Document:

<PAGE>   1
                                                                    EXHIBIT 10.9

                          ARGONAUT TECHNOLOGIES, INC.

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

               AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT

                            Dated as of May 21, 1999

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

<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>          <C>                                                            <C>
SECTION 1  Definitions....................................................     1

SECTION 2  Information Rights.............................................     3
     2.1     Financial Information........................................     3
     2.2     Assignment of Rights.........................................     4

SECTION 3  Rights of First Refusal On New Issuances.......................     4
     3.1     Rights of First Refusal......................................     5
     3.2     Termination..................................................     5

SECTION 4  Registration Rights............................................     5
     4.1     Requested Registration.......................................     5
     4.2     Company Registration.........................................     8
     4.3     Registration on Form S-3.....................................     9
     4.4     Limitations on Subsequent Registration Rights................    10
     4.5     Expenses of Registration.....................................    10
     4.6     Registration Procedures......................................    10
     4.7     Preparation; Reasonable Investigation........................    12
     4.8     Indemnification..............................................    13
     4.9     Information by Holder........................................    15
     4.10    Rule 144 Reporting...........................................    15
     4.11    Transfer of Registration Rights..............................    16
     4.12    Termination..................................................    16
     4.13    Lockup Agreement.............................................    16
     4.14    Representations and Warranties of Company....................    16

SECTION 5  Miscellaneous Covenants........................................    17
     5.1     Proprietary Information Agreement............................    17
     5.2     Stock Vesting................................................    17
     5.3     Changes in Common Stock or Preferred Stock...................    17
     5.4     Board of Directors...........................................    17
     5.5     Termination..................................................    18

SECTION 6  Legends........................................................    18
     6.1     Legends......................................................    18

SECTION 7  Miscellaneous..................................................    18
     7.1     Governing Law................................................    18
     7.2     Entire Agreement; Amendment..................................    18
     7.3     Aggregation..................................................    19
     7.4     Notices, etc.................................................    19
     7.5     Severability.................................................    19
     7.6     Counterparts.................................................    19
     7.7     Prior Agreement..............................................    19
</TABLE>

                                      -i-

<PAGE>   3
                          ARGONAUT TECHNOLOGIES, INC.

               AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT

     THIS AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT (the "AGREEMENT")
is made as of the 21st day of May, 1999, by and among Argonaut Technologies,
Inc., a Delaware corporation (the "COMPANY"), and the persons listed on the
Schedule of Stockholders attached hereto as Exhibit A (collectively the
"STOCKHOLDERS" and individually a "STOCKHOLDER").

                                    RECITALS

     WHEREAS, the Company and certain of the Stockholders entered into a
Stockholder Rights Agreement dated January 23, 1995 and amended and restated the
Stockholder Rights Agreement on each of April 23, 1996 and March 14, 1997 (the
"STOCKHOLDER RIGHTS AGREEMENT"), and such parties now desire to amend and
restate such agreement to read as set forth herein to provide similar rights to
the purchasers of the Company's Series D Preferred Stock (the "PURCHASERS");

     WHEREAS, the Company and the Purchasers have entered into an agreement for
sale by the Company and purchase by the Purchasers of the Company's Series D
Preferred Stock of even date herewith; and

     WHEREAS, in connection with the purchase and sale of the Company's
securities, the Company and the Purchasers desire to provide for (i) the rights
of the Purchasers with respect to registration of Common Stock issued upon
conversion of the shares of the Company's stock held by the Purchasers
according to the terms of this Agreement; and (ii) certain other provisions as
set forth below.

     For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree that the Stockholder Rights Agreement
shall be amended and restated to read as follows:

                                   SECTION 1

                                  Definitions

     As used in this Agreement, the following terms shall have the following
respective meanings:

     1.1  "Commission" shall mean the Securities and Exchange Commission of the
United States or any other U.S. federal agency at the time administering the
Securities Act of 1933.

     1.2  "Common Stock" shall mean shares of the Company's Common Stock.

<PAGE>   4
     1.3  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, as the same shall be in effect at the time.

     1.4  "Holder" shall mean each of the Stockholders (and their transferees
as permitted by Section 4.10) holding Registrable Securities or securities
convertible into Registrable Securities.

     1.5  "Initiating Holders" shall mean Holders who in the aggregate hold
greater than forty percent (40%) of the Registrable Securities.

     1.6  "Other Holders" shall mean holders of Company securities, other than
the Holders, proposing to distribute their securities pursuant to a
registration under Section 4 of this Agreement.

     1.7  "Preferred" shall mean shares of the Company's Series A Preferred
Stock, Series A-1 Preferred Stock, Series B Preferred Stock, Series B-1
Preferred Stock, Series C Preferred Stock, Series C-1 Preferred Stock, Series D
Preferred Stock or Series D-1 Preferred Stock.

     1.8  "Registrable Securities" means Common Stock originally purchased or
Common Stock issued or issuable on conversion of the Preferred and any shares of
Common Stock issued or issuable in respect of such Common Stock upon any stock
split, stock dividend, recapitalization, or similar event. Shares of Common
Stock or other securities shall only be treated as Registrable Securities if
they have not been sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction.

     1.9  The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

     1.10 "Registration Expenses" shall mean all expenses, except as otherwise
stated below, incurred by the Company in complying with Sections 4.1, 4.2, and
4.3 hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
and independent public accountants for the Company (and fees and disbursements
of one special counsel for Holders, if any), blue sky fees, transfer taxes, fees
of transfer agents and registrars and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).

     1.11 "Securities" shall mean Common Stock or Preferred.

     1.12 "Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar United States federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.

                                      -2-
<PAGE>   5
     1.13 "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the securities registered by the Holders.

                                   SECTION 2

                               Information Rights

     2.1  Financial Information. As soon as practicable after the end of each
fiscal year, and in any event within one hundred twenty (120) days thereafter,
the Company will provide each Stockholder with consolidated balance sheets of
the Company and its subsidiaries, if any, as of the end of such fiscal year,
and consolidated statements of income, stockholders' equity and cash flows of
the Company and its subsidiaries, if any, for such year, prepared in accordance
with generally accepted accounting principles and setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and audited (without qualification as to scope) by independent auditors
of national standing selected by the Company. In addition, the Company will
provide each Stockholder with the following reports for so long as the
Stockholder is a holder of a minimum of one hundred twenty five thousand
(125,000) shares of Preferred or Common Stock, including for purposes of this
Section 2 any such Shares which have been transferred to an affiliate of a
Stockholder:

          (a)  As soon as practicable after the end of each month and fiscal
quarter, and in any event within thirty (30) days and forty-five (45) days,
respectively, thereafter, a consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of each such period, consolidated
statements of income, consolidated statements of changes in financial condition,
a consolidated statement of cash flow of the Company and its subsidiaries and a
statement of stockholders' equity for such period and for the current fiscal
year to date, and setting forth in each case in comparative form the figures
for corresponding periods in the previous fiscal year, and setting forth in
comparative form the budgeted figures, prepared in accordance with generally
accepted accounting principles (other than for accompanying notes), subject to
changes resulting from year-end audit adjustments, all in reasonable detail and
signed by the principal financial or accounting officer of the Company.

          (b)  As soon as practicable after its adoption by the Board of
Directors, a copy of the annual operating plan of the Company for the next
fiscal year and an annual budget for the next fiscal year of the Company
containing profit and loss projections, cash flow projections and capital
expenditures, all on a monthly basis.

     2.2  Assignment of Rights. The rights granted pursuant to Section 2.1 may
be assigned or otherwise conveyed by a Stockholder to an affiliate of a
Stockholder or to a transferee who acquires (i) at least one hundred twenty five
thousand (125,000) shares of Preferred or (ii) all shares of Preferred or Common
Stock held by such transferor. Notwithstanding the foregoing, the rights granted
pursuant to Section 2.1 may not be assigned or otherwise conveyed to a
competitor of the

                                      -3-
<PAGE>   6
Company, as reasonably determined by the Board of Directors of the Company
excluding any director with an interest in such transferee. The Stockholder
shall provide the Company with written notice of any assignment or conveyance of
the rights granted pursuant to Section 2.1.

     2.3  Termination. The provisions of Sections 2, 3 and 5, including
information rights, rights of first refusal and miscellaneous covenants, shall
terminate upon the closing of a firmly underwritten public offering of the
Common Stock of the Company with a sales price per share (as adjusted for
combinations, stock dividends, subdivisions or split-ups) of at least $6.50 and
with aggregate gross proceeds to the corporation, at the public offering price,
of at least $25,000,000, and the provisions of Section 3 shall not be applicable
to such transaction.

                                   SECTION 3

                    Rights of First Refusal On New Issuances

     3.1  Rights of First Refusal. The Company hereby grants to each Stockholder
the right of first refusal to purchase such Stockholder's pro rata portion of
New Securities (as defined in Section 3.1(a)) that the Company may, from time to
time, propose to sell and issue. Such shares of Common Stock held by such
Stockholder (including Common Stock issuable upon conversion of securities
convertible into Common Stock of the Company held by such Stockholder, including
the Preferred) divided by the total number of shares of Common Stock outstanding
at the time of issuance of such New Securities (including Common Stock issuable
upon conversion of all outstanding securities convertible into Common Stock,
including the Preferred). This right of first refusal shall be subject to the
following provisions:

          (a)  "NEW SECURITIES" shall mean any Common Stock of the Company,
whether now authorized or not, and any rights, options, or warrants to purchase
said Common Stock, and securities of any type whatsoever that are, or may
become, convertible into Common Stock; provided, however, that "New Securities"
does not include (i) shares of Common Stock issued upon conversion of the
Preferred Stock; (ii) securities issued pursuant to the acquisition of another
corporation by the Company by merger, purchase of substantially all of the
assets, or other reorganization; (iii) up to 2,500,000 shares and such
additional shares as approved by the unanimous written consent of the Board of
Directors or the unanimous vote of the members of the Company's Board of
Directors present and voting at a duly held meeting (as adjusted for stock
splits, stock dividends or recapitalization) of the Company's Common Stock (or
related options) issued to employees, officers, directors, consultants, or other
persons performing services for the Company (including, but not by way of
limitation, distributors and sales representatives) pursuant to any stock
offering, plan, or arrangement; (iv) securities issued to financial institutions
regularly engaged in the business of the lending money or providing equipment
lease financing in connection with the extension of credit to the Company for
the purpose of financing equipment, inventory, or accounts receivable or in
connection with the lease of equipment and in both cases for other than equity
financing.

                                      -4-
<PAGE>   7
purposes; (v) securities issued to customers or potential customers of the
Company in connection with participation in a product development consortium or
other corporate partner transaction with the Company for purposes which are not
primarily equity financing; or (vi) shares of the Company's Common Stock issued
in connection with any stock split, stock dividend, or recapitalization by the
Company.

          (b)  In the event that the Company proposes to issue New Securities,
it shall give each Stockholder at least thirty (30) days prior written notice of
its intention, describing the type of New Securities, the price, and the general
terms upon which the Company proposes to issue the same. Each Stockholder shall
have twenty (20) days from the date of mailing of any such notice to agree to
purchase its 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.

          (c)  In the event that a Stockholder fails to exercise in full the
right of first refusal within said twenty (20) day period, the Company shall
have seventy-five (75) days thereafter to sell (or enter into an agreement
pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within thirty (30) days from the date of said agreement) the New
Securities respecting which the Stockholder's rights were not exercised, at a
price and upon general terms no more favorable to the purchasers thereof than
specified in the Company's notice. In the event the Company has not sold the
New Securities within said seventy-five (75) day period (or sold and issued New
Securities in accordance with the foregoing within thirty (30) days from the
date of said agreement), the Company shall not thereafter issue or sell any New
Securities, without first offering such securities to the Stockholders in the
manner provided above.

          (d)  The Stockholder's failure to exercise this right of first
refusal on any issuance of New Securities shall not adversely affect the
Stockholder's right of first refusal to purchase subsequent issuances of New
Securities.

          (e)  The right of first refusal set forth in this Section 3.1 is
nonassignable except to another Stockholder or another entity under common
control with a Stockholder.

     3.2  Termination. The provisions of this Section 3 shall terminate in
accordance with the provisions of Section 2.3.

                                   SECTION 4

                              Registration Rights

     4.1  Requested Registration.

          (a)  Request for Registration. If the Company shall receive from
Initiating Holders a written request that the Company effect any registration,
qualification or compliance with respect

                                      -5-
<PAGE>   8
to not less than forty percent (40%) of the Registrable Securities (or such
lesser percentage of the Registrable Securities if the reasonably anticipated
aggregate price to the public thereof would exceed $5,000,000) the Company will:

          (i)  promptly give written notice of the proposed registration,
qualification or compliance to all other Holders and afford each Holder the
opportunity of including in the registration such Registrable Securities owned
by such Holder; and

          (ii) as soon as practicable, use its best efforts to effect such
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within twenty (20) days after receipt of such written notice from
the Company;

          Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 4.1:

          (A)  In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;

          (B)  Prior to the earlier to occur of (i) six (6) months after the
effective date of the Company's first registered public offering of its stock or
(ii) December 31, 20001;

          (C)  During the period starting with the sixty (60) days prior to the
Company's estimated date of filing of, and ending on the date six (6) months
immediately following the effective date of, a registration statement in
connection with the initial public offering of securities of the Company,
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;

          (D)  During the period starting with the date thirty (30) days prior
to the Company's estimated date of filing of, and ending on the date three (3)
months immediately following the effective date of, any registration statement
pertaining to securities of the Company sold by the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective;

                                      -6-
<PAGE>   9
          (E)  After the Company has effected two registrations pursuant to this
paragraph 4.1, and such registrations have been declared or ordered effective,
provided that all Registrable Securities requested to be included in each such
registration were in fact included in the registration;

          (F)  If the Company shall furnish to such Holders a certificate signed
by the President of the Company, and concurred to in writing by an underwriter
or other financial advisor of the Company, stating that in the good faith
judgment of the Board of Directors it would be seriously detrimental to the
Company or its stockholders for a registration statement to be filed in the near
future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 4 shall be deferred for a period not to
exceed ninety (90) days from the date of receipt of written request from the
Initiating Holders, provided, however, that the Company shall not utilize this
right more than once in any twelve (12) month period.

          Subject to the foregoing clauses (A) through (F), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable, after receipt of the request or
requests of the Initiating Holders.

     (b)  Underwriting. In the event that a registration pursuant to Section 4.1
is for a registered public offering involving an underwriting, the Initiating
Holders will so advise the Company as part of the written request given by such
Initiating Holders pursuant to Section 4.1(a), and the Company shall in turn
advise the Holders as part of the notice given pursuant to Section 4.1(a)(i). In
such event, the right of any Holder to registration pursuant to Section 4.1
shall be conditioned upon such Holder's participation in the underwriting
arrangements required by this Section 4.1, and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent shall be limited to the
extent provided herein.

     The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company, but subject to the reasonable approval of a majority in interest of
the Initiating Holders. Notwithstanding any other provision of this Section 4.1,
if the managing underwriter advises the Initiating Holders in writing that the
number of shares to be underwritten exceeds the number that can be sold in such
offering so as to be likely to have a material adverse effect on the price or
amount at which the Initiating Holders can sell their Shares, then the Company
shall so advise all Holders and Other Holders, and the number of shares that may
be included in the registration and underwriting shall be allocated first among
all Holders in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities held by such Holders at the time of filing the
registration statement and second among the Other Holders in proportion to the
number of shares proposed to be included in such registration by such Other
Holders. No Registrable Securities or other securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any holder to the nearest one hundred (100)
shares.

                                      -7-

<PAGE>   10
          If any Holder of Registrable Securities or Other Holder disapproves
of the terms of the underwriting, such person may elect to withdraw therefrom
by written notice to the Company, the managing underwriter and the Initiating
Holders. The Registrable Securities and/or other securities so withdrawn shall
also be withdrawn from registration.

     4.2  Company Registration

          (a)  Notice of Registration. If at any time or from time to time the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Rule 145 transaction, the Company will:

               (i)  promptly give to each Holder written notice thereof; and

               (ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by any Holder within twenty (20) days after receipt of such
written notice from the Company.

          (b)  Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 4.2(a)(i). In such event the right of any Holder to
registration pursuant to Section 4.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall, together with the
Company and the Other Holders, enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company. Notwithstanding any other provision of this Section 4.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
number of shares of Registrable Securities to be included in such registration
without requiring any limitation in the number of shares to be registered on
behalf of the Company, provided that if such underwriting is other than an
initial public offering the number of shares of Registrable Securities held by
Holders and Other Holders to be included in such registration shall not be
limited to less than twenty-five percent (25%) of the total number of shares to
be included in such registration. The Company shall so advise all Holders and
Other Holders and the number of shares that may be included in the registration
and underwriting by all Holders and Other Holders shall be allocated among them,
as nearly as practicable, first, to the Company (or, if applicable, to the
holders for whose account the Company is registering the securities), second,
among the Holders of Registrable Securities in proportion to the respective
amounts of Registrable Securities held by such Holders at the time of filing of
the registration statement, and, third, among the Other Holders in proportion
to the number of shares proposed to be included in such registration by such
Other Holders; provided, however, that at all times, such allocation shall be
subject to the twenty-five percent (25%) threshold set forth in the preceding
sentence if such registration and underwriting is

                                      -8-
<PAGE>   11
other than an initial public offering. To facilitate the allocation of shares
in accordance with the above provisions, the Company may round the number of
shares allocated to any Holder or Other Holder to the nearest one hundred (100)
shares. If any Holder or Other Holder disapproves of the terms of any such
underwriting, such holder may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

          (c)  Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 4.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such registration.

     4.3  Registration on Form S-3.

          (a) Request for Registration. If any Holder or Holders request that
the Company file a registration statement on Form S-3 (or any successor form to
Form S-3) for a public offering of shares of the Registrable Securities held by
such party the reasonably anticipated aggregate price to the public of which
would exceed $1,000,000 and the Company is a registrant entitled to use Form
S-3 to register the Registrable Securities for such an offering, the Company
shall use its best efforts to cause such Registrable Securities to be
registered for the offering on such form and to cause such Registrable
Securities to be qualified in such jurisdictions as the Holder or Holders may
reasonably request. The substantive provisions of Section 4.1(b) shall be
applicable to each registration initiated under this Section 4.3.

          (b)  Limitations. Notwithstanding the foregoing, the Company shall
not be obligated to take any action pursuant to this Section 4.3: (i) in any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act; (ii)
with respect to Section 4.3 only, for a period of one hundred twenty (120) days
after receipt of the request of the initiating Holders, if the Company, within
ten (10) days after such receipt gives notice of its bona fide intention to
effect the filing of a registration statement with the Commission within ninety
(90) days of receipt of such request (other than with respect to a registration
statement relating to a Rule 145 transaction, an offering solely to employees
or any other registration which is not appropriate for the registration of
Registrable Securities) and the Company shall promptly notify the initiating
Holders in the event it abandons its intention to effect such registration
statement; (iii) during the period starting with the date sixty (60) days prior
to the Company's estimated date of filing of, and ending on the date six (6)
months immediately following, the effective date of any registration statement
pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective
and, provided further that the Company shall have the right to defer filing a
registration statement under the Securities Act not more than one in any twelve
month period; or (iv) if the Company shall furnish to such Holder a

                                      -9-
<PAGE>   12
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or the stockholders as a whole for registration statements to be
filed in the near future, then the Company's obligation to use its best efforts
to file a registration statement shall be deferred for a period not to exceed
ninety (90) days from the receipt of the request to file such registration by
such Holder, provided, however, that the Company shall not utilize this right
more than once in any twelve (12) month period.

     4.4  Limitations on Subsequent Registration Rights. From and after the date
hereof, the Company, will not, without the prior written consent of holders of a
majority of the voting power of the then outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which allows such holder or prospective holder of any securities
of the Company to include such securities in any registration filed under
Sections 4.1, 4.2 or 4.3 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
diminish the amount of Registrable Securities which are included. However, the
Company may by agreement grant such holder or prospective holder a registration
right analogous to that set forth in Section 4.1 provided that (i) such holder
or prospective holder may not demand a registration analogous to that set forth
in Section 4.1 at any time earlier than the Holders first have such right, and
(ii) that the Registrable Securities may be included in any such registration
demanded by such holders to the extent such inclusion will not diminish the
amount of securities of such holders which are included.

     4.5  Expenses of Registration.

          (a)  Registration Expenses. The Company shall bear all Registration
Expenses incurred in connection with all registrations pursuant to Section 4.1
or Section 4.2 and up to four registrations pursuant to Section 4.3.

          (b)  Selling Expenses. Unless otherwise stated in Section 4.5(a), all
Selling Expenses and Registration Expenses relating to securities registered on
behalf of the Holders shall be borne by the Holders pro rata on the basis of the
number of shares so registered by such Holder.

     4.6  Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will:

          (a)  keep each Holder advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof;

          (b)  as soon as practicable, prepare and file with the Commission a
registration statement with respect to such securities and use its best efforts
to cause such registration statement to become and remain effective until the
earlier of (i) one hundred twenty (120) days or (ii) the distribution described
in the Registration Statement has been completed; provided, however, that (i)
such 120-day period shall be extended for a period of time equal to the period
the Holder refrains

                                      -10-

<PAGE>   13
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 145, or any
successor rule under the Securities Act, permits an offering on a continuous or
delayed basis, and, provided further, that applicable rules under the
Securities Act governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amended which (I) includes any
prospectus required by Section 10(a)(3) of the Securities Act or (II) reflects
facts or events representing a material or fundamental change in the
information set forth in the registration statement, the incorporation by
reference of information required to be included in (I) and (II) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement;

          (c)  furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order
to facilitate the public offering of such securities;

          (d)  prepare and file with the Commission 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;

          (e)  in the event of an underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter 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 hereto 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 material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements made therein not misleading in the light of the circumstances then
existing;

          (g) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;

          (h)  use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
as any Holder reasonably requests and do any and all other acts and things
which may be necessary or advisable to enable such holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller;

                                      -11-
<PAGE>   14
provided, that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service or process in any such
jurisdiction, but the Company will be required to consent to service or process
in actions arising out of or in connection with the sale of the Registrable
Securities or any violation of state securities laws;

          (i)  use its best efforts to cause the Registrable Securities covered
by such registration statement to be registered with or approved by any other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities;

          (j)  use its best efforts to obtain a comfort letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters with respect to
offerings of such type as the Holders may reasonably request;

          (k)  otherwise comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering a period of twelve
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and rule 158 thereunder; and

          (l)  cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied.

          The Company may require each holder of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may from time to time reasonably request in writing.

     4.7  Preparation: Reasonable Investigation.

     In connection with the preparation and filing of each registration
statement under the Securities Act pursuant to this Agreement, the Company will
give each Holder of Registrable Securities, their underwriters, if any, and
their respective counsel and accountants, the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment, thereof or supplement thereto,
and will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.

                                      -12-
<PAGE>   15
     4.8  Indemnification.

          (a)  By Company. The Company will indemnify and hold harmless each
Holder, each of its officers and directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act and each Stockholder and its officers, directors and partners
and each person controlling such Stockholder within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages or
liabilities, joint or several, (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
violation by the Company of the Securities Act, the Exchange Act or any state
or federal securities law, or any rule or regulation promulgated under such
Acts or law applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such
underwriter, each Stockholder, each of its officers, directors and partners and
each person controlling such Stockholder, in advance of the final disposition
of such matter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in
any such case to any such Holder to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person, underwriter or
Stockholder and stated to be specifically for use therein. If the Holders and
Stockholders are represented by counsel other than counsel for the Company, the
Company will not be obligated under this Section 4.7(a) to reimburse legal fees
and expenses of more than one separate counsel for all Holders and Stockholders.

          (b)  By Holders. Each Holder will, if Registrable Securities held by
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors, each of its officers, each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material

                                      -13-
<PAGE>   16
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, that
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall be limited in an amount equal to the public offering price
of the Registrable Securities sold by such Holder, unless such liability arises
out of or is based on willful misconduct by such Holder.

     (c)  Procedures. Each party entitled to indemnification under this Section
4.8 (the "Indemnified Party") shall given written notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnify may
be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the Indemnifying Party
shall not assume the defense for matters as to which there is conflict of
interest or separate and different defenses. No Indemnifying Party, in the
defenses of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.

     (d)  Contribution. If the indemnification provided for in this Section 4.8
is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party or is insufficient with respect to any loss, liability,
claim, damage, or expense referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such loss,
liability, claim, damage, or expense in such proportion as it appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage, or expense as well as any
other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result
of any loss, liability, claim, damage or expense referred to above shall

                                      -14-

<PAGE>   17
be deemed to include, subject to the limitations set forth in Section 4.8(c),
any legal or other fees, or expenses reasonably incurred by such party in
connection with any investigation or proceeding. If indemnification is
available under this Section 4.8, the indemnifying parties shall indemnify each
indemnified party to the full extent provided in Section 4.8(a) and (b) without
regard to the relative fault of said indemnifying party or indemnified party or
other equitable consideration provided for in this Section 4.8(d).

          (e)  Controlling Agreement. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions of this Section 4.8, the
provisions in the underwriting agreement shall control.

     4.9  Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held
by them and the distribution proposed by them as the Company may request in
writing and only as shall be necessary to enable the Company to comply with the
provisions hereof in connection with any registration, qualification or
compliance referred to in this Agreement.

     4.10 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 use its best efforts 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 that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act.

          (b)  Use its best 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 Exchange Act (at any time after it has become subject to
such reporting requirements);

          (c)  Furnish to any Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
(at any time after 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 Exchange Act (at any time after it
becomes subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as such Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing such Holder to sell
any such securities without registration.

                                      -15-
<PAGE>   18
     4.11  Transfer of Registration Rights. The rights to cause the Company to
register securities granted Holders under Sections 4.1, 4.2 and 4.3 may be
assigned in connection with any transfer or assignment by a Holder of
Registrable Securities provided that: (i) such transfer may otherwise be
effected in accordance with applicable securities laws, (ii) such transfer is
effected in compliance with the restrictions on transfer contained in this
Agreement and in any other agreement between the Company and the Holder, and
(iii) such assignee or transferee is a constituent partner of a Stockholder or
purchases (a) at least 125,000 shares of Preferred or Common Stock into which
such Preferred has been converted or (b) all shares of Preferred and Common
Stock, into which such Preferred has been converted, held by a Stockholder. No
transfer or assignment will divest a Holder or any subsequent owner of such
rights and powers unless all Registrable Shares are transferred or assigned.

     4.12  Termination. The registration rights granted pursuant to this Section
4 shall terminate as to any Holder at the later of (i) five years after the
Company's initial public offering or (ii) after the effective date of the
Company's first registered public offering of its stock, at such time as such
Holder may sell under Rule 144, or a successor rule, in a three month period all
Registrable Securities then held by such Holder.

     4.13  Lockup Agreement. Each Holder agrees that, if, in connection with the
Company's initial public offering of the Company's securities, the Company or
the underwriters managing the offering so request, the Holder shall not sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any Registrable Securities (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may
be requested by the Company or the underwriters; provided that each officer and
director of the Company who owns stock of the Company also agrees to such
restrictions. This Section 4.13 shall be binding on all transferees or assignees
of Registrable Securities, whether or not such persons are entitled to
registration rights pursuant to Section 4.11.

     4.14  Representations and Warranties of the Company. The Company represents
and warrants to each of the Stockholders as follows:

          (i)  The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Restated Certificate or By-laws of the Company or any provision
of any indenture, agreement or other instrument to which it or any or its
properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.

                                      -16-
<PAGE>   19
          (ii) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.

                                   SECTION 5

                            Miscellaneous Covenants

     5.1  Proprietary Information Agreement. Unless otherwise determined by
Board of Directors, the Company shall require all future officers, directors
and employees of, and consultants to, the Company and its subsidiaries, if any,
to execute a proprietary information agreement providing for the protection of
the Company's proprietary or confidential information and the assignment of
intellectual property rights to the Company.

     5.2  Stock Vesting. The Company shall cause all future recipients of the
Company's Common Stock or options to purchase the Company's Common Stock
receiving such securities in connection with the performance of services for
the Company to execute and deliver agreements providing that such Common Stock
shall be subject to a right of the Company to repurchase such Common Stock at
the original purchase price in the event that the relationship of such person
with the Company is terminated, which right shall lapse over a four-year
period, or providing that such options shall become exercisable over a
four-year period based upon continuing employment, or providing such other
vesting arrangements as determined appropriate by the Company's Board of
Directors.

     5.3  Changes in Common Stock or Preferred Stock. If, and as often as,
there is any change in the Common Stock or the Preferred by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Preferred as so changed.

     5.4  Board of Directors. At each election of the Board of Directors of the
Company, each Stockholder agrees to vote a sufficient number of shares of
Preferred and Common Stock to elect one (1) representative of the Series D
Preferred Stock and Series D-1 Preferred Stock to the Board of Directors, which
representative shall be designated by holders of a majority in interest of the
Series D Preferred Stock and Series D-1 Preferred Stock. In the event any
director elected pursuant to the terms of this Section 5.4 ceases to serve as a
member of the Board of Directors, the Company and the Stockholders agree to
take all such action as is reasonable and necessary, including the voting of
shares of capital stock of the Company by the Stockholders as to which they
have beneficial ownership, to cause the election or appointment of such other
substitute person to the Board of Directors as may be designated pursuant to
this Section 5.4.

                                      -17-
<PAGE>   20
     5.5  Termination. The provisions of this Section 5 shall terminate in
accordance with the provisions of Section 2.3.

                                   SECTION 6

                                    Legends

     6.1  Legends. Each Stockholder understands that the share certificates
evidencing any Registrable Securities shall be endorsed with the following
legends (in addition to any legends required under applicable state securities
laws):

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

          (b)  "THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE REGISTERED HOLDER OR HIS PREDECESSOR IN INTEREST. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD
OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.

          (c)  Any legend required to be placed thereon by the California
Commissioner of Corporations or any other applicable state securities laws.

                                   SECTION 7

                                 Miscellaneous

     7.1  Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as applied to contracts made and to be fully
performed entirely within that state between residents of that state. All
disputes arising out of this Agreement shall be subject to the exclusive
jurisdiction and venue of the California state courts of Santa Clara County,
California, (or, if there is exclusive federal jurisdiction, the United States
District Court for the Northern District of California) and the parties consent
to the personal and exclusive jurisdiction and venue of these courts.

     7.2  Entire Agreement: Amendment. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof. This Agreement or any term hereof may be amended,
waived, discharged or terminated by a written

                                      -18-
<PAGE>   21

instrument signed by the Company and (i) the Holders, or transferees of such
Holders, holding more than fifty percent (50%) of the Registrable Securities,
and (ii) with respect to Section 5.4 hereof, the Holders, or transferees of
such Holders, holding more than fifty percent (50%) of the Series D Preferred
Stock and Series D-1 Preferred Stock, voting together as a separate class;
provided, however, that no such amendment may treat any Holder in a manner
different from the other Holders.

     7.3 Aggregation. For the purposes of determining the number of shares of
Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by
gift, will or intestate succession) shall be aggregated together and with the
partnership; provided, that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under Sections 2 and 4.

     7.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be deemed given if in writing and mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand
or by messenger, addressed (a) if to a Holder, at such Holder's address as set
forth on Exhibit A to this Agreement, or at such other address as such Holder
shall have furnished to the Company in writing, or (b) if to any other holder
of any Registrable Securities, at such address as such holder shall have
furnished the Company in writing, or until any such holder so furnishes an
address to the Company, then to and at the address of the last holder of such
Registrable Securities who has so furnished an address to the Company, or (c)
if to the Company, at the address of its principal offices and addressed to the
attention of the Corporate Secretary and with a copy to Wilson, Sonsini,
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California 94304-1050,
Attention: Michael J. O'Donnell, or at such other address as the Company shall
have furnished to the Purchasers.

     7.5 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.

     7.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.

     7.7 Prior Agreement. This Agreement is intended to supersede and replace
that certain Amended Stockholder Rights Agreement dated as of March 14, 1997,
which prior agreement is hereby canceled.

                                      -19-<PAGE>   1
                                                                   EXHIBIT 10.10

October 29, 1996

David P. Binkley, Ph.D.
239 Keeler Drive
Ridgefield, CT 06877

Dear Dave,

This letter supersedes any similar such letters on the same subject of prior
date.

The Board of Directors and employees of ARGONAUT TECHNOLOGIES, INC. are very
excited and pleased about you becoming our President, Chief Executive Officer
and Board member. We are unanimous in the belief that you can lead the Company
in its move forward toward worldwide prominence. This letter is a formal offer
to join the Company.

Your initial salary for the position will be $17,667 per month, an 8% increase
over your current salary. Your salary will be reviewed annually. The first
review will be in January 1998 and adjustments will be based on performance.
You will also receive a bonus plan that will provide you the opportunity of
earning up to 40% of your base salary in additional cash compensation based
upon achieving milestones to be established by you and the Board. You will be
eligible for this bonus annually (to be reviewed and paid in each January for
the prior calendar year) beginning in January 1998.

You will be granted an option to purchase 500,000 shares of common stock at a
price equal to the fair market value on the date of grant, which is currently
$0.30 per share for common stock. We sold preferred stock in our last financing
round at $3.25 per share. This share amount represents more than 50% above any
other officer in the Company. Your shares will vest monthly over 48 months based
upon your continued employment, however the first six months of vesting will be
accelerated so that one eighth (62,500 shares) will be fully vested to you upon
commencement of employment and the remainder will begin vesting after your
initial six months with the Company.

To facilitate your relocation, you may receive reimbursement of moving expenses
(to include transportation, house selling costs, house purchase closing fees)
of up to $100,000. The Company will also make available a loan of up to $300,000
to further assist you in purchasing a home in this area. This loan will be held
as a second mortgage and due in five years or sooner in the event of
termination of your employment. The interest rate on this loan will be the
minimum rate allowable under Internal Revenue Service regulations (currently
approximately 6%), and will be fixed on the date the note is signed. You may
pay off this loan at any time. In the event of the Company's termination of
your employment without cause, you would receive twelve month's base salary as
severance.
<PAGE>   2
David P. Binkley, Ph.D.
October 29, 1996
Page two

The employee benefit package will be sent to you under a separate cover from
the Company. The component parts are medical, dental, long term disability,
life insurance, two weeks paid vacation, and 401K plan that is non-matching
until the Company is profitable.

In the event the Company is acquired by or merged into another company, if you
are not offered a position of similar responsibility and leave, the Board of
Directors will waive its right to repurchase the remaining of your unvested
shares and, therefore, you would be able to keep them.

This is not an employment contract for any specified duration. Accordingly,
your employment may be terminated by you or by us at any time, with or without
cause. This offer is contingent upon your signing of the Argonaut Proprietary
Information and Invention Assignment Agreement which will be sent to you under
separate cover. The terms of this offer are considered confidential information
to ARGONAUT TECHNOLOGIES, INC., and we trust that you will treat it
confidentially as between you and the Board of Directors.

If you have any questions about this offer, please contact me at 415-233-3322.
If you accept the offer, please sign this offer letter where indicated and
return it to me at your earliest convenience.

Dave, I speak for the Board of Directors and employees of the Company when I
say that we are looking forward to building a mutually rewarding business
relationship.

We are looking forward to having you join the ARGONAUT TECHNOLOGIES team.

Sincerely,

/s/ BROOK H. BYERS
---------------------------
Brook H. Byers
Chairman of the Board
ARGONAUT TECHNOLOGIES, INC.

Accepted: /s/ D.P. BINKLEY         Date:   Oct. 29, 1996
          ---------------------         ---------------------
          David P. Binkley

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]