Document:

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                                                                EXHIBIT 10.34

                          MASTER REMARKETING AGREEMENT

            This Agreement (this "Agreement") is made as of this 31st day of
March, 2000, by and between COYOTE TECHNOLOGIES, LLC, a California limited
liability company with its principal office located at 1640 S. Sepulveda Blvd.,
Suite 222, Los Angeles, CA 90025 ("CTL"), and FIRST VENTURE LEASING, LLC, a
Delaware limited liability company with its principal its principal place of
business in Stamford, Connecticut ("Owner").

            WHEREAS, CTL has agreed that Owner shall be a source for providing
certain leasing and credit programs to CTL's Customers pursuant to that certain
Financial Services Agreement, dated as of the date hereof (the "Financial
Services Agreement"), among CTL, Coyote Network Systems, Inc., and Owner.
Capitalized terms used but not defined herein shall have the meanings specified
in the Financial Services Agreement;

            WHEREAS, Owner may purchase from time to time certain equipment
manufactured by CTL (the "Equipment") which will initially be leased by Owner to
third parties pursuant to a User Lease (as defined below) and which Owner and
CTL desire to have remarketed upon the termination of any such User Lease
pursuant to the terms hereof; and

            WHEREAS, Owner desires to engage CTL and CTL desires to accept such
engagement to participate with Owner in remarketing the Equipment on behalf of
Owner under the terms and conditions set forth below.

            NOW, THEREFORE, Owner and CTL agree as follows:

            1. Appointment. Owner hereby appoints CTL as its exclusive agent to
remarket the Equipment on behalf of Owner, and CTL accepts the appointment and
agrees to use its commercially reasonable efforts to perform certain remarketing
services as more fully described in this Agreement. Remarketing shall include
the sale (including, without limitation, any installment or conditional sale,
whether in the form of a lease or otherwise or any trade-in of Equipment),
re-lease or renewal of any existing lease of the Equipment (such re-leases and
existing leases are to be collectively referred to herein as the "User Leases")
to either the person leasing the Equipment immediately prior to the remarketing
or to a new user (collectively, the "Users"). Owner further appoints CTL, upon
prior written request by Owner to CTL, to use its commercially reasonable
efforts to assist Owner to effect a transfer of Owner's right, title and
interest in and to any Equipment which Owner has agreed to sell to a User,
subject to the rights of CTL hereunder (including the right to be reimbursed for
its Actual Costs (as defined below) incurred in providing such assistance), any
prior User or any Senior Lienholder (as defined below) and CTL hereby accepts
such appointment.

            2. Schedules; Availability of Equipment for Remarketing. Owner will
from time to time, deliver to CTL Remarketing Schedules (each, a "Remarketing
Schedule") under this Agreement. Each Remarketing Schedule shall be
substantially in the form of Exhibit A hereto, shall be consecutively numbered
and shall set forth the description and location of the Equipment, the date such
Equipment will be available for sale, re-lease or lease renewal (the
"Availability Date"), and such other terms as required. Each Remarketing
Schedule shall

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identify only Equipment which has been leased pursuant to one particular User
Lease.

            3. Remarketing Procedures, Services and Reimbursed Expenses. The
procedure for remarketing the Equipment shall be as follows:

            (a) In the event that any User Lease is terminated prior to the
expiration of its originally scheduled initial term (whether as a result of any
default or event of default by any User thereunder or by such User exercising
any early termination right thereunder, in either event, an "Early
Termination"), upon receipt of a Remarketing Schedule which identifies Equipment
which was subject to such User Lease, CTL will promote and market such Equipment
as equivalent to all other equipment of comparable cost, functionality and
performance sold by CTL at such time ("Similar Equipment") and shall exert its
best efforts to solicit firm offers ("Offers") from Users (which shall include,
without limitation, CTL's current customers both in the U.S. and
internationally) for the sale, re-lease or lease renewal of such Equipment. In
addition to CTL's obligations in the preceding sentence to promote, market and
solicit Offers for Equipment as equivalent to any Similar Equipment, in the
event that any User Lease is terminated prior to the expiration of its
originally scheduled initial term (whether as a result of any default or event
of default by any User thereunder or by such User exercising any early
termination right thereunder, in either event, an "Early Termination"), CTL
shall promote and market any Equipment which was subject to such User Lease as
equivalent to Similar Equipment which is new. Each Offer shall identify the
potential User and shall set out the basic terms and conditions of such Offer,
including, without limitation, the proposed sale price for the sale of the
Equipment or the proposed rent payment amounts and term for any re-lease or
lease renewal of the Equipment. CTL will promptly inform Owner of any such
Offers it receives.

            (b) Upon receipt of a Remarketing Schedule which identifies
Equipment which was leased pursuant to a User Lease which was not subject to an
Early Termination, CTL will exert commercially reasonable efforts to promote and
market such Equipment and solicit Offers for the sale, re-lease or lease renewal
of such Equipment. CTL will promptly inform Owner of any such Offers it
receives. In the event that Owner has not received written notice from either
CTL that either CTL has received an Offer for such Equipment by the later of (i)
90 days after Owner has delivered to CTL a Remarketing Schedule for such
Equipment or (ii) 30 days prior to the Availability Date for such Equipment,
Owner shall then have the right to promote and market such Equipment and solicit
Offers directly from any Users (which shall include, without limitation, CTL's
current customers both in the U.S. and internationally), for the sale, re-lease
or lease renewal of such Equipment. The terms of any such marketing activity by
Owner will be subject to the prior review and approval (not to be unreasonably
withheld) of CTL. Under no circumstances, other than as provided in this Section
3(b), shall Owner circumvent CTL or otherwise promote or market any Equipment or
solicit Offers directly from Users for the sale, re-lease or lease renewal of
such Equipment without providing advance notice to CTL.

            (c) In the event that an existing User of Equipment does not renew
an existing User Lease or purchase the Equipment upon the termination of such
User Lease, Owner shall direct such User to ship such Equipment to CTL at such
facility as directed by CTL by written notice to Owner from time to time ("CTL's
Facility"), at such User's expense, in accordance

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with the terms of the applicable User Lease. In the event that any User does not
comply with Owner's direction to ship any Equipment to CTL's Facility, Owner
shall undertake to deinstall, insure and transport such Equipment to CTL's
Facility at Owner's Actual Cost. Upon delivery of such equipment to CTL's
Facility, CTL shall store, insure and maintain the Equipment, as required to
preserve the value of such Equipment at CTL's Actual Cost (as defined below).
Upon receipt by CTL of a purchase order from Owner to refurbish the Equipment,
CTL shall promptly refurbish the Equipment (which may include the application of
"Skins" decals, painting, and electronic and software upgrades) and perform any
Equipment modifications (which may include standard board and software changes),
so as to bring the Equipment to the highest release level as Owner and CTL shall
agree will result in the realization of the maximum profit margin for the sale
or re-lease of such Equipment (after accounting for the Actual Costs of any such
refurbishment or modifications). Any of CTL's Actual Costs incurred in
performing such refurbishment or modifications may be reimbursed as an Approved
Expense in accordance with Section 6(a) hereof; provided, however, that in the
event that the amount of Equipment Proceeds (as defined below) available from
the sale, re-lease or lease renewal of Equipment is not sufficient to reimburse
CTL for CTL's Actual Costs incurred in performing such refurbishment or
modifications, Owner shall promptly reimburse CTL for any such shortfall upon
Owner's reasonable determination of such insufficiency of Equipment Proceeds.
"Actual Costs" for the purpose of this Agreement shall mean CTL's or Owner's, as
applicable, actual cost (without mark-up), incurred in performing any
remarketing services pursuant to this Agreement, determined as follows: (i) if
such services are performed by a third party, then the actual cost shall be the
actual charges of such third party paid by CTL or Owner, as applicable (without
markups or overhead by CTL or Owner, as applicable), and (ii) if CTL or Owner,
as applicable, elects to perform such obligation itself, then the actual cost
shall be such party's direct cost for labor and materials.

            (d) Owner and CTL shall consider the terms and conditions of any
Offer received by Owner or CTL (including, without limitation, any purchase
price, lease payments, lease term and credit worthiness of the proposed User),
and Owner and CTL shall mutually agree to the terms of (i) any Offer (or
subsequent counter-offer from User) before accepting such Offer or (ii) the
terms of any counter-offer before making such counter-offer to any proposed
User. In the event that Owner or CTL are unable to agree to the terms of an
Offer (or subsequent counter-offer from a User) or with respect to the terms and
conditions of any counter-offer to a User, within ten (10) days of receipt by
Owner or CTL of an Offer (or subsequent counter-offer from User), Owner shall
upon notice to CTL have the right to sell, re-lease or enter into a lease
renewal for the applicable Equipment, without the agreement of CTL; provided,
however, that neither CNSL nor CTL shall be responsible for the terms of any
related Equipment servicing agreement, warranty or intellectual property rights
provided to a User under such circumstances, other than as may be provided
pursuant to Section 4 hereof.

            (e) Upon agreement by Owner and a User for the sale, re-lease or
lease renewal of any Equipment, pursuant to the terms hereof, Owner will
promptly prepare and arrange for the execution of commercially standard
documentation for the sale, re-lease or lease renewal of such Equipment and CTL
shall arrange for the packing, shipping and installation of such Equipment,
which shall be accompanied by new manuals and any appropriate warranty cards
and/or registration information, and all Actual Costs associated with the above
may be

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reimbursed as an Approved Expense in accordance with Section 6 hereof.

            4. Equipment Servicing; Warranties; Intellectual Property Rights;
and Repurchase or Guarantee Agreements.

            (a) CTL shall offer to any User of Equipment which is subject to any
sale, re-lease or lease renewal hereunder, the option to enter into a service
agreement for such Equipment, upon similar terms and conditions as CTL generally
offers to users of Similar Equipment.

            (b) CTL hereby consents to Owner's assignment to any User of any
unexpired portion of any warranty on Equipment which is to be used by such User
pursuant to a sale or re-lease of such Equipment hereunder. CTL shall provide
such additional warranties, as required, so that all Equipment which is sold or
re-leased, shall be subject to CTL's basic warranties for such Equipment for a
minimum period of 90 days after the effective date of such sale or re-lease. In
addition to any of the foregoing, CTL shall provide such additional warranty
coverage to Equipment which is subject to any Early Termination, which shall be
equivalent to any warranty which CTL provides for Similar Equipment which is
new. The cost to CTL of the additional warranties set forth in the preceding two
sentences shall be agreed to by Owner and CTL and shall be reimbursed to CTL as
an Approved Expense pursuant to Section 6(a) hereof.

            (c) CTL shall grant to any User of Equipment which is subject to any
sale, re-lease or lease renewal hereunder all intellectual property rights and
other rights that are necessary or reasonably appropriate for the use and
operation of any such Equipment and subject to CTL's standard terms and
conditions for sale of Equipment. Such grant shall be free of any additional
charge or fee to Owner or any User.

            (d) CTL shall assign to Owner any rights it has or may hereafter
acquire in any agreement, including, without limitation, any OEM, distribution
or re-seller agreement, relating to (i) any guaranty by any Person of payment
for the lease or purchase of Equipment, or (ii) any obligation by any Person to
purchase Equipment upon the termination of a User Lease.

            5. Administration; Billing and Collecting; Distribution of Equipment
Proceeds. Owner shall: (a) timely invoice (i) Users under a re-lease or lease
renewal of the Equipment for any rental payments and other sums due to be paid
by them to Owner ("Equipment Lease Proceeds") and (ii) Users under a sale of the
Equipment for all sale proceeds and other sums due to be paid to Owner
("Equipment Sale Proceeds," collectively with Equipment Lease Proceeds,
"Equipment Proceeds"); (b) use its best efforts (subject to the rights of any
party holding a lien or security interest in the Equipment and/or Equipment
Proceeds superior to that of Owner (the "Senior Lienholder")) to collect the
Equipment Proceeds; (c) distribute the Equipment Proceeds in accordance with
Section 6 hereof; (d) file and pay, or cause any User to file and pay, all sales
and/or use tax returns arising from a sale, re-lease or lease renewal of
Equipment; and (e) to use reasonable efforts to enforce all remedies (including
lawful repossession) in the event of any default or event of default by User
under any re-lease or lease renewal or sale agreement relating to the Equipment,
subject however, to the rights of a Senior Lienholder, if any.

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            6. Payment of Equipment Proceeds. All Equipment Proceeds, upon
receipt of such Equipment Proceeds by Owner, shall be applied as follows (to the
extent Equipment Proceeds are available therefor):

            (a) first, to the payment of or to reimburse CTL for all "Approved
Expenses" incurred in connection with the administration and remarketing of
Equipment hereunder. "Approved Expenses" shall mean, for the purposes of this
Agreement, any and all appropriate or necessary Actual Costs incurred and paid
in connection with the performance by each of CTL and Owner of its obligations
hereunder, including, but not limited to, Actual Costs of installation and
deinstallation, maintenance and service, refurbishing, modification, storage,
salesmen's commissions paid to CTL's sales force (in accordance with CTL's
standard sales compensation plan or as otherwise agreed to by Owner and CTL) for
any sale or re-lease of Equipment to a new User, broker's fees paid to any
third-party brokers (in such amount as mutually agreed to by Owner and CTL) for
any sale or re-lease of the Equipment to a new User, legal fees paid to outside
counsel, Equipment transportation, drayage and freight from and to points of
installation and for any warranty or insurance, all of which shall be
appropriately documented. Other than as specifically provided in the previous
sentence, Approved Expenses for the remarketing of any item of Equipment shall
not include any general overhead costs or expenses of CTL, Owner, or either of
their employees, or any travel expenses, or salesmen's commissions and brokerage
fees not specifically included as Approved Expenses in the previous sentence, or
any advertising, direct mail or similar costs incurred by CTL or Owner in
connection with its remarketing activities, hereunder. Except as specifically
provided in Section 3(c) hereof, Approved Expenses shall be paid or reimbursed
to CTL solely from Equipment Proceeds, and notwithstanding anything herein to
the contrary, Owner shall have no direct, personal, out-of-pocket liability for
the payment thereof;

            (b) second, to the payment to Owner of any amounts which have not
been paid by a User having leased the Equipment pursuant to a User Lease and
which are payable pursuant to a User Lease, immediately prior to its remarketing
to a new User hereunder, including, without limitation, (i) all unpaid sums
accrued and due to Owner pursuant to such User Lease (including, without
limitation, any default interest or late charges), as of the date that Owner
first receives any Equipment Proceeds under a sale or lease agreement with such
a new User (the "Initial Payment Date") and (ii) an amount equal to the present
value of rental payments and other sums which were to become due after the
Initial Payment Date during any remaining portion of the initial term of such
User Lease which is subject to Early Termination (which amount shall be
discounted to present value as of the Initial Payment Date at the discount rate
as provided in the remedies section of the applicable User Lease); provided,
however, that in the event that Owner subsequently recovers from such prior User
any amounts for which Owner has received payment pursuant to (i) and (ii) above,
such recovered amounts shall be included as part of the Equipment Proceeds and
distributed in accordance with this Section 6. Owner shall use its commercially
reasonable efforts to collect all amounts which have not been paid by a User
having leased the Equipment pursuant to a User Lease. Owner shall distribute any
Equipment Proceeds which it may receive pursuant to this Section 6(b), in such
manner as may be required pursuant to the terms and conditions, if any, of any
then existing agreement between Owner and CTL; and

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            (c) third, the remaining "Net Proceeds" to the Owner.

            7. Termination.

            This Agreement shall terminate upon the mutual agreement of the
parties hereto; provided, however, that Owner shall have the right to earlier
terminate this Agreement prior to such date upon notice in writing to CTL:

            (a) If CTL shall have breached in any material respect any of its
covenants, obligations, and agreements hereunder, if such breach shall be
capable of' being cured, such breach shall have continued for thirty (30) days
after CTL receives a written notice thereof from Owner specifying the nature of
the breach; or

            (b) If CTL shall:

               (i) admit in writing its inability to pay or fail to pay its
        debts generally as they become due;

               (ii) file a voluntary petition in bankruptcy or a petition to
        take advantage of any insolvency, reorganization, arrangement,
        composition, readjustment, liquidation, dissolution or similar
        arrangement, under any present or future law, statute or regulation or
        file an answer admitting or failing to deny the material allegations of
        a petition filed against it in any such proceeding;

               (iii) make an assignment for the benefit of its creditors;

               (iv) consent to or acquiesce in the appointment of, or possession
        by, a receiver, trustee, liquidator or custodian for itself or for the
        whole or any substantial part of its property;

               (v) have a petition in bankruptcy or an involuntary petition for
        reorganization, arrangement, composition, readjustment, liquidation,
        dissolution or similar arrangement under any present or future law,
        statute or regulation filed against it, and such proceeding or case
        shall continue undismissed or an order, judgment or decree approving or
        ordering any of the foregoing shall be entered and continue unstayed and
        in effect for a period of sixty (60) or more days or an order for relief
        against such party shall be entered in an involuntary case under any law
        with respect to bankruptcy, insolvency, liquidation, moratorium,
        reorganization or similar laws affecting creditors' rights generally; or

               (vi) cease doing business as a going concern; or

            (c) If a court of competent jurisdiction shall enter an order,
judgment or decree appointing, with or without the consent of CTL, a custodian
for such party or the whole or any substantial part of its property, or
approving a petition filed against it seeking reorganization or arrangement of
such party under any bankruptcy or insolvency laws or any other state of federal
law for the relief of debtors, and such order, judgment or decree shall not be
vacated or

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set aside or stayed within sixty (60) days from the date of entry thereof; or

            (d) If, under the provisions of any other law for the relief of
debtors, any court of competent jurisdiction or a custodian shall assume custody
or control of CTL or the whole or any substantial part of its property, with or
without the consent of such party, and such custody or control shall not be
terminated or stayed within sixty (60) days from the date of assumption of such
custody or control; or

            (e) If any material representation by CTL under any Operative
Agreement (as defined in the Financial Services Agreement) or this Agreement
shall have been untrue when made.

            In addition to any right which Owner may have to earlier terminate
this Agreement pursuant to (a) through (e) above, Owner shall have the right to
earlier terminate this Agreement upon notice in writing to CTL if CTL shall
cease to be actively engaged in the business of remarketing equipment of the
type similar to the Equipment or shall transfer or sell all or substantially all
of its assets and such transferee or purchaser does not assume CTL's obligations
hereunder.

            8. Miscellaneous.

            8.1 Representations and Warranties. Each of the parties hereto
represents and warrants to the other that each has the power and authority to
execute and to carry out the terms of this Agreement, the execution of which has
been duly authorized by all requisite action of such party, and each makes for
the benefit of the other the same representations and warranties as to its
authority with respect to the subject matter hereof and the validity and
enforceability of this Agreement as are made by them in the Financial Services
Agreement.

            8.2 Successors and Assigns. The rights and obligations of the
parties hereunder shall inure to the benefit of, and be binding and enforceable
upon, the respective successors, assigns and transferees of either party;
provided, however, that neither party hereto may assign this Agreement (by
operation of law or otherwise) without prior written consent of the other party
which may be withheld in such party's sole discretion.

            8.3 Notices. Any notice, request or other communication to either
party by the other hereunder shall be given in writing and shall he deemed given
(i) on the date the same is personally delivered, whether by hand delivery,
facsimile transmission or overnight courier with receipt acknowledged or (ii)
three (3) days following the date it is mailed by certified mail, return receipt
requested, postage prepaid and addressed to the party for which it is intended
at the address set forth at the head of this Agreement (or such other address of
which notice has been given pursuant to the provisions of this Section 8.3)
together with a copy thereof to one additional addressee as may be requested by
notice hereunder. The place to which notices or copies of notices are to be
given to either party may changed from time to time by such party by written
notice to the other party.

            8.4 Captions. Captions used herein are inserted for reference
purposes only and shall not affect the interpretation or construction of this
Agreement.

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

            8.6 Amendments. This Agreement may be amended or varied only by a
document in writing executed by Owner and CTL.

            8.7 Relationship of Parties. By their respective actions in
connection with this Agreement, the parties hereto do not intend to be and shall
not be deemed partners or joint venturers with each other.

            8.8 Indemnification.

            (a) Each of the parties hereto agrees to and hereby does indemnify
and protect, defend and hold the other party and its subsidiaries, affiliates,
successors, assigns, stockholders or partners, or any of its, or their,
directors, officers, agents, employees, stockholders or partners (the
"Indemnitee") harmless from and against any and all claims, actions, suits or
proceedings of any kind and nature whatsoever, including all damages,
liabilities, penalties, costs, expenses and legal fees ("Losses") which such
Indemnitee may incur based on, arising out of, connected with or resulting from
any breach of or failure to fulfill any of the other party's covenants or
agreements set forth in this Agreement.

            (b) In the event any claim for indemnification hereunder arises on
account of a claim or action instituted by a third person against an Indemnitee,
the Indemnitee shall notify the indemnifying party (the "Indemnitor") in writing
promptly after the receipt of notice by the Indemnitee that such claim was made
or that such action was commenced, provided, that failure to so notify the
Indemnitor shall not relieve the Indemnitor of its obligations hereunder except
to the extent such delay or failure resulted in increased Losses otherwise
subject to indemnification under this Section 8.8. The Indemnitor shall be
entitled to participate in or, at its option, assume the defense of any such
claim or action by counsel of its own choosing, and if it assumes such defense,
to control and settle the same. If the Indemnitor proposes to enter into a
settlement of such a claim pursuant to which the Indemnitee will incur no
obligation and will receive a general release of claims from the claimant, the
Indemnitee will take all actions and execute all documents necessary to
accomplish such settlement; such claims shall not be settled otherwise without
the Indemnitee's prior written consent. If the Indemnitor shall only participate
in the defense of any such claim or action, the same shall not be settled
without its prior written consent (which consent shall not be unreasonably
withheld or delayed).

            8.9 Governing Law. This Agreement shall be governed by the laws of
the State of California without giving effect to the conflicts of law principles
of such state.

                                                     FIRST VENTURE LEASING, LLC

                                                     BY: /s/ Robert Loonin
                                                     ITS: Managing Member

                                                     COYOTE TECHNOLOGIES, LLC

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                                                     BY: /s/ Daniel W. Latham
                                                     ITS: President

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                                    EXHIBIT A

                          REMARKETING SCHEDULE NO. ___
                             Dated __________, ____

Description of Equipment:

<TABLE>
<CAPTION>
                            Equipment           Model/
   Qty.         Mfg.           Type             Feature         Description        Serial No.
   ----         ----        ---------           -------         -----------        ----------
<S>             <C>         <C>                 <C>             <C>                <C>

</TABLE>

Location of Equipment:

                                   Name

                                   Address

                                   City/State/Zip

                                   Contact Person/Telephone
                             (Equipment Schedule No. ___ dated __________, ____)

Availability Date: __________, ____; or the first day following Termination Date
of the User Lease if (i) an Early Termination Option or any similar option has
been exercised by the User, or (ii) termination of the User Lease by Owner due
to a default or event of default thereunder; in each case, as notified in
writing from time to time by Owner to CTL.

        This Remarketing Schedule is issued pursuant to the Master Remarketing
Agreement dated as of March 31, 2000 between CTL and Owner and incorporates by
reference all of the terms and conditions of that Agreement.

FIRST VENTURE LEASING, LLC                           COYOTE TECHNOLOGIES, LLC
BY:                                                  BY:
ITS:                                                 ITS:
DATE:                                                DATE:<PAGE>   1

                                                                  EXHIBIT 10.35

                              SEPARATION AGREEMENT

        THIS AGREEMENT, effective as of February 16, 2000 (the "Effective
Date"), is by and between COYOTE NETWORK SYSTEMS, INC., a Delaware corporation
("Coyote"), and JAMES J. FIEDLER.

                                    RECITALS

        A. Mr. Fiedler has been employed by Coyote since 1995 and has served as
Chairman and Chief Executive Officer since November 1996, with a current
contract dated April 11, 1998, and Mr. Fiedler is a member of Coyote's Board of
Directors.

        B. Effective January 27, 2000, Mr. Fiedler relinquished his duties as
Chief Executive Officer and, pursuant to the terms and conditions hereof, Mr.
Fiedler is hereby retiring as Coyote's Chairman and as a member of Coyote's
Board of Directors.

        C. In recognition of his many years of leadership and service, it is the
desire of Coyote to provide to Mr. Fiedler certain severance and other benefits,
on the terms and conditions as set out herein.

        D. It is the desire of the parties to resolve any and all issues between
them with respect to Mr. Fiedler's employment and retirement.

                                   AGREEMENTS

        In consideration of the mutual covenants set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

        1. Mr. Fiedler's employment as Chairman of Coyote and as a member of
Coyote's Board of Directors with Coyote shall terminate effective seven (7) days
after the submission of Coyote's 10Q, for the quarter ended December 31, 1999.

        2. Coyote shall pay to Mr. Fiedler severance pay through March 31, 2003
at his present salary pursuant to the Employment Agreement dated as of April 1,
1998 between Coyote and Mr. Fiedler, as modified by Coyote's Board of Directors
on January 24, 2000 (the "Employment Agreement"); provided, however, in lieu of
the $150,000 to be paid on June 24, 2000, Coyote shall grant to Mr. Fiedler
200,000 immediately vested options to purchase Coyote common

<PAGE>   2

stock for $5.00/share ("Severance Options"). All such severance payments shall
be subject to all applicable deductions and withholdings. In connection with the
Severance Options, Mr. Fiedler acknowledges that they will not be available for
exercise until such time as the Company's shareholders approve and authorize a
sufficient number of shares of common stock to permit exercise of the options
and in the event the shareholders fail to authorize additional shares by March
1, 2003, the options will be void. The Company agrees to use its best efforts to
obtain shareholder authorization of additional shares and further authorization
of an additional 2,000,000 shares in the Company's Nonqualified Employee Stock
Option Plan.

        3. Coyote shall provide medical benefits to Mr. Fiedler through June 30,
2006 pursuant to the terms of the Employment Agreement, and further agrees to
promptly pay all past expenses and loans owing Mr. Fiedler.

        4. In consideration for past services and services to be provided
pursuant to paragraph 9 below, Coyote shall transfer to Mr. Fiedler the cell
phone and laptop computer currently provided by Coyote.

        5. Coyote shall transfer and assign to Heather Fiedler the two insurance
policies on the life of Mr. Fiedler and the related Met Life shares of stock
which are proceeds of such insurance policies. Coyote shall continue to pay all
premiums relating to such policies through June 30, 2001.

        6. Mr. Fiedler shall be subject to the normal non-employee black-out
provisions with respect to all Coyote options held by Mr. Fiedler.

        7. As a former officer and director, Mr. Fiedler shall continue to be
indemnified by Coyote, to the fullest extent permitted under the General
Corporations Law of Delaware and covered under any director and officer's
liability insurance coverage of Coyote in place from time to time.

        8. Coyote and Mr. Fiedler agree that neither party shall make any
disparaging statements concerning the other or his or its business activities.

        9. Mr. Fiedler shall, upon reasonable request by Coyote, make himself
reasonably available and otherwise fully cooperate with Coyote regarding
questions or information which is known or may be known by Mr. Fiedler
concerning Coyote or its business including, without limitation, Wildfire,
Ericsson, Systeam, European business and all lawsuits. In addition, in
consideration of the severance payments and other benefits to be provided by
Coyote to Mr. Fiedler hereunder, Mr. Fiedler hereby agrees to perform such
consulting services as Coyote may reasonably request from time to time, and as
mutually agreed upon,

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and to undertake to confer with representatives of Coyote as Coyote may
reasonably request from time to time, and as mutually agreed upon, from the
Effective Date through March 31, 2003. Such consulting activities are expected
to vary from 10-40 hours per month and will not exceed approximately 40 to 50
hours per month and are expected to lessen over time.

        10. Mr. Fiedler acknowledges that in the course of his employment with
Coyote he received confidential information concerning Coyote and its business.
Mr. Fiedler shall keep such information confidential and further agrees not to
disclose such information to third parties without the prior written consent of
Coyote. Mr. Fiedler represents that has returned to Coyote all such information
in his possession of which he has knowledge and he has not taken or retained any
such information in any form other than any such information directly related to
the activities he has agreed to perform under paragraph 9 above. Mr. Fiedler
further represents that he has returned all other Coyote property in his
possession. Mr. Fiedler also agrees not to contact or solicit any information
regarding Coyote's business from employees, customers or suppliers other than in
relation to the activities described in paragraph 9 above.

        11. This Agreement shall bind and benefit the heirs, personal
representatives, administrators, successors, and assigns of the parties hereto.

        12. This Agreement shall constitute the entire agreement between the
parties and supersedes all prior representations, understandings, and agreements
of the parties with respect thereto. Any waiver or amendment of any provision of
this Agreement shall be effective only if in writing and signed by the parties
hereto.

        13. Except for the payments and obligations expressed or adopted in this
Agreement, each party waives and fully releases the other from any claims,
demands, or causes of action, known or unknown, arising prior to the date
hereof.

        14. This Agreement shall be governed by the laws of the State of
California.

                                            COYOTE NETWORK SYSTEMS, INC.

                                            BY     /s/ James R. McCullough
                                                   -----------------------------
                                                   Its Chief Executive Officer
                                                       -------------------------

                                                   /s/ James J. Fiedler
                                                   -----------------------------
                                                             James J. Fiedler

                                       3

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