issuable pursuant to the exercise or
                  conversion of then outstanding and then exercisable options,
                  warrants or convertible securities.

                           (d) Holder. For purposes of this Section 2 and
                  Sections 3 and 4 hereof, the term "HOLDER" means any person
                  owning of record Registrable Securities that have not been
                  sold to the public or pursuant to Rule 144 promulgated under
                  the Securities Act or any assignee of record of such
                  Registrable Securities to whom rights under such Sections have
                  been duly assigned in accordance with this Agreement;
                  provided, however, that for purposes of this Agreement, a
                  record holder of the Warrant or shares of Series A Stock,
                  Series B Stock or Series C Stock convertible into such
                  Registrable Securities shall be deemed to be the Holder of
                  such Registrable Securities; and provided, further, that the
                  Company shall in no event be obligated to register the Warrant
                  or shares of Series A Stock, Series B Stock, or Series C Stock
                  and that Holders of Registrable Securities will not be
                  required to convert the Warrant or their shares of Series A
                  Stock, Series B Stock or Series C Stock into Common Stock in
                  order to exercise the registration rights granted hereunder,
                  until immediately before the closing of the offering to which
                  the registration relates.

                           (e) Form S-3. The term "FORM S-3" means such form
                  under the Securities Act as is in effect on the date hereof or
                  any successor registration form under the Securities Act
                  subsequently adopted by the SEC which permits inclusion or
                  incorporation of substantial information by reference to other
                  documents filed by the Company with the SEC.

                           (f) SEC. The term "SEC" or "COMMISSION" means the
                  U.S. Securities and Exchange Commission.

                           (g) Series A Stock. The term "SERIES A STOCK" shall
                  mean the Company's Series A Preferred Stock, par value $0.001
                  per share.

                           (h) Series B Stock. The term "SERIES B STOCK" shall
                  mean the Company's Series B Preferred Stock, par value $0.001
                  per share.

                           (i) Series C Stock. The term "SERIES C STOCK" shall
                  mean the Company's Series C Preferred Stock, par value $0.001
                  per share.

                  2.2      Demand Registration.

                           (a) Request by Holders. If the Company shall receive
                  at any time after six (6) months after the effective date of
                  the Company's initial public offering of its securities
                  pursuant to a registration filed under the Securities Act, a
                  written request from the Holders of at least two-thirds of the
                  Registrable Securities then outstanding that the Company file
                  a registration statement under the Securities Act covering the
                  registration of Registrable Securities pursuant to this
                  Section 2.2, then the Company shall, within twenty (20) days
                  after the receipt of such written request, give written notice
                  of

                                  CONFIDENTIAL                      Page 2 of 14
<PAGE>   3

                  such request ("REQUEST NOTICE") to all Holders, and effect, as
                  soon as practicable, the registration under the Securities Act
                  of all Registrable Securities which Holders request to be
                  registered and included in such registration by written notice
                  given by such Holders to the Company within twenty (20) days
                  after receipt of the Request Notice, subject only to the
                  limitations of this Section 2; provided that the Registrable
                  Securities requested by all Holders to be registered pursuant
                  to such request must be at least twenty-five percent (25%) of
                  all Registrable Securities then outstanding.

                           (b) Underwriting. If the Holders initiating the
                  registration request under this Section 2.2 ("INITIATING
                  HOLDERS") intend to distribute the Registrable Securities
                  covered by their request by means of an underwriting, then
                  they shall so advise the Company as a part of their request
                  made pursuant to this Section 2.2 and the Company shall
                  include such information in the written notice referred to in
                  subsection 2.2(a). In such event, the right of any Holder to
                  include his Registrable Securities in such registration shall
                  be conditioned upon such Holder's participation in such
                  underwriting and the inclusion of such Holder's Registrable
                  Securities in the underwriting (unless otherwise mutually
                  agreed by a majority in interest of the Initiating Holders and
                  such Holder) to the extent provided herein. All Holders
                  proposing to distribute their securities through such
                  underwriting shall enter into an underwriting agreement in
                  customary form with the managing underwriter or underwriters
                  selected for such underwriting by the Company. Notwithstanding
                  any other provision of this Section 2.2, if the underwriter(s)
                  advise(s) the Company in writing that marketing factors
                  require a limitation of the number of securities to be
                  underwritten then the Company shall so advise all Holders of
                  Registrable Securities that would otherwise be registered and
                  underwritten pursuant hereto, and the number of Registrable
                  Securities that may be included in the underwriting shall be
                  reduced as required by the underwriter(s) and allocated among
                  the Holders of Registrable Securities on a pro rata basis
                  according to the number of Registrable Securities then
                  outstanding held by each Holder requesting registration
                  (including the Initiating Holders); provided, however, that
                  the number of shares of Registrable Securities to be included
                  in such underwriting and registration shall not be reduced
                  unless all other securities of the Company are first entirely
                  excluded from the underwriting and registration. Any
                  Registrable Securities excluded and withdrawn from such
                  underwriting shall be withdrawn from the registration.

                           (c) Maximum Number of Demand Registrations. The
                  Company is obligated to effect only two (2) such registrations
                  pursuant to this Section 2.2.

                           (d) Deferral. Notwithstanding the foregoing, if the
                  Company shall furnish to Holders requesting the filing of a
                  registration statement pursuant to this Section 2.2, a
                  certificate signed by the President or Chief Executive Officer
                  of the Company stating that in the good faith judgment of the
                  Board of Directors of the Company, it would be seriously
                  detrimental to the Company and its stockholders for such
                  registration statement to be filed and it is therefore
                  essential to defer the filing of such registration statement,
                  then the Company shall have the right to defer such filing for
                  a period of not more than one hundred twenty (120) days after
                  receipt of the request of the Initiating Holders; provided,
                  however, that the Company may not utilize this right more than
                  once in any twelve (12) month period.

                           (e) Expenses. All expenses incurred in connection
                  with a registration pursuant to this Section 2.2, including
                  without limitation all registration and qualification fees,
                  printers' and accounting fees, fees and disbursements of
                  counsel for the Company, and the reasonable fees and
                  disbursements of one counsel for the selling Holders (but
                  excluding underwriters' discounts and commissions), shall be
                  borne by the Company. Each Holder participating in a
                  registration pursuant to this Section 2.2 shall bear such
                  Holder's proportionate share (based on the total number of
                  shares sold in such registration other than for the account of
                  the Company) of all discounts, commissions or other amounts
                  payable to underwriters or brokers in connection with such
                  offering. Notwithstanding the foregoing, the Company shall not
                  be required to pay for any expenses of any registration
                  proceeding begun pursuant to this Section 2.2 if the
                  registration request is subsequently withdrawn at the request
                  of the Holders of a majority of the Registrable Securities to
                  be registered, unless the Holders of a majority of the
                  Registrable Securities then outstanding agree to forfeit their
                  right to one (1) demand registration pursuant to this Section
                  2.2 (in which case such right shall be forfeited by all
                  Holders of Registrable Securities); provided, further,
                  however, that if at the time of such withdrawal, the Holders
                  have learned of a material adverse change in the condition,
                  business, or prospects of the Company not known to the Holders
                  at the time of their request for such registration and have
                  withdrawn their request for registration with reasonable
                  promptness after learning of such material adverse change,
                  then the Holders shall not be required to pay any of such
                  expenses and shall retain their rights pursuant to this
                  Section 2.2.

                                  CONFIDENTIAL                      Page 3 of 14
<PAGE>   4

                  2.3 Piggyback Registrations. The Company shall notify all
         Holders of Registrable Securities in writing at least thirty (30) days
         prior to filing any registration statement under the Securities Act for
         purposes of effecting a public offering of securities of the Company
         (including, but not limited to, registration statements relating to
         secondary offerings of securities of the Company, but excluding
         registration statements relating to any registration under Section 2.2
         or Section 2.4 of this Agreement or to any employee benefit plan or a
         corporate reorganization) and will afford each such Holder an
         opportunity to include in such registration statement all or any part
         of the Registrable Securities then held by such Holder. Each Holder
         desiring to include in any such registration statement all or any part
         of the Registrable Securities held by such Holder shall, within twenty
         (20) days after receipt of the above-described notice from the Company,
         so notify the Company in writing, and in such notice shall inform the
         Company of the number of Registrable Securities such Holder wishes to
         include in such registration statement. If a Holder decides not to
         include all of its Registrable Securities in any registration statement
         thereafter filed by the Company, such Holder shall nevertheless
         continue to have the right to include any Registrable Securities in any
         subsequent registration statement or registration statements as may be
         filed by the Company with respect to offerings of its securities, all
         upon the terms and conditions set forth herein.

                           (a) Underwriting. If a registration statement under
                  which the Company gives notice under this Section 2.3 is for
                  an underwritten offering, then the Company shall so advise the
                  Holders of Registrable Securities. In such event, the right of
                  any such Holder's Registrable Securities to be included in a
                  registration pursuant to this Section 2.3 shall be conditioned
                  upon such Holder's participation in such underwriting and the
                  inclusion of such Holder's Registrable Securities in the
                  underwriting to the extent provided herein. All Holders
                  proposing to distribute their Registrable Securities through
                  such underwriting shall enter into an underwriting agreement
                  in customary form with the managing underwriter or
                  underwriter(s) selected for such underwriting. Notwithstanding
                  any other provision of this Agreement, if the managing
                  underwriter determine(s) in good faith that marketing factors
                  require a limitation of the number of shares to be
                  underwritten, then the managing underwriter(s) may exclude
                  shares (including Registrable Securities) from the
                  registration and the underwriting, and the number of shares
                  that may be included in the registration and the underwriting
                  shall be allocated, first, to stockholders exercising any
                  demand registration rights, second to the Company, and third,
                  to each of the Holders requesting inclusion of their
                  Registrable Securities in such registration statement on a pro
                  rata basis based on the total number of Registrable Securities
                  then held by each such Holder; provided however, that the
                  right of the underwriters to exclude shares (including
                  Registrable Securities) from the registration and underwriting
                  as described above shall be restricted so that: (i) the number
                  of Registrable Securities included in any such registration is
                  not reduced below twenty-five percent (25%) of the shares
                  included in the registration, except for a registration
                  relating to the Company's initial public offering or an
                  offering solely by stockholders of the Company exercising
                  demand registration rights, from which all Registrable
                  Securities may be excluded, and (ii) all shares that are not
                  Registrable Securities and are held by persons who are
                  employees or directors of the Company (or any subsidiary of
                  the Company) shall first be excluded from such registration
                  and underwriting before any Registrable Securities are so
                  excluded. If any Holder disapproves of the terms of any such
                  underwriting, such Holder may elect to withdraw therefrom by
                  written notice to the Company and the underwriter, delivered
                  at least twenty (20) days prior to the effective date of the
                  registration statement. Any Registrable Securities excluded or
                  withdrawn from such underwriting shall be excluded and
                  withdrawn from the registration. For any Holder that is a
                  partnership or corporation, the partners, retired partners and
                  stockholders of such Holder, or the estates and family members
                  of any such partners and retired partners and any trusts for
                  the benefit of any of the foregoing persons shall be deemed to
                  be a single "Holder," and any pro rata reduction with respect
                  to such "Holder" shall be based upon the aggregate amount of
                  shares carrying registration rights owned by all entities and
                  individuals included in such "Holder," as defined in this
                  sentence.

                           (b) Expenses. All expenses incurred in connection
                  with a registration pursuant to this Section 2.3 (excluding
                  underwriters' and brokers' discounts and commissions),
                  including, without limitation all federal and "blue sky"
                  registration and qualification fees, printers' and accounting
                  fees, fees and disbursements of counsel for the Company and
                  reasonable fees and disbursements of one counsel for the
                  selling Holders shall be borne by the Company.

                  2.4 Form S-3 Registration. In case the Company shall receive
         from any Holder or Holders of at least twenty-five percent (25%) of all
         Registrable Securities then outstanding a written request or requests
         that the Company effect a registration on Form S-3 and any related
         qualification or compliance with respect to all or a part of the
         Registrable Securities owned by such Holder or Holders, then the
         Company will:

                                  CONFIDENTIAL                      Page 4 of 14
<PAGE>   5

                           (a) Notice. Promptly give written notice of the
                  proposed registration and the Holder's or Holders' request
                  therefor, and any related qualification or compliance, to all
                  other Holders of Registrable Securities; and

                           (b) Registration. As soon as practicable, effect such
                  registration and all such qualifications and compliances as
                  may be so requested and as would permit or facilitate the sale
                  and distribution of all or such portion of such Holder's or
                  Holders' Registrable Securities as are specified in such
                  request, together with all or such portion of the Registrable
                  Securities of any other Holder or Holders joining in such
                  request as are specified in a written request given within
                  twenty (20) days after receipt of such written notice from the
                  Company; provided, however, that the Company shall not be
                  obligated to effect any such registration, qualification or
                  compliance pursuant to this Section 2.4:

                                    (i) if Form S-3 is not available for such
                           offering;

                                    (ii) if the Holders, together with the
                           holders of any other securities of the Company
                           entitled to inclusion in such registration, propose
                           to sell Registrable Securities and such other
                           securities (if any) at an aggregate price to the
                           public of less than $1,000,000;

                                    (iii) if the Company shall furnish to the
                           Holders a certificate signed by the President or
                           Chief Executive Officer of the Company stating that
                           in the good faith judgment of the Board of Directors
                           of the Company, it would be seriously detrimental to
                           the Company and its stockholders for such Form S-3
                           Registration to be effected at such time, in which
                           event the Company shall have the right to defer the
                           filing of the Form S-3 registration statement no more
                           than once during any twelve month period for a period
                           of not more than 120 days after receipt of the
                           request of the Holder or Holders under this Section
                           2.4;

                                    (iv) if the Company has, within the twelve
                           (12) month period preceding the date of such request,
                           already effected two (2) registrations on Form S-3
                           for the Holders pursuant to this Section 2.4; or

                                    (v) in any particular jurisdiction in which
                           the Company would be required to qualify to do
                           business or to execute a general consent to service
                           of process in effecting such registration,
                           qualification or compliance.

                           (c) Expenses. Subject to the foregoing, the Company
                  shall file a Form S-3 registration statement covering the
                  Registrable Securities and other securities so requested to be
                  registered pursuant to this Section 2.4 as soon as practicable
                  after receipt of the request or requests of the Holders for
                  such registration. The Company shall pay all expenses incurred
                  in connection with each registration requested pursuant to
                  this Section 2.4, (excluding underwriters' or brokers'
                  discounts and commissions), including without limitation all
                  filing, registration and qualification, printers' and
                  accounting fees and the reasonable fees and disbursements of
                  one counsel for the selling Holder or Holders and counsel for
                  the Company.

                           (d) Not Demand Registration. Form S-3 registrations
                  shall not be deemed to be demand registrations as described in
                  Section 2.2 above.

                  2.5 Obligations of the Company. Whenever required to effect
         the registration of any Registrable Securities under this Agreement,
         the Company shall, as expeditiously as reasonably possible:

                           (a) Prepare and file with the SEC a registration
                  statement with respect to such Registrable Securities and use
                  reasonable, diligent efforts to cause such registration
                  statement to become effective, and, upon the request of the
                  Holders of a majority of the Registrable Securities registered
                  thereunder, keep such registration statement effective for up
                  to ninety (90) days.

                           (b) Prepare and file with the SEC such amendments and
                  supplements to such registration statement and the prospectus
                  used in connection with such registration statement as may be
                  necessary to comply with the provisions of the Securities Act
                  with respect to the disposition of all securities covered by
                  such registration statement.

                           (c) Furnish to the Holders such number of copies of a
                  prospectus, including a preliminary prospectus, in conformity
                  with the requirements of the Securities Act, and such other
                  documents as they may reasonably request in order to
                  facilitate the disposition of the Registrable Securities owned
                  by them that are included in such registration.

                           (d) Use reasonable, diligent efforts to register and
                  qualify the securities covered by such registration statement
                  under such other securities or Blue Sky laws of such
                  jurisdictions as shall be reasonably requested by the Holders,
                  provided that the Company shall not be required in connection

                                  CONFIDENTIAL                      Page 5 of 14
<PAGE>   6

                  therewith or as a condition thereto to qualify to do business
                  or to file a general consent to service of process in any such
                  states or jurisdictions.

                           (e) In the event of any underwritten public offering,
                  enter into and perform its obligations under an underwriting
                  agreement, in usual and customary form, with the managing
                  underwriter(s) of such offering. Each Holder participating in
                  such underwriting shall also enter into and perform its
                  obligations under such an agreement.

                           (f) Notify each Holder of Registrable Securities
                  covered by such registration statement at any time when a
                  prospectus relating thereto is required to be delivered under
                  the Securities Act of the happening of any event as a result
                  of which the prospectus included in such registration
                  statement, as then in effect, includes an untrue statement of
                  a material fact or omits to state a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading in the light of the circumstances then
                  existing.

                           (g) Furnish, at the request of any Holder requesting
                  registration of Registrable Securities, on the date that such
                  Registrable Securities are delivered to the underwriters for
                  sale, if such securities are being sold through underwriters,
                  or, if such securities are not being sold through
                  underwriters, on the date that the registration statement with
                  respect to such securities becomes effective, (i) an opinion,
                  dated as of such date, of the counsel representing the Company
                  for the purposes of such registration, in form and substance
                  as is customarily given to underwriters in an underwritten
                  public offering and reasonably satisfactory to a majority in
                  interest of the Holders requesting registration, addressed to
                  the underwriters, if any, and to the Holders requesting
                  registration of Registrable Securities and (ii) a "comfort"
                  letter dated as of such date, from the independent certified
                  public accountants of the Company, in form and substance as is
                  customarily given by independent certified public accountants
                  to underwriters in an underwritten public offering and
                  reasonably satisfactory to a majority in interest of the
                  Holders requesting registration, addressed to the
                  underwriters, if any, and to the Holders requesting
                  registration of Registrable Securities.

                  2.6 Furnish Information. It shall be a condition precedent to
         the obligations of the Company to take any action pursuant to Sections
         2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company
         such information regarding themselves, the Registrable Securities held
         by them, and the intended method of disposition of such securities as
         shall be required to timely effect the registration of their
         Registrable Securities.

                  2.7 Delay of Registration. No Holder shall have any right to
         obtain or seek an injunction restraining or otherwise delaying any such
         registration as the result of any controversy that might arise with
         respect to the interpretation or implementation of this Section 2.

                  2.8 Indemnification. In the event any Registrable Securities
         are included in a registration statement under Sections 2.2, 2.3 or
         2.4:

                           (a) By the Company. To the extent permitted by law,
                  the Company will indemnify and hold harmless each Holder, the
                  partners, officers and directors of each Holder, any
                  underwriter (as defined in the Securities Act) for such Holder
                  and each person, if any, who controls such Holder or
                  underwriter within the meaning of the Securities Act or the
                  Securities Exchange Act of 1934, as amended, (the "1934 ACT"),
                  against any losses, claims, damages, or liabilities (joint or
                  several) to which they may become subject under the Securities
                  Act, the l934 Act or other federal or state law, insofar as
                  such losses, claims, damages, or liabilities (or actions in
                  respect thereof) arise out of or are based upon any of the
                  following statements, omissions or violations (collectively,
                  "VIOLATIONS" and, individually, a "VIOLATION"):

                                    (i) any untrue statement or alleged untrue
                           statement of a material fact contained in such
                           registration statement, including any preliminary
                           prospectus or final prospectus contained therein or
                           any amendments or supplements thereto;

                                    (ii) the omission or alleged omission to
                           state therein a material fact required to be stated
                           therein, or necessary to make the statements therein
                           not misleading, or

                                    (iii) any violation or alleged violation by
                           the Company of the Securities Act, the 1934 Act, any
                           federal or state securities law or any rule or
                           regulation promulgated under the Securities Act, the
                           1934 Act or any federal or state securities law in
                           connection with the offering covered by such
                           registration statement; and the Company will
                           reimburse each such Holder, partner, officer or
                           director, underwriter or controlling person for any
                           legal or other expenses reasonably incurred by them,
                           as incurred, in connection with investigating or
                           defending any such loss, claim, damage, liability or
                           action; provided however, that the indemnity
                           agreement contained in this subsection 2.8(a) shall
                           not apply to amounts paid in

                                  CONFIDENTIAL                      Page 6 of 14

<PAGE>   7

                           settlement of any such loss, claim, damage, liability
                           or action if such settlement is effected without the
                           consent of the Company (which consent shall not be
                           unreasonably withheld), nor shall the Company be
                           liable in any such case for any such loss, claim,
                           damage, liability or action to the extent that it
                           arises out of or is based upon a Violation which
                           occurs in reliance upon and in conformity with
                           written information furnished expressly for use in
                           connection with such registration by such Holder,
                           partner, officer, director, underwriter or
                           controlling person of such Holder.

                           (b) By Selling Holders. To the extent permitted by
                  law, each selling Holder will indemnify and hold harmless the
                  Company, each of its directors, each of its officers who have
                  signed the registration statement, each person, if any, who
                  controls the Company within the meaning of the Securities Act,
                  any underwriter and any other Holder selling securities under
                  such registration statement or any of such other Holder's
                  partners, directors or officers or any person who controls
                  such Holder within the meaning of the Securities Act or the
                  1934 Act, against any losses, claims, damages or liabilities
                  (joint or several) to which the Company or any such director,
                  officer, controlling person, underwriter or other such Holder,
                  partner or director, officer or controlling person of such
                  other Holder may become subject under the Securities Act, the
                  1934 Act or other federal or state law, insofar as such
                  losses, claims, damages or liabilities (or actions in respect
                  thereto) arise out of or are based upon any Violation, in each
                  case to the extent (and only to the extent) that such
                  Violation occurs in reliance upon and in conformity with
                  written information furnished by such Holder expressly for use
                  in connection with such registration; and each such Holder
                  will reimburse any legal or other expenses reasonably incurred
                  by the Company or any such director, officer, controlling
                  person, underwriter or other Holder, partner, officer,
                  director or controlling person of such other Holder in
                  connection with investigating or defending any such loss,
                  claim, damage, liability or action; provided, however, that
                  the indemnity agreement contained in this subsection 2.8(b)
                  shall not apply to amounts paid in settlement of any such
                  loss, claim, damage, liability or action if such settlement is
                  effected without the consent of the Holder, which consent
                  shall not be unreasonably withheld; and provided further, that
                  the total amounts payable in indemnity by a Holder under this
                  Section 2.8(b) in respect of any Violation shall not exceed
                  the net proceeds received by such Holder in the registered
                  offering out of which such Violation arises.

                           (c) Notice. Promptly after receipt by an indemnified
                  party under this Section 2.8 of notice of the commencement of
                  any action (including any governmental action), such
                  indemnified party will, if a claim in respect thereof is to be
                  made against any indemnifying party under this Section 2.8,
                  deliver to the indemnifying party a written notice of the
                  commencement thereof and the indemnifying party shall have the
                  right to participate in, and, to the extent the indemnifying
                  party so desires, jointly with any other indemnifying party
                  similarly noticed, to assume the defense thereof with counsel
                  mutually satisfactory to the parties; provided, however, that
                  an indemnified party shall have the right to retain its own
                  counsel, with the fees and expenses to be paid by the
                  indemnifying party, if representation of such indemnified
                  party by the counsel retained by the indemnifying party would
                  be inappropriate due to actual or potential conflict of
                  interests between such indemnified party and any other party
                  represented by such counsel in such proceeding. The failure to
                  deliver written notice to the indemnifying party within a
                  reasonable time of the commencement of any such action, if
                  prejudicial to its ability to defend such action, shall
                  relieve such indemnifying party of any liability to the
                  indemnified party under this Section 2.8, but the omission so
                  to deliver written notice to the indemnifying party will not
                  relieve it of any liability that it may have to any
                  indemnified party otherwise than under this Section 2.8.

                           (d) Defect Eliminated in Final Prospectus. The
                  foregoing indemnity agreements of the Company and Holders are
                  subject to the condition that, insofar as they relate to any
                  Violation made in a preliminary prospectus but eliminated or
                  remedied in the amended prospectus on file with the SEC at the
                  time the registration statement in question becomes effective
                  or the amended prospectus filed with the SEC pursuant to SEC
                  Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement
                  shall not inure to the benefit of any person if a copy of the
                  Final Prospectus was furnished to the indemnified party and
                  was not furnished to the person asserting the loss, liability,
                  claim or damage at or prior to the time such action is
                  required by the Securities Act.

                           (e) Contribution. In order to provide for just and
                  equitable contribution to joint liability under the Securities
                  Act in any case in which either (i) any Holder exercising
                  rights under this Agreement, or any controlling person of any
                  such Holder, makes a claim for indemnification pursuant to
                  this Section 2.8 but it is judicially determined (by the entry
                  of a final judgment or decree by a court of competent
                  jurisdiction and the expiration of time to appeal or the
                  denial of the last right of appeal) that such indemnification
                  may not be enforced in such case notwithstanding the fact that
                  this Section 2.8 provides for indemnification in such case, or
                  (ii) contribution under the Securities Act may be required

                                  CONFIDENTIAL                      Page 7 of 14
<PAGE>   8

                  on the part of any such selling Holder or any such controlling
                  person in circumstances for which indemnification is provided
                  under this Section 2.8; then, and in each such case, the
                  Company and such Holder will contribute to the aggregate
                  losses, claims, damages or liabilities to which they may be
                  subject (after contribution from others) in such proportion so
                  that such Holder is responsible for the portion represented by
                  the percentage that the public offering price of its
                  Registrable Securities offered by and sold under the
                  registration statement bears to the public offering price of
                  all securities offered by and sold under such registration
                  statement, and the Company and other selling Holders are
                  responsible for the remaining portion; provided, however,
                  that, in any such case, (A) no such Holder will be required to
                  contribute any amount in excess of the public offering price
                  of all such Registrable Securities offered and sold by such
                  Holder pursuant to such registration statement; and (B) no
                  person or entity guilty of fraudulent misrepresentation
                  (within the meaning of Section 11(f) of the Securities Act)
                  will be entitled to contribution from any person or entity who
                  was not guilty of such fraudulent misrepresentation.

                           (f) Survival. The obligations of the Company and
                  Holders under this Section 2.8 shall survive the completion of
                  any offering of Registrable Securities in a registration
                  statement, and otherwise.

                  2.9 "Market Stand-Off" Agreement. Each Holder hereby agrees
         that it shall not, to the extent requested by the Company or an
         underwriter of securities of the Company, sell or otherwise transfer or
         dispose of any Registrable Securities or other shares of stock of the
         Company then owned by such Holder (other than to donees or partners of
         the Holder who agree to be similarly bound) for up to one hundred
         eighty (180) days following the effective date of a registration
         statement of the Company filed under the Securities Act; provided,
         however, that:

                           (a) such agreement shall be applicable only to the
                  first such registration statement of the Company which covers
                  securities to be sold on its behalf to the public in an
                  underwritten offering but not to Registrable Securities sold
                  pursuant to such registration statement; and

                           (b) all officers and directors of the Company then
                  holding Common Stock of the Company enter into similar
                  agreements.

                  In order to enforce the foregoing covenant, the Company shall
         have the right to place restrictive legends on the certificates
         representing the shares subject to this Section and to impose stop
         transfer instructions with respect to the Registrable Securities and
         such other shares of stock of each Holder (and the shares or securities
         of every other person subject to the foregoing restriction) until the
         end of such period.

                  2.10 Rule 144 Reporting. With a view to making available the
         benefits of certain rules and regulations of the Commission which may
         at any time permit the sale of the Registrable Securities to the public
         without registration, after such time as a public market exists for the
         Common Stock of the Company, the Company agrees to:

                           (a) Make and keep public information available, as
                  those terms are understood and defined in Rule 144 under the
                  Securities Act, at all times after the effective date of the
                  first registration under the Securities Act filed by the
                  Company for an offering of its securities to the general
                  public;

                           (b) Use reasonable, diligent efforts to file with the
                  Commission in a timely manner all reports and other documents
                  required of the Company under the Securities Act and the 1934
                  Act (at any time after it has become subject to such reporting
                  requirements); and

                           (c) So long as a Holder owns any Registrable
                  Securities, to furnish to the Holder forthwith upon request a
                  written statement by the Company as to its compliance with the
                  reporting requirements of said Rule 144 (at any time after
                  ninety (90) days after the effective date of the first
                  registration statement filed by the Company for an offering of
                  its securities to the general public), and of the Securities
                  Act and the 1934 Act (at any time after it has become subject
                  to the reporting requirements of the 1934 Act), a copy of the
                  most recent annual or quarterly report of the Company, and
                  such other reports and documents of the Company as a Holder
                  may reasonably request in availing itself of any rule or
                  regulation of the Commission allowing a Holder to sell any
                  such securities without registration (at any time after the
                  Company has become subject to the reporting requirements of
                  the 1934 Act).

                  2.11 Termination of the Company's Obligations. The Company
         shall have no obligations pursuant to Sections 2.2 through 2.4 with
         respect to any request or requests for registration made by any Holder
         on a date more than five (5) years after the closing date of the
         Company's initial public offering. Notwithstanding anything to the
         contrary contained in Section 2.2 or 2.4, if any Holder is eligible to
         sell Registrable Securities pursuant Rule 144(k) or any successor
         provision under the Securities Act (an "Excluded Holder"), the

                                  CONFIDENTIAL                      Page 8 of 14
<PAGE>   9

         Registrable Securities of such Excluded Holder shall be disregarded in
         determining the requisite percentage of Registrable Securities that are
         required to initiate a registration pursuant to Section 2.2 or 2.4
         (i.e., a registration under Section 2.2 must be initiated by persons
         holding at least two-thirds of the Registrable Securities held by all
         Holders who are not Excluded Holders and a registration under Section
         2.4 must be initiated by persons holding at least 25% of the
         Registrable Securities held by all Holders who are not Excluded
         Holders). After a registration has been requested pursuant to Section
         2.2 or 2.4, as the case may be, by the requisite percentage of shares
         held by Holders who are not Excluded Holders, all Holders (including
         Excluded Holders) shall be entitled to include their Registrable
         Securities in such registration subject to the terms and conditions of
         this Agreement.

                  2.12 Limitations on Subsequent Registration Rights. From and
         after the date of this Agreement, the Company shall not, without the
         prior written consent of the Holders of a majority of the Registrable
         Securities then outstanding, enter into any agreement with any holder
         or prospective holder of any securities of the Company which would
         allow such holder or prospective holder (a) to include such securities
         in any registration filed under Section 2.2 hereof, unless under the
         terms of such agreement, such holder or prospective holder may include
         such securities in any such registration only to the extent that the
         inclusion of his securities will not reduce the amount of the
         Registrable Securities of the Holders which is included, or (b) to make
         a demand registration which could result in such registration statement
         being declared effective prior to the earlier of either of the dates
         set forth in subsection 2.2(a), or within one hundred twenty (120) days
         of the effective date of any registration effected pursuant to Section
         2.2.

         3.       PRE-EMPTIVE RIGHTS.

                  3.1 General. Each Holder (as defined in Section 2.1(d)) and
         any party to whom such Holder's rights under this Section 3 have been
         duly assigned in accordance with Section 4.1(b) (each such Holder or
         assignee being hereinafter referred to as a "RIGHTS HOLDER") has the
         right of first refusal to purchase such Rights Holder's Pro Rata Share
         (as defined below), of all (or any part) of any "New Securities" (as
         defined in Section 3.2) that the Company may from time to time issue
         after the date of this Agreement. A Rights Holder's "PRO RATA SHARE"
         for purposes of this right of first refusal is the ratio of (a) the
         number of Registrable Securities as to which such Rights Holder is the
         Holder (and/or is deemed to be the Holder under Section 2.1(d)), to (b)
         a number of shares of Common Stock of the Company equal to the sum of
         (i) the total number of shares of Common Stock of the Company then
         outstanding plus (ii) the total number of shares of Common Stock of the
         Company into which all then outstanding shares of Preferred Stock of
         the Company are then convertible.

                  3.2 New Securities. "NEW SECURITIES" shall mean any Common
         Stock or Preferred Stock of the Company, whether now authorized or not,
         and rights, options or warrants to purchase such Common Stock or
         Preferred Stock, and securities of any type whatsoever that are, or may
         become, convertible or exchangeable into such Common Stock or Preferred
         Stock; provided, however, that the term "New Securities" does not
         include:

                      (a) up to 8,000,000 shares of the Company's Common Stock
                  (and/or options or warrants therefor) issued to employees,
                  officers, directors, contractors, advisors or consultants of
                  the Company pursuant to incentive agreements or plans approved
                  by the Board of Directors of the Company;

                      (b) any shares of Series A Stock, Series B Preferred Stock
                  or Series C Preferred Stock set forth in Exhibit A hereto (the
                  "ISSUED PREFERRED STOCK");

                      (c) any securities issuable upon conversion of or with
                  respect to any then outstanding shares of Series A Stock,
                  Series B Stock or Series C Stock of the Company or Common
                  Stock or other securities issuable upon conversion thereof;

                      (d) any securities issuable upon exercise of any options,
                  warrants or rights to purchase any securities of the Company
                  outstanding on the date of this Agreement ("WARRANT
                  SECURITIES") and any securities issuable upon the conversion
                  of any Warrant Securities or upon the exercise or conversion
                  of any securities, if such securities were first offered to
                  the Rights Holders hereunder;

                      (e) shares of the Company's Common Stock or Preferred
                  Stock issued in connection with any stock split or stock
                  dividend;

                      (f) securities offered by the Company to the public
                  pursuant to a registration statement filed under the
                  Securities Act;

                      (g) up to 125,000 shares of the Company's Common Stock or
                  Preferred Stock (and/or options or warrants therefor) issued
                  or issuable to parties providing the Company with equipment
                  leases, real property leases, loans, credit lines, guaranties
                  of indebtedness, cash price reductions or similar financing
                  such number of shares being subject to proportional adjustment
                  to reflect

                                  CONFIDENTIAL                      Page 9 of 14
<PAGE>   10

                  subdivisions, combinations and stock dividends affecting the
                  number of outstanding shares of such stock;

                      (h) securities issued pursuant to the acquisition of
                  another corporation or entity by the Company by consolidation,
                  merger, purchase of all or substantially all of the assets, or
                  other reorganization in which the Company acquires, in a
                  single transaction or series of related transactions, all or
                  substantially all of the assets of such other corporation or
                  entity or fifty percent (50%) or more of the voting power of
                  such other corporation or entity or fifty percent (50%) or
                  more of the equity ownership of such other entity; or

                      (i) up to 3,000,000 shares of the Company's Common Stock
                  (and/or options or warrants therefor) issued or issuable in
                  connection with strategic alliances or partnering arrangements
                  approved by the Board of Directors of the Company.

                  3.3 Procedures. In the event that the Company proposes to
         undertake an issuance of New Securities, it shall give to each Rights
         Holder written notice of its intention to issue New Securities (the
         "NOTICE"), describing the type of New Securities and the price and the
         general terms upon which the Company proposes to issue such New
         Securities. Each Rights Holder shall have ten (10) days from the date
         of mailing of any such Notice to agree in writing to purchase such
         Rights Holder's Pro Rata Share of such New Securities for the price and
         upon the general terms specified in the Notice by giving written notice
         to the Company and stating therein the quantity of New Securities to be
         purchased (not to exceed such Rights Holder's Pro Rata Share). If any
         Rights Holder fails to so agree in writing within such ten (10) day
         period to purchase such Rights Holder's full Pro Rata Share of an
         offering of New Securities (a "NONPURCHASING HOLDER"), then such
         Nonpurchasing Holder shall forfeit the right hereunder to purchase that
         part of his Pro Rata Share of such New Securities that he did not so
         agree to purchase and the Company shall promptly give each Rights
         Holder who has timely agreed to purchase his full Pro Rata Share of
         such offering of New Securities (a "PURCHASING HOLDER") written notice
         of the failure of any Nonpurchasing Holder to purchase such
         Nonpurchasing Rights Holder's full Pro Rata Share of such offering of
         New Securities (the "OVERALLOTMENT NOTICE"). Each Purchasing Holder
         shall have a right of overallotment such that such Purchasing Holder
         may agree to purchase a portion of the Nonpurchasing Holders'
         unpurchased Pro Rata Shares of such offering on a pro rata basis
         according to the relative Pro Rata Shares of the Purchasing Rights
         Holders, at any time within five (5) days after receiving the
         Overallotment Notice.

                  3.4 Failure to Exercise. In the event that the Rights Holders
         fail to exercise in full the right of first refusal within such ten
         (10) plus five (5) day period, then the Company shall have 120 days
         thereafter to sell the New Securities with respect to which the Rights
         Holders' rights of first refusal hereunder were not exercised, at a
         price and upon general terms not materially more favorable to the
         purchasers thereof than specified in the Company's Notice to the Rights
         Holders. In the event that the Company has not issued and sold the New
         Securities within such 120-day period, then the Company shall not
         thereafter issue or sell any New Securities without again first
         offering such New Securities to the Rights Holders pursuant to this
         Section 3.

                  3.5 Termination. This right of first refusal shall terminate
         (a) immediately before the closing of the first underwritten sale of
         Common Stock of the Company to the public pursuant to a registration
         statement filed with, and declared effective by, the SEC under the
         Securities Act, covering the offer and sale of Common Stock to the
         public at an offering price of at least $2.20 per share (such offering
         price being subject to proportional adjustment to reflect subdivisions,
         combinations, stock dividends and similar transactions affecting the
         number of outstanding shares of Common Stock) for an aggregate gross
         public offering price (calculated before deduction of underwriters'
         discounts and commissions) of at least $15,000,000 or (b) upon (i) the
         acquisition of all or substantially all the assets of the Company or
         (ii) an acquisition of the Company by another corporation or entity by
         consolidation, merger or other reorganization in which the holders of
         the Company's outstanding voting stock immediately prior to such
         transaction own, immediately after such transaction, securities
         representing less than fifty percent (50%) or more of the voting power
         of the corporation or other entity surviving such transaction.

                  3.6 Waiver. Each Rights Holder hereby confirms its waiver of
         any right of first refusal it may have had to purchase such Rights
         Holder's Pro Rata Share of the Issued Preferred Stock.

         4.       ASSIGNMENT AND AMENDMENT.

                  4.1 Assignment. Notwithstanding anything herein to the
         contrary:

                           (a) Information Rights. The rights of an Investor
                  under Section 1.1 or 1.2 or 1.4 hereof may be assigned only to
                  (i) a party who acquires from an Investor (or an Investor's
                  permitted assigns) at least 200,000 shares of Series A Stock,
                  Series B Stock or Series C Stock subject to this Agreement
                  and/or 100,000 shares (on an as-converted basis) of
                  Registrable Securities issued upon conversion

                                  CONFIDENTIAL                     Page 10 of 14
<PAGE>   11

                  thereof or (ii) a partner, member or stockholder of an
                  Investor who acquires at least 100,000 shares of Series A
                  Stock, Series B Stock, or Series C Stock subject to this
                  Agreement and/or 50,000 shares (on an as-converted basis) of
                  Registrable Securities issued upon conversion.

                           (b) Registration Rights; Refusal Rights. The
                  registration rights of a Holder under Section 2 hereof and the
                  rights of first refusal of a Rights Holder under Section 3
                  hereof may be assigned only to (i) a party who acquires at
                  least 200,000 shares of Series A Stock, Series B Stock or
                  Series C Stock subject to this Agreement and/or 100,000 shares
                  (on an as-converted basis) of Registrable Securities issued
                  upon conversion thereof or (ii) any partner, member or
                  shareholder of an Investor or permitted transferee thereof;
                  provided, however that no party may be assigned any of the
                  foregoing rights unless the Company is given written notice by
                  the assigning party at the time of such assignment stating the
                  name and address of the assignee and identifying the
                  securities of the Company as to which the rights in question
                  are being assigned; and provided further that any such
                  assignee shall receive such assigned rights subject to all the
                  terms and conditions of this Agreement, including without
                  limitation the provisions of this Section 4.

                  4.2 Amendment of Rights. Any provision of this Agreement may
         be amended and the observance thereof may be waived (either generally
         or in a particular instance and either retroactively or prospectively),
         only with the written consent of the Company and Investors (and/or any
         of their permitted successors or assigns) holding shares of Series A
         Stock, Series B Stock, Series C Stock and/or Conversion Stock
         representing and/or convertible into a majority of all the Investors'
         Shares (as defined below). As used herein, the term "INVESTORS' SHARES"
         shall mean the shares of Common Stock then issuable upon conversion of
         all then outstanding shares of Series A Stock, Series B Stock and
         Series C Stock subject to this Agreement plus all then outstanding
         shares of Conversion Stock that were issued upon the conversion of any
         shares of Series A Stock, Series B Stock or Series C Stock subject to
         this Agreement. Any amendment or waiver effected in accordance with
         this Section 4.2 shall be binding upon each Investor, each Holder, each
         permitted successor or assignee of such Investor or Holder and the
         Company.

         5.      GENERAL PROVISIONS.

                 5.1 Notices. Any notice, request or other communication
         required or permitted hereunder shall be in writing and shall be deemed
         to have been duly given if personally delivered or if deposited in the
         U.S. mail by registered or certified mail, return receipt requested,
         postage prepaid, as follows:

                  (a)   if to the Investors, at the addresses set forth on
                        Exhibit A.

                  (b)   if to the Company, at 1951 S. Fordham Street, Longmont,
                        Colorado 90503.

                  Any party hereto (and such party's permitted assigns) may by
         notice so given change its address for future notices hereunder. Notice
         shall conclusively be deemed to have been given when personally
         delivered or when deposited in the mail in the manner set forth above.

                  5.2 Entire Agreement. This Agreement, together with all the
         Exhibits hereto, constitutes and contains the entire agreement and
         understanding of the parties with respect to the subject matter hereof
         and supersedes any and all prior negotiations, correspondence,
         agreements, understandings, duties or obligations between the parties
         respecting the subject matter hereof.

                  5.3 Governing Law. This Agreement shall be governed by and
         construed exclusively in accordance with the internal laws of the State
         of Colorado as applied to agreements among Colorado residents entered
         into and to be performed entirely within Colorado, excluding that body
         of law relating to conflict of laws and choice of law.

                  5.4 Severability. If one or more provisions of this Agreement
         are held to be unenforceable under applicable law, then such
         provision(s) shall be excluded from this Agreement and the balance of
         this Agreement shall be interpreted as if such provision(s) were so
         excluded and shall be enforceable in accordance with its terms.

                  5.5 Third Parties. Nothing in this Agreement, express or
         implied, is intended to confer upon any person, other than the parties
         hereto and their successors and assigns, any rights or remedies under
         or by reason of this Agreement.

                  5.6 Successors And Assigns. Subject to the provisions of
         Section 4.1, the provisions of this Agreement shall inure to the
         benefit of, and shall be binding upon, the successors and permitted
         assigns of the parties hereto.

                  5.7 Captions. The captions to sections of this Agreement have
         been inserted for identification and reference purposes only and shall
         not be used to construe or interpret this Agreement.

                                  CONFIDENTIAL                     Page 11 of 14

<PAGE>   12

                  5.8 Counterparts. This Agreement may be executed in
         counterparts, each of which shall be deemed an original, but all of
         which together shall constitute one and the same instrument.

                  5.9 Costs And Attorneys' Fees. In the event that any action,
         suit or other proceeding is instituted concerning or arising out of
         this Agreement or any transaction contemplated hereunder, the
         prevailing party shall recover all of such party's costs and attorneys'
         fees incurred in each such action, suit or other proceeding, including
         any and all appeals or petitions therefrom.

                  5.10 Adjustments for Stock Splits, Etc. Wherever in this
         Agreement there is a reference to a specific number of shares of Common
         Stock or Preferred Stock of the Company of any class or series, then,
         upon the occurrence of any subdivision, combination or stock dividend
         of such class or series of stock, the specific number of shares so
         referenced in this Agreement shall automatically be proportionally
         adjusted to reflect the affect on the outstanding shares of such class
         or series of stock by such subdivision, combination or stock dividend.

                  5.11 Aggregation of Stock. All shares held or acquired by
         affiliated entities or persons shall be aggregated together for the
         purpose of determining the availability of any rights under this
         Agreement.

                  5.12 Arbitration Any disputes between the Company and the
         Investors with respect to this Agreement shall be settled by binding,
         final arbitration in accordance with the commercial arbitration rules
         of the American Arbitration Association then in effect (the "AAA
         Rules"). Any arbitration proceeding shall be conducted in Denver, CO.
         The following arbitration provisions shall govern over any conflicting
         rules which may now or hereafter be contained in the AAA Rules. Any
         judgment upon the award rendered by the arbitrator may be entered in
         any court having jurisdiction over the subject matter thereof. The
         arbitrator shall have the authority to grant any equitable and legal
         remedies that would be available.

                       (a) Any such arbitration shall be conducted before a
                  single arbitrator who shall be compensated for his or her
                  services at a rate to be determined by the parties or by the
                  American Arbitration Association, but based upon reasonable
                  hourly or daily consulting rates for the arbitrator in the
                  event the parties are not able to agree upon his or her rate
                  of compensation.

                       (b) The AAA Rules for the selection of the arbitrator
                  shall be followed.

                       (c) Each party to such arbitration shall each advance an
                  equal portion of the initial compensation to be paid to the
                  arbitrator in any such arbitration and an equal portion of the
                  costs of transcripts and other normal and regular expenses of
                  the arbitration proceedings; provided, however, that the
                  arbitrator shall have the discretion to grant to the
                  prevailing party in any arbitration an award of attorneys'
                  fees and costs, and all costs of arbitration.

                       (d) The parties shall be entitled to conduct discovery
                  proceedings in accordance with the provisions of the Federal
                  Rules of Civil Procedure, subject to any limitation imposed by
                  the arbitrator.

                       (e) For any claim submitted to arbitration, the burden of
                  proof shall be as it would be if the claim were litigated in a
                  judicial proceedings.

                       (f) Upon the conclusion of any arbitration proceeding
                  hereunder, the arbitrator shall render findings of fact and
                  conclusions of law and a written opinion setting forth the
                  basis and reasons for any decision reached by him or her and
                  shall deliver such documents to each party to this Agreement
                  along with a signed copy of the award.

                       (g) The arbitrator chosen in accordance with these
                  provisions shall not have the power to alter, amend or
                  otherwise affect the terms of these arbitration provisions or
                  the provisions of this Agreement.

                       (h) The parties acknowledge that, except as specifically
                  provided in this Agreement, no other action need be taken by
                  either party before proceeding directly in accordance with the
                  provisions of this Section.

                       (i) The arbitration provisions set forth in this Section
                  5.12 are intended by the parties to be exclusive for all
                  purposes and applicable to each and every controversy, dispute
                  and/or claim in any manner arising out of or relating to this
                  Agreement, the meaning, application and/or interpretation of
                  this Agreement, any breach hereof and/or any voluntary or
                  involuntary termination of this Agreement with or without
                  cause, including, without limitation, any such controversy,
                  dispute and/or claim which, if pursued through any state or
                  federal court or administrative agency, would arise at law, in
                  equity and/or pursuant to statutory, regulatory and/or common
                  law rules, regardless of whether any such dispute, controversy
                  and/or claim would arise in and/or from contract, tort or any
                  other legal and/or equitable theory or basis. The prevailing
                  party in any action instituted pursuant to this Section
                  5.13(i),

                                  CONFIDENTIAL                     Page 12 of 14
<PAGE>   13

                  or in any appeal from any arbitration conducted pursuant to
                  this Section 5.13, shall be entitled to recover from the other
                  party its reasonable attorneys' fees and other expenses
                  incurred in such litigation.

                  5.13 Effectiveness; Termination of the Original Agreement This
         Agreement shall become effective upon its execution by (a) holders of
         at least a majority of the Registrable Securities as defined in the
         Third Amended Agreement, and (b) the Company. Upon effectiveness of
         this Agreement, the Third Amended Agreement shall be terminated and
         shall be of no further force or effect.

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

                                       THE COMPANY:

                                       CHAPARRAL NETWORK STORAGE, INC.,
                                       a Delaware corporation

                                       /s/ Gary L. Allison
                                       ----------------------------------------
                                       Gary L. Allison, Chairman & CEO

                                       THE  INVESTORS:

                                       Adaptec, Inc.,
                                       a Delaware corporation

                                       By: /s/ J. Peter Campagna
                                          -------------------------------------
                                          Name: J. Peter Campagna
                                          Title: Vice President and Treasurer

                                       /s/ Gary L. Allison
                                       ----------------------------------------
                                       Gary L. Allison

                                       /s/ William R. Childs
                                       ----------------------------------------
                                       William R. Childs

                                       /s/ Haim Brill
                                       ----------------------------------------
                                       Haim Brill

                                       /s/ F. Grant Saviers
                                       ----------------------------------------
                                       F. Grant Saviers

                                       /s/ Robert Graham
                                       ----------------------------------------
                                       Robert Graham

                                       Harvest Storage Technology Group LLC,
                                       a Delaware limited liability company

                                       By: /s/ Robert Harvey
                                          -------------------------------------
                                          Name: Robert Harvey
                                          Title: Manager

                                       Woodcarvers LLC,
                                       a Delaware limited liability company

                                       By: /s/ Robert Harvey
                                          -------------------------------------
                                          Name: Robert Harvey
                                          Title: Manager

                                       /s/ Sam Coleman
                                       ----------------------------------------
                                       Sam Coleman

                                  CONFIDENTIAL                     Page 13 of 14

<PAGE>   14

                                       /s/ Frank Bigelow
                                       ----------------------------------------
                                       Frank Bigelow: Trustee

                                       The Linde Company
                                       By: /s/ Ian R. Linde
                                          -------------------------------------
                                          Name: Ian R. Linde
                                          Title: Partner

                                       Ohio Valley Venture Fund L.P.
                                       OSF Ltd, its general partner

                                       By: /s/ Karl Elderkin
                                          -------------------------------------
                                          Name:  Karl Elderkin
                                          Title: President

                                       /s/ Jeff Jensen
                                       ----------------------------------------
                                       Jeff Jensen

                                  CONFIDENTIAL                     Page 14 of 14

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