Document:

SurgX Corporation
                                       and
                            Iriso Electronics Company

                     Supplemental Agreement For Amendment of
                 Intellectual Property Rights License Agreement

         This Supplemental  Agreement,  dated the 1st day of April, 2003, and by
and between SurgX  Corporation a corporation  of Delaware,  having an office and
place of business at 4340  Almaden  Expressway,  Ste 220,  San Jose,  California
95118  (hereinafter  referred to as "SurgX" ), and Iriso Electronics  Company, a
Japanese  corporation  having its principal office located at 2-35-8  Kitamikata
Takatsu-Ku,  Kawasaki Kanagawa, Japan 213-0005 ("Iriso") either or both of which
may also  hereinafter be referred to respectively as the "Party" or "Parties" to
this Supplemental Agreement,

                                WITNESSETH THAT:

WHEREAS,  Iriso and SurgX have entered  into the  Intellectual  Property  Rights
License Agreement dated October 22, 1997 (the "License Agreement);

WHEREAS,  Bussmann  (McGraw-Edison)  has allowed its corresponding  license from
SurgX to convert from exclusive to nonexclusive;

WHEREAS,  SurgX and Iriso desire to amend the terms of the License  Agreement as
set forth in this Supplemental Agreement; and

WHEREAS,  Iriso and SurgX each  represents  that it is fully  authorized to deal
generally with and make an agreement respecting the subject matter hereof.

NOW,  THEREFORE,  in  consideration  of the above premises and mutual  covenants
hereinafter contained, Iriso and SurgX agree as follows:

                                       1

<PAGE>

1. The Grant under  Paragraph 2.1 shall be and is hereby amended to a license to
use Intellectual Property and Technical Information for the manufacture, use and
sale of Licensed Products worldwide,  which sales may be through distributors or
agents selected by IRISO, provided that IRISO shall be responsible for reporting
all such sales and for payment of royalty on such sales.  The worldwide  license
provided  by  this  amendment  shall  be  nonexclusive,  without  the  right  to
sublicense,  except to the extent that the Licensed Products sold by IRISO shall
carry with them the right and  license  for the  customer  to use them for their
intended use.

2. The Royalty  provisions of Paragraphs 5.1 and 5.2 and the Payment  provisions
of  Paragraph  6.1  shall be and are  hereby  replaced  with the  following  new
Paragraphs 5.1 through 5.6 for Section 5:

5.1 The royalty  shall be nine  percent  (9%) of Net Sales of Licensed  Products
which are non-connector SurgX devices, such as component, board or chip devices.

5.2 The  royalty  shall be two percent  (2%) of Net Sales of  Licensed  Products
which are SurgX connector devices.

5.3  There shall be no minimum royalties.

5.4 The term "Net  Sales"  shall mean total  gross  sales of  Licensed  Products
invoiced by IRISO, less only discounts shown on invoices, shipping charges shown
on invoices,  taxes shown on invoices and returns of Licensed Products for which
customers are given credit.

5.5 Net Sales shall be reported  and  Royalties  shall be paid for the  previous
calendar quarter within 45 days following the last day of the previous  calendar
quarter.  Net Sales are to be  reported  and  royalties  paid based on  invoiced
sales,  without regard to product shipment or customer payment.  Net Sales shall
include and Royalties shall be paid on any Licensed Product  manufactured during
the  term of this  Supplemental  Agreement  reportable  and due  when  invoiced,
without  regard to when sold or  shipped.  Any  Licensed  Products  bartered  or
transfer priced below market price shall be reported as Net Sales on the earlier
of ship date or invoice date and royalties shall be calculated on prices charged
third parties for comparable products.

                                       2

<PAGE>

5.6 In order to avoid double  taxation,  when IRISO submits royalty  payments to
SurgX, IRISO will include  documentation  regarding any taxes withheld therefrom
because of government requirements,  to enable SurgX to obtain tax treaty credit
for such  withholding.  Any taxes not required by the  government to be withheld
from royalty payments shall be IRISO's  responsibility and shall not be deducted
from or a credit claimed against royalties due.

3. The License Fee for the above grant of the worldwide  license is  $200,000.00
(US) payable by IRISO to SurgX upon signing of this Supplemental Agreement. This
Supplemental  Agreement  and the terms and  provisions  contained  herein  shall
become  effective and in force upon the date of receipt by SurgX of said License
Fee ("Effective  Date").  Said License Fee is nonrefundable  and is not credited
against past or future royalties due SurgX.

4. This  Supplemental  Agreement  shall be  construed,  interpreted  and applied
consistent with the terms of the Intellectual  Property Rights License Agreement
and in  accordance  with the laws of the State of  California,  USA.  Except for
matters of urgent need to protect trade secret  confidentiality and unauthorized
use of trade secrets of SurgX, disputes under this Agreement shall be subject to
Arbitration and such Arbitration shall be combined with and conducted consistent
with Section 10 of the License Agreement dated October 22, 1997.

5. This  Supplemental  Agreement shall continue in force and effect for the term
of the  Intellectual  Property Rights License  Agreement dated October 22, 1997,
and shall  terminate at the time said License  Agreement is  terminated  for any
reason.

6. The Notice provision of Paragraph 9 shall be and is hereby amended to provide
that the address for SurgX shall be:

                           SurgX Corporation
                           4340 Almaden Expressway, Ste. 220
                           San Jose, CA  95118
                           Attention:  Philip Micciche, President

7.  This  Supplemental   Agreement  constitutes  the  entire  understanding  and
agreement  between  the  Parties  relating  to the item  set  forth  herein  and
supersedes   and  cancels  any  and  all  previous  or  collateral   agreements,
negotiations, commitments, representations or understandings between the Parties
in  respect  thereto,   and,  except  as  specified  herein,   nothing  in  this
Supplemental Agreement shall supersede or in any way modify any of the terms and
conditions,  or the  rights  and  obligations  of the  Parties  included  in the
Intellectual  Property  Rights  License  Agreement  between  the  Parties.  This
Supplemental  Agreement  may not be  changed,  modified,  released,  discharged,
abandoned,  or assigned (in whole or in part) except by an instrument in writing
signed by an authorized representative of each Party hereto.

8. This  Supplemental  Agreement is subject to all of the laws and  regulations,
now in effect or hereafter in effect,  of the United States  Government  and its
Departments and Agencies.

IN WITNESS WHEREOF,  the Parties hereto have caused this Supplemental  Agreement
to be executed by their duly  authorized  representatives  dated as specified on
the first page of this Supplemental  Agreement and effective as of the Effective
Date specified above in Paragraph 3 of this Supplemental Agreement.

Iriso Electronics Company                            SurgX Corporation

By: /s/ Sadao Sato                                   By: /s/ Philip J. Micciche
    --------------                                       ----------------------
Name: Sadao Sato                                     Name: Philip J. Micciche
      ----------                                           ------------------
Title: President                                     Title: CEO
       ---------                                            ---

                                       3S2 TECHNOLOGIES, INC.

                  SERIES B-1 PREFERRED STOCK PURCHASE AGREEMENT

                                   MAY 6, 2003

<PAGE>

                              S2 TECHNOLOGIES, INC.
                  SERIES B-1 PREFERRED STOCK PURCHASE AGREEMENT

         THIS SERIES B-1 PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
made and entered into as of May 6, 2003, by and among S2  TECHNOLOGIES,  INC., a
California corporation (the "Company"),  and each of those persons and entities,
severally  and not  jointly,  whose  names  are set  forth  on the  Schedule  of
Purchasers  attached  hereto  as  Exhibit  A (which  persons  and  entities  are
hereinafter  collectively referred to as "Purchasers" and each individually as a
"Purchaser").  Together,  the  Company  and the  Purchasers  are  referred to as
"parties" and each as a "party."

                                    RECITALS

         WHEREAS,  the  Company  has  authorized  the  sale and  issuance  of an
aggregate of two million nine hundred thousand  (2,900,000) shares of its Series
B-1 Preferred Stock (the "Shares");

         WHEREAS,  Purchasers  desire to  purchase  the  Shares on the terms and
conditions set forth herein; and

         WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein.

                                    AGREEMENT

         NOW,  THEREFORE,  in  consideration  of the foregoing  recitals and the
mutual  promises,  representations,  warranties,  and covenants  hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

    1. AGREEMENT TO SELL AND PURCHASE.

         1.1  Authorization of Shares. On or prior to the Closing (as defined in
Section 2 below), the Company shall have authorized (a) the sale and issuance to
Purchasers  of the Shares and (b) the issuance of such shares of Common Stock to
be issued upon conversion of the Shares (the  "Conversion  Shares").  The Shares
and the  Conversion  Shares shall have the rights,  preferences,  privileges and
restrictions  set  forth  in  the  Second  Amended  and  Restated   Articles  of
Incorporation  of the Company,  in the form  attached  hereto as Exhibit B (also
referred to as the "Restated Charter").

         1.2  Sale and Purchase. Subject to the terms and conditions  hereof, at
the Closing (as  hereinafter  defined) the Company  shall issue and sell to each
Purchaser, severally and not jointly, and each Purchaser shall purchase from the
Company, severally and not jointly, the number of Shares set forth opposite such
Purchaser's  name as set forth on the Schedule of Purchasers  attached hereto as
Exhibit A (the "Schedule of Purchasers") under the heading "First Closing," at a
purchase price of thirty-five cents ($0.35) per share. The per share price

                                       1.
<PAGE>

will be adjusted based upon the Company  meeting  certain  milestones as further
described  in Section  (4)(j) of the Second  Amended  and  Restated  Articles of
Incorporation.

    2. CLOSING, DELIVERY AND PAYMENT.

         2.1  Closing.  The  closing  of the sale and  purchase  of a minimum of
1,714,286  Shares set forth under the heading "First  Closing" on Exhibit A (the
"Closing") shall take place at 12:00 p.m. on the date hereof,  at the offices of
Cooley Godward LLP located at 4401 Eastgate Mall, San Diego, CA 92121 or at such
other time or place as the Company and  Purchasers may mutually agree (such date
is hereinafter referred to as the "Closing Date").

         2.2  Delivery.  At each  Closing,  subject to the terms and  conditions
hereof,  the Company will deliver to each  Purchaser a certificate  representing
the number of Shares purchased at the Closing by such Purchaser, against payment
of the purchase price therefor by check, wire transfer made payable to the order
of  the  Company,  cancellation  of  indebtedness  or  any  combination  of  the
foregoing.

         2.3  Subsequent  Sales of Shares. At any time on or before the 90th day
following  the Closing or at such later time as the Company and the holders of a
majority of the Shares  purchased  at the Closing  (pursuant to Section 2.1) may
mutually agree, the Company may sell up to the balance of the authorized  shares
of Series B-1 Preferred Stock not sold at the Closing (the  "Remaining  Shares")
to such persons as may be approved by the Company (the "Additional  Purchasers")
provided,  however, that no such sales of Remaining Shares may be made hereunder
unless the Purchasers at the first Closing hereunder (the "Initial  Purchasers")
are first  offered a right to purchase  their pro rata portion of the  Remaining
Shares offered at any such Additional  Closing (as defined below).  Each Initial
Purchaser's "pro rata portion", for the purposes of this Section 2.3 only, shall
be equal to the number of shares that such Initial Purchaser  actually purchased
at the first  Closing  divided by the total number of Shares sold by the Company
to all Initial Purchasers at the first Closing.  If the Company proposes to sell
Remaining  Shares,  it shall give each Initial  Purchaser  written notice of its
intention.  Each Initial  Purchaser  shall have ten (10) days from the giving of
such  notice to agree to purchase  up to its pro rata  portion of the  Remaining
Shares on the terms and conditions specified in this Agreement by giving written
notice to the Company and stating therein the quantity of Remaining Shares to be
purchased and  delivering the requisite  purchase price for such shares.  If not
all of the Initial Purchasers elect to purchase their entire pro rata portion of
the Remaining  Shares then being offered by the Company,  the Company shall have
sixty (60) days thereafter to sell any such Remaining Shares to persons selected
in the  Company's  discretion,  on the terms and  conditions  of this  Agreement
during  the ninety  (90) day period  referenced  in the first  sentence  of this
Section 2.3. All such sales made at any additional closings (each an "Additional
Closing"),  (i)  shall be made on the  terms  and  conditions  set forth in this
Agreement,  (ii) the  representations and warranties of the Company set forth in
Section 3 hereof (and the Schedule of Exceptions) shall speak as of the Closing,
and (iii) the  representations  and warranties of the  Additional  Purchasers in
Section 4 hereof  shall speak as of such  Additional  Closing.  This  Agreement,
including without limitation,  the Schedule of Purchasers, may be amended by the
Company without the consent of Purchasers to include any Additional  Purchasers.
Any shares of Series B-1 Preferred Stock sold pursuant to this Section 2.3 shall
be deemed to be "Shares" for

                                       2.
<PAGE>

all purposes under this Agreement and any Additional Purchasers thereof shall be
deemed to be "Purchasers" for all purposes under this Agreement.

    3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         Except  as set  forth on a  Schedule  of  Exceptions  delivered  by the
Company to the  Purchasers at the Closing,  the Company  hereby  represents  and
warrants to each Purchaser as of the date of this Agreement as set forth below.

         3.1  Organization,  Good Standing and  Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California.  The Company has all requisite  corporate  power and
authority to own and operate its properties  and assets,  to execute and deliver
this Agreement,  the Amended and Restated  Investor Rights Agreement in the form
attached hereto as Exhibit C (the "Investor Rights Agreement"),  the Amended and
Restated  Co-Sale  Agreement  in the form  attached  hereto  as  Exhibit  D (the
"Co-Sale Agreement"),  and the Amended and Restated Voting Agreement in the form
attached  hereto  as  Exhibit  E (the  "Voting  Agreement")  (collectively,  the
"Related  Agreements"),  to issue and sell the Shares and the Conversion Shares,
and to carry out the provisions of this  Agreement,  the Related  Agreements and
the Restated Charter and to carry on its business as presently  conducted and as
presently proposed to be conducted.

         3.2  Subsidiaries.  The  Company  does not own or  control  any  equity
security or other  interest of any other  corporation,  limited  partnership  or
other  business  entity.  The Company is not a participant in any joint venture,
partnership or similar arrangement.

         3.3 Capitalization; Voting Rights.

                  (a) The authorized  capital stock of the Company,  immediately
prior to the Closing,  consists of (i) thirty-eight  million (38,000,000) shares
of Common Stock,  five million eight hundred  seventy-two  thousand nine hundred
and sixteen  (5,872,916)  shares of which are issued and  outstanding,  and (ii)
fifteen  million  four hundred  ninety-two  thousand  five hundred  ninety-three
(15,492,593)  shares of Preferred  Stock,  two million  five hundred  ninety-two
thousand five hundred  ninety-three  (2,592,593)  shares of which are designated
Series A  Preferred  Stock,  all of which are  issued and  outstanding,  and ten
million  (10,000,000)  shares of which are designated  Series B Preferred Stock,
nine  million  nine  hundred  sixty-four  thousand  two hundred  and  eighty-six
(9,964,286)  of which are issued and  outstanding.  Of the  Preferred  Stock two
million nine  hundred  thousand  (2,900,000)  shares are  designated  Series B-1
Preferred Stock,  none of which are issued and outstanding  immediately prior to
the Closing.

                  (b)  Under  the  Company's  2000  Equity  Incentive  Plan (the
"Plan"),  (i) three hundred six thousand five hundred (306,500) shares have been
issued pursuant to restricted stock purchase  agreements  and/or the exercise of
outstanding  options,  (ii)  options  to  purchase  one  million  eight  hundred
sixty-three  thousand five hundred  (1,863,500) shares of Common Stock have been
granted  and are  currently  outstanding,  and (iii) one  million  four  hundred
thirty-seven thousand six hundred fifty-seven (1,437,657) shares of Common Stock
remain  available  for future  issuance to officers,  directors,  employees  and
consultants of the Company.

                                       3.
<PAGE>

                  (c) Other than (i) the shares  reserved for issuance under the
Plan, (ii) warrants to purchase up to seven hundred thousand (700,000) shares of
Common  Stock  pursuant  to that  certain  Business  Consultant  and  Management
Agreement dated July 20, 2000, between the Company and Oryx Technologies,  Inc.,
of which four hundred sixty-six thousand six hundred sixty-six  (466,666) shares
have been  exercised,  and (iii) warrants to purchase up to thirty five thousand
seven hundred fourteen (35,714) shares of the Company's Series B Preferred Stock
issued to VMR High  Octane  Fund and except as may be granted  pursuant  to this
Agreement  and  the  Related  Agreements,  there  are  no  outstanding  options,
warrants,  rights (including conversion or preemptive rights and rights of first
refusal),  proxy or  shareholder  agreements,  or agreements of any kind for the
purchase or acquisition from the Company of any of its securities.

                  (d) All issued and outstanding  shares of the Company's Common
Stock (i) have been duly  authorized  and validly  issued and are fully paid and
nonassessable,  and (ii) were issued in compliance with all applicable state and
federal laws concerning the issuance of securities.

                  (e) The rights,  preferences,  privileges and  restrictions of
the Shares are as stated in the Restated Charter. Each series of Preferred Stock
is convertible  into Common Stock on a one-for-one  basis as of the date hereof.
The  Conversion  Shares have been duly and validly  reserved for issuance.  When
issued in  compliance  with the  provisions  of this  Agreement and the Restated
Charter, the Shares and the Conversion Shares will be validly issued, fully paid
and  nonassessable,  and will be free of any  liens or  encumbrances;  provided,
however,   that  the  Shares  and  the  Conversion  Shares  may  be  subject  to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise  required by such laws at the time a transfer is proposed
and will be  subject  to the terms of the  Investor  Rights  Agreement,  Co-Sale
Agreement and the Company's Bylaws.

                  (f) No stock  plan,  stock  purchase,  stock  option  or other
agreement  or  understanding  between  the  Company and any holder of any equity
securities or rights to purchase equity securities  provides for acceleration or
other  changes in the vesting  provisions  or other terms of such  agreement  or
understanding  as the  result  of any  merger,  consolidation,  sale of stock or
assets, change in control or any other transaction(s) by the Company.

         3.4  Authorization;  Binding  Obligations.  All corporate action on the
part of the Company, its officers,  directors and shareholders necessary for the
authorization of this Agreement and the Related  Agreements,  the performance of
all  obligations of the Company  hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion  Shares  pursuant to the  Restated  Charter has been taken or will be
taken prior to the  Closing.  The  Agreement  and the Related  Agreements,  when
executed and  delivered,  will be valid and binding  obligations  of the Company
enforceable in accordance with their terms,  except (a) as limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or other  laws of general
application  affecting  enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable  remedies,  and (c) to the
extent that the enforceability of the indemnification  provisions in Section 2.9
of the Investor Rights  Agreement may be limited by applicable laws. The sale of
the Shares and the subsequent  conversion of the Shares into  Conversion  Shares
are not and will not

                                       4.
<PAGE>

be subject to any  preemptive  rights or rights of first  refusal  that have not
been properly waived or complied with.

         3.5 Liabilities.  The Company has no material  liabilities and knows of
no material contingent  liabilities,  except current liabilities incurred in the
ordinary  course of business which have not been,  either in any individual case
or in the aggregate, materially adverse.

         3.6 Agreements; Action.

                  (a) Except for agreements  explicitly  contemplated hereby and
agreements between the Company and its individual  employees with respect to the
sale of the Company's Common Stock,  there are no agreements,  understandings or
proposed  transactions  between the Company and any of its officers,  directors,
affiliates or any affiliate thereof.

                  (b)  There  are no  agreements,  understandings,  instruments,
contracts,  proposed transactions,  judgments, orders, writs or decrees to which
the Company is a party or by which it is bound which may involve (i) obligations
(contingent  or otherwise)  of, or payments to, the Company in excess of $25,000
(other than obligations of, or payments to, the Company arising from purchase or
sale agreements  entered into in the ordinary  course of business),  or (ii) the
transfer or license of any patent, copyright,  trade secret or other proprietary
right to or from the Company  (other than licenses  arising from the purchase of
"off the shelf" or other standard  products),  or (iii)  indemnification  by the
Company  with  respect  to  infringements  of  proprietary  rights  (other  than
indemnification  obligations arising from purchase or sale or license agreements
entered  into by the Company for the benefit of its  customers  in the  ordinary
course of business).

                  (c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution  upon or with respect to any class or series
of its capital stock,  (ii) incurred any  indebtedness for money borrowed or any
other   liabilities   (other  than  with   respect  to   dividend   obligations,
distributions,  indebtedness  and other  obligations  incurred  in the  ordinary
course  of  business)  individually  in  excess  of  $25,000  or, in the case of
indebtedness  and/or  liabilities  individually less than $25,000,  in excess of
$50,000 in the aggregate,  (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.

                  (d) For the  purposes of  subsections  (b) and (c) above,  all
indebtedness,  liabilities, agreements,  understandings,  instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the  individual  minimum dollar amounts of
such subsections.

         3.7  Obligations  to Related  Parties.  There are no obligations of the
Company to officers, directors,  shareholders, or employees of the Company other
than (a) for payment of salary for  services  rendered,  (b)  reimbursement  for
reasonable  expenses  incurred  on behalf of the  Company,  and/or (c) for other
standard employee benefits made generally available to all

                                       5.
<PAGE>

employees (including stock option agreements  outstanding under any stock option
plan approved by the Board of Directors of the  Company).  None of the officers,
directors, key employees or shareholders of the Company, or any members of their
immediate families, is indebted to the Company. None of the officers,  directors
or, to the best of the Company's knowledge, key employees or shareholders of the
Company or any members of their immediate  families,  has any direct or indirect
ownership  interest  in any  firm or  corporation  with  which  the  Company  is
affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company,  other than passive  investments in
publicly traded companies  (representing less than 1% of such company) which may
compete with the Company.  The Company is not a guarantor or  indemnitor  of any
indebtedness of any other person, firm or corporation.

         3.8 Title to Properties  and Assets;  Liens,  Etc. The Company has good
and marketable title to its properties and assets,  including the properties and
assets  reflected in the Company's  most recent balance sheet dated December 31,
2003, a copy of which has been provided to the Purchasers, and good title to its
leasehold  estates,  in each case subject to no mortgage,  pledge,  lien, lease,
encumbrance or charge,  other than (a) those resulting from taxes which have not
yet become delinquent,  (b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially  impair the
operations  of the  Company,  and (c) those  that have  otherwise  arisen in the
ordinary  course of  business.  The Company is in  compliance  with all material
terms of each lease to which it is a party or is otherwise bound.

         3.9 Intellectual Property.

                  (a) The Company owns or possesses  sufficient  legal rights to
all patents, trademarks,  service marks, trade names, copyrights, trade secrets,
licenses,  information and other proprietary rights and processes  necessary for
its business as now conducted and as presently proposed to be conducted, without
any known  infringement  of the  rights  of  others.  There  are no  outstanding
options,   licenses  or  agreements  of  any  kind  relating  to  the  foregoing
proprietary  rights,  nor is the  Company  bound by or a party  to any  options,
licenses or  agreements  of any kind with  respect to the  patents,  trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information and
other proprietary  rights and processes of any other person or entity other than
such  licenses or  agreements  arising  from the  purchase of "off the shelf" or
standard products.

                  (b) The Company has not received any  communications  alleging
that the  Company has  violated  or, by  conducting  its  business as  presently
proposed in the Business Plan (as defined in Section 3.18 hereof), would violate
any of the patents, trademarks,  service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity.

                  (c) The  Company  is not aware  that any of its  employees  is
obligated under any contract  (including  licenses,  covenants or commitments of
any nature) or other agreement,  or subject to any judgment,  decree or order of
any court or  administrative  agency,  that would interfere with their duties to
the Company or that would  conflict  with the  Company's  business as  presently
proposed to be  conducted  in the  Business  Plan.  Each  employee,  officer and

                                       6.
<PAGE>

consultant of the Company has executed a Proprietary  Information and Inventions
Agreement  in the form of Exhibit F attached  hereto.  No  employee,  officer or
consultant of the Company has excluded works or inventions  made prior to his or
her  employment  with the  Company  from  his or her  assignment  of  inventions
pursuant to such employee,  officer or consultant's  proprietary information and
inventions agreement. The Company does not believe it is or will be necessary to
utilize any inventions,  trade secrets or proprietary  information of any of its
employees made prior to their employment by the Company,  except for inventions,
trade secrets or proprietary information that have been assigned to the Company.

                  (d) Neither the  execution  nor delivery of this  Agreement or
the Related  Agreements,  nor the carrying on of the  Company's  business by the
employees  of the  Company,  nor  the  conduct  of the  Company's  business  (as
presently  proposed in the Business Plan (as defined in Section  3.18)) will, to
the  Company's  knowledge,  conflict  with or result  in a breach of the  terms,
conditions  or  provisions  of, or  constitute a default  under,  any  contract,
covenant or instrument under which any employee is now obligated.

         3.10 Compliance with Other Instruments. The Company is not in violation
or default of any term of its Restated Charter or Bylaws, or of any provision of
any mortgage, indenture, contract, agreement, instrument or contract to which it
is party or by which it is bound or of any judgment,  decree,  order,  writ. The
execution,  delivery, and performance of and compliance with this Agreement, and
the Related Agreements,  and the issuance and sale of the Shares pursuant hereto
and of the Conversion Shares pursuant to the Restated Charter, will not, with or
without  the  passage of time or giving of notice,  result in any such  material
violation,  or be in conflict  with or constitute a default under any such term,
or result in the creation of any mortgage,  pledge, lien,  encumbrance or charge
upon  any  of  the  properties  or  assets  of the  Company  or the  suspension,
revocation,  impairment,  forfeiture  or  nonrenewal  of  any  permit,  license,
authorization or approval applicable to the Company,  its business or operations
or any of its assets or properties. The Company has avoided every condition, and
has not performed any act, the occurrence of which would result in the Company's
loss of any right  granted  under any license,  distribution  agreement or other
agreement required to be disclosed on the Schedule of Exceptions.

         3.11 Litigation.  There is no action, suit, proceeding or investigation
pending or, to the Company's knowledge, currently threatened against the Company
that questions the validity of this Agreement,  or the Related Agreements or the
right of the Company to enter into any of such agreements,  or to consummate the
transactions  contemplated  hereby or  thereby,  or which might  result,  either
individually or in the aggregate,  in any material adverse change in the assets,
condition, affairs or prospects of the Company, financially or otherwise, or any
change in the current equity ownership of the Company,  nor is the Company aware
that  there is any  basis  for any of the  foregoing.  The  foregoing  includes,
without limitation,  actions pending or, to the Company's knowledge,  threatened
or any basis therefor known by the Company involving the prior employment of any
of the Company's employees,  their use in connection with the Company's business
of any  information or techniques  allegedly  proprietary to any of their former
employers,  or their obligations under any agreements with prior employers.  The
Company  is not a  party  or  subject  to the  provisions  of any  order,  writ,
injunction,   judgment  or  decree  of  any  court  or   government   agency  or
instrumentality.  There is no action,  suit,

                                       7.
<PAGE>

proceeding  or  investigation  by the  Company  currently  pending  or which the
Company intends to initiate.

         3.12  Tax  Returns and  Payments. The Company has filed all tax returns
(federal, state and local) required to be filed by it. All taxes shown to be due
and payable on such  returns,  any  assessments  imposed,  and to the  Company's
knowledge  all other  taxes due and  payable  by the  Company  on or before  the
Closing,  have  been  paid or  will  be  paid  prior  to the  time  they  become
delinquent.  The  Company has no  knowledge  of any  liability  of any tax to be
imposed upon its  properties or assets as of the date of this  Agreement that is
not adequately provided for.

         3.13  Employees.  The Company has no collective  bargaining  agreements
with any of its employees.  There is no labor union organizing  activity pending
or, to the  Company's  knowledge,  threatened  with respect to the Company.  The
Company  is not a  party  to or  bound  by any  currently  effective  employment
contract, deferred compensation arrangement,  bonus plan, incentive plan, profit
sharing  plan,  retirement  agreement  or other  employee  compensation  plan or
agreement.  To the  Company's  knowledge,  no employee of the  Company,  nor any
consultant with whom the Company has contracted,  is in violation of any term of
any  employment  contract,  proprietary  information  agreement  or of any other
agreement  relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business to be conducted
by the Company;  and to the Company's knowledge the continued  employment by the
Company of its  present  employees,  and/or  the  performance  of the  Company's
contracts  with  its  independent  contractors,  will  not  result  in any  such
violation.  The  Company  has not  received  any notice  alleging  that any such
violation has occurred. No employee of the Company has been granted the right to
continued employment by the Company or to any compensation following termination
of employment  with the Company.  The Company has no knowledge that any officer,
key  employee  or group of  employees  intends to  terminate  his,  her or their
employment  with the Company,  nor does the Company have a present  intention to
terminate the employment of any officer,  key employee,  group of employees,  or
contractor.

         3.14  Obligations of  Management.  Each officer and key employee of the
Company is currently  devoting  substantially all of his or her business time to
the conduct of the  business of the  Company.  The Company is not aware that any
officer or key  employee  of the Company is planning to work less than full time
at the Company in the future.  No officer or key employee is  currently  working
or, to the  Company's  knowledge,  plans to work for a  competitive  enterprise,
whether or not such  officer or key employee is or will be  compensated  by such
enterprise.

         3.15 Registration Rights and Voting Rights. Except as required pursuant
to the Investor Rights Agreement,  the Company is not under any obligation,  and
has not  granted  any  rights,  to  register  (as  defined in Section 1.1 of the
Investor Rights Agreement) any of the Company's presently outstanding securities
or any of  its  securities  that  may  hereafter  be  issued.  To the  Company's
knowledge, except as contemplated in the Voting Agreement, no shareholder of the
Company  has entered  into any  agreement  with  respect to the voting of equity
securities of the Company.

                                       8.
<PAGE>

         3.16  Compliance with Laws; Permits. The Company is not in violation of
any applicable statute, rule,  regulation,  order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely  affect the business,  assets,  liabilities,  financial
condition,  operations  or  prospects of the Company.  No  governmental  orders,
permissions,  consents,  approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution  and delivery of this  Agreement and the issuance of the Shares or
the  Conversion  Shares,  except such as has been duly and  validly  obtained or
filed,  or with respect to any filings  that must be made after the Closing,  as
will be filed in a timely manner.  The Company (a) has all franchises,  permits,
licenses and any similar authority  necessary for the conduct of its business as
now being  conducted  by it, the lack of which could  materially  and  adversely
affect the business, properties, prospects or financial condition of the Company
and (b) believes it can obtain,  without  undue  burden or expense,  any similar
authority  for the  conduct of its  business as planned to be  conducted  in the
Business Plan.

         3.17  Offering Valid. Assuming the accuracy of the  representations and
warranties of the Purchasers  contained in Section 4.2 hereof,  the offer,  sale
and  issuance  of the Shares and the  Conversion  Shares will be exempt from the
registration  requirements  of the  Securities  Act of  1933,  as  amended  (the
"Securities  Act"),  and will have been  registered  or qualified (or are exempt
from  registration  and  qualification)   under  the  registration,   permit  or
qualification  requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has  solicited or will solicit any offers to
sell or has  offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such  Shares by the  Company
within the registration provisions of the Securities Act or any state securities
laws.

         3.18  Full Disclosure. The Company has provided the Purchasers with all
information  requested by the  Purchasers in connection  with their  decision to
purchase  the  Shares,   including  all  information  the  Company  believes  is
reasonably necessary to make such investment  decision.  Neither this Agreement,
the exhibits hereto,  the Related Agreements nor any other document delivered by
the Company to Purchasers or their attorneys or agents in connection herewith or
therewith or with the transactions  contemplated hereby or thereby,  contain any
untrue statement of a material fact nor, omit to state a material fact necessary
in order to make the  statements  contained  herein or therein  not  misleading.
Notwithstanding the foregoing, the 2003 Business Plan attached hereto as Exhibit
H (the "Business  Plan")  provided to each of the Purchasers was prepared by the
management  of the  Company in a good faith  effort to  describe  the  Company's
presently  proposed  business  and  products  and  the  markets  therefor.   The
assumptions  applied in  preparing  the Business  Plan  appeared  reasonable  to
management as of the date thereof and as of the date hereof;  however,  there is
no  assurance  that  these  assumptions  will  prove  to be  valid  or that  the
objectives  set forth in the Business  Plan will be achieved.  To the  Company's
knowledge,  there  are  no  facts  which  (individually  or  in  the  aggregate)
materially  adversely  affect  the  business,  assets,  liabilities,   financial
condition,  prospects or  operations of the Company that have not been set forth
in the  Agreement,  the  exhibits  hereto,  the Related  Agreements  or in other
documents  delivered to  Purchasers  or their  attorneys or agents in connection
herewith.

                                       9.
<PAGE>

         3.19 Section 83(b) Elections. To the Company's knowledge, all elections
and notices permitted by Section 83(b) of the Code and any analogous  provisions
of  applicable  state tax laws have been timely filed by all  employees who have
purchased shares of the Company's common stock under agreements that provide for
the vesting of such shares.

         3.20  Insurance. The Company has or will obtain promptly  following the
Closing  general  commercial,  product  liability,  fire and casualty  insurance
policies  with  coverage  customary  for  companies  similarly  situated  to the
Company.

         3.21  Qualified Small Business. The Company  represents and warrants to
the Purchasers  that, to the best of its knowledge,  the Company is a "qualified
small business"  within the meaning of Section  1202(d) of the Internal  Revenue
Code of 1986,  as  amended  (the  "Code")  as of the date  hereof  and that upon
issuance  the Shares  should  qualify as  "qualified  small  business  stock" as
defined in Section 1202(c) of the Code as of the date hereof.

         3.22 U.S. Real Property Holding Corporation. The Company is not now and
has never been a "United States real property holding corporation" as defined in
Section  897(c)(2)  of the  Code  and  Section  1.897-2(b)  of  the  Regulations
promulgated by the Internal Revenue Service,  and the Company has filed with the
Internal  Revenue Service all statements,  if any, with its United States income
tax returns which are required under Section 1.897-2(h) of the such Regulations.

         3.23  Compliance with Environmental Laws. The Company has not caused or
allowed, or contracted with any party for, the generation,  use, transportation,
treatment, storage or disposal of any Hazardous Substances (as defined below) in
connection  with the operation of its business or otherwise.  To its  knowledge,
the Company,  the  operation of its  business,  and any real  property  that the
Company  owns,  leases or  otherwise  occupies or uses (the  "Premises")  are in
compliance with all applicable  Environmental Laws (as defined below) and orders
or directives of any governmental  authorities  having  jurisdiction  under such
Environmental Laws. The Company has not received any citation, directive, letter
or other communication,  written or oral, or any notice of any proceeding, claim
or lawsuit,  from any person  arising out of the  ownership or occupation of the
Premises,  or the conduct of its operation,  and the Company is not aware of any
basis therefor.  For purposes of this Agreement,  the term "Environmental  Laws"
shall mean any Federal, state or local law or ordinance or regulation pertaining
to the  protection  of human  health or the  environment.  For  purposes of this
Agreement,   the  term  "Hazardous   Substances"  shall  include  any  materials
classified as hazardous or toxic under any Environmental Laws.

         3.24  Minute  Books. The minute books of the Company made  available to
the  Investors  contain a complete  summary of all  meetings  of  directors  and
shareholders of the Company since the time of incorporation of the Company.

                                       10.
<PAGE>

    4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.

         Each Purchaser hereby represents and warrants to the Company as follows
(such   representations   and   warranties   do  not  lessen  or   obviate   the
representations and warranties of the Company set forth in this Agreement):

         4.1  Requisite Power and Authority.  Purchaser has all necessary  power
and authority under all applicable provisions of law to execute and deliver this
Agreement  and the Related  Agreements  and to carry out their  provisions.  All
action on  Purchaser's  part  required for the lawful  execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery,  this Agreement and the
Related  Agreements  will  be  valid  and  binding   obligations  of  Purchaser,
enforceable in accordance with their terms,  except (a) as limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or other  laws of general
application  affecting  enforcement  of  creditors'  rights,  (b) as  limited by
general  principles  of equity  that  restrict  the  availability  of  equitable
remedies,  and (c) to the extent that the enforceability of the  indemnification
provisions  of Section 2.9 of the Investor  Rights  Agreement  may be limited by
applicable laws.

         4.2  Investment Representations. Purchaser understands that neither the
Shares nor the Conversion  Shares have been registered under the Securities Act.
Purchaser also  understands  that the Shares are being offered and sold pursuant
to an exemption from registration  contained in the Securities Act based in part
upon Purchaser's  representations  contained in the Agreement.  Purchaser hereby
represents and warrants as follows:

                  (a) Purchaser  Bears Economic Risk.  Purchaser has substantial
experience in  evaluating  and investing in private  placement  transactions  of
securities in companies  similar to the Company so that  Purchaser is capable of
evaluating  the merits and risks of its  investment  in the  Company and has the
capacity to protect its own interests.  Purchaser must bear the economic risk of
this investment  indefinitely  unless the Shares (or the Conversion  Shares) are
registered  pursuant to the Securities Act, or an exemption from registration is
available.  Purchaser  understands that the Company has no present  intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser  also  understands  that there is no assurance that any exemption from
registration  under the  Securities  Act will be  available  and  that,  even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the  circumstances,  in the amounts
or at the times Purchaser might propose.

                  (b)  Acquisition  for Own Account.  Purchaser is acquiring the
Shares and the  Conversion  Shares for  Purchaser's  own account for  investment
only, and not with a view towards their distribution.

                  (c) Purchaser Can Protect Its Interest.  Purchaser  represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own  interests in connection  with the
transactions  contemplated  in  this  Agreement,  and  the  Related  Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement.

                                       11.
<PAGE>

                  (d) Accredited  Investor.  Purchaser  represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.

                  (e) Company  Information.  Purchaser has received and read the
Company's  financial  statements and Business Plan and has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's  operations and facilities.  Purchaser has also had the opportunity to
ask  questions  of and receive  answers  from,  the  Company and its  management
regarding the terms and conditions of this investment.

                  (f) Rule  144.  Purchaser  acknowledges  and  agrees  that the
Shares,  and, if issued, the Conversion Shares, must be held indefinitely unless
they are  subsequently  registered under the Securities Act or an exemption from
such  registration  is available.  Purchaser has been advised or is aware of the
provisions of Rule 144  promulgated  under the  Securities Act as in effect from
time to time,  which  permits  limited  resale of shares  purchased in a private
placement subject to the satisfaction of certain  conditions,  including,  among
other things:  the availability of certain current public  information about the
Company,  the resale occurring  following the required holding period under Rule
144 and the  number of shares  being  sold  during  any  three-month  period not
exceeding specified limitations.

                  (g)  Residence.  If the Purchaser is an  individual,  then the
Purchaser  resides in the state or  province  identified  in the  address of the
Purchaser  set  forth  on  Exhibit  A;  if  the  Purchaser  is  a   partnership,
corporation,  limited  liability  company  or other  entity,  then the office or
offices of the Purchaser in which its investment decision was made is located at
the address or addresses of the Purchaser set forth on Exhibit A.

         4.3 Transfer Restrictions.  Each Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares, are subject to restrictions on
transfer as set forth in the Investor Rights Agreement and are subject to voting
requirements as set forth in the Voting Agreement.

    5. CONDITIONS TO CLOSING.

         5.1 Conditions to Purchasers'  Obligations at the Closing.  Purchasers'
obligations   to  purchase  the  Shares  at  the  Closing  are  subject  to  the
satisfaction, at or prior to the Closing Date, of the following conditions:

                  (a)  Representations  and  Warranties  True;   Performance  of
Obligations. The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing  Date,
and the Company  shall have  performed all  obligations  and  conditions  herein
required to be performed or observed by it on or prior to the Closing.

                  (b)  Legal  Investment.  On the  Closing  Date,  the  sale and
issuance of the Shares and the proposed  issuance of the Conversion Shares shall
be legally  permitted by all laws and  regulations  to which  Purchasers and the
Company are subject.

                                       12.
<PAGE>

                  (c)  Consents,  Permits,  and Waivers.  The Company shall have
obtained any and all consents,  permits and waivers necessary or appropriate for
consummation of the  transactions  contemplated by the Agreement and the Related
Agreements  (except  for  such as may be  properly  obtained  subsequent  to the
Closing).

                  (d) Filing of Restated  Charter.  The Restated  Charter  shall
have been filed with the Secretary of State of California  and shall continue to
be in full force and effect as of the Closing Date.

                  (e) Corporate  Documents.  The Company shall have delivered to
Purchasers or their counsel, copies of all corporate documents of the Company as
Purchasers shall reasonably request.

                  (f) Reservation of Conversion  Shares.  The Conversion  Shares
issuable upon  conversion of the Shares  issuable at the Closing shall have been
duly authorized and reserved for issuance upon such conversion.

                  (g) Compliance  Certificate.  The Company shall have delivered
to  Purchasers  a  Compliance  Certificate,  executed  by the  President  of the
Company,  dated the Closing Date, to the effect that the conditions specified in
subsections (a), (c), (d) and (f) of this Section 5.1 have been satisfied.

                  (h)  Secretary's   Certificate.   The  Purchasers  shall  have
received from the Company's Secretary, a certificate having attached thereto (i)
the Company's Articles of Incorporation as in effect at the time of the Closing,
(ii)  the  Company's  Bylaws  as in  effect  at the time of the  Closing,  (iii)
resolutions  approved by the Board of  Directors  authorizing  the  transactions
contemplated  hereby,  (iv) resolutions  approved by the Company's  shareholders
authorizing  the  filing  of  the  Restated  Charter,   and  (v)  good  standing
certificates  (including  tax  clearance)  with  respect to the Company from the
applicable  authority(ies) in California and any other jurisdiction in which the
Company is qualified to do business, dated a recent date before the Closing.

                  (i) Investor Rights  Agreement.  The Investor Rights Agreement
shall have been executed and delivered by the parties thereto.

                  (j) Co-Sale  Agreement.  The Co-Sale Agreement shall have been
executed  and  delivered  by  the  parties  thereto.   The  stock   certificates
representing  the  shares  subject  to the  Co-Sale  Agreement  shall  have been
delivered to the Secretary of the Company and shall have had appropriate legends
placed  upon them to  reflect  the  restrictions  on  transfer  set forth on the
Co-Sale Agreement.

                  (k) Voting  Agreement.  The Voting  Agreement  shall have been
executed and delivered by the parties thereto.

                  (l) Board of Directors.  Upon the Closing, the authorized size
of the Board of Directors of the Company shall be five (5) members and the Board
shall consist of Phil Micciche,  Mark Underseth,  Phil Wickham and two (2) other
members, as further specified in the Voting Agreement.

                                       13.
<PAGE>

                  (m) Legal  Opinion.  The  Purchasers  shall have received from
legal  counsel  to the  Company an opinion  addressed  to them,  dated as of the
Closing Date, in substantially the form attached hereto as Exhibit G.

                  (n)  Proceedings  and  Documents.   All  corporate  and  other
proceedings  in connection  with the  transactions  contemplated  at the Closing
hereby and all documents and instruments  incident to such transactions shall be
reasonably  satisfactory  in  substance  and form to the  Purchasers  and  their
special  counsel,  and the  Purchasers  and their  special  counsel  shall  have
received  all such  counterpart  originals  or certified or other copies of such
documents as they may reasonably request.

                  (o)  Proprietary  Information  and Inventions  Agreement.  The
Company and each of its officers,  employees and consultants  shall have entered
into the  Company's  standard form of  Proprietary  Information  and  Inventions
Agreement,  in  substantially  the form attached hereto as Exhibit F or in other
form reasonably acceptable to the Purchasers.

                  (p) Executed Side Letter.  Mark Underseth shall have delivered
to the Investors an executed  side letter  regarding the impact of the Company's
ability to reach certain milestones as further defined in the letter.

         5.2  Conditions to Purchasers'  Obligations  at an Additional  Closing.
Purchasers'  obligations  to purchase the Shares at any  Additional  Closing are
subject to the satisfaction,  at or prior to the date of the Additional  Closing
of the following conditions:

                  (a) Legal Investment.  The sale and issuance of the Shares and
the proposed issuance of the Conversion Shares shall be legally permitted by all
laws and regulations to which Purchasers and the Company are subject.

                  (b) Filing of Restated  Charter.  The Restated  Charter  shall
have been filed with the Secretary of State of the State of California and shall
continue to be in full force and effect.

                  (c) Reservation of Conversion  Shares.  The Conversion  Shares
issuable  upon  conversion  of the Shares  shall have been duly  authorized  and
reserved for issuance upon such conversion.

                  (d) Compliance  Certificate.  The Company shall have delivered
to the  Additional  Purchasers  at  such  Additional  Closing  (i) a  Compliance
Certificate,  executed by the President of the Company,  dated as of the date of
the  Additional  Closing,  to  the  effect  that  the  conditions  specified  in
subsections  (b) and (c) of this  Section  5.2 have  been  satisfied  and (ii) a
Certificate  of the Chief  Executive  Officer  that there have been no  material
changes to representations  and warranties of the Company set forth in Section 3
herein or, if they have so changed,  then said Certificate  shall be accompanied
by a revised Schedule of Exceptions dated as of the date of the Closing.

                  (e) Secretary's Certificate. The Additional Purchasers at such
Additional  Closing  shall  have  received  from  the  Company's  Secretary,   a
certificate  having attached thereto (i) the Company's Articles of Incorporation
as in  effect  at the  time  of the

                                       14.
<PAGE>

respective  Additional  Closing,  (ii) the Company's  Bylaws as in effect at the
time of the respective  Additional  Closing,  (iii) resolutions  approved by the
Board of  Directors  authorizing  the  transactions  contemplated  hereby,  (iv)
resolutions approved by the Company's shareholders authorizing the filing of the
Restated Charter, and (v) good standing  certificates  (including tax clearance)
with respect to the Company from the applicable authority(ies) in California and
any other jurisdiction in which the Company is qualified to do business, dated a
recent date before the given Additional Closing.

         5.3 Conditions to Obligations of the Company.  The Company's obligation
to issue and sell the Shares at the  Closing and at each  Additional  Closing is
subject  to the  satisfaction,  on or prior  to the  Closing  or the  Additional
Closing,  as the case may be,  of the  following  conditions  by each  Purchaser
participating  in the  Closing  or the  Additional  Closing,  as the case may be
(except that with respect to any Additional Closing, the references to "Closing"
shall instead be deemed to refer to the applicable "Additional Closing"):

                  (a)  Representations  and Warranties True. The representations
and warranties in Section 4 made by those  Purchasers  acquiring Shares shall be
true and correct in all material  respects at the date of the Closing,  with the
same force and effect as if they had been made on and as of said date.

                  (b)  Performance of Obligations.  Such  Purchasers  shall have
performed and complied with all agreements and conditions  herein required to be
performed or complied with by such Purchasers on or before the Closing.

                  (c) Filing of Restated  Charter.  The Restated  Charter  shall
have been filed with the Secretary of State of the State of California.

                  (d) Investor Rights  Agreement.  The Investor Rights Agreement
shall have been executed and delivered by the parties thereto.

                  (e) Co-Sale  Agreement.  The Co-Sale Agreement shall have been
executed and delivered by the parties thereto.

                  (f) Voting  Agreement.  The Voting  Agreement  shall have been
executed and delivered by the parties thereto.

                  (g)  Consents,  Permits,  and Waivers.  The Company shall have
obtained any and all consents,  permits and waivers necessary or appropriate for
consummation of the  transactions  contemplated by the Agreement and the Related
Agreements  (except  for  such as may be  properly  obtained  subsequent  to the
Closing).

    6. MISCELLANEOUS.

         6.1  Governing Law. This Agreement shall be governed in all respects by
the laws of the State of  California  as such  laws are  applied  to  agreements
between California residents entered into and performed entirely in California.

                                       15
<PAGE>

         6.2 Survival. The representations, warranties, covenants and agreements
made  herein  shall  survive any  investigation  made by any  Purchaser  and the
closing of the transactions  contemplated  hereby.  All statements as to factual
matters  contained in any  certificate  or other  instrument  delivered by or on
behalf of the  Company  pursuant  hereto  in  connection  with the  transactions
contemplated  hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

         6.3  Successors  and Assigns.  Except as otherwise  expressly  provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon,  the  successors,  assigns,  heirs,  executors and  administrators  of the
parties  hereto and shall  inure to the  benefit of and be  enforceable  by each
person who shall be a holder of the Shares from time to time.

         6.4  Entire  Agreement.  This Agreement,  the  exhibits  and  schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute  the full and entire  understanding  and agreement  among the parties
with regard to the subjects hereof, and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.

         6.5  Severability.  In case any  provision of this  Agreement  shall be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

         6.6  Amendment and Waiver.

                  (a) This Agreement  shall be amended or modified only upon the
written  consent  of the  Company  and  holders  of at least a  majority  of the
outstanding  Shares (treated as if converted and including any Conversion Shares
into  which  the  Shares  have  been  converted  that  have not been sold to the
public).

                  (b) The  obligations  of the  Company  and the  rights  of the
holders of the Shares  and the  Conversion  Shares  under the  Agreement  may be
waived  only with the  written  consent of the holders of at least a majority of
the  outstanding  Shares  (treated as if converted and including any  Conversion
Shares into which the Shares have been  converted that have not been sold to the
public).

         6.7 Delays or  Omissions.  No delay or omission to exercise  any right,
power or remedy accruing to any party, upon any breach, default or noncompliance
by another party under this  Agreement,  the Related  Agreements or the Restated
Charter, shall impair any such right, power or remedy, nor shall it be construed
to be a waiver of any such breach, default or noncompliance, or any acquiescence
therein,  or  of  any  similar  breach,  default  or  noncompliance   thereafter
occurring.  Any waiver,  permit, consent or approval of any kind or character on
any  Purchaser's  part  of any  breach,  default  or  noncompliance  under  this
Agreement, the Related Agreements or under the Restated Charter or any waiver on
such party's part of any provisions or conditions of the Agreement,  the Related
Agreements,  or the  Restated  Charter must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies,  either
under this Agreement,  the Related Agreements,  the Restated Charter, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.

                                       16.
<PAGE>

         6.8  Notices.  All notices required or permitted  hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, provided
that any facsimile  transmission  shall be followed  immediately  by notice sent
registered or certified mail as provided herein;  (c) five (5) days after having
been sent by registered or certified  mail,  return receipt  requested,  postage
prepaid;  or (d) upon  delivery to  recipient  after  deposit  with a nationally
recognized  overnight  courier,  specifying  next  day  delivery,  with  written
verification of receipt.  All communications shall be sent to the Company at the
address  as set forth on the  signature  page  hereof  and to  Purchaser  at the
address set forth on Exhibit A attached  hereto or at such other  address as the
Company or Purchaser  may designate by ten (10) days advance  written  notice to
the other parties hereto.

         6.9  Expenses.  The Company  shall pay all costs and  expenses  that it
incurs with respect to the negotiation,  execution,  delivery and performance of
the Agreement. The Company shall,  immediately following the Closing,  reimburse
the  reasonable  fees of and expenses of one counsel for all Investors and shall
reimburse such counsel for reasonable  expenses  incurred in connection with the
negotiation,  execution,  delivery and performance of this Agreement;  provided,
however,  that the  cumulative  amount of said fees and expenses to such counsel
shall not exceed $10,000.

         6.10  Attorneys'  Fees.  In the  event  that  any  suit  or  action  is
instituted to enforce any provision in this Agreement,  the prevailing  party in
such dispute shall be entitled to recover from the losing party all fees,  costs
and  expenses  of  enforcing  any right of such  prevailing  party under or with
respect to this Agreement,  including,  without limitation, such reasonable fees
and  expenses  of  attorneys  and  accountants,  which  shall  include,  without
limitation, all fees, costs and expenses of appeals.

         6.11  Titles and Subtitles. The titles of the sections and  subsections
of the  Agreement  are  for  convenience  of  reference  only  and are not to be
considered in construing this Agreement.

         6.12  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one instrument. This Agreement may be executed and delivered by
facsimile and upon such delivery the facsimile  signature will be deemed to have
the same effect as if the  original  signature  had been  delivered to the other
party.

         6.13  Broker's Fees. Each party hereto  represents and warrants that no
agent,  broker,  investment banker,  person or firm acting on behalf of or under
the  authority  of such party  hereto is or will be entitled to any  broker's or
finder's fee or any other  commission  directly or indirectly in connection with
the  transactions  contemplated  herein.  Each party  hereto  further  agrees to
indemnify each other party for any claims,  losses or expenses  incurred by such
other party as a result of the representation in this Section 6.13 being untrue.

         6.14  Confidentiality.  Each party hereto agrees that,  except with the
prior written consent of the other party or parties, as applicable,  it shall at
all times keep  confidential  and not  divulge,  furnish or make  accessible  to
anyone any confidential information, knowledge

                                       17.
<PAGE>

or data concerning or relating to the business or financial affairs of the other
parties  to which such  party has been or shall  become  privy by reason of this
Agreement or the Related  Agreements,  discussions or  negotiations  relating to
this Agreement or the Related  Agreements,  the  performance of its  obligations
hereunder or the ownership of the Shares purchased hereunder.  The provisions of
this  Section  6.14 shall be in addition  to, and not in  substitution  for, the
provisions  of any  separate  nondisclosure  agreement  executed  by the parties
hereto.

     Notwithstanding  anything  herein  to  the  contrary,  any  party  to  this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons,  without limitation of any kind,
the tax  treatment and tax structure of the  transactions  contemplated  by this
Agreement  and all  materials  of any kind  (including  opinions  or  other  tax
analyses)  that  are  provided  to it  relating  to such tax  treatment  and tax
structure;  provided however, that such disclosure may not be made to the extent
reasonably  necessary to comply with any applicable  federal or state securities
laws. For the purposes of the foregoing  sentence,  (i) the "tax treatment" of a
transaction  means the purported or claimed  federal income tax treatment of the
transaction,  and (ii) the "tax structure" of a transaction  means any fact that
may be relevant to  understanding  the purported or claimed  federal  income tax
treatment of the transaction.

     Thus, for the avoidance of doubt,  the parties  acknowledge  and agree that
the tax treatment and tax structure of any transaction does not include the name
of any party to a transaction or any sensitive business information  (including,
without  limitation,  the name and other specific  information about any party's
intellectual  property or other proprietary  assets) unless such information may
be related or relevant to the purported or claimed  federal income tax treatment
of the transaction.

         6.15  Pronouns.  All  pronouns  contained  herein,  and any  variations
thereof,  shall be  deemed  to  refer to the  masculine,  feminine  or  neutral,
singular or plural, as to the identity of the parties hereto may require.

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

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       18.
<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  the SERIES B-1
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

COMPANY:                              PURCHASERS:

S2 TECHNOLOGIES, INC.                 ORYX VENTURES, LLC

Signature: /s/ MARK UNDERSETH         Signature: /s/ PHIL MICCICHE
         -------------------------             -------------------------
Print Name: MARK UNDERSETH            Print Name: PHIL MICCICHE
          ------------------------              ------------------------
Title: CEO                               Title: CEO
     -----------------------------         -----------------------------

Address:   2031 San Elijo Avenue
           Cardiff, CA 92007

                                      PROFILE VENTURE PARTNERS FUND 1, L.P.

                                      Signature: /s/ JOSEPH F. WATERMAN
                                                ------------------------
                                      Print Name: JOSEPH F. WATERMAN
                                                ------------------------
                                      Title: PRESIDENT & COO OF
                                             SANCHEZ COMPUTER ASSOC.
                                             THE SOLE G.P.
                                            ----------------------------

                                      VMR HIGH OCTANE FUND

                                      Signature: /s/ S. M. SAWYER
                                                ------------------------
                                      Print Name: S. M. SAWYER
                                                ------------------------
                                      Title: DIRECTOR
                                            ----------------------------

                                      COLUMBUS NOVA INVESTMENTS

                                      Signature: /s/ ANDREW INTRATER
                                                ------------------------
                                      Print Name: ANDREW INTRATER
                                                ------------------------
                                      Title: DIRECTOR
                                            ----------------------------

         [SERIES B-1 PREFERRED STOCK PURCHASE AGREEMENT SIGNATURE PAGE]

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

1.    AGREEMENT TO SELL AND PURCHASE...........................................1

      1.1      Authorization of Shares.........................................1

      1.2      Sale and Purchase...............................................1

2.    CLOSING, DELIVERY AND PAYMENT............................................2

      2.1      Closing and Subsequent Closing..................................2

      2.2      Delivery........................................................2

      2.3      Subsequent Sale of Shares.......................................2

3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................3

      3.1      Organization, Good Standing and Qualification...................3

      3.2      Subsidiaries....................................................3

      3.3      Capitalization; Voting Rights...................................3

      3.4      Authorization; Binding Obligations..............................4

      3.5      Liabilities.....................................................5

      3.6      Agreements; Action..............................................5

      3.7      Obligations to Related Parties..................................5

      3.8      Title to Properties and Assets; Liens, Etc......................6

      3.9      Intellectual Property...........................................6

      3.10     Compliance with Other Instruments...............................7

      3.11     Litigation......................................................7

      3.12     Tax Returns and Payments........................................8

      3.13     Employees.......................................................8

      3.14     Obligations of Management.......................................8

      3.15     Registration Rights and Voting Rights...........................8

      3.16     Compliance with Laws; Permits...................................9

      3.17     Offering Valid..................................................9

      3.18     Full Disclosure.................................................9

      3.19     Section 83(b) Elections........................................10

      3.20     Insurance......................................................10

      3.21     Qualified Small Business.......................................10

      3.22     U.S. Real Property Holding Corporation.........................10

                                       i.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

      3.23     Compliance with Environmental Laws.............................10

      3.24     Minute Books...................................................10

4.    REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS........................11

      4.1      Requisite Power and Authority..................................11

      4.2      Investment Representations.....................................11

      4.3      Transfer Restrictions..........................................12

5.    CONDITIONS TO CLOSING...................................................12

      5.1      Conditions to Purchasers' Obligations at the Closing...........12

      5.2      Conditions to Purchasers' Obligations at an Additional Closing.14

      5.3      Conditions to Obligations of the Company.......................15

6.    MISCELLANEOUS...........................................................15

      6.1      Governing Law..................................................15

      6.2      Survival.......................................................16

      6.3      Successors and Assigns.........................................16

      6.4      Entire Agreement...............................................16

      6.5      Severability...................................................16

      6.6      Amendment and Waiver...........................................16

      6.7      Delays or Omissions............................................16

      6.8      Notices........................................................17

      6.9      Expenses.......................................................17

      6.10     Attorneys' Fees................................................17

      6.11     Titles and Subtitles...........................................17

      6.12     Counterparts...................................................17

      6.13     Broker's Fees..................................................17

      6.14     Confidentiality................................................17

      6.15     Pronouns.......................................................18

      6.16     California Corporate Securities Law............................18

                                       ii.
<PAGE>

                                LIST OF EXHIBITS

     Schedule of Purchasers                                          Exhibit A

     Amended and Restated Articles of Incorporation                  Exhibit B

     Amended and Restated Investor Rights Agreement                  Exhibit C

     Amended and Restated Co-Sale Agreement                          Exhibit D

     Amended and Restated Voting Agreement                           Exhibit E

     Proprietary Information and Inventions Agreement                Exhibit F

     Form of Legal Opinion                                           Exhibit G

     Business Plan                                                   Exhibit H

<PAGE>

                                    EXHIBIT A

                             SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
                                                                               PURCHASE PRICE PAYABLE IN
                                                                                 IMMEDIATELY AVAILABLE
                       PURCHASER                               SHARES            FUNDS AT FIRST CLOSING
                       ---------                               ------          -------------------------
<S>                                                          <C>                       <C>
FIRST CLOSING

ORYX VENTURES, LLC                                            571,428                  $200,000.00
4340 Almaden Expressway, Suite 220
San Jose, CA  95118

PROFILE VENTURE PARTNERS FUND 1, L.P.                         214,285                   $75,000.00
500 Chesterfield Parkway
Malvern, PA  19355

HIGH OCTANE FUND                                              857,142                  $300,000.00
c/o Bridgewaters
P.O. Box 282, Victoria Street
Douglas, Isle of Man  1M992DR

COLUMBUS NOVA INVESTMENTS                                     857,142                  $300,000.00
c/o Columbus Nova Partners LLC
590 Madison Avenue, 38th Floor
New York, NY  10022

TOTAL FOR FIRST CLOSING:                                    2,499,999                  $875,000.00
                                                            ---------                  -----------

</TABLE>

<PAGE>

                                   EXHIBIT B

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION

                                       OF

                              S2 TECHNOLOGIES, INC.

<PAGE>

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION

                                       OF

                              S2 TECHNOLOGIES, INC.

         Mark Underseth hereby certifies that:

         ONE: He is the duly elected and acting  President  and  Secretary of S2
Technologies, Inc., a California corporation (the "Corporation").

         TWO:  The  Amended  and  Restated  Articles  of  Incorporation  of this
Corporation are hereby amended and restated to read in full as follows:

                                       "I.

         The  name  of  the   Corporation   is  S2   TECHNOLOGIES,   INC.   (the
"Corporation").

                                       II.

         The  purpose  of the  Corporation  is to  engage in any  lawful  act or
activity for which a corporation may be organized under the General  Corporation
Law of California other than the banking business, the trust company business or
the practice of a  profession  permitted to be  incorporated  by the  California
Corporations Code.

                                      III.

         A. This  Corporation  is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the  Corporation is authorized to issue is  fifty-three  million
four hundred ninety-two thousand five hundred ninety-three  (53,492,593) shares,
thirty-eight  million  (38,000,000)  shares of which shall be Common  Stock (the
"Common  Stock") and fifteen  million  four  hundred  ninety-two  thousand  five
hundred ninety-three  (15,492,593) shares of which shall be Preferred Stock (the
"Preferred Stock").

         B.  Two  million  five  hundred   ninety-two   thousand   five  hundred
ninety-three  (2,592,593) of the authorized shares of Preferred Stock are hereby
designated  "Series A Preferred  Stock" (the "Series A Preferred"),  ten million
(10,000,000) of the authorized  shares of Preferred Stock are hereby  designated
"Series B  Preferred  Stock" (the  "Series B  Preferred")  and two million  nine
hundred  thousand  (2,900,000) of the authorized  shares of Preferred  Stock are
hereby designated "Series B-1 Preferred Stock" (the "Series B-1 Preferred") (the
Series A Preferred, Series B Preferred, and Series B-1 Preferred are referred to
herein collectively as the "Series Preferred").

         C. The rights, preferences,  privileges, restrictions and other matters
relating to the Series Preferred are as follows:

                                       1.
<PAGE>

     1. DIVIDEND RIGHTS.

         (a) Holders of Series  Preferred,  in  preference to the holders of any
other stock of the Corporation  ("Junior Stock"),  shall be entitled to receive,
when, as and if declared by the Board of  Directors,  but only out of funds that
are legally available therefor, cash dividends at the rate of eight percent (8%)
of the  applicable  Original  Issue Price (as  defined  below) per annum on each
outstanding  share of Series  Preferred  (as adjusted  for any stock  dividends,
combinations,  splits  recapitalizations  and  the  like  with  respect  to such
shares).  The  "Original  Issue  Price"  of the  Series  A  Preferred  shall  be
twenty-seven  cents ($0.27) (the "Series A Original Issue Price").  The Original
Issue Price of the Series B Preferred  shall be  thirty-five  cents ($0.35) (the
"Series B Original  Issue  Price").  The Original  Issue Price of the Series B-1
Preferred  shall be  thirty-five  cents ($0.35) (the "Series B-1 Original  Issue
Price").  Such  dividends  shall be payable only when, as and if declared by the
Board of Directors and shall be non-cumulative.

         (b) So long as any shares of Series Preferred shall be outstanding,  no
dividend,  whether in cash or property, shall be paid or declared, nor shall any
other  distribution  be made, on any Junior  Stock,  nor shall any shares of any
Junior Stock of the Corporation be purchased,  redeemed,  or otherwise  acquired
for value by the  Corporation  (except for  acquisitions  of Common Stock by the
Corporation  pursuant to agreements  which permit the  Corporation to repurchase
such shares upon  termination  of services to the  Corporation or in exercise of
the  Corporation's  right of first refusal upon a proposed  transfer)  until all
dividends (set forth in Section 1(a) above) on the Series  Preferred  shall have
been paid or  declared  and set apart.  In the event  dividends  are paid on any
share of Common Stock, an additional  dividend shall be paid with respect to all
outstanding  shares of  Series  Preferred  in an  amount  equal per share (on an
as-if-converted  to Common Stock basis) to the dividend amount paid or set aside
for each share of Common Stock.  The  provisions of this Section 1(b) shall not,
however,  apply to (i) a dividend payable in Common Stock,  (ii) the acquisition
of shares of any Junior Stock in exchange for shares of any other Junior  Stock,
or (iii) any repurchase of any outstanding securities of the Corporation that is
unanimously approved by the Corporation's Board of Directors. The holders of the
Series Preferred  expressly waive their rights, if any, as described in Sections
502 and 503 of the  General  Corporation  Law of  California  as they  relate to
repurchase of shares upon  termination of employment or service by any person as
a consultant or director.

     2. VOTING RIGHTS.

         (a) General Rights.  Except as otherwise provided herein or as required
by law,  the  Series  Preferred  shall be voted  equally  with the shares of the
Common Stock of the  Corporation  and not as a separate  class, at any annual or
special  meeting  of  shareholders  of the  Corporation,  and may act by written
consent  in the same  manner  as the  Common  Stock,  in  either  case  upon the
following basis:  each holder of shares of Series Preferred shall be entitled to
such  number of votes as shall be equal to the whole  number of shares of Common
Stock into which such holder's  aggregate  number of shares of Series  Preferred
are convertible  (pursuant to Section 4 hereof)  immediately  after the close of
business on the record date fixed for such meeting or the effective date of such
written consent.

         (b)  Separate  Vote of Series  Preferred.  With respect to the Series A
Preferred,  so long as at least  one  million  (1,000,000)  shares  of  Series A
Preferred remain

                                       2.
<PAGE>

outstanding,  and with  respect  to the  Series B  Preferred  and/or  Series B-1
Preferred,  so long as, in the  aggregate,  at least  four  million  (4,000,000)
shares of Series B Preferred and/or Series B-1 Preferred remain  outstanding (in
each case  subject to  adjustment  for any stock split,  reverse  stock split or
other similar event  affecting the Series  Preferred),  in addition to any other
vote or consent  required  herein or by law, the vote or written  consent of the
holders of, as the case may be, a majority of the outstanding Series A Preferred
and/or  sixty-six and two-thirds  percent  (662/3%) of the outstanding  Series B
Preferred and Series B-1  Preferred,  in the  aggregate,  shall be necessary for
effecting or validating the actions described in all enumerated  clauses (i)-(x)
of this clause (b) except for clause  (ii),  as to which the  respective  Series
Preferred  affected  adversely  must vote in favor of such adverse change by the
described percentage vote:

                  (i) Any amendment,  alteration,  or repeal of any provision of
the Articles of  Incorporation  or the Bylaws of the Corporation  (including any
filing of a Certificate of Determination);

                  (ii) Any adverse  change to the powers,  rights,  preferences,
privileges, or restrictions of the Series Preferred;

                  (iii)  Any  increase  in the  authorized  number  of shares of
Preferred Stock;

                  (iv)  Any   authorization  or  any  designation,   whether  by
reclassification or otherwise,  of any new class or series of stock or any other
securities  convertible into equity  securities of the Corporation  ranking on a
parity  with  or  senior  to the  Series  Preferred  in  rights  of  redemption,
liquidation preference, voting or dividends or any increase in the authorized or
designated number of any such new class or series;

                  (v) Any repurchase or redemption of Preferred Stock (except as
expressly contemplated by the Articles of Incorporation);

                  (vi) Any redemption, repurchase, payment of dividends or other
distributions  with respect to Junior Stock (except for  acquisitions  of Common
Stock by the Corporation  pursuant to agreements which permit the Corporation to
repurchase  such shares upon  termination  of services to the  Corporation or in
exercise  of  the   Corporation's   right  of  first  refusal  upon  a  proposed
transaction;  provided that excluding  circumstances involving the Corporation's
right of  first  refusal,  the  repurchase  price  is equal to or less  than the
original purchase price for such shares);

                  (vii) Any  agreement by the  Corporation  or its  shareholders
regarding an Asset Transfer or Acquisition (each as defined in Section 3(c));

                  (viii) Any action that  results in the payment or  declaration
of a dividend on any shares of Common Stock or Preferred Stock;

                  (ix)  Any  voluntary   dissolution   or   liquidation  of  the
Corporation; or

                  (x) Any  change in the  authorized  number of  members  of the
Corporation's Board of Directors.

                                       3.
<PAGE>

         (c) Election of Board of Directors. The authorized number of members on
the Corporation's  Board of Directors shall be five (5). For so long as at least
one million (1,000,000) shares of Series A Preferred remain outstanding (subject
to  adjustment  for any  stock  split,  reverse  stock  split or  similar  event
affecting the Series A Preferred) the holders of Series A Preferred, voting as a
separate  class,  shall be  entitled  to elect two (2)  members  of the Board of
Directors  (also referred to as the "Board") at each meeting or pursuant to each
consent of the Corporation's  shareholders for the election of directors, and to
remove  from  office  such  directors  and to fill  any  vacancy  caused  by the
resignation, death or removal of such directors.  Notwithstanding the foregoing,
in the event of a change in control,  dissolution  or liquidation of either Oryx
Ventures  or Oryx  Technologies  Corp.  (collectively  referred to as "Oryx") or
both, thereafter the holders of Series A shall be entitled to elect only one (1)
member of the Board. For so long as at least one million  (1,000,000)  shares of
Series B  Preferred  and/or  Series  B-1  Preferred,  in the  aggregate,  remain
outstanding  (subject to adjustment for any stock split,  reverse stock split or
similar event affecting the Series B Preferred  and/or Series B-1 Preferred) the
holders of Series B Preferred  and Series B-1  Preferred,  voting  together as a
single  class,  shall be entitled  to elect one (1) member of the  Corporation's
Board  of  Directors  at  each  meeting  or  pursuant  to  each  consent  of the
Corporation's  shareholders  for the election of  directors,  and to remove from
office such director and to fill any vacancy caused by the resignation, death or
removal of such  director.  The  holders of Common  Stock,  voting as a separate
class,  shall be  entitled  to  elect  all  remaining  members  of the  Board of
Directors  at each  meeting or  pursuant  to each  consent of the  Corporation's
shareholders  for the  election  of  directors,  and to remove  from office such
directors and to fill any vacancy caused by the resignation, death or removal of
such directors.  For the purposes of this Section 2(c) only, a change of control
shall mean:

                  (i) any  consolidation  or  merger  of Oryx  Ventures  or Oryx
Technologies Corp. with or into any other corporation or other entity or person,
or any  other  corporate  reorganization,  in  which  the  shareholders  of Oryx
Ventures or Oryx  Technologies  Corp., as the case may be,  immediately prior to
such  consolidation,  merger or  reorganization,  own less than 50% of the given
entity's  voting  power   immediately  after  such   consolidation,   merger  or
reorganization,  or any  transaction or series of related  transactions to which
Oryx Ventures or Oryx Technologies  Corp. is a party in which in excess of fifty
percent (50%) of the given entity's voting power is  transferred,  excluding any
consolidation  or merger  effected  exclusively  to change the  domicile of Oryx
Ventures or Oryx Technologies Corp.; or

                  (ii) a sale,  lease,  pledge,  license or other disposition of
all or  substantially  all  of the  assets  of  either  Oryx  Ventures  or  Oryx
Technologies Corp.

     3. LIQUIDATION RIGHTS.

         (a)  Upon  any   liquidation,   dissolution,   or  winding  up  of  the
Corporation,  whether  voluntary  or  involuntary,  before any  distribution  or
payment  shall be made to the  holders of any Junior  Stock,  the holders of the
respective  Series  Preferred  shall be entitled to be paid out of the assets of
the Corporation an amount per share of Series  Preferred equal to the applicable
Original Issue Price for the respective  Series  Preferred plus all declared and
unpaid  dividends on such shares of  Preferred  Stock (as adjusted for any stock
dividends,  combinations, splits, recapitalizations and the like with respect to
such shares) for each share of Series  Preferred held by them. If, upon any such
liquidation, dissolution, or winding up, the assets of

                                       4.
<PAGE>

the Corporation  shall be insufficient to make payment in full to all holders of
Series  Preferred of the liquidation  preference set forth in this Section 3(a),
then such assets shall be distributed among the holders of the respective Series
Preferred at the time outstanding,  ratably in proportion to the full amounts to
which they would otherwise be respectively entitled.

         (b) After  payment  of the full  liquidation  preference  of the Series
Preferred  as set forth in  Section  3(a)  above,  any  remaining  assets of the
Corporation  legally  available for  distribution,  if any, shall be distributed
ratably to the holders of the Common Stock and the Series Preferred on the basis
of Common Stock equivalents.

         (c) The following  events shall be considered a liquidation  under this
Section 3:

                           (i) any  consolidation  or merger of the  Corporation
with or into any  other  corporation  or other  entity or  person,  or any other
corporate   reorganization,   in  which  the  shareholders  of  the  Corporation
immediately prior to such consolidation, merger or reorganization, own less than
50% of the  Corporation's  voting power  immediately  after such  consolidation,
merger or reorganization,  or any transaction or series of related  transactions
to which the Corporation is a party in which in excess of fifty percent (50%) of
the Corporation's voting power is transferred (an "Acquisition"),  excluding any
consolidation  or merger  effected  exclusively  to change the  domicile  of the
Corporation;

                           (ii)  a  sale,  lease,   pledge,   license  or  other
disposition of all or  substantially  all of the assets of the  Corporation  (an
"Asset Transfer");

                           (iii)  in any of such  events,  if the  consideration
received by this  Corporation  is other than cash,  its value will be deemed its
fair market value as  determined  in good faith by the Board of  Directors.  Any
securities shall be valued as follows:

                                    (1)  Securities  not  subject to  investment
letter or other similar restrictions on free marketability covered by clause (B)
immediately below:

                                             a.  If  traded   on  a   securities
exchange or through the Nasdaq National Market,  the value shall be deemed to be
the average of the closing  prices of the  securities on such  quotation  system
over the thirty (30) day period ending three (3) days prior to the closing;

                                             b.     If      actively      traded
over-the-counter, the value shall be deemed to be the average of the closing bid
or sale prices  (whichever is applicable) over the thirty (30) day period ending
three (3) days prior to the closing; and

                                             c. If  there  is no  active  public
market,  the value shall be the fair market value thereof,  as determined by the
Board of Directors.

                                    (2) The method of  valuation  of  securities
subject to investment letter or other restrictions on free marketability  (other
than  restrictions  arising  solely by virtue  of a  shareholder's  status as an
affiliate or former affiliate) shall be to make an appropriate discount

                                       5.
<PAGE>

from the market value  determined as above in (A)(1),  (2) or (3) to reflect the
approximate fair market value thereof, as determined by the Board of Directors.

     4. CONVERSION RIGHTS.

         The holders of the Series  Preferred  shall have the  following  rights
with respect to the  conversion  of the Series  Preferred  into shares of Common
Stock (the "Conversion Rights"):

                  (a) Optional Conversion. Subject to and in compliance with the
provisions of this Section 4, any shares of Series  Preferred may, at the option
of the holder, be converted at any time into fully-paid and nonassessable shares
of Common  Stock.  The  number  of  shares of Common  Stock to which a holder of
respective  Series  Preferred  shall be entitled  upon  conversion  shall be the
product  obtained  by  multiplying  the  then  in  effect  "Series  A  Preferred
Conversion Rate," "Series B Preferred Conversion Rate," or "Series B-1 Preferred
Conversion Rate" as applicable,  (determined as provided in Section 4(b)) by the
number of shares of Series A  Preferred,  Series B  Preferred,  and Series  B-1,
respectively, being converted.

                  (b) Series  Preferred  Conversion Rate. The conversion rate in
effect at any time for  conversion  of the  Series A  Preferred  (the  "Series A
Preferred  Conversion  Rate")  shall be the  quotient  obtained by dividing  the
Original  Issue  Price of the  Series A  Preferred  by the  "Series A  Preferred
Conversion  Price,"  calculated as provided in Section 4(c). The conversion rate
then in effect at any time for conversion of the Series B Preferred (the "Series
B Preferred  Conversion  Rate") shall be the  quotient  obtained by dividing the
Original  Issue  Price of the  Series B  Preferred  by the  "Series B  Preferred
Conversion  Price,"  calculated as provided in Section 4(c). The conversion rate
then in effect at any time for  conversion  of the  Series  B-1  Preferred  (the
"Series  B-1  Preferred  Conversion  Rate")  shall be the  quotient  obtained by
dividing the Original Issue Price of the Series B-1 Preferred by the "Series B-1
Preferred Conversion Price," calculated as provided in Section 4(c).

                  (c) Conversion  Price.  The conversion  price for the Series A
Preferred  shall initially be the Original Issue Price of the Series A Preferred
(the "Series A Preferred Conversion Price"). The conversion price for the Series
B  Preferred  shall  initially  be the  Original  Issue  Price  of the  Series B
Preferred (the "Series B Preferred  Conversion Price"). The conversion price for
the Series B-1  Preferred  shall  initially be the  Original  Issue Price of the
Series B-1 Preferred (the "Series B-1 Preferred Conversion Price"). Such initial
Series  Preferred  Conversion  Price  shall  be  adjusted  from  time to time in
accordance  with  this  Section  4. All  references  to the  Series A  Preferred
Conversion  Price,  the Series B  Preferred  Conversion  Price or the Series B-1
Preferred  Conversion Price herein shall mean the Series A Preferred  Conversion
Price,  the Series B  Preferred  Conversion  Price and the Series B-1  Preferred
Conversion Price, in each case as adjusted.

                  (d) Mechanics of Conversion.  Each holder of Series  Preferred
who  desires to convert the same into  shares of Common  Stock  pursuant to this
Section  4 shall  surrender  the  certificate  or  certificates  therefor,  duly
endorsed,  at the office of the Corporation or any transfer agent for the Series
Preferred,  and shall give written notice to the Corporation at such office that
such holder  elects to convert the same.  Such notice  shall state the number of
shares of Series Preferred being  converted.  Thereupon,  the Corporation  shall
promptly  issue and  deliver  at such

                                       6.
<PAGE>

office to such holder a certificate or certificates  for the number of shares of
Common Stock to which such holder is entitled and shall promptly pay (i) in cash
or, to the extent sufficient funds are not then legally available  therefor,  in
Common Stock (at the Common Stock's fair market value determined by the Board of
Directors as of the date of such conversion),  any declared and unpaid dividends
on the  shares  of Series  Preferred  being  converted  and (ii) in cash (at the
Common Stock's fair market value  determined by the Board of Directors as of the
date of conversion) the value of any fractional  share of Common Stock otherwise
issuable to any holder of Series  Preferred.  Such conversion shall be deemed to
have been made at the close of  business  on the date of such  surrender  of the
certificates  representing the shares of Series  Preferred to be converted,  and
the person  entitled to receive the shares of Common  Stock  issuable  upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.

                  (e)  Adjustment  for Stock  Splits  and  Combinations.  If the
Corporation shall at any time or from time to time after the date that the first
share of Series B-1  Preferred is issued (the "Series B-1 Original  Issue Date")
effect a subdivision  of the  outstanding  Common Stock without a  corresponding
subdivision of the Preferred Stock, the Series A Preferred Conversion Price, the
Series B  Preferred  Conversion  Price and the Series B-1  Preferred  Conversion
Price in effect  immediately  before that subdivision  shall be  proportionately
decreased. Conversely, if the Corporation shall at any time or from time to time
after the Series B-1  Original  Issue Date  combine  the  outstanding  shares of
Common Stock into a smaller number of shares without a corresponding combination
of the Preferred  Stock, the Series A Preferred  Conversion  Price, the Series B
Preferred  Conversion  Price and the Series B-1  Preferred  Conversion  Price in
effect immediately  before the combination shall be  proportionately  increased.
Any  adjustment  under this Section 4(e) shall become  effective at the close of
business on the date the subdivision or combination becomes effective.

                  (f) Adjustment for Common Stock  Dividends and  Distributions.
If the  Corporation  at any  time or from  time to time  after  the  Series  B-1
Original  Issue Date  makes,  or fixes a record  date for the  determination  of
holders of Common Stock  entitled to receive,  a dividend or other  distribution
payable in additional  shares of Common  Stock,  in each such event the Series A
Preferred  Conversion  Price,  the Series B Preferred  Conversion  Price and the
Series B-1 Preferred  Conversion Price that is then in effect shall be decreased
as of the time of such  issuance or, in the event such record date is fixed,  as
of the close of  business  on such  record  date,  by  multiplying  the Series A
Preferred  Conversion  Price,  the Series B  Preferred  Conversion  Price or the
Series B-1  Preferred  Conversion  Price  then in effect by a  fraction  (i) the
numerator  of which is the total  number of shares of Common  Stock  issued  and
outstanding  immediately  prior to the  time of such  issuance  or the  close of
business on such record  date,  and (ii) the  denominator  of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such  issuance  or the close of  business  on such  record date plus the
number of shares of  Common  Stock  issuable  in  payment  of such  dividend  or
distribution;  provided,  however,  that if such  record  date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor,  the Series A Preferred Conversion Price, the Series B Preferred
Conversion  Price  and the  Series  B-1

                                       7.
<PAGE>

Preferred  Conversion  Price shall be recomputed  accordingly as of the close of
business on such record date and  thereafter  the Series A Preferred  Conversion
Price,  the Series B  Preferred  Conversion  Price and the Series B-1  Preferred
Conversion Price shall be adjusted  pursuant to this Section 4(f) to reflect the
actual payment of such dividend or distribution.

                  (g)    Adjustment   for    Reclassification,    Exchange   and
Substitution.  If at any time or from time to time after the Series B-1 Original
Issue  Date,  the  Common  Stock  issuable  upon the  conversion  of the  Series
Preferred is changed into the same or a different  number of shares of any class
or classes of stock, whether by recapitalization,  reclassification or otherwise
(other than an  Acquisition  or Asset  Transfer as defined in Section  3(c) or a
subdivision  or  combination  of shares or stock  dividend or a  reorganization,
merger,  consolidation  or sale of assets provided for elsewhere in this Section
4), then in any such event each holder of Series  Preferred shall have the right
thereafter  to  convert  such  stock into the kind and amount of stock and other
securities and property receivable upon such recapitalization,  reclassification
or other change by holders of the maximum  number of shares of Common Stock into
which such  shares of Series  Preferred  could have been  converted  immediately
prior to such  recapitalization,  reclassification  or  change,  all  subject to
further  adjustment as provided herein or with respect to such other  securities
or property by the terms thereof.

                  (h) Reorganizations, Mergers or Consolidations. If at any time
or from time to time  after the  Series  B-1  Original  Issue  Date,  there is a
capital reorganization of the Common Stock or the merger or consolidation of the
Corporation with or into another  corporation or another entity or person (other
than  an  Acquisition  or  Asset  Transfer  as  defined  in  Section  3(c)  or a
recapitalization,   subdivision,  combination,  reclassification,   exchange  or
substitution  of shares  provided for elsewhere in this Section 4), as a part of
such capital reorganization,  provision shall be made so that the holders of the
Series  Preferred shall thereafter be entitled to receive upon conversion of the
Series  Preferred the number of shares of stock or other  securities or property
of the  Corporation  to which a holder of the  number of shares of Common  Stock
deliverable   upon   conversion   would  have  been  entitled  on  such  capital
reorganization,  subject to adjustment in respect of such stock or securities by
the terms thereof. In any such case, appropriate adjustment shall be made in the
application  of the  provisions  of this Section 4 with respect to the rights of
the holders of Series Preferred after the capital reorganization to the end that
the provisions of this Section 4 (including adjustment of the Series A Preferred
Conversion  Price,  the Series B Preferred  Conversion  Price and the Series B-1
Preferred Conversion Price then in effect and the number of shares issuable upon
conversion of the respective  Series  Preferred)  shall be applicable after that
event and be as nearly equivalent as practicable.

                  (i) Sale of Shares Below Series Preferred Conversion Price.

                           (i) If at any  time or from  time to time  after  the
Series B-1 Original Issue Date, the Corporation issues or sells, or is deemed by
the express  provisions of this Section 4(i) to have issued or sold,  Additional
Shares of Common  Stock (as defined in clause (iv) of this  Section 4(i) below),
other than as a dividend or other distribution on any class of stock as provided
in Section 4(f) above,  and other than a subdivision or combination of shares of
Common  Stock as provided  in Section  4(e) above,  for an  Effective  Price (as
defined in clause (iv) of this Section 4(i) below) less than the then  effective
Series A Preferred  Conversion Price, the Series B Preferred Conversion Price or
the  Series  B-1  Preferred  Conversion  Price,  then and in each  such case the
current Series A Preferred  Conversion Price, the Series B Preferred

                                       8.
<PAGE>

Conversion Price or the Series B-1 Preferred  Conversion  Price, as the case may
be, shall be reduced, as of the opening of business on the date of such issue or
sale, to a price  determined by  multiplying  the Series A Preferred  Conversion
Price,  the Series B  Preferred  Conversion  Price or the  Series B-1  Preferred
Conversion  Price,  as the case may be, by a fraction (i) the numerator of which
shall be (A) the number of shares of Common Stock deemed outstanding (as defined
below) immediately prior to such issue or sale, plus (B) the number of shares of
Common Stock which the  aggregate  consideration  received (as defined  below in
clause (ii) of this  Section  4(i)) by the  Corporation  for the total number of
Additional  Shares of Common Stock so issued would  purchase at such  respective
Series A Preferred  Conversion Price, the Series B Preferred Conversion Price or
the Series B-1 Preferred  Conversion  Price,  and (ii) the  denominator of which
shall be the number of shares of Common  Stock  deemed  outstanding  (as defined
below)  immediately  prior  to such  issue  or sale  plus the  total  number  of
Additional  Shares of Common  Stock so issued or sold.  For the  purposes of the
immediately  preceding sentence,  the number of shares of Common Stock deemed to
be  outstanding  as of a given date shall be the sum of (A) the number of shares
of Common Stock actually  outstanding,  (B) the number of shares of Common Stock
into which the then outstanding shares of Series Preferred could be converted if
fully  converted on the day  immediately  preceding the given date,  and (C) the
number of shares of Common Stock issuable upon the exercise or conversion of all
other  rights,  options  and  convertible  securities  outstanding  on  the  day
immediately  preceding the given date. No adjustment shall be made to the Series
A Preferred  Conversion  Price,  the Series B Preferred  Conversion Price or the
Series B-1 Preferred  Conversion Price in an amount less than one-quarter of one
cent per share. Any adjustment  otherwise  required by this Section 4(i) that is
not  required  to be made due to the  immediately  preceding  sentence  shall be
included  in any  subsequent  adjustment  to the Series A  Preferred  Conversion
Price,  the Series B  Preferred  Conversion  Price or the  Series B-1  Preferred
Conversion  Price.  For  avoidance of doubt,  any  adjustment  to the Series B-1
Conversion  Price as a result of the  provisions  of Section 4(j) and 4(k) below
shall not cause  any  adjustments  to the  applicable  Conversion  Prices of the
Series Preferred pursuant to the provisions of this Section 4(i)(i).

                           (ii)  For  the  purpose  of  making  any   adjustment
required under this Section 4(i), the consideration  received by the Corporation
for any issue or sale of securities shall (A) to the extent it consists of cash,
be  computed  at the  net  amount  of cash  received  by the  Corporation  after
deduction  of  any   underwriting  or  similar   commissions,   compensation  or
concessions  paid or allowed by the Corporation in connection with such issue or
sale but without  deduction of any expenses payable by the  Corporation,  (B) to
the extent it  consists  of  property  other than cash,  be computed at the fair
value of that  property as  determined  in good faith by the Board of Directors,
and (C) if Additional Shares of Common Stock, Convertible Securities (as defined
in clause  (iii) of this  Section  4(i)  below) or rights or options to purchase
either Additional Shares of Common Stock or Convertible Securities are issued or
sold together with other stock or securities or other assets of the  Corporation
for a  consideration  which  covers  both,  be  computed  as the  portion of the
consideration so received that may be reasonably determined in good faith by the
Board of Directors to be allocable to such  Additional  Shares of Common  Stock,
Convertible Securities or rights or options.

                           (iii)  For the  purpose  of the  adjustment  required
under this Section 4(i), if (x) the Corporation issues or sells any (i) stock or
other  securities  convertible  into,  Additional  Shares of Common  Stock (such
convertible  stock  or  securities  being  herein  referred  to as

                                       9.
<PAGE>

"Convertible  Securities")  or  (ii)  rights  or  options  for the  purchase  of
Additional  Shares  of  Common  Stock  or  Convertible  Securities  and  (y) the
Effective  Price of such  Additional  Shares  of  Common  Stock is less than the
Series A Preferred  Conversion Price, the Series B Preferred Conversion Price or
the Series B-1 Preferred  Conversion  Price,  then in each case the  Corporation
shall be deemed to have  issued at the time of the  issuance  of such  rights or
options or Convertible  Securities  the maximum  number of Additional  Shares of
Common Stock  issuable upon exercise or conversion  thereof and to have received
as  consideration  for the  issuance of such shares an amount equal to the total
amount  of the  consideration,  if  any,  received  by the  Corporation  for the
issuance of such rights or options or Convertible Securities,  plus, in the case
of such rights or options, the minimum amounts of consideration, if any, payable
to the  Corporation  upon the exercise of such rights or options,  plus,  in the
case of Convertible  Securities,  the minimum amounts of consideration,  if any,
payable  to the  Corporation  (other  than by  cancellation  of  liabilities  or
obligations  evidenced  by such  Convertible  Securities)  upon  the  conversion
thereof;  provided  that if in the case of  Convertible  Securities  the minimum
amounts of such  consideration  cannot be  ascertained,  but are a  function  of
antidilution or similar protective  clauses,  the Corporation shall be deemed to
have received the minimum  amounts of  consideration  without  reference to such
clauses; provided further that if the minimum amount of consideration payable to
the  Corporation  upon  the  exercise  or  conversion  of  rights,   options  or
Convertible   Securities   is  reduced  over  time  or  on  the   occurrence  or
non-occurrence  of  specified  events  other  than  by  reason  of  antidilution
adjustments, the Effective Price shall be recalculated using the figure to which
such minimum amount of  consideration  is reduced;  provided further that if the
minimum amount of consideration  payable to the Corporation upon the exercise or
conversion of such rights,  options or  Convertible  Securities is  subsequently
increased,  the Effective Price shall be again  recalculated using the increased
minimum amount of consideration  payable to the Corporation upon the exercise or
conversion  of such  rights,  options  or  Convertible  Securities.  No  further
adjustment of the Series A Preferred  Conversion  Price,  the Series B Preferred
Conversion Price or the Series B-1 Preferred  Conversion Price, as adjusted upon
the issuance of such rights, options or Convertible Securities, shall be made as
a result of the actual  issuance  of  Additional  Shares of Common  Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities.   If  any  such  rights  or  options  or  the  conversion  privilege
represented by any such Convertible  Securities shall expire without having been
exercised,  the Series A  Preferred  Conversion  Price,  the Series B  Preferred
Conversion  Price or the Series B-1 Preferred  Conversion Price as adjusted upon
the  issuance  of such  rights,  options  or  Convertible  Securities  shall  be
readjusted to the Series A Preferred  Conversion  Price,  the Series B Preferred
Conversion  Price or the Series B-1 Preferred  Conversion Price which would have
been in effect had an adjustment been made on the basis that the only Additional
Shares of Common Stock so issued were the Additional  Shares of Common Stock, if
any, actually issued or sold on the exercise of such rights or options or rights
of conversion of such  Convertible  Securities,  and such  Additional  Shares of
Common  Stock,  if any,  were  issued  or sold  for the  consideration  actually
received by the Corporation upon such exercise, plus the consideration,  if any,
actually  received  by the  Corporation  for the  granting of all such rights or
options,  whether or not exercised,  plus the consideration received for issuing
or  selling   the   Convertible   Securities   actually   converted,   plus  the
consideration,  if any,  actually  received  by the  Corporation  (other than by
cancellation  of  liabilities  or  obligations  evidenced  by  such  Convertible
Securities) on the conversion of such Convertible Securities; provided that such
readjustment shall not apply to prior conversions of Series Preferred.

                                       10.
<PAGE>

                           (iv)  "Additional  Shares of Common Stock" shall mean
all shares of Common Stock issued by the  Corporation or deemed issued  pursuant
to this Section 4(i),  whether or not subsequently  reacquired or retired by the
Corporation  other than: (A) shares of Series B-1 Preferred and/or any shares of
Common  Stock  issued upon  conversion  of the Series  Preferred;  (B) shares of
Common Stock and/or options,  warrants or other Common Stock purchase rights and
the Common Stock issued  pursuant to such options,  warrants or other rights (as
adjusted for any stock dividends,  combinations,  splits,  recapitalizations and
the like) after the Series B-1  Original  Issue Date to  employees,  officers or
directors of, or  consultants  or advisors to the  Corporation or any subsidiary
pursuant to stock purchase or stock option plans or other  arrangements that are
approved  by the  Board;  (C)  shares of Common  Stock  issued  pursuant  to the
exercise of options,  warrants or convertible  securities  outstanding as of the
Series B-1  Original  Issue  Date;  (D)  shares of Common  Stock  issued  and/or
options,  warrants or other Common Stock purchase  rights,  and the Common Stock
issued  pursuant to such  options,  warrants or other  rights for  consideration
other than cash  pursuant  to a merger,  consolidation,  acquisition  or similar
business  combination  approved by the Board; (E) shares issued in any bona fide
strategic  transactions  approved by the Board;  and (F) shares of Common  Stock
issued pursuant to any equipment leasing  arrangement,  or debt financing from a
bank or similar  financial  institution  approved  by the Board.  References  to
Common Stock in the  provisions  of this clause (iv) above shall mean all shares
of Common Stock  issued by the  Corporation  or deemed to be issued  pursuant to
this Section 4(i).  The "Effective  Price" of Additional  Shares of Common Stock
shall mean the quotient  determined  by dividing the total number of  Additional
Shares of Common Stock issued or sold,  or deemed to have been issued or sold by
the  Corporation  under this  Section  4(i),  into the  aggregate  consideration
received,  or deemed to have been  received  by the  Corporation  for such issue
under this Section 4(i), for such Additional Shares of Common Stock.

                  (j)  Adjustment  for  Milestone  Completion.  If during the 12
month  period  beginning  March 1,  2003  and  ending  February  29,  2004  (the
"Measurement Period") the Corporation does not (i) enter into written agreements
with new or  existing  customers  providing  for the  license of at least  three
hundred (300) annual seats for the Corporation's STRIDE software program or (ii)
achieve gross  billings of at least one million eight hundred  thousand  dollars
($1,800,000) (together the "Primary Milestones"), then the Series B-1 Conversion
Price will be adjusted to equal fifty  percent  (50%) of the Series B-1 Original
Issue  Price.  If (x) the  Corporation  does not  achieve  either of the Primary
Milestones  described  in the  preceding  sentence,  and (y) during the 12 month
period beginning March 1, 2003 and ending February 29, 2004 the Corporation also
does not (i)  enter  into  written  agreements  with new or  existing  customers
providing  for the license of at least two hundred  (200)  annual  seats for the
Corporation's STRIDE software program or (ii) achieve gross billings of at least
one million  two  hundred  thousand  dollars  ($1,200,000),  then the Series B-1
Conversion Price will be adjusted to equal forty percent (40%) of the Series B-1
Original Issue Price. Such adjustments shall be automatic  effective as of March
1, 2004; provided,  however, that there shall be no adjustments pursuant to this
Section  4(j) if the  Corporation  achieves  either of the  Primary  Milestones.
Notwithstanding the foregoing, in no event will any adjustment to the Series B-1
Conversion Price result in any increase of the Series B-1 Conversion Price to an
amount that is greater  than such Series B-1  Conversion  Price on February  29,
2004.  For  purposes of this Section 4(j) and Section  4(k),  the  Corporation's
"gross  billings"  shall  include  license  agreements  for STRIDE

                                      11.
<PAGE>

products  and  professional  services  which  includes,  but is not  limited to,
implementation, installation, training and support services.

                  (k) Notices of Adjustment for Milestone Completion.  Following
any adjustment of the Series B-1 Preferred  Conversion  Price due to the failure
of the  Corporation to achieve either of the Primary  Milestones,  within thirty
(30) days following  February 29, 2004 the Corporation shall mail to each holder
of  Series  Preferred  B-1 a  notice  specifying  whether  or not  there  was an
adjustment to the Series B Conversion Price pursuant to Section 4(j) hereof.  In
the case of an  adjustment,  such notice shall describe the adjustment and state
the then  current  Series B-1  Conversion  Price.  Such  notice  shall state the
Corporation's actual gross billings during the Measurement Period and the actual
number  of  written  agreements  for the  license  of the  Corporation's  STRIDE
software entered into during the Measurement Period.

                  (l)  Certificate of Adjustment.  In each case of an adjustment
or  readjustment  of the  Series A  Preferred  Conversion  Price,  the  Series B
Preferred  Conversion Price or the Series B-1 Preferred Conversion Price for the
number of shares of Common Stock or other securities issuable upon conversion of
the respective  Series  Preferred,  if the respective  Series  Preferred is then
convertible pursuant to this Section 4, the Corporation,  at its expense,  shall
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate  showing such  adjustment or  readjustment,  and shall
mail such certificate,  by first class mail, postage prepaid, to each registered
holder of Series Preferred at the holder's address as shown in the Corporation's
books. The certificate shall set forth such adjustment or readjustment,  showing
in detail  the facts  upon  which  such  adjustment  or  readjustment  is based,
including a statement of (i) the consideration received or deemed to be received
by the Corporation  for any Additional  Shares of Common Stock issued or sold or
deemed to have been issued or sold, (ii) the Series A Preferred Conversion Price
and/or the Series B Preferred  Conversion  Price and/or the Series B-1 Preferred
Conversion Price, as the case may be, at the time in effect, (iii) the number of
Additional Shares of Common Stock and (iv) the type and amount, if any, of other
property  which at the time  would be  received  upon  conversion  of the Series
Preferred.

                  (m)  Notices  of  Record  Date.  Upon  (i) any  taking  by the
Corporation  of a record  of the  holders  of any  class of  securities  for the
purpose of  determining  the  holders  thereof  who are  entitled to receive any
dividend or other  distribution,  or (ii) any Acquisition (as defined in Section
3(c) or other capital reorganization of the Corporation, any reclassification or
recapitalization  of  the  capital  stock  of the  Corporation,  any  merger  or
consolidation  of the  Corporation  with or into any other  corporation,  or any
Asset  Transfer (as defined in Section  (3c)),  or any voluntary or  involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation shall
mail to each  holder of  Series  Preferred  at least ten (10) days  prior to the
record date specified  therein (or such shorter period approved by a majority of
each Series of the outstanding  Series Preferred voting separately as a class) a
notice  specifying  (A) the date on which any such record is to be taken for the
purpose of such dividend or  distribution  and a description of such dividend or
distribution,  (B) the  date on  which  any  such  Acquisition,  reorganization,
reclassification,  transfer, consolidation, merger, Asset Transfer, dissolution,
liquidation or winding up is expected to become effective,  and (C) the date, if
any,  that is to be fixed as to when the  holders of record of Common  Stock (or
other securities) shall be entitled to exchange their shares of Common Stock (or
other  securities)  for  securities  or other  property

                                      12.
<PAGE>

deliverable upon such Acquisition, reorganization,  reclassification,  transfer,
consolidation, merger, Asset Transfer, dissolution, liquidation or winding up.

                  (n) Automatic Conversion.

                           (i) (A) Each  respective  share of  Series  Preferred
shall  automatically  be  converted  into shares of Common  Stock,  based on the
then-effective  Series A  Preferred  Conversion  Price,  the Series B  Preferred
Conversion Price or the Series B-1 Preferred  Conversion  Price, as the case may
be,  immediately  upon the  closing  of a firmly  underwritten  public  offering
pursuant to an effective  registration  statement  under the  Securities  Act of
1933, as amended, covering the offer and sale of Common Stock for the account of
the Corporation in which (i) the per share price is at least $5.00 per share (as
adjusted for stock splits, dividends,  recapitalizations and the like), and (ii)
the cash proceeds to the Corporation (before underwriting discounts, commissions
and fees) are at least $20,000,000.

                                    (B) Each share of Series A  Preferred  shall
automatically   be  converted  into  shares  of  Common  Stock,   based  on  the
then-effective Series A Preferred Conversion Price upon the affirmative election
of the  holders of at least a  majority  of the  outstanding  shares of Series A
Preferred.  Each share of Series B  Preferred  and Series  B-1  Preferred  shall
automatically   be  converted  into  shares  of  Common  Stock,   based  on  the
then-effective  Series B  Preferred  Conversion  Price and Series B-1  Preferred
Conversion Price, respectively,  upon the affirmative election of the holders of
at least a majority of the  outstanding  shares of Series B Preferred and Series
B-1  Preferred,   voting  together  as  a  single  class.  Upon  such  automatic
conversion,  any declared and unpaid  dividends shall be paid in accordance with
the provisions of Section 4(d).

                           (ii)  Upon  the  occurrence  of  any  of  the  events
specified  in  Section  4(n)(i)(A)  above,  the  outstanding  shares  of  Series
Preferred  shall be converted  automatically  without any further  action by the
holders of such shares and  whether or not the  certificates  representing  such
shares are  surrendered  to the  Corporation  or its transfer  agent;  provided,
however,  that the  Corporation  shall not be  obligated  to issue  certificates
evidencing the shares of Common Stock issuable upon such  conversion  unless the
certificates  evidencing such shares of Series Preferred are either delivered to
the  Corporation or its transfer agent as provided below, or the holder notifies
the  Corporation  or its transfer agent that such  certificates  have been lost,
stolen or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the  Corporation  from any loss incurred by it in connection with such
certificates.  Upon the  occurrence of such  automatic  conversion of the Series
Preferred,  the holders of Series  Preferred  shall  surrender the  certificates
representing  such shares at the office of the Corporation or any transfer agent
for the Series Preferred.  Thereupon, the Corporation shall issue and deliver to
such holder promptly at such office and in its name as shown on such surrendered
certificate or  certificates,  a certificate or  certificates  for the number of
shares of Common  Stock into which the  shares of Series  Preferred  surrendered
were convertible on the date on which such automatic  conversion  occurred,  and
any  declared  and  unpaid  dividends  shall  be paid  in  accordance  with  the
provisions of Section 4(d).

                  (o) Fractional  Shares.  No fractional  shares of Common Stock
shall be issued upon conversion of Series Preferred.  All shares of Common Stock
(including fractions

                                      13.
<PAGE>

thereof)  issuable upon conversion of more than one share of Series Preferred by
a holder  thereof shall be aggregated  for purposes of  determining  whether the
conversion  would result in the issuance of any fractional  share. If, after the
aforementioned  aggregation,  the conversion would result in the issuance of any
fractional  share,  the  Corporation  shall,  in lieu of issuing any  fractional
share,  pay cash equal to the product of such fraction  multiplied by the Common
Stock's  fair  market  value  (as  determined  by  the  Board)  on the  date  of
conversion.

                  (p)  Reservation  of  Stock  Issuable  Upon  Conversion.   The
Corporation  shall at all times reserve and keep available out of its authorized
but unissued  shares of Common  Stock,  solely for the purpose of effecting  the
conversion of the shares of the Series  Preferred,  such number of its shares of
Common Stock as shall from time to time be sufficient  to effect the  conversion
of all outstanding shares of the Series Preferred.  If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the  conversion  of all then  outstanding  shares of the Series  Preferred,  the
Corporation  will  take such  corporate  action as may,  in the  opinion  of its
counsel,  be necessary to increase its authorized but unissued  shares of Common
Stock to such number of shares as shall be sufficient for such purpose.

                  (q) Notices.  Any notice  required by the  provisions  of this
Section 4 shall be in writing and shall be deemed  effectively  given:  (i) upon
personal  delivery  to the party to be  notified,  (ii)  when sent by  confirmed
facsimile if sent during  normal  business  hours of the recipient and if not so
sent  within such  hours,  then on the next  business  day,  provided  that such
facsimile  notice  is  followed  upon  within  three (3) days by  registered  or
certified mail,  postage prepaid as set forth in this clause (q), (iii) five (5)
days after having been sent by  registered  or certified  mail,  return  receipt
requested,  postage prepaid, or (iv) one (1) day after deposit with a nationally
recognized  overnight  courier,  specifying  next  day  delivery,  with  written
verification of receipt. All notices shall be addressed to each holder of record
at the address of such holder appearing on the books of the Corporation.

                  (r)  Payment  of  Taxes.  The  Corporation  will pay all taxes
(other than taxes based upon income) and other governmental  charges that may be
imposed  with  respect to the issue or delivery  of shares of Common  Stock upon
conversion  of shares of Series  Preferred,  excluding  any tax or other  charge
imposed in  connection  with any transfer  involved in the issue and delivery of
shares of Common  Stock in a name  other than that in which the shares of Series
Preferred so converted were registered.

                  (s) No  Dilution  or  Impairment.  Without  the consent of the
holders of the then  outstanding  Series  Preferred,  as required  under Section
2(b),  the  Corporation  shall not amend its  Amended and  Restated  Articles of
Incorporation  or  participate  in  any  reorganization,   transfer  of  assets,
consolidation,  merger,  dissolution,  issue or sale of  securities  or take any
other  voluntary  action,  for the  purpose of  avoiding or seeking to avoid the
observance  or  performance  of any of the  terms to be  observed  or  performed
hereunder  by the  Corporation,  but shall at all times in good faith  assist in
carrying out all such action as may be reasonably  necessary or  appropriate  in
order to protect the  conversion  rights of the holders of the Series  Preferred
against dilution or other impairment.

                                      14.
<PAGE>

         5. REDEMPTION.

                  (a) The Corporation  shall be obligated to redeem the Series B
Preferred and Series B-1 Preferred as follows:

                           (i) The holders of at least  sixty-six and two-thirds
percent  (66 2/3%) of the then  outstanding  shares of  Series B  Preferred  and
Series B-1  Preferred,  voting  together  as a single  class,  may  require  the
Corporation,  to the  extent  it may  lawfully  do so, to  redeem  the  Series B
Preferred  and  Series  B-1  Preferred  in three (3) equal  annual  installments
beginning on the fifth anniversary after the date that the first share of Series
B-1 Preferred is issued (the "Original Issue Date"),  and ending on the date two
(2) years from such first redemption date (each a "Redemption  Date");  provided
that the Corporation  shall receive at least sixty (60) days prior to such fifth
anniversary  written notice of such request of the Series B Preferred and Series
B-1 Preferred.  The Corporation  shall effect such redemptions on the applicable
Redemption  Date by  paying  in cash in  exchange  for the  shares  of  Series B
Preferred  and Series B-1  Preferred  to be redeemed a sum equal to the Series B
Original  Issue Price or Series B-1 Original  Issue Price,  as  applicable,  per
share of Series B Preferred or Series B-1 Preferred, as applicable, (as adjusted
for any stock dividends,  combinations,  splits, recapitalizations and the like)
plus declared and unpaid dividends with respect to such shares. The total amount
to be paid for the Series B Preferred  is the "Series B Redemption  Price".  The
total  amount  to be paid  for the  Series  B-1  Preferred  is the  "Series  B-1
Redemption  Price".  The number of shares of Series B  Preferred  and Series B-1
Preferred that the Corporation shall be required to redeem on any one Redemption
Date shall be equal to the  amount  determined  by  dividing  (A) the  aggregate
number of shares of Series B  Preferred  and  Series B-1  Preferred  outstanding
immediately  prior  to the  Redemption  Date  by (B)  the  number  of  remaining
Redemption  Dates  (including  the  Redemption  Date to which  such  calculation
applies).  Shares  subject to redemption  pursuant to this Section 5(a) shall be
redeemed  from each holder of Series B Preferred  and Series B-1  Preferred on a
pro rata basis.

                           (ii) At least  thirty  (30)  days,  but no more  than
sixty (60) days prior to the first Redemption Date, the Corporation shall send a
notice (a  "Redemption  Notice") to all holders of Series B Preferred and Series
B-1 Preferred to be redeemed setting forth (A) the Series B Redemption Price and
the Series B-1 Redemption Price for the shares to be redeemed; and (B) the place
at which such holders may obtain  payment of the Series B  Redemption  Price and
the Series B-1 Redemption Price upon surrender of their share  certificates.  If
the Corporation does not have sufficient  funds legally  available to redeem all
shares to be redeemed at the Redemption Date (including, if applicable, those to
be redeemed at the option of the Corporation),  then it shall redeem such shares
pro rata (based on the portion of the  aggregate  Series B Redemption  Price and
Series B-1  Redemption  Price payable to them) to the extent  possible and shall
redeem the  remaining  shares to be  redeemed  as soon as  sufficient  funds are
legally available.

                  (b) On or prior to the Redemption Date, the Corporation  shall
deposit the Series B  Redemption  Price and Series B-1  Redemption  Price of all
shares to be redeemed with a bank or trust company having aggregate  capital and
surplus  in  excess  of   $100,000,000,   as  a  trust  fund,  with  irrevocable
instructions  and  authority  to the bank or trust  company to pay, on and after
such  Redemption  Date, the Series B Redemption  Price and Series B-1 Redemption
Price,  as  applicable,  of the  shares  to their  respective  holders  upon the
surrender of their share  certificates.

                                      15.
<PAGE>

Any moneys  deposited by the  Corporation  pursuant to this Section 5(b) for the
redemption of shares  thereafter  converted into shares of Common Stock pursuant
to Section 4 hereof no later than the fifth (5th) day preceding  the  Redemption
Date, as applicable,  shall be returned to the  Corporation  forthwith upon such
conversion.  The balance of any funds deposited by the  Corporation  pursuant to
this  Section  5(b)  remaining  unclaimed  at the  expiration  of one  (1)  year
following such Series  Redemption Date, as applicable,  shall be returned to the
Corporation promptly upon its written request.

                  (c) On or after such Redemption Date, each holder of shares of
Series B Preferred and Series B-1 Preferred to be redeemed shall  surrender such
holder's certificates  representing such shares to the Corporation in the manner
and at the place designated in the Redemption  Notice and thereupon the Series B
Redemption Price and Series B-1 Redemption Price, as applicable,  of such shares
shall  be  payable  to the  order  of the  person  whose  name  appears  on such
certificate  or  certificates   as  the  owner  thereof  and  each   surrendered
certificate shall be canceled. In the event less than all the shares represented
by  such   certificates  are  redeemed,   a  new  certificate  shall  be  issued
representing the unredeemed shares.  From and after such Redemption Date, unless
there  shall  have  been  respectively  a default  in  payment  of the  Series B
Redemption Price and Series B-1 Redemption Price or the Corporation is unable to
pay the respective Series B Redemption Price and Series B-1 Redemption Price due
to not having  sufficient  legally available funds, all rights of the respective
holder of Series B Preferred  and/or Series B-1  Preferred  (except the right to
receive  the  Series B  Redemption  Price or Series  B-1  Redemption  Price,  as
applicable, without interest upon surrender of their certificates),  shall cease
and  terminate  with  respect to such  shares;  provided  that in the event that
shares of Series B Preferred  and Series B-1 Preferred are not redeemed due to a
default in payment by the Corporation or because the  Corporation  does not have
sufficient  legally  available  funds,  then such respective  shares of Series B
Preferred  and  Series  B-1  Preferred  shall  remain  outstanding  and shall be
entitled to all of the rights and preferences provided herein.

                  (d) In the  event of a call for  redemption  of any  shares of
Series B Preferred and Series B-1 Preferred the Conversion Rights (as defined in
Section 4) for such Series B Preferred and Series B-1 Preferred  shall terminate
as to the shares designated for redemption at the close of business on the fifth
(5th) day  preceding  the  Redemption  Date, as  applicable,  unless  default is
respectively  made in payment of the  Series B  Redemption  Price and Series B-1
Redemption Price.

         6. NO REISSUANCE OF SERIES PREFERRED.

         No share or shares of Series  Preferred  acquired by the Corporation by
reason of purchase, conversion or otherwise shall be reissued.

                                       IV.

         A.  The liability  of the  directors  of the  Corporation  for monetary
damages shall be eliminated to the fullest extent  permissible  under California
law.

         B. The Corporation is authorized to provide  indemnification  of agents
(as defined in Section 317 of the General  Corporation  Law of  California)  for
breach of duty to the Corporation

                                      16.
<PAGE>

and its shareholders through bylaw provisions or through agreements with agents,
or both, in excess of the indemnification  otherwise permitted by Section 317 of
the General Corporation Law of California,  subject to the limits on such excess
indemnification  set forth in  Section  204 of the  General  Corporation  Law of
California.  If, after the effective date of this Article IV,  California law is
amended in a manner which permits a  corporation  to limit the monetary or other
liability of its directors or to authorize indemnification of, or advancement of
such defense expenses to, its directors or other persons,  in any such case to a
greater extent than is permitted on such effective  date, the references in this
Article  to  "California  law"  shall  to that  extent  be  deemed  to  refer to
California law as so amended.

         C.   Any  repeal  or  modification  of this  Article  IV shall  only be
prospective  and shall not affect the rights under this Article in effect at the
time of the alleged  occurrence  of any action or omission to act giving rise to
liability."

         THREE:  The  foregoing  amendment  and  restatement  of the Amended and
Restated  Articles  of  Incorporation  has been  duly  approved  by the Board of
Directors of this Corporation.

         FOUR: The foregoing  Amended and Restated Articles of Incorporation has
been duly  approved by the required  vote of  shareholders  in  accordance  with
Section 902 of the General  Corporation  Law of California.  The total number of
outstanding  shares  entitled to vote or act by written consent was five million
eight hundred  seventy-two  thousand nine hundred sixteen  (5,872,916) shares of
Common  Stock,  two  million  five  hundred  ninety-two  thousand  five  hundred
ninety-three  (2,592,593)  shares of Series A Preferred  and nine  million  nine
hundred sixty-four thousand two hundred eighty-six  (9,964,286) shares of Series
B Preferred.  A majority of the outstanding shares of the Common Stock voting as
a single class, a majority of the  outstanding  shares of the Series A Preferred
Stock voting as a single class,  sixty-six  and two thirds  percent (66 2/3%) of
the outstanding  shares of the Series B Preferred Stock voting as a single class
and a majority of the  outstanding  shares of the Common Stock and the Preferred
Stock,  voting  together as a single  class,  approved  the Amended and Restated
Articles of  Incorporation  by written consent in accordance with Section 603 of
the General Corporation Law of California.

                                      17.
<PAGE>

         The  undersigned,  Mark  Underseth,  the  President and Secretary of S2
TECHNOLOGIES,  INC.,  declares  under  penalty of perjury  under the laws of the
State of California  that the matters set out in the foregoing  certificate  are
true of his own knowledge.

         Executed at San Diego, California on April __, 2003.

                                         _______________________________________
                                         Mark Underseth, President and Secretary

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION
                                 SIGNATURE PAGE

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

1.  DIVIDEND RIGHTS............................................................2

2.  VOTING RIGHTS..............................................................2

    (a)      General Rights....................................................2

    (b)      Separate Vote of Series Preferred.................................2

    (c)      Election of Board of Directors....................................4

3.  LIQUIDATION RIGHTS.........................................................4

4.  CONVERSION RIGHTS..........................................................6

    (a)      Optional Conversion...............................................6

    (b)      Series Preferred Conversion Rate..................................6

    (c)      Conversion Price..................................................6

    (d)      Mechanics of Conversion...........................................6

    (e)      Adjustment for Stock Splits and Combinations......................7

    (f)      Adjustment for Common Stock Dividends and Distributions...........7

    (g)      Adjustment for Reclassification, Exchange and Substitution........7

    (h)      Reorganizations, Mergers or Consolidations........................8

    (i)      Sale of Shares Below Series Preferred Conversion Price............8

    (j)      Certificate of Adjustment........................................11

    (k)      Notices of Record Date...........................................11

    (l)      Automatic Conversion.............................................12

    (m)      Fractional Shares................................................12

    (n)      Reservation of Stock Issuable Upon Conversion....................13

    (o)      Notices..........................................................13

    (p)      Payment of Taxes.................................................13

    (q)      No Dilution or Impairment........................................13

5.  REDEMPTION................................................................13

6.  NO REISSUANCE OF SERIES PREFERRED.........................................15

                                       i.
<PAGE>

An extra  section break has been inserted  above this  paragraph.  Do not delete
this   section   break   if  you   plan  to  add  text   after   the   Table  of
Contents/Authorities.    Deleting    this   break    will    cause    Table   of
Contents/Authorities  headers and footers to appear on any pages  following  the
Table of Contents/Authorities.

<PAGE>

                                    EXHIBIT C

                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

                              S2 TECHNOLOGIES, INC.

                              AMENDED AND RESTATED
                            INVESTOR RIGHTS AGREEMENT

                                   MAY 6, 2003

<PAGE>

                              S2 TECHNOLOGIES, INC.

                              AMENDED AND RESTATED

                            INVESTOR RIGHTS AGREEMENT

         THIS AMENDED AND RESTATED  INVESTOR RIGHTS AGREEMENT (the  "Agreement")
is  entered  into as of May 6,  2003  (the  "Effective  Date"),  by and among S2
TECHNOLOGIES,  INC., a California  corporation (the "Company") and the investors
listed on Exhibit A hereto,  referred to hereinafter as the "Investors" and each
individually as an "Investor."

                                    RECITALS

         WHEREAS,  certain  of  the  Investors  are  purchasing  shares  of  the
Company's  Series B-1  Preferred  Stock  (also  referred  to as the  "Series B-1
Stock"),  pursuant to that certain Series B-1 Preferred Stock Purchase Agreement
(the "Purchase Agreement") of even date herewith (the "Financing");

         WHEREAS, the obligations in the Purchase Agreement are conditioned upon
the execution and delivery of this Agreement;

         WHEREAS,  certain of the Investors (the "Prior  Investors") are holders
of the Company's  Series A Preferred Stock ("Series A Stock") and Series B Stock
(the  "Series B Stock"  which,  together  with the Series A Stock and Series B-1
Stock, shall be referred to as the "Preferred Stock");

         WHEREAS,  the Prior Investors and the Company are parties to an Amended
and  Restated  Investor  Rights  Agreement  dated  October  18, 2001 (the "Prior
Agreement");

         WHEREAS,  the parties to the Prior  Agreement  desire to terminate  the
Prior  Agreement  and accept the  rights and  covenants  hereof in lieu of their
rights and covenants under the Prior Agreement; and

         WHEREAS,  in connection  with the  consummation  of the Financing,  the
Company and the Investors have agreed to the  registration  rights,  information
rights, and other rights as set forth below.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

                                       1.
<PAGE>

1. GENERAL.

     1.1 Definitions. As used in this Agreement the following terms shall mean:

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Form S-3" means such form under the Securities Act as in effect on the
date hereof or any successor or similar  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.

         "Holder" means any person owning of record Registrable  Securities that
have not been sold to the public or any  assignee of record of such  Registrable
Securities in accordance with Section 2.10 hereof.

         "Initial   Offering"   means  the  Company's   first  firm   commitment
underwritten public offering of its Common Stock registered under the Securities
Act.

         "Qualified  Offering"  means the  Company's  first firmly  underwritten
public offering of shares of the Company's  Common Stock at a per share price of
at least five dollars  ($5.00) per share and having an aggregate  offering price
to the public of at least twenty million dollars ($20,000,000) (before deduction
of Registration Expenses).

         "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  effectiveness  of such
registration statement or document.

         "Registrable  Securities"  means (a) Common Stock of the Company issued
or issuable upon  conversion  of the Shares,  and/or (b) any 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, such  above-described
securities.  Notwithstanding  the foregoing,  Registrable  Securities  shall not
include any  securities  sold by a person to the public either (a) pursuant to a
registration  statement or Rule 144 or (b) in a private transaction in which the
transferor's rights under Section 2 of this Agreement are not assigned.

         "Registrable Securities then outstanding" shall be the number of shares
determined by  calculating  the total number of shares of the  Company's  Common
Stock  that are  Registrable  Securities  and  either  (a) are then  issued  and
outstanding  or (b) are issuable  pursuant to then  exercisable  or  convertible
securities.

         "Registration  Expenses" means all expenses  incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including,  without limitation,
all registration and filing fees,  printing expenses,  fees and disbursements of
counsel for the Company,  reasonable fees and  disbursements of a single special
counsel  for the  Holders,  blue sky fees 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).

                                       2.
<PAGE>

         "SEC" or "Commission" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Selling  Expenses"  means  all  underwriting   discounts  and  selling
commissions applicable to the sale.

         "Shares"  means (i) the  Company's  Series A Stock,  (ii) the Company's
Series B Stock and/or (iii) the Company's Series B-1 Stock.

         "Special  Registration   Statement"  means  a  registration   statement
relating  to any  employee  benefit  plan  or  with  respect  to  any  corporate
reorganization or other transaction under Rule 145 (including any replacement or
successor Rule thereto) or any other Rule or Regulation of the Securities Act.

2. REGISTRATION; RESTRICTIONS ON TRANSFER.

         2.1 Restrictions on Transfer.

                  (a) Each Holder agrees not to make any  disposition  of all or
any portion of the Shares or Registrable Securities unless and until:

                           (i) There is then in effect a registration  statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or

                           (ii) (A) The  transferee  has agreed in writing to be
bound by the terms of this  Agreement,  (B) such Holder shall have  notified the
Company of the proposed  disposition and shall have furnished the Company with a
detailed  statement of the circumstances  surrounding the proposed  disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished
the Company with an opinion of counsel,  reasonably satisfactory to the Company,
that such  disposition  will not require  registration  of such shares under the
Securities  Act.  The  Company  agrees not to require  opinions  of counsel  for
transactions made pursuant to Rule 144 except in unusual circumstances.

                           (iii)  Notwithstanding  the  provisions of paragraphs
(i) and (ii) above, no such  registration  statement or opinion of counsel shall
be  necessary  for a transfer  by a Holder  which is (A) a  partnership,  to its
partners or former  partners in accordance  with  partnership  interests,  (B) a
corporation,  to its  shareholders  in  accordance  with their  interest  in the
corporation,  (C) a limited liability company,  to its members or former members
in accordance with their interest in the limited  liability  company,  or (D) to
the Holder's  family  member or trust for the benefit of an  individual  Holder;
provided that in each case the  transferee  will be subject to the terms of this
Agreement to the same extent as if he were an original Holder hereunder.

                  (b)  Each  certificate   representing  Shares  or  Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise  imprinted  with a legend  substantially  similar to the
following (in addition to any legend required under  applicable state securities
laws):

                                       3.
<PAGE>

                   THE SECURITIES  REPRESENTED  HEREBY HAVE NOT
                   BEEN REGISTERED  UNDER THE SECURITIES ACT OF
                   1933  (THE  "ACT")  AND MAY NOT BE  OFFERED,
                   SOLD  OR  OTHERWISE  TRANSFERRED,  ASSIGNED,
                   PLEDGED  OR  HYPOTHECATED  UNLESS  AND UNTIL
                   REGISTERED  UNDER  THE  ACT  OR  UNLESS  THE
                   COMPANY  HAS  RECEIVED AN OPINION OF COUNSEL
                   SATISFACTORY  TO THE COMPANY AND ITS COUNSEL
                   THAT SUCH REGISTRATION IS NOT REQUIRED.

                  (c) The  Company  shall be  obligated  to  reissue  unlegended
certificates  promptly at the request of any holder  thereof if the holder shall
have  obtained  an  opinion  of  counsel  (which  counsel  may be counsel to the
Company) reasonably  acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without  registration,
qualification or legend.

                  (d)  Any  legend   endorsed  on  an  instrument   pursuant  to
applicable state securities laws and the stop-transfer instructions with respect
to such  securities  shall be removed upon receipt by the Company of an order of
the appropriate blue sky authority authorizing such removal.

         2.2 Demand Registration.

                  (a)  Subject to the  conditions  of this  Section  2.2, if the
Company shall receive a written request from the Holders of thirty percent (30%)
of the Registrable Securities (the "Initiating Holders") that the Company file a
registration  statement  under the Securities Act covering the  registration  of
Registrable  Securities having an aggregate offering price to the public, net of
Selling  Expenses,  in excess of seven  million  five hundred  thousand  dollars
($7,500,000),  then the Company  shall,  within  thirty (30) days of the receipt
thereof,  give written notice of such request to all Holders, and subject to the
limitations  of  this  Section  2.2,  effect,  as  expeditiously  as  reasonably
possible,   the  registration  under  the  Securities  Act  of  all  Registrable
Securities that the Holders request to be registered.

                  (b)  If  the  Initiating  Holders  intend  to  distribute  the
Registrable  Securities  covered by their  request by means of an  underwriting,
they shall so advise the  Company as a part of their  request  made  pursuant to
this  Section 2.2 or any request  pursuant to Section 2.4 and the Company  shall
include such  information in the written notice referred to in Section 2.2(a) or
Section 2.4(a), as applicable. In such event, the right of any Holder to include
its 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 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 underwriter or
underwriters selected for such underwriting by the Company (which underwriter or
underwriters  shall be  reasonably  acceptable  to a majority in interest of the
Holders).  Notwithstanding  any other  provision  of this Section 2.2 or Section
2.4, if the  underwriter  advises the Company that marketing  factors  require a
limitation of the number of securities to be underwritten (including Registrable
Securities)  then the  Company  shall  so  advise  all  Holders  of

                                       4.
<PAGE>

Registrable  Securities  which would otherwise be underwritten  pursuant hereto,
and the  number of shares  that may be  included  in the  underwriting  shall be
allocated  to the  Holders of such  Registrable  Securities  on a pro rata basis
based  on  the  number  of  Registrable  Securities  held  by all  such  Holders
(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 less  than  30%  (thirty  percent)  of the  total  shares  in such
registration;  provided  further  that in a  Qualified  Offering  the  number of
Registrable  Securities  to be  included  in  such  offering  may be  zero.  Any
Registrable  Securities  excluded or withdrawn from such  underwriting  shall be
withdrawn from the registration.

                  (c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:

                           (i)  prior to the  earlier  of three  years  from the
First  Closing  (as  defined in Section 2.2 of the  Purchase  Agreement)  or one
hundred  eighty (180) days  following  the  effective  date of the  registration
statement pertaining to the Qualified Offering;

                           (ii)  after  the   Company  has   effected   two  (2)
registrations  pursuant to this Section 2.2,  and such  registrations  have been
declared or ordered effective;

                           (iii)  during  the period  starting  with the date of
filing of, and ending on the date one hundred  eighty (180) days  following  the
effective date of the  registration  statement  pertaining to the earlier of (1)
the  Company's  Qualified  Offering  and (2) any other  public  offering  of the
Company's securities pursuant to which the Company's outstanding Preferred Stock
is converted into shares of Common Stock  pursuant to the Company's  Articles of
Incorporation;  provided that the Company makes reasonable good faith efforts to
cause such registration statement to become effective;

                           (iv)   within  12  months   of  a   previous   demand
registration pursuant to this Section 2.2;

                           (v) if  within  thirty  (30)  days  of  receipt  of a
written request from Initiating  Holders pursuant to Section 2.2(a), the Company
gives  notice  to the  Holders  of the  Company's  intention  to  make a  public
offering,  other  than  pursuant  to a  Special  Registration  Statement  within
forty-five (45) days;

                           (vi)  if  the  Company   shall   furnish  to  Holders
requesting a registration  statement pursuant to this Section 2.2, a certificate
signed by the  President,  Chief  Executive  Officer,  or  Chairman of the Board
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 shareholders
for such registration  statement to be effected at such time, in which event 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  that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period; or

                                       5.
<PAGE>

                  (vii) if the Initiating  Holders  propose to dispose of shares
of  Registrable  Securities  that  may be  immediately  registered  on Form  S-3
pursuant to a request made pursuant to Section 2.4 below.

         2.3  Piggyback  Registrations.  The Company shall notify all Holders of
Registrable Securities in writing at least fifteen (15) days prior to the filing
of any registration  statement under the Securities Act for purposes of 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  Special  Registration  Statements) and will afford each
such Holder an opportunity to include in such registration statement all or part
of such  Registrable  Securities  held by such Holder.  Each Holder  desiring to
include in any such  registration  statement all or any part of the  Registrable
Securities held by it shall,  within fifteen (15) days after the above-described
notice from the  Company,  so notify the Company in writing.  Such notice  shall
state the intended method of disposition of the  Registrable  Securities by such
Holder. 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 the registration  statement under which
the Company gives notice under this Section 2.3 is for an underwritten offering,
the  Company  shall so advise the  Holders of  Registrable  Securities.  In such
event, the right of any such Holder 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  underwriter or  underwriters
selected  for  such  underwriting  by the  Company.  Notwithstanding  any  other
provision of the  Agreement,  if the  underwriter  determines in good faith that
marketing   factors  require  a  limitation  of  the  number  of  shares  to  be
underwritten,  the number of shares  that may be  included  in the  underwriting
shall be allocated,  first, to the Company; second, to the Holders on a pro rata
basis based on the total number of Registrable  Securities  held by the Holders.
No such reduction  shall reduce the amount of securities of the selling  Holders
included in the  registration  below thirty percent (30%) of the total amount of
securities included in such registration,  unless such offering is the Qualified
Offering, in which event any or all of the Registrable Securities of the Holders
may be excluded in accordance with the immediately  preceding  sentence.  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 ten (10)  business  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 which is a partnership or corporation, the partners, retired partners and
shareholders  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  person  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.

                                       6.
<PAGE>

                  (b) Right to Terminate  Registration.  The Company  shall have
the right to terminate or withdraw any  registration  initiated by it under this
Section 2.3 prior to the effectiveness of such registration,  whether or not any
Holder has elected to include securities in such registration.  The Registration
Expenses  of such  withdrawn  registration  shall  be borne  by the  Company  in
accordance with Section 2.5 hereof.

         2.4 Form S-3  Registration.  In case the Company shall receive from any
Holder or Holders of Registrable  Securities a written  request or requests that
the Company effect a registration  on Form S-3 (or any successor to Form S-3) or
any similar short-form  registration  statement and any related qualification or
compliance with respect to all or a part of the Registrable  Securities owned by
such Holder or Holders, the Company will:

                  (a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of Registrable
Securities; and

                  (b) 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  fifteen (15) 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 by
the Holders;

                           (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 seven hundred fifty thousand  dollars
($750,000);

                           (iii) if  within  thirty  (30) days of  receipt  of a
written  request  from any Holder or Holders  pursuant to this  Section 2.4, the
Company  gives  notice to such Holder or Holders of the  Company's  intention to
make a public offering within ninety (90) days, other than pursuant to a Special
Registration Statement;

                           (iv) if the  Company  shall  furnish to the Holders a
certificate signed by the President, Chief Executive Officer, or Chairman of the
Board of Directors 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  shareholders  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 for a period of not more than ninety (90)
days after  receipt of the request of the Holder or Holders  under this  Section
2.4;  provided,  that such right to delay a request  shall be  exercised  by the
Company not more than once in any twelve (12) month period;

                                       7.
<PAGE>

                           (v) 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 any of the Holders  pursuant to this Section 2.4;
or

                           (vi) 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) 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 as soon as practicable after receipt of
the request or requests of the Holders.  Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for  registration  or  registrations
effected  pursuant to Sections 2.2 or 2.3,  respectively.  All such Registration
Expenses incurred in connection with  registrations  requested  pursuant to this
Section 2.4 after the first two (2)  registrations  shall be paid by the selling
Holders pro rata in proportion to the number of shares sold by each.

         2.5 Expenses of Registration.  Except as specifically  provided herein,
all  Registration   Expenses  incurred  in  connection  with  any  registration,
qualification or compliance  pursuant to Section 2.2 or any  registration  under
Section 2.3 or Section  2.4 herein  shall be borne by the  Company.  All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the  holders of the  securities  so  registered  pro rata on the basis of the
number of shares so registered.  The Company shall not, however,  be required to
pay for expenses of any registration proceeding begun pursuant to Section 2.2 or
2.4,  the request of which has been  subsequently  withdrawn  by the  Initiating
Holders  unless (a) the  withdrawal is based upon material  adverse  information
concerning  the Company of which the  Initiating  Holders  were not aware at the
time of such request or (b) the Holders of a majority of Registrable  Securities
agree to forfeit their right to one requested  registration  pursuant to Section
2.2 or Section 2.4, as applicable,  in which event such right shall be forfeited
by all Holders.  If the Holders are required to pay the  Registration  Expenses,
such expenses shall be borne by the holders of securities (including Registrable
Securities)  requesting such  registration in proportion to the number of shares
for which  registration  was  requested.  If the  Company is required to pay the
Registration  Expenses  of a  withdrawn  offering  pursuant to clause (a) of the
third  sentence of this  Section 2.5 above,  then the Holders  shall not forfeit
their rights pursuant to Section 2.2 or Section 2.4 to a demand registration.

         2.6  Obligations  of the  Company.  Whenever  required  to  effect  the
registration of any Registrable Securities,  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 all reasonable  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 thirty (30) days or, if
earlier,  until the Holder or Holders have  completed the  distribution  related
thereto. The Company shall not be required to file, cause to become effective or
maintain the  effectiveness  of any registration  statement that  contemplates a
distribution of securities on a delayed or continuous basis pursuant to Rule 415
under the Securities Act.

                                       8.
<PAGE>

                  (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 for the period set forth in
paragraph 2.6 (a) above.

                  (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  Registrable
Securities owned by them.

                  (d) Use its  reasonable  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.  The Company will use reasonable  efforts to amend or supplement  such
prospectus in order to cause such prospectus not to include any untrue statement
of a  material  fact or omit 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) Use its  reasonable  efforts to furnish,  on the date that
such Registrable  Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (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, addressed to the underwriters, if any, and (ii)
a  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 addressed to the underwriters.

         2.7 Termination of Registration Rights. All registration rights granted
under this Section 2 shall  terminate and be of no further force and effect five
(5) years after the earlier of (a) the date of the Company's  Qualified Offering
and (b) the  date of any  other  public  offering  of the  Company's  securities
pursuant to which the Company's  outstanding  Preferred  Stock is converted into
shares  of  common  stock  in  accordance   with  the   Company's   Articles  of

                                       9.
<PAGE>

Incorporation.  In addition, a Holder's  registration rights shall expire if all
Registrable Securities held by such Holder (including its affiliates,  partners,
former  partners,  members  and former  members  owning  Registrable  Securities
through  such  Holder)  may be sold  under  Rule  144 or  other  Securities  Act
exemption during any ninety (90) day period.

         2.8 Delay of Registration; Furnishing Information.

                  (a) 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.

                  (b) It shall be a condition  precedent to the  obligations  of
the  Company to take any action  pursuant  to Section  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 effect the  registration
of their Registrable Securities.

                  (c) The Company shall have no  obligation  with respect to any
registration  requested  pursuant  to Section  2.2 or Section 2.4 if, due to the
operation  of  subsection  2.2(b),  the  number  of  shares  or the  anticipated
aggregate  offering  price of the  Registrable  Securities to be included in the
registration  does not equal or exceed the  number of shares or the  anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate  such  registration  as  specified  in Section  2.2 or Section  2.4,
whichever is applicable.

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

                  (a) 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 Exchange Act, against any losses, claims,  damages,
or  liabilities  (joint or several) to which they may become  subject  under the
Securities Act, the Exchange 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 a "Violation") by the Company: (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  Exchange  Act, any state
securities law or any rule or regulation  promulgated  under the Securities Act,
the Exchange Act or any state  securities  law in  connection  with the offering
covered by such registration statement;  and the Company will pay as incurred to
each such Holder, partner, officer, director,  underwriter or controlling person
for any legal or other expenses  reasonably  incurred by them in connection with
investigating or defending any such loss,  claim,  damage,  liability or action;
provided however,  that the indemnity agreement contained in this Section 2.9(a)
shall not apply to amounts paid in settlement of any such loss,  claim,  damage,

                                      10.
<PAGE>

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) To the extent  permitted  by law,  each  Holder  will,  if
Registrable  Securities held by such Holder are included in the securities as to
which  such  registration   qualifications  or  compliance  is  being  effected,
indemnify and hold harmless the Company, each of its directors, its officers and
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,  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,  or
partner, director, officer or controlling person of such other Holder may become
subject  under the  Securities  Act, the Exchange 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 under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will pay as incurred any
legal or other expenses reasonably incurred by the Company or any such director,
officer,  controlling person,  underwriter or other Holder, or partner, officer,
director  or  controlling  person  of  such  other  Holder  in  connection  with
investigating or defending any such loss, claim, damage,  liability or action if
it is judicially determined that there was such a Violation;  provided, however,
that the indemnity agreement contained in this Section 2.9(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; provided further, that in no event shall any
indemnity  under this  Section  2.9 exceed the net  proceeds  from the  offering
received by such Holder.

                  (c) Promptly after receipt by an indemnified  party under this
Section  2.9  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 2.9, 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  differing  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 materially  prejudicial  to its ability to
defend such action,  shall relieve such  indemnifying  party of any liability to
the  indemnified  party under this  Section  2.9, but the omission so to deliver
written notice to the

                                      11.
<PAGE>

indemnifying  party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.9.

                  (d) If the indemnification provided for in this Section 2.9 is
held by a court of competent  jurisdiction  to be  unavailable to an indemnified
party with respect to any losses,  claims,  damages or  liabilities  referred to
herein,  the indemnifying  party, in lieu of indemnifying such indemnified party
thereunder,  shall to the extent  permitted by applicable  law contribute to the
amount  paid or  payable  by such  indemnified  party as a result of such  loss,
claim,  damage or liability in such  proportion as is 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  Violation(s)  that resulted in such
loss,  claim,  damage  or  liability,  as well as any other  relevant  equitable
considerations.  The  relative  fault  of  the  indemnifying  party  and  of the
indemnified  party shall be  determined by a court of law 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;  provided,  that in no event shall any  contribution by a
Holder  hereunder  exceed the net proceeds  from the  offering  received by such
Holder.

                  (e) The  obligations  of the Company  and  Holders  under this
Section 2.9 shall survive  completion of any offering of Registrable  Securities
in  a  registration  statement  and  the  termination  of  this  agreement.   No
Indemnifying  Party,  in the  defense  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.

         2.10 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of  Registrable  Securities  which (a) is a
subsidiary, parent, general partner, limited partner, retired partner, member or
retired  member of a Holder,  (b) is a Holder's  family  member or trust for the
benefit  of an  individual  Holder,  or (c)  acquires  at least  fifty  thousand
(50,000)  shares of  Registrable  Securities  (as  adjusted for stock splits and
combinations); provided, however, (i) the transferor shall, within ten (10) days
after such  transfer,  furnish  to the  Company  written  notice of the name and
address of such  transferee or assignee and the securities with respect to which
such registration rights are being assigned and (ii) such transferee shall agree
in writing to be subject to all provisions in this Agreement.

         2.11 Amendment of Registration  Rights. Any provision of this Section 2
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 the  Holders  of at least  sixty-six  and
two-thirds percent (662/3%) of the Registrable Securities then outstanding.  Any
amendment  or waiver  effected in  accordance  with this  Section  2.11 shall be
binding upon each Holder and the Company.  By acceptance  of any benefits  under
this Section 2, Holders of  Registrable  Securities  hereby agree to be bound by
the provisions hereunder.

                                      12.
<PAGE>

         2.12  Limitation  on  Subsequent  Registration  Rights.  Other  than as
provided in Section 5.11,  after the date of this  Agreement,  the Company shall
not,  without the prior written consent of the Holders of at least sixty-six and
two-thirds  percent  (662/3%) of the Registrable  Securities  then  outstanding,
enter into any agreement with any holder or prospective holder of any securities
of the Company  that would grant such holder  registration  rights pari passu or
senior to those granted to the Holders hereunder.

         2.13 "Market Stand-Off"  Agreement;  Agreement to Furnish  Information.
Each Holder  hereby agrees that such Holder shall not sell,  transfer,  make any
short sale of,  grant any option for the  purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any Common Stock
(or other  securities)  of the  Company  held by such  Holder  (other than those
included in the  registration)  for a period specified by the  representative of
the  underwriters  of Common Stock (or other  securities)  of the Company not to
exceed  one  hundred  eighty  (180)  days  following  the  effective  date  of a
registration  statement of the Company filed under the Securities Act;  provided
that:

                  (i) such agreement  shall apply only to the earlier of (a) the
Company's  Qualified Offering and (b) any other public offering of securities of
the  Company  pursuant to which the  Company's  outstanding  Preferred  Stock is
converted into shares of Common Stock in accordance with the Company's  Articles
of Incorporation; and

                  (ii) all  officers,  directors,  founders of the Company,  and
holders of at least five percent (5%) of the Company's  voting  securities enter
into similar agreements.

         2.14 Each Holder agrees to execute and deliver such other agreements as
may  be  reasonably  requested  by the  Company  or the  underwriter  which  are
consistent  with the  foregoing or which are  necessary  to give further  effect
thereto.  In addition,  if requested by the Company or the representative of the
underwriters of Common Stock (or other  securities) of the Company,  each Holder
shall provide,  within ten (10) days of such request, such information as may be
required by the Company or such representative in connection with the completion
of any public  offering of the Company's  securities  pursuant to a registration
statement  filed under the  Securities  Act. The  obligations  described in this
Section  2.14  shall not apply to a  registration  relating  solely to  employee
benefit plans on Form S-1 or Form S-8 or similar  forms that may be  promulgated
in the future,  or a registration  relating  solely to a Rule 145 transaction on
Form S-4 or similar forms that may be promulgated in the future. The Company may
impose stop-transfer instructions with respect to the shares of Common Stock (or
other securities) subject to the foregoing restriction until the end of said one
hundred  eighty (180) day period.  Each Holder agrees that any transferee of any
shares of  Registrable  Securities  shall be bound by Section 2.13 and 2.14. The
underwriters  of the Company's stock are intended third party  beneficiaries  of
Section 2.13 and 2.14 and shall have the right,  power and  authority to enforce
the provisions of Sections 2.13 and 2.14 as though they were a party hereto.

         2.15 Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain  rules and  regulations  of the SEC which may permit the
sale of the  Registrable  Securities  to the public  without  registration,  the
Company agrees to use its best efforts to:

                                      13.
<PAGE>

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

                  (b) File with the SEC,  in a timely  manner,  all  reports and
other documents required of the Company under the Exchange Act; and

                  (c) So long  as a  Holder  owns  any  Registrable  Securities,
furnish to such  Holder  forthwith  upon  request:  a written  statement  by the
Company as to its compliance with the reporting requirements of said Rule 144 of
the  Securities  Act,  and of the  Exchange Act (at any time after it has become
subject to such  reporting  requirements);  a copy of the most recent  annual or
quarterly  report of the  Company;  and such other  reports and  documents  as a
Holder may  reasonably  request in availing  itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.

3. COVENANTS OF THE COMPANY.

         3.1 Basic Financial Information and Reporting.

                  (a) The Company will  maintain  accurate  books and records of
account  in which  full and  correct  entries  will be made of all its  business
transactions pursuant to a system of accounting  established and administered in
accordance with generally accepted accounting  principles  consistently applied,
and will set aside on its books all such proper  accruals  and reserves as shall
be required under generally accepted accounting principles consistently applied.

                  (b) As soon as  practicable  after the end of each fiscal year
of the  Company,  and  in  any  event  within  one  hundred  twenty  (120)  days
thereafter, to the extent requested by an Investor the Company will furnish each
Investor a balance sheet of the Company,  as at the end of such fiscal year, and
a statement  of income and a statement  of cash flows of the  Company,  for such
year, all prepared in accordance with generally accepted  accounting  principles
consistently  applied and  setting  forth in each case in  comparative  form the
figures for the previous fiscal year, all in reasonable  detail.  Such financial
statements  shall be accompanied by a report and opinion  thereon by independent
public  accountants  of national  standing  selected by the  Company's  Board of
Directors.

                  (c)  The  Company  will  furnish  each  Investor,  as  soon as
practicable  after the end of the first,  second and third quarterly  accounting
periods in each fiscal year of the Company,  and in any event within  forty-five
(45) days  thereafter,  to the extent requested by such Investor a balance sheet
of the Company as of the end of each such quarterly  period,  and a statement of
income and a statement  of cash flows of the Company for such period and for the
current  fiscal year to date,  prepared in accordance  with  generally  accepted
accounting principles,  but unaudited,  with the exception that no notes need be
attached to such  statements  and year-end audit  adjustments  may not have been
made.

                  (d) So long as an Investor (with its affiliates) shall own not
less than five hundred thousand  (500,000) shares of Registrable  Securities (as
adjusted for stock splits and

                                      14.
<PAGE>

combinations)  (a "Major  Investor"),  the Company  will furnish each such Major
Investor (i) at least forty-five (45) days prior to the beginning of each fiscal
year an annual budget and  operating  plans for such fiscal year (and as soon as
available,  any subsequent  revisions thereto);  and (ii) as soon as practicable
after  the  end of  each  month,  and in  any  event  within  twenty  (20)  days
thereafter,  upon request of such Major  Investor a balance sheet of the Company
as of the end of each such month,  and a statement  of income and a statement of
cash flows of the  Company  for such month and for the  current  fiscal  year to
date,  including  a  comparison  to plan  figures for such  period,  prepared in
accordance with generally accepted accounting  principles  consistently applied,
with the  exception  that no  notes  need be  attached  to such  statements  and
year-end audit adjustments may not have been made.

         3.2  Inspection  Rights.  Each Major  Investor  shall have the right to
visit  and  inspect  any  of  the  properties  of  the  Company  or  any  of its
subsidiaries,  and to discuss the affairs,  finances and accounts of the Company
or any of its subsidiaries with its officers,  and to review such information as
is  reasonably  requested  all at such  reasonable  times and as often as may be
reasonably requested; provided, however, that the Company shall not be obligated
under this  Section  3.2 with  respect to a  competitor  of the  Company or with
respect to information which the Board of Directors  determines in good faith is
confidential and should not, therefore, be disclosed.

         3.3 Confidentiality of Records. Each Investor agrees to use, and to use
its best  efforts to ensure that its  authorized  representatives  use, the same
degree of care as such Investor uses to protect its own confidential information
to  keep  confidential  any  information  furnished  to it by  the  Company,  or
representatives  or agents of the Company,  and which the Company  identifies as
being  confidential  or proprietary  (so long as such  information is not in the
public  domain),  except that such  Investor may disclose  such  proprietary  or
confidential  information to any partner,  subsidiary or parent of such Investor
for the  purpose of  evaluating  its  investment  in the Company as long as such
partner,  subsidiary or parent is advised of the  confidentiality  provisions of
this Section 3.3. To the extent  requested  by the Company,  the Investor  shall
sign a confidentiality and non-disclosure  agreement prior to the release of any
such confidential or proprietary information.

         3.4 Reservation of Common Stock.  The Company will at all times reserve
and keep available,  solely for issuance and delivery upon the conversion of the
Preferred  Stock,  all  Common  Stock  issuable  from  time  to time  upon  such
conversion.

         3.5 Stock Vesting.  Unless otherwise approved by the Board of Directors
(including  a majority of the  directors  elected by the  Preferred  Stock) or a
Compensation  Committee  thereof,  all stock options and other stock equivalents
issued after the date of this Agreement to employees, directors, consultants and
other service providers shall be subject to vesting as follows:  (a) twenty-five
percent  (25%) of such stock  shall vest at the end of the first year  following
the earlier of the date of issuance or such person's services  commencement date
with the Company,  and (b)  seventy-five  percent (75%) of such stock shall vest
over the remaining three (3) years. The Company shall not permit the transfer of
unvested  stock by any such person prior to vesting.  With respect to any shares
of stock  purchased by any such person,  the Company's  repurchase  option shall
provide that upon such  person's  termination  of employment or service with the
Company,  with or without  cause,  the  Company or its  assignee  (to the extent

                                      15.
<PAGE>

permissible  under  applicable  securities  laws and other  laws) shall have the
option to purchase at cost any unvested shares of stock held by such person. The
Company's  Board of  Directors  may only  change the  provisions  applicable  to
vesting of stock or options  described in this Section 3.5 by a unanimous  vote,
including those Directors representing (i) the Series A Preferred Stock and (ii)
the Series B Preferred Stock.

         3.6 Proprietary Information and Inventions Agreement. The Company shall
require  all  employees,  officers  and  consultants  to execute  and  deliver a
Proprietary  Information  and  Inventions  Agreement in the form attached to the
Purchase Agreement.

         3.7 Assignment of Right of First Refusal.  If the Company elects not to
exercise any right of first refusal or right of first offer the Company may have
on a proposed transfer of any of the Company's  outstanding common stock held by
employees, consultants, and others pursuant to the Company's bylaws, articles of
incorporation, contract or otherwise, the Company shall, to the extent it may do
so, assign such right of first refusal or right of first offer to each Investor.
In the event of such  assignment,  each Investor  shall have a right to purchase
its pro rata portion (as defined in Section 4.1) of the common stock proposed to
be transferred.

         3.8 Approval.  The Company shall not without the approval of a majority
of the Board of  Directors,  with all  non-interested  Directors  voting and the
approval  at least one of the  Directors  designated  by holders of the Series A
Preferred Stock,  authorize or enter into any transactions  with any director or
management employee, or such director's or employee's immediate family.

         3.9  Compensation  Committee.  The  Company  shall form a  Compensation
Committee that will be responsible for determining all compensation arrangements
relating to the Company's executive officers. One member of such Committee shall
be a Director  representing the Series A Preferred Stock and one member shall be
a Director representing the Series B and Series B-1 Preferred Stock, together as
a single class.

         3.10  Directors'  Compensation.  The  Company  shall  not pay any  cash
compensation  to any member of the  Company's  Board of Directors in  connection
with the performance of such member's duties as a Director.  Notwithstanding the
foregoing, the Company may grant options to purchase Common Stock of the Company
to any member of the Board of Directors in connection  with the  performance  of
his or her duties as a  Director,  provided,  that such  Director  is neither an
employee of the Company nor an affiliate of any Holder.

         3.11 Directors' Liability and  Indemnification.  The Company's Articles
of  Incorporation  and Bylaws shall provide (a) for elimination of the liability
of director to the maximum extent  permitted by law and (b) for  indemnification
of directors for acts on behalf of the Company to the maximum  extent  permitted
by law.

         3.12 Termination of Covenants.  All covenants of the Company  contained
in Section 3 of this  Agreement  shall expire and  terminate as to each Investor
upon  the  earlier  of (i)  the  effective  date of the  registration  statement
pertaining  to a Qualified  Offering or any other  public  offering of Company's
securities  in  which  all of  the  Company's  outstanding  Preferred  Stock  is
converted  into  Common  Stock in  accordance  with the  Company's  Articles  of
Incorporation  or

                                      16.
<PAGE>

(ii) upon (a) the sale, lease or other  disposition of all or substantially  all
of the assets of the  Company or (b) 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%) of the voting power of the Company or other entity
surviving such  transaction (a "Change in Control"),  provided that this Section
3.13(ii)(b) shall not apply to a merger effected  exclusively for the purpose of
changing the domicile of the Company.

4. RIGHTS OF FIRST REFUSAL.

         4.1  Subsequent  Offerings.  Each Investor  shall have a right of first
refusal to  purchase  its pro rata share of all  Equity  Securities,  as defined
below, that the Company may, from time to time,  propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
4.6 hereof.  Each Investor's pro rata share shall be the ratio of (a) the number
of shares of the Company's  Common Stock  (including  all shares of Common Stock
issued or  issuable  upon  conversion  of the  Preferred  Stock)  of which  such
Investor  is deemed to be a holder  immediately  prior to the  issuance  of such
Equity Securities to (b) the total number of shares of the Company's outstanding
Common  Stock  (including  all shares of Common  Stock  issued or issuable  upon
conversion  of the Shares or upon the  exercise of any  outstanding  warrants or
options)  immediately prior to the issuance of the Equity  Securities;  provided
however,  that with respect to Oryx  Technologies  Corp.,  which  includes  Oryx
Ventures  LLC  (collectively  referred to herein as "Oryx"),  the pro rata share
shall be the ratio of (c) the  number of shares of the  Company's  Common  Stock
(including all shares of Common Stock issued or issuable upon  conversion of the
Shares or exercise of that certain warrant for seven hundred thousand  (700,000)
shares of the Company's  Common Stock issued  pursuant to that certain  Business
and Consultant  Management  Agreement dated July 20, 2000,  between Oryx and the
Company) which Oryx is deemed to be a holder  immediately  prior to the issuance
of such Equity  Securities  to (d) the total  number of shares of the  Company's
outstanding  Common  Stock  (including  all  shares  of Common  Stock  issued or
issuable upon  conversion of the Shares or upon the exercise of any  outstanding
warrants or options) immediately prior to the issuance of the Equity Securities.
The term "Equity Securities" shall mean (i) any Common Stock, Preferred Stock or
other security of the Company,  (ii) any security  convertible,  with or without
consideration,  into  any  Common  Stock,  Preferred  Stock  or  other  security
(including  any  option to  purchase  such a  convertible  security),  (iii) any
security  carrying  any warrant or right to  subscribe to or purchase any Common
Stock, Preferred Stock or other security or (iv) any such warrant or right.

         4.2  Exercise of Rights.  If the  Company  proposes to issue any Equity
Securities,  it shall  give  each  Investor  written  notice  of its  intention,
describing the Equity  Securities,  the price and the terms and conditions  upon
which the Company  proposes to issue the same.  Each Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase its pro rata share
of the  Equity  Securities  for the  price  and upon the  terms  and  conditions
specified  in the notice by giving  written  notice to the  Company  and stating
therein the quantity of Equity Securities to be purchased.  Notwithstanding  the
foregoing,  the  Company  shall not be  required  to offer or sell  such  Equity
Securities  to any  Investor  who would cause the Company to be in  violation of
applicable federal securities laws by virtue of such offer or sale.

                                      17.
<PAGE>

         4.3 Issuance of Equity  Securities to Other Persons.  If not all of the
Investors elect to purchase their pro rata share of the Equity Securities,  then
the Company shall  promptly  notify in writing the Investors who do so elect and
shall offer such Investors the right to acquire such unsubscribed  shares.  Each
respective  Investor  shall  then have five (5) days  after its  receipt of such
notice to notify  the  Company  of its  election  to  purchase  all or a portion
thereof of the  unsubscribed  shares.  If all such Investors fail to exercise in
full the  rights of first  refusal,  the  Company  shall have  ninety  (90) days
thereafter to sell any such remaining  Equity  Securities to persons selected in
the  Company's  discretion,  at a price and upon  general  terms and  conditions
materially no more favorable to the purchasers  thereof than those  specified in
the  Company's  notice to the Investors  pursuant to Section 4.2 hereof.  If the
Company has not sold all such Equity  Securities  within ninety (90) days of the
notice provided  pursuant to Section 4.2, the Company shall not thereafter issue
or sell any Equity  Securities,  without first  offering such  securities to the
Investors in the manner provided above.

         4.4  Termination  and Waiver of Rights of First Refusal.  The rights of
first  refusal  established  by this  Section 4 shall  not  apply to,  and shall
terminate  upon  the  earlier  of (i) the  effective  date  of the  registration
statement  pertaining to the Company's  Qualified  Offering,  (ii) the effective
date of the  registration  statement  pertaining to any other public offering of
the Company's  securities in which all of the  Company's  outstanding  Preferred
Stock is converted into Common Stock in accordance  with the Company's  Articles
of  Incorporation,  or (iii) a Change in  Control.  The rights of first  refusal
established by this Section 4 may be amended,  or any provision  waived with the
written consent of Investors  holding a majority of the  Registrable  Securities
held by all Investors, or as permitted by Section 5.6.

         4.5 Transfer of Rights of First Refusal. The rights of first refusal of
each  Investor  under  this  Section 4 may be  transferred,  subject to the same
restrictions as any transfer of registration rights pursuant to Section 2.10.

         4.6 Excluded  Securities.  The rights of first refusal  established  by
this Section 4 shall have no  application  to the sale or issuance of any of the
following Equity Securities:

                  (a) shares of Common Stock and/or  options,  warrants or other
Common  Stock  purchase  rights and the Common  Stock  issued  pursuant  to such
options, warrants or other rights issued or to be issued to employees,  officers
or directors of, or  consultants  or advisors to the Company or any  subsidiary,
pursuant to stock purchase or stock option plans or other  arrangements that are
approved by the Board of Directors;

                  (b) stock issued pursuant to any rights,  agreements,  options
or warrants outstanding as of the date of this Agreement;

                  (c) any Equity Securities issued for consideration  other than
cash  pursuant  to a merger,  consolidation,  acquisition  or  similar  business
combination approved by the Board of Directors;

                  (d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;

                                      18.
<PAGE>
                  (e)  shares of Common  Stock  issued  upon  conversion  of the
Shares;

                  (f) any Equity  Securities  issued  pursuant to any  equipment
leasing or loan arrangement,  or debt financing from a bank or similar financial
or lending institution approved by the Board of Directors;

                  (g) any  Equity  Securities  that are  issued  by the  Company
pursuant to a registration statement filed under the Securities Act;

                  (h) any Equity  Securities issued in connection with strategic
transactions  involving  the Company  and other  entities,  including  (i) joint
ventures,   manufacturing,   marketing  or  distribution  arrangements  or  (ii)
technology  transfer  or  development  arrangements;   provided  that  any  such
strategic transactions and the issuance of shares therein, have been approved by
the Company's Board of Directors; and

                  (i) up to two million nine hundred thousand (2,900,000) shares
of the Company's  Series B-1 Preferred Stock that the Company may issue and sell
pursuant to the Purchase Agreement.

5. MISCELLANEOUS.

         5.1 Governing  Law. This  Agreement  shall be governed by and construed
under  the laws of the  State of  California  as  applied  to  agreements  among
California   residents  entered  into  and  to  be  performed   entirely  within
California.

         5.2  Survival.   The  representations,   warranties,   covenants,   and
agreements made herein shall survive any investigation  made by any Investor and
the  closing of the  transactions  contemplated  hereby.  All  statements  as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company  pursuant  hereto in connection  with the  transactions
contemplated  hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

         5.3  Successors  and Assigns.  Except as otherwise  expressly  provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon, the successors,  assigns,  heirs,  executors,  and  administrators  of the
parties  hereto and shall  inure to the  benefit of and be  enforceable  by each
person  who  shall be a holder  of  Registrable  Securities  from  time to time;
provided,  however, that prior to the receipt by the Company of adequate written
notice of the transfer of any  Registrable  Securities  specifying the full name
and address of the transferee,  the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute  owner and holder of
such  shares  for all  purposes,  including  the  payment  of  dividends  or any
redemption price.

         5.4 Entire Agreement.

                  (a) The Prior  Agreement is hereby amended in its entirety and
restated herein.  Such amendment and restatement is effective upon the execution
of the  Agreement  by the  Company  and the  Prior  Investors  holding  at least
sixty-six  and  two-thirds  percent  (662/3%)  in  interest  of the  Registrable
Securities that remain  outstanding as of the date of this Agreement.

                                      19.
<PAGE>

Upon such execution, all provisions of, rights granted and covenants made in the
Prior Agreement are hereby waived, released and terminated in their entirety and
shall have no further force and effect.

                  (b) This  Agreement,  the Exhibits and Schedules  hereto,  the
Purchase Agreement and the other documents delivered pursuant thereto constitute
the full and entire  understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any  representations,  warranties,  covenants and agreements except as
specifically set forth herein and therein.

         5.5  Severability.  If one or more of the  provisions of this Agreement
is, for any reason, held to be invalid, illegal or unenforceable in any respect,
such  invalidity,  illegality,  or  unenforceability  shall not affect any other
provisions of this  Agreement,  and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.

         5.6 Amendment and Waiver.

                  (a) Except as otherwise expressly provided, this Agreement may
be amended or  modified  only upon the  written  consent of the  Company and the
Investors  holding at least  sixty-six and  two-thirds  percent  (662/3%) of the
Registrable Securities.

                  (b) Except as otherwise expressly provided, the obligations of
the Company and the rights of the Investors  under this  Agreement may be waived
only  with  the  written  consent  of the  holders  of at  least  sixty-six  and
two-thirds percent (662/3%) of the Registrable Securities.

                  (c) For the  purposes of  determining  the number of Investors
entitled to vote or exercise any rights hereunder, the Company shall be entitled
to rely solely on the list of record holders of its stock as maintained by or on
behalf of the Company.

         5.7 Delays or  Omissions.  No delay or omission to exercise  any right,
power,  or  remedy  accruing  to any  Investor,  upon  any  breach,  default  or
noncompliance  of the Company under this Agreement  shall impair any such right,
power,  or remedy,  nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of any similar breach,
default or noncompliance  thereafter occurring.  Any waiver, permit, consent, or
approval of any kind or character on any Investor's part of any breach,  default
or  noncompliance  under the Agreement or any waiver on such  Investor's part of
any  provisions or conditions of this  Agreement must be in writing and shall be
effective  only to the  extent  specifically  set  forth  in such  writing.  All
remedies,  either  under  this  Agreement,  by law,  or  otherwise  afforded  to
Investors, shall be cumulative and not alternative.

         5.8 Notices.  All notices  required or permitted  hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient; if not, then on the next business day (provided
that to be effective  upon receipt,  any notice by facsimile must be followed up
immediately  by notice sent by registered or certified  mail as provided in this
Section

                                      20.
<PAGE>

5.8); (c) five (5) days after having been sent by registered or certified  mail,
return receipt  requested,  postage  prepaid;  or (d) upon receipt after deposit
with a nationally  recognized  overnight courier,  specifying next day delivery,
with written  verification of receipt.  All communications  shall be sent to the
party to be notified at the address as set forth on the  signature  pages hereof
or Exhibit A hereto or at such other  address as such party may designate by ten
(10) days advance written notice to the other parties hereto.

         5.9 Attorneys' Fees. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees,  costs and expenses
of enforcing  any right of such  prevailing  party under or with respect to this
Agreement,  including  without  limitation,  reasonable  fees  and  expenses  of
attorneys,  which shall include, without limitation,  reasonable fees, costs and
expenses of appeals.

         5.10 Titles and Subtitles.  The titles of the sections and  subsections
of this  Agreement  are for  convenience  of  reference  only  and are not to be
considered in construing this Agreement.

         5.11  Additional  Investors.  Notwithstanding  anything to the contrary
contained herein, (a) if the Company shall issue additional shares of its Series
B-1 Preferred Stock pursuant to the Purchase Agreement, any additional purchaser
of such shares of  Preferred  Stock shall  become a party to this  Agreement  by
executing  and  delivering  an  additional  counterpart  signature  page to this
Agreement  and shall be deemed an  "Investor"  hereunder  and (b) if the Company
shall issue Equity  Securities in accordance with Section 4.6 (c), (f) or (h) of
this  Agreement,  any purchaser of such Equity  Securities may become a party to
Section  2  of  this   Agreement  by  executing  and  delivering  an  additional
counterpart  signature page to this Agreement and in such case shall be deemed a
"Holder" hereunder;  provided further that (i) upon any such issuance covered by
Section  4.6(c),  (f), or (h), if agreed by the  Company  and such  Holder,  the
Common Stock  underlying  such Equity  Securities so issued  shall,  without any
further  action  on  the  part  of  the  Investors,  be  considered  Registrable
Securities  under this  Agreement  and (ii) for  purposes of such  Section 2, no
further  action shall be required by any Investor to make such purchaser a party
to Section 2.

         5.12  Counterparts;  Facsimile.  This  Agreement may be executed in any
number of  counterparts,  each of which shall be an  original,  but all of which
together  shall  constitute one  instrument.  This Agreement may be executed and
delivered by facsimile and upon such delivery the  facsimile  signature  will be
deemed to have the same effect as if the original  signature had been  delivered
to the other party.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                      21.
<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto have  executed  this INVESTOR
RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                              INVESTORS:

S2 TECHNOLOGIES, INC.                 COLUMBUS NOVA INVESTMENTS

By:________________________________   By:__________________________________

Title:_____________________________   Title:_______________________________

                                      ORYX VENTURES LLC

                                      By:__________________________________

                                      Name:________________________________

                                      Title:_______________________________

                                      ORYX TECHNOLOGIES, INC.

                                      By:__________________________________

                                      Name:________________________________

                                      Title:_______________________________

                                      PROFILE VENTURE PARTNERS FUND 1, L.P.

                                      By:__________________________________

                                      Name:________________________________

                                      Title:_______________________________

                             [AMENDED AND RESTATED
                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE]

<PAGE>

                                      STAR TRUST 1982

                                      By:__________________________________

                                      Name:________________________________

                                      Title:_______________________________

                                      HIGH OCTANE FUND

                                      By:__________________________________

                                      Name:________________________________

                                      Title:_______________________________

                                      DIABLO PARTNERS

                                      By:__________________________________

                                      Name:________________________________

                                      Title:_______________________________

                             [AMENDED AND RESTATED
                    INVESTOR RIGHTS AGREEMENT SIGNATURE PAGE]

<PAGE>

                                    EXHIBIT A

                              SCHEDULE OF INVESTORS

INVESTOR                                                          SHARES
------------------------------------------------------------  ---------------
Holders of Series A Preferred Stock:
------------------------------------------------------------

ORYX TECHNOLOGIES, INC.                                          1,851,852
4340 Almaden Expwy
Suite 220
San Jose, CA  95118

STAR TRUST 1982                                                    370,371
c/o Amr Mohsen
1338 Ridder Park
San Jose, CA  95131

VMR HIGH OCTANE FUND                                               370,370
c/o Bridgewaters
P.O. Box 282, Victoria Street
Douglas, Isle of Man  1M992DR

Holders of Series B Preferred Stock:
------------------------------------------------------------
ORYX VENTURES, LLC                                               5,835,715
4340 Almaden Expwy
Suite 220
San Jose, CA  95118

PROFILE VENTURE PARTNERS FUND 1, L.P.                            2,000,000
500 Chesterfield Parkway
Malvern, PA  19355

VMR HIGH OCTANE FUND                                               957,142
c/o Bridgewaters
P.O. Box 282, Victoria Street
Douglas, Isle of Man  1M992DR

COLUMBUS NOVA INVESTMENTS LIMITED, A.V.V.                        1,142,858
c/o Columbus Nova Partners LLC
590 Madison Avenue, 38th Floor
New York, NY  10022

<PAGE>

INVESTOR                                                          SHARES
------------------------------------------------------------  ---------------

DIABLO PARTNERS                                                     28,571
411 Hartz Avenue
Suite 200
Danville, CA  94526

Purchasers of Series B-1 Preferred Stock:
------------------------------------------------------------
ORYX VENTURES, LLC                                                 571,428
4340 Almaden Expwy
Suite 220
San Jose, CA  95118

PROFILE VENTURE PARTNERS FUND 1, L.P.                              214,285
500 Chesterfield Parkway
Malvern, PA  19355

HIGH OCTANE FUND                                                   857,142
c/o Bridgewaters
P.O. Box 282, Victoria Street
Douglas, Isle of Man  1M992DR

COLUMBUS NOVA INVESTMENTS                                          857,142
c/o Columbus Nova Partners LLC
590 Madison Avenue, 38th Floor
New York, NY  10022

<PAGE>

SECTION 1. GENERAL.............................................................2

         1.1 Definitions.......................................................2

SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER..............................3

         2.1 Restrictions on Transfer..........................................3

         2.2 Demand Registration...............................................4

         2.3 Piggyback Registrations...........................................6

         2.4 Form S-3 Registration.............................................7

         2.5 Expenses of Registration..........................................8

         2.6 Obligations of the Company........................................8

         2.7 Termination of Registration Rights................................9

         2.8 Delay of Registration; Furnishing Information....................10

         2.9 Indemnification..................................................10

         2.10 Assignment of Registration Rights...............................12

         2.11 Amendment of Registration Rights................................12

         2.12 Limitation on Subsequent Registration Rights....................12

         2.13 "Market Stand-Off" Agreement; Agreement to Furnish Information..13

         2.14     ............................................................13

         2.15 Rule 144 Reporting..............................................13

SECTION 3. COVENANTS OF THE COMPANY...........................................14

         3.1 Basic Financial Information and Reporting........................14

         3.2 Inspection Rights................................................15

         3.3 Confidentiality of Records.......................................15

         3.4 Reservation of Common Stock......................................15

         3.5 Stock Vesting....................................................15

         3.6 Proprietary Information and Inventions Agreement.................16

         3.7 Assignment of Right of First Refusal.............................16

         3.8 Approval.........................................................16

         3.9 Compensation Committee...........................................16

         3.10 Directors' Expenses.............................................16

         3.11 Directors' Liability and Indemnification........................16

         3.13 Termination of Covenants........................................16

                                       i.
<PAGE>

SECTION 4. RIGHTS OF FIRST REFUSAL............................................17

         4.1 Subsequent Offerings.............................................17

         4.2 Exercise of Rights...............................................17

         4.3 Issuance of Equity Securities to Other Persons...................17

         4.4 Termination and Waiver of Rights of First Refusal................18

         4.5 Transfer of Rights of First Refusal..............................18

         4.6 Excluded Securities..............................................18

SECTION 5. MISCELLANEOUS......................................................19

         5.1 Governing Law....................................................19

         5.2 Survival.........................................................19

         5.3 Successors and Assigns...........................................19

         5.4 Entire Agreement.................................................19

         5.5 Severability.....................................................20

         5.6 Amendment and Waiver.............................................20

         5.7 Delays or Omissions..............................................20

         5.8 Notices..........................................................20

         5.9 Attorneys' Fees..................................................21

         5.10 Titles and Subtitles............................................21

         5.11 Additional Investors............................................21

         5.12 Counterparts....................................................21

                                       ii.
<PAGE>

An extra  section break has been inserted  above this  paragraph.  Do not delete
this   section   break   if  you   plan  to  add  text   after   the   Table  of
Contents/Authorities.    Deleting    this   break    will    cause    Table   of
Contents/Authorities  headers and footers to appear on any pages  following  the
Table of Contents/Authorities.

<PAGE>

                                    EXHIBIT D

                     AMENDED AND RESTATED CO-SALE AGREEMENT

                              S2 TECHNOLOGIES, INC.

                              AMENDED AND RESTATED
                                CO-SALE AGREEMENT

                                   MAY 6, 2003

                                       2.

<PAGE>

                              S2 TECHNOLOGIES, INC.
                              AMENDED AND RESTATED
                                CO-SALE AGREEMENT

         THIS AMENDED AND RESTATED CO-SALE  AGREEMENT (the  "Agreement") is made
and  entered  into as of May 6, 2003  (the  "Effective  Date"),  by and among S2
TECHNOLOGIES, INC., a California corporation (the "Company"), the holders of the
Company's  Series A Preferred  Stock,  Series B Preferred  Stock, and Series B-1
Preferred Stock listed on Exhibit A hereto (collectively,  the "Investors"), and
certain  holders of the  Company's  Common Stock listed on Exhibit B hereto (the
"Shareholders").  Collectively,  the Company, Shareholders and the Investors are
referred to as the "Parties."

                                    RECITALS

         WHEREAS, certain of the Investors hold shares of the Company's Series A
Preferred  Stock (the "Series A Preferred  Stock") and Series B Preferred  Stock
(the "Series B Preferred  Stock") and possess certain co-sale rights pursuant to
an existing Amended and Restated Co-Sale  Agreement dated as of October 18, 2001
by and among the  Company,  the  Shareholders  and such  Investors  (the  "Prior
Agreement");

         WHEREAS,  the  undersigned  Investors  hold  more  than a  majority  in
interest  of the Common  Stock (as defined in the Prior  Agreement)  held by the
Investors  and the  Shareholders  hold more than a majority  in  interest of the
Common  Stock held by  Shareholders  and such  Investors,  Shareholders  and the
Company desire to terminate the Prior Agreement and to accept the rights created
pursuant  hereto in lieu of the rights granted under the Prior  Agreement,  with
the Prior Agreement being superseded hereby and of no further force or effect as
of the Effective Date hereof;

         WHEREAS,  certain  of  the  Investors  are  purchasing  shares  of  the
Company's  Series B-1  Preferred  Stock (the "Series B-1  Preferred  Stock" and,
collectively with the Series A Preferred Stock and Series B Preferred Stock, the
"Preferred  Stock") pursuant to that certain Series B-1 Preferred Stock Purchase
Agreement (the "Purchase  Agreement") of even date herewith among such Investors
and the Company (the "Financing");

         WHEREAS, the obligations in the Purchase Agreement are conditioned upon
the execution and delivery of this Agreement; and

         WHEREAS,  in connection  with the  consummation  of the Financing,  the
Parties  desire to enter into this Agreement in order to grant rights of co-sale
to each Investor.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the Parties agree as follows:

                                       1.
<PAGE>

         7. DEFINITIONS.

         (a) "Co-Sale Stock" shall mean shares of the Company's Common Stock now
owned or subsequently acquired by the Shareholders by gift, purchase,  dividend,
option exercise or any other means whether or not such securities are registered
in Shareholder's  name or beneficially or legally owned by any such Shareholder,
including  any  interest of a spouse in any of the Co-Sale  Stock,  whether that
interest is asserted pursuant to marital property laws or otherwise.  The number
of shares of Co-Sale  Stock owned by the  Shareholders  as of the date hereof is
set forth on Exhibit B, which  Exhibit  may be amended  from time to time by the
Company to reflect  changes in the number of shares  owned by the  Shareholders,
but the failure to so amend shall have no effect on such Co-Sale  Stock  subject
to this Agreement.

         (b) "Common Stock" shall mean the Company's  Common Stock and shares of
Common Stock issued or issuable upon  conversion  of the  Company's  outstanding
Preferred Stock or exercise of any option, warrant or other security or right of
any kind convertible into or exchangeable for Common Stock.

         (c) For the  purpose  of this  Agreement,  the  term  "Transfer"  shall
include any sale, assignment, encumbrance,  hypothecation, pledge, conveyance in
trust,  gift,  transfer by  request,  devise or  descent,  or other  transfer or
disposition of any kind, including,  but not limited to, transfers to receivers,
levying  creditors,  trustees or receivers in bankruptcy  proceedings or general
assignees  for the benefit of  creditors,  whether  voluntary or by operation of
law, directly or indirectly, of any of the Co-Sale Stock.

         8. TRANSFERS BY A SHAREHOLDER.

         (a) If a  Shareholder  proposes to Transfer any shares of Co-Sale Stock
then  the  Shareholder   shall  promptly  give  written  notice  (the  "Notice")
simultaneously  to the Company and to each of the Investors at least thirty (30)
days prior to the proposed  closing of such Transfer.  The Notice shall describe
in reasonable detail the proposed Transfer including,  without  limitation,  the
number  of  shares  of  Co-Sale  Stock to be  transferred,  the  nature  of such
Transfer,  the  consideration  to be  paid,  and the name  and  address  of each
prospective  purchaser  or  transferee.  In the event that the Transfer is being
made pursuant to the  provisions  of Section 3(a),  the Notice shall state under
which section the Transfer is being made.

         (b) Each Investor shall have the right, exercisable upon written notice
to such Shareholder within fifteen (15) days after the Notice, to participate in
such  Transfer of Co-Sale  Stock on the same terms and  conditions.  Such notice
shall indicate the number of shares of Common Stock such Investor wishes to sell
under  his,  her or its right to  participate.  To the extent one or more of the
Investors  exercise such right of participation in accordance with the terms and
conditions  set forth  below,  the number of shares of  Co-Sale  Stock that such
Shareholder may sell in the transaction shall be correspondingly reduced.

         (c) Each  Investor  may sell all or any part of that  number  of shares
equal to the product  obtained by multiplying (i) the aggregate number of shares
of Co-Sale Stock covered by the Notice by (ii) a fraction the numerator of which
is the number of shares of Common  Stock  owned by such  Investor at the time of
the  Transfer  and the  denominator  of which is the  total

                                       2.
<PAGE>

number of shares of Common Stock owned by such  Shareholder and the Investors at
the time of the Transfer.  If not all of the Investors elect to sell their share
of the Co-Sale  Stock  proposed to be  transferred  within said fifteen (15) day
period,  then the Shareholder shall promptly notify in writing the Investors who
do so elect and shall offer such Investors the  additional  right to participate
in  the  sale  of  such  additional  shares  of  Co-Sale  Stock  proposed  to be
transferred  on the same  percentage  basis as set forth  above in this  Section
2(c).  The  Investors  shall have five (5) days after  receipt of such notice to
notify the Shareholder of their election to sell all or a portion thereof of the
unsubscribed shares.

         (d) Each Investor who elects to participate in the Transfer pursuant to
this Section 2 (a "Participant")  shall effect its participation in the Transfer
by promptly  delivering  to such  Shareholder  for  transfer to the  prospective
purchaser  one or more  certificates,  properly  endorsed  for  transfer,  which
represent:

                  (i) the type and number of shares of Common  Stock  which such
Participant elects to sell; or

                  (ii) that number of shares of Preferred Stock which is at that
time  convertible  into the number of shares of Common  Stock  such  Participant
elects to sell; provided,  however, that if the prospective purchaser objects to
the delivery of Preferred Stock in lieu of Common Stock,  such Participant shall
convert  such  Preferred  Stock into Common  Stock and deliver  Common  Stock as
provided in Section  2(d)(i) above.  The Company shall make any such  conversion
concurrent with the actual Transfer of such shares to the proposed purchaser.

         (e) The stock certificate or certificates that the Participant delivers
to such  Shareholder  pursuant  to  Section  2(d)  shall be  transferred  to the
prospective  purchaser in  consummation of the sale of the Common Stock pursuant
to the terms and conditions  specified in the Notice,  and the Shareholder shall
concurrently  therewith  remit  to such  Participant  that  portion  of the sale
proceeds to which such Participant is entitled by reason of its participation in
such sale. To the extent that any prospective  purchaser or purchasers prohibits
such assignment or otherwise refuses to purchase shares or other securities from
a Participant exercising its rights of co-sale hereunder, such Shareholder shall
not sell to such  prospective  purchaser or purchasers  any Co-Sale Stock unless
and until,  simultaneously  with such sale, such Shareholder shall purchase such
shares  or  other  securities  from  such  Participant  on the  same  terms  and
conditions specified in the Notice.

         (f)  The  exercise  or  non-exercise  of the  rights  of the  Investors
hereunder to  participate in one or more Transfers of Co-Sale Stock made by such
Shareholder shall not adversely affect their rights to participate in subsequent
Transfers of Co-Sale Stock subject to Section 2(a).

         (g) If none of the Investors  elects to  participate in the sale of the
Co-Sale Stock subject to the Notice,  such Shareholder may, not later than sixty
(60) days  following  delivery  to the  Company  of the  Notice,  enter  into an
agreement providing for the closing of the Transfer of the Co-Sale Stock covered
by the Notice within thirty (30) days of such  agreement on terms and conditions
not more  materially  favorable to the  transferee  than those

                                       3.
<PAGE>

described  in  the  Notice.  Any  proposed  Transfer  on  terms  and  conditions
materially  more  favorable than those  described in the Notice,  as well as any
subsequent proposed Transfer of any of the Co-Sale Stock by a Shareholder, shall
again be subject to the co-sale  rights of the Investors and require  compliance
by a Shareholder with the procedures described in this Section 2.

         9. EXEMPT TRANSFERS.

         (a) Notwithstanding the foregoing,  the co-sale rights of the Investors
shall not apply to (i) any Transfer or Transfers by a  Shareholder  which in the
aggregate, over the term of this Agreement, amount to less than 10% (measured on
a cumulative  basis) of all outstanding  Co-Sale Stock as of the date hereof (as
adjusted for stock  splits,  dividends  and the like),  (ii) any Transfer to the
ancestors, descendants or spouse or to trusts for the benefit of such persons or
the Shareholder,  or (iii) any bona fide gift; provided that in the event of any
Transfer  made  pursuant to one of the  exemptions  provided by clauses  (ii) or
(iii), (A) the Shareholder  shall inform the Investors of such pledge,  Transfer
or gift prior to  effecting it and (B) the  pledgee,  transferee  or donee shall
furnish the  Investors  with a written  agreement to be bound by and comply with
all  provisions of Section 2. Except with respect to Co-Sale  Stock  transferred
under  clause (i)  immediately  above  (which  Co-Sale  Stock shall no longer be
subject to the co-sale rights of the Investors),  such transferred Co-Sale Stock
shall remain "Co-Sale Stock"  hereunder,  and such pledgee,  transferee or donee
shall be treated as a "Shareholder" for all purposes of this Agreement.

         (b)  Notwithstanding  the foregoing,  the provisions of Section 2 shall
not  apply to the  sale of any  Co-Sale  Stock as part of a firmly  underwritten
public  offering of the Company's  Common Stock at a price per share of at least
five  dollars  ($5.00) per share and having an aggregate  offering  price to the
public of at least twenty  million  dollars  ($20,000,000)  before  deduction of
underwriting  discounts and selling  commissions (a "Qualified  Offering") or as
part of any other  public  offering  of the  Company's  securities  in which the
Company's  outstanding  Preferred  Stock  is  converted  into  Common  Stock  in
accordance with the Company's Articles of Incorporation.

         (c) This  Agreement  is subject  to,  and shall in no manner  limit the
right which the Company may have to repurchase  securities from the Shareholders
pursuant  to (i) a stock  restriction  agreement  or other  agreement  among the
Company and the  Shareholders  and (ii) any right of first  refusal set forth in
the Bylaws of the Company.

         10. PROHIBITED TRANSFERS.

         (a) In the event that a  Shareholder  Transfers  any  Co-Sale  Stock in
contravention  of the co-sale  rights of any  Investor  under this  Agreement (a
"Prohibited Transfer"), each Investor, in addition to such other remedies as may
be available at law, in equity or hereunder,  shall have the put option provided
below, and such Shareholder shall be bound by the applicable  provisions of such
option.

         (b) In the event of a Prohibited Transfer, each Investor shall have the
right to sell to such  Shareholder the type and number of shares of Common Stock
equal to the number of shares each Investor would have been entitled to Transfer
to the  purchaser  under  Section 2(c)

                                       4.
<PAGE>

hereof had the Prohibited  Transfer been effected  pursuant to and in compliance
with the  terms  hereof.  Such  sale  shall be made on the  following  terms and
conditions:

         (i) The  price  per  share at which  the  shares  are to be sold to the
Shareholder  shall be equal to the price per share paid by the purchaser to such
Shareholder in such Prohibited Transfer.  In such instance of a put option being
exercised,  the respective  Shareholders  shall also reimburse each Investor for
any and all reasonable fees and expenses,  including  reasonable  legal fees and
expenses,  incurred  pursuant to the exercise or the  attempted  exercise of the
Investor's rights under Section 2.

         (ii)  Within  ninety  (90)  days  after  the date on which an  Investor
received  notice of the  Prohibited  Transfer or  otherwise  became aware of the
Prohibited  Transfer,  such Investor  shall,  if exercising  the option  created
hereby, deliver to the Shareholder the certificate or certificates  representing
shares to be sold, each certificate to be properly endorsed for Transfer. If the
Investor  does not  exercise  its put option right within such ninety (90) days,
then such  Investor  shall  lose all  rights it has  under  this  Section 4 with
respect to such Prohibited Transfer.

         (iii)  Such  Shareholder  shall,  upon  receipt of the  certificate  or
certificates for the shares to be sold by an Investor,  pursuant to this Section
4(b), pay the aggregate  purchase price therefor and the amount of  reimbursable
fees and expenses,  as specified in Section  4(b)(i),  in cash or by other means
acceptable to the Investor.

         (iv)  Notwithstanding  the  foregoing,  any attempt by a Shareholder to
Transfer Co-Sale Stock in violation of Section 2 hereof shall be voidable at the
option of a majority in interest of the  Investors  if a majority in interest of
the  Investors  does not  elect to  exercise  the put  option  set forth in this
Section 4, and the Company agrees it will not effect such a Transfer nor will it
treat any alleged  transferee  as the holder of such shares  without the written
consent of a majority in interest of the  Investors;  provided,  however that no
such  Transfer  shall be  voidable  as  provided in this clause (iv) unless said
majority in interest  advises the Shareholder of its intent to void (in writing)
within ninety (90) days after the date any Investor learns of such Transfer.

         11. LEGEND.

         (a) Each  certificate  representing  shares  of  Co-Sale  Stock  now or
hereafter  owned by the Shareholder or issued to any person in connection with a
Transfer  pursuant to Section 3(a) hereof shall be endorsed  with the  following
legend:

               THE SALE,  PLEDGE,  HYPOTHECATION OR TRANSFER
               OF  THE   SECURITIES   REPRESENTED   BY  THIS
               CERTIFICATE  IS  SUBJECT  TO  THE  TERMS  AND
               CONDITIONS OF A CERTAIN  AMENDED AND RESTATED
               CO-SALE   AGREEMENT   BY  AND   BETWEEN   THE
               SHAREHOLDER,  THE COMPANY AND CERTAIN HOLDERS
               OF  STOCK  OF THE  COMPANY.  COPIES  OF  SUCH
               AGREEMENT MAY

                                       5.
<PAGE>

                BE  OBTAINED  UPON  WRITTEN  REQUEST  TO THE
                SECRETARY OF THE COMPANY.

         (b) The  Shareholders  agree that the Company may instruct its transfer
agent to impose Transfer  restrictions on the shares represented by certificates
bearing the legend  referred to in Section 5(a) above to enforce the  provisions
of this  Agreement and the Company agrees to promptly do so. The legend shall be
removed upon termination of this Agreement.

         12. MISCELLANEOUS.

         (a) Conditions to Exercise of Rights. Exercise of the Investors' rights
under  this  Agreement  shall  be  subject  to and  conditioned  upon,  and  the
Shareholders  and the  Company  shall  use their  best  efforts  to assist  each
Investor in, compliance with applicable laws.

         (b) Governing  Law. This  Agreement  shall be governed by and construed
under  the laws of the  State of  California  as  applied  to  agreements  among
California   residents  entered  into  and  to  be  performed   entirely  within
California.

         (c)  Amendment.  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 by the written consent of (i)
as to the Company, only the Company,  (ii) as to the Investors,  persons holding
more than a majority in interest of the Common Stock held by the  Investors  and
their  assignees,  pursuant  to  Section  6(d)  hereof,  and  (iii)  as  to  the
Shareholders,  only those  persons  holding a majority in interest of the Common
Stock held by the Shareholders and their assignees; provided, that no consent of
Shareholders  shall be necessary  for any  amendment  and/or  restatement  which
includes  additional  holders of Preferred Stock or other preferred stock of the
Company as "Investors" and Parties  hereto.  Any amendment or waiver effected in
accordance  with  clauses  (i),  (ii),  and (iii) of this  Section 6(c) shall be
binding upon each  Investor,  its  successors  and assigns,  the Company and the
Shareholders.

         (d)  Assignment  of  Rights.  This  Agreement  constitutes  the  entire
agreement  between the Parties  relative to the specific  subject matter hereof.
Any previous agreement among the Parties relative to the specific subject matter
hereof is  superseded  by this  Agreement.  This  Agreement  and the  rights and
obligations  of the  Parties  hereunder  shall  inure to the  benefit of, and be
binding upon, their respective successors, assigns and legal representatives.

         (e) Term.  This Agreement  shall continue in full force and effect from
the date hereof  through the earliest of the following  dates,  on which date it
shall terminate in its entirety:

                  (i) the date of the closing of a Qualified Offering;

                  (ii) the date of the closing of any other  public  offering of
the Company's securities in which the Company's  outstanding  Preferred Stock is
converted  into  Common  Stock in  accordance  with the  Company's  Articles  of
Incorporation;

                                       6.
<PAGE>

                  (iii)  the  date of the  closing  of a sale,  lease,  or other
disposition of all or substantially all of the Company's assets or the Company's
merger into or consolidation  with any other corporation or other entity, or any
other  corporate   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%) of
the voting power of the corporation or other entity surviving such  transaction,
provided  that this  Section  6(e)(iii)  shall  not  apply to a merger  effected
exclusively for the purpose of changing the domicile of the Company; or

                  (iv) the date as of which the Parties  hereto  terminate  this
Agreement by written  consent of a majority in interest of the  Investors and by
written consent of a majority in interest of the Shareholders.

         (f) Ownership. The Shareholders respectively represent and warrant that
they are the only legal and  beneficial  owners of those shares of Co-Sale Stock
they  currently  hold subject to the  Agreement and that no other person has any
interest (other than a community property interest) in such shares.

         (g) Notices.  All notices  required or permitted  hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
Party to be  notified;  (ii) when sent by  confirmed  facsimile  if sent  during
normal  business  hours  of  the  recipient,   provided,   that  such  facsimile
transmission  shall be followed up by certified or  registered  mail as provided
herein;  (iii) five (5) days after having been sent by  registered  or certified
mail,  return receipt  requested,  postage  prepaid;  or (iv) upon receipt after
deposit with a nationally  recognized  overnight  courier,  specifying  next day
delivery, with written verification of receipt. All communications shall be sent
to the Party to be notified at the  address as set forth on the  signature  page
hereof or at such other  address as such  Party may  designate  by ten (10) days
advance written notice to the other Parties.

         (h)  Severability.  If one or more of the  provisions of this Agreement
is, for any reason, held to be invalid, illegal or unenforceable in any respect,
such  invalidity,  illegality,  or  unenforceability  shall not affect any other
provisions of this  Agreement,  and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.

         (i) Attorneys' Fees. If any suit or action is instituted to enforce any
provision in this  Agreement,  the  prevailing  Party in such  dispute  shall be
entitled to recover from the losing  Party(ies) all reasonable  fees,  costs and
expenses of enforcing any right of such  prevailing  Party under or with respect
to this  Agreement,  including  without  limitation,  such  reasonable  fees and
expenses of attorneys, which shall include, without limitation, reasonable fees,
costs and expenses of appeals.

         (j) Entire  Agreement.  This Agreement and its Exhibits  constitute the
full and entire understanding and agreement among the Parties with regard to the
subject  hereof and no Party shall be liable or bound to any other in any manner
by any  representations,  warranties,  covenants and agreements  respecting such
subject matter except as specifically set forth herein.

                                       7.
<PAGE>

         (k)  Additional  Investors.  Notwithstanding  anything to the  contrary
contained  herein,  if,  after the  Effective  Date,  the  Company  shall  issue
additional  shares  of  Series  B  Preferred  Stock  pursuant  to  the  Purchase
Agreement, any purchaser of such shares of Series B Preferred Stock may become a
Party to this Agreement  after the Effective Date by executing and delivering an
additional  counterpart  signature  page to this Agreement and for all purposes,
such Purchaser shall be deemed an "Investor" hereunder.

         (l)  Counterparts;  Facsimile.  This  Agreement  may be executed in any
number of  counterparts,  each of which shall be an  original,  but all of which
together  shall  constitute one  instrument.  This Agreement may be executed and
delivered by facsimile and upon such delivery the  facsimile  signature  will be
deemed to have the same effect as if the original  signature had been  delivered
to the other party.

         (m) Termination of Prior  Agreement.  Pursuant to the Prior  Agreement,
upon  execution of this  Agreement by the Company,  the  Shareholders  holding a
majority  in  interest  of the  Common  Stock held by the  Shareholders  and the
holders  of at least a majority  in  interest  of the  Common  Stock held by the
Investors  named in the Prior  Agreement and that remain  outstanding  as of the
date of this Agreement, the Prior Agreement is hereby terminated in its entirety
and restated herein. Upon such execution,  all provisions of, rights granted and
covenants made in the Prior Agreement are hereby waived, released and terminated
in their entirety and shall have no further force to effect.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       8.
<PAGE>

         The foregoing CO-SALE AGREEMENT is hereby executed as of the date first
above written.

COMPANY:                                   INVESTORS:

S2 TECHNOLOGIES, INC.                      COLUMBUS NOVA INVESTMENTS

By:______________________________          By:__________________________________
         Mark Underseth
         President and CEO                 Name:________________________________

                                           Title:_______________________________
SHAREHOLDERS:

                                           ORYX VENTURES LLC
_________________________________
MARK UNDERSETH
                                           By:__________________________________
_________________________________
RICK GREENBURG                             Name:________________________________

                                           Title:_______________________________

                                           ORYX TECHNOLOGIES, INC.

                                           By:__________________________________

                                           Name:________________________________

                                           Title:_______________________________

                                           PROFILE VENTURE PARTNERS FUND 1, L.P.

                                           By:__________________________________

                                           Name:________________________________

                                           Title:_______________________________

                     AMENDED AND RESTATED CO-SALE AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                                            STAR TRUST 1982

                                            By:_________________________________

                                            Name:_______________________________

                                            Title:______________________________

                                            VMR HIGH OCTANE FUND

                                            By:_________________________________

                                            Name:_______________________________

                                            Title:______________________________

                                            DIABLO PARTNERS

                                            By:_________________________________

                                            Name:_______________________________

                                            Title:______________________________

                     AMENDED AND RESTATED CO-SALE AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                                    EXHIBIT A

                                LIST OF INVESTORS

Oryx Technologies, Inc.

Oryx Ventures, LLC

Profile Venture Partners Fund 1, L.P.

Star Trust 1982

VMR High Octane Fund

Columbus Nova Investments

Diablo Partners

                     AMENDED AND RESTATED CO-SALE AGREEMENT

<PAGE>

                                    EXHIBIT B

                             CO-SALE STOCK OWNERSHIP

     Name of Shareholder                                       Co-Sale Stock
     Mark Underseth                                              5,100,000
     Rick Greenburg                                                300,000
     Oryx Ventures, LLC                                            466,666

                     AMENDED AND RESTATED CO-SALE AGREEMENT

<PAGE>

                                TABLE OF CONTENTS

                                                                       PAGE

1.       DEFINITIONS......................................................2

2.       TRANSFERS BY A SHAREHOLDER.......................................2

3.       EXEMPT TRANSFERS.................................................4

4.       PROHIBITED TRANSFERS.............................................4

5.       LEGEND...........................................................5

6.       MISCELLANEOUS....................................................6

                                       i.

<PAGE>

An extra  section break has been inserted  above this  paragraph.  Do not delete
this   section   break   if  you   plan  to  add  text   after   the   Table  of
Contents/Authorities.    Deleting    this   break    will    cause    Table   of
Contents/Authorities  headers and footers to appear on any pages  following  the
Table of Contents/Authorities.

<PAGE>

                                    EXHIBIT E

                      AMENDED AND RESTATED VOTING AGREEMENT

                              S2 TECHNOLOGIES, INC.

                              AMENDED AND RESTATED
                                VOTING AGREEMENT

                                   MAY 6, 2003

<PAGE>

                              S2 TECHNOLOGIES, INC.

                              AMENDED AND RESTATED
                                VOTING AGREEMENT

         THIS AMENDED AND RESTATED  VOTING  AGREEMENT (the  "Agreement") is made
and  entered  into  as of May 6,  2003  ("Effective  Date"),  by  and  among  S2
TECHNOLOGIES,  INC., a California  corporation  (the  "Company"),  those certain
holders of the  Company's  Common  Stock  listed on  Exhibit A hereto  (the "Key
Stockholders")  and the  persons  and  entities  listed on Exhibit B hereto (the
"Investors").  Together, the Company, the Key Stockholders and the Investors are
referred to as the "parties," each a "party."

                                   Witnesseth:

         WHEREAS, certain of the Investors hold shares of the Company's Series A
Preferred  Stock (the "Series A Preferred  Stock") and certain of the  Investors
hold shares of the Company's  Series B Preferred  Stock (the "Series B Preferred
Stock"),  and possess  certain  voting  rights  pursuant  to an existing  Voting
Agreement  dated as of  October  18,  2001 by and  among  the  Company  and such
Investors (the "Prior Voting Agreement");

         WHEREAS, the undersigned Key Stockholders and Investors who hold Series
A  Preferred  Stock  and  Series B Stock  hold a  majority  in  interest  of the
Company's  Common  Stock,  the Series A  Preferred  Stock and Series B Preferred
Stock held by such Key  Stockholders and Investors,  respectively,  and such Key
Stockholders,  Investors  and the Company  desire to amend and restate the Prior
Voting Agreement to add the holders of Series B-1 Preferred Stock of the Company
as parties thereto;

         WHEREAS, the Key Stockholders are the beneficial owners of an aggregate
of five million  eight  hundred  sixty-six  thousand  six hundred and  sixty-six
(5,866,666)  shares of the Common  Stock of the  Company  (the "Key  Stockholder
Shares");

         WHEREAS,  the Company  proposes to sell shares of Series B-1  Preferred
Stock (the "Series B-1 Preferred Stock") to certain of the Investors pursuant to
the Series B-1 Preferred Stock Purchase Agreement (the "Purchase  Agreement") of
even date herewith (the "Financing");

         WHEREAS, the obligations in the Purchase Agreement are conditioned upon
the execution and delivery of this Agreement; and

         WHEREAS,  in connection  with the  consummation  of the Financing,  the
Company,  the Key  Stockholders  and  Investors  have  agreed to provide for the
future voting of their shares of the Company's capital stock as set forth below.

         NOW,  THEREFORE,  in consideration of these premises and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree as follows:

                                       1.
<PAGE>

                                    AGREEMENT

6.       VOTING.

         6.1      Common Shares; Investor Shares.

                  (a) Each Key  Stockholder  agrees to hold all shares of voting
capital stock of the Company  registered in its respective  name or beneficially
owned  by it as of the date  hereof  (and any and all  other  securities  of the
Company legally or beneficially  acquired by each of the Key Stockholders  after
the date hereof) (hereinafter  collectively  referred to as the "Common Shares")
subject to, and to vote the Common Shares in accordance  with, the provisions of
this Agreement.

                  (b) Each Investor  agrees to hold all shares of voting capital
stock of the Company  (including  but not limited to all shares of Common  Stock
issued upon conversion of the Series A Preferred  Stock,  the Series B Preferred
Stock or the Series B-1 Preferred  Stock)  registered in its respective  name or
beneficially  owned by it as of the date hereof and any and all other securities
of the Company legally or beneficially  acquired by each Investor after the date
hereof (hereinafter  collectively  referred to as the "Investor Shares") subject
to, and to vote the Investor  Shares in accordance  with, the provisions of this
Agreement.

         6.2  Election  of  Directors.  During the term of this  Agreement,  the
authorized  size of  Company's  Board of  Directors  shall be five  (5).  On all
matters  relating  to  the  election  of  Directors  of  the  Company,  the  Key
Stockholders  and the  Investors  agree to vote all Common  Shares and  Investor
Shares held by them (or the holders thereof shall consent  pursuant to an action
by written  consent of the  holders of capital  stock of the  Company)  so as to
elect members of the Company's Board of Directors as follows:

                  (a) So long as (i) the holders of the Series A Preferred Stock
have a right to  elect  at least  one (1)  Director  to the  Company's  Board of
Directors in  accordance  with the  Company's  Amended and Restated  Articles of
Incorporation  (the  "Restated  Charter"),  and (ii) Oryx  Ventures  and/or Oryx
Technologies  Corp.  (collectively  referred to as "Oryx")  continues to hold at
least five hundred thousand  (500,000) shares of Series A Preferred Stock,  then
the Investors holding shares of the Series A Preferred Stock shall vote for Phil
Micciche.  If (i) the holders of Series A Preferred  Stock have a right to elect
two (2)  Directors to the Company's  Board of Directors in  accordance  with the
Company's  Restated  Charter,  and (ii)  Oryx  continues  to hold at least  five
hundred  thousand  (500,000)  shares  of  Series  A  Preferred  Stock,  then the
Investors  holding  Series A  Preferred  Stock shall also vote for one (1) other
person  designated by Oryx. If Phil Micciche shall die or become disabled,  then
Oryx shall designate his  replacement  and Investors  holding shares of Series A
Preferred  Stock  shall  vote for such  designee.  Any vote  taken to remove any
Director  elected pursuant to this Section 1.2(a) or to fill any vacancy created
by the  resignation  or death of a Director  elected  pursuant  to this  Section
1.2(a) shall also be subject to the provisions of this Section 1.2(a).

                  (b) So long as (i) the holders of the Series B Preferred Stock
and Series B-1 have a right to elect one (1) Director to the Company's  Board of
Directors in accordance with the Company's  Restated  Charter,  and (ii) Profile
Venture  Partners  ("PVP")  continues  to hold at least

                                       2.
<PAGE>

one  million  (1,000,000)  shares of Series B  Preferred  Stock and  Series  B-1
Preferred Stock, in the aggregate,  the Investors holding shares of the Series B
Preferred  Stock and Series B-1  Preferred  Stock shall vote for Phil Wickham or
another representative  designated by PVP. Any vote taken to remove any Director
elected  pursuant to this Section 1.2(b),  or to fill any vacancy created by the
resignation  or death of a Director  elected  pursuant to this  Section  1.2(b),
shall also be subject to the provisions of this Section 1.2(b).

                  (c) At each  election  of  Directors  in which the  holders of
Common Stock, voting as a separate class, are entitled to elect Directors of the
Company, the Key Stockholders shall vote all of their respective Key Stockholder
Shares so as to elect: (i) the person serving as Chief Executive  Officer of the
Company,  and (ii) one (1) individual  nominated by the holders of a majority in
interest of the Key  Stockholder  Shares.  Any vote taken to remove any Director
elected  pursuant to this Section 1.2(c),  or to fill any vacancy created by the
resignation,  removal or death of a Director  elected  pursuant to this  Section
1.2(c), shall also be subject to the provisions of this Section 1.2(c).

         6.3      Legend.

                  (a) Concurrently  with the execution of this Agreement,  there
shall be  imprinted  or  otherwise  placed,  on  certificates  representing  Key
Stockholder Shares and the Investor Shares the following restrictive legend (the
"Legend"):

                  "THE SHARES  REPRESENTED BY THIS  CERTIFICATE
                  ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN
                  AMENDED AND RESTATED  VOTING  AGREEMENT WHICH
                  PLACES CERTAIN  RESTRICTIONS ON THE VOTING OF
                  THE  SHARES  REPRESENTED  HEREBY.  ANY PERSON
                  ACCEPTING  ANY  INTEREST IN SUCH SHARES SHALL
                  BE DEEMED TO AGREE TO AND SHALL  BECOME BOUND
                  BY ALL THE  PROVISIONS OF SUCH  AGREEMENT.  A
                  COPY  OF  SUCH  VOTING   AGREEMENT   WILL  BE
                  FURNISHED  TO  THE  RECORD   HOLDER  OF  THIS
                  CERTIFICATE   WITHOUT   CHARGE  UPON  WRITTEN
                  REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE
                  OF BUSINESS."

                  (b)  The  Company  agrees  that,   during  the  term  of  this
Agreement,  it will  not  remove,  and  will  not  permit  to be  removed  (upon
registration  of transfer,  reissuance or  otherwise),  the Legend from any such
certificate  and  will  place  or  cause  to be  placed  the  Legend  on any new
certificate  issued to  represent  Key  Stockholder  Shares or  Investor  Shares
theretofore represented by a certificate carrying the Legend.

         6.4 Successors.  The provisions of this Agreement shall be binding upon
the  successors  in  interest to any of the Key  Stockholder  Shares or Investor
Shares.  The Company shall not permit the transfer of any of the Key Stockholder
Shares or Investor Shares on its books or issue a new  certificate  representing
any of the Key Stockholder Shares or Investor Shares unless and until the person
to whom  such  security  is to be  transferred  shall  have  executed  a written
agreement,  substantially in the form of this Agreement,  pursuant to which such
person

                                       3.
<PAGE>

agrees to be bound by all the  provisions  hereof as if such  person  were a Key
Stockholder or Investor, as applicable.

         6.5 Other  Rights.  Except as provided by this  Agreement  or any other
agreement  entered into in connection  with the Financing,  each Key Stockholder
and Investor  shall exercise the full rights of a holder of capital stock of the
Company  with  respect  to the  Key  Stockholder  Shares  and  Investor  Shares,
respectively.

7.       TERMINATION.

         7.1 This  Agreement  shall  continue  in full force and effect from the
date hereof through the earliest of the following  dates, on which date it shall
terminate in its entirety:

                  (a) the date of the  closing of a firmly  underwritten  public
offering of the Common Stock pursuant to a registration statement filed with the
Securities and Exchange Commission,  and declared effective under the Securities
Act of 1933, as amended,  which results in the Series A, Series B and Series B-1
Preferred Stock being converted into Common Stock;

                  (b) the date of the  closing of any other  public  offering of
the Company's securities pursuant to which the Company's  outstanding  Preferred
Stock is  converted  into  shares  of Common  Stock  pursuant  to the  Company's
Articles of Incorporation;

                  (c) at such time as the Investors  hold less than an aggregate
of one  million  (1,000,000)  shares of Series A  Preferred  Stock,  one million
(1,000,000)  shares of the Series B Preferred  Stock and five  hundred  thousand
(500,000)  shares of the Series B-1 Preferred  Stock (each as adjusted for stock
splits, dividends or the like);

                  (d) ten (10) years from the Effective Date;

                  (e)  the  date  of the  closing  of a sale,  lease,  or  other
disposition of all or substantially all of the Company's assets or the Company's
merger into or consolidation  with any other corporation or other entity, or any
other  corporate   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%) of
the voting power of the corporation or other entity surviving such  transaction,
provided  that  this  Section  2.1(e)  shall  not  apply  to a  merger  effected
exclusively for the purpose of changing the domicile of the Company; or

                  (f) the date as of which the parties  terminate this Agreement
by written  consent of a majority in interest of the Investors and a majority in
interest of the Key Stockholders.

8.       MISCELLANEOUS.

         8.1 Specific Performance.  The parties declare that it is impossible to
measure  in money the  damages  which  will  accrue to a party  hereto or to its
heirs,  personal  representatives,  or assigns by reason of a failure to perform
any of the  obligations  under this  Agreement  and agree that the terms of this
Agreement shall be specifically enforceable. If any party or its heirs,

                                       4.
<PAGE>

personal  representatives,  or assigns  institutes  any action or  proceeding to
specifically  enforce the provisions hereof, any person against whom such action
or proceeding  is brought  hereby waives any claim or defense that such party or
personal representative has an adequate remedy at law, and such person shall not
offer in any such action or proceeding  any claim or defense that such remedy at
law exists.

         8.2 Governing Law. This Agreement shall be governed by and construed in
accordance  with  the laws of the  State of  California  as such  laws  apply to
agreements among California  residents made and to be performed  entirely within
the State of California.

         8.3 Amendment or Waiver. This Agreement shall be amended (or provisions
of this  Agreement  waived) only by an instrument  in writing  signed by (i) the
Company,  (ii) a majority in interest of the  Investors  and (iii) a majority in
interest of the Key  Stockholders.  Any amendment or waiver so effected shall be
binding upon each of the parties and any of their assignees.

         8.4 Severability. If one or more of the provisions of this Agreement is
held  invalid,  illegal  or  unenforceable  in  any  respect,  such  invalidity,
illegality  or  unenforceability  shall not affect any other  provisions of this
Agreement,  and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

         8.5  Successors.  This  Agreement  shall inure to the benefit of and be
binding  upon the  parties  and their  respective  heirs,  successors,  assigns,
administrators, executors and other legal representatives.

         8.6 Additional  Shares. If subsequent to the Effective Date, any shares
or  other  securities  are  issued  on,  or in  exchange  for,  any of  the  Key
Stockholder  Shares or Investor  Shares by reason of any stock  dividend,  stock
split,  combination  of shares,  reclassification  or the like,  such  shares or
securities shall be deemed to be Key Stockholder or Investor Shares, as the case
may  be,  for  purposes  of  this   Agreement.

         8.7  Addition of  Investors.  Notwithstanding  anything to the contrary
contained herein, if the Company shall issue additional shares of its Series B-1
Preferred Stock pursuant to the Purchase Agreement, any purchaser of such shares
of Series B-1 Preferred  Stock shall become a party to this  Agreement  (without
any further action by any then current signatory hereto or successor in interest
to such  signatory's  interest in Series B-1  Preferred  Stock) by executing and
delivering an additional  counterpart signature page to this Agreement and shall
be deemed an "Investor" hereunder.

         8.8  Counterparts;  Facsimile.  This  Agreement  may be executed in any
number of  counterparts,  each of which shall be an  original,  but all of which
together  shall  constitute one  instrument.  This Agreement may be executed and
delivered by facsimile and upon such delivery the  facsimile  signature  will be
deemed to have the same effect as if the original  signature had been  delivered
to the other party.

                                       5.
<PAGE>

         8.9  Waiver.  No waivers of any breach of this  Agreement  by any party
shall be  construed  as a waiver of any rights or remedies of any other party or
with  respect to any  subsequent  breach,  unless such waiver so provides by its
terms.

         8.10  Attorney's  Fees.  If any suit or action is instituted to enforce
any provision in this Agreement,  the prevailing  party in such dispute shall be
entitled to recover from the losing party reasonable fees, costs and expenses of
enforcing  any right of such  prevailing  party  under or with  respect  to this
Agreement,  including without  limitation,  such reasonable fees and expenses of
attorneys, which shall include, without limitation,  fees, costs and expenses of
appeals.

         8.11 Notices.  Any notices  required in connection  with this Agreement
shall be in writing and shall be deemed  effectively  given:  (i) upon  personal
delivery to the party to be notified;  (ii) when sent by confirmed  facsimile if
sent  during  normal  business  hours of the  recipient  (provided  that same is
followed up by certified or registered  mail  immediately as otherwise  provided
herein;  (iii) five (5) days after having been sent by  registered  or certified
mail,  return  receipt  requested,  postage  prepaid;  or (iv) one (1) day after
deposit with a nationally  recognized  overnight  courier,  specifying  next day
delivery,  with written  notification of receipt. All notices shall be addressed
to the holder  appearing  on the books of the Company or at such address as such
party may designate by ten (10) days advance written notice to the other parties
hereto.

         8.12 Entire Agreement.  This Agreement and its Exhibits  constitute the
full and entire understanding and agreement among the parties with regard to its
subject  matter and no party shall be liable or bound to any other in any manner
with respect to such subject  matter by any other  representations,  warranties,
covenants and agreements.

         8.13  Termination  of  Prior  Agreement.  Upon  the  execution  of this
Agreement by the Company, a majority in interest of the Key Stockholders and the
holders of a majority in  interest of the Series A Preferred  Stock and Series B
Preferred  Stock held by the Investors  named in the Prior Voting  Agreement and
outstanding  as of the date of this  Agreement,  the Prior  Voting  Agreement is
hereby terminated in its entirety and restated herein. Upon such execution,  all
provisions of, rights  granted and covenants made in the Prior Voting  Agreement
are hereby  waived,  released and terminated in their entirety and shall have no
further force and effect.

                                       6.
<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have executed this AMENDED AND
RESTATED VOTING AGREEMENT as of the date first above written.

         COMPANY:                          INVESTORS:

         S2 TECHNOLOGIES, INC.             COLUMBUS NOVA INVESTMENTS

         By:________________________       By:__________________________________
                           President
                                           Name:________________________________

                                           Title:_______________________________

                                               ORYX VENTURES LLC

                                               By:______________________________

                                               Name:____________________________

                                               Title:___________________________

                                               ORYX TECHNOLOGIES, INC.

                                               By:______________________________

                                               Name:____________________________

                                               Title:___________________________

                                               PROFILE VENTURE PARTNERS FUND
                                           1, L.P.

                                               By:______________________________

                                               Name:____________________________

                                               Title:___________________________

<PAGE>

                                               STAR TRUST 1982

                                               By:______________________________

                                               Name:____________________________

                                               Title:___________________________

                                               VMR HIGH OCTANE FUND

                                               By:______________________________

                                               Name:____________________________

                                               Title:___________________________

                                               DIABLO PARTNERS

                                               By:______________________________

                                               Name:____________________________

                                               Title:___________________________

                                               KEY STOCKHOLDERS:

                                               _________________________________
                                               Mark Underseth

                                               _________________________________
                                               Rick Greenburg

<PAGE>

                                    EXHIBIT A

                            LIST OF KEY STOCKHOLDERS

         Mark Underseth

         Rick Greenburg

<PAGE>

                                    EXHIBIT B

                                LIST OF INVESTORS

         Oryx Technologies, Inc.

         Oryx Ventures, LLC

         Profile Venture Partners Fund 1, L.P.

         Star Trust 1982

         VMR High Octane Fund

         Columbus Nova Investments

         Diablo Partners

<PAGE>

                                    EXHIBIT F

                PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

<PAGE>

                                    EXHIBIT G

                              FORM OF LEGAL OPINION

<PAGE>

                                    EXHIBIT H

                                  BUSINESS PLAN

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