Document:

<PAGE>

                                                                   EXHIBIT 10.13

                            DESKTALK SYSTEMS, INC.,
                           A CALIFORNIA CORPORATION

                       1997 INCENTIVE STOCK OPTION PLAN
                             Effective May 1, 1997
<PAGE>

                               TABLE OF CONTENTS

                        1997 INCENTIVE STOCK OPTION PLAN
                             Effective May 1, 1997

Paragraph                                                                   Page
---------                                                                   ----

1.   PURPOSE.............................................................      1

2.   STOCK SUBJECT TO THE PLAN...........................................      1

3.   ADMINISTRATION......................................................      1

4.   EMPLOYEES ELIGIBLE..................................................      2

5.   OPTION PRICE........................................................      2

6.   TERM OF OPTIONS.....................................................      2

7.   EXERCISE OF OPTIONS.................................................      2

8.   NON-TRANSFERABILITY OF OPTIONS......................................      3

9.   TERMINATION OF EMPLOYMENT...........................................      3

10.  DISABILITY OF OPTIONEE..............................................      3

11.  DEATH OF OPTIONEE...................................................      3

12.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION..........................      4

13.  MERGER OR CONSOLIDATION.............................................      4

14.  VESTING OF RIGHTS UNDER OPTIONS.....................................      4

15.  RESTRICTIVE STOCK PURCHASE AGREEMENT................................      4

16.  PREEMPTION BY APPLICABLE LAWS AND REGULATIONS.......................      5

17.  NO RESTRICTION ON CORPORATE ACTION..................................      5

18.  RESTRICTED SECURITIES...............................................      5

19.  NON-ASSIGNABILITY...................................................      5

20.  APPLICATION OF FUNDS................................................      5

21.  AMENDMENT AND TERMINATION...........................................      5

22.  EFFECTIVE DATE......................................................      6

23.  GOVERNING LAW; CONSTRUCTION.........................................      6

24.  TITLES AND HEADINGS.................................................      6

                                      (ii)
<PAGE>

                             DESKTALK SYSTEMS, INC.

                        1997 INCENTIVE STOCK OPTION PLAN
                             Effective May 1, 1997

    DESKTALK SYSTEMS, INC., a California corporation (the "Company"), hereby
formulates and adopts the following 1997 INCENTIVE STOCK OPTION PLAN (the "1997
Plan") for key employees of the Company.

     1.   PURPOSE.    The purpose of the 1997 Plan is to further the growth and
          --------
development of the Company by encouraging key employees of the Company to obtain
a proprietary interest in the Company through the ownership of Common Stock,
thereby providing such employees with additional incentive to continue in the
employ and to promote the success of the Company, and affording the Company the
means of attracting to its service employees of outstanding quality.

     2.   STOCK SUBJECT TO THE PLAN.
          --------------------------

          2.1  An aggregate of five hundred thousand (500,000) shares of Common
Stock of the Company (the "Common Stock"), subject however, to adjustment or
change pursuant to Paragraph 12 hereof, shall be reserved for issuance upon the
exercise of options which may be granted from time to time in accordance with
1997 Plan (the "Options").  If, for any reason, an Option shall lapse, expire or
terminate without having been exercised in full, the unpurchased shares covered
thereby shall again be available for the purposes of the 1997 Plan.

          2.2  Subject to Paragraph 2.1 above, the aggregate fair market value
(determined as of the time the option is granted) of the Common Stock underlying
Options granted to any key employee in any calendar year shall not exceed
$100,000 calculated under section 422 (d) of the Internal Revenue Code of 1986,
as amended, with respect to such employee.

     3.   ADMINISTRATION.   The Board of Directors shall administer the 1997
          ---------------
Plan and, subject to the provisions of the 1997 Plan, shall have authority in
its discretion to determine the employees to whom, and the time or times at
which, Options shall be granted and the number of shares to be subject to each
Option.  In making such determination, the Board of Directors may take into
account the nature of the services rendered by the respective employees, their
present and potential contributions to the Company's success and such other
factors as the Board of Directors in its sole discretion shall deem relevant.
Subject to the express provisions of the 1997 Plan, the Board of Directors shall
also have the authority to interpret the 1997 Plan, to prescribe, amend and
rescind rules and regulations relating to it, to the term and the terms and
provisions of the respective Option Agreements, which shall be substantially in
the form attached hereto as Exhibit "A", and to make all of the determinations
necessary or advisable for the administration of the 1997 Plan all of which
determinations shall be conclusive and not subject to review.

                                       1
<PAGE>

    4.   EMPLOYEES ELIGIBLE.   Options may be granted under the 1997 Plan to any
         -------------------
key employee of the Company.  Employees who are also officers or directors of
the Company shall not by reason of such offices be ineligible to receive Options
under the 1997 Plan. No person who would own, directly or indirectly,
immediately after the granting of an Option to him, more than ten percent (10%)
of the total combined voting power or value of all classes or stock of the
Company shall be eligible to receive any options under the 1997 Plan, unless the
exercise price of the Option granted is at least 110 percent of the fair market
value of the stock subject to the Option. An employee receiving an option under
the 1997 Plan is hereinafter referred to as an "Optionee".

     5.   OPTION PRICE.   The exercise price per share for each option shall be
          -------------
equal to the fair market value for each share of the common stock of the Company
on the date of grant as determined by the Board of Directors after consideration
of the earnings history, book value and prospects of the Company in light of
market conditions generally.  The exercise price as fixed by the Board of
Directors shall be conclusive and not subject to review.

     6.   TERM OF OPTIONS.   The term of each Option shall be six years from the
          ----------------
date of grant thereof, but shall be subject to earlier termination as herein
provided.  Except as provided in Paragraphs 10 and 11 hereof, no Option shall be
exercisable unless the Optionee shall have been an employee of the Company
continuously from the date of grant to the date of exercise.  The Board of
Directors may, in its discretion, accelerate the exercisability of all or part
of an Optionee's Option that is not exercisable as of the date of death,
disability or employment termination of the optionee.

     7.   EXERCISE OF OPTIONS.
          --------------------

          7.1  No Option granted under the 1997 Plan shall be exercisable until
one year from the date of grant.  Thereafter each Option shall be exercisable as
follows:

               7.1.1  At the end of one year from such date of grant, up to
twenty-five percent (25%) of the total shares subject to such Option; and

               7.1.2  At the end of the thirteenth month of employment and at
the expiration of each month thereafter from the date of grant an additional
1/48 of the total shares subject to such Option until the completion of the
fourth year of employment when the Option shall be one hundred percent (100%)
exercisable until termination of the option. Provided, however, that no option
may be exercised as to less than one hundred (100) shares at any one time (or
the remaining shares then purchasable under the option if less than one hundred
(100) shares).

                                       2
<PAGE>

          7.2  The exercise of an Option shall be contingent upon receipt from
the optionee of a written representation that at the time of such exercise it is
the Optionee's then present intention to acquire the Option shares for
investment and not with a view to distribution or resale thereof, the signing of
the Company's then standard Lock Up Agreement restricting, under certain
conditions the sell or transfer of the Stock upon registration under the
Securities Act of 1933 as amended, and upon receipt by the Company of cash, or a
certified or bank cashier's check to its order, for the full purchase price of
such shares and such other representations as may be reasonably required by the
Corporation.

          7.3  An Optionee shall have none of the rights of a shareholder with
respect to shares subject to the option until a certificate for such shares
shall have been issued to the Optionee upon the due exercise of the option.

     8.   NON-TRANSFERABILITY OF OPTIONS.   No Option granted pursuant to the
          -------------------------------
1997 Plan shall be transferable otherwise than by a Will or the laws of descent
and distribution and an Option may be exercised, during the lifetime of the
optionee, only by the  optionee.

     9.   TERMINATION OF EMPLOYMENT.   In the event that the employment of an
          --------------------------
Optionee shall be terminated by the Company for any reason, other than by reason
of death or disability, such Option shall forthwith terminate, lapse and expire,
except that within one month from the date of termination the Optionee may
exercise an Option to the extent such Option was exercisable by such Optionee at
the date of termination.  So long as an Optionee shall continue to be in the
employ of the Company, his or her Option shall not be affected by any change of
duties or position.  Absence on leave approved by the Company shall not be
considered an interruption of employment for any purpose under the 1997 Plan.
Nothing in the 1997 Plan or in any Option Agreement granted hereunder shall
confer upon any optionee any right to continue in the employ of the Company or
interfere in any way with the right of the Company to terminate the employment
of an optionee at any time.

     10.  DISABILITY OF OPTIONEE.   If the employment of an Optionee shall be
          -----------------------
terminated by reason of disability, such Optionee may, within three months from
the date of termination for such cause, exercise the option to the extent such
Option was exercisable by such Optionee at the date of termination.
Notwithstanding the foregoing, no option may be exercised after six years from
the date of its grant.

     11.  DEATH OF OPTIONEE.    If an Optionee shall die while in the employ of
          ------------------
the Company, the Option theretofore granted to him or her may be exercised, but
only to the extent such Option was exercisable by the optionee at the date of
death, by the legatees of such optionee under his or her Last Will, or by his or
her personal representative or distributees, within three months from the date
of death, but in no event after six years from the date of the grant of the
Option.

                                       3
<PAGE>

     12.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If at any time after the
          -------------------------------------------
date of grant of an Option, the Company shall, by stock dividend, stock split,
reverse stock split, combination, reclassification or exchange or through merger
or consolidation, or otherwise, change its shares of Common Stock into a
different number or kind or class of shares or other securities or property,
then the number of shares covered by such Option and the price per share thereof
shall be proportionally adjusted for any such change by the Board of Directors
whose determination thereon shall be conclusive.  In the event that a fraction
of a share results from the foregoing adjustment, the fraction shall be
eliminated and the price per share of the remaining shares subject to the Option
adjusted accordingly.

     13.  MERGER OR CONSOLIDATION.  After a merger of one or more corporations
          ------------------------
into the Company in which the Company shall survive, or after the consolidation
of the Company and one or more corporations, in which the resulting corporation
remains as an independent corporation, Optionee shall, at the same cost, be
entitled upon exercise of an Option to receive (subject to any required action
by shareholders) such securities of the surviving or resulting corporation as
the Board of Directors of such corporation, in its sole discretion, and without
liability to any person, shall determine to be equivalent, as nearly as
practicable to the nearest whole number and class of shares, to the shares, that
were then subject to such Option, and such shares, after such merger or
consolidation, shall be deemed to be shares of Common Stock for all purposes of
the 1997 Plan.

     14.  VESTING OF RIGHTS UNDER OPTIONS.   Neither anything contained in the
          --------------------------------
1997 Plan nor in any resolution adopted or to be adopted by the Board of
Directors or the shareholders of the Company shall constitute the vesting of any
rights under any Option.  The vesting of such rights shall take place only when
a written option Agreement substantially in the form of the Option Agreement
which is attached to the 1997 Plan as Exhibit "A" shall be duly executed and
delivered by and on behalf of the Company and the employee to whom the option
shall be granted.

     15.  RESTRICTIVE STOCK PURCHASE AGREEMENT.    Concurrently with the
          -------------------------------------
exercise of an option, the optionee shall execute a Restrictive Stock Purchase
Agreement (the "Agreement") substantially in the form attached as Exhibit "B" to
the 1997 Plan and incorporated herein by this reference.  The purpose of the
Restrictive Stock Purchase Agreement is to provide the optionee with an
opportunity to dispose of his or her Common Stock upon the occurrence of certain
events, to provide that such Common Stock shall be transferable only upon
compliance with the terms and conditions of the Agreement and to provide for
continuity of operating, administrative and sales personnel of the Company to be
derived from the opportunity of share ownership.

                                       4
<PAGE>

     16.  PREEMPTION BY APPLICABLE LAWS AND REGULATIONS.   Anything in  the 1997
          ----------------------------------------------
Plan or any agreement entered into pursuant to the 1997 Plan to the contrary
notwithstanding, if, at any time specified herein or therein for the making of
any determination or the issuance or other distribution of shares of Common
Stock, as the case may be, any law, regulation or requirement of any
governmental authority having jurisdiction shall require either the Company or
the Optionee (or the Optionee's beneficiary) , as the case may be, to take any
action in connection with such determination, the shares then to be issued or
distributed, or the making of such determination or payment, as the case may be,
shall be deferred until such action shall have been taken.

     17.  NO RESTRICTION ON CORPORATE ACTION.   Nothing contained in the 1997
          -----------------------------------
Plan shall be construed to prevent the Company from taking any corporate action
that is deemed by the Board of Directors of the Company to be appropriate or in
the best interest of the Company, whether or not such action would have an
adverse effect on the 1997 Plan or any award made under the 1997 Plan.  No
Optionee, beneficiary or other person shall have any claim against the Company
as the result of any such action.

     18.  RESTRICTED SECURITIES.   All Options and all shares issued pursuant to
          ----------------------
the 1997 Plan shall not be registered under the Federal Securities Laws or any
State Securities Laws, and the Option and all such shares shall be "Restricted
Securities" as defined in Rule 144 of the General Rules and Regulations of the
Securities Act of 1933, as amended (the "Act") and may not be offered for sale,
sold, or otherwise transferred except pursuant to an effective registration
statement under the Act or pursuant to an exemption from registration under the
Act. Accordingly, all certificates evidencing shares covered by an option shall
bear a restrictive legend to this effect.

     19.  NON-ASSIGNABILITY.  Neither an optionee nor an Optionee's beneficiary
          ------------------
shall have the power or right to sell, exchange, pledge, transfer, assign or
otherwise encumber or dispose of such Optionee's or beneficiary's interest
arising under the 1997 Plan; nor shall such interest be subject to seizure for
the payment of an Optionee's or beneficiary's debts, judgments, alimony or
separate maintenance or be transferable by operation of law in the event of an
Optionee's or beneficiary's bankruptcy or insolvency and to the extent any such
interest arising under the 1997 Plan is awarded to a spouse pursuant to any
marital dissolution proceeding, such interest shall be deemed to be terminated
and forfeited notwithstanding any vesting provisions or other terms herein or in
the agreement evidencing such award.

     20.  APPLICATION OF FUNDS.    The proceeds received from the sale of shares
          ---------------------
pursuant to the 1997 Plan will be added to the working capital of the Company
and be available for general corporate purposes.

     21.  AMENDMENT AND TERMINATION.    The Board of Directors may
          --------------------------

                                       5
<PAGE>

from time to time and at any time suspend, discontinue or terminate the 1997
Plan and any awards and grants hereunder.  The Board of Directors may amend the
1997 Plan from time to time in such respects as it may deem advisable.

     22.  EFFECTIVE DATE.  The 1997 Plan, having been adopted by the Board of
          ---------------
Directors at a meeting duly held on May 1, 1997, shall be effective as of such
date, upon, and subject to, its approval by a majority in interest of the Common
Stock of the Company on or before the first anniversary of such date.  Unless
renewed by the Board of Directors, the 1997 Plan shall terminate on April 30,
2007.

     23.  GOVERNING LAW; CONSTRUCTION.  All rights and obligations under the
          ----------------------------
1997 Plan shall be governed by, and the 1997 Plan shall be construed in
accordance with, the laws of the State of California without regard to the
principles of conflicts of laws.

     24.  TITLES AND HEADINGS.  Titles and headings herein are for purposes of
          --------------------
reference only, and shall in no way limit, define or otherwise affect the
meaning or interpretation of any provisions of the 1997 Plan.

                                       6
<PAGE>

                                  Exhibit "A"

                               OPTION AGREEMENT

                            DESKTALK SYSTEMS, INC.,
                           A CALIFORNIA CORPORATION
<PAGE>

                               TABLE OF CONTENTS

                                OPTION AGREEMENT

Paragraph                                                                Page
---------                                                                ----

1.   PURCHASE PRICE...................................................      1

2.   EXERCISE OF OPTION...............................................      1

3.   METHOD OF EXERCISE...............................................      1

4.   TERMINATION OF EMPLOYMENT........................................      1

5.   DEATH OR DISABILITY..............................................      2

6.   ADJUSTMENTS TO CAPITALIZATION....................................      2

7.   MERGER OR CONSOLIDATION..........................................      2

8.   VESTING OF RIGHTS................................................      2

9.   NON-TRANSFERABILITY..............................................      2

10.  NOTICES..........................................................      3

11.  INVESTMENT REPRESENTATION........................................      3

12.  RESTRICTIVE STOCK PURCHASE AGREEMENT.............................      3

13.  INUREMENT........................................................      4

14.  GOVERNING LAW....................................................      4

                                      (i)
<PAGE>

                            DESKTALK SYSTEMS, INC.
                               OPTION AGREEMENT

       This Agreement is made and entered into by and between DESKTALK SYSTEMS,
INC., a California corporation (the "Company"), with its principal office at
19401 South Vermont Avenue, Suite F100, Torrance, California 90502, and
__________________________________________(the "Optionee"), whose address
is___________________________________________, as of the _________day
of________________________,19___, pursuant to the  1997 Incentive Stock Option
Plan of the Company (the " 1997 Plan").

    As an incentive and an inducement to the Optionee to continue in the employ
of the Company, and to devote his or her best efforts to promote the success of
the Company, the Company hereby grants to the Optionee the option to purchase
from the Company, at the times and upon the terms and conditions hereinafter set
forth, an aggregate of shares of common stock (the "Shares") of the Company (the
"Option").

     1.   PURCHASE PRICE.  Subject to the terms and conditions hereinafter set
          ---------------
forth, the purchase price of the Shares shall be ______________ per share.

     2.   EXERCISE OF OPTION.  The Option granted herein may be exercised at the
          -------------------
end of one year from the date hereof as to up to twenty-five percent (25%) of
the total Shares and at the end of the thirteenth month of employment and the
end of each subsequent month as to an additional 1/48 of the total Shares until
one hundred percent of the Option is exercisable, provided, however, that this
Option may not be exercised as to less than one hundred shares at any one time
(or the remaining shares then purchasable under the Option if less than one
hundred shares) and may not be exercised more than six years from the date of
grant, unless sooner terminated pursuant to the terms hereof.

     3.   METHOD OF EXERCISE.  Subject to prior termination as provided in
          -------------------
Paragraphs 4 and 5 hereof, the Option shall be exercisable as set forth above by
giving ten days written notice of exercise to the Company, which notice shall
specify the number of Shares to be purchased and the purchase price to be paid
therefore, and concurrently making payment to the Company of such purchase price
by certified or bank cashier's check payable to the order of the Company.  Upon
such exercise of the Option, the Company shall promptly issue the Shares so
purchased.  Such notice of exercise shall be accompanied by the letter required
by Paragraph 11, below.

     4.   TERMINATION OF EMPLOYMENT.  If the Optionee's services as an employee
          --------------------------
of the Company shall terminate at any time and for any

                                       1
<PAGE>

reason, with or without cause, the Option, together with all rights, privileges
and obligations hereunder, shall terminate forthwith; provided, however, that
for one month after such date of termination any unexercised portion of the
Option which might have been exercised at the date of such termination may be
exercised, in the manner provided in Paragraph 3 above. Notwithstanding the
foregoing, no Option may be exercised after six years from the date of its
grant.

     5.  DEATH OR DISABILITY.  If the optionee's services as an employee of the
         --------------------
Company shall terminate by reason of death or disability, the option, together
with all rights, privileges and obligations hereunder, shall terminate
forthwith; provided, however, that for three months after such date of
termination any unexercised portion of the Option which might have been
exercised at the date of such termination may be exercised, in the manner
provided in Paragraph 3 above, by the Optionee or the Optionee's executor or
administrators.  Notwithstanding the foregoing, no option may be exercised after
six years from the date of its grant.

     6.  ADJUSTMENTS TO CAPITALIZATION.  If at any time after the date hereof,
         ------------------------------
the Company shall, by stock dividend, stock split, reverse stock split,
combination, reclassification or exchange or through merger or consolidation, or
otherwise, change its shares of common stock into a different number or kind or
class of shares or other securities or property, the number of shares
purchasable upon exercise of the Option and the purchase price therefore shall
be proportionally adjusted by the Board of Directors pursuant to the  1997 Plan.

     7.  MERGER OR CONSOLIDATION.  After a merger of one or more corporations
         -----------------------
into the Company in which the Company shall survive, or after the consolidation
of the Company and one or more corporations, in which the resulting corporation
remains as an independent corporation, Optionee shall, at the same cost, be
entitled upon exercise of an Option to receive (subject to any required action
by shareholders) such securities of the surviving or resulting corporation as
the Board of Directors of such corporation, in its sole discretion, and without
liability to any person, shall determine to be equivalent, as nearly as
practicable to the nearest whole number and class of shares, to the Shares, and
such shares, after such merger or consolidation, shall be deemed to be Shares
subject to the  1997 Plan.

     8.  VESTING OF RIGHTS.  The Optionee (or any executor or administrator of
         ------------------
the optionee who may exercise the Option pursuant to this Agreement) shall not
be deemed to be a shareholder of the Company nor shall he or she have any rights
or privileges as a shareholder of the Company by virtue of the Option, and he or
she shall acquire such status, rights and privileges only when, as and to the
extent the Option is duly exercised in accordance with the terms hereof.

     9.  NON-TRANSFERABILITY.  The Option and the rights and privileges
         --------------------
conferred hereby shall not be transferable other than by will or by the laws of
descent and distribution, and during the Optionee's lifetime shall be
exercisable only by the optionee.

                                       2
<PAGE>

     10.  NOTICES.  Any notice required to be given under the terms of this
          --------
Agreement, including any written notice of exercise given pursuant to Paragraph
3 hereof, shall be given by registered or certified mail, return receipt
requested.  Any such notice shall be addressed, if to the Company, at its
address as set forth above, to the attention of its President, and if to the
Optionee, at his or her address as set forth above, or at such other address as
either party may hereafter designate by notice to the other.

     11.  INVESTMENT REPRESENTATION.  If the Shares have not been registered
          --------------------------
under the Securities Act of 1933, as amended (the "Act"), the exercise of any
part or all of the Option shall be conditioned upon delivery to the Company of a
letter from the Optionee addressed to the Company stating in substance (i) that
the Shares proposed to be acquired by the Optionee upon such exercise are being
acquired for his or her own account for investment and not with a view to sale
or distribution, and (ii) that the Optionee understands that the Shares acquired
must be held indefinitely unless they are subsequently registered under the Act,
or an exemption from such registration is available.  In addition, in all cases,
the Optionee shall deliver to the Company prior to exercise of any part or all
of the Option Shares a letter to the Company stating in substance (i)  that if
requested at any time by the Company or any representative of the underwriters
in connection with any registration of the offering of any securities of the
Company under the Securities Act of 1933, as amended (the "Securities Act"), the
Optionee agrees not to sell or otherwise dispose of, whether privately
negotiated or open market transactions, any shares of Common Stock or other
securities of the Company held by the Optionee during such period as the Company
and the representatives of the underwriters may request (not to exceed 180 days)
following the effective date of any registration statement of the Company filed
under the Securities Act for an underwritten public offering, and the Optionee
agrees that the Company may impose stop-transfer instructions with respect to
any securities of the Company subject to the foregoing restrictions until the
end of such market standoff period, and the Optionee shall enter into a 180
day(or such lesser period as the representative of the underwriters may request)
market standoff agreement with the representative of the Company's underwriters
for each underwritten public offering by the Company.

    12.  RESTRICTIVE STOCK PURCHASE AGREEMENT.  Concurrently with the exercise
         -------------------------------------
of an Option, the Optionee shall execute a Restrictive Stock Purchase Agreement
(the "Agreement") substantially in the form attached as Exhibit "B" to the 1997
Plan and incorporated herein by this reference.  The purpose of the Restrictive
Stock Purchase Agreement is to provide the Corporation with an opportunity to
acquire the Shares upon the occurrence of certain events, to provide that such
Shares shall be transferable only upon compliance with the terms and conditions
of the Agreement and to provide for continuity of operating, administrative and
sales personnel of the Company to be derived from the opportunity of share
ownership.

                                       3
<PAGE>

     13.  INUREMENT.  This Agreement shall be binding. upon and inure to the
          ----------
benefit of any successor or successors of the Company.

     14.  GOVERNING LAW.  This Agreement shall be interpreted under the laws of
          --------------
the State of California applicable to agreements entered into and to be
performed entirely within such state.

     IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
officer of the Company and by the Optionee as of the day and year set forth
below.

Dated:                                   DESKTALK SYSTEMS, INC.

                                         By___________________________
                                           David J. Kaufman, President

Dated:                                   NAME

                                         By____________________________
                                           Optionee

                                       4
<PAGE>

                                  Exhibit "B"

                      RESTRICTIVE STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                            DESKTALK SYSTEMS, INC.,
                           A CALIFORNIA CORPORATION

                                      AND

             _____________________________________________________

                              Stock Option Issuee
<PAGE>

                               TABLE OF CONTENTS

                      RESTRICTIVE STOCK PURCHASE AGREEMENT

Paragraph                                                                 Page
---------                                                                 ----

1.    RESTRICTION ON SUBJECT STOCK......................................    1

2.    INTER VIVOS TRANSFERS.............................................    2

3.    PURCHASE ON TERMINATION...........................................    3

4.    PURCHASE PRICE....................................................    4

5.    LEGEND CONDITION; CERTIFICATES....................................    4

6.    CONTINUED EMPLOYMENT..............................................    5

7.    TERMINATION.......................................................    5

8.    INVESTMENT REPRESENTATION.........................................    5

9.    GOVERNING LAW; SUCCESSORS.........................................    5

10.   ENFORCEMENT.......................................................    6

11.   ARBITRATION.......................................................    6

12.   SEVERABILITY......................................................    6

13.   ATTORNEYS, FEES...................................................    6

14.   PARAGRAPH HEADINGS................................................    6

15.   NOTICES...........................................................    7

16.   ENTIRE AGREEMENT..................................................    7

17.   REPRESENTATION OF COUNSEL.........................................    8

18.   EFFECTIVE DATE....................................................    8

                                      (i)
<PAGE>

                                  Exhibit "B"

                      RESTRICTIVE STOCK PURCHASE AGREEMENT
                      ------------------------------------

THIS AGREEMENT (the "Agreement") is made as of _________________, 19_____, by
and between DESKTALK SYSTEMS, INC., a California corporation (the "Company"),
located at 19401 South Vermont Avenue, Suite F100, Torrance, California 90502
and  ________________________________________________________ (the "Purchaser"),
with reference to the following facts:

     A.   The Company is a corporation engaged in the business of producing and
distributing computer network management software;

     B.   The authorized capitalization of the Company consists of 20,000,000
shares of common stock (the "Common Stock")and 4,000,000 shares of preferred
stock (the "Preferred Stock";

     C.   The Purchaser has been engaged as a key employee of the Company, and
in connection with such employment the Company granted Purchaser an option to
purchase _______________(___) shares of Common Stock (the "Option") pursuant to
its 1997 Incentive Stock Option Plan, and evidenced by an Option Agreement dated
_____________________, 19_____(the "Option Agreement");

     D.   The Purchaser has exercised the Option with respect to _______________
(_____) shares of Common Stock (the "Subject Stock") for ___________________
($_____________) per share, pursuant to the terms of the Option Agreement, and
the Company proposes to issue the Subject Stock, subject to the terms of this
Agreement; and

     E.   Concurrently with such sale and issuance, the Company and the
Purchaser are entering into this Agreement (i) to provide for the disposition of
the Subject Stock upon the occurrence of certain events, (ii) to provide the
Subject Stock shall be transferable by the Purchaser only upon compliance with
the terms and conditions of this Agreement and (iii) to provide for continuity
of operating, administrative and sales personnel of the Company through equity
ownership of the Company.

NOW THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed as follows:

          1.  RESTRICTION ON SUBJECT STOCK.  The Purchaser shall not have the
              -----------------------------
right or power either voluntarily or involuntarily (by operation of law or
otherwise) to sell, assign, transfer, pledge, hypothecate, or in any way
encumber any shares of the Subject Stock, or any legal or economic interest
therein without the prior written consent of the Company except in accordance
with this Agreement. In

                                       1
<PAGE>

the event the Subject Stock is transferred in violation of this Paragraph, the
transfer shall be null and void.

               1.1  If the Purchaser desires to sell all or any part of the
Subject Stock in a bona fide transaction during his lifetime, he shall give
written notice thereof to the Company. The notice shall name the proposed
transferee and specify the number of shares sought to be sold, the price offered
per share, the terms of payment and any other material terms or conditions of
the sale, including a written copy of the proposed offer to purchase.

               1.2  The Company shall have an option to purchase all or any part
of the Subject Stock the Purchaser desires to sell at the price and upon the
terms specified in the notice. The Company shall have thirty (30) days after the
receipt of such written notice to exercise its option. It shall exercise the
option by giving notice of such exercise to the Purchaser and by paying the
purchase price in the same manner as provided in the purchase offer.

               1.3  If the Company does not exercise the option provided for in
this Paragraph 1 as to all of the shares offered for sale by the Purchaser, the
Purchaser shall be entitled to sell the Subject Stock not purchased free of any
restrictions. He shall be entitled to surrender to the Company his Certificates
representing such unpurchased shares and to receive in lieu thereof new
Certificates for an equal number of shares, without the endorsement provided for
in Paragraph 5.1 hereof. Thereupon, the Purchaser shall cease to be a party to
this Agreement.

               1.4  If the offer from a proposed buyer for all or any part of
the Subject Stock states a consideration other than cash or evidences of
indebtedness, then for the purpose of determining the price stated in the offer,
the value of such other consideration shall be the fair market value of such
consideration either as agreed upon by the Purchaser and the Company within
twenty (20) days after the date of the notice or, if such agreement is not
reached, then as determined by arbitration pursuant to the procedure set forth
in Paragraph 11 hereof, and the parties shall be bound by the valuation so
determined.

          2.   INTER VIVOS TRANSFERS.   Notwithstanding any provisions to the
               ----------------------
contrary contained in this Agreement, the Purchaser, while he or she is living,
may at any time transfer any or all of his or her interest in the fully paid
Subject Stock to his or her spouse, descendants, spouses of any such
descendants, or the trustee(s) of trust(s) at any time established by the
Purchaser for the sole benefit of one or more of such persons (hereinafter
collectively called "Family Members").  In such event, the Family Member shall
hold the interest involved subject to all of the terms of this Agreement and,
upon demand made at any time by any of the parties to this Agreement, shall
execute an appropriate instrument to that effect.  All actions hereunder taken
or omitted by the Purchaser hereunder shall be binding on such Family Member.
Any obligations of the Purchaser hereunder

                                       2
<PAGE>

shall be obligations of such Family Member.  The Purchaser and Family Members of
the Purchaser shall be deemed one and the same indivisible unit, and all
interest transferred as permitted by this Paragraph shall be still deemed to be
held and owned by the Purchaser for the purpose of this Agreement.

          3.   PURCHASE ON TERMINATION.
               ------------------------

               3.1 If the Purchaser

     (i)    dies;

     (ii)   becomes disabled (as hereinafter defined);

     (iii)  has his employment by the Company terminated with or
     without cause;

     (iv)   voluntarily terminates his employment with the Company;

     (v)    obtains or becomes subject to an order for relief under
     the United States Bankruptcy Code, or a similar law in other jurisdictions;

     (vi)   makes an assignment for the benefit of his or her
     creditors;

     (vii)  is subject to legal process which shall permit the taking of any
     shares of the Subject Stock including, without limitation, division of the
     Subject Stock with a spouse in a marital dissolution proceeding (all of the
     foregoing being defined as a "Triggering Event");

the Company shall have the right to purchase from the Purchaser (or his or her
estate, successors, assigns, executor, administrator or personal representative
or trustees of intervivos trusts referred to in Paragraph 2 hereof, hereinafter
collectively referred to as "personal representative") , and the Purchaser (or
his or her personal representative) shall sell to the Company, all of the
Subject Stock at the purchase price and on the terms and conditions hereinafter
set forth.

               3.2  The closing for the purchase and sale (the "Closing"), if
the company exercises its right to acquire the subject stock, shall take place
at the office of the Company in Torrance, California within ninety (90) days
after the Company becomes aware of the Triggering Event; provided, however, if
such Triggering Event is occasioned by the death of the Purchaser, the Closing
shall take place within ninety (90) days after the later of (i) the
qualification of the personal representative of the Purchaser or (ii) the
Company becoming aware of the Triggering Event. The Company shall give the
Purchaser, or his or her

                                       3
<PAGE>

personal representative, and the Escrow Agent (as hereinafter defined) at least
ten (10) days prior notice of the time, date and place of Closing.  At the
Closing, the Company shall remit the purchase price (as hereinafter defined) in
the manner set forth in Paragraph 4 hereof.

               3.3  The term "disability", as used herein, shall mean such
mental or physical incapacity which prevents the Purchaser from thereafter
performing his normal and customary services for the Company. The determination
of whether such disability exists shall be made by the Company, in its sole
discretion, and the determination of the Company shall be final and binding upon
the Purchaser and his or her personal representative, if any.

               3.4  The restrictions on transferability of the Subject Stock
shall lapse as to any shares of the Subject Stock not acquired by the Company
pursuant to this Agreement upon the occurrence of a Triggering Event.

          4.   PURCHASE PRICE.  The purchase price to be paid by the Company for
               --------------
each share of the Subject Stock shall be determined by first computing one
hundred percent (100%) of the fair market value of the Company, as of the end of
the last fiscal quarter prior to the Triggering Event.  The fair market value as
so determined shall then be divided by the number of shares of Common Stock then
outstanding and the quotient multiplied by the number of shares of the Subject
Stock owned by the Purchaser.  The determination of fair market value shall be
made by the Board of Directors after consideration of the earnings history, book
value, and prospects of the Company in light of market conditions generally.
All values fixed by the Board of Directors shall be conclusive, final and
binding upon (i) the Company and its successors and assigns and (ii) the
Purchaser and the personal representative of Purchaser.  Any lien or encumbrance
on the Subject Stock as of the Closing shall reduce the purchase price by an
amount equal to the value of any and all such liens and encumbrances.  The
purchase price to be paid by the Company for the Subject Stock shall be paid to
the Purchaser (or his or her personal representative) by cashier's or certified
check at the Closing.

          5.   LEGEND CONDITION; CERTIFICATES.
               -------------------------------

               5.1  Each stock certificate now or hereafter issued to the
Purchaser evidencing the Subject Stock shall be endorsed as follows:

     "This stock certificate and the rights represented hereby are subject to
     all of the terms, covenants, conditions and limitations of a certain
     agreement made and entered into by__________________________________ with
     DESKTALK SYSTEMS, INC. , dated as of____________________ (the "Agreement"),

                                       4
<PAGE>

     a copy of which is on file with the Secretary of the aforesaid Company, and
     the holder of this certificate accepts and agrees to be bound by the
     Agreement."

               5.2  If the Purchaser is a California resident at the date of
this Agreement, then this Agreement shall be executed by the Purchaser and his
or her spouse, if any. If the Purchaser becomes a California resident at any
time after the date of this Agreement, his or her spouse shall promptly execute
such an acknowledgment.

               5.3  Each stock certificate now or hereafter issued to the
Purchaser evidencing any shares of the Subject Stock shall bear any legend
required by the California Department of corporations or any other governmental
agency with respect to the issuance and transfer of the Subject Stock.

               5.4  Each stock certificate now or hereafter issued to the
Purchaser evidencing any shares of the Subject Stock shall be endorsed as
follows:

     "The shares represented by this certificate have not been registered under
     the Securities Act of 1933, as amended, and are being issued pursuant to an
     exemption that limits their disposition and the transfer of such shares is
     therefore subject to those limitations."

          6.   CONTINUED EMPLOYMENT.   Nothing in this Agreement shall confer
               ---------------------
upon the Purchaser any right to continue in the employ of or to consult for the
Company or shall affect any right of the Company to terminate the employment of
Purchaser as would exist in the absence of this Agreement.

          7.   TERMINATION.   All restrictions under this Agreement shall
               ------------
continue until thirty (30) days after the Common Stock has been listed for
trading on a United States national securities exchange or has been trading in
the over-the-counter market for at least three months on the National
Association of Security Dealers Automated Quotation System.  Thereafter this
Agreement shall be of no further force or effect.

          8.   INVESTMENT REPRESENTATION.  The Purchaser represents that he
               --------------------------
or she is purchasing the Subject Stock for his or her own account for investment
purposes only and not with a view to the distribution thereof, and that he or
she will not dispose of the Subject Stock in violation of the federal securities
laws of the United States, or the State of California, or the jurisdiction where
he or she resides.

          9.   GOVERNING LAW; SUCCESSORS.  The execution, delivery,
               --------------------------
effectiveness and performance of this Agreement shall be governed by and
construed under the local laws of the State of California.

                                       5
<PAGE>

This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, representatives, executors, administrators,
successors and assigns, and the Purchaser, by signing this Agreement, directs
his or her personal representative to open his or her estate promptly in the
courts of proper jurisdiction and to procure, execute and deliver all documents,
including, but not limited to, appropriate orders of the Superior Court, Probate
Division (or court of comparable jurisdiction), and estate and inheritance tax
waivers, as shall be required to effectuate the purposes of this Agreement.

          10.  ENFORCEMENT.  The Purchaser acknowledges that it will be
               ------------
impossible to measure in money the damage to the Company if the Purchaser fails
to comply with any of the restrictions or obligations herein imposed upon the
transfer, encumbrance or other disposition of the Subject Stock, that such
restrictions and obligations are material, and that in the event of any such
failure, the Company will not have an adequate remedy at law or in damages.
Therefore, the Purchaser hereby consents to the issuance of an injunction or the
enforcement of the equitable remedies against him or her upon the filing of an
action by an aggrieved party without bond or other security, to compel
performance of the terms hereof, and waives any defenses thereto, including,
without limiting the generality of the foregoing, the defenses of (a) failure of
consideration, (b) breach of any other provision of this Agreement, and (c)
availability of relief in damages.  The foregoing provisions shall not limit any
other remedies which the aggrieved party may have at law or in equity in
connection with any breach, interpretation or nonperformance hereof.

          11.  ARBITRATION.  Subject to Paragraph 10 hereof, any controversy or
               ------------
claim arising out of or relating to this Agreement, or the breach thereof, shall
be settled by binding arbitration in the City of Los Angeles, in accordance with
the then current rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) may entered in any court having
jurisdiction thereof.

          12.  SEVERABILITY.  In the event any provision or provisions of this
               -------------
Agreement are for any reason adjudged to be indefinite, invalid or otherwise
unenforceable, such provision or provisions shall to such extent be severed and
disregarded, and the remaining provisions hereof shall subsist and be carried
into effect.

          13.  ATTORNEYS' FEES.  In the event any action, suit or proceeding
               ----------------
is instituted under or in connection with this Agreement by any party hereto
against any party hereto, the unsuccessful party therein agrees to pay the other
party therein such attorneys' fees as the Court or board of arbitration assuming
jurisdiction may adjudge reasonable in such action, suit or proceeding.

          14.  PARAGRAPH HEADINGS.  The headings of the paragraphs of this
               -------------------
Agreement are inserted solely for convenience and are not a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.

                                       6
<PAGE>

          15.  NOTICES.
               --------

               15.1  All notices hereunder to the Purchaser shall be sent to the
Purchaser at his or her address hereinabove set forth or at such other address
as the Purchaser may designate by written notice sent to the Company at its
office in Torrance, California, addressed to the attention of Paul Madick,
General Counsel.

               15.2  All notices to the Company hereunder shall be sent to its
offices in Torrance, California at the address hereinabove set forth, addressed
to the attention of Paul Madick, General Counsel.

               15.3  All notices shall be in writing and shall be deemed to have
been given on the date of service if served personally on the party to whom
addressed; or if mailed within the United States within seventy-two (72) hours
after mailing, if sent by first-class mail, registered or certified, return
receipt requested, postage prepaid.

               15.4  Any address set forth in this Agreement may be changed by
any party giving notice of such change to the other parties hereto in the manner
provided above.

          16.  ENTIRE AGREEMENT.  Except for the Option Agreement, this
               -----------------
Agreement is the entire agreement between the parties with respect to the
subject matter hereof, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof.  This Agreement may be
amended, supplemented or discharged, and any provision hereof may be modified or
waived only by a written agreement executed by all of the parties hereto.

                                       7
<PAGE>

          17.  REPRESENTATION OF COUNSEL.  The Purchaser acknowledges that
               -------------------------
Paul Madick, is counsel for the Company and does not represent the individual
interest of the Purchaser in this matter.  The Purchaser acknowledges that he or
she has been advised, and has been given the opportunity, to seek independent
counsel to advise him or her on' both the form and substance of this Agreement.

          18.  EFFECTIVE DATE.  This Agreement shall be effective as of the date
               --------------
it becomes fully executed by the parties hereto.

     IN WITNESS WHEREOF, the parties hereinbefore duly authorized have executed
this Agreement the day and year set forth opposite their respective signatures.

_________________________________          _______________________
Purchaser                                  Date

DESKTALK SYSTEMS, INC.

By________________________________         _______________________
David J. Kaufman, President                Date

                                       8
<PAGE>

     This is Page 9 of a Restrictive Stock Purchase Agreement by and between
DeskTalk Systems, Inc., and the spouse of the undersigned.

     I acknowledge that I have read and know and understand the contents of the
Restrictive Stock Purchase Agreement between my spouse and DeskTalk Systems,
Inc. (the "Company"), and hereby agree to be bound by its terms and provisions.
I am aware that by the provisions of the Agreement my spouse agrees to sell to
the Company shares of common stock upon the terms and conditions contained
therein, including my community, quasi-community, or similar interest in such
shares, and I agree that I will not bequeath such shares or any of them or any
interest therein by my Will if I should predecease my spouse.  I direct that the
residuary clause in my Will shall not be deemed to apply to my community,
quasicommunity, or similar interest, if any, in such shares.  I consent to have
the terms and conditions of the Agreement specifically enforced against my
estate if the executor of my estate shall fail to abide by such provisions and
my desires herein expressed.

Date:_____________________________

                                       _________________________________________

                                       9<PAGE>

                                                                   Exhibit 10.14

           SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     This Second Amended and Restated Registration Rights Agreement
("Agreement") is made as of this 11th day of April, 2000 by and among DeskTalk
Systems, Inc., a California corporation (the "Company"), the parties whose names
are set forth on Schedule I (individually, an "Investor" and collectively, the
                 ----------
"Investors") and the shareholders listed on Schedule II (individually, a
Shareholder and collectively, the Shareholders").

     WHEREAS, the Company and the Shareholders are parties to an Amended and
Restated Registration Rights Agreement dated April 18, 1997, as further amended
on December 8, 1998;

     WHEREAS, the Investors and the Company are parties to the Series D
Preferred Stock Purchase Agreement, dated the date hereof (the "Purchase
Agreement"), and in order to induce the Investors to enter into the Purchase
Agreement, the Company has agreed to provide the Investors the registration
rights set forth in this Agreement and the Company and the Shareholders have
agreed to amend and restate in its entirety the Amended and Restated
Registration Rights Agreement as set forth within.

     NOW, THEREFORE, in consideration of the foregoing and of the agreements
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

                                   SECTION 1

                 Restrictions on Transferability of Securities;
                 ----------------------------------------------
                         Compliance with Securities Act
                         ------------------------------

     1.1  Restrictions on Transferability.  The Shares and the Common Stock
          -------------------------------
issuable upon conversion of the Shares shall not be sold, assigned, transferred
or pledged except upon the conditions specified in the Agreement, which
conditions are intended to ensure compliance with provisions of the Securities
Act.  Each Investor shall cause any proposed purchaser, assignee, transferee, or
pledgee of the Shares or such Common Stock held by an Investor to agree to take
and hold such securities subject to the provisions and upon the conditions
specified in this Agreement including without limitation those imposed upon
Holders (as defined below) under Section 1.13.

     1.2  Certain Definitions.  As used in this Agreement, the following terms
          -------------------
shall have the following respective meanings:

          "Affiliate" shall mean an entity controlling, controlled by or under
           ---------
     common control with another entity.

                                       1
<PAGE>

          "Commission" shall mean the Securities and Exchange Commission or any
           ----------
     other federal agency at the time administering the Securities Act.

          "Holder" shall mean any Investor or Shareholder holding Registrable
           ------
     Securities and any person holding Registrable Securities to whom the rights
     under this Agreement have been transferred in accordance with Section 1.12
     hereof.

          "Initiating Holders" shall mean either (a) any Holder or Holders who
           ------------------
     in the aggregate are Holders of not less than 25% of the Registrable
     Securities and who request a registration pursuant to Section 1.5, or (b)
     Holders of not less than 50% of the Series D Registrable Securities and who
     request a registration pursuant to Section 1.5.

          "Restricted Securities" shall mean the securities of the Company
           ---------------------
     required to bear the legend set forth in Section 1.3 hereof.

          "Registrable Securities" means (i) shares of the Company's Common
           ----------------------
     Stock issued or issuable pursuant to the conversion of the Series B
     Preferred Shares, Series C Preferred Shares and Series D Preferred Shares,
     (ii) the Series A Conversion Shares and (iii) any shares of Common Stock
     issued or issuable in respect of the Shares or in respect of the shares of
     Common Stock or other securities issued or issuable pursuant to the
     conversion of the Shares upon any stock split, stock dividend,
     recapitalization or similar event; provided, however, that Registrable
     Securities shall not include:  (i) any such shares that have been sold
     pursuant to Rule 144 under the Securities Act or to the public pursuant to
     a registration statement filed under the Securities Act; and (ii) shares
     held by a Holder who would be entitled to sell all such shares pursuant to
     Rule 144 under the Securities Act in any 90-day period without limitation.

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

          "Registration Expenses" shall mean all expenses incurred by the
           ---------------------
     Company in complying with Sections 1.5, 1.6, and 1.7 hereof, including,
     without limitation, all registration, qualification and filing fees,
     printing expenses, escrow fees, fees and disbursements of counsel for the
     Company, 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).

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

                                       2
<PAGE>

          "Series A Conversion Shares" shall mean the issued and outstanding
           --------------------------
     shares of Common Stock that were issued upon the conversion of the Series A
     Preferred Stock of the Company.

          "Series B Preferred Shares" shall mean all of the Company's Series B
           -------------------------
     Preferred Stock purchased by Shareholders pursuant to that certain Series B
     Preferred Stock Purchase Agreement dated April 18, 1997.

          "Series C Preferred Shares" shall mean all of the Company's Series C
           -------------------------
     Preferred Stock purchased by Shareholders pursuant to that certain Series C
     Preferred Stock Purchase Agreement dated December 8, 1998.

          "Series D Preferred Shares" shall mean all of the Company's Series D
          --------------------------
     Preferred Stock purchased by Investors pursuant to that certain Series D
     Preferred Stock Purchase Agreement dated April 11, 2000.

          "Series D Registrable Securities" shall mean Registrable Securities
           -------------------------------
     resulting from the conversion of the Series D Preferred Stock and
     Registrable Securities issued or issuable in respect of the Series D
     Preferred Stock.

          "Shares" shall mean the Series A Conversion Shares, the Series B
           ------
     Preferred Stock, the Series C Preferred Stock and Series D Preferred Stock.

          "Selling Expenses" shall mean all underwriting discounts, selling
           ----------------
     commissions (including any non-accountable expense allowance of the
     underwriters expressed as a fraction of the gross offering proceeds) stock
     transfer taxes applicable to the securities registered by the Holders and
     all fees and disbursements of counsel for the Holders.

     1.3  Restrictive Legend.  Each certificate representing (i) the Shares,
          ------------------
(ii) the Company's Common Stock issued upon conversion of the Series B Preferred
Shares, Series C Preferred Shares and Series D Preferred Shares and (iii) any
other securities issued in respect of the Shares or Common Stock issued upon
conversion of the Shares upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 1.4 below) be stamped or otherwise imprinted with a legend
in the following form (in addition to any legend required under applicable state
securities laws):

     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
     INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
     SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
     REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR AS PROVIDED IN THE
     AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR
     TRANSFER.  COPIES OF THE AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
     REQUEST MADE BY THE HOLDER OF

                                       3
<PAGE>

     THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL
     OFFICE.

     Each Investor consents to the Company's making a notation on its records
and giving instructions to any transfer agent of the Shares or the Common Stock
in order to implement the restrictions on transfer established in this
Agreement.

     1.4    Notice of Proposed Transfers.  The holder of each certificate
            ----------------------------
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 1.4.  Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities, unless there is in
effect a registration statement under the Securities Act covering the proposed
transfer, the holder thereof shall give written notice to the Company of such
holder's intention to effect such transfer, sale, assignment or pledge.  Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied at such holder's expense by either (i) an unqualified written
opinion of legal counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to the Company addressed to the Company, to the effect
that the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by the holder to the
Company; provided, however, that the Company will not require such a legal
         --------  -------
opinion or "no action" letter (a) in any transaction in compliance with Rule
144, (b) in any transaction in which an Investor that is a partnership or
limited liability company distributes Shares or Common Stock issuable upon
conversion thereof solely to partners or members thereof for no consideration,
or transfers by gift, will or intestate succession to the spouse, siblings,
lineal descendants or ancestors of any partner, provided that each transferee
agrees in writing to be subject to the terms of this Section 1.4; or (c) any
transfer to an Affiliate of a Holder.  Each certificate evidencing the
Restricted Securities transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144, the appropriate restrictive legend set
forth in Section 1.3 above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for such Holder and the Company
such legend is not required in order to establish compliance with any provisions
of the Securities Act.

     1.5    Demand Registration.
            -------------------

            (a) Request for Registration.  In case the Company shall receive
                ------------------------
from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to the Registrable
Securities, the anticipated aggregate offering price, net of underwriting
discounts and commissions, of which would exceed $5,000,000, the Company will:

               (i)  promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and

                                       4
<PAGE>

               (ii) as soon as practicable, use its best efforts to effect such
registration, qualification or compliance (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within 30 days after receipt of such written notice from the
Company;

provided, however, that the Company shall not be obligated to take any action to
--------  -------
effect any such registration, qualification or compliance pursuant to this
Section 1.5:

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

                    (B) prior to the date six (6) months immediately following
the effective date of the registration statement pertaining to the initial
public offering of securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan);

                    (C) after the Company has effected two (2) such
registrations pursuant to this Section 1.5(a), such registrations have been
declared or ordered effective and the securities offered pursuant to such
registrations have been sold, except that until Holders who hold Series D
Registrable Securities have initiated two such registrations and sold at least
80% of the Registrable Securities requested to be registered by such Holders,
then such Holders shall continue to have the right to request registration
pursuant to this Section 1.5(a); or

                    (D) if the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good-
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 1.5 shall be deferred for a period not to
exceed 90 days; provided that the Company shall not exercise its right under
this clause to defer such obligation more than once in any twelve-month period.

     Subject to the foregoing clauses (A) through (D), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable, but in any event no later than 60 days, after
receipt of the request or requests of the Initiating Holders.

          (b)   Underwriting.  The right of any Holder to registration pursuant
                ------------
to Section 1.5 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 1.5 and the inclusion of such
Holder's Registrable

                                       5
<PAGE>

Securities in the underwriting to the extent requested to the extent provided
herein. In any registration pursuant to Section 1.5, the Initiating Holders
(based on a majority of the Registrable Securities to be included therein) will
have the right to select the investment banker(s) and manager(s) to administer
the offering, subject to the approval of the Company, which shall not be
unreasonably withheld or delayed.

     The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by a
majority in interest of the Initiating Holders (which managing underwriter shall
be reasonably acceptable to the Company).  Notwithstanding any other provision
of this Section 1.5, if the managing underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities and the number of shares of Registrable Securities that
may be included in the registration and underwriting shall be allocated among
all Holders thereof in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities requested to be registered by each such Holder
at the time of filing the registration statement.  No Registrable Securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration.

     If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders.  The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to 120 days after the effective date
of such registration; provided, however, that, if by the withdrawal of such
                      --------  -------
Registrable Securities a greater number of Registrable Securities held by other
Holders may be included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company shall offer to all
Holders who have included Registrable Securities in the registration the right
to include additional Registrable Securities in the same proportion used in
determining the underwriter limitation in this Section 1.5(b).

     1.6  Piggyback Registration.
          ----------------------

          (a) Notice of Registration.  If at any time or from time to time, the
              ----------------------
Company shall determine to register any of its securities, either for its own
account or the account of a Holder or Holders exercising their respective demand
registration rights, other than (i) a registration relating solely to employee
benefit plans, or (ii) a registration relating solely to a Rule 145 transaction,
the Company will:

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

               (ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within 30 days after receipt of such written notice from the
Company by any Holder, but only to the extent that such inclusion will not
diminish the number of securities included by the Company or by Holders of the
Company's

                                       6
<PAGE>

securities who have demanded such registration (subject, however, to the rights
of the Holders, as set forth in Section 1.6(b)); provided, however,
                                                 -----------------
that if the registration that is subject to such requests was initiated by
holders of Series D Preferred Stock, then any reduction made in the number of
shares registered shall be made on a pro rata basis among the Initiating Holders
and the holders requesting inclusion, based on the number of shares of
Registrable Securities requested to be included in such registration by each
such holder.

          (b) Underwriting.  If the registration of which the Company gives
              ------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.6(a)(i).  In such event the right of any Holder to
registration pursuant to Section 1.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein.  In the case of the Company
initiating a registration statement for the sale of shares for its own account,
the Board will have the right to select the investment banker(s) and manager(s)
to administer the offering, subject to the approval of a majority of the
Initiating Holders if the registration has been requested under Section 1.5(a)
hereof, which approval shall not be unreasonably withheld or delayed.  All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other Holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the Company
(or by the Holders who have demanded such registration).  Notwithstanding any
other provision of this Section 1.6, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Securities to
be included in such registration, provided, however, that in the case of a
                                  --------  -------
public offering other than the Company's initial public offering in no event may
less than one-third of the total number of shares of Common Stock to be included
in such underwriting be made available for Registrable Securities, and provided,
                                                                       --------
further, that, prior to any such reduction, the Company shall first exclude from
-------
such registration, in the following order, all shares of Common Stock sought to
be included therein by (i) any holder thereof not having any such contractual,
incidental registration rights, and (ii) any holder thereof having contractual,
incidental registration rights subordinate and junior to the rights of the
Holders of Registrable Securities.  If a limitation of the number of shares is
still required, the number of shares that may be included in the registration
and underwriting shall be allocated among all Holders in proportion, as nearly
as practicable, to the respective amounts of Registrable Securities requested to
be registered by each such Holder pursuant to Section 1.6(a)(ii). If any Holder
or other Holder disapproves of the terms of any such underwriting,  he may elect
to withdraw therefrom by written notice to the Company and the managing
underwriter.  Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to 120 days after the effective date of the registration
statement relating thereto.

          (c) Right to Terminate Registration.  The Company shall have the right
              -------------------------------
to terminate or withdraw any registration initiated by it for the sale of its
own shares under this Section 1.6 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such
registration.

                                       7
<PAGE>

     1.7  Registration on Form S-3.
          ------------------------

          (a) If any Holder or Holders requests that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities the reasonably
anticipated aggregate price to the public of which would exceed $1,000,000, and
the Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall use its best efforts to cause
such Registrable Securities to be registered for the offering on such form;
provided, however, that the Company shall not be required to effect more than
--------  -------
two registrations in any 12-month period pursuant to this Section 1.7.  The
Company will (i) promptly give written notice of the proposed registration to
all other Holders, and (ii) as soon as practicable, use its best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within 30 days after receipt of such written notice from the Company.  If the
registration is for a public offering involving an underwriting, the substantive
provisions of Section 1.5(c) shall be applicable to each registration initiated
under this Section 1.7.

          (b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 1.7:  (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; (ii) during the period
starting with the date sixty (60) days prior to the filing of, and ending on a
date six (6) months following the effective date of, a registration statement
(other than with respect to a registration statement relating to a Rule 145
transaction, an offering solely to employees or any other registration that is
not appropriate for the registration of Registrable Securities), provided that
the Company is actively employing, in good faith, all reasonable efforts to
cause such registration statement to become effective; or (iii) if the Company
shall furnish to such Holder a certificate signed by the President of the
Company stating that in the good-faith judgment of the Board of Directors it
would be seriously detrimental to the Company or its shareholders for
registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a period not to exceed 90 days from the receipt of the request to
file such registration by such Holder; provided, however, that the Company shall
                                       --------  -------
not exercise its right under this clause to defer such obligation more than once
in any twelve-month period.

     1.8  Expenses of Registration.  All Registration Expenses incurred in
          ------------------------
connection with any registration pursuant to Sections 1.5, 1.6 and up to two (2)
registrations pursuant to Section 1.7 and the reasonable cost of one special
legal counsel not to exceed $35,000 per registration pursuant to Section 1.7 to
represent all of the Holders together shall be borne by the Company (unless in
the reasonable opinion of the counsel for the Company it may represent the
Holders without conflict of interest), provided that the Company shall not be
required to pay the

                                       8
<PAGE>

Registration Expenses of any registration proceeding begun pursuant to Section
1.5, the request of which has been subsequently withdrawn by the Initiating
Holders, unless the Holders of a majority of the Registrable Securities agree to
forfeit their right to one demand registration pursuant to Section 1.5. The
Holders of Registrable Securities to have been registered shall bear all such
Registration Expenses pro rata on the basis of the number of shares to have been
registered. Notwithstanding the foregoing, however, if, at the time of the
withdrawal, the Holders have learned of a material adverse change in the
condition, business or prospects of the Company from that known to the Holders
at the time of their request, of which the Company had knowledge at the time of
the request, then the Holders shall not be required to pay any of said
Registration Expenses and shall retain their rights pursuant to Section 1.5.
Unless otherwise stated, all other Selling Expenses relating to securities
registered on behalf of the Holders shall be borne by the Holders of the
registered securities pro rata on the basis of the number of shares so
registered.

     1.9  Indemnification.
          ---------------

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

          (b) Each Holder, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, will indemnify the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and

                                       9
<PAGE>

liabilities thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by such Holder and stated to be
specifically for use therein; provided, however, that the liability of a Holder
for indemnity under this Section 1.9(b) shall not exceed the gross proceeds from
the offering received by such Holder.

          (c) Each party entitled to indemnification under this Section 1.9 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action.
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 that 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.  An
Indemnified Party shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party would be inappropriate due to actual
differing interests between such Indemnified Party and the Indemnifying Party;
provided, however, that all Indemnified Parties with the same actual differing
--------  -------
interests from the Indemnifying Party shall be entitled to payment for only one
counsel collectively.

          (d) The indemnity agreements contained in Sections 1.9(a) and 1.9(b)
shall not apply to amounts paid in settlement of any claim, loss, damage,
liability or action if such settlement is effected without the consent of the
Indemnifying Party.

     1.10  Information by Holder; Copies of Prospectus.  The Holder or Holders
           -------------------------------------------
of Registrable Securities included in any registration shall furnish to the
Company such information regarding such Holder or Holders, the Registrable
Securities held by them and the distribution proposed by such Holder or Holders
as the Company may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.  In connection with any such registration, the Company shall furnish
to such Holder or Holders such numbers of copies as it or they may reasonably
request, in order to facilitate the

                                       10
<PAGE>

disposition of Registrable Securities owned by them, of any prospectus or
preliminary prospectus prepared in conformity with the Securities Act.

     1.11  Rule 144 Reporting.  With a view to making available the benefits of
           ------------------
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, or
registration on Form S-3, after such time as a public market exists for the
Common Stock of the Company, the Company agrees to use its best efforts to:

          (a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act;

          (b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and

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

     1.12  Transfer of Registration Rights.  The rights to cause the Company to
           -------------------------------
register securities granted to the Shareholders and the Investors under Sections
1.5, 1.6 and 1.7 may be assigned to a transferee or assignee ("Right Holder") in
connection with any transfer or assignment of Registrable Securities by a
Shareholder or Investor (together with any affiliate), provided that (a) such
transfer may otherwise be effected in accordance with applicable securities
laws, (b) the Shareholder or Investor effecting such transfer shall comply with
the requirements of Section 1.4 of this Agreement, (c) the transferee shall
agree to be bound by all of the provisions of this Agreement, and (d) such
transferee or assignee (i) is a majority-owned subsidiary or constituent partner
(including limited partners) of such Shareholder or Investor or otherwise an
Affiliate thereof , or a transferee pursuant to Section 1.4(b), as applicable,
or (ii) acquires from such Shareholder or Investor at least 200,000 Shares (or
shares of Common Stock issuable upon conversion thereof or a combination of such
Shares and shares of Common Stock, as appropriately adjusted for stock splits
and the like).

     1.13  Lock-Up Agreement.  Each Holder agrees, if requested by the Company
           -----------------
and the managing underwriter of Common Stock of the Company, in connection with
the registration and sale thereof, not to sell or otherwise transfer or dispose
of, whether in privately negotiated or open market transactions, any Common
Stock of the Company held by it:  (a) during the 180-day

                                       11
<PAGE>

period following the effective date of a registration statement of the Company
filed under the Securities Act for the first underwritten registered public
offering of the Company, and (b) during the 90-day period following the
effective date of a registration statement of the Company filed under the
Securities Act for any later underwritten registered public offering of the
Company. The Company shall use all reasonable efforts to obtain similar
agreements from all officers, directors and key employees of the Company and all
other holders and option holders of at least 1% of the Company's voting
securities on an as-converted basis.

     Such agreement shall be in writing and in form and substance reasonably
satisfactory to the Company, such Holder and such underwriter.  The Company may
impose stop-transfer instructions with respect to the shares (or securities)
subject to the foregoing restriction until the end of such period.

     1.14  Limitations on Subsequent Registration Rights.  From and after the
           ---------------------------------------------
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities and a
majority of the outstanding Series D Registrable Securities, enter into any
agreement with any shareholder or prospective shareholder of any securities of
the Company that would allow such shareholder or prospective shareholder (i) to
include such securities in any registration filed under Section 1.5 hereof,
unless, under the terms of such agreement such shareholder or prospective
shareholder may include such securities in any such registration only to the
extent that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders that is included or (ii) to make a demand
registration that could result in such registration statement being declared
effective prior to the earlier of the date set forth in Section 1.5(a)(ii)(B)
hereof or within 120 days prior to the effective date of any registration
effected pursuant to Section 1.5.

                                   SECTION 2

                                 Miscellaneous
                                 -------------

     2.1  Governing Law.  This Agreement shall be governed by and construed in
          -------------
accordance with the substantive laws of the State of California.

     2.2  Successors and Assigns.  The terms and conditions of this Agreement
          ----------------------
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

     2.3  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 with the written consent of the
Company and Holders of at least 51% in interest of the Registrable Securities
and 51% of the Series D Registrable Securities.  Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each Holder of
any Registrable Securities at the time outstanding, each future Holder of
Registrable Securities and the Company.

                                       12
<PAGE>

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

     2.5  Titles and Subtitles.  The titles and subtitles used in this Agreement
          --------------------
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.

     2.6  Notices.  Any notices and other communications required or permitted
          --------
under this Agreement shall be effective if in writing and delivered personally
or sent by telecopier, Federal Express or other commercial overnight delivery
service, or registered or certified mail, postage prepaid, addressed as follows:
(a) if to a Series B Purchaser, at such address as such Series B Purchaser shall
have furnished to the Company in writing, (b) if to any other Holder of any
Shares or Common Stock of the Company, at such address as such Holder shall have
furnished to the Company in writing, or, until such Holder so furnishes an
address to the Company, then at the address of the last Holder of such shares
who has so furnished an address to the Company, or (c) if to the Company, then
at its address set forth on the first page of the Series B Preferred Stock
Purchase Agreement of even date herewith and addressed to the attention of the
Secretary, or at such other address as the Company shall have furnished to the
Purchaser.

     Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) two business days after being sent, if sent by Federal Express or other
commercial overnight delivery service, (c) one business day after being sent, if
sent by telecopier with confirmation of good transmission and receipt, and (d)
three business days after being sent, if sent by registered or certified mail.
Each of the parties herewith shall be entitled to specify another address by
giving notice as aforesaid to each of the other parties hereto.

     2.7  Expenses.  Each party shall bear its own expenses incurred in
          --------
connection with this Agreement.  If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

     2.8  Damages.  The Company recognizes and agrees that the Holders of
          -------
Registrable Securities will not have an adequate remedy if the Company fails to
comply with this Agreement and that damages may not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by a Holder of Registrable Securities requiring
specific performance of any and all provisions hereof or enjoining the Company
from continuing to commit any such breach of this Agreement.

     2.9  Entire Agreement.  This Agreement constitutes the entire agreement
          ----------------
among the parties with respect to the subject matter hereof and supersedes all
prior oral and written agreements and understandings between them or any of them
as to such subject matter.

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

                                       13
<PAGE>

                      The next page is the signature page.

                                       14
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Registration Rights Agreement as of the date first above written.

COMPANY                             DESKTALK SYSTEMS, INC.,
                                    a California corporation

                                    By: /s/ DAVID P. WOODALL
                                       _______________________________
                                        Name: David P. Woodall
                                        Title: Chief Executive Officer

INVESTORS                           DTALK ACQUISITION CORP.
                                    a Delaware corporation

                                    By: /s/ BODIL ARLANDER
                                       _______________________________

                                        Name: Bodil Arlander
                                              ________________________

                                        Title:  Vice President
                                               _______________________

                                    SIGNAL EQUITY PARTNERS, L.P.
                                    a Delaware limited partnership

                                    By:  /s/ CHARLES T. LAKE II
                                       _______________________________
                                        Name:  Charles T. Lake
                                              ________________________
                                        Title:   VP
                                               _______________________

SERIES A CONVERSION STOCK           THE GENE B. KAUFMAN AND
                                    ANNETTE B. KAUFMAN 1980 FAMILY
SHAREHOLDERS                        TRUST DATED 2/12/81

                                    By: /s/ GENE B. KAUFMAN
                                       _______________________________
                                        Name: Gene B. Kaufman
                                        Title: Trustee

                                    By:  /s/ ANNETTE B. KAUFMAN
                                       _______________________________
                                        Name: Annette B. Kaufman
                                        Title: Trustee

                                       15
<PAGE>

SERIES B PREFERRED STOCK            GEOCAPITAL IV, L.P.
PURCHASERS
                                    By:  GEOCAPITAL IV MANAGEMENT, L.P.

                                    By: /s/ STEPHEN CLEARMAN
                                       _______________________________
                                        General Partner

                                    PETER MOONEY, AS NOMINEE FOR
                                    THE BROADVIEW PARTNERS GROUP

                                       /s/ PETER MOONEY
                                    __________________________________
                                    Name:  Peter Mooney
                                    Title: Nominee for the Broadview Partners
                                          Group

                                    ABRAHAM AND MARTHA HEPNER
                                    FAMILY TRUST DATED 11/17/95

                                    By: /s/ ABRAHAM HEPNER
                                       _______________________________
                                        Name:
                                        Title:

                                    By:_______________________________
                                        Name:
                                        Title:

                                    DENNIS KIRSHY

                                      /s/ DENNIS A. KIRSHY
                                    ___________________________________

                                    FRED KAPLAN

                                      /s/ FRED KAPLAN
                                    ___________________________________

                                       16
<PAGE>

                                    FRED KAPLAN & ASSOCIATES
                                    RETIREMENT TRUST

                                    By: /s/ FRED KAPLAN
                                       _______________________________
                                        Name:
                                        Title:

                                       17
<PAGE>

                                   SCHEDULE I
                                   ----------
                                   INVESTORS
                                   ---------

Name and Address
----------------

DTalk Acquisition Corp.
c/o The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Attention:  John D. Howard

Signal Equity Partners, L.P.
10 East 53rd Street, 32nd Floor
New York, New York,  10022
Attention:  Timothy Bradley

                                       18
<PAGE>

                                  SCHEDULE II
                                  ------------
                                  SHAREHOLDERS
                                  ------------

Name and Address
----------------

Series A Conversion Stock
-------------------------
Gene B. Kaufman and Annette B. Kaufman, Trustees of
The Gene B. Kaufman and Annette B. Kaufman 1980 Family
Trust Dated 2/12/81
549 Via Almar
Palos Verdes Estates, CA  90274

Series B Preferred Stock
------------------------
Geocapital IV, L.P.
One Bridge Plaza
Fifth Floor
Fort Lee, New Jersey  07024
Attn:  Stephen J. Clearman

Broadview Partners Group
(Peter Mooney, as Nominee)
Broadview Associates
One Bridge Plaza
Fifth Floor
Fort Lee, NJ 07024

Dennis A. Kirshy
26 Cart Path Road
Weston, MA  02193-2303

Abraham Hepner and Martha Hepner, Trustees, or
their Successor, under the Abraham and Martha
Hepner Family Trust dated 11/17/95
29129 Whites Point Drive
Rancho Palos Verdes, CA  90275

Fred Kaplan
806 Pearl Street
Redondo Beach, CA  90277

Fred Kaplan as Trustee of the Fred Kaplan &
Associates Retirement Trust
806 Pearl Street
Redondo Beach, CA  90277

                                       19
<PAGE>

Series C Preferred Stock
------------------------

Law Department
Nortel Networks NA Inc.
4401 Great America Parkway
MS SC 2-05
Santa Clara, CA  95052
Fax:  (408) 495-5323

Geocapital IV, L.P.
One Bridge Plaza
Fifth Floor
Fort Lee, New Jersey  07024
Attn:  Stephen J. Clearman

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