Document:

<PAGE>

             [PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A
             REQUEST FOR CONFIDENTIALITY UNDER RULE 24b-2 OF THE
             SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A COPY OF THIS
             AGREEMENT WITH THIS EXHIBIT INTACT HAS BEEN FILED SEPARATELY
             WITH THE SECURITIES AND EXCHANGE COMMISSION.]

                               FIRST AMENDMENT TO
                           EXCLUSIVE LICENSE AGREEMENT
                                       FOR
            SELECTED APPLICATIONS OF COATED NANOCRYSTALLINE PARTICLES

                                     BETWEEN

                   THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

                                       AND

                          BEN-ABRAHAM TECHNOLOGIES INC.

                               UC CASE NO. 89-204

<PAGE>

               FIRST AMENDMENT TO THE EXCLUSIVE LICENSE AGREEMENT
         FOR SELECTED APPLICATIONS OF COATED NANOCRYSTALLINE PARTICLES

         This amendment ("Amendment") is effective this 26th day of October,
1999, by and between The Regents of the University of California ("The
Regents"), a California corporation, having its statewide administrative
offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200,
and Ben-Abraham Technologies Inc. ("Licensee"), a Wyoming corporation, having
a principal place of business at 175 Olde Half Day Road, Suite 123,
Lincolnshire, Illinois 60069.

                                    RECITALS

         Whereas, Licensee and The Regents entered into a license agreement
entitled "Exclusive License Agreement for Selected Applications of Coated
Nanocrystalline Particles," effective on June 18, 1997, having U.C. Agreement
Control Number 1997-04-0671 ("License Agreement"), covering licensure to
Licensee by The Regents of rights in certain inventions developed by Dr. Nir
Kossovsky et al. at the University of California, Los Angeles and covered by
Patent Rights (as defined in the License Agreement);

         Whereas, although Licensee and The Regents both agree that the other
party has substantially complied with the terms of the License Agreement,
changed circumstances have necessitated that certain other provisions of the
License Agreement be modified and amended;

         Whereas, Licensee has requested that The Regents amend certain
provisions in the License Agreement to a more financial and time feasible
schedule; and

         Whereas, The Regents is willing to amend the License Agreement to
reflect such request.

         Now, Therefore, in consideration of the foregoing and the mutual
promises and covenants contained herein, the parties hereto agree as follows:

<PAGE>

1.       Paragraph 1.6 (Definitions) of the License Agreement is deleted in its
         entirety and replaced with the following:

                  "1.6     Drug Delivery  System" means coated  nanocrystalline
                   particles  used in  pharmaceutical preparations to facilitate
                   the therapeutic delivery of insulin in humans."

2.       Paragraph 1.7 (Definition) of the License Agreement is deleted in its
         entirety and replaced with the following:

                  "1.7     [reserved]."

3.       Paragraph 1.8 (Definitions) of the License Agreement is deleted in its
         entirety and replaced with the following:

                  "1.8     "Field" means Vaccine Adjuvant, Virus Vaccine
                  Construct, and Drug Delivery System."

4.       Paragraph 1.13 (Definitions) is added to the License Agreement
         as follows:

                  "1.13 "Project" means the Vaccine Adjuvant project specified
         in Subparagraph 5.9a, Epstein Barr Vaccine project specified in
         Subparagraph 5.9b, Herpes 2 Vaccine project specified in Subparagraph
         5.9c, HIV Vaccine project specified in Subparagraph 5.9d, and Insulin
         project specified in Subparagraph 5.9e."

5.       Paragraph 4.5 (Royalties) of the License Agreement is deleted in its
         entirety and replaced with the following:

                  "4.5 Beginning in the year 2004, Licensee will pay to The
         Regents a minimum annual royalty in the amounts and at the times set
         forth below:

<TABLE>
                             <S>                            <C>
                             2004                             $  50,000
                             2005                             $ 100,000
                             2006                             $ 150,000
                             2007                             $ 200,000
                             2008                             $ 400,000
                             2009                             $ 600,000
                             2010                             $ 800,000
                             2011                           $ 1,500,000
</TABLE>

                                       2
<PAGE>

         In each succeeding calendar year after the year 2011, Licensee will pay
         a minimum annual royalty of One Million Five Hundred Thousand Dollars
         ($1,500,000) and thereafter for the life of this Agreement. This
         minimum annual royalty will be paid to The Regents by February 28 of
         the year following accrual of the royalties and will be credited
         against the earned royalty due and owing for the calendar year in which
         the minimum payment was made."

5.       Paragraph 5.7 (Due Diligence) of the License Agreement is deleted in
         its entirety and replaced with the following:

                  "5.7     Licensee must hire the following key employees or
         independent contractors by the designated dates:

<TABLE>
<CAPTION>
------------------------------------------------------------ ------------------ --------------------------------------
                   Position Description                         # Req.                  Hiring Target Date
------------------------------------------------------------ ------------------ --------------------------------------
<S>                                                          <C>                <C>
Director, Research & Development                                     1                  December 1, 1996
Senior Vaccine Development Specialist                                1                  June 30, 1997
Senior Pharmaceutical Development Specialist                         1                  June 30, 1997
Process Development Scientist                                        1                  April 30, 1997
Quality Control/Assurance Manager                                    1                  December 31, 1997
Information Management Systems Specialist                            1                  December 31, 1997
Regulatory Specialist                                                1                  December 31, 1998

</TABLE>

6.       Paragraph 5.8 (Due Diligence) of the License Agreement is deleted in
         its entirety and replaced with the following:

         "5.8 In the hiring of key employees or independent contractors
designated in Paragraph 5.7 above, Licensee will use the criteria set forth
and hire qualified candidates.

                                       3
<PAGE>

7.       Sub-paragraph 5.9a (Due Diligence) of the License Agreement is deleted
         in its entirety and replaced with the following:

                          5.9a Vaccine Adjuvant Project

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                MILESTONES #                                                   TARGET DATE
<S>                                                                       <C>
-------------------------------------------------------------------------------------------------
1:  Produce a Patent Product comprising Vaccine Adjuvant for test              September 30, 1997
purposes
-------------------------------------------------------------------------------------------------
2:  Produce a test model for a Patent Product comprising Vaccine               February 28, 1998
Adjuvant
-------------------------------------------------------------------------------------------------
3:  Complete toxicity testing for a Patent Product comprising Vaccine          September 30, 1998
Adjuvant
-------------------------------------------------------------------------------------------------
4:  Enter into strategic alliances or sublicenses for the development of a     January 31, 2000
Patent Product comprising Vaccine Adjuvant
-------------------------------------------------------------------------------------------------
5:  Submit IND in the United States and the foreign regulatory
counterpart in Europe and Japan for a Patent Product comprising
Vaccine Adjuvant
-------------------------------------------------------------------------------------------------
6:  Begin Phase I Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Vaccine Adjuvant
-------------------------------------------------------------------------------------------------
7:  Begin Phase 2/3 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Vaccine Adjuvant
-------------------------------------------------------------------------------------------------
8:  File for marketing approval in the United States, Germany, France,
England, and Japan for a Patent Product comprising Vaccine Adjuvant
-------------------------------------------------------------------------------------------------
9:  Introduce a Patent Product comprising Vaccine Adjuvant to the
market in the United States, Germany, and France within 6 months from
marketing approval
-------------------------------------------------------------------------------------------------
10: Fill market demand in each country within 6 months of introduction
for a Patent Product comprising Vaccine Adjuvant
-------------------------------------------------------------------------------------------------
</TABLE>

         [Portions of this Exhibit have been omitted pursuant to a request for
         confidentiality under Rule 24b-2 of the Securities Exchange Act of
         1934, as amended. A copy of this agreement with this Exhibit intact
         has been filed separately with the Securities and Exchange Commission.]

8.       Sub-paragraph 5.9b (Due Diligence) of the License Agreement is deleted
         in its entirety and replaced with the following:

                        5.9b Epstein Barr Vaccine Project

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                MILESTONES #                                                   TARGET DATE
<S>                                                                          <C>
-------------------------------------------------------------------------------------------------
1:  Produce a Patent Product comprising Virus Vaccine Construct for the         December 31, 1997
Epstein Barr application
-------------------------------------------------------------------------------------------------
2:  Test a pilot vaccine consisting of a Patent Product comprising Virus        June 30, 1998
Vaccine Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
3:  Complete pre-clinical tests on a Patent Product comprising Virus            December 31, 1998
Vaccine Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
4:  Submit IND in the United States and the foreign regulatory
counterpart in Europe and Japan for a Patent Product comprising Virus
Vaccine Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
5:  Begin Phase I Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
6:  Begin Phase 2 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
7:  Begin Phase 3 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
8:  File for marketing approval in the United States, Germany, France,
England, and Japan for a Patent Product comprising Virus Vaccine
Construct for the Epstein Barr application
-------------------------------------------------------------------------------------------------
9:  Introduce a Patent Product comprising Virus Vaccine Construct for
the Epstein Barr application to the market in the United States,
Germany, France, England, and Japan within 6 months from marketing
approval
-------------------------------------------------------------------------------------------------
10: Fill market demand in each country within 6 months of introduction
for a Patent Product comprising Virus Vaccine Construct for the Epstein
Barr application
-------------------------------------------------------------------------------------------------
</TABLE>

         [Portions of this Exhibit have been omitted pursuant to a request for
         confidentiality under Rule 24b-2 of the Securities Exchange Act of
         1934, as amended. A copy of this agreement with this Exhibit intact
         has been filed separately with the Securities and Exchange Commission.]

9.       Sub-paragraph 5.9c (Due Diligence) of the License Agreement is deleted
         in its entirety and replaced with the following:

                          5.9c Herpes 2 Vaccine Project

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                MILESTONES #                                                   TARGET DATE
<S>                                                                          <C>
-------------------------------------------------------------------------------------------------
1:  Produce a Patent Product comprising Virus Vaccine Construct for the         February 28, 1998
Herpes 2 application
-------------------------------------------------------------------------------------------------
2:  Test a pilot vaccine consisting of a Patent Product comprising Virus        August 31, 1998
Vaccine Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
3:  Complete pre-clinical tests on a Patent Product comprising Virus            February 28, 1999
Vaccine Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
4:  Submit IND in the United States and the foreign regulatory
counterpart in Europe and Japan for a Patent Product comprising Virus
Vaccine Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
5:  Begin Phase I Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
6:  Begin Phase 2 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
7:  Begin Phase 3 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
8:  File for marketing approval in the United States, Germany, France,
England, and Japan for a Patent Product comprising Virus Vaccine
Construct for the Herpes 2 application
-------------------------------------------------------------------------------------------------
9:  Introduce a Patent Product comprising Virus Vaccine Construct for
the Herpes 2 application to the market in the United States, Germany,
France, England, and Japan within 6 months from marketing approval
-------------------------------------------------------------------------------------------------
10: Fill market demand in each country within 6 months of introduction
for a Patent Product comprising Virus Vaccine Construct for the Herpes
2 application
-------------------------------------------------------------------------------------------------
</TABLE>

         [Portions of this Exhibit have been omitted pursuant to a request for
         confidentiality under Rule 24b-2 of the Securities Exchange Act of
         1934, as amended. A copy of this agreement with this Exhibit intact
         has been filed separately with the Securities and Exchange Commission.]

                                       4
<PAGE>

10.      Sub-paragraph 5.9d (Due Diligence) of the License Agreement is deleted
         in its entirety and replaced with the following:

                            5.9d HIV Vaccine Project

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                MILESTONES #                                                   TARGET DATE
<S>                                                                          <C>
-------------------------------------------------------------------------------------------------
1:  Produce a Patent Product comprising Virus Vaccine Construct for the         January 31, 1998
HIV vaccine application
-------------------------------------------------------------------------------------------------
2:  Test a pilot vaccine consisting of a Patent Product comprising Virus        December 31, 1998
Vaccine Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
3:  Complete pre-clinical tests on a Patent Product comprising Virus            May 31, 1999
Vaccine Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
4:  Submit IND in the United States and the foreign regulatory
counterpart in Europe and Japan for a Patent Product comprising Virus
Vaccine Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
5:  Begin Phase I Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
6:  Begin Phase 2 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
7:  Begin Phase 3 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Virus Vaccine Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
8:  File for marketing approval in the United States, Germany, France,
England, and Japan for a Patent Product comprising Virus Vaccine
Construct for the HIV vaccine application
-------------------------------------------------------------------------------------------------
9:  Introduce a Patent Product comprising Virus Vaccine Construct for
the HIV vaccine application to the market in the United States,
Germany, France, England, and Japan within 6 months from marketing
approval
-------------------------------------------------------------------------------------------------
10: Fill market demand in each country within 6 months of introduction
for a Patent Product comprising Virus Vaccine Construct for the HIV
vaccine application
-------------------------------------------------------------------------------------------------
</TABLE>

         [Portions of this Exhibit have been omitted pursuant to a request for
         confidentiality under Rule 24b-2 of the Securities Exchange Act of
         1934, as amended. A copy of this agreement with this Exhibit intact
         has been filed separately with the Securities and Exchange Commission.]

11.      Sub-paragraph 5.9e (Due Diligence) of the License Agreement is deleted
         in its entirety and replaced with the following:

                              5.9e Insulin Project

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                MILESTONES #                                                   TARGET DATE
<S>                                                                          <C>
-------------------------------------------------------------------------------------------------
1:  Produce a Patent Product comprising Drug Delivery System for the            May 31, 1998
insulin application
-------------------------------------------------------------------------------------------------
2:  Test a clinical material consisting of a Patent Product comprising          May 31, 1999
Drug Delivery System for the insulin application
-------------------------------------------------------------------------------------------------
3:  Complete pre-clinical tests on a Patent Product comprising Drug             October 31, 1999
Delivery System for the insulin application
-------------------------------------------------------------------------------------------------
4:  Submit IND for Phase 1 Clinical Trials for use of calcium phosphate
nanoparticles (CAP) as adjuvant or carrier in inhaled or other insulin
application
-------------------------------------------------------------------------------------------------
5:  Submit IND in the United States and the foreign regulatory
counterpart in Europe and Japan for a Patent Product comprising Drug
Delivery System for the insulin application
-------------------------------------------------------------------------------------------------
6:  Begin Phase I Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Drug Delivery System for the insulin application
-------------------------------------------------------------------------------------------------
7:  Begin Phase 2 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Drug Delivery System for the insulin application
-------------------------------------------------------------------------------------------------
8:  Begin Phase 3 Clinical Trials in the United States and the foreign
regulatory counterpart in Europe and Japan for a Patent Product
comprising Drug Delivery System for the insulin application
-------------------------------------------------------------------------------------------------
9:  File for marketing approval in the United States, Germany, France,
England, and Japan for a Patent Product comprising Drug Delivery
System for the insulin application
-------------------------------------------------------------------------------------------------
10: Introduce a Patent Product comprising Drug Delivery System for
the insulin application to the market in the United States, Germany,
France, England, and Japan within 6 months from marketing approval
-------------------------------------------------------------------------------------------------
11: Fill market demand in each country within 6 months of introduction
for a Patent Product comprising Drug Delivery System for the insulin
application
-------------------------------------------------------------------------------------------------
</TABLE>

         [Portions of this Exhibit have been omitted pursuant to a request for
         confidentiality under Rule 24b-2 of the Securities Exchange Act of
         1934, as amended. A copy of this agreement with this Exhibit intact
         has been filed separately with the Securities and Exchange Commission.]

12.      Sub-paragraphs 5.9f, 5.9g and 5.9h (Due Diligence) are deleted in their
         entirety from the License Agreement.

13.      Paragraph 5.11 (Due Diligence) of the License Agreement is deleted in
         its entirety and replaced with the following:

         "5.11 The Regents shall have the right and option to either (1)
terminate this Agreement when Licensee fails to meet due diligence provisions
for any three of the five projects specified under Projects, as defined in
Paragraph 1.13 above; or (2) reduce the exclusive license granted to
non-exclusive licenses for each project specified under Projects, as defined
in Paragraph 1.13 above, when Licensee fails to meet due diligence provisions
for that particular project, subject to the notice and opportunity to repair
provisions of Paragraph 9.1."

14.      Paragraph 9.1 (Termination by the Regents) of the License Agreement is
         deleted in its entirety and replaced with the following:

                                       5
<PAGE>

         "9.1 Subject to Paragraph 5.11, if Licensee should violate or fail
to perform any term or covenant of this Agreement, then The Regents may give
written notice of such default ("Notice of Default") to Licensee. If Licensee
should fail to repair such default within sixty (60) days after the date such
notice takes effect, The Regents will have the right to terminate this
Agreement and the licenses herein by a second written notice ("Notice of
Termination") to Licensee. If a Notice of Termination is sent to Licensee,
this Agreement will automatically terminate on the date such notice takes
effect. Such termination will not relieve Licensee of its obligation to pay
any royalty or license fees owing at the time of such termination and will
not impair any accrued right of The Regents. These notices will be subject to
Article 18 (Notices)."

15.      Paragraph 18.1 (Notices) of the License Agreement is deleted in its
         entirety and replaced with the following:

         "18.1 Any notice or payment required to be given to either party
will be deemed to have been properly given and to be effective:

               18.1a    on the date of delivery if delivered in person;

               18.1b    on the date of mailing if mailed by first-class
                        certified mail, postage paid; or

               18.1c    on the date of mailing if mailed by any global express
                        carrier service that requires the recipient to sign the
                        documents demonstrating the delivery of such notice of
                        payment;

to the respective addresses given below, or to another address as designated
in writing by the party changing its prior address.

In the case of Licensee:          Ben-Abraham Technologies, Inc.
                                  175 Olde Half Day Road, Suite 123
                                  Lincolnshire, Illinois 60069
                                  Telephone: (847) 793-2434
                                  Facsimile: (847) 793-2435
                                  Attention: Stephen M. Simes
                                             President & CEO

In the case of The Regents:       The Regents of the University of California
                                  Office of the President
                                  Office of Technology Transfer
                                  1111 Franklin Street, 5th Floor
                                  Oakland, California 94607-5200
                                  Telephone: (510) 587-6000
                                  Facsimile: (510) 587-6090
                                  Attention: Executive Director
                                             Office of Technology Transfer
                                             Referring to: U.C. Case No. 89-204

                                       6
<PAGE>

         In Witness Whereof, both The Regents and the Licensee have executed
this Amendment, in duplicate originals, by their respective officers hereunto
duly authorized, on the day and year hereinafter written.

              BEN-ABRAHAM                            THE REGENTS OF THE
            TECHNOLOGIES INC.                     UNIVERSITY OF CALIFORNIA
By        /s/ Stephen M. Simes                By    /s/ Terence A. Feuerborn
  ------------------------------------          --------------------------------
                (Signature)                           (Signature)
Name    Stephen M. Simes                      Name   Terence A. Feuerborn
    ----------------------------------
Title      President & CEO                    Title   Executive Director,
    ----------------------------------                Research Administration
                                                      and Technology Transfer

Date      10/22/99                            Date     10/26/99
    ----------------------------------            ------------------------------

                    Approved as to legal form: /s/ Edwin H. Baker   10/22/99
                                              ---------------------------------
                                              Edwin H. Baker               Date
                                              University Counsel
                                              Office of General Counsel

                                       7<PAGE>
                                                             EXHIBIT (10)(A)(2)

===============================================================================

                                    K2, INC.
                       Second Amendment to Note Agreements

                          Dated as of December 1, 1999

                Re: Note Agreements dated as of October 15, 1992
                                       and
                         $40,000,000 8.39% Senior Notes
                              due November 30, 2004

===============================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                              HEADING                                           PAGE
<S>                   <C>                                                              <C>
SECTION 1.            AMENDMENTS .........................................................1

     Section 1.1.     Amendment of Section 5.9 ...........................................1
     Section 1.2.     Amendment of Section 5.11(d) .......................................2
     Section 1.3.     Amendment of Section 5.12 ..........................................2
     Section 1.4.     Amendment of Section 8.1 ...........................................3

SECTION 2.            REPRESENTATIONS AND WARRANTIES .....................................5

SECTION 3.            CONDITIONS PRECEDENT ...............................................5

     Section 3.1.     Payment of Special Counsel Fees ....................................5
     Section 3.2.     Consent of Requisite Holders .......................................5
     Section 3.3.     Intercreditor Agreement ............................................5
     Section 3.4.     Guaranty Agreement .................................................5
     Section 3.5.     Opinion of Counsel .................................................5

SECTION 4.            MISCELLANEOUS ......................................................5

     Section 4.1.     Effective Date .....................................................5
     Section 4.2.     Counterparts .......................................................5
     Section 4.3.     Headings ...........................................................6
     Section 4.4.     Governing Law ......................................................6
     Section 4.5.     References to Note Agreements ......................................6
     Section 4.6.     Ratification .......................................................6
     Section 4.7.     Fees and Expenses ..................................................6

Signatures................................................................................7

EXHIBIT A             --   Form of Representations and Warranties

EXHIBIT B             --   Form of Intercreditor Agreement

EXHIBIT C             --   Form of Guaranty Agreement

EXHIBIT D             --   Form of Opinion of Company Counsel

</TABLE>

                                     -i-
<PAGE>

                                    K2, INC.

                       SECOND AMENDMENT TO NOTE AGREEMENTS

                                                                    Dated as of
                                                               December 1, 1999

                Re: Note Agreements dated as of October 15, 1992
                                       and
                         $40,000,000 8.39% Senior Notes
                              Due November 30, 2004

To the Holders Named in Schedule I

Ladies and Gentlemen:

         Reference is made to those separate Note Agreements, each dated as
of October 15, 1992, as amended by that certain First Amendment dated as of
May 1, 1996 (collectively referred to herein as the "NOTE AGREEMENTS"),
pursuant to which K2, Inc. (formerly known as Anthony Industries, Inc.), a
Delaware corporation (the "COMPANY"), issued $40,000,000 aggregate principal
amount of its 8.39% Senior Notes due November 30, 2004. You and the other
Institutional Holders named in Schedule I are hereinafter sometimes referred
to as the "HOLDERS". Capitalized terms used herein and not otherwise defined
shall have the meanings given thereto in the Note Agreements.

         The Company requests the amendment of certain provisions of the Note
Agreements to read as hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the Company agrees with you as follows:

SECTION 1.           AMENDMENTS.

         SECTION 1.1.    AMENDMENT OF SECTION 5.9.  Section 5.9 of each of
the Note Agreements is hereby amended as follows:

                  (a)  Clause (h) of Section 5.9 is hereby amended by
deleting "and" where it appears at the end of said clause (h).

                  (b)  Clause (i) of Section 5.9 is hereby amended by
inserting ";and" at the end of said clause (i).

                  (c)  Clause (j) is hereby added to Section 5.9 as follows:

<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

                  "(j)  Liens arising out of an Accounts Receivable
                  Financing Facility."

         SECTION 1.2.    AMENDMENT OF SECTION 5.11(d).  Section 5.11(d) of
each of the Note Agreements is hereby amended as follows:

                           "(d) Neither the Company nor any Restricted
                  Subsidiary will sell, transfer or otherwise dispose of any
                  receivables other than any sale, lease or other disposition
                  of receivables pursuant to the Accounts Receivable
                  Financing Facility, PROVIDED that at all times the Accounts
                  Receivable Financing Facility has a Deemed Principal Amount
                  not exceeding (i) $75,000,000 for such Accounts Receivable
                  Financing Facility originating within the United States or
                  (ii) $20,000,000 for such Accounts Receivable Financing
                  Facility originating outside of the United States; PROVIDED
                  FURTHER that the net proceeds from any such Accounts
                  Receivable Financing Facility shall be applied to the
                  prepayment of Funded Debt of the Company or any Restricted
                  Subsidiary which for purposed of this Section 5.11(d) and
                  Section 5.11(e), shall include a temporary reduction in
                  Indebtedness outstanding under the Bank Credit Facility."

         SECTION 1.3.    AMENDMENT OF SECTION 5.12.  Section 5.12 of each
of the Note Agreements is hereby amended as follows:

                           "SECTION 5.12. GUARANTIES.  (a) The Company will
                  not, and will not permit any Restricted Subsidiary to,
                  become or be liable in respect of any Guaranty except (i)
                  Guaranties by the Company which are limited in amount to a
                  stated maximum dollar exposure or which constitute
                  Guaranties of obligations incurred by any Restricted
                  Subsidiary in compliance with the provisions of this
                  Agreement and (ii) Guaranties which constitute Excluded
                  Subsidiary Obligations.

                           (b) The Company will cause any Person which
                  becomes a Subsidiary after December 1, 1999 and which is
                  required by the terms of the Bank Credit Agreement to
                  become a party to, or otherwise Guaranty, Indebtedness
                  outstanding under the Bank Credit Agreement to enter into
                  the Guaranty Agreement, and deliver within three Business
                  Days thereafter to each of the holders of the Notes the
                  following items:

                           (i)      a joinder agreement in respect of
                  the Guaranty Agreement;

                                    -2-
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

                           (ii) a certificate signed by the President, a Vice
                  President or another authorized Responsible Officer of the
                  Company making representations and warranties to the effect
                  of those contained in Exhibit A to the Second Amendment,
                  with respect to such Subsidiary and the Guaranty Agreement,
                  as applicable;

                           (iii) such documents and evidence with respect to
                  such Subsidiary as any holder of the Notes may reasonably
                  request in order to establish the existence and good
                  standing of such Subsidiary;

                           (iv) an opinion of counsel addressed to each of
                  the holders of the Notes satisfactory to the holders of 66
                  2/3% in aggregate principal amount of the Notes, to the
                  effect that the Guaranty Agreement has been duly
                  authorized, executed and delivered and constitutes the
                  legal, valid and binding contract and agreement of such
                  Subsidiary enforceable in accordance with its terms, except
                  as an enforcement of such terms may be limited by
                  bankruptcy, insolvency, fraudulent conveyance and similar
                  laws affecting the enforcement of creditors' rights
                  generally and by general equitable principles; and

                           (v) If at any time one or more Subsidiaries which
                  shall have guaranteed the Indebtedness outstanding under
                  the Bank Credit Agreement shall have been released from its
                  obligations under such Guaranty, then upon delivery to the
                  holders of the Notes of evidence of such release (which
                  evidence shall be reasonably satisfactory to holders of 66
                  2/3% aggregate principal amount of the Notes), such
                  Subsidiary shall be released from its obligations under the
                  Guaranty Agreement."

         SECTION 1.4.    AMENDMENT OF SECTION 8.1.  Section 8.1 of each of
the Note Agreements is hereby amended as follows:

                   (a)   The definitions of "Accounts Receivable Financing
         Facility" and "Priority Debt" are hereby deleted in their entirety and
         the following inserted in lieu thereof:

                           "ACCOUNTS RECEIVABLE FINANCING FACILITY" shall
                  mean the facility or facilities as amended, extended or
                  renewed from time to time, providing for the sale,
                  encumbrance or other disposition to a Person or Persons
                  other than the Company or a Restricted Subsidiary, at any
                  time or from time to time, of all or a portion of the
                  accounts receivable of the Company or its Restricted
                  Subsidiaries, whether now existing or hereafter created;
                  but only so

                                     -3-
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

                  long as the obligations of the Company and its
                  Restricted Subsidiaries thereunder shall not be deemed to
                  be liabilities on the balance sheet of the Company or any
                  Restricted Subsidiary prepared in accordance with GAAP.

                           "'PRIORITY DEBT' shall mean shall mean (x) any
                  Funded Debt of the Company secured by Liens permitted by
                  paragraphs (f), (g), (h) and (i) of Section 5.9 and (y)
                  any Funded Debt of a Restricted Subsidiary; PROVIDED,
                  however that Funded Debt in respect of Excluded Subsidiary
                  Obligations shall not be considered Priority Debt."

                   (b)   The following definitions are hereby incorporated into
         Section 8.1 in their correct alphabetical order:

                           "'BANK CREDIT AGREEMENT' shall mean the credit
                  agreement between the Company and its bank lenders dated as
                  of December __, 1999, as amended, restated, refinanced,
                  replaced, increased or reduced from time to time and any
                  successor bank credit agreement."

                           "'EXCLUDED SUBSIDIARY OBLIGATIONS' shall mean (a)
                  the Guaranty Agreement and any other Guaranty of Debt of
                  the Company by a Subsidiary Guarantor which shall be a
                  party to the Guaranty Agreement and (b) obligations of
                  Subsidiary Guarantors as Co-obligors with the Company on
                  Debt; PROVIDED that each creditor which is a beneficiary of
                  an Excluded Subsidiary Obligation shall have become a party
                  to the Intercreditor Agreement."

                           "'GUARANTY AGREEMENT' that certain Guaranty
                  Agreement dated as of December 1, 1999 from certain
                  Subsidiaries of the Company."

                           "'INTERCREDITOR AGREEMENT' shall mean that certain
                  Intercreditor Agreement dated as of December 17, 1999 among
                  the Purchasers and the banks which are parties to the Bank
                  Credit Agreement and certain other creditors which are
                  beneficiaries of Excluded Subsidiary Obligations."

                           "'SECOND AMENDMENT' shall mean that certain Second
                  Amendment dated as of December 1, 1999 among the Company
                  and the Purchasers named therein."

                                     -4-
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

                           "SUBSIDIARY GUARANTOR' shall mean each Subsidiary of
                  the Company which shall be a party to the Guaranty Agreement.

SECTION 2.           REPRESENTATIONS AND WARRANTIES.

         The Company represents and warrants that all representations and
warranties set forth in Exhibit A hereto are true and correct as of the
Effective Date.

SECTION 3.           CONDITIONS PRECEDENT.

         The Effective Date for this Second Amendment shall be subject to the
fulfillment by the Company of the following conditions precedent:

         SECTION 3.1.    PAYMENT OF SPECIAL COUNSEL FEES.  The Company shall
have paid the reasonable fees and disbursements of your special counsel for
which the Company shall have received an invoice at least one business day
prior to the Closing Date.

         SECTION 3.2.    CONSENT OF REQUISITE HOLDERS.  The Company shall have
obtained the written consent of the Holders at least 66-2/3% in aggregate
principal amount of the Notes, as evidenced by their signatures at the foot
of this Second Amendment.

         SECTION 3.3.    INTERCREDITOR AGREEMENT.  The Intercreditor
Agreement, substantially in the form of Exhibit B hereto, shall have been
executed and delivered by the parties thereto.

         SECTION 3.4.    GUARANTY AGREEMENT.  The Guaranty Agreement shall
have been duly authorized, executed and delivered by each of Subsidiary,
shall constitute the legal, valid and binding contract and agreement of each
such Subsidiary and shall be enforceable against each such Subsidiary in
accordance with its terms and shall be substantially in the form of Exhibit C
hereto.

         SECTION 3.5.    OPINION OF COUNSEL.  The Holders shall have received
from Gibson, Dunn & Crutcher LLP, counsel for the Company, their opinion
dated the Closing Date, in form and substance satisfactory to the Holders,
and covering the matters set forth in Exhibit D hereto.

SECTION 4.       MISCELLANEOUS.

         SECTION 4.1.    EFFECTIVE DATE.  This Second Amendment shall become
effective on December 17, 1999 (the "EFFECTIVE DATE").

         SECTION 4.2.    COUNTERPARTS.  This Second Amendment may be executed
in any number of counterparts, each executed counterpart constituting an
original, but all together only one Second Amendment.

                                    -5-
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

         SECTION 4.3.    HEADINGS.  The headings of the sections of this
Second Amendment are for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions
hereof.

         SECTION 4.4.    GOVERNING LAW.  This Second Amendment shall be
governed by and construed in accordance with the laws of the State of New
York.

         SECTION 4.5.    REFERENCES TO NOTE AGREEMENTS.  Any and all notices,
requests, certificates and other instruments executed and delivered
concurrently with or after the execution of the Second Amendment may refer to
the Note Agreements without making specific reference to this Second
Amendment, but nevertheless all such references shall be deemed to include
this Second Amendment unless the context shall otherwise require.

         SECTION 4.6.    RATIFICATION.  Except to the extent hereby modified
or amended, the Note Agreements are in all respects hereby ratified,
confirmed and approved by the parties hereto.

         SECTION 4.7.    FEES AND EXPENSES.  All fees and expenses relating
to the subject matter of this Second Amendment, including, without
limitation, all fees and expenses of special counsel to the Holders, shall be
paid by the Company.

                                     -6-
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

         Please signify your consent to the amendment of the Note Agreements
between you and the Company by signing and returning this Second Amendment.

                                       K2, INC.

                                       By
                                          Name:
                                                ------------------------------
                                          Title:
                                                ------------------------------

         Accepted as of the date first above written.

                                      PRINCIPAL LIFE INSURANCE COMPANY

                                      By:    Principal Capital
                                             Management, LLC, a Delaware
                                             limited liability company,
                                             its authorized signatory

                                             By
                                                ------------------------------
                                                Name:
                                                Title:

                                             By
                                                ------------------------------
                                                Name:
                                                Title:

                                             Holder of $20,000,000 in
                                             aggregate original principal
                                             amount of the Notes

         Accepted as of the date first above written.

                                       MASSACHUSETTS MUTUAL LIFE
                                       INSURANCE COMPANY

                                       By
                                         -------------------------------------
                                         Name:
                                               -------------------------------
                                         Title:
                                               -------------------------------

                                               Holder of $10,000,000 in
                                               aggregate original principal
                                               amount of the Notes

                                     -7-
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

         Accepted as of the date first above written.

                                       LIFE INVESTORS INSURANCE
                                       COMPANY OF AMERICA

                                       By
                                         -------------------------------------
                                         Name:
                                               -------------------------------
                                         Title:
                                               -------------------------------

                                               Holder of $3,000,000 in
                                               aggregate original
                                               principal amount of the
                                               Notes

         Accepted as of the date first above written.

                                       MONUMENTAL LIFE INSURANCE COMPANY

                                       By
                                         -------------------------------------
                                         Name:
                                               -------------------------------
                                         Title:
                                               -------------------------------

                                               Holder of $7,000,000 in
                                               aggregate original principal
                                               amount of the Notes

                                     -8-
<PAGE>

                                   SCHEDULE I

Principal Life Insurance Company
c/o Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa  50392-0800

Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts  01111

Life Investors Insurance Company of America
c/o AEGON USA Investment Management, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa  52499

Monumental Life Insurance Company
c/o AEGON USA Investment Management, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa  52499

<PAGE>

                         REPRESENTATIONS AND WARRANTIES

         The Company hereby represent and warrants to you as follows:

         1.    ORGANIZATION; POWER AND AUTHORITY.  The Company and each
Restricted Subsidiary is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company and each Restricted Subsidiary has the
corporate power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver the Second Amendment or the
Guaranty Agreement, as the case may be, and to perform the provisions thereof.

         2.    AUTHORIZATION, ETC. The Second Amendment has been duly
authorized by all necessary corporate action on the part of the Company, and
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

               The Guaranty Agreement has been duly authorized by all
necessary corporate action on the part of each Subsidiary, and constitutes a
legal, valid and binding obligation of the such Subsidiary enforceable
against such Subsidiary in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

         3.    COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. Neither the
execution, delivery and performance by the Company of the Second Amendment
nor the execution, delivery and performance by the Subsidiaries of the
Guaranty Agreement will (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect
of any property of the Company or any Restricted Subsidiary under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, or any other agreement or instrument to
which the Company or any Restricted Subsidiary is bound or by which the
Company or any Restricted Subsidiary or any of their respective properties
may be bound or affected, (b) conflict with or result in a breach of any of
the terms, conditions or provisions of any order, judgment, decree, or ruling
of any court, arbitrator or governmental authority or agency, Federal, State
or local, applicable to the Company or any Restricted Subsidiary or (c)
violate any provision of any statute or other rule or regulation of any

                                   EXHIBIT A
                              (to Second Amendment)
<PAGE>

K2, Inc.                                    Second Amendment to Note Agreements

governmental authority or agency, Federal, State or local, applicable to the
Company or any Restricted Subsidiary.

         4.   GOVERNMENTAL AUTHORIZATIONS, ETC.. No consent, approval or
authorization of, or registration, filing or declaration with, any
governmental authority or agency, Federal, State or local is required in
connection with the execution, delivery or performance by the Company of this
Agreement or the Notes or by the Subsidiaries of the Guaranty Agreement.

         5.    GOVERNMENTAL CONSENT. No consent, approval or authorization
of, or registration, filing or declaration with, any governmental authority
or agency, Federal, State or local, is required in connection with the
execution, delivery or performance by the Subsidiaries of the Guaranty
Agreement.

         6.    NO DEFAULTS. No Default or Event of Default has occurred and
is continuing.

                                     -2-
<PAGE>

                         FORM OF INTERCREDITOR AGREEMENT

                                   EXHIBIT B
                              (to Second Amendment)
<PAGE>

                           FORM OF GUARANTY AGREEMENT

                                   EXHIBIT C
                              (to Second Amendment)
<PAGE>

                       FORM OF OPINION OF COMPANY COUNSEL

                  The closing opinion of Gibson, Dunn & Crutcher LLP, counsel
for the Company, which is called for by Section 3.5 of the Second Amendment,
shall be dated the Closing Date and addressed to the Holders, shall be
satisfactory in scope and form to the Holders and shall be to the effect that:

                    1.   The Company is a corporation duly organized, validly
         existing and in good standing under the laws of the State of
         Delaware, has the corporate power and authority and is duly
         authorized to enter into the Second Amendment and perform the Note
         Agreements, as amended by the Second Amendment, and has full
         corporate power and authority to conduct the activities in which, to
         such counsel's knowledge, it is now engaged.

                    2.   The Second Amendment has been duly authorized,
         executed and delivered by the Company and the Note Agreements, as
         amended by the Second Amendment, constitute the legal, valid and
         binding agreement of the Company enforceable against the Company in
         accordance with its terms, subject to bankruptcy, insolvency,
         fraudulent conveyance or similar laws affecting creditors' rights
         generally, and general principles of equity (regardless of whether
         the application of such principles is considered in a proceeding in
         equity or law).

                    3.   No approval, consent, filing, registration or
         qualification with any governmental authority or agency, Federal,
         State or local, is necessary on the part of the Company in
         connection with the execution and delivery of the Second Amendment.

                    4.   The execution, delivery and performance by the Company
         of the Second Amendment will not conflict with or result in any
         breach of any of the provisions of or constitute a default under or
         result in the creation or imposition of any Lien upon any property
         of the Company pursuant to the provisions of the Articles of
         Incorporation or By-laws of the Company or any agreement or other
         instrument for borrowed money known to such counsel to which the
         Company is a party or by which the Company may be bound.

         The opinion of Gibson, Dunn & Crutcher LLP shall cover such other
matters relating to the sale of the Notes as the Holders may reasonably
request. With respect to matters of fact on which such opinion is based, such
counsel shall be entitled to rely on appropriate certificates of public
officials and officers of the Company. The opinion of Gibson, Dunn & Crutcher
LLP may be relied upon by the Holders and its assignees and transferees.

                                   EXHIBIT D
                              (to Second Amendment)

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